HOLT HAULING & WAREHOUSING SYS. v. M/V MING JOY

• Decision Date: 17 July 1985
• Docket Number: Civ. A. No. 81-1897.
• Citation: 614 F. Supp. 890
• Parties: HOLT HAULING & WAREHOUSING SYSTEMS, INC. v. M/V MING JOY, her engines, machinery, tackle and apparel, etc., Retla Steamship Company, and Yangming Marine Transport Corporation v. HOLT MARINE TERMINAL, INC.
• Court: U.S. District Court — Eastern District of Pennsylvania

614 F. Supp. 890

HOLT HAULING & WAREHOUSING SYSTEMS, INC. v. M/V MING JOY, her engines, machinery, tackle and apparel, etc., Retla Steamship Company, and Yangming Marine Transport Corporation v. HOLT MARINE TERMINAL, INC.

Civ. A. No. 81-1897.

United States District Court, E.D. Pennsylvania.

July 17, 1985.

Harry P. Begier, Jr., Philadelphia, Pa., for plaintiff.

Douglas P. Riblet, Henry C. Lucas, III, John Mattioni, Philadelphia, Pa., for defendant.

OPINION

LOUIS H. POLLAK, District Judge.

This case arises out of a March, 1978 accident which damaged Pier 7 on Newton Creek in Gloucester, New Jersey. According to the Complaint, two heavy steel coils fell onto the pier during the course of unloading cargo from the S.S. Ming Joy. Complaint ¶¶ 12-15. The coils allegedly caused extensive damage to the surface of the pier and to the sea wall. Holt Hauling and Warehousing Systems, Pier 7's owner, sued the Ming Joy, its owner (Yangming Marine Transport, hereinafter "Yangming"), and its charterer (Retla Steamship Company, hereinafter "Retla"), alleging that the unseaworthiness of the Ming Joy and the negligence of its personnel caused the accident. Yangming then filed a third-party complaint against the stevedore (Holt Marine Terminal, hereinafter "Holt Marine"), alleging that the stevedore's negligence in unloading the cargo was the cause of the accident. Holt Marine counterclaimed, alleging that Yangming's negligence had cost Holt Marine the use of Pier 7 for some period of time. The counterclaim, as amended, seeks recovery of "stevedoring and related revenues" which Holt Marine lost due to the pier's incapacitation.

The primary claim in this case has settled, so that the sole remaining dispute is between the Yangming and the Ming Joy on the one hand, and Holt Marine on the other. Yangming has moved for summary judgment on Holt Marine's counterclaim, arguing that it is barred by Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927). In that case, the Supreme Court, per Justice Holmes, rejected the claim of a ship's time charterer for loss of use of the ship due to the negligence of the defendant dry dock. Yangming contends that Robins Dry Dock establishes that Holt Marine cannot recover in tort for economic losses occasioned by damage to property in which Holt Marine had no proprietary interest. Holt Marine accepts the validity of Robins Dry Dock and the doctrine it spawned, but argues that it does not bar the counterclaim against Yangming because Holt Marine in fact had a valid property interest in Pier 7 under New Jersey law. Both parties have briefed and orally argued Yangming's motion.

In addition to their legal arguments, the parties have devoted substantial energy and paper to characterizing the web of business relationships surrounding Pier 7. On this motion for summary judgment, of course, I must resolve all factual disputes in Holt Marine's favor. Fed.R.Civ.P. 56(c); Gans v. Mundy, 762 F.2d 338, 340 (3d Cir.1985). Bearing this standard in mind, I consider below the nature of Holt Marine's relationship to Pier 7 and the significance of that relationship under Robins Dry Dock.

I

Both Yangming and Holt Marine presume that Robins Dry Dock bars Holt Marine from recovering on its counterclaim unless Holt Marine had a proprietary interest in Pier 7 at the time of the accident. Consequently, both parties treat the nature of Holt Marine's interest in the pier as the primary issue for purposes of deciding Yangming's motion.

Pier 7's owner was, at all relevant times, Holt Hauling and Warehousing Systems. In July 1976, Holt Hauling leased Pier 7 to Pierpoint Management Corporation. The lease agreement (which is attached as Exhibit A to Holt Marine's answer to Yangming's motion for summary judgment) is triangular: it involves Holt Hauling as landlord, Pierpoint as tenant, and Retla Steamship Company as the chief supplier of shipping business to the pier. (In response to questions from the bench at oral argument, the parties stated that Retla is Pierpoint's corporate parent.) Pierpoint was to operate and maintain the pier, pay utilities, and indemnify Holt Hauling for any liabilities incurred because of Pierpoint's activities. Rent was to be paid according to the tonnage of Retla cargo unloaded at the pier: base rental was $300,000 per year (based on $2 per short ton on the first 150,000 tons of steel and wood products to be unloaded), plus $1 for every short ton over 150,000 which might be unloaded.

