Jose FERNANDEZ, Plaintiff,
v.
CHIOS SHIPPING CO., LTD., Defendant and Third-Party Plaintiff-Appellee,
v.
MAHER STEVEDORING COMPANY, INC., and States Marine Lines,
Inc., Third-Party Defendant-Appellants.
CHIOS SHIPPING CO., LTD., Fourth Party Plaintiff-Appellee,
v.
CASTLE & COOK, INC., et al., Fourth Party Defendants-Appellants.
Nos. 1090, 1093, 1216-1218, Dockets 75-7465, 76-7066,
76-7071, 76-7078 and 76-7079.
United States Court of Appeals,
Second Circuit.
Argued May 26, 1976.
Decided Sept. 16, 1976.
Edwin K. Reid, New York City (Zock Petrie, Reid, Curtin & Byrnes, New York City, of counsel), for defendant and third and fourth-party plaintiff-appellee, Chios Shipping Co., Ltd.
James M. Kenny, New York City (McHugh, Heckman, Smith & Leonard, New York City, of counsel), for third-party defendant-appellant, Maher Stevedoring Co., Inc.
William P. Larsen, Jr., New York City (Boal, Doti & Larsen, New York City, of counsel), for third party defendant-appellee, States Marine Lines, Inc.
Patrick L. Wynne, New York City (Joseph Edward Brady, Fogarty & Wynne, New York City, of counsel), for fourth-party defendants-appellants Castle & Cook, Inc., Dole Corp., and Castle & Cook Foods Corp.
Before HAYS, MULLIGAN and MESKILL, Circuit Judges.
MESKILL, Circuit Judge:
The issues raised on this admiralty appeal stem not from the injured longshoreman's quest for damages but from the subsequent contest among four other parties to shift the burden of indemnification for his recovery.
On September 1, 1968, employees of Maher Stevedoring Company, Inc. ("Stevedore"), plaintiff Fernandez among them, were unloading a cargo of "pre-palletized" units of pineapples from the # 3 hold of the SS Chios. A "pre-palletized" unit is a single package consisting of a pallet and cartons glued together so that no bands or lashings are necessary to bind the unit when transporting it. The lightweight, disposable pallets1 were constructed by Castle & Cook, Inc., Dole Corp., and Castle & Cook Foods Corp. (collectively called "Shipper"), for use in transporting their pineapple products. Longshoreman Fernandez was injured when one such unit came apart as it was being lifted out of the hold, spilling cartons on him.
Fernandez sued Chios Shipping Co., Ltd. ("Shipowner") on theories of negligence and unseaworthiness.2 The Shipowner impleaded States Marine Lines, Inc. (now Isco, Inc., "Time Charterer"), and the Stevedore for indemnification if it were found liable to plaintiff. Shipowner also sought indemnification from the Shipper. In case it was held liable to the Shipowner, the Time Charterer cross-claimed for indemnification from the Stevedore. Finally, both the Time Charterer and the Stevedore sought indemnity from the Shipper.
The jury returned a special verdict for plaintiff, finding that the SS Chios was unseaworthy and that this unseaworthiness was a proximate cause of the injury. They also found that Fernandez was not contributorily negligent and awarded damages of $90,2003 The indemnity claims then were submitted to the jury in interrogatory form, except for the Shipowner's claim against the Time Charterer, which the court resolved as a matter of law in the Shipowner's favor.
The jury found that the Stevedore breached its warranty of workmanlike performance by failing to supervise and direct its employees properly in the unloading operation and to provide for the safety of its employees; the jury also determined that the Stevedore's action was a proximate cause of plaintiff's injuries. As to the Shipper, the jury found that its negligence resulted in the disintegration of the pre-palletized unit and that the Shipper's actions also were a proximate cause of plaintiff's injuries. Finally, the jury found that the pineapple unit broke apart because of a latent or hidden defect in the pallet.
