Stevedoring Services v. Prudential Lines, Inc.

• Citation: 226 Cal.Rptr. 225,181 Cal.App.3d 154
• Court: California Court of Appeals
• Decision Date: 19 May 1986
• Parties: , 1986 A.M.C. 2743 STEVEDORE SERVICES OF AMERICA, Plaintiff and Appellant, v. PRUDENTIAL LINES, INC., Defendant and Respondent. Civ. B015947.

Page 225

226 Cal.Rptr. 225

181 Cal.App.3d 154, 1986 A.M.C. 2743

STEVEDORE SERVICES OF AMERICA, Plaintiff and Appellant, v. PRUDENTIAL LINES, INC., Defendant and Respondent.

Civ. B015947.

Court of Appeal, Second District, Division 5, California.

May 19, 1986.

Review Denied Aug. 13, 1986.

Leon A. Pinney, Woodland Hills, for plaintiff and appellant

Lillick, McHose & Charles, Francis J. MacLaughlin and Alan Rubin, Los Angeles, for defendant and respondent.

EAGLESON, Associate Justice.

Plaintiff Stevedore Services of America appeals from a judgment of dismissal entered after the trial court sustained defendant Prudential Lines' demurrer to the first amended complaint without leave to amend. The demurrer asserted that the action was barred by the statute of limitations or, alternatively, laches. We affirm.

FACTS

On July 2, 1978, James Spright, a longshoreman, was injured while working on defendant's vessel, the PRUDENTIAL OCEANJET, while it was docked in Long Beach Harbor. Spright was employed at the time by plaintiff's predecessor in interest, Crescent Wharf and Warehouse Company (hereinafter plaintiff). ¹ As a result of the injury, plaintiff paid worker's compensation benefits to Spright under the Longshoremen's and Harbor Workers' Compensation Act (LHWCA or Act). (33 U.S.C., § 901 et seq.)

On June 29, 1979, Spright filed a complaint for personal injuries against defendant. Plaintiff received a copy of this complaint less than a year later, on March 3, 1980.

On January 21, 1983, the United States Department of Labor issued a "Compensation Order" representing final disposition of Spright's claim against plaintiff under the LHWCA. At the time this order was issued, plaintiff already had paid Spright almost $65,000 in disability benefits.

On December 19, 1983, plaintiff filed a complaint against defendant to recover the benefits paid to Spright. Defendant's subsequent demurrer was sustained with leave to amend.

On November 2, 1984, plaintiff filed an "Amended Complaint for Indemnity and Compensation Benefits." The first cause of action alleged, inter alia, that defendant's negligence proximately caused Spright's injuries and obligated plaintiff to pay Spright benefits under the LHWCA. In the second cause of action, plaintiff alleged that it paid these benefits as a result of defendant's breach of contract.

Defendant demurred, asserting that the first cause of action was barred by the one-year statute of limitations on personal injury actions (Code Civ.Proc., § 340, subd. (3)), and that the second cause of action was barred by the four-year period for breach of contract actions (Code Civ.Proc., § 337, subd. (1)). Alternatively, defendant argued that the action was barred by the doctrine of laches.

The trial court sustained the demurrer without leave to amend "on the grounds stated in the moving papers...."

ISSUES

We consider whether plaintiff's action arises under general maritime law and, if so, whether it is barred by the federal doctrine of laches.

DISCUSSION

I

State courts have concurrent jurisdiction with federal courts over claims arising under the LHWCA and general maritime law. (28 U.S.C., § 1331; Madruga v. Superior Court (1954) 346 U.S. 556, 560-561, 74 S.Ct. 298, 301, 98 L.Ed. 290; Stance v. Jackson (1984) 155 Cal.App.3d 838, 843-844, 202 Cal.Rptr. 480.) When adjudicating such claims, the state court must preserve the substantive admiralty rights of the litigants by applying federal law as it would be applied in federal court. (Fahey v. Gledhill (1983) 33 Cal.3d 884, 887, 191 Cal.Rptr. 639, 663 P.2d 197; Long w v. Presidente Miguel Aleman (1974) 36 Cal.App.3d 508, 513, 111 Cal.Rptr. 643.)

Alluding to these principles, plaintiff contends that since the complaint alleges general "maritime" claims, the trial court erred in not applying the "federal doctrine of laches." In response, defendant also relies on federal law. However, defendant cites non-maritime and non-LHWCA cases which, in the absence of a federal statute of limitations, have applied the relevant state statute to claims arising under various congressional acts. ² Defendant theorizes that the same result is warranted here because plaintiff's action arises under the LHWCA.

