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MILLER YACHT SALES v. M.V. VISHVA SHOBHA

August 12, 1980

MILLER YACHT SALES, INC., Plaintiff, against M.V. VISHVA SHOBHA, her engines, boilers, etc., THE SHIPPING CORPORATION OF INDIA, LTD., PITTSTON STEVEDORING CORP., and M.P. HOWLETT, INC., Defendants.


The opinion of the court was delivered by: TENNEY

In this admiralty action, Miller Yacht Sales, Inc., the owner and consignee of a motor yacht, sues the M.V. VISHVA SHOBHA, The Shipping Corporation of India, Ltd. ("SCI"), Pittston Stevedoring Corp. ("Pittston"), and M.P. Howlett, Inc. ("Howlett") for damages to the yacht plus interest, costs and disbursements. The Court will address the liability of the defendants as well as the extent of damages. The parties agree that the yacht was damaged in the amount of $ 21,250.00, but the defendants argue that applicable clauses in the Bill of Lading limit any liability to a much smaller amount. For the reasons given below, the Court concludes that the defendants SCI, Pittston, and Howlett are liable to Miller Yacht Sales for limited damages to the yacht, that SCI is entitled to indemnification from Pittston and Howlett, and that such damages are chargeable 70% to Howlett and 30% to Pittston. SCI is also entitled to its costs, including attorneys' fees, to be assessed against Howlett and Pittston in the same proportions.

Background

The following background is not in dispute. Miller Yacht Sales is a corporation organized and doing business in New Jersey. SCI is the owner of the M.V. VISHVA SHOBHA and is engaged as an ocean carrier of merchandise for hire. Pittston is a New York corporation engaged in stevedoring and terminal operation. Howlett is a New Jersey corporation engaged in the business of crane operation.

 On July 1, 1976, SCI issued Bill of Lading No. 1 for one diesel motor yacht to be shipped on the deck of the M.V. VISHVA SHOBHA from Keelung, Taiwan to New York, New York. The yacht was consigned to the order of the Bank of New York with Miller Yacht Sales as the "notify party." After July 1, 1976, the bank negotiated the Bill of Lading to Miller Yacht Sales.

 On August 9, 1976, the yacht was discharged from the M.V. VISHVA SHOBHA at a pier in Hoboken, New Jersey. Pittston provided the stevedoring services, including supplying some of the gear for discharge: the slings, straps and spreader bars. Howlett provided and operated the floating crane used to discharge the yachts aboard the M.V. VISHVA SHOBHA into the water. After the crane had lifted the yacht in question from the deck of the vessel and had swung it beyond the vessel's rail, the yacht fell into the water and was damaged. At the conclusion of trial, the parties stipulated that the damage to the yacht amounted to $ 21,250.00.

 The parties dispute the cause of the yacht's fall into the water. Miller Yacht Sales claims that both Pittston and Howlett negligently caused the yacht to fall. It claims that Pittston failed to rig the yacht properly for discharge by neglecting to use safety lines, which allegedly would have prevented the lifting slings from moving from their proper positions. Howlett, in the course of discharging the yacht, allegedly allowed it to become hung up on a line running from the M.V. VISHVA SHOBHA to the crane, causing the yacht to slip from the slings and fall into the water. Miller Yacht Sales also argues that it has established its prima facie case against the carrier by proving that the yacht was delivered to the vessel in good condition, but delivered at the destination in damaged condition.

 SCI agrees that both Pittston and Howlett caused the damage to the yacht: Pittston failed to secure the slings in position with safety lines, and Howlett hit a mooring line, allowing the aft sling to move forward in the absence of safety lines and fall into the water. SCI claims that both Pittston and Howlett were negligent and that the negligence of each caused the damage to the yacht.

 Pittston claims that Howlett caused the yacht to fall by hitting a mooring (or "breast") line. It further claims that safety lines could not have prevented the sling from moving forward and thereby kept the yacht from falling into the water.

 Howlett denies any negligence on its part. It claims that the yacht fell because the aft sling, in the absence of safety lines, slid forward, unbalancing the yacht and causing it to fall. Howlett denies that it allowed the yacht to touch the breast lines or anything else.

