Hercules, Inc. v. Stevens Shipping Co., Inc.
| Decision Date | 31 October 1980 |
| Docket Number | 78-1887,Nos. 78-1505,s. 78-1505 |
| Citation | 629 F.2d 418 |
| Parties | HERCULES, INC., Plaintiff, v. STEVENS SHIPPING CO., INC., et al., Defendants. DETCO TOWING CO., INC., Defendant-Appellee, v. AETNA CASUALTY & SURETY CO., Intervenor-Appellant. HERCULES, INC., Plaintiff, v. STEVENS SHIPPING CO., INC., et al., Defendants. ESCAMBIA TREATING CO., Defendant-Appellant, v. DETCO TOWING CO., INC., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
George D. Gabel, Jr., Jacksonville, Fla., H. Edward Moore, Jr., Pensacola, Fla., for Escambia Treating Co.
Albert Fendig, Jr., Brunswick, Ga., Brunswick G. Deutsch, Allen F. Campbell, New Orleans, La., for Aetna Casualty & Surety Co.
Gustave R. Dubus, III, Savannah, Ga., for Detco.
Ralph O. Bowden, III, Robert S. Glenn, Jr., Savannah, Ga., for other interested parties.
Appeals from the United States District Court for the Southern District of Georgia.
Before GODBOLD, GARZA and RANDALL, Circuit Judges.
We have before us appeals by Escambia Treating Company and the Aetna Casualty and Surety Company from summary judgment in favor of appellee Detco Towing Company. Both the facts giving rise to this litigation and the procedural history of the case are somewhat complex, and require extended treatment.
The issues on appeal revolve around the contractual relationships among certain of the parties to this lawsuit, and a one-year limitation of action period contained in one of the contracts. On April 25, 1975, Escambia, the owner of a cargo of telephone logs, entered into a voyage charter party agreement with Hercules Incorporated for the transportation of this cargo from Brunswick, Georgia to San Juan, Puerto Rico on Hercules' barge, the HERWOOD.
Hercules was party to a towing agreement with Detco, by which that company had agreed to provide towage service for the HERWOOD. This contract had been entered in November of 1974, and was amended on April 23, 1975, to set out towage rates pertinent to voyages "on behalf of Escambia Treating Company." The amendment expressly made all terms of the November 1974 agreement applicable to such voyages.
Among those terms was a requirement that any suit for loss or damage arising from performance of the contract be brought within one year after the delivery of the tow and cargo, the language of the term substantially following that of § 1303(6) of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 1300 et seq. 1
While the Hercules-Detco towing agreement specifically referred to voyages for Escambia, the Escambia-Hercules charter did not mention Detco or its tug, the TRACY D. There was no direct contractual relationship between Escambia and Detco.
On or about June 9-11, 1975, the HERWOOD was loaded in Brunswick with some 4,350 poles. Under the charter party agreement Escambia was responsible for loading, but Stevens Shipping and Terminal Company On May 11, 1977, Hercules filed a complaint against Escambia, Detco, the TRACY D, and Stevens, seeking compensation for damage to the HERWOOD. Hercules alleged that improper loading had caused the HERWOOD to capsize, and that the defendants were jointly and severally liable.
an independent contract stevedore, was said to have been in actual charge. On June 11, the TRACY D departed for San Juan with the HERWOOD in tow. After a call on Puerto Plata in the Dominican Republic to take on fuel, the HERWOOD capsized at sea, resulting in damage to her hull and the loss of her cargo.
On August 15, 1977, Escambia cross-claimed against Detco, the TRACY D, and Stevens, seeking indemnity in the event that Hercules was found entitled to recover against it. The claim alleged that any liability for damage to the hull of the HERWOOD arose from either negligence on the part of the cross-defendants, or breach of an implied warranty of workmanlike service arising from the towage contract. 2 In this pleading, Escambia claimed to be a third-party beneficiary of the towing contract between Hercules and Detco. 3
Aetna, Escambia's insurer, paid a claim for the total loss of the cargo, and filed a petition to intervene as Escambia's subrogee, charging that the cargo damage was caused by the negligence of Detco and Stevens, and their failure to perform in accordance with the implied warranty of workmanlike performance. 4
Detco and Stevens moved to dismiss the intervention. In a memorandum in opposition to the motion to dismiss, Aetna stated with regard to the Hercules-Detco contract that "Escambia was entitled to receive the benefits of the tower's undertaking as a third-party beneficiary." In a supplemental memorandum, Aetna stated that the ". . . amendment (to the Hercules-Detco agreement) can only mean that Escambia is the beneficiary to the contract of towage."
