Federal Commerce & Nav. Co., Ltd. v. M/V MARATHONIAN

• Citation: 392 F. Supp. 908
• Decision Date: 08 April 1975
• Docket Number: No. 74 Civ. 1899 (JMC).,74 Civ. 1899 (JMC).
• Parties: FEDERAL COMMERCE & NAVIGATION CO., LTD., Plaintiff, v. The M/V MARATHONIAN, her engines, etc., and Europa Shipping Corporation, Defendants.
• Court: U.S. District Court — Southern District of New York

392 F. Supp. 908

FEDERAL COMMERCE & NAVIGATION CO., LTD., Plaintiff, v. The M/V MARATHONIAN, her engines, etc., and Europa Shipping Corporation, Defendants.

No. 74 Civ. 1899 (JMC).

United States District Court, S. D. New York.

April 8, 1975.

Healy & Baillie, New York City (Nicholas J. Healy and Edward J. Miller, New York City, of counsel), for plaintiff.

Burlingham, Underwood & Lord, New York City (Kenneth H. Volk and Michael C. Bynane, New York City, of counsel), for defendants.

MEMORANDUM DECISION

CANNELLA, District Judge:

Upon the authority of Robins Dry Dock & Repair Co. v. Flint, 275 U. S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927), the defendants have moved the Court for an order dismissing the complaint for failure to state a claim upon which relief can be granted.¹ As we find the decision in Robins controlling, the motion is hereby granted.

Accepting, as we must on motions of the instant nature, the allegations of the complaint as true, the facts giving rise to this controversy are easily stated. At all times here relevant, the plaintiff, Federal Commerce & Navigation Co., was the time charterer of the M.V. ROLWI under a time charter dated January 21, 1970. On October 2, 1973, the M.V. ROLWI was involved in a collision on Lake Michigan with the M.V. MARATHONIAN, a vessel owned and operated by the defendant Europa Shipping Corporation. Plaintiff alleges that "the aforesaid collision was not caused or contributed to by any fault or negligence on the part of Plaintiff, but was caused in whole or in part by fault and negligence of Defendant, the M.V. MARATHONIAN, and those in charge of the said vessel, and in particular by the operation of the said vessel at a highly excessive rate of speed in dense fog." (Complaint at ¶ 6.) It is further alleged in the complaint that as the result of this collision, "Plaintiff has sustained damages consisting of the loss of use of the M.V. ROLWI, and expenses incidental thereto, which, as nearly as can be estimated at present, will amount to approximately Seven Hundred Thousand ($700,000.00) Dollars . . . ." (Complaint at ¶ 7.)

To these facts, the Court's decision in Robins squarely applies. In Robins, a time charterer sued a drydocker to recover damages (loss of use and profits) arising from a delay in the release of the chartered vessel from drydock, such delay having been caused by the drydocker's negligent injury to the ship's propeller. Mr. Justice Holmes, after first rejecting the notion that a recovery might be had by the charterer under contract and third-party beneficiary principles, posed the question of the case in these terms: "whether the charterers have an interest protected by the law against unintended injuries inflicted upon the vessel by third persons who know nothing of the charter." 275 U.S. at 308, 48 S.Ct. at 135. To that question the Justice, writing for a unanimous Court, answered:

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 citation omitted, 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. Citation omitted. The law does not spread its protection so far.

Id. at 308-09, 48 S.Ct. at 135.

The Supreme Court's holding in Robins was later summarized by Judge Learned Hand in the following fashion:

The Supreme Court thought that the only basis for charging the drydocker with liability was because he had prevented the performance of the charterparty by the promisor — the owner — and that interference by a third person with the performance of a contract was an actionable wrong only if it was intentional. The Court thought it irrelevant that this resulted in exonerating the drydocker from nearly all liability through the fortuity that the profitable use of the ship had been divided between the owner and the charterer: the difficulty went deeper; the drydocker had committed no legal wrong against the charterer at all, though he had caused it serious damage.

Agwilines, Inc. v. Eagle Oil & Shipping Co., 153 F.2d 869, 871 (2 Cir.), cert. denied, 328 U.S. 835, 66 S.Ct. 980, 90 L. Ed. 1611 (1946). Simply put, the rule of Robins is clear: A time charterer (who is without any property right in the vessel)² cannot recover pecuniary losses sustained as the result of a third-party's negligent interference with the performance of the contract between the charterer and the vessel's owner.

