Ente Nazionale Per L'Energia Electtrica v. Baliwag Nav., Inc.
| Citation | 774 F.2d 648 |
| Decision Date | 10 October 1985 |
| Docket Number | Nos. 84-1996,s. 84-1996 |
| Parties | ENTE NAZIONALE PER L'ENERGIA ELECTTRICA, Plaintiff, v. BALIWAG NAVIGATION, INC. and Wheelock Marine Services, Ltd., Defendants, and REX SHIPPING COMPANY S.A. OF PANAMA in personam and M/V KUNIANG, her engines, tackle, and apparel, etc., in rem, Appellees, v. CRAVAT COAL COMPANY, Third Party Defendant and Third Party Plaintiff, v. BALIWAG NAVIGATION, INC., Wheelock Marine Services, Ltd., Almare Societa di Navigazione S.P.A., Cooper Stevedoring Company, Inc., Third Party Defendants, and Alla-Ohio Valley Coals, Inc., Appellant. ENTE NAZIONALE PER L'ENERGIA ELECTTRICA, Plaintiff, v. BALIWAG NAVIGATION, INC. and Wheelock Marine Services, Ltd., Defendants, and REX SHIPPING COMPANY S.A. OF PANAMA in personam and M/V KUNIANG, her engines, tackle, and apparel, etc., in rem, Appellees, v. CRAVAT COAL COMPANY, Appellant, v. BALIWAG NAVIGATION, INC., Wheelock Marine Services, Ltd., Almare Societa di Navigazione S.P.A., Cooper Stevedoring Company, Inc., and Alla-Ohio Valley Coals, Inc., Third Party Defendants. ENTE NAZIONALE PER L'ENERGIA ELECTTRICA, Plaintiff, v. BALIWAG NAVIGATION, INC. and Wheelock Marine Services, Ltd., Defendants, and REX SHIPPING COMPANY S.A. OF PANAMA in personam and M/V KUNIANG, her engines, tackle, and apparel, etc., in rem, Defendants and Third Party Plaintiffs, v. CRAVAT COAL COMPANY, Appellee, v. BALIWAG NAVIGATION, INC., Wheelock Marine Services, Ltd., Almare Societa di Navigazione, S.P.A., Third Party Defendants, Cooper Stevedoring Company, Inc., Appellant, and Alla-Ohio Valley Coals, Inc., Appellee. ENTE NAZIONALE PER L'ENERGIA ELECTTRICA, Plaintiff, v. BALIWAG NAVIGATION, INC. and Wheelock Marine Services, Ltd., Defendants, and REX SHIPPING COMPANY S.A. OF PANAMA, in personam, and M/V KUNIANG, her engines, tackle, and apparel, etc., in rem, Defendants and Third Party Plaintiffs, v. CRAVAT COAL COMPANY, Appellant, v. BALIWAG NAVIGATION, INC., Wheelock Marine Services, Ltd., Almare Societa di Navigazione S.P.A., Cooper Stevedoring Company, Inc., Th |
| Court | U.S. Court of Appeals — Fourth Circuit |
Gregory N. Stillman, Hunton & Williams, Norfolk, Va., for Cravat Coal co.
Daniel R. Warman, John Y. Richardson, Jr., Williams, Worrell, Kelly & Greer, P.C., Norfolk, Va., for Alla-Ohio Valley Coals, Inc.
R. Arthur Jett, Jr., Jett, Agelasto, Berkley, Furr & Price, Norfolk, Va., for Cooper Stevedoring Co., Inc.
Carter T. Gunn, Hugh Meredith, Vandeventer, Black, Meredith & Martin, Norfolk, Va., for Rex Shipping Co.
Before HALL and CHAPMAN, Circuit Judges and KNAPP, United States District Judge for the Southern District of West Virginia, sitting by designation.
The original plaintiff, Ente Nazionale Per L'Energia Electtrica (ENEL), an Italian power company, brought an action in admiralty against the original defendant and third-party plaintiff, Rex Shipping Company S.A. of Panama (Rex), for Rex's failure to deliver a cargo of steam coal to ENEL. The coal shipment never arrived in Italy because the ship carrying the steam coal, the M/V Kuniang, ran aground through vessel negligence and because the transfer of the coal from the M/V Kuniang to another vessel was stopped when the coal began to heat. ENEL and Rex reached a settlement agreement prior to trial.
Rex then brought this action in admiralty for contribution or indemnification against third-party defendants Cravat Coal Company (Cravat), Alla-Ohio Valley Coals, Inc. (AOV), and Cooper Stevedoring Company, Inc. (Cooper). Rex alleged that the combined negligence of the third-party defendants caused the coal to heat which in turn caused the termination of the transshipment operation and increased the cost of handling the coal. Rex sought contribution or indemnification from the third-party defendants for the increased costs of handling the coal required by the coal's heat. Cravat and AOV appeal from the decision of the district court finding them jointly and severally liable for one-third of the increased costs Rex incurred in handling the coal. Cooper settled with Rex on the first day of trial.
