Watz v. Zapata Off-Shore Company

• Decision Date: 07 October 1970
• Docket Number: No. 27974.,27974.
• Citation: 431 F.2d 100
• Parties: John M. WATZ, Plaintiff-Appellee, v. ZAPATA OFF-SHORE COMPANY, Defendant-Appellee-Cross Appellant, v. EATON YALE & TOWNE, INC., Third-Party Defendant-Appellee-Cross Appellant, v. CAMPBELL CHAIN COMPANY, Fourth-Party Defendant-Appellant-Cross Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

431 F.2d 100 (1970)

John M. WATZ, Plaintiff-Appellee, v. ZAPATA OFF-SHORE COMPANY, Defendant-Appellee-Cross Appellant, v. EATON YALE & TOWNE, INC., Third-Party Defendant-Appellee-Cross Appellant, v. CAMPBELL CHAIN COMPANY, Fourth-Party Defendant-Appellant-Cross Appellee.

No. 27974.

United States Court of Appeals, Fifth Circuit.

September 1, 1970.

Rehearing Denied October 7, 1970.

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Strong, Pipkin, Nelson & Parker, Louis V. Nelson, Beaumont, Tex., for Zapata Off-Shore Co.

Mehaffy, Weber, Keith & Gonsoulin, Beaumont, Tex., for Eaton Yale & Towne, Inc.; James W. Mehaffy, Dewey J. Gonsoulin, Beaumont, Tex., of counsel.

Orgain, Bell & Tucker, Beaumont, Tex., for Campbell Chain Co.; by John G. Tucker, Beaumont, Tex., of counsel.

Jamail & Gano, Houston, Tex., for John M. Watz; Joseph D. Jamail, Jr., John Gano, Houston, Tex., of counsel.

Before TUTTLE, WISDOM, and GOLDBERG, Circuit Judges.

WISDOM, Circuit Judge.

This four-party case in admiralty presents a host of issues, some old, some new. We discuss the warranty owed by a ship undergoing major repairs, the basis of admiralty jurisdiction over torts, principles of negligence and legal cause in admiralty (more particularly, where shipowners and seamen are not involved), laches, indemnity, and contribution.

I.

Facts, Contentions, Conclusions.

Unlike the legal issues, the facts of the case are uncomplicated. The plaintiff, John Watz, was a pipefitter for Levingston Shipbuilding Company. He was injured on October 12, 1959, when a twenty-foot pipe fell on his leg and foot. At the time of the injury, Watz was helping to install the pipe in an exhaust system on Zapata Off-Shore Company's vessel NOLA III. Zapata had purchased the vessel NOLA III as a drill tender barge and had hired Levingston to convert it to an over-the-side drilling barge.

The pipe fell on Watz because a one-ton hand hoist holding the pipe failed. Levingston owned this hoist; Eaton Yale & Towne, Inc., had assembled the device. The hoist failed because a link of the load chain on the hoist gave way. Eaton had purchased the chain from its manufacturer, Campbell Chain Company.

The link gave way for two reasons. First, the link suffered from an imperfect weld: only 42.6 percent of the welded area had been fused and even in that area foreign materials were present. Second, external damage from abuse of the chain had occurred after Eaton had sold the hoist in commerce. The district court found that neither of these two factors alone would have caused the failure, but that together they did so.

Watz recovered medical expenses and compensation benefits from Levingston on March 4, 1963. Not until May 15, 1967, did Watz sue Zapata. Travelers Insurance Company, compensation insurer for Levingston, is subrogated to $25,965.06 of the judgment. Zapata impleaded Eaton, the hoist-maker, and Watz thereupon also named Eaton as a defendant. Eaton impleaded Campbell, the chain-maker, but Watz did not name Campbell as a defendant.

The district court awarded Watz a joint and several judgment of $136,185.06 against Zapata and Eaton; awarded Zapata fifty percent indemnity against Eaton; and awarded Eaton fifty percent indemnity against Campbell. Thus, if Watz should execute his judgment against Zapata, the liabilities would be Zapata, fifty percent; Eaton, twenty-five percent; and Campbell, twenty-five percent.

These damages derive from the district court's findings that Zapata owed Watz a warranty of seaworthiness with regard to the NOLA III and that the defective hoist breached this warranty; that Eaton was negligent in failing to discover the defective weld before it placed the hoist in commerce and that it breached its implied warranty of reasonable fitness for intended use; that Campbell negligently manufactured the chain and breached its implied warranty of reasonable fitness for intended use.

Zapata, Eaton, and Campbell appeal. Zapata contends that Watz's claim is barred by laches, that it owed no warranty of seaworthiness to Watz, and that it should recover from Eaton one hundred percent of any judgment it must pay Watz. Eaton contends that it was not negligent, that its implied warranty was inoperative because of the external damage occurring to the chain, that Watz is barred by the Texas statute of limitations or laches in any event, that it should recover from Campbell one hundred percent of any judgment it must pay, and that it should pay no indemnity to Zapata. Campbell contends that the evidence does not prove its negligence, that the external damage to the chain was the real cause of the accident, that having met Eaton's specifications on the chain it had no other duty, that Eaton's claim was barred by the Pennsylvania statute of limitations or laches, that the district court had no jurisdiction of the fourth-party complaint against Campbell, and that the court erred in refusing Campbell's jury demand.

