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FEEHAN v. UNITED STATES LINES

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK


December 18, 1980

In the Matter of PETER J. FEEHAN, as Personal Representative of the Estate and Beneficiaries of WALTER J. MINCHICK, Deceased, Plaintiff, against UNITED STATES LINES, INC., THE UNITED STATES OF AMERICA, HYSTER COMPANY d/b/a HYSTER COMPANY, INC., and NACIREMA OPERATING CO., INC., Defendants.

The opinion of the court was delivered by: STEWART

MEMORANDUM DECISION

STEWART, District Judge:

 Plaintiff brought suit for the wrongful death of a merchant seaman against the decedent's employer, United States Lines, Inc., and against the manufacturer and operators of the "straddle carrier" that allegedly struck and killed the decedent. Cross-claims for indemnification or contribution were asserted by the United States and Nacirema Operating Co., Inc. ("Nacirema"), operators of the straddle carrier, as well as by United States Lines, Inc., against Hyster Company, Inc. ("Hyster"), the manufacturer of the machine. Hyster moves to dismiss the complaint and the cross-claims or, alternatively, for summary judgment.

 Hyster contends that New York law applies because the complaint bases jurisdiction solely on diversity of citizenship between the parties. Hyster further alleges that New York would apply Virginia law in this case and that the plaintiff's action is time-barred under Virginia law. Hyster also moves to dismiss the cross-claims, contending that Virginia allows no action for indemnification or contribution where plaintiff is barred from suing the indemnitor. Plaintiff now seeks to avoid sole reliance on diversity jurisdiction. Instead, plaintiff's affidavit in opposition to the motion to dismiss asserts that "general maritime law" provides jurisdiction and that the doctrine of laches applies. Plaintiff claims that the applicable jurisdictional provisions are 28 U.S.C. § 1333 and the Admiralty Extension Act, 46 U.S.C. § 740 (1976).

 The circumstances surrounding the accident are as follows. On October 11, 1977, the decedent's ship was docked at a U.S. Navy pier in Norfolk, Virginia. While decedent was walking on the pier, a specialized motor vehicle allegedly manufactured by Hyster that was used to transport, load or unload cargo and was known as a straddle carrier struck and killed the decedent. The straddle carrier was operated by an employee of the United States. An employee of defendant Nacirema allegedly aided in the operation of the straddle carrier by directing vehicular and pedestrian traffic in the vicinity of the straddle carrier.

 Plaintiff's complaint was required to set forth "[a] short and plain statement of the grounds upon which the Court's jurisdiction depends." F.R.Civ.P. 8(a)(1). A valid complaint must plead sufficient facts to establish a cause of action. See Harary v. Blumenthal, 555 F.2d 1113, 1115 n.1 (2d Cir. 1977); N.Y. State Waterman's Ass'n. v. Diamond, 469 F.2d 419, 421 (2d Cir. 1972). Provided that adequate facts on which to uphold jurisdiction are pleaded in the complaint, the action need not be dismissed for failure to allege the proper statutory basis of jurisdiction. See Andrus v. Charlestons Stone Products Co. v. Blumenthal, 436 U.S. 604, 607-08 n.6 (1978); Harary v. Blumenthal, 555 F.2d at 1115 n.1.

 We must determine whether plaintiff's complaint established an admiralty cause of action in order to apply the doctrine of laches. Torts that occur on land may come within federal admiralty jurisdiction where the wrong at issue bears a significant relationship to traditional maritime activities. See Executive Jet Aviation v. City of Cleveland, 409 U.S. 249, 268 (1972). There is an additional requirement under the Admiralty Extension Act, 46 U.S.C. § 740, that an injury "done or consummated on land" must be "caused by a vessel." See Victory Carriers, Inc. v. Law, 404 U.S. 202, 210-11 (1971); Guiterrez v. Waterman Steamship Corp., 373 U.S. 206, 209-10 (1963). The Admiralty Extension Act was expressly intended to circumvent prior Supreme Court cases preventing claims in admiralty for torts on land even where the ship proximately caused the injury. See Pryer v. American President Lines, 520 F.2d 974, 979 (4th Cir. 1975), cert. denied, 423 U.S. 1055 (1976); Victory Carriers, Inc. v. Law, 404 U.S. at 2098 n.8. Thus, an injury suffered on land in connection with traditional maritime activity must be proximately caused by a vessel to establish admiralty jurisdiction. See id.

