Sea-Land Service, Inc. v. US

• Decision Date: 13 July 1988
• Docket Number: Civ. A. No. 87-2483.
• Citation: 689 F. Supp. 450
• Parties: SEA-LAND SERVICE, INC., Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — District of New Jersey

689 F. Supp. 450

SEA-LAND SERVICE, INC., Plaintiff, v. UNITED STATES of America, Defendant.

Civ. A. No. 87-2483.

United States District Court, D. New Jersey.

July 13, 1988.

John R. Bolton, Asst. Atty. Gen., Samuel A. Alito, Jr., U.S. Atty., D. N.J., Jerome L. Merin, Asst. U.S. Atty., U.S. Dept. of Justice, Newark, N.J., and J. Patrick Glynn, Director, Torts Branch, Civ. Div., Harold J. Engel, Deputy Director, J. Charles Kruse, Special Litigation Counsel, Steven M. Talson, Trial Attorney, U.S. Dept. of Justice, Washington, D.C., for defendant.

Crummy, Del Deo, Dolan, Griffinger & Vecchione, Michael D. Loprete, Newark, N.J., and Haight, Gardner, Poor & Havens, Stephen K. Carr, New York City, for plaintiff.

OPINION

WOLIN, District Judge.

In the instant action, this Court is faced with defendant's motion to dismiss plaintiff's suit on the theories that (1) plaintiff's claim for contribution is barred by the statute of limitations and (2) there is no legal duty to indemnify plaintiff. For the following reasons, defendant's motion is granted.

I. BACKGROUND

This action arises from a wrongful death action brought in the New York State Supreme Court for New York County captioned Anna Claire Swogger, as Executrix of the Estate of David Swogger v. Waterman Steamship Corp., et al., Index No. 13163/79 (the "Swogger action"). The Swogger action, commenced on April 13, 1979, was originally brought by David Swogger as a seaman's action for personal injury pursuant to the Jones Act, 46 U.S.C. App. § 688, and general maritime law.¹ The complaint alleged that while working as a marine engineer aboard thirteen vessels owned by five shipowner defendants (one of whom was Sea-Land Service, Inc.— the plaintiff herein), David Swogger was exposed to asbestos-containing products which caused him to contract a lung disease. Swogger's period of employment aboard these named vessels spanned 29 years from 1949 through 1978.

Discovery in the Swogger action indicated that David Swogger's complaint did not, however, seek recovery for his initial years at sea between the period 1943-1949. During this period, Swogger sailed exclusively aboard vessels owned and/or operated for the United States pursuant to General Agency Agreements by four shipping companies.²

In February, 1984, Sea-Land (a defendant in the Swogger action) filed a third-party complaint in New York State naming 52 third-party defendants, including asbestos manufacturers, shipyards, distributors and additional shipping companies. Included within this group of third-party defendants were the four shipowner-employers who, although not named as primary defendants in the Swogger action, operated ships for the United States during 1943-1948 pursuant to the above-noted General Agency Agreements. Pursuant to contractual relations and/or the Suits in Admiralty Act, 46 U.S.C.App. § 741 et seq. ("SIAA"), these four defendants, because they operated as agents of the United States, tendered their defenses to the United States whereupon Sea-Land agreed to their voluntary dismissal from the Swogger action.³

On June 24, 1985, Sea-Land reached a settlement in the Swogger action. Thereafter, Sea-Land made payments pursuant to that settlement. Exactly two years later, on June 24, 1987, Sea-Land ("plaintiff") filed the instant suit against the United States ("defendant") pursuant to the provisions of the Public Vessels Act, 46 U.S.C.App. § 782, et seq., and general admiralty law. In this action, Sea-Land seeks indemnity or contribution from the United States for the sums it paid in settlement of the Swogger action due to Swogger's alleged exposure to asbestos while employed aboard the vessels owned or operated by the United States.

Currently, the United States moves to dismiss the complaint, claiming that (i) the action is barred by the applicable statute of limitations and (ii) the relationship between Sea-Land and the United States is such that no valid claim for indemnity exists.

II. DISCUSSION

A. Statute of Limitations—Contribution

Section five of the Suits in Admiralty Act, 46 U.S.C.App. § 745, provides, in pertinent part, that suits against the United States "may be brought only within two years after the cause of action arises...." Defendant maintains, therefore, that plaintiff's action is now time-barred because the two-year statute of limitations began to run, at the latest, upon the date of David Swogger's death—January 10, 1980. Plaintiff, however, did not file the instant action for contribution and indemnity until June 24, 1987—more than seven-and-one-half years following Mr. Swogger's death. In response, plaintiff maintains that its cause of action did not accrue until June 24, 1985, the date of the settlement of the Swogger action. Thus, according to plaintiff its action was timely. Therefore, the issue before this Court with respect to the statute of limitations is the determination of precisely when plaintiff's cause of action in its contribution/indemnification action accrued.

