Fernandez v. Chios Shipping Co., Ltd., s. 1090

• Citation: 542 F.2d 145
• Decision Date: 16 September 1976
• Docket Number: 1216-1218,1093,Nos. 1090,D,s. 1090
• Parties: 1 Fed. R. Evid. Serv. 355 Jose FERNANDEZ, Plaintiff, v. CHIOS SHIPPING CO., LTD., Defendant and Third-Party Plaintiff-Appellee, v. MAHER STEVEDORING COMPANY, INC., and States Marine Lines, Inc., Third-Party Defendant-Appellants. CHIOS SHIPPING CO., LTD., Fourth Party Plaintiff-Appellee, v. CASTLE & COOK, INC., et al., Fourth Party Defendants-Appellants. ockets 75-7465, 76-7066, 76-7071, 76-7078 and 76-7079.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 145

542 F.2d 145

1 Fed. R. Evid. Serv. 355

Jose FERNANDEZ, Plaintiff, v. CHIOS SHIPPING CO., LTD., Defendant and Third-Party Plaintiff-Appellee, v. MAHER STEVEDORING COMPANY, INC., and States Marine Lines, Inc., Third-Party Defendant-Appellants.

CHIOS SHIPPING CO., LTD., Fourth Party Plaintiff-Appellee, v. CASTLE & COOK, INC., et al., Fourth Party Defendants-Appellants.

Nos. 1090, 1093, 1216-1218, Dockets 75-7465, 76-7066,

76-7071, 76-7078 and 76-7079.

United States Court of Appeals, Second Circuit.

Argued May 26, 1976.

Decided Sept. 16, 1976.

Edwin K. Reid, New York City (Zock Petrie, Reid, Curtin & Byrnes, New York City, of counsel), for defendant and third and fourth-party plaintiff-appellee, Chios Shipping Co., Ltd.

James M. Kenny, New York City (McHugh, Heckman, Smith & Leonard, New York City, of counsel), for third-party defendant-appellant, Maher Stevedoring Co., Inc.

William P. Larsen, Jr., New York City (Boal, Doti & Larsen, New York City, of counsel), for third party defendant-appellee, States Marine Lines, Inc.

Patrick L. Wynne, New York City (Joseph Edward Brady, Fogarty & Wynne, New York City, of counsel), for fourth-party defendants-appellants Castle & Cook, Inc., Dole Corp., and Castle & Cook Foods Corp.

Before HAYS, MULLIGAN and MESKILL, Circuit Judges.

MESKILL, Circuit Judge:

The issues raised on this admiralty appeal stem not from the injured longshoreman's quest for damages but from the subsequent contest among four other parties to shift the burden of indemnification for his recovery.

On September 1, 1968, employees of Maher Stevedoring Company, Inc. ("Stevedore"), plaintiff Fernandez among them, were unloading a cargo of "pre-palletized" units of pineapples from the # 3 hold of the SS Chios. A "pre-palletized" unit is a single package consisting of a pallet and cartons glued together so that no bands or lashings are necessary to bind the unit when transporting it. The lightweight, disposable pallets ¹ were constructed by Castle & Cook, Inc., Dole Corp., and Castle & Cook Foods Corp. (collectively called "Shipper"), for use in transporting their pineapple products. Longshoreman Fernandez was injured when one such unit came apart as it was being lifted out of the hold, spilling cartons on him.

Fernandez sued Chios Shipping Co., Ltd. ("Shipowner") on theories of negligence and unseaworthiness. ² The Shipowner impleaded States Marine Lines, Inc. (now Isco, Inc., "Time Charterer"), and the Stevedore for indemnification if it were found liable to plaintiff. Shipowner also sought indemnification from the Shipper. In case it was held liable to the Shipowner, the Time Charterer cross-claimed for indemnification from the Stevedore. Finally, both the Time Charterer and the Stevedore sought indemnity from the Shipper.

The jury returned a special verdict for plaintiff, finding that the SS Chios was unseaworthy and that this unseaworthiness was a proximate cause of the injury. They also found that Fernandez was not contributorily negligent and awarded damages of $90,200 ³ The indemnity claims then were submitted to the jury in interrogatory form, except for the Shipowner's claim against the Time Charterer, which the court resolved as a matter of law in the Shipowner's favor.

The jury found that the Stevedore breached its warranty of workmanlike performance by failing to supervise and direct its employees properly in the unloading operation and to provide for the safety of its employees; the jury also determined that the Stevedore's action was a proximate cause of plaintiff's injuries. As to the Shipper, the jury found that its negligence resulted in the disintegration of the pre-palletized unit and that the Shipper's actions also were a proximate cause of plaintiff's injuries. Finally, the jury found that the pineapple unit broke apart because of a latent or hidden defect in the pallet.

