Royal Ins. Co. v. Cineraria Shipping Co.
| Citation | 894 F. Supp. 1557 |
| Decision Date | 24 July 1995 |
| Docket Number | No. 92-1694-CIV-T-24(C).,92-1694-CIV-T-24(C). |
| Parties | ROYAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. CINERARIA SHIPPING COMPANY, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
Kenneth E. Cohen, Kroll & Tract, Miami, FL, James W. Carbin, Kroll & Tract, New York City, for Royal Ins. Co.
Allen K. Von Spiegelfeld, Fowler, White, Gillen, Boggs, Villareal & Banker, P.A., Tampa, FL, for Cineraria Shipping.
Before the Court are the parties' cross motions for summary judgment (D-37 & D-40). This Court considers these motions upon the parties' joint stipulation (D-31) to resolve this matter by summary judgment based upon submitted stipulations and briefs.
On October 24, 1986, the M/V KALLIOPI II came into the Tampa Bay port under pilotage to load a shipment of scrap iron cargo bound for Korea .1 The loading of the cargo was completed on October 29, 1986, and shortly thereafter, the crew prepared the vessel for sailing (D-36, Stip. 3, 4). The crew's preparation included testing all of the vessel's navigational equipment including the steering gear, radar and other items (D-36, Stip. 4).
Captain George McDonald, a Tampa Bay pilot, boarded the vessel at approximately 2125 hours and instructed the crew to secure the Tug ORANGE on the port bow and the Tug TAMPA on the port quarter. The crew complied with Captain McDonald's instructions (D-36, Stip. 5). At 2140 hours, the engines of the M/V KALLIOPI II were tested and placed on standby (D-36, Stip. 6). Shortly thereafter at 2145 hours, the vessel dropped her lines, and the two tugs backed the vessel out of her slip, berth 223, into the Cut D Channel, which runs perpendicular to the berth (D-36, Stip. 6, 7).2 Not using the ship's engines until 2159 hours in an attempt to line the vessel up with the channel, the Captain ordered "slow ahead" and then ordered the helm "hard to starboard" (D-36, Stip. 9). Until this point, all movement of the vessel was controlled by the Tug TAMPA and the Tug ORANGE (D-36, Stip. 9).
Upon hearing the "hard to starboard" order, the master noticed that the rudder angle indicator did not match the helm order. He thus switched the steering gear motors on bridge and thereafter observed problems in getting the helm orders to synchronize with the rudder indicator. Upon investigation by the chief engineer and second officer, it was discovered that the steering gear machinery was damaged (D-36, Stip. 10). It was further determined that the rudder damage was apparently caused by the pilot backing the vessel too far and striking the western bank of Channel D with the rudder (D-36, Stip. 11). Upon the master's determination that the M/V KALLIOPI II could not proceed on her own, the vessel was returned to berth 223 with tug assistance for further inspection (D-36, Stip. 12). At that point, it was determined that disabling damage to the rudder stock occurred (D-36, Stip. 12).
Throughout this entire incident, the vessel remained within the Tampa port with tug services readily available (D-36, Stip. 13). The damage did not affect the hull of the vessel, and there was no danger of entry of seawater into the vessel as a consequence of the incident (D-36, Stip. 11). No distress calls were made by the vessel during the incident (D-36, Stip. 13). Seas were calm with winds of Beaufort force 3 at departure and diminishing to force 1 upon the vessel's return to berth (D-36, Stip. 14).
Once it was determined that the rudder was disabled and the vessel could not continue its voyage, the shipowners declared general average (D-36, Stip. 15). Following the declaration of general average, it was determined that the M/V KALLIOPI II could not be repaired with all of the cargo onboard (D-36, Stip. 21). A portion of the cargo was therefore discharged, placed on the dock, and then reloaded after the repairs were completed (D-36, Stip. 21). The repairs were performed at Tampa shipyard, and thereafter the cargo was reloaded, and the vessel completed its voyage delivering the cargo to its destination (D-36, Stip. 21).
Due to the general average declaration, all of the cargo interests were required to post security for the general average claim (D-36, Stip. 16). A general average statement was thus prepared setting forth both the general average and particular average items (D-36, Stip. 22). The statement calculates that the Plaintiff's contribution to general average would be $108,744.02 (D-36, Stip. 23). Royal Insurance Company "Royal", as insurer of the cargo,3 posted the requisite security, but contends that this is not a general average act and thus, contribution is not due on their part.
