Hillier v. Southern Towing Co.

• Decision Date: 01 August 1983
• Docket Number: No. 81-2825,81-2825
• Citation: 714 F.2d 714
• Parties: Evelyn HILLIER, individually and as administratrix of the estate of Henry Hillier, deceased, Plaintiff, v. SOUTHERN TOWING COMPANY, Defendant, Third-Party-Plaintiff-Appellant, v. UNITED STATES of America, Third-Party-Defendant-Appellee. In the Matter of the Complaint of MEMPHIS TOWING COMPANY, a corporation, for exoneration from or limitation of liability, Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 714

714 F.2d 714

1983 A.M.C. 2907

Evelyn HILLIER, individually and as administratrix of the estate of Henry Hillier, deceased, Plaintiff, v. SOUTHERN TOWING COMPANY, Defendant, Third-Party-Plaintiff-Appellant, v. UNITED STATES of America, Third-Party-Defendant-Appellee.

In the Matter of the Complaint of MEMPHIS TOWING COMPANY, a

corporation, for exoneration from or limitation of

liability, Appellant.

No. 81-2825.

United States Court of Appeals Seventh Circuit.

Argued April 21, 1983.

Decided Aug. 1, 1983.

Gary T. Sacks, Goldstein & Price, St. Louis, Mo., for Southern Towing co.

Barbara B. O'Malley, Dept. of Justice, Torts Branch, Civ. Div., Washington, D.C., for the U.S.

Before POSNER, NICHOLS ^* and COFFEY, Circuit Judges.

POSNER, Circuit Judge.

This appeal raises difficult questions of admiralty law and sovereign immunity arising from the effort of two firms to obtain indemnity from the United States. The firms are defendants in a suit brought by the widow of a member of the armed forces who was killed while on active duty. They seek indemnity on the ground that the United States was the primary wrongdoer in the accident.

Henry Hillier, a marine safety inspector in the Coast Guard with the rank of boatswain's mate second class, was sent to one of the Great Lakes ports to monitor the discharge of a cargo of ammonia from a barge owned by Southern Towing Company. The barge had been towed to the port by a tug owned by Memphis Towing Company. He died on the barge from inhaling ammonia fumes. Since he died what is called an "operational death" while on active duty, his widow received death benefits under 38 U.S.C., ch. 13, §§ 401 et seq., a part of the Veterans' Benefits Act, 38 U.S.C. §§ 301 et seq.

She then sued Southern and Memphis under the admiralty jurisdiction, 28 U.S.C. § 1333, alleging that her husband's death had been due to their negligence in, among other things, failing to inspect the barge for defects and to have proper safety equipment. Southern and Memphis impleaded the United States under Fed.R.Civ.P. 14(c) and the Suits in Admiralty Act, 46 U.S.C. §§ 741 et seq., alleging that Hillier's death had been due not to their negligence but to the Coast Guard's negligence in failing to train Hillier properly and provide him with adequate safety equipment. They asked that the United States be ordered to indemnify them for any damages they might be ordered to pay Mrs. Hillier. The district court granted the government's motion for summary judgment, and dismissed the third-party complaint, on the ground that there is no right to indemnity from the government for the consequences of its negligence toward a member of the armed forces. Southern and Memphis appeal this dismissal under 28 U.S.C. § 1292(a)(3).

The government bases its argument against indemnity on two Supreme Court decisions-- Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950), which held that the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671 et seq., does not authorize servicemen on active duty to sue the government, and Stencel Aero Engineering Corp. v. United States, 431 U.S. 666, 97 S.Ct. 2054, 52 L.Ed.2d 665 (1977), which held that a private defendant in a serviceman's tort suit could not get indemnity from the government by showing that the government had been guilty of active wrongdoing compared to its own merely passive wrongdoing. But neither case involved an admiralty claim. Weyerhaeuser S.S. Co. v. United States, 372 U.S. 597, 83 S.Ct. 926, 10 L.Ed.2d 1 (1963), did; and the Supreme Court allowed the tort defendant to obtain contribution--partial indemnity--against the United States even though the tort plaintiff, like the military tort plaintiffs in Feres and Stencel Aero, could not have brought a tort action against the United States, instead being confined to a form of workmen's compensation (the Federal Employees' Compensation Act, now 5 U.S.C. §§ 8101 et seq., corresponding to the Veterans' Benefits Act in Feres, Stencel Aero, and the present case). Although Weyerhaeuser involved a collision, which as we shall see could make a difference, it has been followed in two noncollision indemnity cases-- Wallenius Bremen G.m.b.H. v. United States, 409 F.2d 994 (4th Cir.1969), which like Weyerhaeuser involved a civilian employee, and Wellington Transport. Co. v. United States, 481 F.2d 108 (6th Cir.1973), which involved a military employee and is indistinguishable from the present case. But Wellington preceded Stencel Aero, and if Stencel Aero limits the application of Weyerhaeuser to civilian cases, then Wellington can no longer be considered authoritative. The appellants also cite Ionian Glow Marine, Inc. v. United States, 670 F.2d 462 (4th Cir.1982), and Lockheed Aircraft Corp. v. United States, --- U.S. ----, 103 S.Ct. 1033, 74 L.Ed.2d 911 (1982). In Ionian Glow a navy ship and a private ship collided. The owner of the private ship sued the United States to divide the damages from the collision according to the relative fault of the two ships and was allowed to include in the damages to be divided the money it had paid an injured serviceman in settlement of his tort claim. Lockheed, which differs from Stencel Aero only in involving a civilian rather than military employee of the armed forces, holds that the Federal Employees' Compensation Act does not bar an action for indemnity against the United States.

