F. J. Walker Ltd. v. Motor Vessel Lemoncore

• Decision Date: 27 October 1977
• Docket Number: No. 75-2066,75-2066
• Citation: 1978 AMC 300,561 F.2d 1138
• Parties: F. J. WALKER, LIMITED, Et Al., Plaintiffs, Orleans International, Inc., Et Al., Plaintiffs-Appellees, v. The MOTOR VESSEL "LEMONCORE," her engines, etc., Et Al., Defendants- Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1138

561 F.2d 1138

F. J. WALKER, LIMITED, Et Al., Plaintiffs, Orleans International, Inc., Et Al., Plaintiffs-Appellees, v. The MOTOR VESSEL "LEMONCORE," her engines, etc., Et Al.,

Defendants- Appellants.

No. 75-2066.

United States Court of Appeals, Fifth Circuit.

Oct. 27, 1977.

Rehearing Denied Nov. 28, 1977.

Paul D. Hardy, Tampa, Fla., for defendants-appellants.

David G. Hanlon, Tampa, Fla., for Orleans, Int. & York Int.

Brooks P. Hoyt, Tampa, Fla., for Gulf Fla. Terminal.

Appeals from the United States District Court for the Middle District of Florida.

Before GODBOLD and CLARK, Circuit Judges, and HOFFMAN ^*, District Judge.

CHARLES CLARK, Circuit Judge:

This action is founded upon admiralty and diversity jurisdiction. Part of a shipment of frozen meat thawed and spoiled during unloading and delivery. The consignees sued to recover their damages from the carrier of the cargo, the stevedore which unloaded the ship, and the warehouseman who received part of the shipment. The carrier denied liability but sought indemnity from the stevedore. We affirm the district court's holding that the Harter Act, 46 U.S.C. §§ 190 et seq. renders the carrier liable to the consignees for the damages to the cargo, but we remand for further fact finding on the indemnity issue.

F. J. Walker, Ltd., an Australian exporter, consigned 61,942 cartons of meat during late-July or early-August 1971 to the Motor Vessel LEMONCORE, at Sydney, Australia, for delivery to Tampa, Florida. The plaintiff, Orleans International, Inc., the consignee of the greatest portion of the shipment, is an importer and a Detroit, Michigan distributor of food. Other consignees who joined Orleans as plaintiffs are York International Exchange Corporation and Pierce Trading Company Sales Corporation. Defendant Maritime Fruit Carriers, Ltd., owned the Motor Vessel LEMONCORE and defendant Refrigerated Express Lines (A/Asia) Proprietary, Ltd., operated the vessel under charter. Both are collectively referred to as the carrier. Defendant Gulf Florida Terminal (stevedore) was employed by the carrier to perform the off-loading, stevedoring, and limited cold storage services at Tampa. Defendant Seaboard Cold Storage, Inc., (warehouseman) also performed cold storage services at Tampa in connection with receiving the shipment of frozen meat, acting on behalf of consignees.

The LEMONCORE arrived at the port of Tampa on Thursday, September 9, 1971. Rain prohibited discharge of the cargo that day and the next. Discharge began Saturday, September 11, and a controversy The carrier instructed the stevedore to use five work gangs to discharge the LEMONCORE on Monday. Pursuant to its Saturday agreement, at 8:00 a. m., on Monday, the stevedore removed the approximately 4,000 cartons of frozen meat that had been placed in its warehouse and transferred them to the unrefrigerated terminal dock area for delivery. The five gangs then began the process of removing the remaining cartons of meat from the LEMONCORE. Another problem arose when the warehouseman and the stevedore got into a dispute over the use of certain pallets. The warehouseman wanted the meat loaded into trucks to be palletized on the pallets regularly used by the stevedore. The stevedore was unwilling to perform this service because over 1,000 of these pallets had not been returned. It was only willing to load the trucks using larger pallets which would not permit dense loading. When both parties remained adamant, the trucks had to be bed-loaded without the use of pallets thereby requiring more than one hour per truck, as compared to 20 minutes by the pallet process. As the day wore on a large quantity of frozen meat accumulated on the unrefrigerated delivery dock of the warehouseman. The district court found this was due to "a shortage of terminal personnel, a high rate of discharge by the stevedoring personnel from the M/V LEMONCORE and/or a large number of mixed bills of lading." The latter problem resulted from cartons meant for different consignees being mixed in stowage on the ship. After discharge, the cartons then had to be segregated into proper grouping.

promptly arose between the carrier and the warehouseman when Seaboard demanded overtime payment for this Saturday work. As a part of the settlement of this wage dispute, the warehouseman agreed to accept and store all meat discharged until 2:00 p. m. on Saturday. Any subsequent discharge was to be placed in the stevedore's warehouse. It was understood that the meat stored at the stevedore's warehouse would be removed on Monday, September 13, and taken to the warehouseman's dock for delivery to the consignees.

