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Zapico v. Bucyrus-Erie Co.

decided as amended.: June 15, 1978.


Appeal from that portion of a judgment of the District Court for the Southern District of New York, Richard Owen, Judge, 434 F. Supp. 567 (1977), which awarded defendant and third party plaintiff manufacturer recovery against third party defendant stevedoring company for 50% of the amount the manufacturer had been adjudged liable to pay in a suit against it by an injured longshoreman and the widow and estate of a deceased longshoreman.

Friendly, Gurfein and Meskill, Circuit Judges.

Author: Friendly

FRIENDLY, Circuit Judge:

The Longshoremen's and Harbor Workers' Compensation Act (LHWCA), as amended in 1972, P.L. 92-576, cuts off the right of a vessel to recover from a concurrently negligent stevedoring company a judgment paid by the vessel to a longshoreman employed by the stevedore in a personal injury suit against the vessel, 33 U.S.C. § 905(b). The 1972 amendments did not, however, deal expressly with such third party actions against stevedores by plaintiffs other than vessels. The primary issue on this appeal is whether a "non-vessel" can recover from a stevedore with whom the non-vessel has been found jointly responsible for injury to the stevedore's employees. The issue has caused considerable division among the district courts. Compare Spadola v. Viking Yacht Co., 441 F. Supp. 798 (S.D.N.Y. 1977); S.S. Seatrain Louisiana v. California Stevedore and Ballast Co., 424 F. Supp. 180 (N.D. Cal. 1976); Fitzgerald v. Compania Naviera La Molinera, 394 F. Supp. 402 (E.D. La. 1974) (denying recovery), with the decision in the instant case, 434 F. Supp. 567 (S.D.N.Y. 1977); Gould v. General Mills, Inc., 411 F. Supp. 1181 (W.D.N.Y. 1976); Cargill v. United States, 1977 A.M.C. (E.D.Va. 1976); Crutchfield v. Atlas Offshore Boat Service, Inc., 403 F. Supp. 920 (E.D. La. 1975) (express indemnity clause); and Brkaric v. Star Iron & Steel Co., 409 F. Supp. 516 (E.D.N.Y. 1976) (generally approving recovery). See also Ocean Drilling & Exploration Co. v. Berry Bros. Oilfield Service, Inc., 377 F.2d 511 (5 Cir. 1967), cert. denied, 389 U.S. 849, 19 L. Ed. 2d 118, 88 S. Ct. 102 (1967); Davis v. Chas. Kurz & Co., 483 F.2d 184 (9 Cir. 1973) (denying recovery on theory that "Ryan" indemnity requires a seaworthiness obligation). See generally Ramirez v. A/S D/A Svendborg, 75 Civ. 703 (S.D.N.Y. Nov. 22, 1976); Petrosino v. Wilhelmson, 75 Civ. 1181 (E.D.N.Y. Oct. 23, 1976); Nieves v. Douglas Steamship, Ltd., 451 F. Supp. 407 (S.D.N.Y. 1978).

On April 12, 1974, Joseph Zapico was killed and Adolfo Millan was injured in an accident aboard the S.S. Atlantic Causeway, a vessel owned by Cunard Steamship Co., Ltd. Zapico and Millan were longshoremen employed by Atlantic Container Line, Ltd. (ACL), a stevedore. The accident occurred during the course of loading a large hydrocrane manufactured by the Bucyrus-Erie Company (Bucyrus). As the vehicle was being driven down a ramp inside the vessel, it went out of control, causing the death of Zapico and injuries to Millan. A jury found that defendant and third party plaintiff Bucyrus negligently manufactured the crane, that third party defendant ACL furnished an incompetent employee to drive it, and that each was 50% responsible for the accident. Judge Owen held these findings supported by the record, stating that the facts were consistent with a conclusion that "while brake failure could have set the tragedy in motion, a competent driver could have taken reasonable steps to avoid it." In so concluding, the judge recognized that the jury also found the driver of the crane, ACL employee Antonio Fuet, not himself "negligent in his driving of the truck-crane, although it found him incompetent to do so."

ACL argued that it was immune from a third party suit since, as a compensation-paying employer, it had no liability under the LHWCA, 33 U.S.C. §§ 905(a), 905(b), beyond the payment of workmen's compensation. Judge Owen rejected this argument, holding that while the Act immunized the stevedore from liability for contribution to Bucyrus, it did not cut off suit for partial indemnity. Although there was no express indemnification agreement nor a direct contractual relationship between ACL and Bucyrus, the court accepted Bucyrus' argument that it was entitled to indemnity either as a third party beneficiary of the implied warranty of workmanlike performance in the stevedoring contract between ACL and the vessel or on a theory of "quasi-contract." The court therefore entered judgment against Bucyrus for the full jury award, and ordered that "upon payment by Bucyrus-Erie Co. of the judgment . . . [it] shall recover from Atlantic Container Line, Ltd. . . . 50% of the amount . . . paid. . . ." Thereafter ACL appealed solely from that portion of the judgment awarding Bucyrus partial recovery against it. Bucyrus did not appeal.

