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Otal Investments Limited v. M/V Clary

June 23, 2008

OTAL INVESTMENTS LIMITED, AS OWNER OF THE M/V KARIBA, FOR EXONERATION FROM OR LIMITATION OF LIABILITY, PLAINTIFF / THIRD-PARTY PLAINTIFF, UNITED SERVICES AUTOMOBILE ASSOCIATION, ASI AUTO SHIPMENT GMBH, CONSOLIDATED CASES: TED L. RAUSCH CO., CHARLES BROOMFIELD, 03 CIV. 9962 MORGAN MOON, PATRICIA YORK, AUGUSTA 04 CIV. 1107 ASSICURAZIONI S.P.A., CHN ITALIA S.P.A., CNH TRADE N.V., NEW HOLLAND NORTH, INC., FEDEX TRADE NETWORKS TRANSPORT AND BROKERAGE, INC., O & K ORENSTEIN & KOPPEL A.G., CASE CORPORATION AND TOWER GROUP INTERNATIONAL, ZURICH INSURANCE CO., ALPINA INSURANCE CO., GERLING INSURANCE CO., AS SUBROGEE AND/OR ASSIGNEE OF SCHEMPP-HIRTH FLUGZEUG- VERTRIEBS-GMBH, DAVID GREEN HILL, LIEBHERR-WERK NENZIG GMBH, LIEBHERR-MISCHTEKNIK, LCT LIEBHERR CONCRETE TECHNOLOGIE, LIEBHERR AMERICA, INC., E.H. HARMS GMBH & CO., BMW OF NORTH AMERICA LLC, N.V. FORTIS CORPORATE INSURANCE, CLAIMANTS,
v.
M/V CLARY, MINERAL SHIPPING CO. PRIVATE LTD., MST MINERALIEN SCHIFFAHRT SPEDITION UND TRANSPORT, CLARY SHIPPING PTE LTD., WALLENIUS WILHEMSEN LINES AS, WILH. WILHEMSEN ASA, ACTINOR CAR CARRIER I AS, CAPITAL BANK PUBLIC LIMITED COMPANY, AND M/V TRICOLOR, THIRD-PARTY DEFENDANTS / CONSOLIDATED DEFENDANTS.



The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge

AMENDED OPINION & ORDER

During the minutes after 2 a.m. on December 14, 2002, three ships sailing in the English channel-the Kariba, the Tricolor and the Clary-committed navigational errors that caused the Kariba and the Tricolor to collide and the Tricolor to capsize and sink.*fn1 On January 4, 2006, after a bench trial, this Court found the Kariba 100% liable for the collision. The Kariba's owner and various owners of lost cargo appealed, and on July 6, 2007, the Second Circuit held that all three vessels were liable for the collision and remanded the matter to this Court to allocate percentages of liability among them. For the reasons set forth below, and with guidance from the Court of Appeals, this Court now finds that the Kariba was 63% liable for the collision, the Clary 20% liable and the Tricolor 17% liable.

Other issues on remand are whether the Tricolor's speed was a proximate cause of the collision, whether the liability of the Tricolor and the Clary may be limited pursuant to the Limitation of Vessel Owner's Liability Act (the "Limitation of Liability Act"), 46 U.S.C. App. § 183 et seq., replaced by 46 U.S.C. § 30505, et seq., and whether the Tricolor is subject to limitation or exoneration under the United States Carriage of Goods by Sea Act ("COGSA"), Ch. 229, 49 Stat. 1207 (1936), Pub. L. No. 109-304, 120 Stat. 1485 (2006), reprinted in note following 46 U.S.C. § 30701 (formerly codified at 46 U.S.C. § 1300, et seq.). For the reasons set forth below, this Court holds that the Tricolor's speed was a proximate cause of the collision. Further, the Clary may not limit its liability pursuant to the Limitation of Liability Act. The owner of the Tricolor, however, may limit its liability pursuant to the Limitation of Liability Act, and is exonerated from liability under COGSA.

I. FACTUAL BACKGROUND*fn2

While many of the facts are set out in my earlier opinion, they are restated here with more clarity and, where helpful to do so, in concert with the language in the Circuit's opinion. At 1:55 a.m. on December 14, 2002, during a night of thick fog and low visibility, the Kariba, the Tricolor and the Clary were sailing in the international waters of the English Channel off the coast of Dunkerque, France, and were approaching an intersection in a Traffic Separation Scheme ("TSS"). The Kariba and the Tricolor were proceeding westward on the East-West branch of the TSS, with the Kariba ahead and the Tricolor some distance behind and about one-half mile to the north of the Kariba. Because the Kariba was sailing at about 16 knots and the Tricolor at 17.9 knots, the Tricolor was gradually overtaking the Kariba and, had the ships maintained their courses, the Tricolor would have passed the Kariba on its starboard side with about one-half mile between them. The Clary, meanwhile, was moving northward on the North-South branch of the TSS at 13 knots, on a collision course with the Kariba.

