U.S. Fire Ins. Co. v. Allied Towing Corp.

• Decision Date: 21 May 1992
• Docket Number: 90-1879 and 90-1882,Nos. 90-1871,s. 90-1871
• Citation: 966 F.2d 820
• Court: U.S. Court of Appeals — Fourth Circuit
• Parties: UNITED STATES FIRE INSURANCE COMPANY; Transerve Marine, Incorporated, Plaintiffs-Appellees, v. ALLIED TOWING CORPORATION, Defendant-Appellant, United States of America, Defendant & Third Party, Plaintiff-Appellee, and TUG STARCRESCENT, her engines, tackle, etc., in rem, Defendant, The TANK BARGE TMI 96, her engines, tackle, etc., in rem, Third Party Defendant. UNITED STATES FIRE INSURANCE COMPANY; Transerve Marine, Incorporated, Plaintiffs-Appellants, v. ALLIED TOWING CORPORATION, Defendant-Appellee, United States of America, Defendant & Third Party Plaintiff-Appellee, and TUG STARCRESCENT, her engines, tackle, etc., in rem, the Tank Barge TMI 96, her engines, tackle, etc., in rem, Defendants. UNITED STATES FIRE INSURANCE COMPANY; Transerve Marine, Incorporated, Plaintiffs-Appellees, v. ALLIED TOWING CORPORATION, Defendant-Appellee, United States of America, Defendant & Third Party Plaintiff-Appellant, and TUG STARCRESCENT, her engines, tackle, etc., in rem, the Tank Barge TMI 96, her engines, tackle, etc., in rem, Defendants.

Page 820

966 F.2d 820

1993 A.M.C. 1276

UNITED STATES FIRE INSURANCE COMPANY; Transerve Marine,Incorporated, Plaintiffs-Appellees, v.ALLIED TOWING CORPORATION, Defendant-Appellant,United States of America, Defendant & Third Party, Plaintiff-Appellee, andTUG STARCRESCENT, her engines, tackle, etc., in rem, Defendant,

The TANK BARGE TMI 96, her engines, tackle, etc., in rem,

Third Party Defendant.

UNITED STATES FIRE INSURANCE COMPANY; Transerve Marine,Incorporated, Plaintiffs-Appellants, v.ALLIED TOWING CORPORATION, Defendant-Appellee,United States of America, Defendant & Third Party Plaintiff-Appellee, andTUG STARCRESCENT, her engines, tackle, etc., in rem, the

Tank Barge TMI 96, her engines, tackle, etc., in

rem, Defendants.

UNITED STATES FIRE INSURANCE COMPANY; Transerve Marine,Incorporated, Plaintiffs-Appellees, v.ALLIED TOWING CORPORATION, Defendant-Appellee,United States of America, Defendant & Third Party Plaintiff-Appellant, andTUG STARCRESCENT, her engines, tackle, etc., in rem, the

Tank Barge TMI 96, her engines, tackle, etc., in

rem, Defendants.

Nos. 90-1871, 90-1879 and 90-1882.

United States Court of Appeals Fourth Circuit.

Argued Feb. 4, 1992.

Decided May 21, 1992.

Morton H. Clark, Vandeventer, Black, Meredith & Martin, Norfolk, Va., argued.(Daniel R. Warman, Williams, Worrell, Kelly, Greer & Frank, Norfolk, Va., on brief), for defendant-appellant.

Craig S. English, Chalos, English & Brown, New York City, James Patrick Jacobsen, Trial Atty., Civ. Div., U.S. Dept. of Justice, Washington, D.C., argued Stuart M. Gerson, Asst. Atty. Gen., Civ. Div., U.S. Dept. of Justice, Washington, D.C., Kenneth E. Melson, U.S. Atty., Norfolk, Va., for plaintiffs-appellees.

Before WILKINSON and LUTTIG, Circuit Judges, and OSTEEN, United States District Judge for the Middle District of North Carolina, sitting by designation.

OPINION

LUTTIG, Circuit Judge:

This admiralty case arises out of a collision involving a tug, a tow, and a Navy ship.Following the collision, the owner of the tow and its insurance company filed suit against the owner of the tug and the United States.The district court found both the tug and the Navy ship at fault for the collision and apportioned liability equally between the owner of the tug and the United States.The court awarded damages, but declined to award prejudgment interest.The defendants appeal the district court's apportionment of liability and its damages award.The plaintiffs appeal the district court's refusal to award prejudgment interest.We affirm the apportionment of liability, vacate the damages award and the denial of the motion for prejudgment interest, and remand the case to the district court.

I.

In the early morning of March 24, 1989, the USS MOUNT BAKER, a Navy ammunition ship, collided with the TMI-96, an unmanned tank barge owned by Transerve Marine, Inc.("Transerve Marine").At the time of the collision, the USS MOUNT BAKER was engaged in a search and rescue mission near the Chesapeake Bay with four other Coast Guard and Navy ships.The TMI-96 was transporting fertilizer from the Gulf of Mexico to Virginia, and was in tow of the STARCRESCENT, a tugboat owned by Allied Towing Corporation("Allied Towing").Both the USS MOUNT BAKER and the TMI-96 sustained damages in the collision.

