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CARGILL INC. v. M/T PACIFIC DAWN

January 17, 1995

CARGILL INC., et al., Plaintiff(s), - and - CHRISTIANSSANDS SKIBSASSURANCEFORENING, et al., Intervening Plaintiff(s), against M/T PACIFIC DAWN, et al., Defendant(s).

John E. Sprizzo, United States District Judge


The opinion of the court was delivered by: JOHN E. SPRIZZO

SPRIZZO, D.J.,

 At issue is whether the plaintiffs or the intervening plaintiff Christianssands Skibsassuranceforening ("Christianssands") is entitled to the remaining Registry Funds plus accumulated interest, which represent the balance of the amount realized from the interlocutory sale of the M/T PACIFIC DAWN.

 BACKGROUND

 The plaintiffs are the owners of numerous parcels of vegetable oil loaded on board the M/T PACIFIC DAWN ("vessel") in New Orleans, Louisiana in April 1992 for carriage to various European and Mediterranean ports. See Pre-Trial Order ("PTO") P 5(a) at 3; see also Verified Complaint at P 6. The intervening plaintiff Christianssands, a mutual insurance company organized under the laws of Norway, served as the vessel's hull underwriter. See PTO P 5(a) at 4-5. On or about January 28, 1992, Christianssands issued defendants Great Bear Shipping Company ("Great Bear"), owner of the vessel, and Stamford Tankers, Inc. ("Stamford Tankers") a policy of marine hull insurance valued at $ 4,000,000 ("policy") which was to be effective from February 1, 1992 through January 31, 1993. See PTO P 5(c) at 10. The policy required Christianssands to reimburse Great Bear only for the vessel's share of any general average expenses incurred during a voyage. See Plaintiffs' Memorandum in Support of Application for Disbursement of Funds from Court Registry at 2.

 On or about June 16, 1992, while the vessel was in the Atlantic Ocean approximately 400 miles from Bermuda, her master reported engine failure and requested assistance. See PTO P 5(c) at 10. Through its U.S. agent Scandinavian Marine Claims Office, Inc. ("SMCO"), Christianssands assisted Great Bear and Stamford Tankers in locating a suitable tug to tow the vessel to New York. See PTO P 5(c) at 10-11. Through SMCO, Christianssands also assisted in the negotiations for a contract for towing services with World Marine Transport & Salvage, Inc. ("World Marine"), the owner of the tug JUPITERIS ("tug"). See PTO P 5(c) at 11.

 Thereafter, Great Bear and World Marine entered a "Towhire" International Ocean Towage Agreement (Daily Hire) form contract which provided, inter alia, that

 See PTO P 5(c) at 11. The contract also provided that the tug's daily rate from departure until return was $ 7,500.00, pro rata, plus certain expenses. Id.

 The tug departed Norfolk, Virginia on June 19, 1992, and after searching for the vessel, which was adrift and without the necessary electrical power to maintain radio contact, eventually located the vessel and took it in tow on or about June 25, 1992. Id.

 On that same day, World Marine sent a message by facsimile to SMCO stating that the towage of the vessel had commenced and requesting the "full style of agents in New York." Id. On or about June 29, 1992, Stamford Tankers advised SMCO, World Marine and the United States Coast Guard by facsimile that it had nominated the Bill Black Agency ("BBA") of New York as agent for the vessel in New York. Id.

 On or about July 1, 1992, BBA advised SMCO by facsimile that it required an advance of $ 33,240 to cover the cost of, inter alia, pilotage, docking tugs, docking pilots, dockage, linesmen, customs fees, agricultural users' fees, agency fees and miscellaneous expenses for both the tug and the vessel in the port of New York. See PTO P 5(c) at 12. When the vessel's owner and operators failed to advance the funds necessary to allow the vessel and tug to enter the Port of New York, and at the vessel owner's specific request, Christianssands, through SMCO, advanced the $ 33,240 to BBA to allow the vessel to enter the port. Id.

 The tug successfully completed the towage and brought the vessel safely to New York. World Marine then billed the master and owner of the vessel $ 109,964.67 for the tug's services over a period of 13 days, 23 hours and 20 minutes at $ 7,500 per day, pro rata, plus expenses. See PTO P 5(c) at 12. When the vessel owner and operators failed to pay for the tug's services, and at the vessel owner's specific request, Christianssands also paid the full amount due to World Marine. Id. Having been paid in full by Christianssands, World Marine did not exercise its lien on the vessel. See PTO P 5(c) at 13. The value of the cargo upon arrival in New York was $ 12,000,000. Id. The vessel was sold at a judicial sale in the context of this action for $ 910,000. Id. On or about August 26, 1993, counsel for all parties except Christianssands entered into a stipulation, pursuant to which all of the proceeds of the sale of the vessel that remained in the Court's Registry except the amount of Christianssands's claim were disbursed to various parties. See Stipulation and Consent Order dated August 29, 1993.

 Christianssands' original claim of $ 143,204.67 has been reduced by the following credits: BBA has refunded to Christianssands $ 5,566.35 in undisbursed agency fees, PTO P 5(c) at 13; Great Bear's hull insurance policy was cancelled on September 1, 1992, and thus Christianssands owes to Great Bear $ 17,267 in unearned premium, PTO P 5(c) at 13; see also Post-Trial Memorandum of Law of Intervening Plaintiff Christianssands Skibsassuranceforening at 6; and Christianssands owes in general average and salvage-type charges $ 9,702.13. *f ...


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