A. The Men on the Bridges of the Three Vessels

On the Kariba, three men were on the bridge: Captain Kamola, who was making his first restricted-visibility voyage as a Master, Second Officer Szymanski and Able-Bodied Seaman Ignacio. They had access to the Kariba's Automatic Radar Plotting Aid ("ARPA"), a computer system that "automatically tracks and plots target vessels and calculates their courses and speeds," thus predicting the "closest point of approach" of other vessels. In re Otal Invs. Ltd., 494 F.3d 40, 47 (2d Cir. 2007) ("Otal II"). The Tricolor also had an ARPA system and three seamen on its bridge: Captain Knutsen, Second Officer Cabanda and Able-Bodied Seaman Matel. The Clary's bridge was manned by just one person: Second Officer Toncic. Due in part to its smaller size, the Clary was not equipped with an ARPA system but did have a device that could calculate the whereabouts of other vessels. That device, however, did not do so automatically as an ARPA would, but could make calculations only for those vessels selected by the one man on the bridge, Second Officer Toncic.

B. From 1:55 a.m. to 2:02 a.m.

On the Kariba, Captain Kamola first noticed the Clary on his radar at 1:55 a.m. At 2:00 a.m., after rounding the Fairy South Buoy, he realized that he might be headed for a collision with the Clary. Id. at 47-48. Captain Kamola did nothing at this time, however, because he expected the Clary to turn to starboard and pass astern of the Kariba and the Tricolor in accordance with basic navigational rules. In re Otal Invs. Ltd., No. 03 Civ. 4304, 2006 WL 14512, at *2 (S.D.N.Y. Jan. 4, 2006) ("Otal I") ("There is no dispute that it was the duty of the Clary, as the vessel intersecting the West-bound TSS, to turn to starboard and go safely astern of the Kariba and Tricolor."). On the Clary, by 2:00 a.m., Second Officer Toncic noticed the Kariba and the Tricolor on his radar. By 2:02 a.m., had Toncic plotted the course of the Kariba he would have realized that only 3.1 miles separated the Clary from a collision with the Kariba. Toncic took no action and maintained his northward course.

C. From 2:04 a.m. to 2:06 a.m.

Meanwhile, on the Tricolor, Captain Knutsen knew that the Kariba was ahead of him, and by 2:04:38 a.m. he realized that the Clary and the Kariba were on a collision course with each other. Tr. of Oral Argument 48:2 (Feb. 13, 2008) (citing Trial Tr. 255-257). Captain Knutsen, however, did nothing and maintained the Tricolor's course and speed. On the Kariba, at 2:04 a.m., when the Kariba was approximately eight minutes away from a collision with the Clary-and the Kariba's ARPA would have shown so-Captain Kamola asked his second officer to go into the port wing and check for the Clary's lights. Second Officer Szymanski looked for approximately two minutes, but did not see anything. Now, at 2:06 a.m., the Kariba was approximately six minutes, or 2.8 miles away from a collision with the Clary.*fn3 Captain Kamola did nothing still.

D. From 2:09 am. to 2:13 a.m.

By 2:09 a.m., on the Kariba, Captain Kamola's ARPA showed that the Clary had not changed its course to steer astern of the Kariba and the Tricolor, as was undisputedly required by navigational rules. At 2:09:45 a.m., only about two miles away from a collision with the Clary, Captain Kamola ordered the Kariba to turn ten degrees to starboard. Fifteen to twenty seconds later, or sometime between 2:10:00 and 2:10:05 a.m., Captain Kamola ordered an additional twenty-degree turn to starboard. At about 2:12 a.m., Captain Knutsen on the Tricolor saw that the Kariba had abruptly turned to starboard and was heading straight for him. Seeking to avoid a collision, Captain Knutsen and Second Officer Cabanda simultaneously converged on the Tricolor's wheel, hurriedly disengaged the autopilot and sent the Tricolor hard to starboard to evade the Kariba. Meanwhile, Captain Kamola on the Kariba saw the lights of the Tricolor and ordered the rudder full to starboard to try to avoid a collision. It was too late, however, as within the next minute or so, around 2:13 a.m., the Kariba's bow struck the Tricolor broadside, causing the Tricolor to capsize and sink. There were no human casualties.

