Standard Structural Steel v. Bethlehem Steel Corp.
| Decision Date | 26 October 1984 |
| Docket Number | H-78-127.,Civ. No. H-75-176 |
| Citation | 597 F. Supp. 164 |
| Court | U.S. District Court — District of Connecticut |
| Parties | The STANDARD STRUCTURAL STEEL CO. v. BETHLEHEM STEEL CORPORATION. The STANDARD STRUCTURAL STEEL CO. v. LIBERTY MUTUAL INSURANCE COMPANY. |
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Frank DeNezzo, Schatz, Weinstein & Seltzer, Robert L. Trowbridge, Esq., Trowbridge, Goodman & Rosenthal, Hartford, Conn., for plaintiff.
John R. Fitzgerald, Howard, Kohn, Sprague & Fitzgerald, Hartford, Conn., for Liberty Mut. Ins. Co.
Thomas J. Groark, Jr., Day, Berry & Howard, Hartford, Conn., for Bethlehem Steel Corp.
The plaintiff, The Standard Structural Steel Company ("Standard" or "the plaintiff") commenced two separate suits in an effort to recover the property damage and economic loss it allegedly suffered during May and June 1974, while performing a contract to dismantle the ironwork in the Gold Star Memorial Bridge at New London, Connecticut, and erect a new bridge to replace it. Standard initially brought suit against the defendant, Bethlehem Steel Corporation ("Bethlehem") in the Connecticut Superior Court, claiming that Bethlehem had breached its implied warranties of merchantability and fitness for a particular purpose in the sale of the "bridge strand" (lifting cable); and further, that Bethlehem was strictly liable in tort to Standard for having sold the plaintiff an unreasonably dangerous product. Bethlehem, an out-of-state defendant, then petitioned to remove this state court action to the federal court. Approximately three years later, the plaintiff decided to sue its own insurance carrier, the defendant Liberty Mutual Insurance Company ("Liberty") in this Court, invoking the principle of diversity jurisdiction. In the latter suit, Standard averred that Liberty had improperly failed to pay the plaintiff pursuant to its policy coverage for the May, 1974 incidents. On January 24, 1979, the two cases were consolidated for the purposes of trial; and thereafter, by agreement of the parties, the consolidated cases were bifurcated, and have been tried to the Court on the issue of liability alone.
The Court finds (1) that the bridge strand which Bethlehem sold to the plaintiff was not unreasonably dangerous so as to trigger strict liability in tort, (2) that Bethlehem successfully disclaimed both of the implied warranties alleged in the case, (3) assuming that the warranties had not been disclaimed, Bethlehem neither created a warranty of fitness for a particular purpose nor breached the warranty of merchantability, and (4) that the "CONTRACTORS' EQUIPMENT FORM (All Risk)" policy issued to Standard by Liberty did cover the damage at issue in this case. The Court also finds that the defendant Bethlehem Steel Corporation is not liable in damages to the plaintiff for the May and/or June 1974 resulting damages which occurred in connection with the cable guide breaking at the weld, but finds the defendant Liberty Mutual Insurance Company liable to indemnify the plaintiff for the provable losses under the terms of the initial policy dated December 31, 1973. Due to the bifurcation of the issues, the exact amount of provable damages due and owing cannot be determined without a further hearing.
The plaintiff Standard Structural Steel Company is a Connecticut corporation engaged in the business of fabricating and erecting structural steel. Its principal place of business is Newington, Connecticut. The defendant Bethlehem Steel Corporation is a Delaware corporation with its principal place of business in Bethlehem, Pennsylvania. The defendant Liberty Mutual Insurance Company is a Massachusetts corporation with its principal place of business in Boston, Massachusetts.
In early 1973, Standard contracted to remove the existing truss spans of the original Gold Star Memorial Bridge, which crosses the Thames River between New London and Groton, Connecticut, and to erect new steel spans. The latter were to be prefabricated on shore and placed upon the existing concrete piers. To protect certain of its property during the course of this dismantling project, Standard entered into an initial contract of insurance, specifically called a "CONTRACTORS' EQUIPMENT FORM (All Risk)" policy with Liberty, effective for the period from October 1, 1973 until October 1, 1974.1
To remove and replace the spans, the plaintiff chose to use a new and rather unique waterborne derrick system. After consulting many experts,2 the plaintiff, under the direction of Joseph Bachta, Assistant to the President of Standard, designed and constructed an apparatus consisting of a jacking system suspended from four shear-leg (boom) derricks, which were themselves floated on barge bases placed on the north and south sides of the bridge to be dismantled. Each derrick included two shear legs, or booms. The two barge bases upon which the derrick systems sat included three individual barges which were firmly affixed and connected one to another. The north and south barges themselves were also connected, but the plaintiff left a space between them to accommodate a movable transportation barge. As the derrick system would remove a section of the existing span, that section would be lowered and placed in a balanced posture upon the transportation barge and floated upstream, where it was dismantled on the shore.
