Smit Americas, Inc. v. M/V Mantinia
| Decision Date | 22 April 2003 |
| Docket Number | No. CIV. 95-2498(RLA).,CIV. 95-2498(RLA). |
| Citation | 259 F.Supp.2d 118 |
| Parties | SMIT AMERICAS, INC., for itself and on behalf of Edward J. Hosking, its employee, Plaintiff, v. THE M/T MANTINIA, her engines, tackle, machinery and other appurtenances, in Rem, and Metro Freighting Corp., and certain London and U.S. Underwriters of Insurance including Lloyd's of London who are insurers of the M/T Mantinia and the West of England Shipowners Protection and Indemnity Association (Luxembourg) Ltd., her liability insurance underwriters, in personam, Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
James T. Shirley, Jr., Haight Gardner Holland & Knight, New York, NY, Francisco G. Bruno-Rovira, McConnell Valdes, San Juan, PR, for Plaintiff.
Juan R. Rivera-Morales, Jimenez, Graffam & Lausell, San Juan, PR, Paul E. Calvesbert-Borgos, San Juan, PR, Stephen P. Kyne, Burke & Parsos, New York, NY, for Defendants.
INTRODUCTION This is an action in admiralty for a marine salvage arising out of the stranding of a fully laden single hull oil tanker, the motor tanker, M/T MANTINIA, while entering the harbor of Guayanilla, Puerto Rico, on June 1, 1994. The only issue before the Court at this juncture is whether Captain Ted Hosking (HOSKING) of Smit Americas, Inc. (SMIT) took charge and directed the successful salvage operation of the MANTINIA on a voluntary basis.1
SMIT is a subsidiary of Smit International (Americas) Inc. which, in turn, is under the control of Smit International BV, a large salvage company with operations and experienced salvage masters world wide. At all relevant times HOSING, with thirty years experience, was in the employ of SMIT as a professional salvor, Rick Chiannelli (CHIANNELLI) as its Logistics Manager and Marius Hoogendorn (HOOGENDORN) was SMIT's Operations Manager.
Metro Freighting Corp. (METRO) was the owner of the MANTINIA at the time of the events under discussion. Captain Leonidas Souralis (SOURALIS) was the Master of the MANTINIA. The United States general agent for METRO and operators of the vessel was National Shipping and Trading Corporation (NSTC). Messrs. Jerry Georges (GEORGES) and George Antoniou (ANTONIOU) were directors of NSTC.
The MANTINIA's protection and indemnity (third party liability) insurer was West of England Ship Owners Mutual Insurance Association (Luxembourg) Ltd. (WOE) and her hull and machinery insurers were certain London and U.S. Underwriters of Insurance (UNDERWRIERS).
The "Qualified Individual" (QI) services for the MANTINIA, as required by the Oil Pollution Act of 1990, 33 U.S.C.A. §§ 2701-2761 (OPA 90), were provided by Hudson Maritime Services (HUDSON). The president of HUDSON was Cynthia Hudson (CYNTHIA), Per Christiansen (CHRISTIANSEN) its CEO. Retired U.S. Coast Guard Commander Hugh Williams (WILLIAMS) was the designated QI from HUDSON assigned to the MANTINIA casualty.
Commander Robert G. Ross, commanding officer of the U.S. Coast Guard Marine Safety Office in Puerto Rico, was the Federal-On-Scene-Coordinator (FOSC and/or ROSS) the official designated by the National Contingency Plan, 40 C.F.R. § 300, to act for the President of the United States in this incident. Other Coast Guard officials who responded on scene were Lt. Pablo E. Roque (ROQUE) and DC1 Dan Benningfield (BENNINGFIELD).2
In order to set forth a claim for "pure salvage" the plaintiff must establish three elements: 1) Clifford v. M/V Islander, 751 F.2d 1, 5 (1st Cir.1984); quoting The SABINE, 101 U.S. (11 Otto 384) 384, 25 L.Ed. 982 (1879); see also, 3A Benedict on Admiralty, § 63.
On the other hand "[c]ontract salvage is that type of salvage service entered into between the salvor and the owners of an imperiled property, or by their respective representative, pursuant to an agreement, written or oral, fixing the amount of compensation to be paid whether successful or unsuccessful in the enterprise." Benedict, § 159 at 12-2. (footnotes omitted) As quoted from The Elfrida, 172 U.S. 186, 193, 19 S.Ct. 146, 43 L.Ed. 413 (1898), a salvage situation under contract is of two types: (i) it could be for a specific payment which is not dependent upon the success of the rescue, i.e., the amount set by the terms of the contract is owed in any event; or (ii) the contract could be for compensation in an amount which is fixed only after there has been success.3 172 U.S. at 193, 19 S.Ct. 146.
