Ionmar Compania Naviera, S. A. v. Olin Corp.

• Decision Date: 01 February 1982
• Docket Number: No. 79-2912,79-2912
• Citation: 666 F.2d 897
• Parties: IONMAR COMPANIA NAVIERA, S.A., as owner of the MOTORSHIP NICOLAOS D.L., Plaintiff-Appellee, Central of Georgia Railroad Company, et al., Defendants-Appellees, v. OLIN CORPORATION, Defendant-Appellant, Appellee, v. SMITH & KELLY COMPANY, Defendant-Appellee, Appellant. CLIMATROL INDUSTRIES, INC., et al., Plaintiffs-Appellees, v. M/V NICOLAOS D.L., et al., Defendants. OLIN CORPORATION, Defendant-Appellant, Appellee, v. SMITH & KELLY COMPANY, Defendant-Appellee, Appellant. CONSOLIDATED BEARING COMPANY PTY., LTD., et al., Plaintiffs-Appellees, v. M/V NICOLAOS D.L., et al., Defendants. OLIN CORPORATION, Defendant-Appellant, Appellee, v. SMITH & KELLY COMPANY, Defendant-Appellee, Appellant. . *
• Court: U.S. Court of Appeals — Fifth Circuit

Page 897

666 F.2d 897

IONMAR COMPANIA NAVIERA, S.A., as owner of the MOTORSHIP

NICOLAOS D.L., Plaintiff-Appellee, Central of Georgia Railroad Company, et al., Defendants-Appellees, v. OLIN CORPORATION, Defendant-Appellant, Appellee, v. SMITH & KELLY COMPANY, Defendant-Appellee, Appellant.

CLIMATROL INDUSTRIES, INC., et al., Plaintiffs-Appellees, v. M/V NICOLAOS D.L., et al., Defendants.

OLIN CORPORATION, Defendant-Appellant, Appellee, v. SMITH & KELLY COMPANY, Defendant-Appellee, Appellant.

CONSOLIDATED BEARING COMPANY PTY., LTD., et al., Plaintiffs-Appellees, v. M/V NICOLAOS D.L., et al., Defendants.

OLIN CORPORATION, Defendant-Appellant, Appellee, v. SMITH & KELLY COMPANY, Defendant-Appellee, Appellant.

No. 79-2912.

United States Court of Appeals, Fifth Circuit. ^*

Feb. 1, 1982.

Sewell K. Loggins, Michael V. Elsberry, Atlanta, Ga., for Olin Corp.

George H. Chamlee, Savannah, Ga., for Ionmar Compania Naviera, S.A.

Hill, Rivkinds, Carey, Loesberg & O'Brien, Martin B. Mulroy, New York City, for Consolidated Bearing Co., etc.

Hunter, Houlihan, MacLean, Exley, Dunn & Connerat, Spencer Connerat, Jr., Savannah, Ga., for Georgia Ports Authority.

Stanley M. Karsman, A. Lee Lassiter, Marshall R. Wood, Savannah, Ga., for Smith & Kelly Co.

Bouhan, Williams & Levy, Edwin D. Robb, Jr., Savannah, Ga., James F. Hart, New York City, for Climatrol Industries, Inc., et al.

Appeals from the United States District Court for the Southern District of Georgia.

Before TUTTLE, TJOFLAT and KRAVITCH, Circuit Judges.

TJOFLAT, Circuit Judge:

This admiralty case resulted from a fire that occurred aboard the dry cargo ship M/V NICOLAOS D.L. (the "NICOLAOS") as it was preparing to depart for Australia from the Port of Savannah, Georgia, on the night of March 14, 1970. The fire originated in a stow of "HTH," an algaecide and bactericide manufactured by Olin Corporation (Olin) for use in swimming pools and small drinking water systems. The NICOLAOS and much of its cargo sustained fire and water damage as a result of the blaze. Suits to recover for cargo losses were instituted in the district court by two groups of cargo interests against the NICOLAOS; its owner, Ionmar Compania Naviera, S.A. (Ionmar); the Georgia Port Authority; Smith & Kelly Company (Smith & Kelly), the stevedore who stowed the HTH aboard the vessel; Olin; and Central of Georgia Railroad Company and Southern Railway Company, the two railroads that transported the HTH from Olin's plant to Savannah. A third suit was filed by Ionmar against Georgia Port Authority, Smith & Kelly, Olin, and the railroads to recover for the damage to the NICOLAOS.

These cases were tried together to the district court. The court found that the fire was caused by the combined acts of Olin and Smith & Kelly and entered judgment against them for the cargo interests and Ionmar. ¹ Olin and Smith & Kelly appeal; each contends that the district court's findings of fact and conclusions of law ² are insufficient to support the court's judgment. We conclude that the district court's findings of fact with respect to the origin of the fire-the cargo of HTH-are amply supported by the evidence. The court's findings of fact are inadequate, however, to permit us to assess the correctness of the court's conclusion that Olin and Smith & Kelly were entirely responsible for the fire. Additionally, the court neglected to make any findings of fact or conclusions of law with respect to Olin's and Smith & Kelly's contention that Ionmar's negligence, through the conduct of the NICOLAOS' master and crew, was a significant cause, if not the sole cause, of the fire; nor did the court address Olin's claim that Ionmar assumed the risk of the fire and resulting property damage when it accepted the cargo of HTH. We therefore vacate the judgment of the district court and remand these cases for further proceedings.

I.

A.

