The opinion of the court was delivered by: HERLANDS
This opinion will decide the common questions of law -- concerning the Government's liability -- which are raised by the Government's motions in the two above-entitled cases.
The action in which Hidick is plaintiff and the Government is third party defendant will be referred to herein as 'the civil case.' The action in which Pacific Cargo Carriers Corp. is libelant and the Government is respondent will be referred to herein as 'the admiralty case.'
Government's Motion in the Civil Case
In the civil case, the Government moves, pursuant to Fed.Rules Civ.Proc. rule 12(b), 28 U.S.C.A., to dismiss the third party complaint against it on three grounds:
(1) that this Court lacks jurisdiction over the subject matter because the third party plaintiff, Pacific Cargo Carriers Corporation (referred to herein as 'Pacific'), failed to start the action against the Government 'within two years after the alleged cause of action arose,' as required by the Suits in Admiralty Act, 46 U.S.C.A. 745;
(2) that this Court lacks jurisdiction over the Government, as third party defendant, because Pacific, as third party plaintiff, failed to start the action against the Government within the said two-year period, as required by the foregoing provision of the Suits in Admiralty Act; and
(3) that the third party complaint fails to state a claim upon which relief can be granted.
Government's Motion in the Admiralty Case
In the admiralty case, the Government excepts to the amended libel on three grounds:
(1) that the amended libel does not state 'facts sufficient to constitute a cause of action';
(2) that the amended libel does not state facts sufficient to constitute a cause of action 'within the jurisdiction' of this Court; and
(3) that this Court lacks jurisdiction 'over the subject matter of this suit and over the respondent' because libelant Pacific failed to start the action 'within two years after the alleged cause of action arose,' as required by the Suits in Admiralty Act, 46 U.S.C.A. 745.
Background Facts of the Litigation
Pacific is the owner of the S.S. Seacoronet. On April 22, 1952, Pacific entered into a time charter of said vessel with the Government as charterer. Copies of the time charter (Contract No. MST-1102, MSTS Dry Cargo War Risk Form) are annexed to the third party complaint in the civil case (as Exhibit Y) and to the amended libel in the admiralty case (as Exhibit A). The pertinent provisions of the time charter are set forth in the course of this opinion.
On August 17, 1953, at Pusan, Korea, the vessel was loading what was purported to be scrap. A full container of chlorine gas which was loaded with the scrap became unsealed in the handling thereof, releasing the gas throughout the ship. As a result of the inhalation of the gas fumes, numerous seamen brought claims against Pacific, as the shipowner, alleging unseaworthiness of the vessel and negligence. Pacific claimed that the accident was caused solely by the Government's negligence.
The pending admiralty case was commenced on July 26, 1956. An amended libel was filed on March 28, 1957. In that case, Pacific seeks indemnification from the Government for payments made to date to eight crew members by way of settlement
or satisfaction of judgments
obtained after trial and for expenses incurred in defending the actions brought by these crew members.
In the pending civil case, another injured crew member, Hidick, brought an action on December 23, 1954 in this district against Pacific and Pacific's operating agent, Orion Shipping and Trading Co., Inc. A third party complaint by Pacific against the Government was filed on March 7, 1957, i.e., more than two years after the occurrence of the accident on August 17, 1953.
Material Recitals in the Pleadings
Because defendant's motions are directed to the alleged insufficiency of the amended libel and the third party complaint, as disclosed by the facts appearing on the face thereof, it is necessary to summarize the material allegations in those pleadings.
The amended libel, filed on March 28, 1957, sets forth two causes of action. The first based upon the Suits in Admiralty Act (Amended libel, para. Twenty-First) describes the circumstances under which Pacific paid a crew member, one Robert L. Wilson, the sum of $ 1,230.65 on account of injuries received by Wilson on August 17, 1953, when he inhaled poisonous gas fumes.
