Marcial Ucin, S.A. v. SS Galicia

• Decision Date: 14 December 1983
• Docket Number: 83-1209,Nos. 83-1192,s. 83-1192
• Citation: 723 F.2d 994
• Parties: MARCIAL UCIN, S.A., et al., Plaintiffs, Appellees, v. SS GALICIA, Her Engines, Tackle, etc., et al., Defendants, Appellees, v. PEREZ Y COMPANIA, Third-Party Defendants, Appellees. Iberbroker, S.A., Defendant, Appellant. MARCIAL UCIN, S.A., et al., Plaintiffs, Appellees, v. SS GALICIA, Her Engines, Tackle, etc., et al., Defendants, Appellants, v. PEREZ Y COMPANIA, et al., Third-Party Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 994

723 F.2d 994

MARCIAL UCIN, S.A., et al., Plaintiffs, Appellees, v. SS GALICIA, Her Engines, Tackle, etc., et al., Defendants, Appellees, v. PEREZ Y COMPANIA, Third-Party Defendants, Appellees.

Iberbroker, S.A., Defendant, Appellant.

MARCIAL UCIN, S.A., et al., Plaintiffs, Appellees, v. SS GALICIA, Her Engines, Tackle, etc., et al., Defendants, Appellants, v. PEREZ Y COMPANIA, et al., Third-Party Defendants, Appellees.

Nos. 83-1192, 83-1209.

United States Court of Appeals First Circuit.

Argued Aug. 2, 1983.

Decided Dec. 14, 1983.

Frank H. Handy, Jr., Boston, Mass., with whom Kneeland, Kydd & Handy, Boston, Mass., was on brief, for Iberbroker, S.A.

Francis J. Sally, Boston, Mass., with whom Thomas H. Walsh, Jr., James B. Re, and Bingham, Dana & Gould, Boston, Mass., were on brief, for SS Galicia and Compania de Navegacion Somerset, S.A.

Before CAMPBELL, Chief Judge, BOWNES, Circuit Judge, and PEREZ-GIMENEZ, ^* District Judge.

PEREZ-GIMENEZ, District Judge.

This is an admiralty action brought in the United States District Court for the District of Massachusetts by the plaintiffs, Marcial Ucin, S.A. ("Ucin") and Schiavone-Chase Corporation ("Chase"), against the S.S. GALICIA, in rem, her owner, Compania de Navegacion Somerset, S.A. ("Somerset"), her time charterer, Perez y Compania ("Perez") and subtime charterer Iberbroker, S.A. ("Iberbroker"), to recover for loss of a cargo of steel turnings and expenditure claimed to have been made in discharging and disposing from the vessel the cargo of turnings. Vessel owner, Somerset, filed third party claims against time charterer Perez, subtime charterer Iberbroker, and voyage charterer Teccomex, S.A. ("Teccomex"). Iberbroker filed a counterclaim against Somerset and Chase for recovery of its discharge costs.

Trial before the United States District Court for the District of Massachusetts was held on January 16, 19-21, 1981. On July 21, 1981, the Trial Court issued its opinion dismissing plaintiff's complaint because the turnings were considered a hazardous cargo which self ignited with no party at fault. On August 28, 1981, plaintiff filed its motion for further findings seeking recovery of its share of the discharge costs. On December 28, 1981, the court issued its opinion finding Somerset liable to Chase and Iberbroker for the costs of cargo discharge. Somerset thereafter, on January 22, 1982, filed its motion to amend complaint to assert claims for breach of charter party against Perez and Iberbroker. Perez was defaulted on January 5, 1983, for failure to answer Somerset's interrogatories. Judgment was rendered on February 15, 1983, in favor of Chase against Somerset and in favor of Somerset on its third party claim against Perez and Iberbroker. No award was made for the loss of cargo nor for attorney's fees. On March 15, 1983, Iberbroker filed its notice of appeal to the United States Circuit Court of Appeals for the First Circuit from the judgment entered on February 15, 1983. Somerset filed another notice of appeal on the same date. The question on the appeal filed by Iberbroker relates to the personal jurisdiction over Iberbroker, the alleged breach of charter party agreement, the amendment of the complaint after the conclusion of trial, and the entry of default against Perez. The issue raised in Somerset's appeal is whether it, as owner of the GALICIA, has a right to recover attorney's fees and costs from the time charterers Perez and Iberbroker. ¹

Statement of Facts

On April 6, 1973, Somerset, a foreign corporation organized under the laws of the Republic of Switzerland, owner of the S.S. GALICIA, entered into a time charter with Perez, a Spanish corporation, as charterer. On May 8, 1973, Perez subchartered the GALICIA to Iberbroker, another Spanish corporation, under an identical time charter agreement. Iberbroker, on February 18, 1974, voyage chartered the S.S. GALICIA to Teccomex, another Spanish corporation, to carry a cargo of metal turnings from Boston to Bilbao, Spain. Plaintiff Ucin, a Spanish steel manufacturer, was the purchaser of the cargo of metal turnings from voyage charterer Teccomex. Plaintiff Chase, a New York corporation, had sold the cargo of turnings to Teccomex. On or about February 26, 1974, Chase, as shipper of the cargo, delivered at its pier in Charlestown, Massachusetts, the metal turnings and loaded the same aboard the S.S. GALICIA. After loading was completed the GALICIA remained at the pier to comply with United States Coast Guard's Regulations which required the metal turnings to drop to a certain temperature before the vessel was allowed to sail. On March 11, 1974, fire erupted in the turnings stowed on GALICIA's hold. Several remedial steps were taken to cool and extinguish the fire. Among the steps taken were the application of carbon dioxide and the partial discharge of the cargo. After it became apparent that efforts to cool the cargo were unsuccessful, the Coast Guard ordered that the cargo of metal turnings be disposed of at sea. In order to comply with the Coast Guard's order a written agreement, dated April 11, 1974, was entered between Somerset, Chase and Iberbroker. Said agreement provided that Somerset, Iberbroker and Chase would advance on an equal basis costs and expenses to be incurred in the discharge and disposal of the cargo of metal turnings without prejudice to any rights of the parties. Somerset actually contributed $185,833.00, Chase $83,333.00, and Iberbroker $33,333.33. Discharge of the cargo was completed on May 15, 1974.

