Stephenson v. Star-Kist Caribe, Inc., STAR-KIST
Decision Date | 17 May 1979 |
Docket Number | No. 78-1262,STAR-KIST |
Citation | 598 F.2d 676 |
Parties | Richard J. STEPHENSON, Plaintiff, Appellee, v.CARIBE, INC., Defendant, Appellant. |
Court | U.S. Court of Appeals — First Circuit |
David Rive Rivera, Hato Rey, P. R., with whom Calderon, Rosa-Silva & Vargas, Hato Rey, P. R., was on brief, for defendant, appellant.
Gustavo A. Gelpi, San Juan, P. R., with whom Feldstein, Gelpi, Hernandez & Castillo, San Juan, P. R., was on brief, for plaintiff, appellee.
Before CAMPBELL and BOWNES, Circuit Judges, and JAMESON, District Judge. *
Plaintiff seaman was injured in the course of his employment aboard the F/V Golden Scarab. Although the vessel was owned by a Canadian corporation, Scarab Fishing Ventures, Ltd., (Scarab), plaintiff brought an action against defendant Star-Kist Caribe, (Star-Kist), for Jones Act negligence, unseaworthiness, and maintenance and cure, alleging Star-Kist to be plaintiff's employer and to have exercised such control over the vessel as to render it liable to him as owner Pro hac vice.
The district court concluded that under the arrangement between Star-Kist and Scarab Fishing Ventures and the course of conduct followed by the parties in execution of the same, 1 that Star-Kist, through its pervasive control over the financing of Scarab's fishing expeditions, "was able to exercise as effective a control as if it had been (the) owner" and hence was liable for plaintiff's injuries.
The arrangement between Star-Kist and Scarab is set forth in two documents, an agreement for the sale and purchase of fish and a loan agreement. Under the former, Scarab was required to sell to Star-Kist "all yellowfin and skipjack tuna suitable for canning by Star-Kist." The agreement specified the location of the fishing operation (along the coast of West Africa), the port of delivery (one of Star-Kist's African base locations), the sale price, the term of the agreement (from January 9, 1967 to "December 31, 1969 or, at Star-Kist's option, for so long as the vessel is indebted to Star-Kist, whichever is longer"), and the sales procedure for miscellaneous fish caught. Star-Kist agreed to arrange for 1) the necessary fishing license, 2) permission to land fish and operate in Ghana, and 3) the appointment of "ships agents, with Scarab's approval, at the African ports where Star-Kist maintains its bases, to handle and service the 'Golden Scarab.' " Pursuant to the loan agreement, Star-Kist in effect loaned Scarab $30,000 to be used to discharge specified obligations and opened a revolving line of credit up to $10,000 to cover expenses of the fishing trips incurred at the various African ports. The line of credit was to be paid in full from the proceeds of the next fishing trip. These proceeds were also to be used to pay $15,000 of the $30,000 loan, the balance to be discharged in $3,750 payments from proceeds of each succeeding trip.
Thus, basically, Star-Kist financed the fishing operations of the Golden Scarab. Star-Kist advanced monies to Scarab upon the understanding that the entire production of the ship would be turned over to Star-Kist. But, as the district court noted, Star-Kist's role went beyond that of a mere lender. Star-Kist, keeping a close rein on the funds, also entered into the administration of the expeditions. It made the arrangements for dry-docking, overhauls, provisions of food, equipment, supplies for the vessel, and disbursements to the crew. The basic procedure was for the captain to inform the Star-Kist representative of the supplies needed and he would procure them. When the Golden Scarab unloaded its fish at one of Star-Kist's African stations, Star-Kist would weigh the fish, calculate its value, deduct the amount necessary to pay the various bills which had accumulated, pay the crew in accordance with instructions issued by the captain, retain a portion against Scarab's debt and transmit the remainder, if any, to Scarab.
The district court concluded that through this arrangement Star-Kist "had and did in fact exercise an owner-like control over the F/V Golden Scarab and that whatever legal labels may appropriately fit the existing relationship, the sheer reality was that without the funds, the vessel could not even get under way."
On these bases, the court concluded Star-Kist was liable for plaintiff's injuries. We reverse.
Generally, it is the vessel owner who, in the ordinary situation, is also the seaman's employer against whom a seaman brings the traditional three count Jones Act, unseaworthiness, and maintenance and cure action for personal injuries. Here, however, plaintiff seeks to impose liability on the purported charterer of the vessel, Star-Kist, on the theory that it was Star-Kist, not Scarab, who in reality exercised control and who therefore must be held to an owner's responsibilities. The legal principles governing the liability of a charterer of a vessel are well settled.
A demise charterer, one who contracts for the vessel itself and assumes exclusive possession, control, command and navigation thereof for a specified period, is treated as the owner for many purposes and is consequently generally subject to an owner's responsibilities and liabilities. In contrast, a time or voyage charterer contracts not for the vessel itself but for a specific service of the vessel, such as carriage of goods, which is rendered by the owner's master and crew. As the owner does not relinquish exclusive possession and control to the time or voyage charterer, the latter is not subject to an owner's liabilities as is the demise charterer. Reed v. The Yaka, 373 U.S. 410, 412, 83 S.Ct. 1349, 10 L.Ed.2d 448 (1963); New Orleans-Belize Royal Mail and Central American Steamship Co. v. United States, 239 U.S. 202, 36 S.Ct. 76, 60 L.Ed. 227 (1915); United States v. Shea, 152 U.S. 178, 14 S.Ct. 519, 38 L.Ed. 403 (1894); Leary v. United States, 14 Wall. 607, 610, 20 L.Ed. 756 (1871); Reed v. United States, 11 Wall. 591, 600-01, 20 L.Ed. 220 (1870); Vitozi v. Balboa Shipping Co., 163 F.2d 286 (1st Cir. 1947); 2B Benedict, Admiralty § 52 (7th ed. 1978); G. Gilmore and C. Black, The Law of Admiralty §§ 4-20 to 4-23 (2d ed. 1975); S. Gebb, "The Demise Charter: A Conceptual and Practical Analysis," 49 Tul.L.Rev. 764 (1975).
A demise charter is "tantamount to, though just short of, an outright transfer of ownership." Guzman v. Pichirilo, 369 U.S. 698, 700, 82 S.Ct. 1095, 1096, 8 L.Ed.2d 205 (1962). Unless the owner completely and exclusively relinquishes "possession, command, and navigation" of the vessel to the charterer, a demise charter is not created. Id. at 699, 82 S.Ct. at 1095.
The arrangement between Scarab and Star-Kist as manifested by the documents and the course of dealing does not amount to a demise charter and hence Star-Kist is not liable as owner pro hac vice for plaintiff's injuries. While we accept the district court's findings of fact we do not attach the same significance to them.
The district court's findings with respect to manning and administration of the vessel do not indicate that Star-Kist exercised "exclusive possession, command and navigation" of the vessel. Authority over the manning of a vessel is an important determinant whether it is the owner or charterer who exercises management and control, since "the presence of an owner's crew on board" is " 'very strong presumptive evidence' " that the owner has not in fact put his vessel into the possession of the charterer "which only 'very cogent circumstances' will overthrow." Hansen v. E. I. DuPont DeNemours &...
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