On the Clary, Second Officer Toncic waited until 2:11:15 a.m. to make a "dramatic" turn to starboard with the intent finally to steer astern the Kariba and the Tricolor. This was approximately nine minutes after he would have known that he was on a collision course with the Kariba, had he plotted the ships' positions. At around 2:13 a.m. Toncic heard "collision, collision" on his VHF radio. Realizing that the blips on his radar that represented the Kariba and the Tricolor had coalesced and ceased to move, Toncic reverted to his original northward course to sail past and to the west of the collided ships. He did not answer the distress call. After passing the area of collision, Toncic erased his chart. At trial, he admitted that "someone" had altered Clary's logbook pages to reflect that conditions were clear and that there were two other men on deck at the time of the collision, while in point of fact Toncic was alone.

II. PROCEDURAL POSTURE

In June 2003, Otal Investments Ltd., the owner of the Kariba, filed a complaint for exoneration or limitation of liability with respect to claims against it that arose from the collision between the Kariba and the Tricolor. In response to this complaint, numerous claimants filed claims against the Kariba, seeking damages for the loss of their cargo, which had sunk along with the Tricolor (hereinafter, the "Cargo Claimants"). The Kariba impleaded the Clary and the Tricolor as third-party defendants.

A trial to determine and apportion liability was held in October 2005, and after post-trial briefs were submitted this Court heard closing arguments on December 12, 2005. On January 4, 2006, this Court issued an Amended Opinion and Order that found the Kariba solely liable for the collision. Otal I, 2006 WL 14512, at *11. The Kariba and the Cargo Claimants appealed the decision, and on July 6, 2007, the Second Circuit found that the Kariba, the Tricolor and the Clary each violated the International Regulations for Preventing Collisions at Sea (the "COLREGS"), Oct. 20, 1972, 28 U.S.T. 3459, codified by Congress at 33 U.S.C. § 1602, et seq., and found that each vessel committed at least one violation that was causative of the collision.

The Circuit remanded the matter to this Court (1) to decide whether the Tricolor's speed was a proximate cause of the collision, (2) to determine each vessel's relative culpability, (3) to determine the relative extent to which each vessel caused the collision, and (4) to allocate liability among the three vessels based on their relative culpability and relative causative role. In their briefs on remand, the Tricolor and the Clary assert that their liability to the Cargo Claimants should be limited pursuant to the Limitation of Liability Act. Further, the Tricolor argues that its liability must be limited pursuant to COGSA. The Kariba and the Cargo Claimants settled their disputes with one another before trial in Otal I.

III. STANDARD OF REVIEW

In allocating the liability for damages among the three vessels, on remand the district court will have to consider the relative culpability of each vessel and the relative extent to which the culpability of each caused the collision.

In making the culpability comparison, the district court should include in its consideration of the fault of the Clary the fact that its logbook was altered.

Otal II, 494 F.3d at 63. "Culpability" refers to "how extensively each ship departed from a proper standard of care," i.e., here, the standard of care as set forth in the COLREGS. Id. at 62. "Causation" refers to "the extent to which each ship's culpable conduct contributed to causing the collision." Id. This Court, therefore, must make two assessments: (1) the extent of each vessel's departure from the COLREGS and (2) the extent to which each departure caused the collision.

IV. DISCUSSION

A. The Tricolor

1. Culpability: COLREG Violations

On the Tricolor's culpability, the Second Circuit held that, as a matter of law, the Tricolor violated COLREGS 13 and 16 on overtaking and COLREGS 6 and 19(b) on safe speed. On overtaking, COLREG 13 provides that "any vessel overtaking any other shall keep out of the way of the vessel being overtaken," and COLREG 16 requires that "[e]very vessel which is directed to keep out of the way of another vessel shall, so far as possible, take early and substantial action to keep well clear." The Circuit held that under COLREGS 13 and 16, the overtaking vessel also has a duty to keep far enough away to allow the overtaken vessel to conduct "reasonably predictable adjustments," and that the overtaking vessel must select a safe place to overtake in the first instance, with regard to factors such as visibility, sea conditions, the space confining the vessels, the vessels' speed and their capabilities. Otal II, 494 F.3d at 54.

The Circuit noted that when the Tricolor's Captain Knutsen realized that he was beginning to overtake the Kariba, the Tricolor did not slow down but instead attempted to overtake the Kariba in a fog, at 17.9 knots, in a heavily trafficked TSS, with the knowledge the Kariba was on a collision course with a northbound vessel, the Clary. We deem this a strikingly precarious situation: attempting to overtake without slowing or altering course in anticipation of adjustments that the overtaken vessel reasonably could be expected to make in response to a third approaching vessel.

