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Fernandez v. Chios Shipping Co.

decided: September 16, 1976.

JOSE FERNANDEZ, PLAINTIFF,
v.
CHIOS SHIPPING CO., LTD., DEFENDANT AND THIRD PARTY PLAINTIFF-APPELLEE, V. MAHER STEVEDORING COMPANY, INC., AND STATES MARINE LINES, INC., THIRD PARTY DEFENDANT-APPELLANTS. CHIOS SHIPPING CO., LTD., FOURTH PARTY PLAINTIFF-APPELLEE, V. CASTLE & COOK, INC., DOLE CORP. AND CASTLE & COOK FOODS CORPORATION, FOURTH PARTY DEFENDANTS-APPELLANTS



Appeals from a judgment and order, after a jury trial before the United States District Court for the Southern District of New York, Motley, J., granting indemnity in favor of shipowner and time charterer against stevedore and shipper for damages resulting from personal injuries to longshoreman and awarding counsel fees.

Hays, Mulligan and Meskill, Circuit Judges.

Author: Meskill

MESKILL, Circuit Judge:

The issues raised on this admiralty appeal stem not from the injured longshoreman's quest for damages but from the subsequent contest among four other parties to shift the burden of indemnification for his recovery.

On September 1, 1968, employees of Maher Stevedoring Company, Inc. ("Stevedore"), plaintiff Fernandez among them, were unloading a cargo of "pre-palletized" units of pineapples from the #3 hold of the SS CHIOS. A "pre-palletized" unit is a single package consisting of a pallet and cartons glued together so that no bands or lashings are necessary to bind the unit when transporting it. The lightweight, disposable pallets*fn1 were constructed by Castle & Cook, Inc., Dole Corp., and Castle & Cook Foods Corp. (collectively called "Shipper"), for use in transporting their pineapple products. Longshoreman Fernandez was injured when one such unit came apart as it was being lifted out of the hold, spilling cartons on him.

Fernandez sued Chios Shipping Co., Ltd. ("Shipowner") on theories of negligence and unseaworthiness.*fn2 The Shipowner impleaded States Marine Lines, Inc. (now Isco, Inc., "Time Charterer"), and the Stevedore for indemnification if it were found liable to plaintiff. Shipowner also sought indemnification from the Shipper. In case it was held liable to the Shipowner, the Time Charterer cross-claimed for indemnification from the Stevedore. Finally, both the Time Charterer and the Stevedore sought indemnity from the Shipper.

The jury returned a special verdict for plaintiff, finding that the SS CHIOS was unseaworthy and that this unseaworthiness was a proximate cause of the injury. They also found that Fernandez was not contributorily negligent and awarded damages of $90,200.*fn3 The indemnity claims then were submitted to the jury in interrogatory form, except for the Shipowner's claim against the Time Charterer, which the court resolved as a matter of law in the Shipowner's favor.

The jury found that the Stevedore breached its warranty of workmanlike performance by failing to supervise and direct its employees properly in the unloading operation and to provide for the safety of its employees; the jury also determined that the Stevedore's action was a proximate cause of plaintiff's injuries. As to the Shipper, the jury found that its negligence resulted in the disintegration of the pre-palletized unit and that the Shipper's actions also were a proximate cause of plaintiff's injuries. Finally, the jury found that the pineapple unit broke apart because of a latent or hidden defect in the pallet.

Based on these findings, the district court held that the Shipowner was entitled to indemnification from the Stevedore and the Shipper. As a matter of law, the court held that the Time Charterer was bound to indemnify the Shipowner from its liability to plaintiff, including costs and attorney's fees, because the Time Charterer warranted in Clause 8 of the charter that it would safely and properly assume control of cargo operations. The court also held that the Time Charterer was entitled to indemnification from the Stevedore and Shipper, in accordance with the jury's answers to the interrogatories. In sum, although the Shipowner was found to be liable to plaintiff, it was entitled to indemnification from all of the other parties. The Time Charterer, bound to indemnify Shipowner, was itself entitled to indemnity from the Stevedore and the Shipper. Thus, the burden of the longshoreman's recovery ultimately fell upon the Stevedore and the Shipper. Every participant held bound to indemnify another appeals from that determination. The Shipper also challenges the amount of the longshoreman's recovery as excessive. Finally, appellants raise numerous procedural and evidentiary claims of error. In an attempt to simplify the issues involved, we shall analyze each claim of error according to the relationship of the parties, presenting additional facts as necessary.