As a preliminary matter, we note ACL's argument that there was "no basis in the record for the finding of any fault" on its part. According to ACL, there were two possible theories embodied in Judge Owen's instructions upon which the jury could find ACL liable. These were that its employee Fuet, the driver of the crane, was himself negligent, or that a signalman negligently gave an all-clear sign to Fuet as he drove down the ramp. ACL argues that since the jury upon a special interrogatory found Fuet not negligent, and there was no evidence that the signalman was an ACL employee, there was no basis for assigning blame to ACL. The trial judge held, however, that the jury's finding of 50% responsibility on the part of ACL was supportable on the basis of its affirmative answer to the question whether ACL "wrongfully failed to provide a competent employee or employees including the driver for the hydrocrane. . . ." Bucyrus argues that this was consistent with the theory that although Fuet on the basis of his abilities was not found negligent, ACL may nevertheless be held for negligence in hiring an employee incapable of exercising the reasonable care required for proper performance of the job, see 8 A.L.R. 574 (1920). There was ample evidence that Mr. Fuet was incompetent to operate a hydrocrane, since he testified that he had never driven one before, never received instruction how to drive one, and could not read instruction booklets printed in English. As we conclude that, even if thus negligent, ACL was not subject to a third party suit by Bucyrus, we need not pass on this claim.

We begin with common ground. Section 905(a) of the LHWCA states:

§ 905 Exclusiveness of liability

(a) The liability of an employer prescribed in section 904 of this title shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death. . . .

ACL and Bucyrus agree that this section immunizes a compensation-paying employer from third party claims for contribution. See, e.g., American Mutual Liability Insurance Co. v. Matthews, 182 F.2d 322 (2 Cir. 1950); Galimi v. Jetco, Inc., 514 F.2d 949, 956 (2 Cir. 1975); Lopez v. Oldendorf, 545 F.2d 836 (2 Cir. 1976), cert. denied, 431 U.S. 938, 53 L. Ed. 2d 256, 97 S. Ct. 2650 (1977). However, Bucyrus argues that, as Judge Owen held, neither § 905(a) nor any other section of the Act bars its claim for partial indemnity. Predictably ACL finds this to be a mere semantic distinction without a difference. It will be useful to begin by considering the origins and nature of the two doctrines, although the discussion will necessarily traverse some familiar ground.

When two or more persons' torts together cause injury, each is fully liable to the victim. Prosser, Law of Torts § 52, at 314 (4th ed. 1971). Under the principle of contribution, a tortfeasor against whom a judgment is rendered seeks to recover proportional shares of the judgment "from other joint tortfeasors whose negligence contributed to the injury and who are also liable to the plaintiff". Dawson v. Contractors Transportation Corp., 151 U.S. App. D.C. 401, 467 F.2d 727 (1972). The historic bar to this was the common law "rule" that there can be no contribution between joint tortfeasors. The rule had its origin in Merryweather v. Nixan, 8 Term. Rep. 186, 101 Eng. Rep. 1337 (K.B. 1799), which itself involved intentional rather than negligent action in concert, and both English and early American cases applied the rule only in that context. Early 20th-century American courts began to disregard the caveat and there was soon a firm rule barring apportionment of loss among multiple tortfeasors. See generally Prosser, supra, § 50 at 305-306; Contribution and Indemnity in California, 57 Calif. L. Rev. 490, 493-94 (1969) [hereinafter Contribution ]; Davis, Indemnity between Negligent Tortfeasors, 37 Iowa L. Rev. 517 (1952). The oft-expressed "rationale" was that as a matter of policy the courts ought not "to make relative value judgments of degrees of culpability among wrongdoers," see Dole v. Dow Chemical Co., 30 N.Y. 2d 143, 147, 331 N.Y.S. 2d 382, 386, 282 N.E.2d 288 (1972); having been himself a wrongdoer, the defendant unlucky enough to have been sued first had only himself to blame and the courts would not sustain a claim founded upon his own wrong. See generally Leflar, Contribution and Indemnity Between Tortfeasors, 81 U. Pa. L. Rev. 130, 131-135 (1932). It was not until the middle of this century that the rule against contribution was generally abrogated, occasionally by judicial action but more often by statute. See Prosser, supra, § 50 at 307; Contribution, supra, 57 Calif. L. Rev. at 499.

In contrast to the rule against apportionment of damages among joint tortfeasors was the doctrine of indemnity. Under this theory, the tortfeasor who had been cast in judgment sought not a proportionate sharing as in contribution, but rather a shifting of the loss from the one who had been forced to pay it "to the shoulders of another who should bear it instead." Prosser, supra, § 51 at 310. Somehow this seemed more palatable to courts operating in the common law tradition. See Contribution and Indemnity under the Federal Employees' Compensation Act, 6 U. Toledo L. Rev. 273, 275 (1974); Rock v. Reed-Prentice, 39 N.Y.2d 34, 39, 382 N.Y.S.2d 720, 722, 346 N.E.2d 520 (1976).

Indemnity was available on a number of grounds. One, which we may call tort indemnity, was based "merely upon a difference between the kinds of negligence of the two tortfeasors; as for instance, if that of the indemnitee is only 'passive,' while that of the indemnitor is 'active.'" Slattery v. Marra Bros., 186 F.2d 134, 138 (2 Cir.), cert. denied, 341 U.S. 915, 95 L. Ed. 1351, 71 S. Ct. 736 (1951). See also Wallenius Bremen v. United States, 409 F.2d 994, 998 (4 Cir. 1969), cert. denied, 398 U.S. 958, 26 L. Ed. 2d 542, 90 S. Ct. 2164 (1970); Contribution, supra, 57 Calif. L. Rev. at 499. As Judge Learned Hand perceived, "such cases may perhaps be accounted for as lenient exceptions to the doctrine that there can be no contribution between joint tortfeasors. . . . When both are liable to the same ...

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