J. Ray McDermott & Co. v. SS EGERO

• Decision Date: 07 January 1972
• Docket Number: No. 71-1885 Summary Calendar.,71-1885 Summary Calendar.
• Citation: 453 F.2d 1202
• Parties: J. RAY McDERMOTT & CO., Inc., Plaintiff-Appellee, v. The SS EGERO, her engines, tackle, etc., Skjelbreds Rederi A/S, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

453 F.2d 1202 (1972)

J. RAY McDERMOTT & CO., Inc., Plaintiff-Appellee, v. The SS EGERO, her engines, tackle, etc., Skjelbreds Rederi A/S, Defendants-Appellants.

No. 71-1885 Summary Calendar.^*

United States Court of Appeals, Fifth Circuit.

January 7, 1972.

Benjamin W. Yancey, Rufus C. Harris, Jr., Terriberry, Carroll, Yancey & Farrell, New Orleans, La., for defendants-appellants.

Neal D. Hobson, Milling, Saal, Benson, Woodward & Hillyer, New Orleans, La., for plaintiff-appellee.

Before GEWIN, GOLDBERG and DYER, Circuit Judges.

GEWIN, Circuit Judge:

The SS EGERO and her owner, Skjelbreds Rederi A/S, appeal from a judgment finding that the plaintiff, J. Ray McDermott & Co. (McDermott) is entitled to recover as an element of provable damages certain "standby" and "delay" expenses incurred in connection with an anchoring incident in the Mississippi River. Pursuant to a consent judgment on liability the parties stipulated that McDermott would recover 60% of its provable damages and the EGERO would recover 40% of its provable damages. A commissioner was appointed to determine what part of McDermott's claim should be regarded as provable damages. The Commissioner found for McDermott on all items claimed and his report was confirmed by the district court. We affirm.

The Commissioner found that McDermott, and its wholly owned subsidiary, Associated Pipe Line Contractors, Inc. (Associated), as joint-venturers, prepared and submitted a bid for a contract to construct for Texaco, Inc. dual twenty-two inch gas pipelines under and across the Mississippi River. McDermott and Associated were to share profits, costs, and risks with each company supplying equipment, labor and supervision for the project. On August 10, 1965, McDermott contracted with Texaco to construct these pipelines. On September 1, 1965, McDermott entered into a subcontract with Williams-McWilliams Industries, Inc. (McWilliams) for all the hydraulic excavation work, including the back-filling of the pipeline trench in the bed of the river, required to fulfill the prime contract with Texaco. The subcontract provided for seven days standby time between the dredging and the backfilling, during which the pipelines would be laid. The subcontract also provided that McDermott would pay McWilliams $4,000.00 per day (less 5% discount) for standby time in excess of the seven days.

By October 19, 1965, the excavation of the trench in the river bed had been completed. One pipeline had been pulled across the river and preparations were being made by Associated to place the second pipeline in the trench. About 1:00 p. m. on October 19, 1965, the S/S EGERO dropped her anchor on or near the pipeline which was already in place. Because of the concern that the anchor may have fallen upon or become entangled with the pipeline special precautions were taken to see that the anchor could be raised without endangering the pipeline. Consequently it was not until 11:00 a. m. on October 20, 1965, that Associated was able to resume pulling the second pipeline into place. McDermott, under an assignment of Associated's claim for this interference with operations and the resulting 10 hour shutdown, asserted that it had suffered provable damages of $7,560.80.

McDermott additionally claimed as provable damages $38,633.35 which it paid to McWilliams for 10.16667 days that McWilliams' equipment stood by waiting to backfill the trench, over and above the seven days standby time provided for in the subcontract. During this time Associated and McDermott undertook the testing required to satisfy Texaco that the line was not damaged. Thereafter the line was accepted by Texaco and the backfilling completed by McWilliams.

The EGERO contends that the Commissioner and the district court erred in finding these two items were part of McDermott's provable damages. The EGERO argues that these damages arise from unintentional interference with contractual relations between McDermott and McWilliams and are therefore not actionable under Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927); and Agwilines, Inc. v. Eagle Oil & Shipping Co., Ltd., 153 F.2d 869 (2d Cir. 1946). Alternately the EGERO argues that the damages were not proximately caused by its negligence and that the damages...