I. Stevedore's Warranty of Workmanlike Performance.

Both the Shipowner and the Time Charterer claimed indemnification from the Stevedore based on its warranty of workmanlike performance. Ryan Stevedoring Co., Inc. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S. Ct. 232, 100 L. Ed. 133 (1956); Demsey & Associates v. S.S. Sea Star, 461 F.2d 1009, 1017 (2d Cir. 1972). The jury found that the Stevedore breached this warranty by failing to properly supervise and direct its employees in the unloading and by failing to provide for the safety of its employees during this process;*fn4 the jury also determined that the Stevedore's actions were a proximate cause of the longshoreman's injuries and that the failure of the Ship's agents to remedy the condition did not preclude the Shipowner's indemnification from the Stevedore. The Stevedore argues that there was insufficient evidence to support the jury's factual findings and that it has no legal duty to provide for the safety of its employees with a sanctuary for retreat. Appellant also raises numerous procedural errors, specifically that the district court failed to give attorneys an opportunity to make objections to its charge and interrogatories, as provided by Fed. R. Civ. P. 51; that the district court permitted the Time Charterer to present argument in summation even though the Time Charterer's liability was not a jury issue; and that prejudicial error resulted from omissions in the interrogatories submitted to the jury. We find sufficient evidence to support the jury's finding that the Stevedore's failure to properly supervise and provide safe working conditions for its employees was a proximate cause of the longshoreman's injuries. Appellant's procedural arguments are without merit.*fn5

Testimony by Edward Ponek, the Stevedore's safety manager, revealed that a superintendent from the Stevedore was assigned to supervise the discharge of the CHIOS. Two witnesses testified, however, that no supervisory personnel were present during discharge on the day of the accident. Plaintiff Fernandez stated that he was given no instructions as to method of unloading and that the confined area of the hold, packed high with the pallets, forced him to stand directly under each pallet as it was lifted out of the hold. Not contesting these facts, the Stevedore asserts its lack of responsibility because the defect was latent and thus not discoverable by a reasonable inspection and because it had no knowledge, constructive or actual, that plaintiff would not have a reasonably safe place to work.

In Fairmont Ship. Corp. v. Chevron Internat'l Oil Co., Inc., 511 F.2d 1252 (2d Cir.), cert. denied, 423 U.S. 838, 96 S. Ct. 66, 46 L. Ed. 2d 57 (1975), we noted that Ryan indemnity evolved to ameliorate the harshness of the shipowner's nondelegable duty to provide a seaworthy ship, a duty which imposes liability independent of fault.*fn6 The principle underlying indemnification to the shipowner, then, is that liability ultimately "should fall upon the party best situated to adopt preventive measures and thereby to reduce the likelihood of injury." Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Co., Inc., 376 U.S. 315, 324, 11 L. Ed. 2d 732, 84 S. Ct. 748 (1964); Hurdich v. Eastmount Shipping Corp., 503 F.2d 397 (2d Cir. 1974). If the improper, unsafe or incompetent execution of the stevedore's services foreseeably renders the vessel unseaworthy, the stevedore will have breached its warranty of workmanlike performance and will incur liability to the shipowner. Moreover, the warranty may be breached by the stevedore's nonnegligent as well as negligent conduct, if it were the party best able to minimize the particular risks involved. Italia Societa, supra; Fairmont Ship. Corp. v. Chevron Internat'l Oil Co., Inc., supra; DeGioia v. United States Lines Company, 304 F.2d 421 (2d Cir. 1962). In Guidry v. Texaco, Inc., 430 F.2d 781 (5th Cir. 1970), the injured longshoreman was required to work in a dangerous area. The court there held that the employer breached its warranty of workmanlike performance because it failed to take any steps to make the work area reasonably safe. In the instant case, the parties agree that the hold was a confined area and that no supervisory personnel were present to oversee unloading. Fernandez was obliged to stand directly under the pre-palletized units, each of which could weigh as much as 1 3/4 tons, while they were being hoisted out of the hold.*fn7 It is not difficult to foresee the injury which might and did result, whether by latent or apparent defect in the pallets, careless operation of the forklift, or whatever cause. Imposing indemnity upon the Stevedore in this case does not make it an insurer against any loss or require it to correct every hidden danger, Calderola v. Cunard Steamship Company, 279 F.2d 475, 478 (2d Cir.), cert. denied sub nom. Cunard Steamship Co., Ltd. v. Clark & Son, 364 U.S. 884, 5 L. Ed. 2d 104, 81 S. Ct. 172 (1960). Rather, where working conditions create obvious risks of injury which might be lessened by a more careful method of discharge, the stevedore is required to do whatever it reasonably can to minimize the danger, whether by rearranging cargo or having supervisory personnel on hand to assess safety and oversee discharge.*fn8 Cf. McNamara v. Weichsel Dampfschifffahrts Ag Kiel, Germany, 339 F.2d 475, 477-478 (2d Cir. 1964). The jury's findings that the Stevedore failed to provide adequately for the supervision and safety of its men and that this failure was a proximate cause of the injuries are supported by the evidence.

The procedural defects alleged to constitute reversible error merit only brief discussion. Stevedore first complains that the district court failed to include an option in the indemnity interrogatories that the Shipowner did not meet its burden of proof. We disagree. Judge Motley's charge, the pertinent part of which is set out in the margin,*fn9 adequately covered the subject, making a separate interrogatory inessential. Second, while under Fed. R. Civ. P. 51, the trial court should permit objections to the charge and special questions prior to the jury deliberations, failure to do so in this case is not reversible error. Review of the transcript reveals that the district court had spent many hours working with the attorneys to "iron out" the charge and the questions. The court was fully aware of their respective positions and objections, had ruled on them, and had given blanket exceptions. Finally, the Stevedore argues that the district court erred in permitting the Time Charterer a summation while withholding the issue of its liability to the Shipowner from the jury. In addition to the latter issue, however, the ...


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