A/S Ludwig Mowinckles Rederi v. Tidewater Const. Co.

• Decision Date: 03 August 1977
• Docket Number: No. 76-2240,76-2240
• Citation: 559 F.2d 928
• Parties: A/S J. LUDWIG MOWINCKLES REDERI, Appellee, v. TIDEWATER CONSTRUCTION CORPORATION, Appellee. LONE STAR INDUSTRIES, INC., Appellant, v. GEARBULK, LTD., Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 928

559 F.2d 928

A/S J. LUDWIG MOWINCKLES REDERI, Appellee, v. TIDEWATER CONSTRUCTION CORPORATION, Appellee.

LONE STAR INDUSTRIES, INC., Appellant, v. GEARBULK, LTD., Appellee.

No. 76-2240.

United States Court of Appeals Fourth Circuit.

Argued May 2, 1977.

Decided Aug. 3, 1977.

John B. King, Jr., Norfolk, Va. (Hugh S. Meredith, Vandeventer, Black, Meredith & Martin, Norfolk, Va., on brief), for appellant.

Robert M. Hughes, III, Norfolk, Va. (John R. Crumpler, Jr., Seawell, McCoy, Dalton, Hughes, Gore & Timms, Norfolk, Va., on brief), R. Arthur Jett, Jr., Norfolk, Va. (Jett, Berkley & Furr, Norfolk, Va., on brief), for appellees.

Before WINTER, Circuit Judge, LEONARD P. MOORE, ^* Senior Circuit Judge, and THOMSEN, ^** Senior District Judge.

THOMSEN, Senior District Judge:

The claims, counterclaims, cross-claims and third-party claim filed in the district court in this action arose out of the collapse of a pier facility in Norfolk, Virginia, owned and operated by appellant Lone Star Industries, Inc., resulting in the death of two Lone Star employees and injuries to a third, as well as damages to the pier and to the M/V Heina. The vessel, which was discharging a cargo of cement clinker at the pier when the casualty occurred, is owned by appellee A/S J. Ludwig Mowinckles Rederi (Mowinckles), and was under charter to appellee Gearbulk, Ltd.

The pier facility was designed and constructed for Lone Star by appellee Tidewater Construction Corp. to receive and accommodate cargoes of cement clinker from large self-unloading vessels (like the M/V Heina) under charter to Gearbulk. Clinker is discharged by use of a vessel's crane into two large hoppers mounted on the pier, which can be moved along the pier to permit unloading of all hatches without moving the vessel. The clinker is carried by conveyor belts from the hoppers to a storage bin.

On the morning of November 8, 1972, the south hopper on the pier collapsed during the unloading of the M/V Heina and fell onto the ship and into the water. Two Lone Star employees on the pier were killed, and a third was injured. The estates of the deceased Lone Star employees have filed wrongful death actions against Mowinckles and Tidewater in a state court, and against Mowinckles in the district court. The injured employee filed an action against Mowinckles and Tidewater in a state court. Those actions have not yet come to trial, and Lone Star is not a party to any of them. Workmen's compensation benefits have been paid under the Virginia Workmen's Compensation Act, Va. Code Ann. § 65.1-1 et seq. (1973 Repl.Vol.). ¹

Mowinckles instituted this suit in admiralty in the Eastern District of Virginia against Lone Star and Tidewater, alleging negligence and breach of contract, and seeking damages for injury to the ship and indemnification for any liability which may be imposed on it in the pending wrongful death or personal injury actions brought against it by Lone Star employees or their estates, and attorneys' fees and expenses incurred in defense of those actions. Lone Star filed a counterclaim against Mowinckles, alleging negligence on the part of the vessel and seeking recovery for damages to the pier. Tidewater also filed a counterclaim against Mowinckles, alleging negligence on the part of the vessel, and seeking damages from Mowinckles for expenses incurred in rebuilding and repairing the pier and indemnification for all sums it had already incurred or would incur in connection with any actions, including personal injury and wrongful death actions, arising out of the casualty. Lone Star filed a cross-claim against Tidewater, alleging negligence and breach of contract by Tidewater in the design and construction of the pier facility, and seeking recovery for all damage to the pier as well as indemnification for all liability and expenses incurred and to be incurred in this case and in any other actions arising out of the casualty. In a cross-claim against Lone Star, Tidewater alleged that the sole cause of the accident was Lone Star's negligence and breach of contract, and sought payment of the unpaid balance due Tidewater under its contract with Lone Star to repair and rebuild the pier, and indemnification for any liability and expenses incurred by Tidewater in Mowinckles' federal suit or any other actions arising out of the casualty.

