Somarelf v. American Bureau of Shipping

• Citation: 704 F. Supp. 59,1989 AMC 1061
• Decision Date: 07 February 1989
• Docket Number: Civ. A. No. 86-4615.
• Parties: SOMARELF, Elf Union and Fairfield Maxwell Services, Ltd., Plaintiff, v. The AMERICAN BUREAU OF SHIPPING, Defendant.
• Court: U.S. District Court — District of New Jersey

704 F. Supp. 59

1989 AMC 1061

SOMARELF, Elf Union and Fairfield Maxwell Services, Ltd., Plaintiff, v. The AMERICAN BUREAU OF SHIPPING, Defendant.

Civ. A. No. 86-4615.

United States District Court, D. New Jersey.

December 29, 1988.

As Amended February 7, 1989.

William France, Healy & Baillie, New York City, for plaintiff.

Sarah M. Barton, Adams & Barton, Paramus, N.J., for defendant.

OPINION

WOLIN, District Judge.

In this maritime action, defendant American Bureau of Shipping ("ABS") moves for summary judgment dismissing the indemnification claim of plaintiff Fairfield Maxwell Services, Ltd. ("Fairfield"). For the reasons set forth below, defendant's motion is denied.

I. BACKGROUND

Defendant ABS is engaged in the business of measuring vessels as well as certifying vessels for seaworthiness, as determined by ABS standards. As part of its business, ABS measures and certifies the gross and net tonnage measurements of vessels. These measurements can be tailored for specific purposes, such as for particular countries or for particular places such as the Suez Canal.

On November 20, 1980, ABS measured the vessel "Happy Sprite" and issued a certificate of measurement as well as a Suez Canal special tonnage certificate. On March 24, 1981, ABS issued a certificate of measurement and Suez Canal special tonnage certificate for the vessel "Jolly Sprite."

The owners of the "Happy Sprite" and "Jolly Sprite" are represented in this action by their designated agent, Fairfield. The "Happy Sprite" was built by Sasebo Heavy Industries Co., Ltd. of Japan ("Sasebo"), and was delivered to her owners in December, 1980. The "Jolly Sprite" was also built by Sasebo and delivered in March, 1981. Both vessels had already been chartered to Elf Union, a French corporation, by virtue of two time charters; the time charter for the Happy Sprite dated April 20, 1979 and that for the Jolly Sprite (renamed Vic Bilh) dated June 5, 1979. On January 1, 1980, Somarelf, also a French corporation, succeeded to the interests of Elf Union as time charterers of the vessels.

Somarelf sub-chartered the vessels on four occasions: The "Happy Sprite" was sub-chartered to Petrolexport of Bucharest under a voyage charter party dated December 23, 1980; and to Societe Francaise des Petroles BP under voyage charters dated January 27, 1983 and March 1, 1983. The "Jolly Sprite" was subchartered to Sociedade Portugesa de Navios Tanques Lda. on April 2, 1981. On each occasion the vessels were sub-chartered, the vessels traveled through the Suez Canal. On twelve other occasions when the vessels passed through the Suez Canal, Somarelf was using the vessels for its own account.

Through an error, ABS miscalculated, ABS had underestimated the Suez Canal tonnage figures of both the "Happy Sprite" and "Jolly Sprite". The ABS originally calculated the Suez Canal tonnage of each vessel to be 43,453.44 tons. The Suez Canal tonnage figure should have been 57,187.74 tons. On October 23, 1984 the Suez Canal Authority ("SCA") wrote to ABS asking for its explanation of an apparent discrepancy in the Suez Canal and British underdeck tonnages which ABS had determined when calculating the Suez Canal tonnage for the "Jolly Sprite" and later, after being renamed the "Vic Bilh", when calculating the British national tonnage. On November 5, 1984 ABS wrote to the SCA advising that because of an error in ABS's calculations the Suez Canal underdeck tonnage was incorrect and subsequently the gross and net Suez Canal tonnages previously calculated by ABS were also incorrect. ABS advised the SCA of the correct Suez Canal tonnages. Thereafter, the SCA revised upward its assessment of charges upon the vessels for use of the Suez Canal, including additional charges for previous passages of the vessels through the Canal. Somarelf claims it paid approximately $200,000.00 in additional Canal dues to the Suez Canal Authority. Somarelf also contends that because of ABS's miscalculation, Somarelf undercharged its sub-charterers on the Suez Canal differential, an element of the charter cost consisting of a lump sum charge plus a dollar charge multiplied by the vessel's Suez Canal net tonnage. As a result of this undercharging, Somarelf claims lost gross income from its four sub-charterers amounting to $166,185.00.