 The decedent's accident occurred when the ship on which he was employed was docked for loading or unloading. Loading and unloading at pierside probably constitute traditional maritime activities under Executive Jet. However, the accident was not proximately caused by the vessel. All of the events, participants and instrumentalities involved in the accident were land-bound and unconnected to the vessel. Therefore, plaintiff's claim does not come within admiralty jurisdiction.

 We must then consider whether he may sustain the claim based solely on diversity of citizenship. In a diversity case, we must apply the substantive law of the forum state, including the applicable limitations period. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941). The New York "borrowing statute" directs us to apply the shorter statute of limitations period of this state or the place where the accident occurred to an action brought by a non-resident based upon an accident occurring outside of New York. N.Y. C.P.L.R. § 202 (McKinney) (1972). Plaintiff and the decedent are non- residents of New York and the accident occurred in Virginia. We must therefore apply the shorter of New York or Virginia statute of limitations to each of plaintiff's theories of recovery.

 Plaintiff first asserts a negligence claim. In New York, a party must bring an action for personal injuries due to negligence within three years of the time the cause of action accrued. N.Y. CPLR § 214 (McKinney) (1972). Virginia has a two-year limitations period for personal injuries or wrongful death due to negligence. Va. Code, §§ 8.01-243, -244 (1977). Decedent's cause of action accrued on October 11, 1977, see Payne v. Piedmont Aviation, Inc., 294 F.Supp. 216, 218 (E.D. Va. 1968), and the claim against Hyster was not interposed until March, 1980. Under Virginia's two-year statute of limitations, plaintiff's action for negligence is time-barred.

 Plaintiff also asserts a breach of warranty claim against Hyster. The Virginia statute of limitations is two years, while the New York statute provides four years within which to bring an action. Compare Va. Code, § 8.01-243 (1977) with N.Y. UCC § 2-725 (McKinney) (1975). Plaintiff's breach of warranty action is also time-barred under the Virginia statute.

 Finally, plaintiff asserts a right to recover under a strict product liability theory. Because all the relevant facts surrounding the accident occurred in Virginia, we must look to Virginia to determine whether plaintiff may maintain such an action. See Wheeler v. Standard Tool & Mfg. Co., 497 F.2d 897, 898 (2d Cir. 1974). Virginia has not adopted the doctrine of strict product liability. See Brigg v. Fotos Int'l., Inc., 357 F.Supp. 89, 92 (E.D. Va. 1973). The Virginia courts have construed products liability claims as stating a cause of action for breach of warranty. Id. Accordingly, plaintiff's action is time- barred under Virginia's two-year statute of limitations.

 In sum, plaintiff's claim does not arise under admiralty jurisdiction. Under principles applicable in diversity cases, the New York borrowing statute directs us to apply the shorter statute of limitations period of New York or Virginia. Each of plaintiff's theories of recovery are time-barred under Virginia law. Therefore, Hyster's motion to dismiss the complaint is granted.

 Hyster also seeks to dismiss the cross-claims of the other defendants for indemnification or contribution. Hyster contends that it cannot be held liable to the cross- claimants if it is not liable to the injured party. This contention is based on the broad proposition that "if a damaged party has a cause of action against only one of the parties responsible for the damage, that one cannot enforce contribution [or indemnification] from the other." See American Tobacco Corp. v. Transport Corp., 277 F.Supp. 457, 461 (E.D.Va. 1967). American Tobacco, however, is distinguishable from the case at bar. In American Tobacco a third-party action by the carrier of allegedly damaged machinery against the owner of the ship that transported the goods was barred because the bill of lading on which liability was based contained an express one-year limitation period. Id. Thus, the rights of both the plaintiff and the third-party plaintiff against the third-party defendant were derived from the bill of lading and subject to an express one-year limitation.

