In re Eternity Shipping, Ltd., Eurocarriers, S.A.

• Decision Date: 03 August 2006
• Docket Number: Civil Action No. L-01-250.
• Citation: 444 F.Supp.2d 347
• Parties: In the Matter of the COMPLAINT OF ETERNITY SHIPPING, LTD. and Eurocarriers, S.A. for Exoneration from or Limitation of Liability.
• Court: U.S. District Court — District of Maryland

444 F.Supp.2d 347

In the Matter of the COMPLAINT OF ETERNITY SHIPPING, LTD. and Eurocarriers, S.A. for Exoneration from or Limitation of Liability.

Civil Action No. L-01-250.

United States District Court, D. Maryland.

August 3, 2006.

James W. Bartlett, III, Alexander M. Giles, Semmes Bowen and Semmes PC, Baltimore, MD, James A. Saville, Robert G. Clyne, Hill Rivkins and Hayden LLP, New York, NY, for American Bureau of Shipping.

Marland Hamilton Whitman, Jr., Carla Napier Murphy, Eric M. Veit, Ober Kaler Grimes and Shriver PC, Baltimore, MD John Walter Sippel, Jr., Office of the United States Attorney, Baltimore, MD, for Eternity Shipping, Ltd. and Eurocarriers, S.A. for Exoneration from or Limitation of Liability.

MEMORANDUM

LEGG, Chief Judge.

Pending are the following motions¹:

(i) American Bureau of Shipping's ("ABS") Motion For Summary Judgment (Docket No. 76);

(ii) Limitation Plaintiffs' Motion For Summary Judgment On First Amended Claim For Damages Of Josefina Gonzales (Docket No. 74); and

(iii) Claimant Tate & Lyle North American Sugars, Inc.'s ("Tate & Lyle" or "T & L") FRCP 56 Motion For Summary Judgment As To Claimant Josefina Gonzales (Docket No. 73).²

After extensive briefing, the Court held two hearings on the motions. For the reasons set forth herein, the Court will, by separate Order: (i) GRANT ABS's motion, (ii) GRANT Limitation Plaintiffs' motion, and (iii) GRANT T & L's motion.

I. Brief Description of the Case

This case arises from the collapse of a crane aboard the M/V Leon I, a vessel owned by Eternity Shipping, Ltd., and managed by Eurocarriers, S.A. (collectively the "Limitation Plaintiffs").³ On July 29, 2000, the vessel was berthed at T & L's Domino Sugar wharf in Baltimore.⁴ T & L was using shore cranes to unload bulk raw sugar from the vessel. At the same time, a crew member of the M/V Leon I was operating one of the ship's cranes to hoist a work basket containing two crew members, Juan Gonzales, Jr, and Joselito Burgos, who were scraping caked sugar off the hatch coaming of one of the vessel's holds.⁵ A wire rope on the ship's crane broke, causing the jib (also known as the boom)⁶ to fall. When the jib fell, the work bucket hit the hatch cover and other parts of the ship, and Seamen Gonzales and Burgos sustained fatal injuries. In addition, the ship's crane hit and damaged one of T & L's shore cranes.

On January 29, 2001, Limitation Plaintiffs filed the instant "Limitation Action" seeking limitation of or exoneration from liability for damages resulting from the accident.⁷ On that same date, the Court ordered: (i) that all persons claiming damages as a result of the crane's collapse must file their respective claims with the Clerk, and (ii) that all other lawsuits relating to the accident are stayed and restrained pending a determination of the instant limitation action.⁸

The following claims were filed:⁹

(i) T & L's and Josefina Gonzales's ("Ms.Gonzales") claims against American Bureau of Shipping ("ABS"), the classification society¹⁰ that inspected the M/V Leon I's cranes seven months prior to the accident and certified that they met certain safety standards. Ms. Gonzales's son, Juan Gonzales, Jr., ("Seaman Gonzales") was one of the seamen who died as a result of the accident. T & L and Ms. Gonzales contend that ABS conducted a substandard inspection and failed to identify alleged defects that ultimately contributed to the accident.

(ii) Ms. Gonzales's claim against Limitation Plaintiffs. Ms. Gonzales, suing under the Jones Act and general maritime law,¹¹ seeks damages from Limitation Plaintiffs in connection with her son's death.

(iii) Ms. Gonzales's claim against T & L. Ms. Gonzales contends that T & L was negligent by operating its shore cranes at the same time that the ship's crane was in operation. Ms. Gonzales alleges that this negligence contributed to the accident and the subsequent death of Seaman Gonzales.

Discovery was involved and lengthy, lasting more than three years. The parties had difficulty locating maritime witnesses, who were often at sea for months at a time. Depositions were conducted internationally.

