Vulcan Materials Co. v. Vulica Shipping Co., Ltd.

• Decision Date: 02 August 1994
• Docket Number: Civ. A. No. 92-2050.
• Citation: 859 F. Supp. 242
• Parties: VULCAN MATERIALS COMPANY and U.S. Fire Insurance Co. v. VULICA SHIPPING CO., LTD.
• Court: U.S. District Court — Western District of Louisiana

859 F. Supp. 242

VULCAN MATERIALS COMPANY and U.S. Fire Insurance Co. v. VULICA SHIPPING CO., LTD.

Civ. A. No. 92-2050.

United States District Court, W.D. Louisiana, Lake Charles Division.

August 2, 1994.

James M. Tompkins, New Orleans, LA, for plaintiff.

Francis X. Neuner, Jr., Lafayette, LA, for defendant.

FINDINGS OF FACT AND CONCLUSION OF LAW

EDWIN F. HUNTER, Jr., Senior District Judge.

On November 17-18, 1991, eighteen thousand tons of limestone aggregate slid into the industrial canal at Lake Charles, Louisiana.¹ This lawsuit ensued. The matter was submitted to the court by way of bench trial on March 29 and 30, 1994. Having considered all the evidence and applicable law, the court rules as follows:

FINDINGS OF FACT

1. Originally, listed as plaintiffs in this matter were Vulcan Materials Company and United States Fire Insurance Company. Several months after original filing, Vulcan/ICA Distribution Company was substituted in place of Vulcan Materials Company.

2. Vulcan/ICA Distribution Company (hereinafter, "Vulcan/ICA") is a New Jersey corporation whose primary business involves shipping various grades of crushed limestone aggregate from Mexico to various U.S. ports. The United States Fire Insurance Company provided insurance coverage for the cargo which forms the subject matter of this litigation. The original defendants in this suit included Vulica Shipping Company, Ltd. (hereinafter, "Vulica Shipping"), and Port Aggregates, Inc. (hereinafter, "Port Aggregates").²

3. Vulica Shipping is a foreign entity organized and existing under the laws of a foreign state. Vulcan Gulf Coast Materials Company, the original plaintiff in this suit, owns 50% of Vulica Shipping.³

4. Shortly before trial, plaintiffs, Vulcan/ICA and United States Fire Insurance Company, settled with defendant, Vulica Shipping. All rights which plaintiffs were entitled to assert against Port Aggregates (as set forth in the pleadings and filings) were assigned to Vulica Shipping. In exchange, plaintiffs' claims against Vulica Shipping and the M/V W.H. BLOUNT were dismissed.

5. Port Aggregates is a Louisiana-based corporation whose principle business involves the distribution of limestone aggregate. At all relevant times, Port Aggregates operated a facility on the Industrial Canal Turning Basin at Lake Charles, Louisiana. At that site, Port Aggregates received deliveries of various grades of limestone aggregate. The material was exhumed from mines in Mexico, and delivered to Lake Charles, Louisiana, aboard vessels chartered by Vulcan/ICA.⁴

6. Port Aggregates' Lake Charles facility consisted of four acres of land adjacent to the Industrial Canal Turning Basin. The facility is rectangular in shape, and is bounded on one side by water. The shoreline bank is unreinforced, lacking a retaining wall or bulkhead. The Port of Lake Charles stepdredged the water adjacent to the facility to a depth of 40 feet.⁵

7. The land comprising the facility previously was covered with spoil from past dredging operations. By the time Port Aggregates leased the land, however, the spoil had been removed and the land compacted. In preparation for establishing their facility, Port Aggregates covered a section of land with a geotextile fabric which formed a separation barrier between the soil and limestone base. A layer of limestone was placed over this fabric. The fabric acted as a stabilizer, equally distributing the load of the tremendous weight it was required to bear.

8. The geotextile fabric was designed and intended as a primary landing area for the limestone, and was referred to as the "pad". Rectangular in shape, the pad paralleled the shore for approximately 400-500 feet. The front edge of the pad and the water were separated by a distance of 25-30 feet. Along this border between the pad and the water was a road used by trucks and loading equipment to access the piles of aggregate. The onset of grass delineated the boundaries of the pad.⁶

9. Port Aggregates utilized four breasting barges configured in a "T" shape to facilitate the docking and unloading of cargo from deep-draft, ocean-going ships. The barges were configured such that one barge rested parallel to the shore. Immediately next to that barge was another barge placed side by side on the outside of the first barge. Finally two more barges were connected end to end, parallel to the shore, and adjacent to the first two barges. As a ship discharged cargo, its draft decreased, one of the barges was removed, and the ship maneuvered closer to shore, allowing it to discharge aggregate farther inland.