I. Was The Defense of Lack of In Personam Jurisdiction Waived by Iberbroker

Lack of personal jurisdiction is a privileged defense that can be waived "by failure [to] assert [it] seasonably, by formal submission in a cause, or by submission through conduct." Neirbo Co. v. Bethlehem Corp., 308 U.S. 165, 168, 60 S.Ct. 153, 155, 84 L.Ed. 167 (1939); see also, Ins. Corp. of Ireland v. Compagnies des Bauxites, 457 U.S. 1105, 102 S.Ct. 2902, 73 L.Ed.2d 1312 (1982); Leroy v. Great Western United Corp., 443 U.S. 173, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979).

Rule 12(h)(1) of the Federal Rules of Civil Procedure does not call for the assertion of the lack of personal jurisdiction defense within the time provided in Rule 12(a). ² It merely dictates that the defense will be waived if not made by motion or included in the responsive pleading.

Furthermore, it is well settled that general appearance by a defendant does not constitute a waiver of the defense of lack of jurisdiction over the person. 2A Moore's Federal Practice (2d Ed.) Sec. 12.12, at 2325, and cases cited at n. 17. However, if defendant appears, a subsequent contest of the court's jurisdiction over the person must be timely. Emerson v. National Cylinder Gas Company, 131 F.Supp. 299 (D.Mass.1955); Wyrough & Loser, Inc. v. Pelmor Laboratories, Inc., 376 F.2d 543 (3rd Cir.1967); Marquest Medical Products, Inc. v. EMDE Corp., 496 F.Supp. 1242 (D.Co.1980); 5 Wright and Miller, Federal Practice and Procedure, Section 1344, at 525, 526. But see, D'Amico v. Treat, 379 F.Supp. 1004 (S.D.Ill.1974). Otherwise, the movant would be guilty of laches. Vozeh v. Good Samaritan Hospital, 84 F.R.D. 143 (S.D.N.Y.1979); Bouas v. Sociedad Maritima San Nicholas, S.A., 252 F.Supp. 286 (S.D.N.Y.1965).

Iberbroker filed a general appearance through its attorney on May 24, 1974. On May 17, 1978, Somerset and GALICIA moved for entry of default judgment against Iberbroker for failure to answer the third party complaint. Soon thereafter, on May 26, 1978, Iberbroker filed a motion to dismiss the complaint, or in the alternative, motion for summary judgment. Iberbroker moved for the dismissal of the action on grounds that it was not subject to service of process within the District of Massachusetts and that it was not properly served with process.

Although it is true that Iberbroker did not file a motion under Federal Rule of Civil Procedure 12(b) nor a responsive pleading before its motion of May 26, 1978, it is undisputed that Iberbroker received actual notice of the action. During the time between Iberbroker's appearance and the filing of the motion to dismiss, Iberbroker's counsel attended some thirteen depositions in the case.

The objective of Rule 12 is to eliminate unnecessary delay at the pleading stage by requiring the presentation of an omnibus pre-answer motion in which defendant advances every available Rule 12 defense. 5 Wright and Miller, Federal Practice and Procedure, Sec. 1384, at 837 (footnote omitted); Rauch v. Day & Night Mfg. Corp., 576 F.2d 697 (6th Cir.1978). After filing an appearance and attending the taking of various depositions, and then four years later presenting the defense of lack of in personam jurisdiction, Iberbroker is trying to obtain the very delay which Rule 12 was designed to prevent. To hold that the privilege of lack of personal jurisdiction may be retained by an appearing defendant for as long as he does not file a pre-answer motion or responsive pleading would be "subversive of orderly procedure and make for harmful delay and confusion." Cf. Commercial Casualty Co. v. Consolidated Stone Co., 278 U.S. 177, 180, 49 S.Ct. 98, 99, 73 L.Ed. 252 (1929). (Statement made in relation to the privilege of venue).

Furthermore, similar to the cases of Spearman v. Sterling Steamship Company, Ltd., 171 F.Supp. 287 (E.D.Pa.1959) and Vozeh v. Good Samaritan Hospital, supra, plaintiffs herein may have been placed at a disadvantage by having to face the possibility that the Massachusetts statute of limitations might bar their claims.

We, therefore, conclude that Iberbroker's conduct was sufficiently dilatory and inconsistent with its assertion of lack of in personam jurisdiction to constitute a waiver of the defense.

II. Is Sub-Time Charterer, Iberbroker, Liable Under the Terms and Conditions of the Charter Party for the "Discharge Costs" Incurred by Chase and Somerset

The general scheme of a time charter is that...