Grace Line, Inc. v. Todd Shipyards Corp.
| Decision Date | 20 May 1974 |
| Docket Number | PRUDENTIAL-GRACE,72-1298 and 72-1297,Nos. 72-1296,72-1336,s. 72-1296 |
| Citation | 500 F.2d 361,1974 A.M.C. 1136 |
| Parties | GRACE LINE, INC., Plaintiff-Appellee, v. TODD SHIPYARDS CORPORATION, Defendant-Appellant. HOME INSURANCE COMPANY et al., Plaintiffs-Appellants, v. S.S. SANTA ANA, etc., et al., Defendants-Appellees. GRACE LINE, INC. (LINES, INC.), Plaintiff-Appellant, v. TODD SHIPYARDS CORPORATION et al., Defendant-Appellee. GRACE LINE, INC., et al., Plaintiffs-Appellees, v. TODD SHIPYARDS CORPORATION, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
George L. Waddell (argued), James D. Boughey, of Dorr, Cooper & Hays, San Francisco, Cal., George L. Varian, of Crowell, Rouse & Varian, New York City, for appellant Todd Shipyards Corp.
John R. Pascoe (argued), of Cushing, Cullinan, Hancock & Rothert, San Francisco, Cal., for Grace Line Inc.
James D. Boughey (argued), of Dorr, Cooper & Hays, San Francisco, Cal., George L. Varian, of Crowell, Rouse & Varian, New York City, for appellees Todd Shipyards Corp. and others.
Robert W. Wyckoff (argued), of Wyckoff & Cunningham, Frederick G. Harris (argued), of Patmont & Myers, San Francisco, Cal., for appellants Home Ins. Co. and others.
Carter Quinby (appeared), of Derby, Cook, Quinby & Tweedt, James D. Boughey, of Dorr, Cooper & Hays, John R. Pascoe, Cushing, Cullinan, Hancock & Rothert, San Francisco, Cal., George L. Varian, of Crowell, Rouse Varian, New York City, for appellees S. S. Santa Ana and others.
Before KOELSCH, CARTER and WALLACE, Circuit Judges.
This case arises out of a collision between a steamship and a drydock. We are presented with issues of negligence, the propriety of prejudgment interest, the scope of the United States Carriage of Goods by Sea Act, the interpretation and validity of so-called 'Himalaya' clauses in bills of lading, and laches. Notwithstanding the number and complexity of the legal issues and the number of parties involved, the facts are rather simple.
The Santa Ana is a 10,000-ton cargo steamship owned and operated by Grace Lines, Inc. (hereafter Grace). On December 8, 1967, the steamship arrived in San Francisco Bay laden with cargo of coffee, lumber, corned beef and quebracho. These goods were insured, respectively, by Home Insurance Company (hereafter Home), Atlantic Mutual Insurance Company (hereafter Atlantic Mutual), Royal Globe Insurance Co. (hereafter Royal Globe), and Commercial Insurance Company of Newark (hereafter Commercial).
During a voyage by a cargo steamship, it is customary for the vessel to enter a drydock for inspection and repair. With this purpose, the Santa Ana steamed into the Oakland Estuary where its intended drydock was located. This was Drydock No. 2, operated by Todd Shipyards Corporation (hereafter Todd).
Ordinarily, Captain Fillipow commanded the Santa Ana, but a special pilot named Carlier took the helm in order to perform the delicate operation of entering the drydock. Pilot Carlier was an employee of Shipowners & Merchants Towboat Company, Ltd. (hereafter S & M Towboat), which also supplied tugboats to assist in the maneuvers.
The Oakland Estuary runs generally east to west, and Drydock No. 2 is on the south shore. After heading east up the estuary until reaching the drydock, the steamship made a 90 degrees turn to the south and aimed towards the drydock's entry.
To picture the accident, it is necessary to understand the design of Drydock No. 2. Known as a Harris self-docking drydock it resembles a long miter box having a bottom and two side walls, but no top or end walls. The structure is 528 feet long and 90 feet wide, and points into the estuary. When a vessel approaches for entry, the drydock is submerged by filling water tanks within the walls. After the vessel is floated into position over the drydock, the water tanks are pumped out and the drydock, rising from its own buoyancy, lifts the vessel high and dry.
