579 F.2d 1204 (10th Cir. 1978), 77-1256, International Barges, Inc. v. Kerr-McGee Corp.

Docket Nº:77-1256.
Citation:579 F.2d 1204
Party Name:INTERNATIONAL BARGES, INC., a Delaware Corporation, Plaintiff-Appellant, v. KERR-McGEE CORPORATION, a Delaware Corporation, and Kerr-McGee Chemical Corporation, a Delaware Corporation, Defendants-Appellees.
Case Date:July 05, 1978
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit

Page 1204

579 F.2d 1204 (10th Cir. 1978)

INTERNATIONAL BARGES, INC., a Delaware Corporation,



KERR-McGEE CORPORATION, a Delaware Corporation, and

Kerr-McGee Chemical Corporation, a Delaware

Corporation, Defendants-Appellees.

No. 77-1256.

United States Court of Appeals, Tenth Circuit

July 5, 1978

Submitted on Briefs June 20, 1978.

Page 1205

Robert B. Smith, of Bloodworth, Smith & Biscone, Oklahoma City, Okl., for plaintiff-appellant.

Derrill Cody and Kerr, Davis, Irvine, Krasnow, Rhodes & Semtner, by Francis S. Irvine and Harvey L. Harmon, Jr., Oklahoma City, Okl., for defendants-appellees.

Before McWILLIAMS, DOYLE and LOGAN, Circuit Judges.

WILLIAM E. DOYLE, Circuit Judge.

This is a diversity suit in which plaintiff, International Barges, Inc., sought damages

Page 1206

arising from movement by it of 3600 tons of anhydrous ammonia in its barges from Lake Charles, Louisiana to New Orleans. The governing agreement was oral and provided that the demurrage rate was to be $125.00 per hour for a maximum of 48 hours delay and thereafter $170.00 per hour. Damages for delay in delivering the ammonia which plaintiff alleges was not through its fault are demanded in the amount of $32,278.60.

Defendant, Kerr-McGee Chemical Corporation, denied its responsibility for the demurrage and asserted that the delays were caused by the actions of plaintiff-appellant. Appellee Kerr-McGee interposed a counterclaim alleging a loss suffered by it as a result of the specific refusal of appellant to move its barge temporarily. This caused damage to American Cyanamid Company, which Kerr-McGee had to pay. This was $1,960. Kerr-McGee also sought $162,000 resulting from alleged loss in market of anhydrous ammonia. This was attributable to the action on the part of the appellant.

Trial was to the court, which awarded judgment to the appellant in the amount of $5,300 for demurrage sustained, and to appellee in the amount of $28,950 for loss suffered as a result of the cargo, anhydrous ammonia, in one of the barges being contaminated by remnants of butylene from the previous cargo. Appellant seeks reversal of this judgment on the counterclaim and seeks also an award of enhanced damages for the demurrage which the court failed to allow for the barge Mary Lee, which contained the allegedly contaminated anhydrous ammonia. It was the Mary Lee which was found to have 117 parts per million of butylene. This remained after a prior transportation, and even though the quantity of the butylene was somewhat infinitesimal, the trial court found that it was unacceptable and that it was International Barges' responsibility to deliver ammonia free of contamination. No such contamination was present in the cargo transported in the second barge of the appellant, the Marjorie B. The demurrage which was awarded to plaintiff in the amount of $5,300 was that which was incurred by the Marjorie B. The trial court found that the plaintiff was not legally responsible for the delay and resulting demurrage in connection with the unloading of the Marjorie B.

The crux of this controversy is whether the court was correct in placing legal responsibility on the appellant for the contamination of the anhydrous ammonia, remnants of which were in the Mary Lee's tanks when the ammonia was taken on. This was the basis for the judgment on the counterclaim in favor of Kerr-McGee for economic loss incurred by Kerr-McGee due to, so to speak, the impure state of the anhydrous ammonia which was sought to be delivered. It was also the basis for the judgment in favor of Kerr-McGee in the controversy involving demurrage resulting from the delay in unloading the Mary Lee. The underlying questions are, first, whether the contamination was so slight as not to be significant, and, second, whether the notification of Kerr-McGee by International Barges produced a waiver or shifted the responsibility to Kerr-McGee. The trial court resolved these questions in favor of Kerr-McGee.

The Mary Lee was found by the trial court to have been used for transportation or storage of butylene immediately prior to the transport of the ammonia. Plaintiff attempted to purge the Mary Lee of any residual butylene (using nitrogen for the purpose) prior to loading it with anhydrous ammonia. The court also found that the effort of appellant to decontaminate the barge was not wholly successful. The court also found that appellant notified appellee of the fact that the barge had been engaged in prior butylene service, which required that it be purged. Appellant emphasizes this fact, believing that it somehow or other shifted the burden of providing a clean vessel to the defendant or perhaps caused the defendant to assume the risk of the contamination. The trial court rejected both of these contentions, and we agree with the view thus adopted...

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