Nutt v. Loomis Hydraulic Testing Co., Inc.

• Citation: 552 F.2d 1126
• Decision Date: 27 May 1977
• Docket Number: No. 75-2429,75-2429
• Parties: Bobby R. NUTT, Union Oil Company of California and Aetna Casualty and Surety Company, Plaintiffs-Appellees, v. LOOMIS HYDRAULIC TESTING COMPANY, INC. and the Home Insurance Company, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1126

552 F.2d 1126

Bobby R. NUTT, Union Oil Company of California and Aetna Casualty and Surety Company, Plaintiffs-Appellees, v. LOOMIS HYDRAULIC TESTING COMPANY, INC. and the Home Insurance Company, Defendants-Appellants.

No. 75-2429.

United States Court of Appeals Fifth Circuit.

May 27, 1977.

Philip J. McMahon, Houma, La., Lester J. Lautenschlaeger, Jr., New Orleans, La., for defendants-appellants.

Robert C. Leininger, Jr., New Orleans, La., for plaintiffs-appellees.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before BROWN, Chief Judge, and HILL and FAY, Circuit Judges.

JOHN R. BROWN, Chief Judge:

This case, like most suits for indemnity, combines the best of musical chairs and hot potato the object of the game is to be sitting pretty when the judicial music stops, by leaving the other party holding the spud. Here, while appellant was stuck with only half of the potato, he objects strenuously to having to bear any of it at all. In more austere terms it is the case of a vessel owner, cast entirely for the death of the operator of the other vessel, seeking and successfully obtaining contribution-indemnity under the 50/50 Divided Damages rule. The loser, owner of the other vessel, challenges any contribution on the ground (i) that negligence of its operator may not be imputed to it and, as an anchor to windward, urges (ii) apportionment should be based on comparative fault, not the old-time rigid 50/50 rule. We reject (i) but sustain (ii). Accordingly, our ditty in this case modifies the judgment of the magistrate below by reducing the amount of damages required to be borne by appellant, but as modified, we affirm.

The Accident

Decedent Uwell J. Derouen was employed by Loomis Hydraulic Testing Company, Inc. (Loomis) as a shop foreman. Bobby R. Nutt (Nutt) was an employee of Union Oil Company of California (Union). On December 12, 1966, the Decedent, together with Earl T. Strickland, a sales representative for Loomis, took the company motorboat ¹ to check Loomis employees on Gracey-Hellum Rig # 5, a Union well. ² Decedent and Strickland arrived at the rig around 4 p. m., stayed for about a half hour and departed.

When they departed Gracey-Hellums Rig # 5, Decedent was the operator. He proceeded down the canal, which dead-ended where Rig # 5 was located, doing approximately (as the parties described it, in very unnautical terms) 35 miles per hour. The weather was very cold and both men were heavily clothed. Due to the cold and wind they were both sitting behind the windshield which was cracked. As Derouen approached Union's Main Terminal Area canal, he was navigating the motorboat parallel to and approximately 16 feet to the left of a mud bank five to eight feet high topped with thick vegetation four to six feet high. Derouen slowed the motorboat to about 15 to 18 miles per hour as he entered the intersection of that canal and the canal leading to Union's Main Terminal.

At this time Nutt had departed Union's Main Terminal at the end of that canal in Union's crew boat. ³ As the crew boat approached the intersection, it was approximately 30 to 40 feet from the left bank or to the left of the center of that canal. The sliding plexiglass window to the left of Nutt was cracked and fogged. Immediately prior to entering the intersection and in order to execute his turn, Nutt slowed his port engine, and turned his wheel slightly to the left. This action caused the boat to list to the left and begin her turn to port. At this point, the motorboat came into sight. At that moment the crew boat swerved to starboard and the motorboat simultaneously swerved to port resulting in the collision, which caused decedent's death and totally destroyed Loomis' boat.

State Trial Court

Suit was filed in Louisiana State Courts on Decedent's behalf against Nutt, Union, and Union's insurer, Aetna Casualty & Surety Company (Aetna). ⁴ These defendants filed a third party petition against Loomis and its insurer, The Home Insurance Company (Home), seeking contribution-indemnity under the hold harmless provision of the service contract between Loomis and Union. ⁵ After being impleaded, Loomis filed a reconventional demand against Union seeking damages for the loss of its vessel in the collision.

On June 8, 1971 the state trial court entered its judgment. It found that "both vessels were negligently operated and that this negligence of both proximately caused the collision". ⁶ After finding both parties negligent, the trial court applied the rules of comparative negligence then applicable to maritime tort claims growing out of a collision. In doing so, the trial court assessed Nutt's negligence at 60% and Decedent's contributory negligence at 40%.

