Penn Tanker Company v. United States

• Decision Date: 21 March 1969
• Docket Number: No. 25382.,25382.
• Parties: PENN TANKER COMPANY, Appellant, v. UNITED STATES of America, Appellee. UNITED STATES of America, Appellant, v. PENN TANKER COMPANY, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

409 F.2d 514 (1969)

PENN TANKER COMPANY, Appellant, v. UNITED STATES of America, Appellee.

UNITED STATES of America, Appellant, v. PENN TANKER COMPANY, Appellee.

No. 25382.

United States Court of Appeals Fifth Circuit.

March 21, 1969.

Carl O. Bue, Jr., Royston, Rayzor & Cook, Ben L. Reynolds, Houston, Tex., for Penn Tanker Co.

James R. Gough, Asst. U. S. Atty., Houston, Tex., Walter H. Fleischer, John C. Eldridge, Attys., Dept. of Justice, Washington, D. C., Edwin L. Weisl, Jr., Asst. Atty. Gen., Morton L. Susman, U. S. Atty., for the United States.

Before ALDRICH^*, GODBOLD and DYER, Circuit Judges.

DYER, Circuit Judge:

Penn Tanker Company, owner of the S. S. Penn Challenger, having settled a state court Jones Act¹ suit brought against it for the injury and death of a seaman, sought full indemnity against the United States under the Federal Tort Claims Act² asserting that although the shipowner was negligent, the Government's subsequent wrongs caused all of the damages. From a judgment of the District Court awarding Penn Tanker "fifty percent indemnity" it appealed and the Government cross-appealed. We reverse.

The seaman, Hodges, sustained welding burns to both eyes while working on board the S. S. Penn Challenger on August 15, 1963. Upon completion of the voyage he was issued a Master's Certificate to receive treatment and medical care. He was admitted to the United States Public Health Service Hospital in Galveston, Texas, in the latter part of August, 1968.

Hodges brought suit in a Texas state court against the vessel owner, Penn Tanker, under the provisions of the Jones Act and the maritime doctrine of unseaworthiness. While this suit was pending, Hodges on November 26, 1963, underwent an unsuccessful operation on his right eye for glaucoma and lost the sight in that eye. Hodges thereupon amended the ad damnum clause in his suit to increase it from $65,000 to $400,000. Penn Tanker sought to implead the United States as a third party defendant, but the United States successfully resisted this because it cannot be sued in state courts either under the Federal Tort Claims Act³ or the Suits in Admiralty Act.⁴ Penn Tanker then instituted this suit in the United States District Court seeking indemnity.

On March 6, 1965, Hodges committed suicide. Hodges' mother was substituted as party plaintiff in the state court action, and it was amended to add a wrongful death count with additional damages of $225,000. On June 7, 1965, the state court ruled that Penn Tanker was liable not only for the loss of Hodges' eye, but for all consequential damages resulting from Penn Tanker's negligence. The state court action was then terminated by a compromise agreement under which a consent judgment was entered. Mrs. Hodges was paid $24,500, less one-third attorney's fees and costs, by Penn Tanker in discharge of its liability for personal injuries, including the death of Hodges. Penn Tanker also paid Mrs. Hodges $500 as consideration for an assignment of any claim she might have against the United States, provided, however, that Penn Tanker would pay Mrs. Hodges any amount in excess of $25,000 that it recovered from the United States.

Penn Tanker's suit against the United States in the District Court then proceeded to trial. There was abundant evidence to sustain the District Court's findings and conclusions that the treating and operating ophthalmologist at the U. S. Public Health Service Hospital at Galveston was a known alcoholic who was guilty of improper diagnosis and pre-operative work-up, improper surgery and improper post-surgical care which caused the loss of Hodges' right eye; that the United States was negligent in permitting its ophthalmologist to operate on Hodges; and that such negligence was the proximate cause of the unsuccessful eye surgery. Indeed, the Government concedes that the District Court's finding that the Government was negligent is not clearly erroneous. The lower court further found that Hodges' suicide was not caused by the loss of his right eye.

The District Court entered judgment awarding Penn Tanker $12,500 as "fifty (50%) percent indemnity," finding that Penn Tanker was precluded from obtaining full indemnity from the United States because Hodges had received a welding burn to his eyes on board Penn Tanker's vessel, and finding further that the glaucoma condition of his eyes would have been permanent if an operation had not been performed.

Penn Tanker seeks reversal because the District Court erred, it claims, in not awarding it indemnity for the full amount of $25,000 paid to Hodges' personal representative, together with recovery of attorney's fees and expenses. The Government, on the other hand, asserts that there was a failure of proof by Penn Tanker since there were a number of discrete elements of damages included in the Penn Tanker-Hodges settlement for which the United States was not legally responsible.

