PPG Industries, Inc. v. Ashland Oil Company-Thomas Petroleum Transit Division
| Decision Date | 29 December 1978 |
| Docket Number | COMPANY-THOMAS,No. 78-1027,78-1027 |
| Citation | 592 F.2d 138 |
| Parties | PPG INDUSTRIES, INC., a Pennsylvania Corporation v. ASHLAND OILPETROLEUM TRANSIT DIVISION, a Kentucky Corporation v. CANAL BARGE COMPANY, INC. and Inland River Transportation Corporation, acorporation, and Dravo Corporation, Canal Barge Company, Inc., Appellant. |
| Court | U.S. Court of Appeals — Third Circuit |
Robert B. Acomb, Jr., Jones, Walker, Waechter, Poitevant, Carrere & Denegre, New Orleans, La., Theodore O. Struk, James R. Miller, Dickie, McCamey & Chilcote, Pittsburgh, Pa., for appellee, Ashland Oil Company-Thomas Petroleum Division.
Donald L. Very, Tucker, Arensberg, Very & Ferguson, Pittsburgh, Pa., for appellant.
Joseph W. Conway, Conway, Meyer & Barrante, Pittsburgh, Pa., John A. Pillar, Pittsburgh, Pa., for appellee, PPG Industries, Inc.
Before ROSENN and WEIS, Circuit Judges and FISHER, District Judge. *
Damage to cargo transported by water has been a subject of litigation since the dawn of nautical history, yet the legal problems engendered by this activity continue to perplex the courts. In this case, the carrier contends that once it established lack of responsibility for damage done to a barge's hull as it struck a submerged object, the burden of proving negligence causing cargo damage shifted to the plaintiff shipper. The trial judge, however, charged the jury that the burden remained with the carrier to show due diligence in caring for the cargo after the incident. The district court also held that a clause in the towing contract requiring the shipper to secure insurance on the cargo with a waiver of subrogation against the carrier was exculpatory and unenforceable. And finally, since double-skinned barges were not in general use on the rivers, the trial judge ruled that a single-skinned barge used for carrying a water soluble cargo was not unseaworthy per se and withdrew that issue from the jury. Finding no reversible error in the district court's rulings, we affirm.
On March 2, 1971, Ashland agreed to transport a cargo of antifreeze owned by PPG Industries, Inc. from Beaumont, Texas to St. Paul, Minnesota. Canal Barge Company later entered into a separate towing contract with Ashland, agreeing to tow the barges containing antifreeze from Baton Rouge, Louisiana to St. Paul. Upon delivery in St. Paul, the antifreeze in one of Ashland's barges was found to be contaminated by river water.
PPG brought suit against both Ashland and Canal. In early stages of the litigation, it was determined that because of the incorporation of the Carriage of Goods by Sea On remand, the case proceeded to trial in the district court 1 before a jury which found a general verdict in favor of Canal, but by special interrogatories determined that Canal was negligent and that the cargo loss was $110,000. Ashland's claim for damages to its barge was denied. The district court entered judgment n.o.v. in favor of PPG for the cargo loss and added interest.
Act (COGSA), 46 U.S.C. §§ 1300-1315, in the PPG-Ashland contract, the limitation period had run before suit was commenced. Judgment was accordingly entered in Ashland's favor against PPG. The claim for cargo loss asserted against Canal, however, continued to be viable as were the cross-claims between Ashland and Canal. PPG Industries, Inc. v. Ashland Oil Co.-Thomas Petroleum Transit Division, 527 F.2d 502, 505-07 (3d Cir. 1975).
The evidence established that about four days before arrival at St. Paul an accident occurred near Lock 14 on the Mississippi River and the Ashland barge was damaged. While maneuvering before entering the lock, the barges and towboat unexpectedly turned around in the river, a movement called "topping." As they did so, at least one barge scraped the river bottom or hit some submerged object. Inspection of the Ashland barge hull after it reached St. Paul and had been taken to dry dock revealed three holes more than one inch wide and a number of cracks varying in size from a fracture line to one-quarter inch in width. None of this damage could be seen while the barge was in the water.
Members of the crew testified that after the topping incident and during the remaining days of the voyage routine external checks did not disclose any signs that the Ashland barge was taking on water. No steps were taken, however, to examine the cargo or have the hull thoroughly inspected. At St. Paul, it was discovered that water had entered some of the barge compartments and contaminated the antifreeze, a highly soluble substance.
