American Independent Oil Company v. Alkaid

• Decision Date: 22 November 1967
• Docket Number: No. 61 Ad. 1014.,61 Ad. 1014.
• Citation: 289 F. Supp. 329
• Parties: AMERICAN INDEPENDENT OIL COMPANY, Plaintiff, v. M. S. ALKAID, her engines, etc., and Alvion Steamship Corporation, and Clyde Valley, Defendants, and against Merritt-Chapman & Scott Corporation, Defendant-Impleaded.
• Court: U.S. District Court — Southern District of New York

289 F. Supp. 329

AMERICAN INDEPENDENT OIL COMPANY, Plaintiff, v. M. S. ALKAID, her engines, etc., and Alvion Steamship Corporation, and Clyde Valley, Defendants, and against Merritt-Chapman & Scott Corporation, Defendant-Impleaded.

No. 61 Ad. 1014.

United States District Court S. D. New York.

November 22, 1967.

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Hill, Rivkins, Warburton, McGowan & Carey, New York City, for plaintiff; Allan B. Lutz, Clare E. Walker, New York City, of counsel.

Zock, Petrie, Sheneman & Reid, New York City, for defendants M/V Alkaid and Alvion Steamship Corp.; John R. Sheneman, James D. Hanlon, New York City, of counsel.

Burlingham, Underwood, Barron, Wright & White, New York City, for defendant Clyde Valley; Eugene Underwood, New York City, of counsel.

Foley, Orainger & Darby, New York City, for defendant-impleaded Merritt-Chapman & Scott Corp.; Walter A. Darby, Jr., William F. Norton, Jr., New York City, of counsel.

WYATT, District Judge.

This is a suit in admiralty by the owner of a cargo of crude oil on account of (a) loss of a part of the oil and (b) contamination of other parts of the oil. The suit has been tried to the Court on the issue of liability; if there is liability, damages are by the pretrial order to be later determined or agreed upon.

There is jurisdiction under 28 U.S.C. § 1333.

Plaintiff American Independent Oil Company, Incorporated (Oilco) wanted to ship crude oil from the Persian Gulf to 138th Street and East River, New York City.

Defendant Alvion Steamship Corporation (Alvion) is the owner of the Motor Ship Alkaid.

Oilco chartered the Alkaid to carry the oil. About June 15, 1960 the Alkaid loaded some 22,500 long tons of fuel oil at a Persian Gulf (Kuwait) port; this oil belonged to Oilco. On July 14, 1960 the Alkaid reached an anchorage in the Narrows off Stapleton, Staten Island. About 0130 in the morning of July 15, two tugs belonging to Moran Towing & Transportation Co., Inc. (Moran) joined the Alkaid at the anchorage and Clyde Valley, a licensed pilot, went aboard the Alkaid. Daylight Saving Time was then in effect in New York (General Construction Law, McKinney's Consol. Laws, c. 22, § 52) and times expressed herein are Eastern Daylight Saving Time. The ship got under way for its destination up the East River, with Valley acting as pilot and with the tugs accompanying. Shortly after passing under the Williamsburg Bridge going upriver, the ship struck something below the water, ruptured some of her cargo tanks, and lost some oil cargo. This was about 0233 on the morning of July 15 and is referred to as the "upriver stranding"; the ship did not stop or even lose speed when it struck the object below water.

The injured ship continued upriver to the area near East 42nd Street where she was intentionally pushed to the west side of the East River alongside the seawall near the United Nations Building. She was held by the tugs in position against the wall, her bow upriver.

During the morning of July 15, Alvion arranged for salvage to be performed by Merritt-Chapman & Scott Corporation (Merritt), a professional salvor. About 1330 on July 15, the Master of the Alkaid signed a salvage agreement with Merritt and Merritt then took over control of the ship.

Merritt took the ship down river in the afternoon of July 15. As she was going down the East River, with three tugs now assisting, she stranded in an area slightly above the Williamsburg Bridge; this was about 1540 in the afternoon of July 15 and is referred to as the "downriver stranding". Merritt was able to refloat the ship by 2245 on the same day and got her under way, with a fourth tug now assisting; the flotilla arrived about 0230 on July 16 at the anchorage off Stapleton (or nearby Tompkinsville), Staten Island. There the Alkaid remained until July 20, during which period a part of her cargo oil was transferred to four barges. These barges took their cargoes to a pier of the Bayonne Terminal Warehouse Company at Bayonne, New Jersey, and discharged the oil into shore tanks.

On July 20, the Alkaid was itself moved to the pier at Bayonne and on the same date began discharging cargo oil (including some mixed with water) into shore tanks. Discharge was completed on July 28. Thereafter the ship was taken to a drydock and was delivered by the salvor to the owner on August 10, 1960.

