Pacific Employers Ins. Co. v. M/V Gloria

• Decision Date: 08 August 1985
• Docket Number: No. 84-3135,84-3135
• Citation: 767 F.2d 229
• Parties: PACIFIC EMPLOYERS INSURANCE COMPANY, et al., Plaintiffs-Appellees, v. The M/V GLORIA, etc., Defendants, AQUARIUS, LTD., et al., Defendants-Third Party Plaintiffs-Appellants, v. GREENWICH MARINE, INC., Third Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 229

767 F.2d 229

PACIFIC EMPLOYERS INSURANCE COMPANY, et al., Plaintiffs-Appellees, v. The M/V GLORIA, etc., Defendants, AQUARIUS, LTD., et al., Defendants-Third Party Plaintiffs-Appellants, v. GREENWICH MARINE, INC., Third Party Defendant-Appellee.

No. 84-3135.

United States Court of Appeals Fifth Circuit.

Aug. 8, 1985.

Terriberry, Carroll & Yancey, M.D. Yager, New Orleans, La., for defendants-third party plaintiffs-appellants.

Lemle, Kelleher, Kohlmeyer & Matthews, W.E. Noel, Heather A. Dolins, New Orleans, La., for Pacific, et al.

Gelpi, Sullivan, Carroll & Laborde, Robert P. McCleskey, Jr., New Orleans, La., for Greenwich.

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

Before THORNBERRY, REAVLEY and HIGGINBOTHAM, Circuit Judges.

THORNBERRY, Circuit Judge:

This case arises out of a shipment of bagged soybean meal from New Orleans, Louisiana, to Puerto Limon, Costa Rica. When the cargo arrived in Puerto Limon, tallies of the cargo showed that some of the bags were wet, some torn and slack, and some shortlanded. Plaintiffs-appellees brought two admiralty actions under the Carriage of Goods by Sea Act, 46 U.S.C. Sec. 1300, et seq. (West 1975) ("COGSA"), in which they sought to recover for the cargo damage, slackage, and shortage. The district court consolidated the two actions. The plaintiffs were: Cargill, Inc. ("Cargill"), the shipper of the cargo; Ternerina, S.A., Central Agricola De Cartago, S.A., Fabrica De Alimentos Para Animales, and Industria National De Alimentos Gibbons, S.A., the Costa Rican consignees and receivers of the cargo; and Pacific Employers Insurance, the cargo underwriter. Pursuant to a stipulation of the parties, Pacific Employers Insurance was subrogated to the rights of the owners of the cargo.

The plaintiffs sought recovery against the M/V GLORIA, Aquarius, Ltd., and Transportacion Maritima Mexicana, S.A. The defendant M/V GLORIA is a three-hatch bulk and general cargo vessel of Liberian registry owned by the defendant Aquarius, Ltd. ("Aquarius"). The GLORIA was under a long-term time charter to the defendant Transportacion Maritima Mexicana, S.A. ("TMM").

For the voyage in issue, TMM entered into a voyage charter with Greenwich Marine, Inc. ("Greenwich"), a subsidiary of plaintiff Cargill. Greenwich was not an original defendant in the action but was tendered as a party defendant by Aquarius and TMM pursuant to Fed.R.Civ.P. 14(c). Aquarius and TMM also filed third-party actions against Greenwich seeking contribution and indemnity.

Cargill entered into contracts to sell soybean meal to certain parties in Costa Rica. Pursuant to these contracts Cargill engaged Greenwich to find a vessel to carry the soybean meal from New Orleans to Puerto Limon, Costa Rica. Greenwich then entered into a voyage charter of the M/V GLORIA for this purpose. Loading of the bagged soybean meal began in New Orleans on August 5, 1980. Rogers Terminal and Shipping Corp. ("Rogers Terminal") was responsible for bagging, clerking, tallying, and stowing the cargo. Rogers Terminal completed stowage on August 11, and seven bills of lading covering the cargo were issued by "ROGERS TERMINAL & SHIPPING CORPORATION, AS AGENTS BY AUTHORITY OF THE MASTER." Each bill of lading indicates that the cargo was being shipped in apparent good order by Cargill, shipper's weight, quantity and quality, unknown. Further, each bill of lading incorporated the terms of the voyage charter party and the provisions of the Carriage of Goods by Sea Act. Cargill subsequently negotiated the bills of lading.