With kinetic ingenuity Penn Tanker argues that the United States owes a legal duty to shipowners to insure that its Public Health Service facilities render reasonable medical care to seamen, and, failing that, full indemnity is recoverable whether the legal theory employed to impose indemnity sounds in contract, tort, or quasi contract, and whether admiralty law or local law be applied.

Before exploring this range of legal doctrines, it will simplify our task to first dispose of two factual issues controverted below and here. First, we fully agree with the finding of the District Court that the loss of Hodges' right eye was not causally connected with his suicide. Second, at the threshold and throughout the case, Penn Tanker has insisted that it did not cause Hodges' glaucoma condition and, further, that Hodges did not have the type of glaucoma which could be traumatically aggravated. This is contrary to the evidence in the state court depositions filed by Penn Tanker in the District Court. The expert opinion of the doctors deposed was that the burn received by Hodges aggravated a pre-existing glaucoma condition which ultimately required surgery. The state court and the lower court so found. We are not left with a definite or firm conviction that a mistake was committed or that the finding is clearly erroneous. McAllister v. United States, 1954, 348 U.S. 19, 75 S.Ct. 6, 99 L.Ed. 20; United States v. United States Gypsum Co., 1948, 333 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746; American Commercial Lines, Inc. v. Eusay, 5 Cir. 1968, 395 F.2d 717; Pure Oil Co. v. Bethlehem Steel Co., 5 Cir. 1968, 391 F.2d 249; Gulf Banana Co., Inc. v. Reefer Shipping Corp., Ltda., 5 Cir. 1968, 391 F.2d 287.

We now turn to the several theories of liability asserted by Penn Tanker.

Penn Tanker focuses upon the interrelationship between seamen, shipowners and the United States Public Health Service and argues that the statutory⁵ and unique relationship of the parties not only imposes upon the Government an obligation to provide seamen with proper professional care, but when, as here, the shipowner has been required to pay for damages resulting from the breach of such duty, the shipowner is the beneficiary of the duty owed to the seamen, for the breach of which the shipowner is entitled to full indemnity. Adopting as its thesis an analogy to the implied warranty of workmanlike performance in Ryan Stevedoring Co., Inc. v. Pan-Atlantic Steamship Corp., 1956, 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133, and its progeny, and invoking the principles of admiralty law which it argues are applicable, Kossick v. United Fruit Co., 1961, 365 U.S. 731, 81 S.Ct. 886, 6 L.Ed. 2d 56, Penn Tanker urges that it is entitled to recover full indemnity from the Government under the Federal Tort Claims Act.⁶ United States v. Yellow Cab Co., 1951, 340 U.S. 543, 71 S.Ct. 399, 95 L.Ed. 523.

We are unable to perceive a uniqueness in the relationship of the parties that alters the legal consequences of their acts. The only thing that is unique about their relationship is that the shipowner saves the amount of maintenance and cure that it would otherwise be liable to pay if the Service facility were not available. Clearly, a shipowner's liability to a seaman for maltreatment of injuries caused by the shipowner's negligence is no different when a seaman goes to a Service facility than when he goes to a private facility. In these circumstances there can be no implied warranty running from the government to the shipowner. To borrow from Chief Judge Brown:

While the maritime jurisprudence affords a fresh example that from little acorns big oaks may grow, we would doubt very much that the Ryan notion is to carry over to every conceivable relationship which might exist between a ship and a third party. * * *

Delta Engineering Corp. v. Scott, 5 Cir. 1963, 322 F.2d 11, 18, cert. denied, 1964, 377 U.S. 905, 84 S.Ct. 1164, 12 L.Ed.2d 176.

Furthermore, we are unwilling to accept Penn Tanker's tenuous argument that the relationship of Service hospitals and shipowners, concerning treatment of seamen, is comparable to those relationships which have been held to justify the application of Ryan. The right to indemnification in the Ryan type of cases is based upon a breach of a contractual obligation, Ryan, supra 350 U.S. at 133, 76 S.Ct. 232; Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Co., Inc., 1964, 376 U.S. 315, 84 S.Ct. 748, 11 L.Ed.2d 732; Weyerhaeuser Steamship Co. v. Nacirema Operating Co., Inc., 1958, 355 U.S. 563, 78 S.Ct. 438, 2 L.Ed.2d 491; Ocean Drilling & Exploration Co. v. Berry Bros. Oilfield Service, Inc., 5 Cir. 1967, 377 F.2d 511, cert. denied, 1967, 389 U.S. 849, 88 S.Ct. 102, 19 L.Ed.2d 118; Schwartz v. Compagnie General Transatlantique, S.D.N.Y.1968, 285 F.Supp. 473. Here there was no express or implied contractual relationship between the parties.

Finally, assuming arguendo an implied warranty running from the United States to Penn Tanker, we find no admiralty jurisdiction to support it....