Although the case law the parties have cited us to may seem a welter of inconsistent decisions, with the majority supporting the appellants' claim, all except Wellington can be reconciled not only with each other but with the district court's decision in this case; and Wellington had been rejected in other circuits even before it was (as we shall see) implicitly overruled by the Supreme Court in Stencel Aero. The key to the reconciliation is that the indemnity claim in this case is based on a tort rather than contract theory of indemnity, which is unusual in an admiralty case.

Most reported admiralty indemnity cases are cases where a shipowner, having been held liable to a longshoreman for unseaworthiness under the doctrine of Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946), sought indemnity from the stevedore company that employed the longshoreman even though there was no explicit indemnity contract. Since the doctrine of unseaworthiness made the ship's owner liable for any injury due to a defective or unreasonably dangerous condition on the ship and thus resembled the doctrine of strict tort liability for defective products, the duty of a negligent stevedore to indemnify the shipowner could have been based on the ground that the stevedore's fault was "active" and the shipowner's merely "passive." Compare the strict-liability cases collected in Patton, Comparative Causation, Indemnity, and the Allocation of Losses Between Joint Tortfeasors in Products Liability Cases, 10 St. Mary's L.J. 587, 598-610 (1979). In a few longshoremen cases the active-passive distinction was the ground--a tort ground--for ordering indemnity. See United States v. Rothschild Int'l Stevedoring Co., 183 F.2d 181, 182 (9th Cir.1950); States S.S. Co. v. Rothschild Int'l Stevedoring Co., 205 F.2d 253, 255 (9th Cir.1953); Parenzan v. Iino Kaiun Kabushiki Kaisya, 251 F.2d 928, 930 (2d Cir.1958).

But in Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 133-34, 76 S.Ct. 232, 237, 100 L.Ed. 133 (1956), and cases following it such as Crumady v. "Joachim Hendrik Fisser", 358 U.S. 423, 428, 79 S.Ct. 445, 448, 3 L.Ed.2d 413 (1959); Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Co., 376 U.S. 315, 321, 84 S.Ct. 748, 752, 11 L.Ed.2d 732 (1964), and Federal Marine Terminals, Inc. v. Burnside Shipping Co., 394 U.S. 404, 420-21, 89 S.Ct. 1144, 1153, 22 L.Ed.2d 385 (1969), the Supreme Court took a different tack: it based the shipowner's right of indemnity on the existence of an implied warranty of the stevedore to the shipowner to perform stevedoring services in a workmanlike manner. This approach has a limitation that is relevant to the present case: a warranty requires the existence of some kind of contractual relationship between indemnitor and indemnitee, although under modern notions privity of contract between the two is not necessary. See, e.g., Waterman S.S. Corp. v. Dugan & McNamara, Inc., 364 U.S. 421, 81 S.Ct. 200, 5 L.Ed.2d 169 (1960); United States v. San Francisco Elevator Co., 512 F.2d 23, 27 (9th Cir.1975).

The 1972 amendments to the Longshoremen's and Harbor Workers' Compensation Act substituted negligence for unseaworthiness as the standard of liability in actions by longshoremen against shipowners and abolished the shipowner's right of indemnity against the stevedore. See 33 U.S.C. § 905(b). The abolition of indemnity was consistent with the acceptance of the active-passive distinction as the basis for indemnity; since the longshoreman now had to prove the shipowner's negligence, it would no longer have been easy to distinguish the "passive" shipowner from the "active" stevedore. Since 1972, indemnity has continued to be sought in cases not involving longshoremen and hence not within the scope of the Longshoremen's and Harbor Workers' Compensation Act. See, e.g., Magnum Marine v. Kenosha Auto Transport Corp., 481 F.2d 933 (5th Cir.1973) (per curiam); Todd Shipyards Corp. v. Turbine Service, Inc., 674 F.2d 401, 416-17 (5th Cir.1982); In re Oil Spill by Amoco Cadiz, 699 F.2d 909, 915 (7th Cir.1983). But in only a few cases besides Wallenius, Wellington, and the present case has it ever been sought in the absence of a contractual relationship, direct or indirect, between the joint tortfeasors. Since Hillier was inspecting Southern's barge pursuant to statute (the Dangerous Cargo Act, 46 U.S.C. §§ 170-170b) rather than to any contract between him (or the Coast Guard) and the appellants, the appellants cannot get indemnity--regardless of the bearing, if...