Williams v. Ocean Transport Lines, Inc.
| Decision Date | 24 April 1970 |
| Docket Number | No. 18143.,18143. |
| Parties | Glenny WILLIAMS, Appellant, v. OCEAN TRANSPORT LINES, INC. |
| Court | U.S. Court of Appeals — Third Circuit |
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Louis Samuel Fine, Fine, Staud, Silverman & Grossman, Philadelphia, Pa. (Joseph E. Kaplan, Philadelphia, Pa., on the brief), for appellant.
Francis E. Marshall, Marshall, Dennehey & Warner, Philadelphia, Pa. (John J. Coffey, Philadelphia, Pa., on the brief), for appellee.
Before McLAUGHLIN, FREEDMAN and GIBBONS, Circuit Judges.
Plaintiff-appellant, Glenny Williams (Williams), a longshoreman, on October 1, 1963 was employed by the T. Hogan Corporation (Hogan), a stevedoring contractor, at the marine terminal in Camden, New Jersey, owned and operated by South Jersey Port Commission (Port Commission).1 While discharging a cargo of bulk nitrate from the S.S. John Wilson, owned by Ocean Transport Lines, Inc. (Ocean Transport), he was injured when part of a shore-based movable crane, owned by the Port Commission and operated by Hogan, failed.
On May 12, 1965, Williams filed suit in the Eastern District of Pennsylvania against Ocean Transport alleging unseaworthiness in failing to provide a safe place to work. On May 26, 1965, Williams filed suit in the District of New Jersey against the Port Commission alleging negligence with respect to the crane.
In the Eastern District of Pennsylvania lawsuit, Ocean Transport, on May 25, 1965, filed a third party complaint against Hogan and the Port Commission alleging breach by each third party defendant of its contract to furnish stevedoring services in a safe and workmanlike manner. Hogan and the Port Commission filed answers to this third party complaint, and Hogan cross-claimed against the Port Commission, which filed an answer to the cross-claim.
At this stage in the Eastern District of Pennsylvania suit, the insurance carrier for the Port Commission, recognizing the merit of Ocean Transport's third party claim for breach of contract to furnish stevedoring services in a safe and workmanlike manner, proposed to Ocean Transport that it take over the defense of that action and indemnify Ocean Transport from all settlements, judgments, interests, costs and counsel fees. Ocean Transport agreed, the third party actions in the Eastern District of Pennsylvania were dismissed, and the attorneys for the Port Commission were substituted for Ocean Transport's attorneys. Thus, the insurance carrier for the owner of the crane, the defect in which was claimed by Williams to have caused the accident, wound up defending both the New Jersey and the Pennsylvania federal court actions.
Both cases proceeded through discovery and pretrial. By the chance operation of the court calendars, the New Jersey case against the Port Commission was reached first and tried in the district court before a jury. Liability was not a serious issue. After six trial days the jury awarded Williams damages in the sum of $90,000, and judgment in that amount was entered against the Port Commission on March 10, 1969. No post-trial motions were made in the New Jersey District Court with respect to the adequacy of this verdict.
After the verdict, the insurance carrier for the Port Commission tendered $90,000 to counsel for Williams, which tender was refused. The insurance carrier then obtained an order permitting payment of the $90,000 to the clerk of the United States District Court for the District of New Jersey, upon which payment the clerk was directed to mark the judgment satisfied of record. Such payment was made on March 24, 1969. On April 17, 1969, the New Jersey District Court vacated that part of its earlier order which directed the clerk to mark the judgment satisfied of record. The reasons for this modification do not appear, but they may have to do with interest from March 10, 1969 to March 24, 1969, since only $90,000 was paid into court.
After paying $90,000 into court in the District of New Jersey, the insurance carrier returned to the Eastern District of Pennsylvania, where it was defending Ocean Transport, brought the above facts to the attention of the district court, and moved for summary judgment.
On behalf of that defendant, the insurance carrier contended:
The District Court for the Eastern District of Pennsylvania granted summary judgment, and from that order Williams appeals. He contends that although he may ultimately have to credit the $90,000 against any judgment he might obtain against Ocean Transport, neither the New Jersey District Court judgment nor the $90,000 payment into court bars him from relitigating against that defendant the amount of his damages.
