American Home Assur. Co. v. L & L Marine Service, Inc.

• Decision Date: 07 July 1989
• Docket Number: No. 88-2074,88-2074
• Citation: American Home Assur. Co. v. L & L Marine Service, Inc., 875 F.2d 1351 (8th Cir. 1989)
• Parties: AMERICAN HOME ASSURANCE CO., Appellant, v. L & L MARINE SERVICE, INC., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1351

875 F.2d 1351

1989 A.M.C. 1817

AMERICAN HOME ASSURANCE CO., Appellant, v. L & L MARINE SERVICE, INC., Appellee.

No. 88-2074.

United States Court of Appeals Eighth Circuit.

Submitted Dec. 14, 1988.

Decided May 30, 1989.

As Amended July 6, 1989.

Rehearing Denied July 7, 1989.

Joseph A. Murphy and Peter M. Maginot, St. Louis, Mo., for appellant.

James W. Herron, St. Louis, Mo., for appellee.

Before ARNOLD and JOHN R. GIBSON, Circuit Judges, and BRIGHT, Senior Circuit Judge.

ARNOLD, Circuit Judge.

This admiralty case arises from the grounding of the barge APEX CHICAGO and the tugboat MAYA off the coast of Massachusetts on October 19, 1981. Both the barge and the tug were under charter to Apex R.E. & T. Inc., (Apex Towing), a subsidiary of Apex Oil Co. (Apex Oil). Both corporations were insured for this voyage by American Home Assurance Co. (American Home). After paying several settlements on claims relating to the accident, American Home brought this suit against L & L Marine Service, Inc. (L & L), the Missouri corporation which provided a crew for the tug MAYA under contract with Apex Towing. As subrogee of Apex Towing and Apex Oil, American Home seeks to recover for the negligent operation of the MAYA by L & L's crew.

The District Court ¹ found that the accident was caused equally by the negligent navigation of the MAYA by L & L's crew and the unseaworthy condition of the tug provided by Apex Towing. American Home Assurance Co. v. L & L Marine Service, 688 F.Supp. 502, 507 (E.D.Mo.1988). The Court awarded judgment to American Home for one-half of the sum of provable damages, a sum which the District Court calculated at $58,671.72, plus prejudgment interest. On appeal, American Home argues that the District Court clearly erred in finding the MAYA unseaworthy, and in assessing Apex Towing's resulting proportionate fault in the accident to be equal to that of L & L's crew. American Home further argues that the District Court erred in reducing or disallowing recovery for certain operations in the rescue of the grounded craft, such as the towing of the grounded barge by a nearby tugboat, the lightering (or transfer) of the APEX CHICAGO's cargo to another barge, and the repairs made on the APEX CHICAGO's hull. With one exception, we affirm the conclusions of the District Court. Insofar as the District Court excluded the costs of lightering the APEX CHICAGO's cargo and repairing its hull from the subtotal of provable damages, we vacate its decision and remand for further proceedings to determine whether the lightering and repair costs should be included in the damages.

I.

On the night of October 18-19, 1981, the tug MAYA was towing the barge APEX CHICAGO from Carteret, New Jersey to Boston, Massachusetts. The APEX CHICAGO carried a cargo of 1.76 million gallons of unleaded gasoline owned by Apex Oil. The crew of the MAYA were employees of L & L, which operated the barge and tug under agreement with Apex Towing. Both the barge and tug were owned by Central Barge & Boat Co., which chartered them to Apex Towing.

The vessels' anticipated route from Carteret to Boston went through Long Island Sound, waters which are protected from the higher seas and more adverse weather of the Atlantic Ocean, then through the unprotected passages of Block Island Sound and Rhode Island Sound, and finally to Buzzard's Bay on the Massachusetts Coast, which leads to Cape Cod Canal and Boston Harbor.

Throughout the preceding day, October 18th, the National Oceanic and Atmospheric Administration (NOAA) had issued small-craft advisories warning of increasingly rough weather along the route of the MAYA. The crew of the MAYA nevertheless left the protected waters of Long Island Sound and ventured into the higher seas of Block Island Sound and Rhode Island Sound. By 6:00 p.m. on October 18, NOAA had upgraded the small-craft advisory in effect for that portion of the Atlantic Coast to gale warnings of winds 20 to 35 knots. Instead of returning to protected waters, the crew of the MAYA continued to make for Buzzard's Bay.