We hold that the alleged negligence of Cravat and AOV in failing to warn the M/V Kuniang's Master of the potential problems with the coal loaded aboard the ship was not a cause in fact of the damages Rex suffered because of the heating of the coal. Accordingly, we reverse that portion of the district court's decision, 605 F.Supp. 355 (D.C.Va.1984), finding Cravat and AOV jointly and severally liable for one-third of the increased costs Rex incurred in handling the coal.
The original plaintiff, ENEL, is an Italian corporation involved in the production, transmission, and distribution of electricity. ENEL was the consignee of the cargo of approximately 45,254.03 long tons of steam coal loaded aboard the M/V Kuniang. The original defendant and third-party plaintiff, Rex, is a Panamanian corporation which was the registered owner of the M/V Kuniang. The M/V Kuniang is an ocean-going carrier of approximately 29,000 gross tons and is registered under the flag of the Republic of Panama.
Third-party defendant Cravat is an Ohio corporation which contracted to sell approximately 200,000 metric tons of steam coal to ENEL in four approximately equal shipments. The coal aboard the M/V Kuniang represented the second of the four scheduled shipments. Cravat is a producer and seller of coal in the domestic and export markets.
Third-party defendant AOV is a Florida corporation presently operating as a debtor in possession under bankruptcy proceedings in the United States District Court for the District of Columbia pursuant to Chapter 11 of the Bankruptcy Code. AOV actually supplied the coal loaded on the M/V Kuniang pursuant to an agreement with Cravat.
Third-party defendant Cooper is an Alabama corporation which loaded the coal aboard the M/V Kuniang at Darrow, Louisiana, between March 25 and April 2, 1981.
In rendering its decision the district court made the following findings of fact. On June 17, 1980, Cravat contracted to sell approximately 200,000 metric tons of Pond Creek "type" steam coal to ENEL in four approximately equal shipments. Although the contract between Cravat and ENEL originally called for Cravat to ship the coal through the Port of Hampton Roads, Virginia, the parties later agreed by amendment to the contract to ship the coal through the Port of New Orleans, Louisiana. The parties designated Commercial Testing and Engineering Company (CTE), a commercial testing laboratory, to test the coal to determine whether it met the contract specifications.
In November 1980 Cravat determined that it would be unable to supply the coal called for in its contract with ENEL. Consequently, on November 28, 1980, Cravat and AOV entered into an agreement in which AOV agreed to supply the coal called for in the Cravat-ENEL contract. AOV and Cravat agreed that Cravat would be listed as the shipper on the bill of lading and other shipping documents. Neither ENEL nor Rex was aware of AOV's involvement.
AOV contracted with various coal suppliers to purchase barge loads of coal. AOV obtained the coal for the shipment in question from nine suppliers. The coal was carried aboard barges to the loading site. The M/V Kuniang, which was voyage-chartered to ENEL, arrived at its loading berth at Darrow, Louisiana, on March 25, 1981. Prior to loading SGS Control Services, Inc. (SGS), a commercial testing laboratory, and Deep Sea Marine Surveyors, Inc. inspected the vessel's cargo holds for cleanliness and readiness to load coal. Furthermore, CTE and SGS sampled and analyzed the coal prior to loading. The testing companies reported that the coal met the contract specifications. Neither reported any problems with the coal.
Cooper's berth at Darrow is a mid-stream loading berth. Coal is transferred from the barges to the vessel by floating cranes which lift the coal into the ship using clam-shell buckets. Cooper began loading the M/V Kuniang on the morning of March 25 and finished on April 2, 1981. Cooper did not trim or compact the coal. Instead, Cooper stowed the coal in the holds in a peaked fashion. Trimming a cargo of coal involves leveling and compacting the cargo throughout the hold with a tractor or bulldozer. Cooper concedes that trimming and compacting the coal is a normal practice in the coal shipping industry.
During the loading of the vessel the Master of the M/V Kuniang, Captain Jose A. Calbes, observed what appeared to be steam coming from the coal aboard two of the barges. At his request AOV arranged for SGS and CTE to examine the coal aboard the two barges. The testing lab employees examined both loads of coal and SGS reported that the coal was "in good exportable condition." The Master thereafter accepted the coal aboard the two barges for loading aboard the M/V Kuniang.
The bill of lading contained no comments concerning the quality of the coal or its suitability for shipment. The bill of lading was completely "clean." In addition, upon the completion of the loading of the M/V Kuniang, SGS issued a certificate of loading dated April 2, 1981, stating that the vessel was loaded "in accordance with all known practices of good seamanship, with observance of all known rules...
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