Pan-Alaska Fisheries, Inc. v. Marine Const. & Design Co.
| Decision Date | 13 December 1977 |
| Docket Number | No. 75-3723,PAN-ALASKA,75-3723 |
| Citation | 565 F.2d 1129 |
| Parties | FISHERIES, INC., a corporation, and IDS Leasing Corporation, Plaintiffs-Appellants, Pan-Alaska Fisheries, Inc., Plaintiff-Appellee, v. MARINE CONSTRUCTION & DESIGN CO., a corporation, Northern Commercial Company, a Delaware Corporation, d/b/a N. C. Marine, and Caterpillar Tractor Company, a corporation, Defendants-Appellees. NORTHERN COMMERCIAL COMPANY, a Delaware Corporation, d/b/a N. C. Marine, Third-Party Plaintiff-Appellee, v. FRAM CORPORATION, a Foreign Corporation doing business in the State of Washington, Third-Party Defendant-Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Gordon W. Moss (argued), of Lane, Powell, Moss & Miller, Seattle, Wash., for Pan-Alaska Fisheries, Inc.
William R. Hickman (argued), Seattle, Wash., for N. C. Marine.
Appeal from the United States District Court for the Western District of Washington, at Seattle.
Before KILKENNY and ANDERSON, Circuit Judges, and CRAIG, * District Judge.
At noon on Christmas Day, 1969, the 76-foot crab fishing vessel Enterprise sailed from Seattle, Washington, bound for Unalaska, Alaska, on its maiden voyage following a major rebuilding of the vessel, which included the installation of a new Caterpillar D-343 marine diesel engine. Approximately thirteen hours later when the vessel was abeam of Nanaimo, British Columbia, in the Strait of Georgia, a fuel oil fire broke out in the engine room, resulting in the sinking and total loss of the vessel, its equipment, fishing gear, provisions and supplies aboard. The crew escaped in a life raft. This admiralty action in negligence and products liability arises from that loss.
Pan-Alaska Fisheries (Pan-Alaska), plaintiff, long-term lessee and owner pro hac vice of the vessel Enterprise;
Caterpillar Tractor Company (Caterpillar), defendant, and manufacturer of the Caterpillar D-343 marine engine, who sold the engine, including two factory-equipped engine-mounted fuel filters, No. 6L7440, to
Northern Commercial Company, d/b/a N. C. Marine (N. C. Marine), defendant, the exclusive franchised dealer for Caterpillar in Western Washington, who sold and delivered the engine to Marine Construction & Design Company (Marco), defendant, engaged in the business of constructing, repairing, and rebuilding fishing vessels. Marco installed the engine in the Enterprise pursuant to its contract with Pan-Alaska to rebuild the vessel, which included, among other things, the furnishing and installation of a new Caterpillar D-343 marine diesel engine, equipped with fuel filters and engine and pilot house instruments and controls.
In early 1969, the Enterprise sank at its dock at Unalaska, Alaska, and was refloated and navigated to Seattle, Washington, where Pan-Alaska decided to have the vessel rebuilt. Pan-Alaska hired Marco to rebuild the Enterprise (according to Pan-Alaska's specifications) and ordered Marco to install in the Enterprise a new Caterpillar D-343 marine engine. Marco purchased this engine from Caterpillar's local distributor, N. C. Marine, and installed it in the Enterprise. This engine had been manufactured in March of 1969 by Caterpillar and sold and shipped to N. C. Marine in April of that year. Mounted on the engine shipped to N. C. Marine were two factory-equipped fuel filters, Caterpillar part No. 6L7440, which, as we shall see, played a crucial role in the loss of the Enterprise.
The vessel, as rebuilt, was "pilot-house controlled;" that is, it was designed and intended to be operated without an engineer on watch at all times in the engine room. There was one important exception to this pilot-house control and that was that there was no way to either start or stop the engine except from within the engine room itself.
The D-343 engine is manufactured with two diesel fuel filters mounted in tandem on the starboard side of the engine and located between the engine's fuel pump and the intake to the cylinders where the fuel is fired. These engine-mounted fuel filters are the second line of defense against contaminated fuel; a primary fuel filter, not supplied by Caterpillar, was installed by Marco in the fuel line leading to the engine from the fuel tanks under the deck plates of the engine room.
Commencing in February 1969, Caterpillar began receiving numerous complaints from its dealers regarding failures of 6L7440 fuel filters (installed and sold by Caterpillar for use on its D-343 engines), including some reports of engine room fires being caused by such filter failures. The 6L7440 filters were found to be rupturing or cracking under designed fuel pressures, and in some cases with very few hours of engine operation. As a result of these complaints, Caterpillar initiated an investigation and testing program which confirmed that the 6L7440 fuel filter was unsatisfactory for use on D-343 engines.
