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FERNANDEZ v. CHIOS SHIPPING CO.

January 15, 1976

Jose FERNANDEZ, Plaintiff,
v.
CHIOS SHIPPING CO., LTD., Defendant and Third-Party Plaintiff, v. MAHER STEVEDORING COMPANY, INC. and States Marine Lines, Inc., Third-Party Defendants. CHIOS SHIPPING CO., LTD., Fourth-Party Plaintiff, v. CASTLE & COOK, INC., Dole Corp. and Castle & Cook Foods Corporation, Fourth-Party Defendants



The opinion of the court was delivered by: MOTLEY

MEMORANDUM OPINION

Plaintiff Jose Fernandez was a longshoreman employed as a holdman by third-party defendant Maher Stevedoring, Inc. ("Maher"). On September 1, 1968, he was injured aboard the SS CHIOS, owned by defendant and third-party plaintiff Chios Shipping Company, Ltd. ("Chios"), as he was assisting in the unloading of a cargo of pre-palletized cartons of pineapple at Port Newark, New Jersey. The cartons of pineapple had been prepared and shipped by the fourth party defendants Castle & Cook, Inc., Dole Corp., and Castle and Cook Foods Corporation ("Castle & Cook"). At the time of injury, the SS CHIOS was time chartered to third-party defendant States Marine Lines, Inc. (referred to herein by its present name, "Isco, Inc.").

 This case was tried before a jury on June 2, 3, 4, 5, and 6, 1975. In answer to special questions, the jury found on June 5 that the SS CHIOS was unseaworthy, that such unseaworthiness was the proximate cause of plaintiff's injuries, that plaintiff was not contributorily negligent, and that plaintiff was entitled to damages amounting to $ 90,200. Judgment in favor of the plaintiff against the defendant Chios was entered on July 8, 1975.

 On June 6, 1975, additional questions were submitted to the jury to resolve the various third-party and fourth-party claims for indemnity. These questions and the jury's responses are set forth below:

 TABLE

 Inasmuch as Chios, Maher, Isco, and Castle & Cook all seek indemnity from each other, their claims will be separately considered.

 Liability of the third party defendant charterer, Isco, to the third-party plaintiff ship owner, Chios, is predicated upon clause 8 of the time charter agreement. That clause provides, in relevant part, that "charterers are to load, stow, and trim and discharge the cargo at their expense under the supervision of the Captain. . . ." On this basis, "Chios claims a right over against (Isco) for any liability to plaintiff arising out of breach of the aforesaid charter party upon a finding, if any, of its failure to properly load, stow, and discharge the palletized packages of pineapple." *fn1"

 While the basis of the liability asserted by Chios here is not entirely clear, it is referred to in the pre-trial order as "breach of charter party," *fn2" and appears to be a species of liability without fault on the part of the charterer, in the nature of a warranty of safe and proper performance of the cargo operations. The court agrees that the charterer should indemnify Chios on this basis.

 Both in argument and in memoranda, Chios relies heavily on two cases from this Circuit which have dealt with the respective liabilities of charterer and ship owner for Cargo damage which occurred aboard ships operating under time charter.

 In Nichimen Company v. M. V. Farland, 462 F.2d 319 (2d Cir. 1972), Chief Judge Friendly had occasion to construe a virtually identical clause in a time charter agreement to determine whether a ship owner or charterer would be held liable for cargo damage which occurred due to negligent stowage by a cargo "specialist" who had been hired by the charterer's port agent in Japan. In the circumstances of that case, Judge Friendly held that, under the time charter clause cited above, "(t)he charterer's prime responsibility for loading and stowage is not destroyed by the qualification that this shall be "under the supervision of the Captain,' a phrase doubtless intended to make plain the master's right to veto a plan that might imperil the seaworthiness of the vessel . . . not to impose on him a duty, as the owner's agent, to supervise the charterer's stow." 462 F.2d at 332. Thus, the supervisory authority contractually retained by the Captain was held not to be a bar to indemnification by the charterer for cargo damage incident to stowage.

 Judge Friendly then touched on the question of negligence in a manner which makes the precedential value of that case to the facts at bar somewhat problematical. "Had the stowage in this case been properly designed by the charterer's agent, no damage would have occurred. The primary negligence was of the charterer's agent, and we can discern no valid reason why the charterer should now be allowed to shift the cargo damage to the owner on the theory that the Captain, on behalf of the owner, should have corrected its improper stowage. Rather, under clause 8, the safety of the stowage, insofar as cargo damage is concerned, generally is the primary responsibility of the charterer." (462 F.2d at 332.) (footnote and citation omitted).

 It is not entirely clear to what extent, if any, the ship owner's right to indemnification was dependent upon some showing of negligence either direct or imputed on the part of the charterer. While Judge Friendly spoke of the "primary negligence" of "the charterer's agent," the opinion revealed no evidence of direct negligence by the Port agent ; rather, the negligence in the case appears to be that of the stowage "specialist" Hired by the port agent. As a matter of agency law, it seems entirely possible that the "specialist" might be deemed an "independent contractor", whose negligence might or might not be imputed to his employer, *fn3" although that issue was not discussed in the opinion.

 It may be that the finding of negligence on the part of the charterer's agent, therefore, is dependent upon the Court's holding that the duty of care imposed upon the charterer by ยง 3(2) of the Carriage of Goods by Sea Act (COGSA) *fn4" is nondelegable, 462 F.2d at 330, and that the charterer is, in effect, vicariously liable under COGSA for the negligence of even independent contractors which it hires. If that were the crux of the Court of Appeals' reasoning, then the charterer's liability for indemnification would be confined to cargo damage cases governed by COGSA, absent some showing of either direct negligence by the charterer, or negligence imputable to him under the law of agency.

 Such a reading of Nichimen finds some support in Demsey & Associates, Inc. v. S.S. Sea Star, 461 F.2d 1009 (2d Cir. 1972), another Second Circuit case decided almost contemporaneously with Nichimen, But by another panel of the Court of Appeals. That case also involved, Inter alia, The respective liabilities of ship owner and time charterer for cargo damage due to improper stowage and discharge. Demsey Was also a COGSA case in which the charterer was found ...


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