Cities Service Co. v. Lee-Vac, Ltd.

• Decision Date: 28 May 1985
• Docket Number: No. 84-4192,LEE-VA,LTD,84-4192
• Parties: CITIES SERVICE COMPANY, Plaintiff, v., Defendant-Third Party Plaintiff-Appellant, American Hoist & Derrick Company, Defendant-Third Party Defendant-Appellee, Southwest Wire Rope, Inc., Third Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 238

761 F.2d 238

CITIES SERVICE COMPANY, Plaintiff, v. LEE-VAC, LTD., Defendant-Third Party Plaintiff-Appellant American Hoist & Derrick Company, Defendant-Third Party Defendant-Appellee Southwest Wire Rope, Inc., Third Party Defendant-Appellee.

No. 84-4192.

United States Court of Appeals Fifth Circuit.

May 28, 1985.

Burke & Mayer, James G. Burke, Jr., New Orleans, La., for defendant-third party plaintiff-appellant.

Michael J. Maginnis, New Orleans, La., for Am. Hoist.

Appeal from the United States District Court for the Western District of Louisiana.

Before THORNBERRY, REAVLEY and HIGGINBOTHAM, Circuit Judges.

REAVLEY, Circuit Judge:

In an action brought by Cities Service Co. against both American Hoist & Derrick Co. and Lee-Vac, Ltd. for property damage, the district court found that Lee-Vac's negligence was the sole cause of the accident. Based on this finding the district court ordered Lee-Vac to pay Cities Service's damages and to indemnify American Hoist for the expenses of its successful defense. Lee-Vac appeals from the district court's order that it alone pay for Cities Service's damages and that it indemnify American Hoist. We reverse the indemnity part of the judgment.

The Cities Service dock on the bank of the Calcasieu River near Lake Charles, Louisiana was struck by Lee-Vac's barge, driven by its tug, in the early morning hours of July 4, 1979. At some point prior to the accident a socket, making the starboard wire rope that secured the tug and barge, failed. The socket was manufactured by American Hoist. Cities Service sued Lee-Vac and American Hoist. The latter two cross-claimed against each other. Five years after the collision and three years after the lawsuit began (an expensive period for the litigants), the relative liability of Lee-Vac and American Hoist was decided by the district judge. He awarded Cities Service its damages against Lee-Vac, absolved American Hoist of liability, and awarded American Hoist its expenses from Lee-Vac. Lee-Vac persists here.

First, Lee-Vac denies sole liability for Cities Service's damages because American Hoist's socket was found to be defective by the district court and therefore, says Lee-Vac, American Hoist should be treated as a co-tortfeasor. This evades the true disposition of the case by the trial court. American Hoist was held to be free of all liability for Cities Service's damages, because the negligent operation of the tug on the part of the employee of Lee-Vac was held to be the sole cause of those damages.

Lee-Vac squabbles about the factfinding of the district court and relies on a statement made by the judge while discussing the cause of the accident: "The evidence does not preponderate one way or the other." However, there can be no doubt but that the court did find against the existence of a causal connection between the failure of this socket and the collision of the barge into the dock. The judge at that time also said that Lee-Vac was solely responsible for the collision. In the ruling of July 27, 1983, the court said: "The sole legal cause of Cities' damages was the negligence of Lee-Vac." Upon reconsideration and by its ruling of August 16, 1983, the court said: "Though American created a defective product, the defect was not the proximate cause of the injury and therefore, American has been absolved of all liability." And in the final opinion of July 1, 1984, the court said:

It is true that at trial the court found that American Hoist had produced a defective spelter socket. However, the evidence also showed that, but for the negligence of Lee-Vac, the socket never would have failed. The accident was solely caused by Lee-Vac's negligence and without this negligence, American Hoist never would have been brought into this lawsuit.

The ruling of the court was quite clear that American Hoist contributed no cause to the collision.

Lee-Vac next argues that American Hoist is not entitled to be indemnified for its attorney's fees and costs in defending against the action brought by Cities Service. We agree.

Indemnity is a shifting of responsibility from the shoulders of one person to another, W. Prosser, The Law of Torts Sec. 51 (4th ed. 1971), and may arise either in contract or in tort, Humble Oil & Refining Co. v. Naquin, 414 F.2d 912, 914 (5th Cir.1969). In tort, indemnity may arise because of the relation of the indemnitor to the indemnitee and the consequent duty owed, because of a significant difference in the degree of their conduct, or because of a difference in character of the duties owed by the two to the injured party. W. Prosser, The Law of Torts Sec. 51 (4th ed. 1971).

The first kind of tort indemnity, predicated upon the relationship and duty owed between the parties, is illustrated in Federal Marine Terminals, Inc. v. Burnside Shipping Co., 394 U.S. 404, 89 S.Ct. 1144, 22 L.Ed.2d 371 (1969). In that case, a stevedoring company brought an action for indemnity against the shipowner to recover the compensation it paid to a longshoreman's widow. The Court held that the shipowner's duty of care to those on board extended to the stevedoring company and that the breach of that duty gave rise to a cause of action by the stevedoring company for any damages proximately caused. Id. at 415, 89 S.Ct. at 1150, 22 L.Ed.2d at 380. In other words, the stevedoring company and the shipowner had a special relationship and, as a consequence, the shipowner owed the stevedoring company a duty of care not to injure any of its longshoremen, thereby rendering the stevedoring company liable for compensation benefits.

The second kind of tort indemnity, where there is liability of both but a significant difference in the kind or quality of...