COMPLAINT OF TECOMAR SA

• Citation: 765 F. Supp. 1150,1991 AMC 2432
• Decision Date: 31 May 1991
• Docket Number: No. 87 Civ. 2611 (CHT).,87 Civ. 2611 (CHT).
• Parties: In the Matter of the Complaint of TECOMAR S.A., as Owner of the M/V TUXPAN for Exoneration from or Limitation of Liability.
• Court: U.S. District Court — Southern District of New York

765 F. Supp. 1150

1991 AMC 2432

In the Matter of the Complaint of TECOMAR S.A., as Owner of the M/V TUXPAN for Exoneration from or Limitation of Liability.

No. 87 Civ. 2611 (CHT).

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

May 31, 1991.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Haight, Gardner, Poor & Havens (Chester D. Hooper, Charles B. Anderson, Christopher G. Kelley, Sloan Schickler, Edward K. Lenci, Charles L. Black, Jr., of counsel), New York City, for petitioner.

Chalos, English & Brown (Michael Chalos, Martin F. Casey, of counsel), New York City, O'Neil, Eichin, Miller & Breckinridge (Machale A. Miller, of counsel), New Orleans, La., for cargo claimants.

OPINION

TENNEY, District Judge.

In February 1987, the M/V TUXPAN mysteriously disappeared with her crew of twenty-seven and cargo worth $22 million. She had departed from Bremen, Germany, on February 16, 1987, to travel across the North Atlantic for her destination, Vera Cruz, Mexico. However, sometime between February 24 and February 28, the ship disappeared leaving no wreckage, debris, or survivors. The owner of the TUXPAN, Tecomar, S.A. ("Tecomar") petitions this court to limit its liability pursuant to 46 U.S.C.App. §§ 181 et seq. (1988) ("Limitation Act"). The cargo claimants ("Claimants") subsequently filed claims against Tecomar pursuant to the United States Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. §§ 1300 et seq. (1982), and the International Convention for the Unification of Certain Rules Relating to Bills of Lading at Brussels on August 25, 1924 ("The Hague Rules"), and their 1968 amendments ("The Visby Amendments"), as interpreted by the laws of Germany and Belgium. For the reasons set forth below, Tecomar's petition to limit its liability pursuant to the Limitation Act is denied, as are its claims for package limitation under the Hague Rules and Visby Amendments. Claimants' claims are allowed subject to future adjudication as to exact amounts and except to the extent they are subject to a package limitation under COGSA, 46 U.S. C.App. §§ 1300 et seq. The following, including those additional facts set forth in the Discussion, constitutes the court's findings of fact and conclusions of law as required by Fed.R.Civ.P. 52(a).

FINDINGS OF FACT

A. The Parties

1. The TUXPAN was owned by Tecomar, a corporation which was created in 1971 under the laws of Mexico and whose principal place of business is in Mexico City, Mexico. Pretrial Order, Joint Undisputed Facts ¶¶ 1, 21 hereinafter PTO.

2. Claimants are comprised of 137 entities asserting 107 claims against Tecomar for damages in the aggregate amount of $22,229,583.27. Id. at 2 ("Relief Prayed").

(a) Corporate and Operational Structure of Tecomar

3. Tecomar was, and still is, managed and controlled by the "Council of Presidents," which establishes the general policies of the company and gives specific management directions to the heads of the various operational and administrative departments within the corporation. Id. ¶¶ 25-26.

4. The day-to-day operations of Tecomar are handled by various departments within the organization, such as the Operations Department, the Technical Department, the Administrative Department, and the Insurance Department. Id. ¶ 26.

(b) Structure of Tecomar's Technical Department

5. The Technical Department is responsible for the maintenance and repair of Tecomar's vessels. Id. ¶ 32. The functions and procedures of this department are described in the company's "Operations Manual." Id. ¶ 27.

6. The Technical Department is headed by the Technical Director who has complete authority over the maintenance of all Tecomar vessels, including the power to revise vessel schedules in order to facilitate repairs. Id. ¶ 41. The Technical Director also has plenary authority to dry-dock the vessels, if he believes the repairs are necessary for the safety of the vessel and its crew.¹ See id.

7. The Technical Director reports to three vice-presidents, namely, Herman Stoldt, Carlos Viveros, and Helmut Muller. Id. ¶¶ 27, 40. The Director reports to Stoldt with respect to financial matters, to Muller regarding operations, and to Viveros regarding day-to-day technical matters, discipline and order of crew members, and union activities. Id. ¶ 39.

8. The Captains of the Tecomar vessels and their Chief Engineers report directly to the Technical Director. Id. ¶ 29. The day-to-day functions of the Technical Department are performed by the port engineer section, which is responsible for vessel maintenance and repair of Tecomar vessels when they are in Mexican ports. Id. ¶¶ 28, 33.

9. The Technical Department coordinates with the Operations Department regarding cargo operations, the maintenance of Tecomar's vessels, and the scheduling of the vessels in light of the maintenance or repairs that are required. Id. ¶ 31.

10. The Technical Department also coordinates with the Insurance Department regarding claims relating to Tecomar's vessels or their operations. Id. ¶ 30. The Insurance Department reports directly to the Council of Presidents. Id.

