Sea Land Industries, Inc. v. General Ship Repair

• Decision Date: 13 January 1982
• Docket Number: Civ. No. H-80-1393.
• Parties: SEA LAND INDUSTRIES, INC. and Sea-Land Service, Inc., Plaintiffs, v. The GENERAL SHIP REPAIR CORPORATION, Defendant.
• Court: U.S. District Court — District of Maryland

530 F. Supp. 550

SEA LAND INDUSTRIES, INC. and Sea-Land Service, Inc., Plaintiffs, v. The GENERAL SHIP REPAIR CORPORATION, Defendant.

Civ. No. H-80-1393.

United States District Court, D. Maryland.

January 13, 1982.

COPYRIGHT MATERIAL OMITTED

Richard R. Jackson, Jr., M. Hamilton Whitman, Jr., and Ober, Grimes & Shriver, Baltimore, Md., for plaintiffs.

David R. Owen, David McI. Williams and Semmes, Bowen & Semmes, Baltimore, Md., for defendant.

ALEXANDER HARVEY, II, District Judge.

In this civil action, plaintiffs are seeking to recover for losses sustained by them when their large, land-based crane, located at their marine terminal in the Port of Baltimore, was blown down the pier during a thunderstorm and damaged. Plaintiffs assert admiralty and maritime jurisdiction under Rule 9(h), F.R.Civ.P., and 28 U.S.C. § 1333. Alternatively, plaintiffs have invoked the diversity jurisdiction of this Court under 28 U.S.C. § 1332.

Sea Land Industries, Inc. and Sea-Land Service, Inc.¹ (hereinafter collectively referred to as "Sea Land"), the plaintiffs, have since 1967 operated their Sea Girt Terminal in the lower Canton area of the Port of Baltimore. Container vessels belonging to the plaintiffs are loaded and unloaded at this terminal by means of a large Paceco crane (hereinafter "the crane") located on the pier.² The crane moves on steel rails, and from time to time is positioned for the loading and unloading of containers on and from container ships docked alongside the pier. The General Ship Repair Corporation (hereinafter "General Ship") is engaged in the business of repairing ships, other water craft and their appurtenances and equipment.³ In 1967, an agreement was entered into between Sea Land and General Ship, whereby the latter was to perform maintenance and other services for plaintiffs' crane. Over the years, General Ship furnished one or more of its employees to perform this crane maintenance and other work at the Sea Girt Terminal.

In the late afternoon of June 27, 1978, an employee of General Ship failed to secure the crane, leaving it unattended following its use. Shortly after 7:00 P.M., a thunderstorm suddenly hit the area, and a high wind blew the unsecured crane down its tracks. The crane collided with the concrete stops at the seaward end of the pier, causing extensive damage both to the crane and to the stops. In this action, plaintiffs are seeking to recover some $313,000 for damage to the crane and the crane stops and for additional operating costs incurred by the plaintiffs when they were unable to use the crane for the loading and unloading of their container ships in Baltimore.

The amended complaint is in three Counts. Count I alleges a breach of contract by the defendant. Count II asserts a breach by defendant of an alleged implied warranty of workmanlike performance. Count III is based on a theory of tort. Plaintiffs base all of their claims on this Court's admiralty jurisdiction, and further assert that they would in any event be entitled to the relief sought in all three Counts under the common law of the State of Maryland.

Defendant admits diversity jurisdiction but denies that admiralty jurisdiction exists in this case. Asserting that Maryland common law should be applied, defendant contends that the employee who was allegedly negligent was the borrowed servant of the plaintiffs, and that defendant therefore cannot be held responsible for any negligent act of that employee. Defendant also contends (1) that the employee in question was not negligent; (2) that defendant is not responsible for the accident because of an exculpatory "red letter clause" which was allegedly a part of the agreement between the parties; and (3) that plaintiffs were contributorily negligent or assumed the risk of the casualty to their crane on the date in question.

The case came on for trial before the Court sitting without a jury. Witnesses were heard and numerous exhibits were entered in evidence. Much of the evidence was conflicting, and in resolving these conflicts, due regard has been had to the credibility of the witnesses. Findings of fact and conclusions of law, pursuant to Rule 52(a), are contained herein, whether or not expressly so stated.