We conclude that Zapata owed Watz no warranty of seaworthiness. Therefore, we do not reach the other issues raised by Zapata's or Eaton's argument against indemnity. We conclude that the district court had admiralty jurisdiction over Watz's claim against Eaton and Eaton's impleader of Campbell. It therefore properly denied Campbell's jury demand. Eaton has not sustained its defense of laches, and the evidence supports the district court's finding that Eaton was negligent. We do not reach the question of its breach of warranty. The evidence also supports the district court's finding that Campbell was negligent, and we do not reach the question of its breach of warranty. We conclude that the district court correctly denied indemnity from Campbell to Eaton but that contribution was proper. Therefore, the court properly divided the damages between Campbell and Eaton. We remand, however, for further findings and conclusions with regard to Campbell's defense of laches.

II.

The Warranty of Seaworthiness.

The problem of what warranty a ship offers while she undergoes repairs continues to trouble the courts notwithstanding such definitive utterances as that of Judge Learned Hand's ten years ago that

It is now authoritatively settled, if indeed it was ever in doubt, that, when a ship has been withdrawn from navigation and while she is being reconditioned, she does not warrant her seaworthiness to those who work aboard her until she returns to active service.

Latus v. United States, 2 Cir. 1960, 277 F.2d 264, 266, cert. denied, 364 U.S. 827, 81 S.Ct. 65, 5 L.Ed.2d 55. The district court here, for example, found that at the time Watz was injured, he "was performing the duties of a seaman aboard the vessel, NOLA III, which was in navigable waters". At one time, this determination would have settled the issue whether the vessel owed a warranty of seaworthiness. Courts "had held it sufficient merely to require proof that the vessel was in navigable waters and that the shore-based worker was engaged in seamen's work". Lawlor v. Socony-Vacuum Oil Company, 2 Cir. 1960, 275 F.2d 599, 603-604, cert. denied, 1960, 363 U.S. 844, 80 S.Ct. 1614, 4 L.Ed.2d 1728. Indeed, the district court here reached the "conclusion of law" "that the NOLA III was not withdrawn from navigation and that the shipowner, Zapata Off-Shore Company, owed a warranty of seaworthiness to the plaintiff".

Roper v. United States, 1961, 368 U.S. 20, 22-23, 82 S.Ct. 5, 7 L.Ed.2d 1, 3, however, has declared that it is a question of fact whether a vessel is in or out of navigation.¹ As Judge Medina had observed a year earlier, the problem in these repair cases is that "resort to a mere phrase such as `out of navigation' does not get us very far." Lawlor, 275 F.2d at 602. "Everything depends upon what we mean by `out of navigation' in the context of the doctrine of unseaworthiness." Id. at 603. That observation holds true for both the factfinder and the reviewing court.

Modern cases dealing with the issue all go back to West v. United States, 1959, 361 U.S. 118, 80 S.Ct. 189, 4 L.Ed. 2d 161, the opinion that prompted Judge Hand's utterance. In West, the Government had relegated a "Liberty" ship of World War II vintage to the "mothball fleet" at Norfolk, Virginia. There it rested "in total deactivation for several years, with its pipes, boilers, and tanks completely drained, and an oil preservative injected through them to prevent rusting". 361 U.S. at 119, 80 S.Ct. at 191, 4 L.Ed.2d at 163. In 1951, however, with the Korean conflict at hand, the Government decided it needed the ship. Accordingly, the Government hired an independent contractor to overhaul and reactivate her, but in order to inspect the work in progress placed six of its own men on board. The Government towed the ship to the contractor's repair docks at Philadelphia and turned it over to the contractor. There, one of the contractor's shore-based employees was injured by a condition that the contractor had been hired to correct. The Supreme Court, concluding that the warranty of seaworthiness did not apply, advanced a loosely defined standard: "It would appear that the focus should be upon the status of the ship, the pattern of the repairs, and the extensive nature of the work contracted to be done, rather than the specific type of work that each of the numerous shore-based workmen is doing on shipboard at the moment of injury." 361 U.S. at 122, 80 S.Ct. at 192, 4 L.Ed.2d at 165. That much is clear. The import of the decision, however, has produced confusion.

The Second Circuit in Lawlor concluded from West that "at least in some cases, control of the vessel is a decisive factor". 275 F.2d at 604.² This Court purportedly adopted the Lawlor reasoning, Moye v. Sioux City & New Orleans Barge Lines, 5 Cir. 1968, 402 F.2d 238, 240, cert. denied, 1969, 395 U.S. 913, 89 S.Ct. 1759, 23 L.Ed.2d 226, but with definite reservations:

It is a mistake * * * to read West as a holding that once all of the owner-charterers\' employees have left

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