 A more accurate statement of the limitation on actions against joint tortfeasors is that contribution or indemnification is available where the indemnitor breaches a duty to the indemnitee independent of the action by the injured party even if the injured party may not sue one of the indemnitors. See Ryan Co. v. Pan-Atlantic Corp., 350 U.S. 124, 131-32 (1956); Prudential Lines, Inc. v. General Tire Int'l. Co., 440 F.Supp. 556, 559-60 (S.D.N.Y. 1977).Clearly, the existence of a contractual agreement to indemnify permits third-party action against the indemnitor despite the fact that the injured party may not sue the indemnitor directly for the tort. See Prudential Lines, Inc. v. General Tire Int'l. Co., 440 F.Supp. at 560; Burnette v. General Electric Co., 389 F.Supp. 1317, 1321 (W.D.Va. 1975). An implied warranty may also be the basis for survival of an indemnity action. See Bell v. Federal Reserve Bank, 57 F.R.D. 632, 635 (E.D.Va. 1972); Atlantic Aviation Corp. v. Estate of Costas, 332 F.Supp. 1002, 1005 (E.D.N.Y. 1971). We must examine the basis of the cross-claims to determine whether or not the claims are dependent upon the plaintiff's claim.

 Both the United States and United States Lines, Inc. base their cross-claims on an express or implied breach of warranty. These defendants contend that Hyster negligently designed or manufactured the straddle carrier, rendering the machine unfit for loading, unloading and transporting cargo, and breached warranties of merchantability and fitness. A warranty action is an independent basis of liability and may be asserted by an indemnitee against an indemnitor despite the inability of the injured party to sue the indemnitor. The cross-claim of defendant Nacirema, however, states no basis for indemnification or contribution other than Hyster's alleged negligence. Because we cannot determine whether Nacirema's right to contribution or indemnification is derived solely from the injured party, we must grant Hyster's motion to dismiss Nacirema's cross-claim, with leave to amend the cross-claim to assert an independent basis of liability.

 Hyster also contends that the cross-claims for contribution or indemnification are either time-barred or not yet ripe. The right to contribution or indemnification does not accrue until a party is held liable or has paid more than a commensurate share of the judgment. See Prudential Lines, Inc. v. General Tire Int'l. Co. 440 F.Supp. at 558; Nationwide Mutual Ins. Co. v. Jewel Tea Co., 118 S.E.2d 646, 649 (Va. 1961). Therefore, the cross-claims are not time-barred. It remains to address Hyster's contention that the cross-claims are not yet ripe. The most recent authority on the timeliness of an action for contribution or indemnification prior to payment by one tortfeasor under a judgment permitted litigation of such a third-party claim. See Bell v. Federal Reserve Bank, 57 F.R.D. at 634-35; Atlantic Aviation Corp. v. Costas Estate, 332 F.Supp. at 1007. We find Bell persuasive and there is no contrary direction from the final arbiter of Virginia law. Therefore, this action is ripe.

 Hyster also moves for summary judgment on the cross-claims. Summary judgment is appropriate when there are no remaining material factural issues. F.R.Civ.P. 56. The cross-claims present factual issues concerning the nature of Hyster's express or implied warranties, the design and manufacture of the straddle carrier and other issues. It is therefore inappropriate to grant summary judgment on the cross-claims at this time.

 As we have dismissed plaintiff's claim against Hyster but not all of the cross-claims, we must consider whether there is jurisdiction over the remaining cross-claims. The United States and United States Lines, Inc. allege independent bases of jurisdiction under either 28 U.S.C. § 1345 or 28 U.S.C. § 1332. Therefore, the remaining cross-claims may be asserted in this action.

 In sum, Hyster's motion to dismiss plaintiff's claim is granted. Hyster's motion to dismiss Nacirema's cross-claim is also granted with leave to amend.However, Hyster's motion to dismiss the cross-claims of defendants United States and United States Lines, Inc. is denied. Finally, the motion for summary judgment is denied.

19801218

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