The accumulation of meat on the open dock first became serious at approximately noon on Monday. The deposition of Earl Martin Tushman, a vice president of Orleans International who was in charge of this importation, stated that the carrier was contacted initially at no later than 2:00 p. m. on September 13 and that other contacts followed. He also testified that the carrier was told that the meat was accumulating on the dock and could not be refrigerated. Despite these notices, the carrier refused to discontinue unloading the cargo.

Tushman's first contact was with Jim Murray, the New York-based manager for the carrier in the LEMONCORE operation. After being told that "we were going to run into a large problem," Murray responded, "We must finish this boat." Murray reputedly also stated that he had to empty the boat since a longshoreman's strike was imminent and that he "could not care less what happened to the meat ashore." Others in the carrier's management were contacted and each refused to stop the discharge. The carrier disputes that these contacts were made as early as 2:00 p. m., instead alleging that no notice of the difficulty in keeping the discharged cargo properly refrigerated was given until 6:00 p. m. or later. The stevedore requested the carrier to permit it to halt the discharge of the boat at approximately 7:30 p.m. on September 13. According to the carrier, there were approximately 12,550 cartons of the total shipment of 60,000 cartons still remaining on the ship at this time.

The testimony of several of the individuals made it clear that even after Jim Murray, the carrier's New York supervisor, knew of the conditions then existing and worsening, Murray insisted that discharge of the vessel continue. Frequent discussions began to take place on the Tampa dock between representatives of the stevedore, the warehouseman, and Captain John Brewster, an independent surveyor of cargo employed by the carrier after the thawing of the meat became apparent. Suggestions made to prevent the impending loss included reloading some of the meat on the vessel and The temperatures on these mid-September days in Tampa reached 90o Fahrenheit. It was agreed that to maintain proper condition of the meat, the temperature must remain below 20o Fahrenheit. By the evening of September 13, there had accumulated in unrefrigerated storage areas approximately 30,000 cartons of frozen meat. Though the shipment was completely removed from the LEMONCORE by 2:30 a. m. Tuesday, September 14, the final cartons of meat were not placed in cold storage until 5:00 p. m. on that day. All the cartons were then refrozen. Captain Brewster and a representative of the insurance carrier determined that the meat was substantially damaged: "all cartons totally defrosted, is in very bad shape, cartons badly blood-stained, degree of external sourness, and greenish fats." Their opinion was that only a total reconditioning of the meat would prevent the need to re-export this shipment. The total number of cartons which were affected was approximately 14 to 15 thousand.

attempting to procure other cold storage locations for the meat. Despite several earlier and virtually unanimous recommendations to stop discharge, Captain Brewster testified that all parties agreed at approximately 11:00 p. m. that continued discharge was appropriate, especially considering that the warehouseman had offered to provide cold storage in its 22 refrigerated trailers that had been standing by to receive the shipment. This testimony is not corroborated. The warehouseman informed the consignees of the serious damage that was occurring and requested releases from the consignees before it would agree to accept the shipment. Although these releases were given, at 9:00 a. m. on Tuesday, the warehouseman acting on behalf of the several consignees refused to accept the meat.

On November 12, 1971, the stevedore delivered the thawed and then refrozen cartons to the warehouseman for Orleans International's use. Orleans International rejected 10,810 of these cartons. These 10,810 cartons were offered at public auction on December 13. The highest bid was 31 cents per pound, and Orleans International accepted the meat rather than a sale at that price. The district court found that this 31 cents per pound was the market value of the thawed meat on September 14 at Tampa, Florida. Orleans took this meat to its Detroit distributing operation where it was reconditioned. It then sold the meat by including two or three of the reconditioned cartons in a larger order of meat. It was hoped that the purchasers might overlook or agree to accept this damaged product. Considerable difficulty was encountered, and the meat was frequently rejected. Apparently on some occasions after rejection, the meat would be offered and accepted at a lower price. Despite these problems, in time all of the reconditioned meat was sold.

York International also received damaged meat. A surveyor after inspecting this shipment determined that it had depreciated fifty percent in value. The district court ordered the carrier to compensate York for this fifty per cent depreciation. Using a reasonable market price for sound meat of 61 cents per pound, the damages awarded York nearly duplicated the per pound damages granted Orleans based on...