The TMI-96 was insured by United States Fire Insurance Co.("U.S. Fire").Transerve Marine recovered $482,000 from U.S. Fire following the collision, ¹ and then sold the TMI-96.Thereafter, U.S. Fire filed a subrogation claim against the STARCRESCENT, Allied Towing, and the United States.²Allied Towing answered U.S. Fire's complaint and filed a cross-claim against the United States.The United States answered the complaint and filed cross-claims against Allied Towing and the STARCRESCENT.

Transerve Marine then filed an intervening complaint, seeking to recover the costs of repairs beyond those covered by its insurance policy with U.S. Fire.Allied Towing and the United States answered this complaint as well, and the United States filed a counterclaim against Transerve Marine.

On October 9, 1990, following a five-day bench trial, the district court found both the STARCRESCENT and the USS MOUNT BAKER at fault for the collision, and apportioned liability equally between Allied Towing and the United States.The court found that at the time of the collision the USS MOUNT BAKER was not making proper use of its radar, was not sounding fog signals, and was travelling at an excessive speed.As for the STARCRESCENT, the court found that its use of a 2000-foot tow line was unnecessarily risky; that it failed to make proper use of its radar, was not sounding fog signals, and was travelling at an excessive speed; and that the captain of the tug did not attempt to make radio contact with the USS MOUNT BAKER.The court found that the TMI-96 was not at fault.

On the issue of damages, the district court concluded that U.S. Fire was entitled to a recovery of $482,000, the amount of its payment to Transerve Marine; that the United States was entitled to recover $267,642.68 as compensation for the damages sustained by the USS MOUNT BAKER; and that Transerve Marine was entitled to recover expenses in the amount of $66,331.The court ordered that Allied Towing and the United States split the total amount of damages (approximately $816,000).The court later denied U.S. Fire and Transerve Marine's motion for prejudgment interest, on the grounds that Transerve Marine's officers were partially responsible for the collision.

Both in personam defendants and both plaintiffs appeal.One of the defendants(Allied Towing) challenges the district court's apportionment of liability, and both defendants claim that the damages award was excessive.Both plaintiffs claim that the district court erred in declining to award prejudgment interest.

We conclude that the district court's apportionment of liability was not clearly erroneous, but that the court failed to provide an explanation for its damages award sufficient to permit meaningful appellate review, and abused its discretion in declining to award prejudgment interest on the grounds that Transerve Marine's officers were partially responsible for the collision.We therefore affirm in part, vacate in part, and remand so that the district court may reconsider its damages award and reconsider whether an award of prejudgment interest is appropriate.

II.

Allied Towing appeals the district court's apportionment of liability and its finding that the TMI-96 was not at fault for the collision.Both of these determinations are reviewed for clear error.McAllister v. United States, 348 U.S. 19, 20, 75 S.Ct. 6, 7-8, 99 L.Ed. 20(1954);Ente Nazionale Per L'Energia Electtrica v. Baliwag Navigation, Inc., 774 F.2d 648, 653-54(4th Cir.1985).

A.

Allied Towing claims that the collision was caused solely by the negligent navigation of the USS MOUNT BAKER, and that the district court therefore erred in apportioning fault equally between the STARCRESCENT and the USS MOUNT BAKER.The gravamen of Allied Towing's claim is that the district court clearly erred in finding that the STARCRESCENT was not sounding fog signals prior to the collision.

The captain, the mate, and the deckhand on watch aboard the STARCRESCENT all testified that the tugboat was sounding fog signals prior to the collision, and several lookouts aboard the USS MOUNT BAKER testified that they had heard fog signals from another vessel prior to the collision.The district court did not believe this testimony, and instead credited the testimony of the STARCRESCENT's engineer, who testified that the tug's foghorn was not operating prior to and at the time of the collision.Allied Towing's claim regarding the sounding of the foghorn thus amounts to a claim that the district court was clearly erroneous in choosing to believe the crew member of the STARCRESCENT who testified that the foghorn had not sounded, rather than the crew members who testified that it had sounded.

Because this determination by the district court was based upon assessments of witness credibility, it is deserving of the highest degree of appellate deference.SeeAnderson v. City of Bessemer City, 470 U.S. 564, 575, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518(1985)("[W]hen a trial judge's finding is based on his decision to credit the testimony of one of two or more witnesses, each of whom has told a coherent and facially plausible story that is not contradicted by extrinsic evidence, that finding, if not internally inconsistent, can virtually never be clear error.").The trial court is uniquely qualified to determine which witnesses are most credible and to resolve conflicts among witnesses' testimony, for the simple reason that it has the benefit of observing the witnesses, and is thereby "aware of the variations in demeanor and tone of voice that bear so heavily on the listener's understanding of and belief in what is said."Id.;seeJ.A.at 697(district court stated that STARCRESCENT engineer's "manner and appearance on the witness stand" supported his "truthfulness").Against this exceedingly deferential standard of review, we cannot conclude that the district court clearly erred in deciding to credit the testimony of the STARCRESCENT engineer--who was in a position to know whether the foghorn could have sounded--over the contradictory testimony of crew members of the STARCRESCENT and USS MOUNT BAKER.³Because the district court did not clearly err in finding that the STARCRESCENT was not sounding fog signals prior to the collision, we affirm the district court's equal apportionment of liability between the STARCRESCENT and the USS MOUNT BAKER.⁴

B.

Allied Towing also contends that the district court erred in finding that the TMI-96 was not at fault for the collision.In support of this contention, it argues that it was a statutory violation for the TMI-96 not to have its lights on at the time of the collision, given...