On September 5, 1986, Somarelf and Fairfield commenced this action in the Southern District of New York. The action was then transferred to the District of New Jersey. Somarelf claimed damages in the amount of $166,185 and Fairfield made a claim for indemnity from ABS. ABS subsequently moved for summary judgment, the motion currently before the Court. In its original supporting brief, ABS argued, in part, that Fairfield could not make a claim for indemnity since it had not yet paid any compensation to Somarelf. However, on August 4, 1988, Fairfield and Somarelf entered into a settlement agreement providing for payment to Somarelf of $200,000.00 in settlement of Somarelf's purported claims under the warranty of the time charter agreements between Somarelf and Fairfield (acting as agent for the owners of the "Happy Sprite" and "Jolly Sprite"). Somarelf apparently is now withdrawing from this action. Plaintiff's Memorandum in Opposition, p. 9. Thus, ABS's original argument as to the right of Fairfield to claim indemnity from ABS is now moot. However, ABS continues to press its argument for summary judgment on other grounds.

II. DISCUSSION

The settlement payment from Fairfield to Somarelf, and Somarelf's withdrawal from this action, narrows the issue in this case to Fairfield's right to be indemnified by ABS in the amount of the $200,000.00 settlement Fairfield paid to Somarelf. Fairfield puts forward two main theories upon which its claim for indemnification can be grounded: contractual indemnity and tort-based indemnity. The Court will discuss each of these theories in turn.

A. Contractual Indemnity

In the context of a maritime case, a contractual right to indemnification can be found in the express terms of the contract or can be implied if there are "unique special factors demonstrating that the parties intended that the would-be indemnitor bear the ultimate responsibility for the plaintiff's safety, or when there is a generally recognized special relationship between the parties." Araujo v. Woods Hole, Martha's Vineyard, Nantucket Steamship Authori- ty, 693 F.2d 1, 2-3 (1st Cir.1982) (citations omitted). See also Maritime Overseas Corp. v. Northeast Pet. Indus., 706 F.2d 349, 353 (1st Cir.1983); W. Prosser, Law of Torts § 51.

In the case at hand, plaintiff has pointed out no express provision in the contract between ABS and the vessel owners which might give rise to an express right of indemnification from ABS. Moreover, the broad exculpatory clause contained in the contract, while of dubious validity, does indicate that ABS did not intend to assume liability for lost revenue or additional Suez Canal dues in the event ABS's tonnage calculations were mistaken. See In Re Oil Spill by the Amoco Cadiz Off the Coast of France on March 16, 1978, 1986 A.M.C. 1945 (N.D.Ill.1986) 1986 WL 4705 (hereinafter Amoco Cadiz).

The Court also finds that a contractual right of indemnification cannot be implied from the contractual relationship between ABS and the vessel owners. An implied contractual right of indemnity has been found in maritime cases in which a ship owner and a contracting party have a special relationship in which the other party is subject to an implied warranty of workmanlike service. The seminal case in this regard is Ryan Stevedoring Co. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956). In Ryan, the Supreme Court found that the special relationship between a stevedoring company and a vessel owner implies that the stevedoring company warrants performance of its services in a workmanlike manner and will indemnify the vessel owner for any liability arising from a breach of that warranty of workmanlike service.

The rationale for implying such a warranty is based on the belief that a stevedoring company which takes control of the ship to unload it is more capable than the vessel owner of avoiding accidents while unloading the ship. See Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Co., 376 U.S. 315, 324, 84 S.Ct. 748, 754, 11 L.Ed.2d 732 (1964); Maritime Overseas Corp., 706 F.2d at 353.

The Ryan decision has been expanded upon by courts to allow for a finding of an implied warranty of workmanlike service and an implied right of indemnification in cases involving non-stevedoring service contracts with vessel owners. See, e.g., Amoco Cadiz, 699 F.2d 909, 915 (7th Cir.), cert. denied, 464 U.S. 864, 104 S.Ct. 196, 78 L.Ed.2d 172 (1983) (negligent design of ship); Tebbs v. Baker-Whiteley Towing Co., 407 F.2d 1055, 1058 (4th Cir.1969) (towing contract); United N.Y. Sandy Hook Pilots Ass'n v. Rodermond Industries, 394 F.2d 65, 71 (3rd Cir.1968) (Ryan principles found to be frequently applied to non-stevedore maritime contractors); American Export Lines v. Norfolk Shipbuilding & Drydock Corp., 336 F.2d 525 (4th Cir.1964) (shipyard service contract).

However, in contrast to the instant action involving ABS, the above cases which expanded upon Ryan all in some way involved safety or the prevention of maritime accidents. Fairmont Shipping Corp. v. Chevron International Oil Co., Inc., 511 F.2d 1252, 1257 (2d Cir.), cert. denied, 423 U.S. 838, 96 S.Ct. 66, 46 L.Ed. 2d 57 (1975) (application of Ryan indemnity has "rested ... on elements of expertise, control, supervision and ability to prevent accidents."). It is clear that the ABS service contract with the owners of the "Happy Sprite" and "Jolly Sprite" did not in any way concern safety or prevention of accidents, nor did ABS's miscalculation of Suez Canal tonnage compromise the safety of the vessels. As such, the contractual relationship ABS had with the vessel owners cannot properly...