In an opinion dated February 2, 1976, the district court found: that the ship had not in any way caused the collapse of the pier; that there was no negligence or breach of warranty by Tidewater in the design or construction of the pier facility; that Lone Star employees had permitted the hopper to be excessively overloaded; and that such overloading was the sole proximate cause of the casualty. The court concluded that neither Mowinckles nor Tidewater had any liability for damages to Lone Star or to each other, that Mowinckles should recover from Lone Star its damages in full, and that Tidewater should recover on its cross-claim against Lone Star for the reconstruction of the pier and facilities. No appeal has been taken from the judgment entered on those ruling.

In September 1976, after further argument, the district court ruled on the indemnity claims, holding that the indemnification issue was ripe for determination and that Mowinckles and Tidewater are entitled to indemnification from Lone Star for all sums, including attorneys' fees and expenses, already incurred or to be incurred by them in the wrongful death and personal injury actions. ² The stated basis of the decision in favor of both Mowinckles and Tidewater was that Lone Star had been the primary tortfeasor whereas Mowinckles and Tidewater had been only passive parties; the decision in favor of Mowinckles was also based on breach by Lone Star of an implied warranty of workmanlike service. ³

On this appeal Lone Star challenges only the district court's judgment on indemnification. The issues presented are: (1) whether the indemnity claims were ripe for adjudication; (2) whether Mowinckles and Tidewater are entitled to indemnification on a tort theory based on the district court's finding that Lone Star's negligence was the sole proximate cause of the casualty, and (3) whether Mowinckles is entitled to indemnification based on a contract theory of a breach by Lone Star of an implied warranty of workmanlike service. Because we conclude that the claims of Mowinckles and Tidewater for indemnification against their expenses and possible liability in the pending actions brought by Lone Star employees or their estates were not ripe for adjudication, we do not reach the other issues.

I

Noting that there is a split of authority as to when the determination of an indemnity issue is premature, the district court adopted the following rule:

To not be premature, a ship owner's claim for indemnity from an employer of an injured shoreworker must be made after some expenses have been incurred in defending against the shoreworker's claim. The shoreworker's claim need not be resolved prior to bringing suit for indemnity.

The court then held that the issue of indemnification was ripe for adjudication because both Mowinckles and Tidewater had incurred some expenses in defense of claims by Lone Star employees or their estates. ⁴

The authorities on this issue are few and conflicting. The district court relied primarily on Ellerman Lines, Ltd. v. Atlantic & Gulf Stevedores, Inc., 339 F.2d 673 (3 Cir. 1964), cert. denied, 382 U.S. 812, 86 S.Ct. 23, 15 L.Ed.2d 60 (1965). In that case a shipowner filed suit against a stevedore claiming indemnity for all sums it had already paid or would have to pay in a suit then pending in the same federal court brought against the shipowner by an injured longshoreman employed by the stevedore. The Third Circuit concluded that the action for indemnification was not premature, because it had been commenced after the shipowner had incurred some expenses in defending the personal injury suit. The court observed, however, that it would be duplicitous, unnecessarily time consuming and an invitation to controversy if the two proceedings were tried on separate occasions; it therefore instructed the district court on remand to consider the question of consolidation, and to consolidate the two proceedings "if it finds no disadvantages outweighing the obvious advantages of consolidation." 339 F.2d at 675. ⁵

Before the decision in Ellerman, two district courts in the Third Circuit had found that claims for indemnification against liability incurred or to be incurred in pending actions were premature where the legal liability of the indemnitee had not yet been established. Mitsui Steamship Co. v. Jarka Corp., 218 F.Supp. 424 (E.D.Pa.1963); West Africa Navigation, Ltd. v. Nacirema Operating Co., 191 F.Supp. 131 (E.D.Pa.1961). ⁶ In Greenwich Marine, Inc. v. S. S. Alexandra, 339 F.2d 901 (2 Cir. 1965), the Second Circuit held that a claim for indemnification in a suit involving loss and damage to cargo was premature, and therefore could not serve as the basis for seizure of the vessel. In that case, however, no suit against the indemnitee for the cargo damage had been instituted, and it was quite possible that no suit which might give rise to an indemnity claim would ever be instituted.

This Circuit has not yet ruled on the issue of the ripeness of a shipowner's claim for indemnity against liability and expenses incurred or to be incurred in a pending but not yet decided personal injury or wrongful death action. In Rederi A/B Dalen v. Maher, 303 F.2d 565 (4 Cir. 1962), we held that an adjudication of liability was not a prerequisite to a shipowner's claim for indemnity from a stevedore for counsel fees incurred in defending a wrongful death action brought by a longshoreman's widow against the shipowner where the wrongful death action had been fully settled and the stevedore, who had been impleaded by the shipowner, had paid the full amount of the settlement to the...