Based on these findings, the district court held that the Shipowner was entitled to indemnification from the Stevedore and the Shipper. As a matter of law, the court held that the Time Charterer was bound to indemnify the Shipowner from its liability to plaintiff, including costs and attorney's fees, because the Time Charterer warranted in Clause 8 of the charter that it would safely and properly assume control of cargo operations. The court also held that the Time Charterer was entitled to indemnification from the Stevedore and Shipper, in accordance with the jury's answers to the interrogatories. In sum, although the Shipowner was found to be liable to plaintiff, it was entitled to indemnification from all of the other parties. The Time Charterer, bound to indemnify Shipowner, was itself entitled to indemnity from the Stevedore and the Shipper. Thus, the burden of the longshoreman's recovery ultimately fell upon the Stevedore and the Shipper. Every participant held bound to indemnify another appeals from that determination. The Shipper also challenges the amount of the longshoreman's recovery as excessive. Finally, appellants raise numerous procedural and evidentiary claims of error. In an attempt to simplify the issues involved, we shall analyze each claim of error according to the relationship of the parties, presenting additional facts as necessary.

I. Stevedore's Warranty of Workmanlike Performance.

Both the Shipowner and the Time Charterer claimed indemnification from the Stevedore based on its warranty of workmanlike performance. Ryan Stevedoring Co., Inc. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956); Demsey & Associates v. S. S. Sea Star, 461 F.2d 1009, 1017 (2d Cir. 1972). The jury found that the Stevedore breached this warranty by failing to properly supervise and direct its employees in the unloading and by failing to provide for the safety of its employees during this process; ⁴ the jury also determined that the Stevedore's actions were a proximate cause of the longshoreman's injuries and that the failure of the Ship's agents to remedy the condition did not preclude the Shipowner's indemnification from the Stevedore. The Stevedore argues that there was insufficient evidence to support the jury's factual findings and that it has no legal duty to provide for the safety of its employees with a sanctuary for retreat. Appellant also raises numerous procedural errors, specifically that the district court failed to give attorneys an opportunity to make objections to its charge and interrogatories, as provided by Fed.R.Civ.P. 51; that the district court permitted the Time Charterer to present argument in summation even though the Time Charterer's liability was not a jury issue; and that prejudicial error resulted from omissions in the interrogatories submitted to the jury. We find sufficient evidence to support the jury's finding that the Stevedore's failure to properly supervise and provide safe working conditions for its employees was a proximate cause of the longshoreman's injuries. Appellant's procedural arguments are without merit. ⁵

Testimony by Edward Ponek, the Stevedore's safety manager, revealed that a superintendent from the Stevedore was assigned to supervise the discharge of the Chios. Two witnesses testified, however, that no supervisory personnel were present during discharge on the day of the accident. Plaintiff Fernandez stated that he was given no instructions as to method of unloading and that the confined area of the hold, packed high with the pallets, forced him to stand directly under each pallet as it was lifted out of the hold. Not contesting these facts, the Stevedore asserts its lack of responsibility because the defect was latent and thus not discoverable by a reasonable inspection and because it had no knowledge, constructive or actual, that plaintiff would not have a reasonably safe place to work.

In Fairmont Ship. Corp. v. Chevron Internat'l Oil Co., Inc.,511 F.2d 1252 (2d Cir.), cert. denied, 423 U.S. 838, 96 S.Ct. 66, 46 L.Ed.2d 57 (1975), we noted that Ryan indemnity evolved to ameliorate the harshness of the shipowner's nondelegable duty to provide a seaworthy ship, a duty which imposes liability independent of fault. ⁶ The principle underlying indemnification to the shipowner, then, is that liability ultimately "should fall upon the party best situated to adopt preventive measures and thereby to reduce the likelihood of injury." Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Co., Inc., 376 U.S. 315, 324, 84 S.Ct. 748, 754, 11 L.Ed.2d 732 (1964); Hurdich v. Eastmount Shipping Corp.,503 F.2d 397 (2d Cir. 1974). If the improper, unsafe or incompetent execution of the stevedore's services foreseeably renders the vessel unseaworthy, the stevedore will have breached its warranty of workmanlike performance and will incur liability to the shipowner. Moreover, the warranty may be breached by the stevedore's nonnegligent as well as negligent conduct, if it were the party best able to minimize the particular risks involved. Italia Societa, supra; Fairmont Ship. Corp. v. Chevron Internat'l Oil Co., Inc., supra; DeGioia v. United States Lines Company, 304 F.2d 421 (2d Cir. 1962). In Guidry v. Texaco, Inc., 430 F.2d 781 (5th Cir. 1970), the injured longshoreman was required to work in a dangerous area. The court there held that the employer breached its warranty of workmanlike performance because it failed to take any steps to make the work area reasonably safe. In the instant case, the parties agree that the hold was a confined area and that no supervisory personnel were present to oversee unloading. Fernandez was obliged to stand directly under the pre-palletized units, each of which could weigh as much as 13/4 tons, while they were being hoisted out of the hold. ⁷ It is not difficult to foresee the injury which might and did result, whether by latent or apparent defect in the pallets, careless operation of the forklift, or whatever cause. Imposing indemnity upon the Stevedore in this case does not make it an...