The trial judge removed from the jury's consideration Canal's contention that the barge was unseaworthy because a double-skinned vessel should have been used to carry cargo of this nature. The district court also decided that a provision in the PPG contract with Ashland requiring that the cargo owner purchase insurance for its own account with waiver of subrogation to the carrier did not relieve Canal of liability for the loss.
The case was submitted to the jury on instructions that upon proof the cargo was in good condition at the voyage's beginning, and was delivered at its end in damaged condition, a prima facie case for PPG was established. The jury was further charged that the burden shifted to Canal to establish due diligence and care for the cargo, but if it were shown that the loss was caused by a peril of the sea, then PPG would not be entitled to recover. The jury was told to submit a general verdict.
During their deliberations, the jurors sent a note to the trial judge reading:
"If in our deliberations we consider that the damage to the barge took place during the topping at Lock 14 and that no negligence existed on the part of the captain and pilot of the Caroline (Canal tug), must we at that point stop any further deliberation, or can we consider what is believed to be negligence on the part of the parties involved following the topping?"
After consultation with counsel, the trial judge instructed the jurors in substance that if they found Canal was not at fault for the topping, they should stop at that point. However, in addition, the judge asked that certain interrogatories be answered. In general they asked, assuming Canal had shown due diligence up to and The jury returned a general verdict in favor of Canal, but in answer to the interrogatories, found that Canal failed to exercise due care after the topping. According to the jury's responses, none of the cargo damage resulted from the topping, but rather flowed from failure to exercise due care thereafter. After consideration of post-trial motions, the district court entered judgment n.o.v. in the amount of $110,000 against Canal.
including the topping incident, what part of the cargo damage took place as a result of the topping; what portion occurred from the failure of due care thereafter; which parties failed to exercise due care; and what was the amount of damage. 2
Canal contends that in submitting the interrogatories to the jury, the trial judge erred in allocating the burden of proof. Canal's position is that if it met the burden of proving a peril of the sea, then PPG was required to prove that negligence of the carrier caused the cargo damage. The judge did not accept this argument. In connection with the interrogatories, he delivered these instructions:
"So what I am asking you to do is that, if you are satisfied that Canal met its burden by a fair preponderance of the evidence that it exercised due care and diligence up to the time of the topping, and if you are satisfied that Canal has met its burden of showing by that standard that the topping itself was not due to the lack of due care or diligence, but to the peril of the sea, if you will, or whatever, then you decide that Canal didn't establish to your satisfaction that it exercised due care and diligence during the rest of the trip, I think there were four days beyond the topping incident, and if you decide they didn't establish that to your satisfaction, then I want to know what percentage of the damage to the contamination to the cargo occurred as a result of the topping itself and what percentage occurred as a result of the failure to exercise diligence and due care after the topping."
The towing contract required Canal to exercise due diligence in the handling, care and delivery of the cargo but reserved for the carrier the limitation of liability granted under § 3 of the Harter Act, 46 U.S.C. § 192. 3 Section 3 would relieve Canal from The jury verdict established that the damage to the barge was caused by the topping incident. Cargo loss, however, was another matter. The jury apparently believed that the damage to the hull was not so extensive as to be the sole and proximate cause of the contamination and that the subsequent neglect of the carrier was the immediate cause. In granting judgment n.o.v. to the cargo owner, the trial judge necessarily implied that there was adequate evidence to support the jury's conclusion.
liability if the loss was caused by a peril of the sea. 4
Where damage to the cargo is not discovered until after it has been delivered and no substantial evidence of the cause remains, allocation of the burden of proof and attendant risk of nonpersuasion in proving that the loss arose from a cause excepted under law or by the parties is often crucial in determining liability. Our task here is to determine whether the judge's charge properly directed the jury on this issue. Since the exculpatory provisions of the Harter Act were incorporated into the towing contract by reference, the decisional law regarding burden of proof under that Act and COGSA, 5 is pertinent to our review.
A seminal case in the United States, a pre-Harter Act decision, 6 is Clark v. Barnwell, 53 U.S. 272, 13 L.Ed. 985 (1851), in which there was a claim for damaged goods shipped under a bill of lading that excepted liability...
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