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Paliaga v. Luckenbach Steamship Co.

March 22, 1962

ANTONIO PALIAGA, PLAINTIFF,
v.
LUCKENBACH STEAMSHIP COMPANY, DEFENDANT AND THIRD-PARTY PLAINTIFF-APPELLANT, V. TURNER & BLANCHARD, INC., THIRD-PARTY DEFENDANT-APPELLEE.



Author: Waterman

Before WATERMAN, SMITH and MARSHALL, Circuit Judges.

WATERMAN, Circuit Judge.

Luckenbach Steamship Company, Inc., the defendant and third-party plaintiff below, appeals from an order entered in the United States District Court for the Eastern District of New York denying its motion for the continuance of the trial against Turner & Blanchard, Inc., the third-party defendant, after the plaintiff in the original action, Antonio Paliaga, and the third-party defendant announced while the plaintiff's case was being considered by the jury that plaintiff had accepted a settlement and would voluntarily suffer a discontinuance with prejudice of his case against Luckenbach.

The plaintiff, a longshoreman employed by Turner & Blanchard, brought this action against Luckenbach Steamship Company for injuries he received when a ninety pound carton of petroleum wax fell on him while he was stowing cargo in one of the deep tanks of the defendant's S.S. Edward Luckenbach. The carton that struck the plaintiff fell from a draft which was being lowered into the tank by means of the ship's boom and winches operated by other Turner & Blanchard longshoremen. The draft consisted of a wooden rectangular pallet on which were placed several tiers of cartons secured by ropes. On top of these tiers rested two or three loose cartons. One of these unsecured cartons slid off the draft and hit the plaintiff. The plaintiff asserted that the carton which hit him should have been secured to the draft with tie ropes and that a circular pallet should have been employed to support the cartons instead of the rectangular one which was used. The plaintiff accused the shipowner of negligence and unseaworthiness.

Under Rule 14 of the Federal Rules of Civil Procedure, 28 U.S.C.A., Luckenbach impleaded the stevedore, Turner & Blanchard, and in this third-party complaint alleged that the stevedore was liable over to the shipowner on theories of negligence, breach of contract, and breach of an implied warranty of indemnity "for all sums that may be adjudged against Luckenbach Steamship Company, Inc., in favor of plaintiff together with costs * * *" The shipowner's demand for judgment did not explicitly include a demand for the recovery of its attorneys' fees and disbursements.

After extensive discovery proceedings, a rather lengthy pre-trial conference, and the issuance of an eighteen page pre-trial order, the third-party claim was tried to the court simultaneously with the trial to a jury of the plaintiff's claim against the shipowner. At the close of all the evidence the district court granted the shipowner's motion to dismiss the plaintiff's claim against it based on the shipowner's alleged negligence, and submitted to the jury the single issue of whether the S.S. Edward Luckenbach was unseaworthy because there had been a failure to secure the loose carton or a failure to use a circular pallet instead of a rectangular one in the draft.

While the jury was deliberating, the attorneys for the plaintiff and for the stevedore, Turner & Blanchard, announced that they were willing to settle the case for $16,000, to be paid by the stevedore. Luckenbach's lawyer reminded the other parties of the shipowner's claim against the stevedore for attorneys' fees and disbursements in defending against plaintiff's claim, a sum that then amounted to about $6,350. Turner & Blanchard temporarily withdrew from its agreement to the previously announced settlement, but shortly thereafter again agreed to settle the plaintiff's claim for the $16,000. Thereupon counsel moved to discontinue with prejudice plaintiff's action against Luckenbach. Luckenbach objected, fearing that a grant of this motion might prejudice a recovery by it of its claim against Turner & Blanchard for its attorneys' fees; but the court granted the plaintiff's motion and taxed costs of $351.65 against the plaintiff in favor of Luckenbach. The shipowner thereupon moved that its third-party claim against the stevedore for the attorneys' fees and disbursements the shipowner had incurred in defending against the plaintiff's claim continue to be tried to the court. The court denied this motion. It relied first, on the fact that the stevedore, not the shipowner, had settled the plaintiff's claims, second, on the fact that the shipowner's demand for judgment had failed specifically to mention its attorneys' fees, and, third, on the precedent contained in the opinion in Guinto v. California Tanker Co., Civil No. 16397, E.D.N.Y.1960, wherein the court in its discretion had denied a shipowner's motion to amend its prayer for relief against a third-party defendant shipyard so as to include recovery for legal expenses incurred by the shipowner in defending against a similar claim for personal injuries. From the denial of its motion Luckenbach appeals.

The question before us is whether the court below committed error in refusing to proceed with the trial of the shipowner's third-party claim against the stevedore, now reduced to a claim for attorneys' fees and disbursements. Its resolution involves several points of federal procedure and the substantive maritime law of indemnity.