 Although the parties stipulated that the yacht was damaged in the amount of $ 21,250.00, Trial Transcript ("Tr.") 166, they dispute the extent of liability, if any. They disagree as to what law governs the rights and liabilities of the parties and as to the effect of provisions in the Bill of Lading that purport to limit liability. Miller Yacht Sales argues that the Harter Act of 1893, 46 U.S.C. §§ 190-196, governs this action.

 SCI contends that the Harter Act has no application once SCI has completed its obligations under the Bill of Lading. Rather, it argues that the Indian Carriage of Goods by Sea Act (1925) ("Indian COGSA"), SCI's Exh. 7, made applicable by the Bill of Lading, *fn1" governs this case. Under article IV(5) of that Act *fn2" and under the Bill of Lading P 19, *fn3" SCI argues, its liability vel non is limited to 100 pounds sterling, or approximately $ 180.00 on the date of the damage to the yacht. Finally, SCI claims that Pittston and Howlett are liable to SCI for any liability it may have to Miller Yacht Sales, as well as for SCI's costs and attorneys' fees.

 Both Pittston and Howlett claim the benefit of the package limitation in the Bill of Lading P 19, quoted in n.3 supra. They claim this benefit by virtue of paragraph 32 in the Bill of Lading, which extends the "exceptions and immunities" of the carrier to its servants and agents. *fn4" Howlett also claims the benefit of the limitation of liability provision in article IV(5) of the Indian COGSA, quoted at n.2 supra. Howlett states that the Harter Act may be applicable to this action, but it argues that the limitation provision in the Bill of Lading is valid under the Harter Act. The provision is valid, it reasons, because the limitation is based on an agreement between the carrier and the shipper in which the latter was given the option of choosing a higher value for its goods and paying a higher shipping rate and, secondly, because the limitation amount is reasonable under case law. Howlett also contends that its liability is limited by the terms of its contract with SCI. *fn5" Finally, Howlett contends that its liability to SCI for indemnification, if any, should not include attorneys' fees and costs.

 Testimonial Evidence

 Miller Yacht Sales introduced the Deposition of Robert P. Selby, taken December 15, 1978 ("Selby Dep."). Selby also testified at the trial on behalf of Howlett. He has been employed by Howlett since 1961 and has been a crane operator for about twelve years. On August 9, 1976, he was operating the Howlett crane when the yacht was damaged. While operating the crane he sat about fifty to sixty feet above water and twenty feet above the deck of the M.V. VISHVA SHOBHA. The floating crane he was operating was secured to the vessel by means of lines. The stern breast line, which was five inches in diameter, attached the crane tightly to the vessel. A half-inch cable ran from the crane to the bow of the vessel. A three-quarter inch cable connected the crane to the stern and the bow of the vessel: these lines enabled the crane to move back and forth along the vessel. Selby Dep. 32-33; Tr. 138-39.

 On August 9, Selby discharged twenty or more yachts from the M.V. VISHVA SHOBHA. The discharging procedure required him to position the crane's boom and gear over the yacht indicated by the Pittston signalman. The Pittston stevedoring crew would then attach slings underneath the yacht. The signalman would indicate to Selby when to lift. Selby would hoist the yacht slowly until it was a foot or less off the deck. If the signalman determined that the yacht was properly slung, he would signal to Selby to continue to lift. When the yacht had been lifted clear of the other yachts and other objects on the deck, the signalman would signal to Selby to complete the lift, swing the yacht across the vessel, and lower it into the water. Selby Dep. 5, 7, 21; Tr. 147-48. Selby would lower the yacht into "free water" outboard of the crane's breast line. Tr. 142.

 In regard to the yacht in question, Selby testified that he was completing the swing across the vessel when "the stern sling . . . slid forward on the bottom of the hull up towards the bow of the boat and the boat tipped up and shot right straight down into the water, approximately 35 (feet) . . . right into the water and never touched anything, never touched the line on the crane or nothing." Tr. 137; see id. 145; Selby Dep. 8, 30-31, 34. Lines were attached to the yacht, and it ...


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