Puamier v. BARGE BT 1793

• Decision Date: 20 November 1974
• Docket Number: 14-73-N and 13-73-N.,Civ. A. No. 12-73-N
• Citation: 395 F. Supp. 1019
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Eutimio PUAMIER, Plaintiff, v. BARGE BT 1793, etc., et al., Defendants. Ruth A. MOREWITZ, Administratrix of the Estate of Barry Belshaw, Deceased, Plaintiff, v. BARGE BT 1793, etc., et al., Defendants. Ruth A. MOREWITZ, Administratrix of the Estate of Juan Rodriguez, Deceased, Plaintiff, v. BARGE BT 1793, etc., et al., Defendants.

395 F. Supp. 1019

Eutimio PUAMIER, Plaintiff, v. BARGE BT 1793, etc., et al., Defendants.

Ruth A. MOREWITZ, Administratrix of the Estate of Barry Belshaw, Deceased, Plaintiff, v. BARGE BT 1793, etc., et al., Defendants.

Ruth A. MOREWITZ, Administratrix of the Estate of Juan Rodriguez, Deceased, Plaintiff, v. BARGE BT 1793, etc., et al., Defendants.

Civ. A. Nos. 12-73-N, 14-73-N and 13-73-N.

United States District Court, E. D. Virginia, Norfolk Division.

November 20, 1974.

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Burt M. Morewitz, Newport News, Va., for plaintiffs.

Furr, Jett, Sykes, Berkley & Heilig, Norfolk, Va., for defendant Gulf Maritime Corp. and for claimants Ocean Marine Services, Inc., Diane Corp. and Mike Zapetis.

Crenshaw, Ware & Johnson, Norfolk, Va., for intervening plaintiff Peoples First National Bank of Miami Shores.

Seawell, McCoy, Winston & Dalton, Norfolk, Va., for Oceanic Transport Co.

Richard I. Gulick, Norfolk, Va., for Frank Brawley, etc.

OPINION AND ORDER

KELLAM, Chief Judge.

This case involves the sinking of the Tug MICHELE as it was proceeding northward from Miami, Florida, to Richmond, Virginia. At the time it was towing Barge BT 1793, which did not sink but was salvaged undamaged. Wound up in this case are the problems of which of two corporations actually owned the MICHELE, was there any unseaworthiness or negligence involved to allow the injured crewmen and the estates of the deceased crewmen to recover from the responsible parties, and who is liable for the expenses incurred in the eventual salvage operation. The facts are lengthy, but must be set out in order to properly explain the Court's ruling.

The Tug MICHELE and Barge BT 1793 were, as of early November in 1972, owned by Oceanic Transport Company (OTC). Henry Larson was President and Max Larson, Henry's son, was Vice-President of the Company. The MICHELE and Barge BT 1793 were its only assets. Ocean Service Corporation, of which Michael Zapetis was President and sole stockholder, wanted to purchase the MICHELE and the Barge in order to fulfill a Navy contract that required the hauling of sand from Richmond, Virginia, to Cuba. As the facts show, Ocean Service Corporation (OSC) had previously owned the MICHELE and had operated her in the Gulf of Mexico for years, using her for hauling barges between Georgia and Puerto Rico, Miami and Puerto Rico, and Georgia and South America. Another company in which Zapetis held shares of stock had at one time owned the Barge in question. Both the MICHELE and the Barge were sold to OTC in 1970, and now OSC wished to buy them back.

OTC wanted a buyer who was more financially secure than OSC, so OSC arranged to have Gulf Maritime Corporation (GMC), William Gruman, President, buy the Tug and Barge. GMC would then lease the Tug and Barge to OSC so the Navy contract could be completed. Zapetis and Gruman negotiated the sales agreement with Max Larson, and a contract of sale was signed late in the afternoon on Friday, November 3, 1973, by Max Larson and William Gruman as officers of their respective companies.

By the terms of the agreement, GMC agreed to pay a combined purchase price of $125,000.00 for the MICHELE and the Barge. $20,000.00 was paid in cash at the time of the signing. As to the remaining $105,000.00, GMC agreed to assume an existing preferred ship's mortgage for which Max and Henry Larson had made themselves personally liable. The assumed mortgage amounted to $38,000.00 on the MICHELE, and $34,495.02 on the Barge. GMC also agreed to secure a second ship's mortgage, under certain conditions which are not material here, in the amount of $32,504.98. Aside from the purchase price, GMC agreed to take out hull and P & I insurance, and to make OTC and the mortgagee bank the named beneficiaries.