As a result of the events described, there was a loss of cargo by leakage from the ship. In addition, salt water had become mixed with some of the oil before discharge at Bayonne; this mixture had to be treated to separate the oil from the salt water. As to a quantity of the mixture, such treatment was successful. As to the rest of the mixture discharged at Bayonne, the treatment was not successful; the water could not be eliminated to the extent necessary to meet commercial standards and this part of the cargo had to be sold at a price discount. Oilco asserts that the oil in this part of the cargo was emulsified with water through the action of chemicals used in tank cleaning operations wrongfully performed before the ship was entirely discharged at Bayonne and that these chemical emulsifiers were negligently permitted to mix with the cargo.

The complaint filed by Oilco on August 28, 1961 contained three separate claims.

The first claim was against the ship and her owner, Alvion. It averred that the upriver stranding was due to the negligence and incompetence of those in charge of navigating the Alkaid in that she struck "a known and charted shoal or rocky area" resulting in "loss by leakage" of cargo and additionally in water contamination of cargo. Recovery was sought (a) for the value of all cargo lost by leakage, (b) for expenses of reconditioning the water contaminated cargo, and (c) for contribution of cargo to a salvage award as a general average expense. While the wrong alleged against the ship was negligence causing the upriver stranding, damages were asked (paragraphs Ninth and Tenth) for all cargo lost by leakage, whether during the upriver stranding, during the stay at the U. N. Building, or during the downriver stranding. This becomes of some significance to part of the claim of Oilco directly against the salvor, Merritt.

The second claim in the complaint was against Moran, its two tugs, and Pilot Valley. It averred that Moran was engaged by the shipowner to supply towage and pilotage of the Alkaid up the East River, and that Moran supplied the two tugs and its employee, Pilot Valley. The second claim averred that the damage to cargo from the upriver stranding was caused by the negligence of the two tugs or to their "insufficiency in power or inability * * * etc." or to the negligence and incompetence of Pilot Valley. Recovery was sought exactly as in the first claim.

The third claim in the complaint was against the ship and her owner. It was based on the claimed damage of cargo by emulsifiers at Bayonne and averred that this resulted from the wrongful conduct of tank cleaning operations while cargo was being discharged and from negligently discharging the tank cleaning material through cargo discharge lines, such material being thereby deposited in the same tank with cargo. Recovery was sought for the damage to that part of the cargo which had to be sold at a price discount.

Jurisdiction was duly obtained over the ship, the tugs, and the other parties defendant.

Answers were filed which put in issue the claims made.

The ship and her owner duly brought in Merritt by impleading petition under old Supreme Court Admiralty Rule 56 (it being long before the unification of admiralty and civil practice, effective July 1, 1966).

Merritt duly answered the complaint and the petition, thus putting in issue the averments of the complaint as well as those of the impleading petition.

Alvion moved in advance of trial to dismiss the first claim (that against the ship and her owner) as insufficient on its face. The position taken by Alvion was that this claim was based on negligence in pilotage and navigation, whereas the charter party specifically provides that neither the ship nor the owner shall be liable for any such negligence. The position taken by Oilco was that under the charter provision the ship was not excused for such negligence if there was "personal design or neglect of the Owner" (wording which in fact applies only to the "fire" exception) or if "caused by want of due diligence on the part of the Owner to make the Vessel seaworthy or to have her properly manned, equipped and supplied" (wording which in fact applies only to the "unseaworthiness" exception). Oilco also urged that the claim ought not to be dismissed before trial but that the questions raised ought to be answered after all evidence was taken. The motion of Alvion was denied by Judge Edelstein without opinion (from the Bench).

Plaintiff Oilco elected to discontinue as against Moran and the two tugs. An order of discontinuance as to them was made by the Court on the stipulation of all parties.

It is agreed by all parties that the Carriage of Goods by Sea Act of 1936 applies (46 U.S.C. § 1300 and following ("Cogsa")).

I The Claim for the Upriver Stranding Against the Ship and Her Owner

During trial on November 1, 1966, plaintiff was permitted to amend paragraph eighth of the complaint (part of the first claim but realleged in the second and third claims). The amendment added after the words "a known and charted shoal or rocky area in the East River" the words "at the location bordered on the south by 40 degrees 40 minutes north latitude and on the north bordered by 40 degrees 45 minutes north latitude". The effect of this amendment was to indicate to some extent where in the East River the upriver stranding was claimed to have occurred.

During trial on the following day and in open Court, plaintiff was permitted to amend paragraph eighth of the complaint so that said paragraph as amended read as follows:

"EIGHTH. On or

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