Based on these findings, the district court held that the Shipowner was entitled to indemnification from the Stevedore and the Shipper. As a matter of law, the court held that the Time Charterer was bound to indemnify the Shipowner from its liability to plaintiff, including costs and attorney's fees, because the Time Charterer warranted in Clause 8 of the charter that it would safely and properly assume control of cargo operations. The court also held that the Time Charterer was entitled to indemnification from the Stevedore and Shipper, in accordance with the jury's answers to the interrogatories. In sum, although the Shipowner was found to be liable to plaintiff, it was entitled to indemnification from all of the other parties. The Time Charterer, bound to indemnify Shipowner, was itself entitled to indemnity from the Stevedore and the Shipper. Thus, the burden of the longshoreman's recovery ultimately fell upon the Stevedore and the Shipper. Every participant held bound to indemnify another appeals from that determination. The Shipper also challenges the amount of the longshoreman's recovery as excessive. Finally, appellants raise numerous procedural and evidentiary claims of error. In an attempt to simplify the issues involved, we shall analyze each claim of error according to the relationship of the parties, presenting additional facts as necessary.
I. Stevedore's Warranty of Workmanlike Performance.
Both the Shipowner and the Time Charterer claimed indemnification from the Stevedore based on its warranty of workmanlike performance. Ryan Stevedoring Co., Inc. v. Pan-Atlantic Steamship Corp.,
Testimony by Edward Ponek, the Stevedore's safety manager, revealed that a superintendent from the Stevedore was assigned to supervise the discharge of the Chios. Two witnesses testified, however, that no supervisory personnel were present during discharge on the day of the accident. Plaintiff Fernandez stated that he was given no instructions as to method of unloading and that the confined area of the hold, packed high with the pallets, forced him to stand directly under each pallet as it was lifted out of the hold. Not contesting these facts, the Stevedore asserts its lack of responsibility because the defect was latent and thus not discoverable by a reasonable inspection and because it had no knowledge, constructive or actual, that plaintiff would not have a reasonably safe place to work.
In Fairmont Ship. Corp. v. Chevron Internat'l Oil Co., Inc.,
The procedural defects alleged to constitute reversible error merit only brief discussion. Stevedore first complains that the district court failed to include an option in the indemnity interrogatories that the Shipowner did not meet its burden of proof. We disagree. Judge Motley's charge, the pertinent part of which is set out in the margin,9 adequately covered the subject, making a separate interrogatory inessential. Second, while under Fed.R.Civ.P. 51, the trial court should permit objections to the charge and special questions prior to the jury deliberations, failure to do so in this case is not reversible error. Review of the transcript reveals that the district court had spent many hours working with the attorneys to "iron out" the charge and the questions. The court was fully aware of their respective positions and objections, had ruled on them, and had given blanket exceptions. Finally, the Stevedore argues that the district court erred in permitting the Time Charterer a summation while withholding the issue of its liability to the Shipowner from the jury. In addition to the latter issue, however, the Time Charterer was also claiming indemnity from the Stevedore, which was a jury issue, since it was based on the warranty of workmanlike performance. Given the trial court's broad discretion in the conduct of litigation, we find no abuse in permitting summation by the Time Charterer.
II. Time Charterer's Contractual Duty to Shipowner.
The Time Charterer appeals from the district court's ruling that it must indemnify the Shipowner under Clause 8 of the time charter. Clause 8, in pertinent part, provides that "the charterers are to load, stow, trim and discharge the cargo at their expense under the supervision of the Captain. . . ."10 Relying primarily on this Court's decisions in Nichimen Company v. M. V. Farland,
Nichimen involved damage to a cargo of steel coils negligently stowed and loaded by a specialist hired by the time charterer's port agent. Under the Carriage of Goods By Seas Act ("Cogsa"), both the time charterer and shipowner were held responsible for damages owed to the purchaser of the cargo.11 On appeal, the time charterer challenged the conclusion that, as between itself and the shipowner, it was responsible to indemnify the shipowner under Clause 8 of the time charter, which clause was virtually identical to that involved in the instant case.
Judge Friendly, speaking for this Court, noted that absent any special provision, the duty to care for cargo and the consequences for failing to do so properly would fall upon the ship and the shipowner. However, under Clause 8, the time charterer assumed the primary responsibility for the safety of stowage, insofar as cargo damage was concerned. Since the cause of the damage, improper stowage, was within the scope of responsibility which Clause 8 intended to shift from the shipowner to the time charterer, the shipowner was entitled to indemnification.