At this juncture it is necessary to discuss the leasing agreement between GMC and OSC, and its relationship to the contract of sale between GMC and OTC. The leasing agreement was oral, and called for OSC to be a bareboat charterer of the MICHELE and the Barge. It would be the responsibility of OSC to hire a master and crew for the MICHELE and the Barge, and OSC agreed to supply sufficient insurance to satisfy the terms of the contract of sale. Thus, GMC would not actually have to contract for the necessary insurance. It is unclear whether a survey was ordered by GMC or OSC, but it is uncontroverted that a survey was performed so that insurance could be obtained by OSC. The survey, performed on November 3, 4 and 5, 1972, found the condition of the MICHELE to be "good," that the hull and deck were well caulked and apparently free from leaks, and that she was in general "heavily built." In conclusion the survey noted "No defects were apparent which would affect or impair the structural strength of the vessel." The survey reached the same conclusion regarding the Barge.

Although the sequence of events is somewhat unclear, at some time on Saturday, November 4, insurance binders were issued on OSC's behalf naming GMC, OTC, and the mortgagee bank as beneficiaries. These binders were accepted by OTC as fulfilling the insurance terms of the contract of sale. On the same day Zapetis took possession of the Tug and Barge directly from OTC, doing so with the proper authorization from GMC to accept delivery.

Zapetis, acting as President of OSC, hired Williams as the master of the MICHELE. Williams hired his cousin, Owens, as cook and mate. Zapetis also hired Belshaw as the engineer, and Puamier, Rodriguez and Zavala as the deckhands.

The MICHELE, towing Barge BT 1793 with a length of 6? diameter polyethylene line, that was approximately 300 feet to 500 feet out (the total length of the tow line was estimated at 600' to 1000'), left Miami, Florida, on Sunday, November 5, at approximately 7:00 p. m. Prior to her sailing, Zapetis personally boarded the MICHELE and looked her over. On board when the MICHELE left Miami was Williams and the crew of five. At the time of sailing the weather was clear, and no evidence exists to show that bad or rough weather was or should have been expected. The Tug was equipped with a new VHF radio, a Loran radio telephone, and a National receiver with a radio bank on it. All three were capable of receiving weather reports.

By the morning of Monday, November 6, there was about one foot of water in the bilge, although there is no explanation as to how it got there. Due to the fact that the permanent pump was out of order, a smaller, portable pump was used to remove the water, this being effected between the hours of 8 a. m. and noon. By noon the water was completely gone and no problem seems to have existed in the way of a permanent, constant leak.

It seems that in the morning the sea was not very rough at all, but that after noon the sea became progressively worse. At this point the facts become quite sparce because the three crewmen who survived the eventual sinking were in their quarters during the time that the MICHELE began foundering, and two of the three were actually asleep until after it became apparent that the MICHELE was in serious danger. The two people who would know the most about the operation of the Tug, the master, Williams, and the engineer, Belshaw, drowned while waiting for rescue from the Coast Guard.

What is certain is that a port list developed sometime during the afternoon. Zapetis stated that at 2:00 p. m. Williams was in touch with another boatman by radio and asked that a message be relayed to Zapetis that everything was fine. However, when crewman Zavala woke up between 3:00 p. m. and 4:00 p. m. the sea was very rough and trouble had developed. By the time Zavala awoke, Rodriguez was already on deck trying to secure a dozen or so five gallon cans of oil that were rolling about freely. Shortly after 5:00 p. m. Williams transmitted an S-O-S. Within minutes the MICHELE rolled to port and sank. Her location was four to five miles off of the East Coast of Florida, and she sank in 66 feet of water. There is no evidence of the strength of the wind, but the swells were from seven to ten feet. All six hands got free of the sinking Tug, but Williams, Belshaw and Rodriguez drowned while awaiting rescue. Zavala and Owens survived by clinging to debris from the MICHELE, and Puamier swam to the Barge and climbed on board to await rescue. On the morning of November 7, the Coast Guard picked up the survivors as well as the bodies of the deceased crewmen. All hands were accounted for.

On November 7, 1972, James Brawley, a marine salvor, learned of the sinking and called the Coast Guard. Brawley cannot be sure if the Coast Guard told him whether OTC or OSC was the proper owner, but he is sure that the telephone number given to him resulted in his being put in touch with Zapetis. Brawley and Zapetis reached an oral agreement regarding the salvage of the Barge, which was still afloat and connected to the Tug by the tow line. Brawley salvaged the Barge and brought it back to Miami. In the meantime, Zapetis confirmed their oral agreement by a telegram sent to Brawley. The telegram was signed "Ocean Service Corp Michael Zapetis President." In a subsequent telephone conversation Zapetis and Brawley confirmed an agreement to attempt to salvage the MICHELE, which was reduced to writing in the form of another telegram signed "Ocean Service Corp." Both Zapetis and Brawley are in agreement that Zapetis orally told Brawley that the Barge would stand as security for the expenses generated in salvaging the MICHELE. This was never put in writing, however.

To conclude this lengthy explanation of the facts, the Barge was taken to Virginia where it was sold to satisfy other creditors. It is now out of the picture. Brawley expended great sums attempting to raise the MICHELE but was unsuccessful. His total bill of $53,101.81 is still outstanding. Because the contract of sale...