DISPOSITION BELOW
The district court granted summary judgment for Detco on the original complaint against it by Hercules, an action which is not complained of on this appeal. The court further rendered summary judgment for Detco on Escambia's cross-claim. Both judgments were based solely on the ground that suit had not been filed within one year of delivery of the HERWOOD, as required by the towage contract between Hercules
and Detco. Escambia was held subject to the limitations provision as a third-party beneficiary of the agreement. Detco's motion to dismiss the Aetna intervention was granted on the same grounds, Aetna being found to stand in Escambia's shoes as its subrogee. Stevens' motion to dismiss Aetna was denied.
CONTENTIONS ON APPEAL
Escambia appeals from the judgment against its cross-claim, and Aetna from the dismissal of its intervention as against Detco. Escambia alleges that the district court erred in finding that it was a third-party beneficiary of the written contract between Detco and Hercules, and thus subject to the fatal one-year limitation period contained therein.
In support of this position, Escambia urges first that third-party beneficiary status was not claimed under the written contract, but under an "implied warranty of workmanlike performance" arising "in all towing agreements." If it be held to the terms of the contract nonetheless, Escambia argues that, as a matter of law, "a claim for indemnity does not accrue until payment of the primary liability is made," and that "a claim cannot be time-barred before it accrues."
Detco, in rebuttal, rejects Escambia's contention that the indemnity cross-action was based on an implied warranty safely apart from the contract: without the existence of some agreement to tow, there would be no agreement from which to imply the warranty." Detco further argues that the dismissal was mandated by the rationale of Grace Lines v. Central Steamship Corp., 416 F.2d 977 (5th Cir. 1969), cert. denied 398 U.S. 939, 90 S.Ct. 1843, 26 L.Ed.2d 271 (1970).
Aetna contends that the trial court erred by casting it in exactly the same position as its subrogor Escambia, noting that its cargo damage claim against Detco was based in part on negligent towage, as well as breach of the implied warranty of workmanlike performance. As negligent towage sounds in tort rather than in contract, it is argued that the general maritime law limitation of laches should govern the claim regardless of Escambia's status as third-party beneficiary to the towage contract. Aetna goes on to dispute any assertion that Escambia was a third-party beneficiary of that agreement. Detco responds by the same arguments made in rebuttal to Escambia. 5
ESCAMBIA AS THIRD-PARTY BENEFICIARY
We hold that Escambia was indeed an intended beneficiary of the towage contract between Hercules and Detco, being thus bound by the limitations clause contained therein. Under Georgia law 6 the beneficiary of a contract made between parties for his or her benefit may maintain an action against the promisor on the contract. Ga.Code Ann. § 3-108. So long as a valid consideration supports the promise, the beneficiary can be a stranger to the consideration and still maintain an action on the contract. Ga.Code Ann. § 20-306. The Supreme Court of Georgia has added a In order for a third-party to have a standing to enforce a contract under Code Ann. § 3-108, it must clearly appear from the contract that it was intended for his benefit. The mere fact that he would benefit from performance of the agreement is not alone sufficient.
gloss to § 3-108 requiring that the third-party beneficiary be an intended beneficiary:
Backus v. Chilivis, 236 Ga. 500, 224 S.E.2d 370, 372 (1976); see also Stewart v. Gainsville Glass Co., Inc., 131 Ga.App. 747, 206 S.E.2d 857, aff'd 233 Ga. 578, 212 S.E.2d 377 (1974); American Fletcher Mortg. v. First Am. Inv., 463 F.Supp. 186 (N.D.Ga. 1978).
While it is generally true that any shipper of cargo would directly benefit from performance of the towage contract, Escambia's status does not rest upon generalities alone. After Escambia and Hercules agreed on the chartering of Hercules' barge, the towage contract between Hercules and Detco was amended by adding the following passage:
Provided, however, that all trips on behalf of Escambia Treating Company of cargoes consisting of telephone poles between San Juan, Puerto Rico, and Brunswick, Georgia, or other points or places as may be agreed by the parties in writing, shall be at a daily rate of $2,200 instead of $2,400 as above stipulated. In all other respects, the agreement, except as specifically amended, remains in full force and effect.
This clause shows that the parties contemplated Escambia as an intended beneficiary of the contract. Indeed, Escambia asserted this status for itself in its pleadings, as we have noted above.
As a third-party beneficiary, Escambia's rights spring from the contract. Shockley v. Sallows, 615 F.2d 233 (5th Cir. 1980). Of course, any defenses that could have been raised against a claim by a party to the contract would be good as against a third-party beneficiary. U.S. v....
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