United States v. Hollis

• Decision Date: 30 March 1970
• Docket Number: No. 13254.,13254.
• Citation: 424 F.2d 188
• Parties: UNITED STATES of America, Appellant, v. Horace E. HOLLIS, Plaintiff, Charleston Drydock & Shipbuilding Company, Inc., Elliott T. Halio, Trustee in Bankruptcy for Charleston Drydock & Shipbuilding Company, Inc., and Liberty Mutual Insurance Company, Third-Party Defendants, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

424 F.2d 188 (1970)

UNITED STATES of America, Appellant, v. Horace E. HOLLIS, Plaintiff, Charleston Drydock & Shipbuilding Company, Inc., Elliott T. Halio, Trustee in Bankruptcy for Charleston Drydock & Shipbuilding Company, Inc., and Liberty Mutual Insurance Company, Third-Party Defendants, Appellees.

No. 13254.

United States Court of Appeals, Fourth Circuit.

Argued December 4, 1969.

Decided March 30, 1970.

Gary H. Baise, Atty., Department of Justice (William D. Ruckelshaus, Asst. Atty. Gen., Robert V. Zener and Ronald R. Glancz, Attys., Department of Justice, and Klyde Robinson, U. S. Atty., on the brief), for appellant.

Charles H. Gibbs, Charleston, S. C. (Sinkler, Gibbs & Simons, Charleston, S. C., on the brief), for appellees.

Before SOBELOFF, BRYAN and CRAVEN, Circuit Judges.

SOBELOFF, Circuit Judge:

Charleston Drydock & Shipbuilding Co. contracted with the United States to overhaul the Navy tug YTM-399. Horace E. Hollis, an employee of Charleston Drydock, was injured when he slipped on a drop of oil on the vessel's deckplates as he attempted to lift and move a 75 pound governor, a machine used to synchronize the speeds of the ship's two diesel engines.

Hollis brought suit against the United States under the Public Vessels Act, 46 U.S.C. § 781. He alleged aggravation of a pre-existing left inguinal hernia discovered two days before the accident. Also he claimed that as a result of the accident he sustained a right hernia. Hollis underwent a number of surgical operations to correct these conditions. The operations, however, were not successful. Moreover, as a result of the operations, one of the plaintiff's testicles atrophied. The nerves and blood vessels into the scrotum were damaged and plaintiff became impotent. The plaintiff attributed his injuries and consequent suffering and disabilities to the unseaworthy condition of the vessel and the negligence of the United States.

The United States impleaded Charleston Drydock, plaintiff's employer, and its Trustee in Bankruptcy, as third-party defendants, asserting a right of indemnity for any liability which might arise. The indemnity claim was predicated upon an express provision in the ship repair contract, as well as upon an implied contractual warranty of workmanlike performance. In relevant part the provision is as follows:

The Contractor indemnifies and holds harmless the Government * * * against all suits * * * (including, without limitation, * * * personal injury * * *) to which the Government * * * may be subject or put by reason of damage or injury * * * to the property or person of anyone other than the Government, its agencies, instrumentalities and personnel * * * arising or resulting in whole or in part from the fault, negligence, wrongful act or wrongful omission of the Contractor, or any subcontractor, his or their servants, agents or employees; * * *. Such indemnity shall include, without limitation, suits, actions, claims, costs or demands of any kind whatsoever, resulting from * * * personal injury * * * occurring during the period of work on the vessel * * *. (Emphasis added.)

In his first order, the District Judge found that the Navy, while repairing the ship's generator, created an unseaworthy condition and was negligent in failing "to remove or clean up the oil after they knew or should have known that the same had been spilled * * *." He further found that the "plaintiff was not negligent in handling the governor singularly" (i. e., alone and without assistance) and "that the drydock company in no way contributed to plaintiff's accident or subsequent injury." There was, the trial judge concluded, no breach of either the express indemnity provision or the implied warranty of workmanlike performance. Judgment was entered in favor of the plaintiff against the United States only.

However, the plaintiff was awarded only $2,750, the court's evaluation of the damage sustained up until the time of plaintiff's first hernia operation. The District Judge was of the view that Hollis had failed to meet his burden of showing a causal connection between the original hernia operation and the later aggravation of the plaintiff's condition.

Hollis submitted a post-trial motion seeking an amendment of the order with respect to damages, or a new trial on the damage issue. The court then amended the original order, explaining that it had "overlooked certain testimony before the South Carolina Industrial Commission * * *" which was submitted at trial. This testimony fully supported Hollis' contention that the aggravation of the left inguinal hernia and other sequelae directly resulted from the accident. The District Judge stated that he had not previously awarded for this injury, "being under the impression that plaintiff was entitled to an award only for damages from a right inguinal hernia which was proximately and admittedly caused by the accident. Plaintiff had a pre-existing left inguinal hernia before the accident but was able to work and perform normal duties until it was aggravated by the accident." Taking into account the testimony before the South Carolina Industrial Commission, the court increased the award to $22,750.

Still adhering to the original holding that the "drydock was not guilty of any form of negligence and consequently the entire burden of liability rests with the United States * * *," the court nevertheless, in determining the amount of damages, later in the same order stated that "consideration of the fact that plaintiff was guilty of some contributory negligence in doing the lifting is also a part of the court's determination." As in his original order, the District Judge denied indemnity to the United States against Charleston Drydock.

The United States brought this appeal to determine "whether the district court's finding that plaintiff was contributorily negligent necessarily compels a finding that, with respect to the damage award against it in Hollis' favor, the United States is entitled to indemnity from Charleston Drydock under the latter's express contract of indemnity and also under its implied warranty of workmanlike performance." The question of indemnity is the only one raised in this court; the appeal does not challenge the $22,750 award finally made in favor of the plaintiff.

I

Charleston Drydock undertook to indemnify the United States for any damages arising from injury to anyone other than the Government or its employees caused "in whole or in part" by Charleston Drydock or its employees. Therefore, if the accident resulted from Hollis' negligence in any degree, the United States is entitled to indemnification from his employer.

This provision, admittedly broad, is in no way unconscionable. It has long been settled law that a party may expressly agree to be held liable, even if the accident stems solely from the fault of another. See, e. g., Norris, Maritime Personal Injuries § 56 at p. 152. The courts have consistently enforced contractual indemnity provisions placing ultimate liability upon an indemnitor, even where the indemnitee's fault also contributed to the loss. Weyerhaeuser S. S. Co. v. Nacirema Operating Co., 355 U.S. 563, 78 S.Ct. 438, 2 L. Ed.2d 491 (1958); Ryan Stevedoring Co. v. Pan-Atlantic S. S. Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956); American Stevedores v. Porello, 330 U.S. 446, 67 S.Ct. 847, 91 L.Ed. 1011 (1947); Smith v. United States, 336 F.2d 165 (4th Cir. 1964); Shenker v. United States, 322 F.2d 622 (2nd Cir. 1963), cert. denied sub nom., American Stevedores, Inc. v. Shenker, 376 U.S. 907, 84 S.Ct. 659, 11 L.Ed.2d 606. Considering the variety of circumstances in which the courts allow recovery for...