The drydocking of the Santa Ana might have gone all right except for a special feature of Drydock No. 2. As we mentioned above, Drydock No. 2 is 'self-docking,' meaning that it can drydock itself whenever it needs maintenance. Without going into the mechanics of this feat, we need only observe that a special recess in the ends of the side walls makes it possible. These walls, for the most part, are flat on top, forming a long narrow deck. At the outmost ends, however, the deck takes a step-like recess. The top of the recessed portion is eleven feet lower than the rest of the wall. Thus, when the drydock is submerged, the side walls stick above the water except at the ends, where the recessed portion of the wall lies under the water, unseen.
At the time Pilot Carlier proceeded to navigate the steamship into the submerged drydock, an eastward breeze and a flowing tide pushed against the vessel on the starboard (i.e., right hand) side. No finding was made, and nobody can say for certain, whether this starboard pressure was what made the steamship enter the drydock as it did, off-center, towards the port (i.e., left hand) side. The port side hull rammed into the unseen recessed wall, ripping a hole in the vessel beneath the water line. Besides damaging the steamship, the collision caused injury to the drydock and allowed flooding water to injure the cargo. The steamship, however, was ultimately drydocked and repaired by Todd.
Out of this accident arose four law suits. (1) Grace, the owner of the steamship sued Todd, the operator of the drydock, for the damages to the vessel and resultant damages. Todd filed a counterclaim against Grace for the damages to the drydock and for the money Todd had spent in repairing the ripped hull. Todd also filed a third-party complaint for the dock damage against S & M Towboat, which employed Pilot Carlier and the tugboats. (2) Two cargo insurers, Home and Atlantic Mutual, joined in suit against Grace, the Santa Ana itself, Todd and S & M Towboat for damage to the coffee and lumber. (3) Commercial brought a separate suit against the same defendants for damage to the quebracho. (4) Royal Globe likewise brought a separate suit against the same defendants for damage to the corned beef.
The suits were consolidated and tried to the district court. In its findings and conclusions, the court held that Todd was negligent and hence liable to Grace in the net amount of $17,265.03; that Todd, though negligent, was entitled to immunity against the cargo insurers; and that neither Grace nor S & M Towboat were negligent or liable to any party.
In the two appeals (by Todd and the cargo insurers) and the two cross-appeals (by Grace and Todd), we face the following questions:
(1) Did the trial court err in finding Todd negligent?
(2) Did the trial court err in finding that there was no negligence on the part of the Santa Ana, Grace or S & M Towboat?
(3) Did the trial court err in refusing to grant pre-judgment interest to Grace?
(4) Did the trial court err in holding that Todd is entitled to the same exemptions and immunities from and limitations of liability which Grace has against the cargo interests (these exemptions, immunities and limitations primarily being those that the United States Carriage of Goods by Sea Act provides specifically for carriers)?
As elaborated below, we answer questions (1), (2) and (3) in the negative, affirming the district court on those points. We conclude, however, that question (4) should be answered in the affirmative; we therefore reverse the district court's holding that Todd is entitled to immunity from liability to the cargo insurers.
The district court found that Drydock No. 2 was negligently constructed and maintained in that it had a concealed and dangerous projection when submerged for drydocking a vessel, and that the damage to the steamship was caused by Todd's negligent maintenance of the drydock in such a dangerous condition. The court further found that Grace and S & M Towboat were unaware of the existence of said concealed, underwater danger on the day of the collision.
Todd does not dispute the finding that it failed to exercise due care. Todd contends, however, that the evidence clearly shows that the pilot of the steamship was aware of the dangerous condition and that his awareness extinguished Todd's duty of due care towards the vessel.
The leading case regarding the duty of care incumbent upon those operating wharfs, drydocks, and so forth, is Smith v. Burnett, 173 U.S. 430, 19 S.Ct. 442, 43 L.Ed. 756 (1898). There the Court stated (at p. 433):
'Although a wharfinger does not guarantee the safety of vessels coming to his wharves, he is bound to exercise reasonable diligence in ascertaining the condition of the berths thereat, and if there is any dangerous obstruction to remove it, or to give due notice of its existence to vessels about to use the berths.'
Todd contends that, since its duty is fulfilled by giving notice to the vessel of the danger, necessarily there is no duty to fulfill if the vessel already knows of the danger. We accept this principle, as have other courts. See, for example, General Construction Co. v. Isthmian Lines, Inc. (D.Ore. 1966) 259 F.Supp. 336, 338-339, where it was accurately observed that
Todd further contends that the evidence clearly established that the pilot of the steamship had sufficient awareness of the danger to invoke this principle. Here we disagree. It must be kept in mind that on this issue we are concerned with the existence of a duty of care on Todd's part, and not with the question of the pilot's negligence, considered hereafter. Regardless of whether the pilot should have...
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