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ATLANTIC RICHFIELD CO. v. INTERSTATE OIL TRANSP. C

January 9, 1981

ATLANTIC RICHFIELD COMPANY, Plaintiff,
v.
INTERSTATE OIL TRANSPORT COMPANY, Defendant



The opinion of the court was delivered by: BRODERICK

MEMORANDUM ORDER

I.

 This is an indemnity action arising under the admiralty and maritime jurisdiction of this court. See 28 U.S.C. § 1333. Plaintiff Atlantic Richfield Company sues defendant Interstate Oil Transport Company to recover money damages that plaintiff previously paid by way of settlement to General American Transportation Company ("American"). The relevant facts are set forth in my memorandum order dated April 16, 1979 denying defendant's original motion to dismiss the complaint or, alternatively, for summary judgment.

 The case is presently before me on defendant's renewed motion for an order dismissing the amended complaint on the ground that plaintiff has failed to state a claim upon which relief can be granted, or, in the alternative, for an order granting summary judgment. See Rules 12(b)(6); 56, Fed.R.Civ.P. Rule 12(b), Fed.R.Civ.P., provides that where, as here, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment. For the reasons set forth below, defendant's motion is denied.

 II.

 Underlying this action is an explosion which occurred while the barge TB Ocean 80 was at dockside space leased by plaintiff from American pursuant to a written lease agreement. Plaintiff was the time charterer of the barge, and defendant was the bareboat charterer.

 Plaintiff's amended complaint, filed July 16, 1979, sets forth two grounds on which plaintiff may have been liable to American, and plaintiff asserts that with respect to each it is entitled to indemnification from defendant. First, plaintiff asserts that it may have been liable to American under the general maritime law because of the unseaworthiness of the barge or the negligence of her crew. Second, plaintiff asserts that it may have been liable to American for the unseaworthiness of the barge or the negligence of her crew under the terms of the lease agreement between plaintiff and American. *fn1" The amended complaint alleges that on the basis of these two grounds of potential liability a reasonable settlement between plaintiff and American was effected, for the payment of which plaintiff is entitled to indemnification from defendant.

 Defendant advances two theories in support of summary judgment. First, defendant contends that under the general maritime law a time charterer assumes no liability to third parties for the unseaworthiness of a vessel or the negligence of her crew, unless the parties intend otherwise, and that here the parties did not intend otherwise. Second, defendant contends that plaintiff could have incurred no liability to American which affected defendant because such liability would have required, as a premise, defendant's liability to American, and the possibility of such liability had been extinguished prior to plaintiff's settlement with American, in a settlement effected between defendant and American in December, 1976. Thus, defendant asserts, plaintiff is not entitled to indemnification from defendant.

 III.

 Defendant's first theory was rejected on defendant's original motion because, on the then existing state of the record, the question whether the parties to the time charter intended plaintiff to be liable to third parties presented a genuine issue of material fact. In its renewed motion, defendant offers the deposition testimony of Bruce H. Hooper, vice president of defendant, and of Herbert J. Russell, the claims manager of plaintiff's insurance division, in support of the contention that the parties did not intend plaintiff to be liable to third parties for unseaworthiness or crew negligence. *fn2"

 Hooper's testimony establishes that the matter of plaintiff's liability to third parties was not discussed during the negotiations with respect to the time chartering of the barge; that a provision for such liability had never been provided for in any other charters between plaintiff and defendant; and that had such a provision been contemplated, Hooper would have been made aware of it because of its unusualness. Hooper conceded, however, that dealings between plaintiff and defendant had been underway before he came on the scene, that all implicit terms of charter parties were not renegotiated each time a barge was chartered, and that the matter of who, as between plaintiff and defendant, would be liable in the case of the unseaworthiness of a chartered barge or the negligence of her crew would depend largely on the course of dealings between the parties. Hooper was aware of plaintiff's lease agreement with American but did not know its terms.

 Russell testified to a pattern of dealing between the parties in the handling of claims involving either the unseaworthiness of chartered barges or the negligence of their crews. If plaintiff became liable to a third party under the terms of a written contract, such as the lease agreement between plaintiff and American, and liability resulted from unseaworthiness or crew negligence, plaintiff would satisfy the liability to the third party in the first instance and look to be reimbursed by the defendant or its insurer. *fn3"

 Regarding intent, Hooper's testimony is neutral. The absence of the subject from negotiations for the charter of the Tì Ocean 80 or other barges is no indication, one way or the other, of the intent of the parties. To contend that such absence is evidence of a lack of intent requires the drawing of an inference consonant with traditional principles of admiralty law but inadequate as a basis for summary judgment. Russell's testimony concerning the pattern of dealing between the parties, on the other hand, is not neutral regarding intent: it sufficiently manifests the intent of the parties to alter the traditional allocation of liability to indicate the existence of a genuine issue of material fact, and thus to make summary judgment ...


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