Marr Equipment Corp. v. I.T.O. Corp. of New England

• Decision Date: 26 July 1982
• Citation: 437 N.E.2d 1076,14 Mass.App.Ct. 231
• Parties: , 1983 A.M.C. 2688 MARR EQUIPMENT CORPORATION v. I.T.O. CORPORATION OF NEW ENGLAND. 1
• Court: Appeals Court of Massachusetts

Page 1076

437 N.E.2d 1076

14 Mass.App.Ct. 231, 1983 A.M.C. 2688

MARR EQUIPMENT CORPORATION v. I.T.O. CORPORATION OF NEW ENGLAND. ¹

Appeals Court of Massachusetts Suffolk.

Argued March 15, 1982.

Decided July 26, 1982.

Cynthia J. Cohen and Robert L. Farrell, Boston, for plaintiff.

John B. Rest, Boston, for defendant.

Before ARMSTRONG, PERRETTA and KASS, JJ.

KASS, Justice.

Michael Horgan, a longshoreman, was employed by I.T.O. Corporation of New England (ITO), a stevedoring company. ² ITO leased two cranes from the Marr Equipment Corporation (Marr), for the purpose of unloading the S.S. Maria Costa, which was docked at Castle Island. During the unloading, Horgan claims to have been hurt while working in the hold of the ship. With respect to that injury he was entitled, under the Longshoremen's and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. §§ 905, 933 (1976), to file a claim for worker's compensation. An injured longshoreman may also bring a negligence claim for actual damages against a non-employer, 33 U.S.C. § 933 (1976), and Horgan did so by his action against Marr, based on Marr's failure to furnish proper and safe equipment and skilled and competent operators of the equipment. Because a maritime tort is involved, Federal law governs. See Capozziello v. Brasileiro, 443 F.2d 1155, 1157 (2d Cir. 1971); Spadola v. Viking Yacht Co., 441 F.Supp. 798, 800 (S.D.N.Y.1977). Marr's third-party claim against ITO is that there was an implied agreement that the lessee of the cranes (ITO) would indemnify Marr (the lessor) against liability arising out of the use of the cranes. ³

Prior to 1972, as the trial judge observed in his memorandum and order on motions for summary judgment, "the right of a tortfeasor (usually a vessel found unseaworthy in an action by a longshoreman) to seek indemnity from the longshoreman's employer upon a theory of breach of an implied contract of workmanlike service was well established." That right was enunciated first in Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956). The warranty implied in Ryan was one of workmanlike performance by the stevedore.

In 1972, Congress amended the LHWCA expressly for the purpose of undoing the round robin sort of litigation stimulated by Ryan and an important precursor, Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946), which had extended to longshoremen the right to recover from a vessel on a strict liability basis (the "unseaworthiness doctrine") for conditions which often were actually created by the stevedore. See Zapico v. Bucyrus-Erie Co., 579 F.2d 714, 721 (2d Cir. 1978). The 1972 amendments to the LHWCA eliminated the unseaworthiness doctrine and limited the liability of vessels to negligence. The liability of stevedores to their longshoremen was also limited to the statutory amounts in the LHWCA, which were increased by the 1972 amendments. Specifically, 33 U.S.C. § 905(b) was added, which reads in pertinent part: "In the event of injury to a person covered under this chapter caused by the negligence of a vessel, then such person, or anyone otherwise entitled to recover damages by reason thereof, may bring an action against such vessel as a third party ... and the employer shall not be liable to the vessel for such damages directly or indirectly and any agreements or warranties to the contrary shall be void."

This brings us, at long last, to the point of the instant case: did the 1972 amendments to the LHWCA prohibit a non-vessel, such as Marr, from seeking indemnification from the stevedore-employer on the basis of an implied contract of indemnity? A judge of the Superior Court ruled that Marr's indemnity complaint was barred by 33 U.S.C. § 905(b) and allowed a motion for summary judgment in favor of ITO. He then certified, in accordance with Mass.R.Civ.P. 54(b), 365 Mass. 821 (1974), that there was no just reason for delay and ordered entry of judgment for ITO and judgment entered accordingly.

The question posed in the preceding paragraph has evoked disparate responses from Federal district courts which have had occasion to confront it. Several have given broad construction to the remedial purposes of the 1972 amendments and, although § 905(b) speaks of vessels, have extended to nonvessels the prohibition of indemnity claims against stevedores. See Fitzgerald v. Compania Naviera La Molinera, 394 F.Supp. 402, 411 (E.D.La.1974); S.S. Seatrain Louisiana v. California Stevedore & Ballast Co., 424 F.Supp. 180, 183 (N.D.Cal.1976); Spadola v. Viking Yacht Co., 441 F.Supp. at 802. Some have read the statute literally and not applied it to non-vessels. See Crutchfield v. Atlas Offshore Boat Serv., Inc., 403 F.Supp. 920, 921 (E.D.La.1975); Brkaric v. Star Iron & Steel Co., 409 F.Supp. 516, 520-521 (E.D.N.Y.1976); Gould v. General Mills, Inc., 411 F.Supp. 1181, 1183 (W.D.N.Y.1976).

Since those opinions were issued, the Courts of Appeal for the Second and Fifth Circuits have come to grips with the problem and each has reached the conclusion that the insulation from indemnity claims conferred upon stevedores by 33 U.S.C. § 905(b), the 1972 amendment, does not apply to claims by non-vessels. Apart from the authoritative weight of opinions of Federal appellate courts on questions involving statutes of the United States and maritime law, the reasoning of these decisions is persuasive. In Zapico v. Bucyrus-Erie Co., 579 F.2d at 716-721, Judge Friendly reviewed the legislative history of the insertion of § 905(b) in the LHWCA. There is no need to rehearse at any length what has been so competently and recently done. In a nutshell, the court said that shipowners got a quid pro quo for the loss of their indemnity rights; they were relieved of strict liability. Owners of non-vessels received no such quid pro quo because they were not subject to the onus of strict liability in the first place. Id. at 721. "Given the clear statutory language [i.e., the reference in § 905(b) to vessels and the definition of vessels in 33 U.S.C. § 902(21) and 1 U.S.C. § 3 as every description of watercraft] and the absence of legislative history at variance with it, we would hesitate to hold that § 905(b) by its own force cuts off the availability of Ryan indemnity to a non-vessel in all cases where the concurring negligence of a stevedoring company has caused injuries to the latter's employees." Id. at 721-722.

In Pippen v. Shell Oil Co., 661 F.2d 378, 386-388 (5th Cir. 1981), although the court did not need to reach the issue, ⁴ it expressed its reluctance "to extend that prohibition [against indemnity actions] to nonvessels." The court in Pippen also wrote, "Until Congress more specifically abrogates this judicial remedy of contractual indemnity...