We begin by ascertaining the source of plaintiff's claims. An employer's only remedy against a negligent shipowner under the LHWCA is contained in section 33(b) of the Act. This section provides that under certain limited circumstances, an employer who pays compensation benefits is subrogated to the injured employee's cause of action against negligent third parties. ³

Yet statutory subrogation is not the employer's exclusive remedy. In Federal Marine Terminals, Inc. v. Burnside Shipping Co. (1969) 394 U.S. 404, 413, 89 S.Ct. 1144, 1149, 22 L.Ed.2d 371, the Court observed that the LHWCA is concerned only with the employer-employee relationship and "does not affect independent relationships between the stevedoring contractor and the shipowner." In particular, the Court held that "federal maritime law" imposes upon "the shipowner a duty to the stevedoring contractor of due care ... and ... recognize[s] a direct action in tort against the shipowner to recover the amount of compensation payments occasioned by the latter's negligence." (Id. at pp. 416-417, 89 S.Ct. at 1151-52.) This tort cause of action is not created expressly or impliedly by the LHWCA, nor does it depend upon any statutory obligations between the employer and shipowner. (Lowe v. Ingalls Shipbuilding, A Div. of Litton (5th Cir.1984) 723 F.2d 1173, 1182.)

Here, plaintiff's two claims arise under general maritime law, not under the LHWCA. The first cause of action states that as a result of defendant' negligence, Spright was injured while working as a longshoreman on defendant's vessel; that the injury occurred while the vessel was in navigable waters; and that plaintiff thereby became obligated to pay benefits to Spright under the LHWCA. These allegations constitute a Burnside cause of action, and are governed by maritime law. (Lowe v. Ingalls Shipbuilding, supra, 723 F.2d at p. 1183.) Plaintiff's second cause of action for breach of a stevedoring contract also falls within admiralty jurisdiction. (American Stevedores, Inc. v. Porello (1946) 330 U.S. 446, 456, 67 S.Ct. 847, 852, 91 L.Ed. 1011 .) Nowhere in the complaint does plaintiff allege a cause of action as subrogee to Spright's rights under section 33(b) of the LHWCA.

II

The next issue is the proper measure of timeliness for plaintiff's admiralty claims. As the parties have indicated, no federal statute governs this action. The doctrine of laches therefore applies. (Sea Quest Marine, Inc. v. Cove Shipping, Inc. (W.D.Wash.1979) 474 F.Supp. 164.) ⁴

In order to prevail on a laches defense, the defendant must establish the existence of inexcusable delay in bringing the action and resultant prejudice to the defense. (McCune v. F. Alioto Fish Co. (9th Cir.1979) 597 F.2d 1244, 1249.) However, if the complaint reveals that the analogous statute of limitations has run, the burden is on the plaintiff to plead facts showing that exceptional circumstances prevented earlier action. The plaintiff also must rebut the presumption that defendant has been prejudiced by the delay. (Brown v. Kayler (9th Cir.1959) 273 F.2d 588; Ortega v. Compagnie Generale Transatlantique (S.D.Cal.1966) 258 F.Supp. 430, 431.) Above all, the delay which will defeat the plaintiff's action depends upon the particular equitable circumstances of the case. (Czaplicki v. SS Hoegh Silvercloud (1956) 351 U.S. 525, 533, 76 S.Ct. 946, 951, 100 L.Ed. 1387.)

As to the plaintiff's first cause of action, the parties agree that California's one-year statute (Code Civ.Proc., § 340, subd. (3)) provides the relevant guideline. However, they disagree on when the statute begins to run. Plaintiff relies on the general rule that an indemnity cause of action accrues when a party suffers actual loss by paying damages caused by the conduct of another person. Plaintiff therefore insists that the statutory period began when the compensation order was issued less than a year before this suit was filed. Yet defendant cites County of San Diego v. Sanfax Corp. (1977) 19 Cal.3d 862, 140 Cal.Rptr. 638, 568 P.2d 363 for the proposition that the statute began when Spright was injured, which occurred over five years before plaintiff filed suit.

Sanfax held that an employer's cause of action against a third party tortfeasor to recover benefits paid under the state worker's compensation scheme accrues at the time of the employee's injury. This holding rested upon the "statutory framework" which "reveal[ed] a legislative design that employer and employee claims against third parties be brought in parallel lines." (Id. at p. 869, 140 Cal.Rptr. 638, 568 P.2d 363.) Given the unique procedural and substantive interchangeability...