Mr. Justice Holmes' decision in Robins and the principle of law established therein were followed by the Court of Appeals for this Circuit in the Agwilines case, supra, and this view has been consistently adhered to by other federal courts.³ Contrary to plaintiff's assertion, Robins correctly reflects the present state of law concerning negligent interference with contract, as evidenced by the Restatement (Second) of Torts § 766B (Tent.Draft No. 14, 1969), which states in relevant part:

(1) Except as stated in subsection (2) concerning the negligent failure to transmit a telegraph message, and in the case of bodily harm to a servant, there is no liability for pecuniary harm caused by

(a) negligent interference with the performance of a contract, or

(b) negligently causing a third person not to enter into or continue a business or other advantageous relation with another.⁴

See also, 46 ALI Proceedings 205-22 (1969); W. Prosser, Law of Torts § 129 at 938-42 (4 ed. 1971); Note, Negligent Interference with Economic Expectancy: The Case for Recovery, 16 Stan.L.Rev. 664 (1964).

We recognize, however, that the rule enunciated in Robins and the broader concept that negligent interference with the performance of a contract does not state a cognizable claim have been the subject of severe criticism by many commentators. See, e. g., 1 F. Harper & F. James, The Law of Torts § 6.10 at 501-505 (1956);⁵ Prosser, supra, at 940 ("no very satisfactory reason has been given for this refusal of a remedy in negligence cases."); 88 Harv.L.Rev. 444 (1974). Indeed, were this Court now free to write upon a tabula rasa and not constrained by the weight of precedent, we would reject the negligent interference with contract doctrine in favor of a negligence-causation-foreseeability analysis, such as that adopted by Chief Judge Kaufman in Petition of Kinsman Transit Co., 388 F.2d 821, 823-24 (2 Cir. 1968) Kinsman II.⁶See also, Ira S. Bushey & Sons, Inc. v. United States, 398 F.2d 167, 171-73 (2 Cir. 1968); In re Lyra Shipping Co., Ltd, 360 F.Supp. 1188, 1192-94 (E.D.La.1973); Chicago & Western Indiana R.R. Co. v. The Buko Maru Nos. 70 C 2259 and 70 C 1837 (N.D.Ill.1973), aff'd, 505 F.2d 579 (7 Cir. 1974); and see the recent English case of Spartan Steel & Alloys Ltd v. Martin & Co. (Contractors) Ltd., 1972 3 All E.R. 557 (C.A.) (particularly the opinion of E. Davies, L.J. at 569).⁷

In the instant case, however we feel bound by the Supreme Court's decision in Robins. We believe that the Robins decision must be adhered to by the lower federal courts, at least in instances involving the factual contours of that case, namely the negligent interference with a time charterer's contract rights by third parties, until such time as the Supreme Court directs otherwise. A nisi prius judge should not overturn the non-constitutional precedents established by the Supreme Court because as the Second Circuit has aptly put it, "we continue to believe that the Supreme Court should retain the exclusive privilege of overruling its own decisions, save perhaps when opinions already delivered have created a near certainty that only the occasion is needed for pronouncement of the doom." Salerno v. American League of Professional Baseball Clubs, 429 F.2d 1003, 1005 (2 Cir. 1970) cert. denied, 400 U.S. 1001, 91 S.Ct. 462, 27 L.Ed.2d 452 (1971). See also, Rederi A/B Soya v. Evergreen Marine Corp., 1972 A.M.C. 1555, 1566 (E.D.Va.1971). No recent decision of the High Court has presaged the doom of Robins, and, therefore, we adhere to it in the matter at bar.

For all of the reasons aforestated, the defendants' motion is hereby granted and the Clerk of the Court is hereby directed to enter judgment dismissing the complaint as to all defendants.

It is so ordered.

1 On October 15, 1974, the defendants interposed the instant motion and denominated it as one pursuant to Fed.R.Civ. 12(b)(6). It appears, however, from the files and records of this cause that prior thereto, on June 27, 1974, the defendants filed an answer to the plaintiff's complaint. Thus, a motion under Rule 12(b)(6) cannot properly lie because "A motion making any of these defenses shall be made before pleading. . . ." Fed.R.Civ.P. 12(b). However, as the Seventh Circuit has pointed out, "A motion to dismiss made after the filing of an answer serves the same function as a motion for judgment on the pleadings and may be regarded as one." Schy v. Susquehanna Corp., 419 F.2d 1112, 1115 (7 Cir.), cert. denied, 400 U.S. 826, 91 S.Ct. 51, 27 L.Ed.2d 55 (1970). Accordingly, we deem the instant motion to constitute one for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) (or, alternatively, for summary judgment under Rule 56(b)). As Judge Clark stated in Central Mexico Light & Power Co. v. Munch, 116 F.2d 85, 87 (2 Cir. 1940), "Since the same relief is sought, the difference in name is unimportant."

2 As Mr. Justice Holmes aptly pointed out in fashioning the rule of Robins, a demise charter is not involved in the circumstances under consideration, and, therefore, the consequences of a property interest in the charterer need not be looked into. Professors Gilmore and Black indicate the distinctions between time and demise charters in the following terms:

The Time Charter. In this form . . . the owner's people continue to navigate...