11. Tecomar's broker for hull and machinery insurance, as well as for Protection and Indemnity ("P & I") insurance, was and continues to be the Fred S. James Company, Inc. of New York. Id. ¶ 39.

12. Since the mid 1970s, three individuals have held the position of Technical Director: Captain Jesus Morales ("Captain Morales") (mid 1970s until October 1985); Captain Luis Perez Hernandez ("Captain Perez") (October 1985 to December 1985); and Rafael Lopez Ruiseco ("Lopez") (from December 1985 to date). Id. ¶ 42.

13. From late 1980 through early 1985, Lopez served as Deputy Technical Manager. Id. ¶ 43. Lopez's duties in this position involved assisting Captain Morales in maintaining and repairing the hull and machinery of Tecomar's vessels. Id. ¶ 44. During the construction of the TUXPAN, Lopez acted as one of Tecomar's representatives. Id. ¶ 45. For one voyage in 1982, Lopez sailed aboard the TUXPAN as chief engineer. Id. ¶ 46. In early 1985, Lopez left the employ of Tecomar, but was rehired as Tecomar's Technical Director when Captain Morales' tenure ended in late 1985. Id. ¶ 43.

(c) Operation of Tecomar Vessels

14. Many of Tecomar's policies regarding the operations of its vessels have been memorialized in two manuals: (1) "Captain's Instructions, Part A and B" ("the Captain's Manual"), and (2) "Staff Functions and Procedures" ("the Lopez Manual").²

15. One of Tecomar's policies requires that its vessels at sea report their noon positions on a daily basis. Id. ¶ 58. These reports provide the following information: the number of the telex message, the day and time the message was sent, the latitude and longitude of the vessel, the vessel's course and speed, the wind according to the Beaufort scale and the sea state according to the Douglas scale,³ the fuel consumption, the engine revolutions per minute, and the vessel's estimated time of arrival ("ETA") at its next port of call. Id. ¶ 59.

16. It is also Tecomar's policy to require its captains to obtain weather reports on a regular and timely basis, and to inform the Technical Department of the daily wind and sea conditions.⁴ Id. ¶ 115. Furthermore, Tecomar requires that the Technical Director be notified immediately of any emergency arising onboard a Tecomar vessel. Id. ¶ 60.

17. Since 1982, Tecomar and its vessels have participated in the United States Coast Guard's "Automated Mutual Assistance Vessel Rescue" system ("AMVER"). Id. ¶ 70. Pursuant to the rules of AMVER, Tecomar vessels are requested to report their position, ETA, speed, and last encountered weather conditions directly to AMVER every forty-eight hours. Id.

B. The Vessel

18. The TUXPAN was a registered vessel of the Republic of Mexico, flying the Mexican flag, whose home port was Tuxpan, Mexico. Id. The ship was built in Germany by the shipyard of J.J. Sietas GmbH ("Sietas") between June 1981 and May 1982. Id. ¶ 3. In May 1982, the TUXPAN was delivered by Sietas with a one year warranty.⁵ See id. ¶¶ 3, 18.

19. Tecomar employed the following entities to assist in maintaining the TUXPAN: the engine manufacturer, Krupp Mak Maschinenbau GmbH ("MAK") to make any engine repairs in Bremen and Antwerp; the firm of Peter Donjak ("Donjak") to make any repairs to the hull or structural parts in Europe; and the shipyards of Sietas, A.G. Weser, and Motorenwerke Bremerhaven GmbH ("MWB") for other miscellaneous repairs. Id. ¶¶ 35, 37.

(a) Design & Construction

20. Throughout the designing and building of the TUXPAN, Tecomar employed the firm of Peter Gast ("Gast") as a supervising consultant. Id. ¶ 12. Gast was affiliated with a naval architectural firm, Euroluk, which also supervised construction of the TUXPAN on behalf of Tecomar. Id. ¶ 13. Tecomar's Technical Director and Deputy Technical Manager reviewed and discussed the building specifications with the consultants from Gast. Id. ¶ 16.

21. Gast stationed three of its employees at the Sietas shipyard to supervise the TUXPAN's construction. Id. ¶ 14. In addition, several members of Tecomar's Technical Department frequently traveled to the Sietas shipyard during the ship's construction, and spent the last month of this period aboard the vessel. Id. ¶ 15.

22. Both the TUXPAN and its sister ship, the M/V TUMILCO, were designed, built, and certified as ocean-going vessels for worldwide trading service. Tr. 1104; J.Exh. 3.⁶ The two ships were designed with virtually identical specifications, and were built for Tecomar at the same time, for the same trade routes, and with the same materials. J. Exh. 3.

23. The customary trade route for both ships was between Mexico (Vera Cruz and Tuxpan) and Northern Europe (Antwerp and Bremen) via the United States (Houston, Texas).⁷ PTO ¶ 67. A round-trip voyage at the TUXPAN's normal speed of 15.5 to 16 knots took approximately forty-two days. Id. ¶¶ 68, 69.

24. The winter season for the North Atlantic along this...