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EAZOR EXPRESS, INC. v. UNITED STATES

June 17, 1985

EAZOR EXPRESS, INC., Plaintiff, against UNITED STATES OF AMERICA, JOHN O. MARSH, Jr.[,] SECRETARY DEPT. OF THE ARMY, UNITED STATES ARMY CORPS OF ENGINEERS, LT. GEN. JOSEPH K. BRATTON, COMMANDER, U.S. ARMY CORPS OF ENGINEERS, Defendants


The opinion of the court was delivered by: NEAHER

MEMORANDUM OF DECISION AND ORDER

NEAHER, District Judge.

 Plaintiff Eazor Express, Inc. ("Eazor"), a Pennsylvania corporation engaged in interstate trucking, commenced this maritime tort action for damages against the United States. Invoking the Extension of Admiralty Act ("EAA") and the Suits in Admiralty Act ("SIAA"), 46 U.S.C. §§ 740, 741-752 (1976), Eazor claims that the Army Corps of Engineers ("ACE") had negligently permitted an independent dredging contractor to remove lateral support from bulkheads, which supported Eazor's trucking terminal property bordering a portion of Newtown Creek in this District. Eazor subsequently sold the property, reserving the right to pursue its claim.

 The following facts are not in dispute. ACE is a unit of the Department of the Army which is charged with, among other functions, maintaining navigable channels in waterways under its jurisdiction. Newtown Creek is such a navigable waterway originating in the Maspeth section of the Borough of Queens and ultimately entering into the East River. Pursuant to the Rivers and Harbor Act of 1919, ACE is authorized to maintain a 125 foot wide channel in Newtown Creek to a depth of 20 feet below mean low water. Based upon its knowledge of user traffic, however, ACE has generally sought to maintain a 16 foot channel depth in the East Branch of the Creek, the portion relevant to this controversy.

 Newtown Creek serves a highly industrialized area which creates heavy waterborne traffic by scows, barges, tugs and the like carrying petroleum, scrap metals and other industrial products. To maintain a clear channel for that traffic, ACE performed soundings from time to time to determine whether shoaling, i.e., the deposit of sedimentation from the sloping sides of the Creek, had raised the 16 foot channel level. ACE had prior experience with that problem, which required dredging in 1958 and again in 1964 to restore the channel to the desired 16 foot depth. Confronted with the shoaling problem in 1974, ACE concluded that dredging was again necessary. Pursuant to standard government practice, bids were advertised for the dredging operation to be performed by an independent contractor. The low bidder was Weeks Dredging & Contracting Co., Inc. ("Weeks"), which was awarded the contract after ACE determined from past experience that Weeks was capable of performing the job from a technical standpoint.

 Weeks commenced dredging in the East Branch on April 8, 1974 and proceeded continuously until completion on April 17. Weeks' daily reports of the dredger's progress were submitted to ACE for review in groups of 2, 3 or 4 days. Post-dredging soundings by ACE indicated that Weeks had removed 36,558 cubic yards of material. Weeks, however, received payment for only 32,127 yards pursuant to the government's standard contract requirements. The non-payment for the excess of 4,431 cubic yards removed was in effect a penalty intended to discourage contractors from dredging more than was necessary and claiming extra compensation. It had nothing to do with any claim of wrongful performance by Weeks.

 Eazor's Claim

 In 1966 Eazor purchased two parcels of vacant land in the Maspeth area bordering the East Branch of Newtown Creek for a total cost of $625,052. A contemporaneous survey reflected that the area of the tract was 182,448 square feet, of which 3,842 square feet lay between the deed line and the U.S. Pier and Bulkhead line, and 2,568 square feet was land under water, leaving a net area above water of 176,038 square feet. PX 2. On this combined tract Eazor constructed a 75 door trucking terminal, outbuildings and a 410 foot riprap bulkhead along one side of the property, all of which were completed in November 1967. The combined cost of land and construction was $1,245,238.

 Eazor utilized the terminal until August 6, 1973, when it leased the entire property for a term of three years to United Parcel Service at a rental of $200,000 per year plus United's payment of yearly real estate taxes of $84,000. Eazor then leased a smaller facility in Maspeth to conduct operations in conjunction with its reopened terminals in New Jersey. After united's lease expired, Eazor used a part of its terminal from August 1976 until April 1982, when it shut down its general commodity business. In the interim Eazor leased 40 doors of its terminal to Roadway Express from December 1979 through April 1981 for a total rental of $198,425, with Eazor paying taxes and insurance. From October 1981 through May 1982 Eazor leased a 20 door portion of its terminal to Tose, Inc. for a total rent of $36,000. Throughout these lease and rental periods Eazor had its terminal up for sale, and on December 29, 1982 De Francisci Machine Corporation agreed to purchase it for $1,150,000, some $95,000 less than Eazor's cost of construction. PX 47.

 Eazor claims that after expiration of the United lease in 1976 it had sought without success to sell its Maspeth terminal, although there were six or eight potential purchasers who showed a serious interest in the property. Three of these brought in their own engineers to study an area of ground subsidence along the west and north sides of the terminal in the vicinity of the riprap bulkhead bordering Newtown Creek. According to Eazor, the engineers' findings regarding the subsidence dissuaded their clients from purchasing the terminal. Subsequently, an unnamed prospective contractor's remark that recent dredging of the Creek could have caused the subsidence, prompted Eazor to employ engineering consultants to investigate "the cause of the settlement problem." Tr. 45.

 On June 25, 1976, Edmund Burke, a partner of Mueser, Rutledge, Wentworth & Johnson, consulting engineers, reported his opinion to Eazor after inspecting the site and reviewing records of channel soundings made available by ACE for the years 1970, 1973 and 1974. Based on such data, Burke prepared drawings of the underwater channel areas adjacent to Eazor's two bulkheads purporting to show the character of the ground fill under the subsidence areas and the depth of the channel after Weeks' dredging in April 1974. PX 25. It was Burke's opinion "that the recent substantial settlements in both areas was caused by sliding settlements on your property caused by the dredging in the adjacent channel." Id. at 3. Thereafter Eazor filed a claim against the United States claiming property damage in the amount of $1,405,000, although the applicable two-year statute of limitations had long expired. Eazor succeeded, however, in reviving the claim by virtue of Private Law 96-66 enacted by the Congress.

 The credibility of Burke's opinion testimony and Eazor's claim is seriously impaired by documentary evidence that as early as July 1972 there were widespread cracks and ground settlement throughout Eazor's terminal, including especially the west riprap bulkhead area. As Burke then stated in his August 10, 1972 investigation report:

 
"The eight photographs show the west bulkhead, damage to the yard pavement, damage to and discontinuity of the building floor slab and settlement of the yard pavement adjacent to the building."

 PX 49 at 2. The cause of those conditions in the area of the buildings was "the result of consolidation of the peat stratum . . . due to the increased loading on the underlying compressible peat stratum." ...


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