HTH is Olin's trade name for a chemical mixture composed of 70% calcium hypochlorite and 30% inert substances. It presents a serious fire hazard. HTH will decompose violently when it is heated to a temperature of 350o F or comes into contact with organic materials ³ in a liquid or semiliquid state, such as oil or grease, or in a solid state but finely divided, such as sawdust. When HTH decomposes, enough heat is produced to ignite any combustible material. ⁴ Since the decomposition yields large quantities of oxygen, HTH is an oxidizing agent. The oxygen it yields can feed a fire to a point of extreme intensity. Such a fire cannot be smothered by a typical fire extinguisher, because HTH, and not the atmosphere, supplies the oxygen necessary to sustain combustion. In this case, the HTH cargo was contained in 286 steel drums, weighing 423 pounds apiece. Drums such as these, if heated to 350o F, will generate large quantities of gas (as the HTH decomposes), explode, and spread their fire-producing contents through a wide area. A conflagration of the magnitude presented here would be probable.

Because of its properties, HTH is subject to considerable regulation. At the time of the fire aboard the NICOLAOS, U. S. Coast Guard and Department of Transportation regulations classified HTH as a "dangerous article" under its generic name: "calcium hypochlorite compounds, dry, containing more than 39 percent available chlorine." 46 CFR § 146.04-5 (1970). These regulations applied to anyone who, like the parties in these consolidated cases, shipped, transported, loaded or stowed HTH. 46 CFR § 146.02-4.

Olin, as the shipper, was required to ship HTH in steel drums that met certain standards, see 46 CFR § 146.22-200-Table E, and to mark each drum with a 4 X 4 , diamond-shaped, yellow label that warned all handlers to "Keep Away from Fire, Heat, and Open-flame Lights; CAUTION; Remove Carefully the Contents of Broken Packages; DO NOT DROP." See 46 CFR § 146.05-17(g). ⁵ This is the same type of label the Intergovernmental Maritime Consultative Organization, a United Nations organization that promulgates model safety rules for international cargo carriers and stevedores, indicated should be used to mark any container bearing an oxidizing agent, like HTH. Olin also was required by these regulations to advise the NICOLAOS, in writing, of the following characteristics of the HTH cargo: the generic name of HTH and a description of HTH as an oxidizing agent; the weight of the shipment; the number of drums involved; and that each drum was marked with a yellow label.

The NICOLAOS, as ultimate carrier of the cargo, once informed by Olin of the hazardous nature of HTH, was required to note on its hazardous cargo manifest the information Olin provided, 46 CFR § 146.06-14, and to transmit that information to Smith & Kelly, the stevedore the NICOLAOS hired to stow the HTH. Though Smith & Kelly had a contractual duty to the NICOLAOS to stow the cargo in a safe manner, the regulations nevertheless imposed on the NICOLAOS the responsibility of directing the stevedore's handling and stowage of the HTH. The NICOLAOS was permitted to carry its cargo of HTH "on deck protected," "on deck under cover," or in "tween decks." 46 CFR 146.22-200-Table E. Because the HTH was an oxidizing agent, however, it could not be stowed in these areas if the areas contained inflammable liquids ... inflammable solids ... readily combustible materials such as combustible liquids and textile products ... finely divided substances such as organic powders, etc. ... corrosive liquids ... (or) cotton.

46 CFR § 146.22-15 (emphasis added). Were leaking drums of HTH to be placed near such matter, the potential for HTH decomposition and fire would be great. Smith & Kelly was therefore instructed by the regulations not to onload any damaged or defective drums. See 46 CFR § 146.02-14.

In this case, Olin shipped the HTH in a steel drum approved by the Coast Guard and Department of Transportation regulations, properly labeled each drum, and communicated the necessary information about the shipment to the NICOLAOS. The NICOLAOS, in turn, entered this information on its hazardous cargo manifest and then communicated it to Smith & Kelly. Smith & Kelly decided to stow the HTH drums in the No. 3 tween deck, directly beneath the 19 ton hatch cover that secured the No. 3 hold; the NICOLAOS approved and the drums were stowed accordingly. The drums were onloaded with pallets and hand rolled into place by Smith & Kelly longshoremen. The stow was secured in two layers, with hardwood dunnage under each layer. To separate the HTH drums from the other cargo in the No. 3 tween deck, Smith & Kelly's shoring gang came aboard with some fresh pine lumber and constructed a fence around the drums. The gang cut the lumber in the tween deck, and there is some dispute whether any sawdust was left among the HTH drums. In any event, the shoring gang left the ship at 10:00 p.m. At 10:45 p.m., as the ship's crew was closing the No. 3 hatch, the fire broke out. It was first observed by some crewmen who saw a deep red glow through an opening between the hatch cover and the hatch coaming. A dense white vapor then began pouring out of the No. 3 hold. A moment later, an explosion lifted the 19 ton hatch cover into the air and dropped it into the hold. Thereafter, the fire alarm sounded and black smoke began to pour out of the No. 3 hold.

The ship's crew, several fire boats and the Savannah Fire Department fought the blaze. Attempts to smother the fire with water from fire hoses and with carbon dioxide proved fruitless. The fire was not extinguished until early the next morning when the Nos. 2 and 3 holds and tween decks, which shared a large cargo area in the forward part of the ship, were flooded with water.

B.

At trial, the cargo interests and Ionmar, in support of their respective claims, advanced two theories for the cause of the fire aboard the NICOLAOS. The first, the "rogue drum" theory, was that one of the drums of HTH contained an organic contaminant, inserted either by Olin or a...