In early October 2004, the parties filed the instant motions for summary judgment. Less than a week later, they requested a settlement conference with a United States Magistrate Judge. The next day, T & L filed a motion requesting sanctions for alleged discovery violations and spoilation of evidence by Limitation Plaintiffs and ABS. The Court referred the case to Magistrate Judge James K. Bredar so that he could hold a settlement conference and decide the pending motion for sanctions. Counsel later asked Magistrate Judge Bredar to postpone the settlement conference until after the Court has ruled on the summary judgment motions.

In February 2005, Judge Bredar denied the motion for sanctions. At T & L's request, the Court allowed the parties to conduct limited additional discovery and file supplemental briefs.

In October 2005, the Court held two all-day hearings regarding the motions. As explained more fully below, the Court rules as follows:

(i) The Court will grant ABS's motion for summary judgment against T & L and Ms. Gonzales. The limited circumstances under which courts have opened the door to classification society liability do not exist here. Even if they did, there is no admissible evidence that ABS's inspection of the cranes was faulty.

(ii) The Court will grant Limitation Plaintiffs' motion for summary judgment against Ms. Gonzales. The forum selection clause contained in Seaman Gonzales's employment contract calls for adjudication of disputes in the Philippines. Accordingly, Ms. Gonzales is barred from pursuing her claims against Limitation Plaintiffs in the United States.

(iii) The Court will grant T & L's motion for summary judgment against Ms. Gonzales. At the second summary judgment hearing, Ms. Gonzales's counsel conceded that T & L could not have contributed to the death of Ms. Gonzales's son.

The Court will now turn its attention to the individual motions.

II. Standard of Review

The Court may grant summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir.1987) (recognizing that trial judges have "an affirmative obligation" to prevent factually unsupported claims and defenses from proceeding to trial). Nevertheless, in determining whether there is a genuine issue of material fact, the Court views the facts, and all reasonable inferences to be drawn from them, in the light most favorable to the non-moving party. Pulliam Inv. Co. v. Cameo Props., 810 F.2d 1282, 1286 (4th Cir.1987).

III. ABS's Motion

ABS is a classification society that was established by the New York Legislature in 1862.¹² (Docket No. 76, Ex. F, 112.) As a classification society, ABS sets safety standards for the marine industry. It establishes criteria, often in the form of published "Rules" or "Guides," for the design, construction, and maintenance of ships. It determines whether a ship is in compliance with the "Rules" or "Guides" by reviewing the construction plans and specifications and by periodically surveying the vessel during construction and while the vessel is in service. (Id. ¶¶ 3-5.)

In addition to these traditional classification activities, ABS certifies cargo gear. (Id. ¶ 5.) ABS has developed standards for ship cranes, which are published in its Guide for Certification of Cranes. (Docket No. 76, Ex. G(5).) ABS surveys cranes to determine whether they are in compliance with those standards.

Seven months prior to the accident, ABS surveyed the M/V Leon I's cranes and certified that they complied with ABS's standards. After the July 29, 2000 accident, Ms. Gonzales and T & L filed claims against ABS, contending that ABS's surveyor failed to notice, or advise the ship-owner of, various defects in the cranes that contributed to the accident.

ABS moved for summary judgment. For the reasons stated below, the Court finds that the limited circumstances under which courts have opened the door to classification society liability do not exist here and, even if they did, there is no admissible evidence that ABS's surveys of the cranes were faulty. Accordingly, ABS is entitled to a grant of summary judgment.

A. Factual Background

1. The M/V Leon I and the Crane Retrofit

Built in 1982, the M/V Leon I was originally a gearless bulk carrier, meaning that it did not have cranes. In the spring of 1999, Eurocarriers began managing the vessel for its owner. (Docket No. 1, Ex. B; Docket No. 76, Ex. H, at 14.) To increase the vessel's market value and to facilitate the carrying of cargo, Eurocarriers decided to retrofit it with four cranes from the M/V Yannis K, another vessel managed by Eurocarriers. (Docket No. 76, Ex. H, at 13, 15, 93-94.)

On May 10, 1999, Rousalis Cargo Gear Services proof load tested all four cranes on the M/V Yannis K and certified that they withstood the load without damage.¹³ (Id. at 23-24; Docket No. 76, Ex. H(2).) In the summer of 1999, in Dubai, Stoyan Terziev, a superintendent engineer at Eurocarriers, supervised the removal of the four cranes. During the work, the cranes' wire ropes were uncoiled from the drums and laid out on the deck. To determine whether Eurocarriers should order replacement wire ropes, Terziev personally inspected each of them as it lay on the deck. He found each rope to be in good condition and he did not see any preexisting damage or flattening of the wires. (Docket No. 76, Ex. I, at 38-43.) After Terziev's inspection, the wire ropes were greased, coiled on two-meter spools, and labeled. (Id. at 38-39, 42.) They...