Judgment was therefore entered in favor of Decedent's widow and minor son, in the amount of $112,639.42, which represented the total Judgment award in favor of these plaintiffs ⁷ ($145,000.00), less 40% deducted for the Decedent's contributory negligence, plus court costs and interest. The court also found that Loomis did not intend to indemnify Union's own negligence under the contract, and accordingly dismissed Union's third party complaint against Loomis. Finally, Loomis received a judgment in the amount of $1,000.00, in its reconventional demand filed against Union for the damage to its boat.

After the Judgment of the Lower Court was affirmed by the First Circuit Court of Appeals for the State of Louisiana, and the Supreme Court of Louisiana denied writs, Union paid the heirs of Decedent $112,639.42.

The Federal Indemnity Action

After Union was forced to pay the heirs of Decedent $112,639.42, it instituted litigation in United States District Court seeking contribution, ⁸ under the Divided Damages rule, ⁹ from Loomis and Home. After answer was filed, a joint stipulation of facts ¹⁰ was agreed upon and filed along with legal memorandum of counsel. On September 17, 1974, the case was referred to the United States Magistrate for "adjudication on stipulation of facts and memorandum."

Based upon the stipulated facts, the Magistrate concluded that, since the collision in question was caused by the mutual fault of both vessels and their operators, ¹¹ Union was entitled, as a matter of fact and of law under the Divided Damages rule, to contribution from Loomis in the amount of $56,319.71. Judgment was entered accordingly. It is from this judgment that Loomis and Home appeal, contending that (i) the District Court erred in imputing the negligence of Decedent to Loomis; (ii) United States v. Reliable Transfer Co., 1975, 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251, 1975 A.M.C. 541 should be applied retroactively to this case; and (iii) under Reliable Transfer, Loomis should not have to pay anything, since Decedent's award has already been reduced by 40%, the extent of Decedent's contributory negligence.

Imputed Negligence

Loomis contends that the District Court erred in imputing the negligence of the Decedent to Loomis. Loomis relies primarily on the cases of Drewery v. Daspit Brothers Marine Divers, Inc., 5 Cir., 1963, 317 F.2d 425, 1963 A.M.C. 1787; and Loffland Brothers Co. v. Roberts, 5 Cir., 1968, 386 F.2d 540, 1968 A.M.C. 1463. Union argues in response that those cases are inapplicable to a collision case where both vessels are at fault and the Divided Damages rule applies. Union relies on Empire Seafoods, Inc. v. Anderson, ¹² 5 Cir., 1968, 398 F.2d 204, 1968 A.M.C. 2664, cert. denied, 393 U.S. 983, 89 S.Ct. 449, 21 L.Ed.2d 444, for the principle that the amount of a personal injury award or settlement must be included as an element of damages to be divided equally between the two offending vessels after first deducting any amount assessed against the personal injury claimant for his own contributory negligence.

The District Court concluded that the "question of whether the restriction on indemnity described in Loffland Brothers should affect the application of the Divided Damages Rule in a mutual fault collision is apparently one of first impression." After phrasing the issue in this manner, the Court ruled that "the Divided Damages Rule is unaffected by the holding in Loffland Brothers, supra." ¹³

The District Court was correct in noting that this case is one of first impression. In this case, Derouen, Loomis' employee, was 40% contributorily negligent and therefore partially responsible for causing this accident. Stated most favorably to Loomis, on the assumption that if Loomis is found to be negligent, it can only be through the imputed negligence of his servant, Derouen, it is clear that if Union sought indemnity, or if third parties such as cargo owners, or those sustaining personal injuries or property losses sought recovery, Loomis would be liable. See, e. g., Standard Oil Company v. Anderson, 1909, 212 U.S. 215, 29 S.Ct. 252, 53 L.Ed. 480. Where, however, the only damages for which Union seeks apportionment are damages for the wrongful death of Derouen the contributorily negligent employee of Loomis Loomis understandably contends that the restriction on indemnity described in Loffland Brothers prevents the application of the Divided Damages rule or the application of the Reliable Transfer ¹⁴ comparative negligence rule. The narrow, unique issue presented for our consideration, therefore, is whether the application of the normal rule in mutual fault collision cases whether it be the Divided Damages rule or the Reliable Transfer comparative negligence rule is dependent on who or what is injured, rather than on the fact of injury and the fact of mutual fault. For the reasons discussed below, we conclude that this issue must be decided against Loomis and that our decision does not stand on Drewery or Loffland.

Appellant cites both Drewery and Loffland for the sweeping proposition that "the negligence of an injured employee may not be imputed to his employer so as to render the employer liable in indemnity for the injur(y)...