S & E Shipping Corp. v. Chesapeake & O. Ry. Co.

• Citation: 678 F.2d 636
• Decision Date: 12 May 1982
• Docket Number: No. 80-3426,80-3426
• Parties: In the Matter of S & E SHIPPING CORP., as owner of the Steamer Henry Steinbrenner, for exoneration from or limitation of liability, Plaintiff-Appellant, v. CHESAPEAKE & OHIO RAILWAY CO., Toledo-Lucas County Port Authority, Lawrence Myhre, Claimants, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 636

678 F.2d 636

In the Matter of S & E SHIPPING CORP., as owner of the

Steamer Henry Steinbrenner, for exoneration from

or limitation of liability, Plaintiff-Appellant, v. CHESAPEAKE & OHIO RAILWAY CO., Toledo-Lucas County Port

Authority, Lawrence Myhre, Claimants, Defendants-Appellees.

No. 80-3426.

United States Court of Appeals, Sixth Circuit.

Argued Dec. 10, 1981.

Decided May 12, 1982.

Gene B. George, Cleveland, Ohio, for plaintiff-appellant.

Robert M. Anspach, Shumaker, Loop & Kendrick, Toledo, Ohio, for Chesapeake & O. Ry. Co. and Lucas County.

Merritt W. Green, II, Green, Ashley, Skow, MacHarg & Weglian, Toledo, Ohio, for Myhre.

Before ENGEL and KENNEDY, Circuit Judges, and CELEBREZZE, Senior Circuit Judge.

CELEBREZZE, Senior Circuit Judge.

Plaintiff-appellant, S & E Shipping Corp., owner and operator of the Steamer Henry Steinbrenner, appeals pursuant to 28 U.S.C. Sec. 1292(a)(1). S & E brought an admiralty action in the District Court for the Northern District of Ohio for exoneration from or limitation of liability arising out of an accident. 46 U.S.C. Secs. 181 et seq. S & E seeks review of the district court's decision modifying its injunction to permit defendants-appellees Lawrence Myhre and Karoline Myhre to proceed with a state court negligence action pending in the Court of Common Pleas for Lucas County, Ohio. We reverse the district court's order and remand the case for trial.

I.

The Steamer Henry Steinbrenner was moored outboard of the Steamer Charles C. West, the Steinbrenner's port side to the West's starboard side. The West was moored in a slip adjacent to a dock owned by the Toledo-Lucas Port Authority and leased to the Chesapeake & Ohio Railway System ("Chessie System"). The Chessie System operates a docking facility with which it unloads ore from vessels onto railroad cars and unloads coal from cars into vessels.

Since April 18, 1978, the Steinbrenner had been fitting out in preparation for her first voyage of the season on April 29, 1978. During this time, the Steinbrenner was fully manned by a crew of officers and seamen, all of whom were under the Shipping Articles. Among the vessel's crew was third assistant engineer Lawrence Myhre. Mr. Myhre began sailing in 1963, obtained his license in 1974, and had worked for S & E aboard various vessels in previous years. On April 27, 1978, watches had not yet been set, and the crew performed fit-out work during the day and was off-duty during the evening.

On the evening of April 27, 1978, Mr. Myhre went ashore to make a telephone call to his wife. In order to reach the telephone booth, Mr. Myhre crossed the Steamer West and some railroad tracks on the Chessie System's dock property. While crossing the track, he heard an oncoming railroad car and unsuccessfully attempted to get off of the track. His foot caught and the car severed his legs at the knees.

Mr. Myhre and his wife, Karoline, filed a civil action on February 9, 1979 in the Court of Common Pleas for Lucas County, Ohio against the Port Authority, the Chessie System, and S & E. The claims against the Port Authority and Chessie are based upon state law; the claims against S & E are maritime. Mr. Myhre alleges that S & E breached its duty to provide a safe work place required under the Jones Act, 46 U.S.C. Sec. 688, that it breached its duty to maintain a seaworthy vessel, and that it breached its duty to provide maintenance and cure to an injured seaman. Karoline Myhre seeks to recover for the loss of her husband's society, comfort, and consortium under state common law and general maritime law.

On March 14, 1979, S & E filed an admiralty action in the district court for exoneration from or limitation of liability. 46 U.S.C. Secs. 181 et seq. The district court entered an order enjoining further prosecution of any action against the shipowner in state court and admonished all claimants to present their claims against S & E in the district court. Fed.R.Civ.P., Supplemental Rules for Certain Admiralty and Maritime Claims F(3) & (4).