I

The facts

Sea Land owns and operates container ships and has container terminals at many different ports throughout the world for the loading and unloading of its vessels. The Baltimore operation began in 1967, when Sea Land placed a single large gantry crane at its Sea Girt Terminal, located in the Canton area of the Port of Baltimore. Crane No. 261, the crane in question, was built by Paceco, Incorporated, a subsidiary of Fruehauf Corporation. It is a large structure, weighing approximately 500 tons and powered by electric motors. The operator sits in a cab 75 feet above the ground, and by its boom, the crane loads and unloads 20 foot by 40 foot containers on and off the container vessels brought alongside the pier.⁴ All loading and unloading work was performed by the stevedores. The crane moves up and down the pier on steel rails embedded in the land alongside the pier where the container vessels dock. The rails extend generally some 700 feet, in a north-south direction along the pier. Steel-reinforced concrete blocks are sunk into the ground at both ends of the rails to serve as bumpers or stops and to keep the crane on the rails. When not in use, the crane is secured at a tie-down position at the north end of the pier. It is there held securely in place by two large metal pins which drop into sockets embedded in the surface of the pier and by four large turnbuckles, sometimes referred to as "hurricane tie-downs." The electric motors which move the crane up and down the rails are equipped with spring-loaded brakes. When away from its tie-down position, the crane can be held in place by rail clamps, which are cranked down to apply pressure against the top of the metal rails.

Crane maintenance is an important consideration in the operation of a marine terminal for container operations. To reduce the time in port, it is particularly important that there be no interruption to loading and unloading operations when container vessels are at the pier. If a crane breaks down during such operations, valuable time is lost while the ship remains docked awaiting the necessary repairs.

When it first came to Baltimore, Sea Land investigated various means whereby maintenance, repair and other work could be done for its newly-installed crane. General Ship had previously worked on Sea Land's shipboard container cranes, and following discussions between representatives of the parties, an oral agreement was reached whereby General Ship would furnish personnel to perform the services required.⁵ The services rendered by personnel of General Ship included maintenance and repair work on the crane while it was not being used, stand-by services while the crane was being used for loading and unloading cargo, and movement of the crane into position for its loading and unloading work. Following its use on a particular day, the crane was returned by the General Ship employee to its tie-down position at the north end of the pier and firmly secured by means of the various tie-down mechanisms.

Pursuant to the agreement between the parties, General Ship supplied the personal services in question through Charles E. Morris, a skilled electrician, who was employed by General Ship and started working in August of 1967. Each day, Morris reported to the Sea Girt Terminal and performed the necessary services required by the contract between the parties. At the outset, there was not enough work for Morris to remain at the Terminal all day, and he worked in General Ship's Yard as well as at Sea Land's pier. In time, however, as business increased, Morris spent almost his entire time at the Terminal.

In 1977, Morris contracted cancer, and in February of that year, he had a colostomy operation. During the three months or so that Morris was recovering from his operation, other employees of General Ship performed the services required by the contract between the parties, including Thomas J. Hoar and Dennis Mielkuski. After his cancer operation, it was necessary for Morris to use a colostomy bag, which required changing from time to time.

Following recovery from his operation, Morris returned to work in 1977 and continued to perform the required maintenance and other services at the Terminal. On June 27, 1978, the container vessel HOUSTON was berthed at the Terminal for unloading. In accordance with his usual practice, Morris had moved the crane into position for cargo operations by the longshoremen engaged by Sea Land and stood by while the unloading work proceeded. At approximately 6:10 P.M., following the completion of cargo operations, Morris moved the crane up the tracks to a point some thirty feet from the tie-down position and proceeded to do certain maintenance work to prepare for its use in connection with cargo operations on a vessel expected the next morning.⁶

At some time between 6:30 and 7:00 P.M., Morris experienced difficulty with his colostomy bag. Ordinarily, he kept a spare bag at the Terminal, but on that day, there was no spare on hand. Without notifying anyone on the pier, Morris left the Terminal and went home to replace his colostomy bag. However, he neglected to secure the crane in any way. The rail clamps were not cranked down, nor was the crane moved to its tie-down position and secured by means of the pins and turnbuckles. During the time that Morris was away from the Terminal, a fast-moving thunderstorm squall passed through the area, with winds reaching maximum speeds of 49 to 54 miles per hour. Robert Bialek, Sea Land's Marine Manager, was in his office on the pier completing certain paperwork when he looked up and saw the crane being blown down the pier by the strong winds. Powerless to stop the massive crane once it was moving, Bialek and James Huseman,...