782 F.2d 329 (2nd Cir. 1986), 85-7106, Dow Chemical Pacific Ltd. v. Rascator Maritime S.A.

Docket Nº:85-7106 and 85-7110.
Citation:782 F.2d 329
Party Name:DOW CHEMICAL PACIFIC LTD., Plaintiff-Appellee, v. RASCATOR MARITIME S.A., Intra-Span, Inc., Mahmud Ahmed, a/k/a Mahmud Sipra, Miles A. Galin, M.D., the Sanko Steamship Co., Ltd., Sanko Kisen (U.S.A.) Corp., M/V OGDEN FRASER, her engines, boilers, etc., and Ogden Fraser Transport, Inc., Defendants, Rascator Maritime S.A., Intra-Span, Inc., Mahmud Si
Case Date:January 21, 1986
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 329

782 F.2d 329 (2nd Cir. 1986)

DOW CHEMICAL PACIFIC LTD., Plaintiff-Appellee,

v.

RASCATOR MARITIME S.A., Intra-Span, Inc., Mahmud Ahmed,

a/k/a Mahmud Sipra, Miles A. Galin, M.D., the Sanko

Steamship Co., Ltd., Sanko Kisen (U.S.A.) Corp., M/V OGDEN

FRASER, her engines, boilers, etc., and Ogden Fraser

Transport, Inc., Defendants,

Rascator Maritime S.A., Intra-Span, Inc., Mahmud Sipra,

Miles A. Galin, M.D., and M/V Ogden Fraser,

Defendants-Appellants,

The Sanko Steamship Co., Ltd., Sanko Kisen (U.S.A.) Corp.,

Ogden Fraser Transport, Inc., Defendants-Appellees.

MANUEL INTERNATIONAL INC. and Manuel International D.I.S.C.,

Inc., Plaintiffs- Appellees,

v.

RASCATOR MARITIME S.A., Intra-Span, Inc., Mahmud Ahmed,

a/k/a Mahmud Sipra, Miles A. Galin, M.D., The Sanko

Steamship Co., Ltd., Sanko Kisen (U.S.A.) Corp., M/V OGDEN

FRASER, her engines, boilers, etc., and Ogden Fraser

Transport, Inc., Defendants,

Rascator Maritime S.A., Intra-Span, Inc., Mahmud Sipra,

Miles A. Galin, M.D., and M/V Ogden Fraser,

Defendants-Appellants,

The Sanko Steamship Co., Ltd., Sanko Kisen (U.S.A.) Corp.,

Ogden Fraser Transport, Inc., Defendants-Appellees.

Nos. 1130, 1131, 1132 and 1143, Dockets 85-7068, 85-7086,

85-7106 and 85-7110.

United States Court of Appeals, Second Circuit

January 21, 1986

Argued June 3, 1985.

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Raymond P. Hayden, New York City (Sanford E. Balick, John F. Ryan, Hill, Rivkins, Carey, Loesberg, O'Brien & Mulroy, New York City, on the brief), for plaintiffs-appellees.

W. Shelby Coates, Jr., New York City, for defendant-appellant Rascator Maritime S.A.

Robert E. Goldman, Garden City, N.Y. (Jesse I. Levine, John F. Kaley, Shaw, Goldman, Licitra, Levine & Weinberg, P.C., Garden City, N.Y., on the brief), for defendant-appellant Miles A. Galin, M.D.

John H. Gross, New York City (Ann V. Kramer, Anderson, Russell, Kill & Olick, P.C., New York City, on the brief), for defendants-appellants Intra-Span, Inc., and Mahmud Sipra.

Michael Marks Cohen, New York City (Elizabeth Reese, Burlingham Underwood & Lord, New York City, on the brief), for defendant-appellant M/V OGDEN FRASER and Defendant-Appellee Ogden Fraser Transport, Inc.

Philip J. Curtin, New York City (Mary T. Reilly, Zock, Petrie & Curtin, New York City, on the brief), for defendants-appellees The Sanko Steamship Co., Ltd., and Sanko Kisen (U.S.A.) Corp.

Before MESKILL, NEWMAN, and KEARSE, Circuit Judges.

KEARSE, Circuit Judge:

Defendants Rascator Maritime S.A. ("Rascator"), Intra-Span, Inc. ("Intra-Span"), Mahmud Ahmed, a/k/a Mahmud Sipra ("Sipra"), Miles A. Galin, M.D., and M/V OGDEN FRASER ("OGDEN FRASER") appeal from a series of judgments entered in the United States District Court for the Southern District of New York, after a bench trial of these consolidated actions before Kevin Thomas Duffy, Judge, awarding damages and attorneys' fees to plaintiff cargo owners, and indemnification and attorneys' fees to defendants ship owner and time charterer, on account of an improper deviation of the OGDEN FRASER and the discharge by the OGDEN FRASER of plaintiffs' cargoes at an unauthorized port, in breach of the carriage contracts and in violation of the Carriage of Goods by Sea Act, 46 U.S.C. Sec. 1300 et seq. (1982) ("COGSA"). On appeal, appellants mount many challenges to the district court's procedural decisions, its findings on the merits, and its determination to award attorneys' fees. We find merit only in the contention that the court did not make findings sufficient to support an award of attorneys' fees, and we remand for further proceedings on the matter of fees. In all other respects we affirm the judgments.

