Master Shipping Agency, Inc. v. M. S. Farida

• Decision Date: 28 February 1978
• Docket Number: D,Nos. 368 and 402,REDERI-AKTIELBOLAG,s. 368 and 402
• Citation: 571 F.2d 131
• Parties: MASTER SHIPPING AGENCY, INC., et al., Plaintiffs, v. M. S. FARIDA, her engines, boilers, etc. and Norton Line, Defendants, Third-Party Plaintiffs. STOCKHOLMSSVEA, Defendant, Third-Party Plaintiff-Appellee, v. COURT CARPENTRY & MARINE CONTRACTORS CO., and International Terminal Operating Co., Defendants, Third-Party Defendants-Appellants and Appellees. ockets 77-7392 and 77-7399.
• Court: U.S. Court of Appeals — Second Circuit

Page 131

571 F.2d 131

MASTER SHIPPING AGENCY, INC., et al., Plaintiffs, v. M. S. FARIDA, her engines, boilers, etc. and Norton Line,

Defendants, Third-Party Plaintiffs.

STOCKHOLMS REDERI-AKTIELBOLAG SVEA, Defendant, Third-Party Plaintiff-Appellee, v. COURT CARPENTRY & MARINE CONTRACTORS CO., and International

Terminal Operating Co., Defendants, Third-Party

Defendants-Appellants and Appellees.

Nos. 368 and 402, Dockets 77-7392 and 77-7399.

United States Court of Appeals, Second Circuit.

Argued Nov. 22, 1977.

Decided Feb. 28, 1978.

M. E. DeOrchis, New York City (Chester D. Hooper, Haight, Gardner, Poor & Havens, and Alexander E. Rugani, Kirlin Campbell & Keating, New York City, of counsel), for defendant, third-party plaintiff-appellee, Stockholms Rederi-Aktielbolag Svea.

Robert H. Peterson, New York City (Eli Ellis, Peter J. McHugh, Hill, Betts & Nash, New York City, of counsel), for defendant, third-party defendant-appellant and appellee International Terminal Operating Co., Inc.

William Warner, New York City (Symmers, Fish & Warner, New York City, of counsel), for defendant, third-party defendant-appellant and appellee, Court Carpentry & Marine Contractors Co., Inc.

Before LUMBARD, WATERMAN and VAN GRAAFEILAND, Circuit Judges.

VAN GRAAFEILAND, Circuit Judge:

On February 19, 1969, the M. S. Farida sailed from New York for ports in South America with a cargo which included four heavy tractors. On February 21, the vessel's crew was forced to abandon ship because one of the tractors, weighing about 14.4 tons, had broken loose and punctured a large hole in the ship's hull below the water line. The crew did not learn what had brought the vessel to the verge of sinking until after it had been towed to Norfolk, Virginia and placed in dry dock.

These are appeals from judgments awarding damages jointly and severally against International Terminal Operating Co., Inc., the stevedore which loaded the vessel, and Court Carpentry & Marine Contractors Co., Inc., the marine lasher which secured the tractors in place in the Number 2 lower hold. In a consolidated action tried in the Southern District of New York, both the ship and appellants were found liable on cargo's claims for damage, and judgment over was directed against appellants on the ship's cross-claim for indemnification of its liability to cargo and for its own losses.

The liability issues were tried before Judge Bonsal and his factual findings should not be set aside unless clearly erroneous. S. S. Amazonia v. New Jersey Export Marine Carpenters, Inc., 564 F.2d 5, 8 (2d Cir. 1977); Union Carbide & Carbon Corp. v. United States, 200 F.2d 908, 910 (2d Cir. 1953). ¹ The district judge's conclusions as to fault are subject to more searching review. See, e. g., Mamiye Bros. v. Barber Steamship Lines, Inc., 360 F.2d 774, 776-78 (2d Cir.), cert. denied, 385 U.S. 835, 87 S.Ct. 80, 17 L.Ed.2d 70 (1966). However, where, as here, his conclusions were reached by application of the appropriate legal standards to the facts as found, there is no reason to disturb them. Cleary v. United States Lines Co., 411 F.2d 1009, 1010 (2d Cir. 1969); Castro v. Moore-McCormack Lines, Inc., 325 F.2d 72, 75-76 (2d Cir. 1963).

A detailed review of the evidence is unnecessary. Court Carpentry was held at fault because it lashed the fourteen ton tractor to the floor while it was sitting on its flexible rubber tires. The proper practice, according to the ship's experts, would have been to support the tractor on rigid wooden blocks placed under its axles. The district court found, as an additional causative factor, that the wooden bracing around the tractor was inadequate and insecurely fastened in place.

Expert testimony also established that periodic inspections of the stowed tractors were required so that wire lashings, stretched or loosened by the pitching of the ship, could be tightened as needed. International was held at fault because it stowed cargo in front of an entranceway into the Number 2 hold, thus preventing entry into the hold by the ship's crew while the ship was at sea. The district court found that, had the ship's chief officer been able to enter the Number 2 hold when he attempted to do so on February 20, prompt remedial action could have been taken to avert the catastrophe or reduce the loss, "even if it meant heading for port."

The district court concluded that the foregoing defects in stowage made the Farida unseaworthy and that the ship failed to carry its burden of proving that its own fault or neglect did not contribute to the loss. See46 U.S.C. § 1304(2)(q); Nichimen Co. v. M. V. Farland, 462 F.2d 319, 329-30 (2d Cir. 1972). For this reason, the ship was held liable to cargo. However, this did not prevent the ship from recovering over against the stevedore and lasher for breach of their implied warranties of workmanlike performance. "The shipowner's own conduct will preclude it from obtaining indemnity from the stevedore only where it prevented or seriously handicapped the stevedore in his effort to perform his duties." Henry v. A/S Ocean, 512 F.2d 401, 407 (2d Cir. 1975). The district court found that no conduct of this nature took place, and this finding is supported by the evidence.

