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DIESEL TANKER A. C. DODGE INC. v. STEWART

March 23, 1966

DIESEL TANKER A. C. DODGE INC. and Alma R. Bushey and Raymond J. Bushey, Jr., Executors of the Estate of Raymond J. Bushey, Deceased, Libellants,
v.
A. B. STEWART, Guy Janson, K. G. Poland and G. B. Brookes, etc., Respondents


Cannella, District Judge.


The opinion of the court was delivered by: CANNELLA

CANNELLA, District Judge.

The libel seeking recovery under the insurance policies involved in this case, is dismissed.

 Since the action is founded on marine insurance, the court finds that it is within the admiralty jurisdiction of this court. 28 U.S.C. § 1333.

 This case was tried before this court, without a jury in January, 1966. Suit was brought against the respondents as underwriters and as representatives of other subscribers to policies of insurance issued by Lloyds, London insuring the libellants *fn1" against loss by reason of liabilities arising from certain cases enumerated in the policies.

 On May 25, 1952 the Diesel Tanker A. C. Dodge collided with the S. S. Michael (and thereafter fire occurred) with resultant loss of life to persons aboard both vessels, personal injuries aboard both craft, loss of cargo on the Dodge, damage to the Michael and total loss to the Dodge.

 Following the collision libellant Dodge filed a petition for limitation of liability and after trial and appeal it was held that the collision resulted from the joint fault of the Dodge and the Michael. It was also held that libellant Dodge was entitled to a limitation of liability. Petition of Diesel Tanker A. C. Dodge, Inc., 133 F. Supp. 510 (E.D.N.Y.1955), aff'd, 234 F.2d 374 (2d Cir. 1956). The Dodge was required to deposit in its limitation of liability fund $60.00 per ton of the vessel's gross tonnage for the benefit of personal injury and death claims, pursuant to 46 U.S.C. § 183. Out of this fund the libellant paid $64,531.50 to Frances Elliott, Administratrix of the Estate of John Elliott, Master of the Dodge, who died in the collision.

 Before the above-mentioned litigation terminated, the owner of the Michael had settled the majority of the personal injury and death claims and the claim of the owner of the cargo on the Dodge. The Michael owner also paid to Frances Elliott the sum of $59,000.00 for a covenant not to sue the Michael.

 The Dodge owner was insured under the policies of Hull and Disbursements Insurance in the amount of $400,000.00 which policies contained an American Hull Syndicate standard form of Running Down clause. Those insurers paid libellant the full face amount of the policy on the loss of the Dodge. The Dodge was also insured against fire in the amount of $150,000.00, in excess of the Hull Insurance coverage. The underwriters of that policy paid libellant $75,000.00 on account of the total loss of the Dodge.

 There were four additional policies of insurance *fn2" in full force and effect at the time of the collision. *fn3" The respondents freely admit the existence of such policies.

 All the policies are in writing. The breach claimed by the libellant is the failure of the respondents to pay the amount of the loss which libellant claims was sustained. The respondents assert that the loss which the libellants claim to have sustained is not payable under the terms and conditions of any of the policies which are involved in this case.

 The clauses of the policies upon which the libellant relies are alleged in the libel and the respondents do not contest the correctness of such clauses.

 It is well settled that in a "both to blame" collision, if one of the colliding vessels pays third-party claims, such claims become part of the collision damage of the vessel paying the claim. See The Albert Dumois, 177 U.S. 240, 20 S. Ct. 595, 44 L. Ed. 751 (1900); New York & Cuba Mail S/S Co. v. American S. S. Owners Mutual Protection and Indemnity Assn., Inc., 72 F.2d 694 (2d Cir.), cert. denied 293 U.S. 622, 55 S. Ct. 218, 79 L. Ed. 709 (1934). Under the maritime law of collision, the Michael was able to offset one-half of her payments on account of these claims against one-half of the damages allowed to the Dodge for loss of the Dodge and incidental expenses.

 It is the libellant's contention that were it not for such third death, personal injury and cargo damage claims, the libellant would have recovered from the Michael $170,515.94. This figure is arrived at by using a general rule in a "both to blame" collision, viz, the vessel that is damaged least pays the other vessel an amount equal to one-half the difference of the sum of the losses sustained. See The North Star, 106 U.S. 17, 20, 27 L. Ed. 91, 1 S. Ct. 41 (1882); Petition of the Diesel Tanker A. C. Dodge, Inc., supra. The sum of $170,515.94 is one-half the difference between the hull claim of the Michael, $462,618.69, and the total loss value of the Dodge, $800,000.00, plus stand-by wreck and salvage expenses, a total of $803,650.57.

 It is libellant's contention that the alleged loss that he suffered is covered under the insurance policies involved herein. Insofar as the Protection and Indemnity (P & I) policies are concerned, the libellant asserts that the loss falls within clauses 4 and 4(a) of the Stewart ...


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