Gulf Tampa Drydock Co. v. Germanischer Lloyd, 78-2298

• Decision Date: 20 January 1981
• Docket Number: No. 78-2298,78-2298
• Citation: 634 F.2d 874
• Parties: GULF TAMPA DRYDOCK CO. and Commercial Union Insurance Company, Plaintiffs-Appellees, v. GERMANISCHER LLOYD, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 874

634 F.2d 874

GULF TAMPA DRYDOCK CO. and Commercial Union Insurance Company, Plaintiffs-Appellees, v. GERMANISCHER LLOYD, Defendant-Appellant.

No. 78-2298.

United States Court of Appeals Fifth Circuit.

Jan. 20, 1981.

Nathaniel G. W. Pieper, Tampa, Fla., for defendant-appellant.

MacFarlane, Ferguson, Allison & Kelly, David F. Pope, Tampa, Fla., for plaintiffs-appellees.

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

Before TJOFLAT, RUBIN and TATE, Circuit Judges.

TJOFLAT, Circuit Judge:

In this admiralty case, the district court below found Germanischer Lloyd, a ship classification society, ¹ liable in contribution to Gulf Tampa Drydock Company (Tampa Drydock) ² for damages arising from a fire aboard the cargo ship CAP NORTE on a theory of concurrent negligence. (Tampa Drydock had been found negligent and thus liable to the owners of the CAP NORTE in an earlier proceeding.) ³ Germanischer Lloyd asks that the district court decision be reversed. The company has raised two issues of law: whether collateral estoppel should preclude liability and whether the duty a classification agency owes to the owners of a ship it classifies is an adequate foundation of liability in the present case. Because we think the district court failed to consider the question of what duty Germanischer Lloyd owed to the owners of the CAP NORTE, we reverse and remand to the district court for findings on this issue.

I The Facts

On July 12, 1968, the CAP NORTE, en route to New York, sustained a deck plating fracture near Tampa, Florida. Germanischer Lloyd, the CAP NORTE's classification society, was notified of the damage to the ship. Soon thereafter, a representative of Germanischer Lloyd, Captain F. H. Young, examined the fracture, and determined that the CAP NORTE needed repairs to remain in class.

Representatives of the CAP NORTE disagreed. After some discussion, however, it became evident that Captain Young would not allow the CAP NORTE to remain in class unless temporary repairs were made before the ship embarked for New York. The CAP NORTE representatives thus reluctantly agreed to pay for those repairs Captain Young deemed necessary to mend the fracture, and selected Tampa Drydock to undertake them. The representatives warned Captain Young that special care would have to be taken in making the repairs because of inflammable insulation materials in the area of the fracture.

Without securing detailed diagrams, which were in Germany, of the ship's structure, Captain Young ordered Tampa Drydock to repair the fracture by welding steel bars across it. Tampa Drydock proceeded to do so, but apparently erred in selecting the welding spots. As a result, Tampa Drydock negligently welded the bars against inflammable materials, causing a fire that damaged both ship and cargo.

The owner of the CAP NORTE ("shipowner") sued Tampa Drydock in federal district court ("Case 1"). In that action, Tampa Drydock alleged a number of defenses, including that of the shipowner's superseding negligence. Under this theory, the Germanischer Lloyd representative was acting as the shipowner's agent, and thus his alleged negligence in ordering and supervising the repairs was attributable to the shipowner. Although no express finding of negligence or agency was made by the district court, judgment was entered for the shipowner. We believe the court's determination that Tampa Drydock was liable without any reduction in liability for negligence of the shipowner necessarily means it found either that Captain Young was not the shipowner's agent or that although he was the shipowner's agent, he was not negligent.

Subsequent to the entry of judgment in Case 1, Tampa Drydock brought the present action against Germanischer Lloyd for contribution. Here, Tampa Drydock contends that Germanischer Lloyd is responsible for the negligence of its employee, Captain Young, in ordering, supervising and inspecting the repairs to the CAP NORTE. Germanischer Lloyd responded in the proceeding below that Captain Young had not been negligent, but even had he been, a finding of liability would be improper for two reasons: (1) the issue of Germanischer Lloyd's negligence was decided against Tampa Drydock in Case 1, which collaterally estops relitigation of the issue here; and (2) Germanischer Lloyd owed no duty to the shipowner to direct, supervise or inspect repairs, and thus could not be a joint tortfeasor. The district court disagreed, and held Germanischer Lloyd liable for 50% of the damages that Tampa Drydock was ordered to pay in Case 1. The court's assignment of liability was based on its conclusion that Captain Young's failure to obtain sufficient pre-repair information, and his direction that steel bars be welded across the fracture, were negligent.

On this appeal, Germanischer Lloyd argues that the district court's conclusions on the issues of collateral estoppel and duty were in error. For reasons we explain below, we hold the collateral estoppel defense inapplicable. We think, however, that the district court failed to determine whether Germanischer Lloyd, through the actions of Captain Young, did in fact breach any duty it owed to the shipowner. Without a breach of such duty, Germanischer Lloyd should not have been found liable to the shipowner, and Tampa Drydock would be foreclosed from suing for contribution. We thus reverse and remand for a finding on this issue.

II Collateral Estoppel

We have described the doctrine of collateral estoppel as follows:

Any right, fact or matter in issue and directly adjudicated, or necessarily involved in the determination of an action before a competent court in which a judgment or decree has been rendered upon the merits, is conclusively settled by the judgment therein and cannot again be litigated between the same parties ... whether the claim, demand, purpose or subject matter of the two suits is the same or not.

In Re Constructors of Florida, Inc., 349 F.2d 595, 599 (5th Cir. 1965), cert. denied, 383 U.S. 912, 86 S.Ct. 886, 15 L.Ed.2d 667 (1966).

Germanischer Lloyd contends that Tampa Drydock litigated the issue of Germanischer Lloyd's negligence in Case 1, and is bound by the adverse determination rendered therein. ⁴ In support of its position, Germanischer Lloyd observes that Tampa Drydock tried to excuse itself from liability in Case 1 by arguing, inter alia, that it performed repairs in the manner directed by Germanischer Lloyd and, that if the repairs were negligently undertaken, the negligence was at least shared by Germanischer Lloyd. Germanischer Lloyd points particularly to the pretrial stipulation which listed as issues to be litigated whether

"... in performing the welding services was Gulf-Tampa Drydock Company following the instructions of the vessel classification society surveyor, not only as to what was to be done but also as to how it should be done; is vessel interest bound by the instructions of the classification society survey or as to repairs and the manner of effecting same; is vessel interest estopped to recover from Gulf Tampa by reason of the actions of ... its classification society surveyor ..."

Record Excerpts, Vol. I at 46. Moreover, Germanischer Lloyd contends that the court resolved these issues in its favor by finding as fact that "the precise spotting or location of each of the straps which were used in connection with the tempoary repair ... was determined by Gulf Tampa ..." Record Excerpts, Vol. I at 32.

We cannot agree that this finding necessarily forecloses the matter. Germanischer Lloyd's alleged negligence was relevant to the first case only insofar as it could be attributed to the shipowner, for it would be the shipowner's contributory negligence and not Germanischer Lloyd's concurrent negligence, that would have excused Tampa Drydock from liability or reduced the extent of Tampa Drydock's liability. This was recognized in the pretrial stipulation that set forth as a triable issue whether "the vessel interest (was) bound by the instructions of the...