Shortly after Pierpoint leased the pier from Holt Hauling, Pierpoint and Holt Marine entered into an informal agreement permitting Holt Marine to use Pier 7 under certain conditions. Under this agreement, Holt Marine was permitted to use Pier 7 to unload cargo from vessels which it had chartered or which it had otherwise induced to unload cargo at Pier 7, to the extent that such use did not interfere with Pierpoint's use of the pier.¹ Holt Marine was not, during the period covered by this agreement, the only stevedore working at Pier 7. Pierpoint employed Cooper Stevedoring to unload Retla vessels; in addition, Cooper was free to bring in other vessels for unloading as long as it did not interfere with Retla business.²

In May 1977, Pierpoint made Holt Marine "our exclusive sub-contractor of certain terminal services contemplated at Pier 7."³ Holt Marine was henceforth to "perform all customary terminal services" as to both Retla vessels and Holt-induced vessels.⁴ Under this revised arrangement, Holt Marine was free to arrange to berth vessels as long as its berthing arrangements were consistent with the needs of Retla vessels. In order to implement this limitation, Holt Marine was kept apprised of when Retla vessels would be docking at Pier 7.⁵ Holt Marine was not required to give Pierpoint advance notice of its plans to berth non-Retla vessels, but did so "as a courtesy."⁶

In return for this largely unrestricted use of Pier 7, Holt Marine agreed to pay Pierpoint according to the volume of cargo unloaded at the pier. No base rental was charged; payment was strictly according to business volume.⁷ In addition to its payment obligations, Holt Marine agreed to assume (1) Pierpoint's routine maintenance obligations under Pierpoint's lease agreement with Holt Hauling, and (2) Pierpoint's liability insurance obligations under that lease agreement. Finally, Holt Marine was obliged to pay the cost of any utilities it required to perform its stevedoring services.⁸

The accident which gave rise to this lawsuit occurred while the Ming Joy, a Retla vessel, was being off-loaded at Pier 7. Holt Marine performed stevedoring services for the Ming Joy, as it apparently did for all other Retla vessels using Pier 7.

II

Both Yangming and Holt Marine assume that Robins Dry Dock bars recovery for negligently inflicted harm to a non-proprietary interest. For the reasons that follow, I find this a correct statement of the rule which Robins Dry Dock lays down. The parties further presume that, in order to apply that test to this case, I must look to the state law of New Jersey to determine whether Holt Marine had a "property" interest in Pier 7. This is incorrect. Robins Dry Dock and the cases which follow it establish a federal common law limitation on maritime tort recovery. The scope of that limitation turns not on the fine points of state property law but on the judicial economy concerns which spawned the limitation and which give it content. In order better to explain how those concerns apply in this case, I begin by briefly discussing Robins Dry Dock and the broader doctrine which it created. Then, I turn to the nature of the interests to which Robins Dry Dock applies, in light of the purposes which its doctrine serves. Finally, I return to the particular circumstances of this case, which present, in my view, a difficult problem in the application of Robins Dry Dock's sensible but sometimes confining limitation.

A

In Robins Dry Dock, the time charterers of a vessel⁹ sued the defendant dry dock for lost profits occasioned by the defendant's alleged negligence in repairing a damaged ship's propeller. At the time of the damage, the vessel was up for regular repairs for which the vessel's owner had contracted with the dry dock. The damage to the propeller required the ship to remain in dry dock an extra two weeks. The time charterers sought to recover for loss of use of the vessel during this two-week period.

The Supreme Court found that the time charterers had no claim for relief against the dry dock:

The contract of the petitioner dry dock with the owners of the vessel imposed no immediate obligation upon the petitioner to third persons ..., and whether the petitioner performed it promptly or with negligent delay was the business of the owners and of nobody else. But as there was a tortious damage to a chattel it is sought to connect the claim of the respondent time charterers with that in some way. The damage was material to them only as it caused the delay in making the repairs, and that delay would be a wrong to no one except for the petitioner's contract with the owners. The injury to the propeller was no wrong to the respondents but only to those to whom it belonged. But suppose that the respondent's loss flowed directly from that source. Their loss arose only through their contract with the owners — and while intentionally to bring about a breach of contract may give rise to a cause of action, ... no authority need be cited to show that, as a general rule, at least, a tort to the person or property of one man does not make the tort-feasor liable to another merely because the injured person was under a contract with that other unknown to the doer of the wrong.

275 U.S. at 308-09, 48 S.Ct. at 135-36. The Court noted that the time charterers had no property interest in the vessel, and that, unlike a demise charterer, the time charterers did not even have "possession" of the vessel. Id. at...