10. Daniel Nemirovsky, the operations manager for Vulica Shipping, and Cliff Kirkmeyer, vice president and general manager of Vulcan/ICA, were involved in the design and approval of the Port Aggregates' facility. Moreover, Nemirovsky established the breasting barge system and approved the mooring devices. On seven previous occasions prior to the underlying incident, aggregate had been successfully delivered by vessels chartered by Vulcan/ICA, including the W.H. BLOUNT. There were no cargo placement problems associated with any of the previous discharges. Furthermore, after the incident in question, approximately ten more shipments were received by the facility without mishap.

11. On May 1, 1990, Port Aggregates entered into a sales agreement (hereinafter referred to as, "the Sales Agreement") with Vulcan/ICA for the purchase of "materials", including limestone aggregate. The initial term of the Sales Agreement extended through, and including, December 31, 1994, unless terminated sooner pursuant to the contract. In November, 1991, in accordance with the Sales Agreement, Vulcan/ICA shipped several grades of limestone aggregate to the Port Aggregates' facility in Lake Charles.

12. The limestone was transported aboard the M/V W.H. BLOUNT, a bulk carrying vessel owned by Vulica Shipping. The vessel is equipped with a 250 foot boom/conveyor system which removes aggregate from the holds of the vessel and deposits it on shore. The boom is fixed along the center line of the main deck; it is able to swing out ninety degrees on either side. The conveyor system discharges cargo at a rate of approximately 5,000 tons per hour.

13. On November 12 and 13, 1991, the M/V W.H. BLOUNT loaded three grades of limestone aggregate in Cozumel, Mexico, and sailed for Lake Charles, Louisiana. The M/V W.H. BLOUNT arrived at the Port Aggregates facility on November 15, 1991. The ship's draft at the time of arrival was approximately 38 feet. Due to the shallow water depth, it was necessary to use two tugs to push the vessel laterally until she came along side the two barges.

14. After securing its mooring lines, the vessel commenced discharge of 610-grade limestone aggregate at approximately 2015 hours. The first mate of the M/V W.H. BLOUNT gave Port Aggregates personnel a hand-held radio which allowed two-way communication between the ship and shore. Andrew and James Guin, owners of Port Aggregates, were present on shore to supervise the unloading. The crew of the BLOUNT informed the Guins that the ship was under orders to discharge the cargo and depart the facility within twelve hours.

15. On the evening in question, as customarily done, the area on the pad where the limestone was to be deposited was marked by surveyor's stakes and tape. The discharge area was well lit by lights from the BLOUNT. The following day, the stakes were removed to avoid personal injury and/or damage to the moving equipment.

16. Initially, discharge operations proceeded smoothly. As the unloading continued, the Guins noticed that the ship did not rise in the water as her load lightened. Also, after 1½ to 2 hours, the vessel began to list to port and edge away from the breasting barges.⁷ As the ship began to list, the arm of the boom dipped, thus decreasing its reach. As a result, the pile of aggregate began accumulating off the pad and closer to the water. At this point, the Guins contacted the vessel and instructed them to move closer to the bank. The vessel replied that it was sitting on the bottom and was unable to move closer to shore. This exchange continued back and forth while the discharged material continued to inch closer and closer to the water. Eventually aggregate began to trickle into the water, at which time the Guins instructed the vessel to stop discharging. The vessel continued to discharge. Finally, the Guins boarded the ship by means of a personnel basket.⁸ Once aboard, the Guins noticed that water was spewing out of the ballast overflows on the port side of the vessel. The first mate denied that the water was ballast. The Guins point-blankly commanded the first mate to stop discharging, which he then did. However, a little over one hour passed between when the Guins originally instructed the ship that there was a problem with the discharge, and when the ship finally halted the unloading procedure.⁹

17. After initially telephoning Dan Nemirovsky, and informing him of the ongoing problem with the discharge of the BLOUNT's cargo, Nemirovsky returned the call and told the Guins that the problem had been solved. Shortly thereafter, the ship began to rise on the port side, even though she was not discharging any cargo.

18. We find that the W.H. BLOUNT took on ballast while discharging, in an attempt to increase the turnaround time. We further find that the increased ballast on the port side caused the boom to lower and the aggregate to be placed in an area between the pad and the shore. Aiding us in this conclusion is the fact that the ship's list was corrected shortly after Nemirovsky contacted the vessel. Also, seventeen other ships, of similar size, off-loaded their cargo at the facility without mishap.

19. After correcting the list and resuming discharge, no additional problems were encountered during the unloading process. At 1430 hours on Saturday, November 16, 1994, the W.H. BLOUNT completed unloading and...