(1) The Government's Position. In support of its argument that plaintiff's cause of action accrued in 1980, defendant cites United New York Sandy Hook Pilots' Association v. United States, 355 F.2d 189 (2d Cir.1965) in which the Second Circuit stated:

The facts pleaded by the party seeking contribution gave rise only to a claim against a tortfeasor and that this became time-barred two years after the accident, although the amount had not yet been established. The settlement did nothing to change this.

Id. at 190-191 (emphasis added). See also Complaint of American Export Lines, Inc., 568 F.Supp. 956, 964 (S.D.N.Y.1983) ("when the Court of Appeals in Sandy Hook referred to `a claim against a tortfeasor' that was barred by the two year limitations period ... it was referring to a claim for contribution").

(2) Sea-Land's Position. In contrast to defendant's position, plaintiff asserts that a cause of action for contribution does not accrue at the time of the underlying injury, but rather when the party seeking contribution makes payment on the underlying claim. For example, in Central Rivers Towing v. City of Beardstown, 750 F.2d 565 (7th Cir.1984), the Seventh Circuit held that a third-party contribution action against the United States brought pursuant to section 5 of the SIAA arose only upon the entry of judgment in the underlying action. The Seventh Circuit continued:

The Suits in Admiralty Act provides that suits under it may be brought against the United States only within two years after the cause of action arises. 46 U.S. C. § 745. Noting that the plaintiff's cause of action against the United States would have arisen at the time of the accident, the government correctly states that a direct suit by the plaintiff would now be barred. But the government goes farther than this, arguing that as a result of its lack of liability to the plaintiff, it cannot share joint liability with the defendant, and therefore the defendant can have no claim of contribution against it. In support of this proposition, the government cites numerous cases in which one joint tortfeasor was immune from tort liability to the plaintiff and the court held that it could not be held liable in contribution to the other tortfeasor.

* * * * * *

We need not explore the government's list of arguably analogous precedent, since there are other and more persuasive cases involving statute of limitations defenses which are directly on point. The district court in this case disposed of the government's statute of limitations argument in rejecting its motion for summary judgment, holding that `the third-party complaint and § 745 statute of limitations are governed by when a final judgment or payment is receive by a third party.' We find this to be a correct statement of the law.

Id. at 571-572. See also Thornton v. Hull, 515 F.Supp. 715, 716 (D.Mass.1981) (notwithstanding two-year limitation of SIAA, third-party action for indemnification or contribution does not accrue until either final judgment or payment by third-party plaintiff to original plaintiff) (citations omitted). But see Brown v. United States, 615 F.Supp. 391, 407 (D.Mass.1985) ("to the extent third-party plaintiff's claim for indemnification is actually a claim for contribution, that claim is barred by the two year statute of limitations under the reasoning set out in the Sandy Hook case").

(3) The Common Law/Admiralty Distinction. The government does not contest Sea-Land's point that at common law "the fact that the statute of limitations has run against the original plaintiff's action does not bar a claim for contribution, since that cause of action does not arise until payment." Prosser & Keeton, The Law of Torts, § 150 at 340 (5th Ed.1984).⁴ Instead, the government maintains that the character of the two-year limitation, inasmuch as it constitutes a substantive jurisdictional prerequisite as well as a temporal limitation, dictates the dismissal of plaintiff's action. In effect, the government asserts that there is a distinction, albeit arbitrary, between claims for contribution against a private party in general litigation and admiralty claims for contribution against the government.

This distinction, however, is not without support. In Sandy Hook, the Second Circuit noted that although a third-party plaintiff's contribution action was barred two years after the underlying incident, an action for contractual indemnity would have been timely inasmuch as it did not accrue until two years after liability had been fixed. 355 F.2d at 191. Subsequently, Sandy Hook was interpreted as follows:

Sandy Hook involved a distinction, for purposes of determining when a cause of action arises, between claims for contribution and claims for indemnity. It specifically discussed claims for contractual indemnity because no claim for tort indemnity was involved in Sandy Hook. On the facts, none was possible. A party may sue in admiralty for tort indemnity if he is

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