In response to the district court's order, the Chessie System, the Port Authority, and the Myhres filed their claims in the district court. The Chessie System and the Port Authority jointly asserted four claims against S & E. ¹ First, Chessie seeks indemnification for any amount it becomes obligated to pay Mr. Myhre, including attorneys' fees and costs of litigation. This claim is based on the indemnity clause in the license agreement between Chessie and S & E. ² Second, Chessie seeks indemnification pursuant to the license agreement for all costs and expenses incurred in its defense of the Port Authority. ³ Third, Chessie seeks indemnification for all claims, costs, and attorneys' fees incurred as a result of the accident. Chessie argues that if it or the Port Authority were negligent, their negligence was passive and secondary and S & E's negligence was active and primary; therefore, S & E should be required to indemnify them. Fourth, the Chessie System and Port Authority seek from S & E, a joint tortfeasor, contribution under Ohio statutory law. Ohio Rev.Code Ann. (Page) Sec. 2307.31. Mr. and Mrs. Myhre filed a joint claim and answer with the district court, setting forth essentially the same maritime claims alleged in their state court action and denying S & E's right to limit liability. ⁴

After all claims had been filed, the Myhres moved to modify the district court's injunction staying proceedings in the state court action. The Myhres asserted that because there is only a single claim against S & E, the district court may modify its injunction. Along with the motion, the Myhres filed the usual stipulations relating to the priority of claims and S & E's right to limit its liability. ⁵ On May 23, 1980, the district court entered an order granting the motion and allowing the Myhres to proceed with their state court action.

On June 20, 1980, S & E filed a notice of appeal. After the notice of appeal had been filed, the Port Authority dismissed with prejudice its claims against S & E. In addition, the Myhres and the Chessie System filed certain stipulations with the district court which they believe settle the priority of the Myhres' and the Chessie System's claims to the extent that they are not identical. ⁶

II.

The claimants initially contend that the issue of whether multiple claims exist need not be reached because the stipulations filed with the district court eliminate the possibility of multiple claims and provide an independent ground supporting the district court's decision to modify the injunction. ⁷ They assert that the Port Authority's claims for indemnity or contribution cannot create multiple claims because it has dismissed its claims against S & E with prejudice. Moreover, the Myhres have stipulated that the Chessie System's claim for attorneys' fees, expenses, and costs, if such a claim is subject to limitation, should be satisfied before any judgment is paid to them. The Chessie System has stipulated that the district court has exclusive jurisdiction to determine the value of the Steinbrenner, the value of any limitation fund, and whether the Chessie System's claims are subject to limitation. In addition, the Chessie System has agreed not to raise the valuation and limitation issues in state court and to waive any res judicata claims relevant to these issues. The district court entered an order modifying the record to include these stipulations and the dismissal pursuant to Fed.R.App.P. 10(e).

The claimants argue that these stipulations, if properly presented before the district court, would, in effect, create a single claim situation. The district court would, therefore, have no need to exercise its exclusive admiralty jurisdiction to allocate an inadequate limitation fund among competing claimants. In Universal Towing Co. v. Barrale, 595 F.2d 414 (8th Cir. 1979), the Eighth Circuit, considering a series of stipulations similar to those made in this case, ruled that a district court should permit the state court action to proceed. The claimant's "consent has, in effect, eliminated the need for a concourse since it is unnecessary to apportion an inadequate limitation fund between two claimants. Any award of attorney's fees and costs ... will be paid in full from the limitation fund." Id. at 420 (footnote omitted). See also Helena Marine Service, Inc. v. Sioux City, 564 F.2d 15 (8th Cir. 1977), cert. denied, 435 U.S. 1006, 98 S.Ct. 1875, 56 L.Ed.2d 387 (1978); In re Moran Transp. Corp., 185 F.2d 386 (2d Cir. 1950), cert. denied, 340 U.S. 953, 71 S.Ct. 573, 95 L.Ed. 687 (1951). The Eighth Circuit concluded that the stipulations essentially created a single claim situation.

We need not reach the issue of the effect of the stipulations filed in this litigation. The stipulations were not properly brought before this court and, therefore, cannot be considered in our evaluation of the procedural issues. The district court accepted the stipulations pursuant to Fed.R.App.P. 10(e) ⁸ after S & E filed its notice of appeal. The district court, however, interpreted Appellate Rule 10(e) too broadly. The purpose of the rule is to allow the district court to correct omissions from or misstatements in the record for appeal, not to introduce new evidence in the court of appeals. ⁹ See United States v. Walker, 601 F.2d 1051, 1054-55 (9th Cir. 1979); Walker v. Felmont Oil Corp., 262 F.2d 163, 165 (6th Cir. 1958); Notes of the Advisory Comm. on Civil Rule 75(h) (1946) (predecessor to current Rule 10(e)). Appellate Rule 10(e) does not empower a district court to accept stipulations which significantly alter the record after a notice of appeal has been filed. ¹⁰

Prohibiting parties from substantially altering the record by submitting stipulations in the district court after a notice of appeal has been filed comports with the policy of fostering judicial efficiency. If parties were permitted to make significant changes in the record...