It has been settled law since Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946), affirming Sieracki v. Seas Shipping Co., 149 F.2d 98 (3 Cir. 1945), that a shipowner owes to a longshoreman engaged in unloading the same non-delegable duty to provide a seaworthy vessel as a place to work as is owed to a seaman. This liability without fault to compensate for injuries caused by unseaworthiness, however, gives rise to a right of indemnity in favor of the vessel and its owner from stevedores who, by rendering unsafe and unworkmanlike services to the ship, have created the condition of unseaworthiness for which the ship and owner have been held liable. Ryan Stevedoring Co. v. Pan-Atlantic Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956). The right of indemnity applies not only to the manner of performance of services but also to the quality of equipment used. Weyerhaeuser S.S. Co. v. Nacirema Operating Co., 355 U.S. 563, 78 S.Ct. 438, 2 L.Ed.2d 491 (1958). Indemnity applies even when the stevedore uses the ship's own unseaworthy equipment and thereby brings into play its existing unseaworthy condition. Crumady v. The Joachim Hendrik Fisser, 358 U.S. 423, 79 S.Ct. 445, 3 L.Ed.2d 413 (1959).
The right of indemnification is not defeated by the shipowner's own negligence, Weyerhaeuser S.S. Co. v. Nacirema Operating Co., supra, and it does not depend upon any privity of contract between the shipowner and the warrantor of workmanlike service. Waterman Steamship Corporation v. Dugan & McNamara, 364 U.S. 421, 81 S.Ct. 200, 5 L.Ed.2d 169 (1960); Crumady v. The Joachim Hendrik Fisser, supra. Nor is the warranty lessened or avoided by the absence of negligence on the part of the warrantor who furnished the equipment which caused the condition of unseaworthiness. Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Co., 376 U.S. 315, 84 S.Ct. 748, 11 L.Ed. 2d 732 (1964). Moreover, this indemnity contract, implied in maritime law, runs not only from stevedores but from shippers whose manner of packaging their merchandise produces a condition of unseaworthiness, Simpson Timber Co. v. Parks, 390 F.2d 353 (9 Cir. 1968), cert. denied, 393 U.S. 858, 89 S.Ct. 126, 21 L.Ed.2d 127 (1968), and from ship repairers. Grigsby v. Coastal Marine Service of Texas, Inc., 412 F.2d 1011, 1040 (5 Cir. 1969); McLaughlin v. Trelleborgs Angfartygs A/B, 408 F.2d 1334 (2 Cir. 1969), cert. denied, 395 U.S. 946, 89 S.Ct. 2020, 23 L.Ed.2d 464 (1969). In short, the vessel is entitled to indemnity from whatever third party causes the condition of unseaworthiness producing the injury.
The insurer defending the Port Commission concluded correctly that the Port Commission owed a duty to indemnify the vessel and its owner, Ocean Transport. There was no dispute that use of the Port Commission's defective crane was relied upon as creating the condition of unseaworthiness. The Port Commission, therefore, owed Ocean Transport a clear duty to indemnify against Williams' unseaworthiness claim. It acknowledged that duty in writing and undertook the defense of the action on Ocean Transport's behalf.
Ocean Transport contends that because of the relationship of indemnitee-indemnitor between it and the Port Commission it is protected, under principles of collateral estoppel, against relitigation of the amount of Williams' damages. Williams contends his injuries are worth more than $90,000 and that he is entitled to proceed against Ocean Transport, who he claims is a joint tort-feasor, so long as he has not accepted full satisfaction for his injuries. United States v. Silliman, 167 F.2d 607 (3 Cir. 1948), cert. denied, 335 U.S. 825, 69 S.Ct. 48, 93 L. Ed. 379 (1948); Theobald v. Kenney's Suburban House, Inc., 48 N.J. 203, 225 A.2d 10 (1966); Pennsylvania Greyhound Lines v. Rosenthal, 14 N.J. 372, 102 A.2d 587 (1954); Hilbert v. Roth, 395 Pa. 270, 149 A.2d 648 (1959); Restatement of Judgments § 94 (1942). He contends that because the parties are different, and the basis of liability against the Port Commission is negligence, while the basis of liability against Ocean Transport is unseaworthiness, there is no such identity of issues and parties, and no such mutuality of estoppel as would permit the Eastern District of Pennsylvania to grant a preclusionary effect to the first judgment.
In deciding whether or not to grant such preclusionary effect a preliminary choice of law problem is presented. The first federal court, in New Jersey, had before it a diversity negligence case. The second federal court, in Pennsylvania, had before it an unseaworthiness claim within the admiralty jurisdiction of the federal courts. Undoubtedly the first federal court looked to New Jersey law to determine both liability and damages. In...
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