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I. BACKGROUND

Plaintiff Dow Chemical Pacific Ltd. ("Dow") was the owner of approximately 2,440,000 pounds polyethylene resin, which it sought, in December 1978, to ship aboard the OGDEN FRASER from Montreal, Canada, to Bombay, India. Plaintiffs Manuel International Inc. and Manuel International D.I.S.C., Inc. (together "Manuel"), were the owners of some 2,500 tons of steel which they sought, in December 1978, to ship aboard the OGDEN FRASER from New Orleans, Louisiana, to Bombay.

The OGDEN FRASER was a general cargo vessel owned by defendant Ogden Fraser Transport, Inc. ("Ogden"); it had been time chartered to defendant The Sanko Steamship Co., Ltd. ("Sanko"), through Sanko's agent, defendant Sanko Kisen (U.S.A.) Corp. ("Sanko Kisen"). In November 1978, the OGDEN FRASER was sub-time chartered by Sanko to Rascator, a Liberian corporation. Galin, a New York City ophthalmologist, was an individual who, as set out in greater detail in Part II.D.3. below, acted on behalf of Rascator. Intra-Span was a corporation which conducted business in the United States on behalf of Rascator; Sipra, a Pakistani residing in the United States, was president and sole stockholder of Intra-Span.

  1. The Events

    The pertinent events of the winter of 1978-79 are set forth in greater detail in a reported opinion of the district court, 594 F.Supp. 1490 (S.D.N.Y.1984), and will be summarized here. The Dow cargo of polyethylene resin was duly loaded on the OGDEN FRASER in Montreal. The vessel proceeded to New Orleans, where it was to pick up a total of 6,000 tons of steel belonging to Manuel and several other shippers. When the OGDEN FRASER arrived on January 24, 1979, behind schedule, some of the steel of the other shippers had been sent on other vessels, leaving less than their anticipated 3,500 tons to be carried by the OGDEN FRASER; some of Manuel's steel had been ice-bound on the Mississippi River and only 1,487 of its originally agreed 2,500 tons of steel were available to be loaded onto the vessel.

    The OGDEN FRASER sailed from New Orleans on or about February 2, 1979, carrying the Dow resin and the steel of Manuel and the other shippers, ostensibly heading for Bombay. On February 1, however, Gulf Stream Navigation, a corporation owned by Sipra, had instructed the OGDEN FRASER to sail not to Bombay, but instead to Cadiz, Spain--a port at which it had not been scheduled to call--and to discharge the steel and resin cargoes in Cadiz and proceed to three ports in Italy to pick up several new cargoes, which it would then carry to Dubai, U.A.E., and to Kuwait.

    The Manuel steel was shipped under 14 bills of lading, four of which had been issued to Manuel as "on board" bills in December 1978, prior to the arrival of the OGDEN FRASER, in order to allow Manuel to draw on a letter of credit that was soon to expire. Following the loading of its steel onto the vessel, Manuel tendered freight payment to Rascator through Intra-Span and requested the issuance of its remaining ten bills of lading. Rascator and Intra-Span rejected the tendered payment and refused to issue the remaining bills, apparently on the ground that the shipment by Manuel and the others of less steel than had originally been agreed had left Rascator with "deadfreight." Rascator commenced an action in the Southern District of New York, Rascator Maritime, S.A. v. Phillipps Overseas, Inc., 79 Civ. 0785 ("Rascator Suit"), seeking damages against, inter alios, Manuel and the other steel shippers for deadfreight and for the four prematurely issued bills of lading.

    Shortly after the refusal to issue Manuel's ten bills of lading, Sipra and Galin sought to persuade Manuel's president and vice president to join with them in a plan to appropriate the steel cargo aboard the OGDEN FRASER belonging to Manuel and the other shippers and to sell it to buyers in Pakistan. Manuel's officials responded to this scheme by causing Manuel to commence its own action in the Southern District

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    of New York, Manuel International, Inc. v. M/V OGDEN FRASER, 79 Civ. 0795, seeking relief against Rascator and the other defendants herein. The court, Gerard L. Goettel, Judge, ordered, without prejudice to Rascator's claims as asserted in the Rascator Suit, that the bills of lading be issued, and it enjoined the sale or disposition of Manuel's steel to anyone other than the proper consignees in Bombay. Pursuant to Judge Goettel's order, bills of lading were issued, signed "For Rascator Maritime S.A. By: Intra-Span Inc. as Agents." The defendants ignored, however, the injunction requiring the OGDEN FRASER to deliver the cargo only to its consignees in Bombay. Instead, the prior instruction to go to Cadiz was renewed, and the OGDEN FRASER proceeded to Cadiz, where it offloaded both Manuel's steel and Dow's resin.

    In the Rascator Suit, Manuel obtained an order from the court, Richard Owen, Judge, holding Rascator in contempt of court for its repeated failures to comply with orders of the court, and requiring Rascator to transship Manuel's steel to Bombay. The order stated that if Rascator failed to transship or to pay the monetary fines imposed for the contempt, the Rascator Suit would be dismissed with prejudice. Notwithstanding Judge Owen's order, defendants did not arrange for the transshipment to Bombay; nor would they release the steel to Manuel until, eventually, Manuel obtained a new court order requiring its release.

    Dow, which learned belatedly that its resin had been discharged in Cadiz, commenced the present action in June 1979 against Rascator, Intra-Span, Sipra, and Galin, and obtained an order requiring the defendants to release the resin offloaded in Cadiz so that Dow could transship it to Bombay. Dow later added Ogden, the OGDEN FRASER, Sanko, and Sanko Kisen as defendants to its action. Manuel brought a new action for damages against all of the defendants, and its action and Dow's were consolidated in July 1982 before Judge Duffy. In the consolidated actions...

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