Plaintiff Royal now seeks a declaratory judgment requesting the Court find that: 1) the October 29, 1986 incident was not a proper general average event; 2) Defendant had no right to declare general average and seek contribution from cargo interests; 3) Defendant's claim for contribution in general average is denied; 4) the general average guarantee issued in response to Defendant's demand is released; 5) denying Defendant's counterclaim for contribution in toto; and 6) granting Plaintiff such other, further, and/or different relief as this Court deems proper. In opposition, the Defendant seeks summary judgment in favor of its counterclaim for general average contribution in the amount of $108,744.02, as well as interest and costs from the time of the general average adjustment.
Based on the foregoing, the Court has before it two issues for consideration: 1) whether these facts establish a general average event; and 2) whether Plaintiff is required to contribute to general average under the provisions of the charter party.
General average is an equitable doctrine that is applicable "when, and only when, any extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritime adventure." Deutsche Shell Tanker Gesellschaft v. Placid Refining Co., 993 F.2d 466, 469 (5th Cir.1993) (quoting York/Antwerp Rule A (1974)). In such circumstances, "the party suffering the loss has a right ... to claim contribution from all who participate in the venture," including the cargo interests. Ceramic Corp. of Am. v. Inka Maritime Corp., 1 F.3d 947, 948 (9th Cir.1993) (quoting Thomas J. Schoenbaum, Admiralty and Maritime Law § 16-1, at 522-23 (1987)).
A claim for general average requires a three prong analysis. Deutsche Shell, 993 F.2d at 468. First, the vessel owner must establish that a general average act occurred and that there was a separate cargo owner at the time of the act. Id. If the vessel owner meets this first requirement, the cargo owner may avoid liability by proving that the vessel was unseaworthy at the start of the voyage, and the unseaworthiness was the proximate cause of the general average act. Id. Lastly, if the cargo owner establishes unseaworthiness, the vessel owner may still succeed if it proves that it exercised "due diligence" to make the vessel seaworthy at the commencement of the voyage. Id.
In determining whether a general average act occurred, the York/Antwerp Rules, 1974,4 provide some guidance in this area of maritime law. Specifically, Rules X and XI are relevant in determining whether general average contribution is warranted.5 Rule X provides in relevant part:
(a) When a ship shall have entered a port or place of refuge, or shall have returned to her port or place of loading in consequence of accident, sacrifice or other extraordinary circumstances, which render that necessary for the common safety, the expenses of entering such port or place shall be admitted as general average; and when she shall have sailed thence with her original cargo, or a part of it, the corresponding expenses of leaving such port or place consequent upon such entry or return shall likewise be admitted as general average....
See Richard Lowndes & George R. Rudolf, The Laws of General Average and the York-Antwerp Rules, ¶ 676 at 319 (10th ed. J. Donaldson, C. Staughton, D. Wilson 1975) (Vol. 7 of British Shipping Laws).
(b) The cost of handling onboard or discharging cargo, fuels or stores whether at a port or place of loading, call or refuge, shall be admitted as general average, when the handling or discharge was necessary for the common safety or to enable damage to the ship caused by sacrifice or accident to be repaired, if the repairs were necessary for the safe prosecution of the voyage, except in cases where the damage to the ship is discovered at a port or place of loading or call without any accident or other extraordinary circumstances connected with such damage having taken place during the voyage....
See Lowndes & Rudolf, supra ¶ 689, at 328.
Rule XI(b) provides in relevant part:
(b) When a ship shall have entered or been detained in any port or place in consequence of accident, sacrifice or other extraordinary circumstances which render that necessary for the common safety, or to enable damage to the ship caused by sacrifice or accident to be repaired, if the repairs were necessary for the safe prosecution of the voyage, the wages and maintenance of the master, officers and crew reasonably incurred during the extra period of detention in such port or place until the ship shall or should have been made ready to proceed upon her voyage, shall be admitted in general average....
See Lowndes & Rudolf, supra ¶ 730, at 347.
Historically, courts throughout the jurisdictions have typically found that general average acts existed in situations involving "imminent peril." See Barnard v. Adams, 51 U.S. (10 How.) 270, 303, 13 L.Ed. 417 (1850); The Star of Hope, 76 U.S. (9 Wall.) 203, 19 L.Ed. 638 (1869); Hobson v. Lord, 92 U.S. 397, 23 L.Ed. 613 (1876); Aktieselskabet Cuzco v. The Sucarseco, 294 U.S. 394, 401, 55 S.Ct. 467, 470, 79 L.Ed....
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