No appeal can be taken to this court from the order below unless the order was a final decision, 28 U.S.C. § 1291 (1958), so we must decide at the outset whether the order denying the third-party plaintiff's motion to proceed with the trial of its claim against the stevedore was such a final decision. The purpose of the rule that a "final decision" is a prerequisite for appealability is to provide the parties with an opportunity for a single review of all the questions raised at the trial level that effectively may be reviewed and corrected and thereby to avoid the waste of time and the delay in reaching trial finality which ensue when piecemeal appeals are permitted. To this end we are instructed to give 28 U.S.C. § 1291 a practical, as opposed to a technical, construction. Cohen v. Beneficial Indus.Loan Corp., 337 U.S. 541, 546, 69 S. Ct. 1221, 93 L. Ed. 1528 (1949). Neither the use of specific words nor the doing of any particular action by the trial judge is necessary in order to signify that he has made his final judgment. United States v. Hark, 320 U.S. 531, 534, 64 S. Ct. 359, 88 L. Ed. 290 (1944). What is required, however, is that there be some manifestation by the judge that it is his intention that the decision he makes is his final act in the case. United States v. F. & M. Schaefer Brewing Co., 356 U.S. 227, 232, 78 S. Ct. 674, 2 L. Ed. 2d 721 (1958); In re Forstner Chain Corp., 177 F.2d 572 (1 Cir. 1949); see Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S. 516, 43 S. Ct. 170, 67 L. Ed. 372 (1923) (quashing summons as final judgment); Brandt v. Renfield Importers, Ltd., 278 F.2d 904 (8 Cir. 1960), cert. denied, 364 U.S. 911, 81 S. Ct. 274, 5 L. Ed. 2d 226 (1960).

By his denial of the shipowner's motion to proceed with the trial of the third-party action after the dismissal of the original action, the judge below surely intended that the litigation before him was at an end. However, the stevedore calls our attention to Sechrist v. Dyke, 256 F.2d 881 (4 Cir. 1958). In that case the Court of Appeals for the Fourth Circuit held that a judgment dismissing a third-party complaint was not a final decision giving rise to appealability. But there the original action was still pending when the court dismissed the thirdparty complaint. Obviously further proceedings at the trial level were expected. Here, on the other hand, the court's refusal to consider the third-party complaint followed a settlement of the original case.

In Lunn v. F. W. Woolworth Co., 207 F.2d 174 (9 Cir.), cert. denied, 346 U.S. 900, 74 S. Ct. 224, 98 L. Ed. 401 (1953), also cited by the appellee, the Court of Appeals for the Ninth Circuit held that a post-judgment order denying a motion by the plaintiff to amend a judgment in her favor so as to include reasonable attorneys' fees and a sum equal to three times the amount of the jury verdict was not an appealable order. The proper procedure is to appeal from the judgment itself and to assign as error the denial of the post-judgment motion. To like effect were Nealon v. Hill, 149 F.2d 883 (9 Cir. 1945) (petition for rehearing); Bowers v. E. J. Rose Mfg. Co., 149 F.2d 612 (9 Cir. 1945) (motion to set aside the judgment); Donovan v. Jeffcott, 147 F.2d 198 (9 Cir. 1945) (motion to vacate the judgment); Hicks v. Bekins Moving & Storage Co., 115 F.2d 406 (9 Cir. 1940) (motion to vacate an order of dismissal). In Republic Supply Co. v. Richfield Oil Co., 74 F.2d 909 (9 Cir. 1935) it was stated:

"The general rule is that no appeal will lie from an order denying a motion to vacate or modify a judgment, decree, or order. Smith v. U.S. ex rel. Gorlo (C.C.A. [7]), 52 F.2d 848; Connor v. Peugh's Lessee, 18 How. 394, 15 L. Ed. 432; In re Gelino's, Inc. (C.C.A. [7]), 51 F.2d 875; International Bank v. Securities Corp., 59 App.D.C. 72, 32 F.2d 968; Painter v. Union Trust Co. (C.C.A. [6]), 246 F. 240; Willis v. Davis (C.C.A. [6]), 184 F. 889; 3 C.J. p. 521 § 535."

But in the present case, unlike Lunn v. F. W. Woolworth Co., supra, and the other cases cited above, there was no order or judgment that preceded the denial of the shipowner's motion from which it could have appropriately appealed the trial court's refusal to proceed with the third-party claim. Therefore, here, the appeal was timely taken from the denial of the motion to proceed with trial, and as the denial was a final order disposing of the litigation it was an appealable order under 28 U.S.C. § 1291.

The substantive questions we are called upon to decide are: First, does the stevedore have a contractual obligation to reimburse the shipowner for its litigation expenses, even though the stevedore has settled and paid the longshoreman's claim against the shipowner after trial has begun but prior to a judgment against the shipowner; and, second, if the stevedore does have such an obligation, was it an abuse of ...


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