Id. Therefore, the Circuit held that, in attempting to overtake under these conditions, the Tricolor violated COLREGS 13 and 16.

On safe speed, COLREG 6 requires that "[e]very vessel shall at all times proceed at a safe speed so that she can take proper and effective action to avoid collision and be stopped within a distance appropriate to the prevailing circumstances and conditions," and COLREG 19(b) provides that "[e]very vessel shall proceed at a safe speed adapted to the prevailing circumstances and conditions of restricted visibility." The Circuit held that, as a matter of law, the Tricolor's speed of 17.9 knots was not a safe speed "under conditions of heavy fog, in a TSS known for its traffic congestion, with the knowledge the Kariba was on a collision course with the Clary." Id. at 55.

2. Extent to Which the Tricolor's COLREG Violations Caused the Collision

The Circuit distinguished between factual, or but-for, causation and proximate causation, and held that both types of causation must be present to constitute a "cause" of the collision. In the context of a shipwreck, however, this Court is unable to construct a meaningful distinction between but-for and proximate causation, except that proximate causation appears, in the Circuit's view, to be tied to the types of harm that the COLREGS seek to prevent. Nonetheless, this Court has analyzed each ship's causative role with respect to both but-for and proximate causation and applies the Circuit's standard for proximate cause when determining whether the Tricolor's speed was a proximate cause of the collision, as the Circuit has instructed.

On the Tricolor's causative impact, the Circuit held that its violations of the COLREGS on overtaking were a but-for cause of the collision, finding that "[i]f the Tricolor had not chosen to overtake in an unsafe place and in an unsafe manner, the collision would not have occurred; the Kariba would have passed across the Tricolor's bow." Id. at 61. The Circuit found too that the Tricolor's overtaking was a proximate cause of the collision because the "choice to overtake created a risk that other vessels, particularly the Kariba, would have less space, and less time, to avoid navigational exigency leading to a collision-the very same risk as makes inopportune overtaking a violation of the COLREGS." Id. Therefore, the Circuit held that the Tricolor's overtaking violations were a cause of the collision.

The Circuit found that the Tricolor's speed was a factual, or a but-for, cause of the collision because "if the Tricolor had been traveling slower, the Kariba would have turned safely in front of its bow." Id. However, the Circuit did not decide whether the Tricolor's speed was a proximate cause of the collision. The Court found that, notwithstanding "the familiar" Berry v. Sugar Notch Borough, 191 Pa. 345 (1899), line of cases*fn4 , the Tricolor's speed could have been a proximate cause, and charged this Court with answering the question in accordance with the following standard:

This question [of whether the Tricolor's unsafe speed was a proximate cause of the collision] hinges entirely on whether the Tricolor, had it not been proceeding at an unsafe speed, would have been able to stop soon enough to avert or mitigate the harm of the collision. In other words, the question hinges not on the factor of the Tricolor's speed in isolation, but whether that speed reflected an inability to stop, or slow, in time to avoid the Kariba's abrupt abaft-the-beam turn.

Id.

The Circuit left unanswered the question of what would have constituted a safe speed, but suggested that "a court might usefully consult the half-distance rule for frame of reference." Id. at 55. Under the half-distance rule, a safe speed is "a speed permitting [the vessel] to stop within half the distance the lookout could see ahead." Id. (citing Union Oil Co. v. The San Jacinto, 409 U.S. 140 (1972)). In other words, "the vessel's speed should be sufficiently slow to enable her to stop within half the limit of visibility." Id. Here, Captain Knutsen stated in his trial declaration that visibility was less than a mile on the night of the collision. Knutsen Decl. ¶ 21. Accordingly, under the half-distance rule, a safe speed would have allowed the Tricolor to stop within a half-mile's distance. The Tricolor's maneuvering characteristics show that at Full Sea Speed, or 17.5 knots, the Tricolor would need about 1.02 miles to stop. Cargo Claimants' Mem. of Law on Remand Ex. B. The Tricolor was proceeding at a slightly faster speed, at 17.9 knots. Had it been proceeding at Full Ahead, or 11.2 knots, however, the Tricolor could have stopped within half a mile. Id. Therefore, a safe speed under the half-distance rule would have been 11.2 knots, and the Cargo Claimants employ this line of reasoning to urge this Court that a safe speed was no faster than 11.2 knots.

The Circuit, however, observed that while stopping distance is a "major factor for considering whether a speed was safe," a court also must consider additional factors such as visibility, sea conditions, traffic and the vessels' capabilities. 494 F.3d at 55. Nevertheless, given the restricted visibility and heavy traffic that night, this ...


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