The amended libel further alleges, inter alia, as part of the first cause of action:
that the Government was the time charterer of the vessel pursuant to the terms of the charter party, Exhibit 'A'; that on August 17, 1953, at Pusan, Korea, the Government was loading a cargo into the vessel's holds, and that the cargo consisted, in part, of gas cylinders, 'which the Master and officers of the said vessel had been informed and believed were empty and free of gas'; but that one of the gas cylinders contained poisonous gas which was 'permitted by' the Government to escape and penetrate the crew quarters (para. Fifth);
that the escape of the poisonous gas 'was due to the failure and neglect' on the Government's part 'to comply with and properly perform the duties and obligations' of the Government 'under the terms of the aforesaid contract of charter party,' in that the cargo of gas cylinders 'was not properly loaded' and the Government 'loaded such dangerous and poisonous cargo at its own risk' (para. Sixth);
that Pacific had not committed any acts of negligence and that the loading of said cargo was not under Pacific's 'control' (para. Seventh);
that 'under the terms and conditions of the aforesaid contract of charter party, the respondent (the Government) was required to and did assume all responsibility for the loading and discharging of the S.S. Seacoronet * * *' (para. Eighth);
that a crew member, one Robert L. Wilson, claimed to have been injured by the escaping poisonous gas (para. Tenth); that, as a consequence, said Wilson sued Pacific and Orion in the City Court of the City of New York for $ 6,000. (para. 'Eleventh'); that Pacific duly notified the Government of that lawsuit and called upon the Government to assume the defense of that action, but the Government refused to take part in either the defense or settlement of that action (paragraphs Thirteenth and Fourteenth);
that thereafter Pacific settled the action for $ 750, in addition to the sum of $ 136 previously paid to Wilson for maintenance and cure; and Pacific also incurred legal expenses and disbursements in the amount of $ 344.65; so that Pacific's present total claim against the Government arising out of the Wilson case is for $ 1,230.65 (paragraphs Fifteenth to Nineteenth);
that it is the Government's duty 'by reason of the matters aforesaid and pursuant to the terms and conditions of the contract of charter party * * * to indemnify' Pacific for its damages (para. Twentieth).
The second cause of action is based upon the fact that seven other crew members sued Pacific for similar injuries arising out of the accident on August 17, 1953 (paragraphs Twenty-Third to Twenty-Seventh).
The amended libel further alleges, inter alia, as part of the second cause of action:
that the Government was impleaded as a party-defendant in said actions 'and was represented by counsel at the subsequent trial of the actions' (para. Twenty-Ninth);
that eventually Pacific paid the suing crew members $ 148,438.80 in satisfaction of judgments obtained by them after trial, and in addition Pacific incurred $ 7,603.75 legal expenses and disbursements, making Pacific's total claim in the amount of $ 156,042.55 (paragraphs Thirtieth to Thirty-Third);
that the United States District Judge who tried the actions dismissed, without prejudice, Pacific's claim against the Government for indemnification 'on the ground that the Court lacked jurisdiction' over the Government (para. Thirtieth). (The Court of Appeals for the Ninth Circuit, as noted supra, note 2, reversed the District Court on that point and ordered the action for indemnification to be transferred to the Southern District of New York.);
that the Government is under the duty 'to indemnify' Pacific to the extent of $ 156,042.55 (para. Thirty-Fourth).
The plaintiff, Hidick, filed an amended complaint on November 28, 1956 against Orion, as operator, and Pacific, as owner of the vessel. The amended complaint, based on the August 17, 1953 accident, contains the standard Jones Act allegations charging negligence and unseaworthiness. The answer to the amended complaint admitted defendants' ownership and operation of the vessel, but denied all other material facts.
On February 19, 1957, the Court granted Pacific's unopposed motion for leave to make the Government a party to this action and to cause to be served upon it a third party summons and third party complaint.
Pacific's third party complaint, filed March 6, 1957, sets forth the time charter between Pacific and the Government (Exhibit 'Y'), and then makes the following allegations:
that on August 17, 1953, the Government was 'loading a cargo into the holds of the vessel,' that part of the cargo consisted of 'gas cylinders said to be empty and free of gas,' and that the loading was being done 'by personnel engaged by and ...