The GLORIA sailed from New Orleans on August 11 and arrived in Puerto Limon The defendants-appellants, Aquarius and TMM, brought Greenwich into the action as a defendant to the main demand and as a third-party defendant to their claims for contribution and indemnity. The district court ordered that the third-party action by TMM against Greenwich be stayed pending arbitration as required by the voyage charter party. The parties then agreed to submit the case to the district court on written briefs, depositions, exhibits, and proposed findings of fact and conclusions of law. No oral evidence was taken.

on August 16. Tallies of the cargo conducted by employees of the Puerto Limon Port Authority (the Japdeva) disclosed that the discharged cargo contained wet and torn bags and that the cargo was slack and short. Subsequently, the owners of the cargo and the cargo underwriter, as subrogee, brought this action to recover for the alleged damage, slackage, and shortage. Only the cargo carried under bills of lading 1, 2, 3, 5, and 7 is at issue in this litigation.

On January 26, 1984, the district court entered judgment in favor of plaintiffs and against the GLORIA, in rem, and Aquarius and TMM, in personam, in the amount of $59,540.24 plus legal interest from the date of judicial demand. In a written opinion the district court found that the vessel, Aquarius, and TMM were carriers under COGSA and that Greenwich was not a carrier. The court also found that plaintiffs established a prima facie case against the carriers for recovery of the cargo damage, slackage, and shortage, and that defendants failed to rebut the plaintiffs' evidence. On February 23, the district court entered an amended judgment dismissing the claims against Greenwich. Aquarius and TMM appeal from the judgment and the amended judgment.

The issues before us are (1) whether the district court erred in entering judgment in rem against the M/V GLORIA; (2) whether the district court's findings that Aquarius and TMM were carriers under COGSA and that Greenwich was not a carrier are clearly erroneous; (3) whether the court erred in holding that the carriers were liable to the plaintiffs for the cargo damage, shortage, and slackage; and (4) whether the court erred in dismissing the claims against Greenwich. We vacate the in rem judgment because we conclude that the district court did not acquire jurisdiction over the vessel, and we vacate the dismissal of TMM's third-party claim against Greenwich. In all other respects we affirm the judgment and amended judgment of the district court.

I. THE JUDGMENT IN REM

The district court entered judgment in rem against the M/V GLORIA. Because we find that the district court did not have the power to exercise jurisdiction over the vessel we vacate that judgment.

The appellees' complaints stated claims for cargo damage against the vessel. At the bottom of the complaints, however, appellees directed as follows: "Please withhold service in rem until further notice from attorneys for plaintiffs." The record discloses that no such further notice was given, that no in rem process was ever issued, that the vessel was not arrested, and that no answer was filed on behalf of the GLORIA. Further, the record does not disclose any waiver of attachment by Aquarius. In these circumstances, the district court lacked jurisdiction to enter judgment against the vessel in rem. Cactus Pipe & Supply Co., Inc. v. M/V MONTMARTRE, 756 F.2d 1103 (5th Cir.1985); Associated Metals & Minerals Corp. v. SS PORTORIA, 484 F.2d 460, 461-62 (5th Cir.1973); Compagnie De Navigation Fraissinet & Cyprien Fabre, S.A. v. Mondial United Corp., 316 F.2d 163, 168 n. 2 (5th Cir.1963).

II. COGSA CARRIERS

Plaintiffs may recover under COGSA only from the "carriers" of the cargo. COGSA defines "carrier" to include "the owner or the charterer who enters into a contract of carriage with a shipper." 46 U.S.C. Sec. 1301(a). Accordingly, the plaintiffs must establish that a party defendant executed a contract of carriage. Associated Metals, 484 F.2d at 462. COGSA defines a "contract of carriage" as follows The term "contract of carriage" applies only to contracts of carriage covered by a bill of lading or any similar document of title, insofar as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same.

46 U.S.C. Sec. 1301(b). The district court found that TMM and Aquarius entered into a contract of carriage with Cargill and thus were carriers under COGSA, and that Greenwich did not enter into a contract of carriage as defined by the Act and thus was not a carrier.

Appellants challenge the district court's findings. The findings will not be overturned unless they are clearly erroneous:

In reviewing a judgment of a trial court, sitting without a jury in admiralty, the Court of Appeals may not set aside the judgment below unless it is clearly erroneous.... A finding is clearly erroneous when "although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed."

Daniels Towing Service, Inc. v. Nat Harrison Associates, Inc., 432 F.2d 103, 105 (5th Cir.1970) (quoting McAllister v. United States, 348 U.S. 19, 20, 75 S.Ct. 6, 8, 99 L.Ed. 20 (1954)). The fact that this case was submitted to the district court without oral testimony does not affect our standard of review:

If the district court's account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous. United States v. Yellow Cab Co., 338 U.S. 338, 342, 70 S.Ct. 177, 179, 94 L.Ed. 150 (1949); see also Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982).

This is so even when the district court's findings do not rest on credibility determinations, but are based instead on physical or documentary evidence or...