In the early fall of 1969 Caterpillar developed a modified filter to which it assigned part No. 1P2299. On October 20, 1969 some nine days before delivery of the Enterprise's engine by N. C. Marine to Marco Caterpillar mailed to all of its dealers, including N. C. Marine, a "product letter" regarding the 6L7440 fuel filters. This product letter instructed the dealer to "Advise all owners of D-343 engines in all applications to discontinue using the 6L7440 Fuel Filter Assemblies in these engines," to substitute the new 1P2299 Filter Assembly, and that "In some cases, the former filter has failed on D-343 engines and sprayed fuel over the engine and nearby areas." The product letter instructed the dealers to furnish the owners with the new filters as soon as possible. The trial court found that N. C. Marine did not change the 6L7440 filters on the Enterprise's engine or advise Marco or Pan-Alaska to change the filters or warn them of any hazards connected with the filters. On its fateful voyage, the filters on the Enterprise's D-343 engine were the 6L7440 filters and not the replacement 1P2299 filters.
Even with the knowledge that a fire hazard existed for vessels at sea equipped with the D-343 engine and 6L7440 filters, Caterpillar did not determine whether N. C. Marine had complied with Caterpillar's instructions contained in the October 20, 1969, product letter. It further appears that Caterpillar made no direct contact or had any type of communication with either Pan-Alaska or Marco regarding the problem filters.
After Marco completed its work, approximately 200 gallons of fuel were transferred from the Pan-Alaska vessel Mercator to the Enterprise. This fuel was contaminated and the contaminated fuel was drained from the fuel tank aboard the Enterprise into the bilges of the ship and then pumped through the bilge pump into Puget Sound. These fuel tanks had been in use when the Enterprise sank in Unalaska and were still on board and in use when it left Seattle. The trial court found that they had not been cleaned when the Enterprise was overhauled nor any other time before the vessel left Seattle.
At noon on December 25, 1969, the Enterprise sailed from Seattle for Unalaska on its maiden voyage with a crew of three: Leif Loklingholm, Master; John Froyen, Engineer; and Lawrence Cole, cook-deckhand. Around 7 or 8 o'clock in the evening, the engine slowed down and the engineer changed the primary filter located under the floor plates because he found dirt in it.
At approximately 1:30 a. m., the next morning, the Enterprise was passing Nanaimo, British Columbia, when Froyen, on watch in the pilot-house, saw the needle on the fuel pressure gauge drop. An inspection of the engine revealed that the forward fuel filter had developed a three-quarter inch by one-eighth inch crack, which was spraying diesel fuel six to eight feet around the engine room and on the starboard fuel tank. Froyen stopped the engine, replaced the cracked 6L7440 filter and replaced it with a spare 1P2299 filter. After wiping up the spilled fuel with rags, Froyen restarted the engine and observed it operate for several minutes at an idle speed. He did not observe the engine or filters at full speed. Because he had a headache, Froyen left the engine room to get a glass of milk. He told the Master to put the engine on full-ahead, which he did.
Shortly after the engineer entered the galley, a fuel oil fire broke out in the engine room. The thick black choking smoke prevented the crew members from entering the engine room to either fight the fire or shut off the engine, which was still running.
Pan-Alaska had not trained the crew in fire-fighting techniques, nor did it learn whether the crew was familiar with the safety features of the vessel. One essential element of a burning fire is oxygen. Oxygen was fed to the engine room via an electric blower and the engine room air ducts. The crew did not know that they could turn off the blower by a switch outside the engine room or by cutting the blower's wires. Nor did they know they could reduce the flow of air to the fire by stuffing the engine room air ducts. Consequently, the blower remained on and the air ducts open feeding the fire with the essential oxygen.
The ship's portable fire extinguishers were expended in an unsuccessful attempt to put out the fire. When the deck planks got warm, the crew abandoned ship in a rubber raft. The Enterprise then burned and sank. All equipment, fishing gear, provisions and supplies were lost.
Originally, in April 1970, Pan-Alaska filed suit in the King County, Washington, Superior Court seeking recovery of $210,190.44 against Marco and N. C. Marine. In the fall of 1971 Caterpillar was added as a third-party defendant by N. C. Marine. Thereafter, Pan-Alaska filed an amended complaint in which Caterpillar was added as a defendant. The case proceeded before a state court jury. However, after hitting a procedural snag in the state court,...
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