Standard rented the mechanical jacking system from the Elgood-Mayo Corporation of New York, which had used the system in previous projects. This jacking system included fixed spreader beams which were suspended from the derricks by "bridge strand" cables. Upper stationary grippers were bolted to these spreader beams. Lower grippers were bolted to a second, movable set of spreader beams. The upper and lower spreader beams were connected by a hydraulic cylinder, which was the actual jacking system. Above the top grippers were channels supported by stationary cables.
The grippers consisted of wedge shaped shoes which operationally engaged the steel lifting cable through air pressure and mechanical power. The air pressure initially activated and opened the grippers. The mechanical power, which was derived from the weight of the system being lowered, exerted pressure on the lifting cable. As such, the carrying capacity was realized from the friction between the wedges, which were constricted by the gripper housing, and the lifting cable. Therefore, during operation, the grippers often squeezed the lifting cable with intense pressure.
There were eight pairs of grippers in all: an upper and a lower gripper on each of the two shear legs positioned abroad each of the two barge bases. Each of these grippers, however, did not work at the same time. When the upper grippers were engaged, the lower grippers were disengaged, and the hydraulic jack moved the lower grippers up or down in relation to the cable. The lower grippers would then be engaged, and the upper grippers disengaged, to permit the jack to move the cable, and with it the suspended bridge span, would be moved up or down.
When Elgood-Mayo employed this jacking system on past projects, it had utilized 2¾" diameter wire rope as the lifting cable. In fact, in early April, 1973, Elgood-Mayo offered 2¾" wire rope to the plaintiff for use on this project. However, the plaintiff rejected this offer. Although the Elgood-Mayo wire rope would have been sufficient for the Gold Star job, the plaintiff wanted to upgrade its system by increasing its lifting capacity for future jobs. (Bachta, direct, November 2, 1982; Bachta, cross, November 4, 1982). As a result, in May, 1973, Joseph Bachta, the plaintiff's chief engineer, decided to purchase 3½" diameter wire rope for the system. (Bachta, direct, November 2, 1982; Plaintiff's Exhibit 11).
In pursuance of this product, Bachta asked Bethlehem's salesman John Bowles, who was the salesman normally assigned to Standard, for a price quote or bid for wire rope to be used as a lifting cable on the Gold Star Memorial Bridge project. Bowles told Bachta that he would call in Ronald Bergmark, another Bethlehem salesman. .
Although Bergmark customarily sold wire rope, he was not technically astute in the area. A high school graduate with one year of college education, Bergmark had begun work at Bethlehem as a mail boy and progressed to the occupation of salesman in 1968. His technical background in wire rope consisted of a two month refresher course on the manufacturing thereof given by his employer. (Bergmark, Tr. 2-3, 5).
On May 31, 1973, at the request of his employer, Bethlehem Steel, Bergmark made his first (and only) visit to the plaintiff's offices. There, he met with Joseph Bachta and Howard Shea, Bachta's assistant. Bergmark spoke with Bachta for only a short period of time, spending the majority of his time in discussion with Shea. During this time, Bergmark understood that he was pursuing a wire rope order. (Bachta, cross, November 4, 1982; Bergmark, Tr. 4-6, 17, 27).
Shea and/or Bachta explained to Bergmark that the plaintiff needed cable for a lifting system for fabricated steel. Standard's personnel showed Bergmark some schematic drawings of components of the system, but never showed Bergmark a diagram of the entire system. After this meeting, Bergmark understood that the plaintiff needed cable to be used as a stationary member of the lifting system along which moving grippers would travel. (Bergmark, Tr. 7, 9, 15-18, 49-50).
The plaintiff's personnel then informed Bergmark that they intended to use 3½" diameter wire rope, but asked him whether or not there was a way to increase the breaking strength of the cable without increasing the diameter. The plaintiff's employees told Bergmark that if they were to use a cable with a larger diameter, the gripper shoes would have to be...
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