The district judge held appellants jointly and severally liable because he felt that an apportionment of damages as between them "would be speculative at best." We construe this holding as an equal division of damages, United States v. Reliable Transfer Co., Inc., 421 U.S. 397, 407, 411, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975) ² for the payment of which appellants are jointly and severally liable and for which a right of contribution exists. See Cooper Stevedoring Co. v. Fritz Kopke, Inc., 417 U.S. 106, 111, 94 S.Ct. 2174, 40 L.Ed.2d 694 (1974); The Alabama, 92 U.S. 695, 697-98, 23 L.Ed. 763 (1875); The Gulf Stream, 64 F. 809, 810-11 (2d Cir. 1894). In Getty Oil Co. (Eastern Operations) Inc. v. SS Ponce DeLeon,555 F.2d 328, 333-35 (2d Cir. 1977), we held that apportionment of damages is a factual determination which will not be disturbed on appeal unless clearly erroneous. The trial judge's determination that he was unable to make an apportionment should be treated in the same manner. Cf. The Max Morris, 137 U.S. 1, 15, 11 S.Ct. 29, 33, 34 L.Ed. 586 (1890). Because we have no firm conviction that damages should have been apportioned herein, we will not disturb the district court's holding.

Following his decision on liability, Judge Bonsal appointed a Special Master to hear and report concerning the elements and amount of damages. The findings of the Special Master which were adopted by the district court may not be set aside unless clearly erroneous. ³ Fed.R.Civ.P. 52(a); Skibs A/S Dalfonn v. S/T Alabama, 373 F.2d 101, 106 (2d Cir. 1967). Although appellants attack a number of these findings, most of their objections are without merit. The findings concerning maintenance expenses were factual in nature and are not clearly erroneous. Appellee's proof of lost profits resulting from the unexpected interruption of the Farida's voyage, supported by evidence of the profits of a sister ship on the same run, was sufficiently certain to support the award for this loss. Moore-McCormack Lines v. The Esso Camden, 244 F.2d 198, 201 (2d Cir.), cert. denied, 355 U.S. 822, 78 S.Ct. 29, 2 L.Ed.2d 37 (1957); The Gylfe v. The Trujillo, 209 F.2d 386, 388-90 (2d Cir. 1954); see also Skou v. United States, 478 F.2d 343, 345-47 (5th Cir. 1973); Continental Oil Co. v. SS Electra, 431 F.2d 391, 392-93 (5th Cir. 1970), cert. denied, 401 U.S. 937, 91 S.Ct. 925, 28 L.Ed.2d 216 (1971).

Upon the Farida's arrival at Norfolk, her master declared general average, a procedure by which ship and cargo share ratably the overall loss resulting from efforts to extricate the ship and its cargo from a danger common to both. ⁴ When general average is declared it is the responsibility of the ship to see that cargo interests contribute to the general average fund or furnish security for such contribution. Dibrell Bros. Inc. v. Prince Line Ltd., 58 F.2d 959 (2d Cir. 1932); Cia. Atlantica Pacifica, S. A. v. Humble Oil & Refining Co., 274 F.Supp. 884, 891 (D.Md.1967); American Tobacco Co. v. Goulandris, 173 F.Supp. 140, 182 (S.D.N.Y.1959), aff'd in part, 281 F.2d 179 (2d Cir. 1960), modified in part sub nom. Lekas & Drivas, Inc. v. Goulandris, 306 F.2d 426 (2d Cir. 1962).

It is then the duty of the ship's master to make the general average adjustments. Johnson & Higgins v. United States, 287 U.S. 459, 462, 53 S.Ct. 209, 77 L.Ed. 426 (1932); Ralli v. Troop, 157 U.S. 386, 400, 15 S.Ct. 657, 39 L.Ed. 742 (1895); The Emilia S. De Perez, 22 F.2d 585, 586 (D.Md.1927). Although the master himself may make the necessary computations, United States v. Atlantic Mutual Insurance Co., 298 U.S. 483, 491-92, 56 S.Ct. 889, 80 L.Ed. 1296 (1936), they are usually so complex that he hires a professional general average adjuster. Cia. Atlantica Pacifica, S. A. v. Humble Oil & Refining Co., supra, 274 F.Supp. at 892. The master of the Farida hired a firm of professional adjusters, and the cost of the adjustment, which was in excess of $101,600.63, has been charged against appellants. Previous decisions in this Circuit and elsewhere have established the shipowner's right to recover for this expenditure. See Moore-McCormack Lines v. The Esso Camden, supra, 244 F.2d at 202; Gray's Harbor Tugboat Co. v. Petersen, 250 F. 956, 959 (9th Cir. 1918); Erie & Western Transportation Co. v. City of Chicago, 178 F. 42, 51 (7th Cir.), cert. denied, 216 U.S. 620, 30 S.Ct. 574, 54 L.Ed. 641 (1910); The Energia, 66 F. 604, 608 (2d Cir. 1895); Compania Punta Alta, S. A. v. Dalzell, 162 F.Supp. 926, 930 (S.D.N.Y.1958).

Appellants contend, however, that when the owners of the Farida discovered the cause of her mishap, they should have realized that they would be unable to recover in general average because they had failed to exercise reasonable diligence...