When there is a contract to undertake a salvage service or to provide some type of service to a distressed vessel there is no "pure salvage". This is because to be "voluntary" there must be an "absence of a legal duty or obligation," B.V. Bureau Wijsmuller v. United States, 702 F.2d 333, 338-39 (2nd Cir.1983), and the existence of a contract between the parties precludes voluntariness. Flagship Marine Services v. Belcher Towing Company, 966 F.2d at 602, 605-06 (11th Cir. 1992); Cargill, Inc. v. MIT Pacific Dawn, 876 F.Supp. 508, 511 (S.D.N.Y.1995) (); Atco, Inc. v. Disch Construction, 1993 A.M.C. 2195, 1992 WL 230482 (S.D.N.Y.1992); Taylor v. Ahmendnager Queen, 1998 A.M.C. 2631 (N.D.Cal.1998). In a contract situation the service is performed under the obligations of the contract. Cf. Clifford v. M/V Islander, 751 F.2d at 5 (). The contract must be "to pay a given sum for the services to be rendered, or a binding engagement to pay at all events, whether successful or unsuccessful...." The Camanche, 75 U.S. (8 Wall.) 448, 477, 19 L.Ed. 397, (1869); see also, Nunley v. Dauntless Colocotronis, 863 F.2d 1190, 1201-02 (5th Cir., 1989).
THE "OFFER"
At approximately 18404 on June 1, 1994, the MANTINIA, laden with 314,273 barrels (1,319,947 gallons) of black oil cargo, ran aground outside Guayanilla Bay, Guayanilla, Puerto Rico (App.1847-1853).5 At approximately 0521 hours on June 3, 1994, the vessel was successfully refloated. The condition of the weather and the sea bottom during the pertinent period are disputed by the parties. The crux of the arguments was not whether there was peril, which was conceded by the defendants,6 but rather its severity or extent, a matter which will be discussed subsequently. Shortly after the MANTINIA grounded, pursuant to their contractual obligation to use SMIT as their "preferred salvage contractor,"7 METRO directed their QI, WILLIAMS, to alert SMIT to request their assistance, and to ascertain from SMIT if it had any salvage vessels or tugs available (App.1751, 1763-74). WILLIAMS, after several calls to the SMIT "hot line," spoke with SMIT's CHIANNELLI shortly after midnight. WILLIAMS requested that SMIT provide "appropriate assistance" (App.1766) and CHIANNELLI recommended sending a SMIT salvage master and a naval architect (App.1049-50). CHIANNELLI also advised that SMIT had no salvage vessels or tugs available in the area (App.1051, 1052). After speaking with WILLIAMS and making his recommendations, CHIANNELLI relayed METRO'S request for assistance to his superior, HOOGENDORN, who then composed a fax to METRO setting forth a proposal for services sent at 0230 June 2, 1994 which, in pertinent part, states as follows:
We refer to our previous telcons... with regard to the provisions of services by SMIT AMERICAS under the agreement covering OPA '90 requirements [i.e., the Smit Contract].
* * * * * *
We understand that at present you would like us to mobilize a salvage master to the site as soon as possible, but you do not want us to respond with a full package as per the terms under OPA '90 requirements. We would like to inform you that we are in a position to offer the service of our salvage master (Mr. Ted Hosking) as follows:
1) Flying by charter, ETA Puerto Rico between 1300 and 1400 hours. Estimated cost for charter U.S. $12,000.
2) Flying by commercial airline, ETA Puerto Rico tomorrow evening.
We are in a position to offer these services based on following rates:
Salvage Master $1,250/day
Travel, lodging at cost + 15%
Other Costs at cost + 15%
We also would like to inform you that we will await further notice if any additional action is required and that we will stand-by to commence mobilization of lightering and other required equipment as soon as such notification has been received by us, terms to be agreed upon.
(App. 1491-92) (emphasis ours).
The terms of this offer were accepted by METRO and constitute the contractual basis for SMIT's deployment of its salvage master, HOSKING, from Houston, Texas, to Guayanilla, Puerto Rico, who boarded the MANTINIA at approximately 1800 hours on June 2, 1994 (App.1663). It is also the source of the controversy between the parties as to the precise role played by HOSKING during the successful refloating operation.
The issue at this point is whether the services performed by HOSKING while he was on board the MANTINIA in June 1994 entitle SMIT to a salvage award. METRO/WOE and UNDEWRITERS' contention is that all the services performed by HOSKING which culminated in the MANTINIA's refloating were rendered pursuant to the terms of the Response Agreement and therefore, were not voluntary. SMIT, on the other hand, argues that the Response Agreement merely required it to provide advisory services and inasmuch as HOSKING's role in refloating the MANTINIA went well beyond that, to that extent, his services were voluntary.
WOE/METRO and UNDERWRITERS do not deny that HOSKING directed the successful salvage operation. However, they contend, that is what he was hired to do. They rely upon...
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