At the time, the MAYA was towing the APEX CHICAGO with a towing cable mounted on a winch on the MAYA's exposed stern. The cable had a breaking strength of 133,000 pounds, a strength which both parties' expert witnesses would later testify was significantly lower than the breaking strength required under industry standards. Furthermore, the tow cable was let out to only half of its 1500-foot length throughout the journey. In severe weather, the stress on the towing cable could have been reduced by letting the cable out to its full length. The crew was prevented from doing this, however, by an antiquated manual release mechanism on the towing winch, which exposed crew members attempting to let out more cable to serious danger in rough weather.

In the early morning hours of October 19th, the MAYA continued to make its way through Rhode Island Sound toward Buzzard's Bay into increasingly severe weather, with winds up to 35 knots and seas of eight to ten feet. The squalls were intermittently so intense that the MAYA's radar became inoperative, and visibility approached zero. At about 12:45 a.m., the tow line to the APEX CHICAGO broke. Because of the intensity of the storm, the crew did not discover that the barge had come adrift until thirty minutes later. The MAYA then doubled back to retrieve the barge. By 2:30 a.m., the crew of the MAYA sighted the APEX CHICAGO aground on the Hen and Chickens Shoals, one mile off the Massachusetts coast, leaking gasoline through a gash in its hull. In attempting to pull the barge from the rocks, the tug further damaged the barge by backing into its bow. The MAYA's fuel filters became clogged during this rescue attempt, and the tug went out of control, leaving both the MAYA and the APEX CHICAGO aground on the Hen and Chickens rocks.

The stranded tug and barge were finally freed when a Coast Guard vessel arrived and pulled both the MAYA and the APEX CHICAGO from the shoals to safety, after attaching a hawser to each craft. Two privately owned tugboats, the CHICOPEE and the JAGUAR, helped tow the vessels to port. The APEX CHICAGO's cargo of gasoline was lightered, or transferred, to the barge PRINCESS B. for completion of the voyage.

In the aftermath of the accident, American Home paid several sizeable claims to, or on behalf of, Apex Oil. American Home paid a total of $105,113.84 to Apex Oil under its cargo insurance policy for the gasoline lost in the accident and the cleanup required after the spill. After the marine insurance brokerage firm for Apex Oil, Johnson & Higgins, apportioned the cost of the various charges resulting from the accident between Apex Oil and the owner of the vessels, Central Barge & Tug, American Home paid $48,011.65 for Apex Oil's apportioned share of the cost of repairing the APEX CHICAGO's hull. American Home also paid $41,572.12 for Apex Oil's portion of the charges for lightering its cargo to the PRINCESS B. Finally, American Home defended two widely dissimilar claims from the owners of the tugs which assisted the stranded vessels. The owner of the CHICOPEE submitted a bill for $6,114.80 for towing services, while the owners of the JAGUAR claimed a much higher sum for salvage. After an arbitration before the American Institute of Marine Underwriters which sustained the JAGUAR's claim, American Home paid $47,190.73 for its share of the salvage claim. L & L did not participate in any proceedings arbitrating claims or adjusting the proportionate cost between the owners of the cargo and the owners of the vessels.

American Home then brought this action against L & L to recover for the damages resulting from the accident, which American Home alleges was proximately caused by the negligent operation of the MAYA by L & L's crew. After trial, the District Court found that the accident was caused equally by negligent navigation by L & L's crew and by the unseaworthy condition of the MAYA's understrength towing cable and defective stern winch. The Court accordingly held L & L liable for one-half of the damages of the accident, which it calculated as one-half the total paid by American Home for loss of cargo, pollution and cleanup costs, and the towing charges for the CHICOPEE and the JAGUAR. The Court held, however, that the settlement paid on the JAGUAR's salvage claim was excessive, in that the JAGUAR was engaged in towage only, and not salvage. As a result, the District Court limited American Home's recovery for the cost of the JAGUAR's services to the same towage charge for $6,114.80 submitted by the CHICOPEE. The Court did not include the costs of lightering or hull repair paid by American Home in the total of provable damages.

II.

On appeal, American Home challenges the District Court's conclusion that the MAYA was unseaworthy and that its unseaworthiness was as much a proximate cause of the accident as the crew's negligence. We review these factual conclusions only for clear error, and we find no such error here.

The essence of American Home's position is that the MAYA is not a coastal tug designed to operate in unprotected waters during rough weather, and so Apex Towing (in whose shoes American Home now stands) should not be charged...