The Time Charterer in the instant case attempts to distinguish Nichimen by arguing that Nichimen involved cargo damage resulting from negligent conduct while the case at bar concerns personal injury without any showing of negligence by the Time Charterer. We can find no convincing basis to limit Nichimen to cargo damage situations. When Clause 8 shifts the responsibility of proper discharge of cargo to the charterer, that responsibility includes whatever damage results from improper discharge, whether to the cargo or to the personnel unloading it.12 The Time Charterer also argues that Nichimen requires a finding of negligence on the part of the charterer before indemnification is justified. However, in Nichimen, the defective stowage was caused by a "specialist" hired by the time charterer's port agent; there did not appear to be any negligent conduct by the port agent or the time charterer. Similarly, in Demsey & Associates v. S.S. Sea Star, supra, the time charterer was found to have breached its duty to properly load and stow the goods under Clause 8 where its agent had negligently designed the stowage plan. Thus, in both cases, the time charterer was required to indemnify the shipowner under Clause 8 of the charter because of the negligence of its stowage agent. In the instant case, the Stevedore hired by the Time Charterer was found to have breached its warranty of workmanlike performance by failing properly to supervise and provide for the safety of its employees during unloading operations. Since the cause of the damage, improper discharge of cargo, is within the scope of responsibilities shifted from Shipowner to Time Charterer by Clause 8, the Time Charterer is obligated to indemnify the Shipowner.
III. Shipper's Liability.
The district court submitted three interrogatories to the jury concerning the potential liability of the Shipper, which also manufactured the pallets. The jury concluded that the pre-palletized unit broke apart due to the negligence of the Shipper, that the pallet contained a latent or hidden defect, and that the Shipper's actions were a proximate cause of the longshoreman's injuries. On the basis of these findings, the district court held that the Shipowner and Time Charterer were entitled to full indemnification from the Shipper.13 Although the claim of indemnity against the Shipper was based on theories of breach of warranty, strict liability in tort, and negligence, the parties agree that the district court submitted the indemnity issue to the jury only on a negligence theory.14 On appeal the Shipper raises five claims of error: (1) that the trial court erred in permitting an unqualified witness to testify as an expert; (2) that the trial court improperly admitted the surveys of independent contractors into evidence as business records; (3) that there was no evidence to support a finding of a latent defect; (4) that there was no evidence that it was negligent; and (5) that the verdict for the plaintiff was excessive.15 We shall first consider appellant's challenges to the admission of certain evidence and then proceed to the sufficiency questions.
The Shipper argues that the district court abused its discretion in permitting Daniel Devaney to testify as an expert witness for the Shipowner because he was unqualified to testify about the pre-palletized units and because his testimony lacked any probative value. We disagree.
Rule 702 of the Federal Rules of Evidence permits a witness qualified by "knowledge, skill, experience, training, or education" to testify as an expert if his specialized knowledge would assist the trier of fact. The broad discretion of the trial court to determine the qualifications of witnesses will not be disturbed unless its ruling was "manifestly erroneous." Salem v. United States Lines Co.,
The Shipper contends that the evidence is insufficient to support the jury's findings of a latent defect in the pallet or that the Shipper was negligent in manufacturing it. While the evidence in this case is less than overwhelming, we conclude that it is sufficient to support the jury's determinations.
As to the allegedly defective pallet, the Shipper claims that the record is barren of evidence that any defect existed, obvious or latent. In cases such as this, where the injury-causing instrument is not available for inspection at a trial occurring seven years after the accident, the courts have allowed circumstantial proof to raise permissible inferences of defective manufacture. Lindsay v. McDonnell Douglas Aircraft Corporation,
The appellee's expert, Mr. Devaney, testified that in his opinion, the probable cause of the accident might be excessive handling of the "fragile" disposable units or faulty materials used in manufacture. Much of appellee's evidence tended to show the lack of any apparent defect or any change in the pallets due to mishandling after leaving the Shipper's hands: clean mate's receipt, loading certificate and clean bill of lading to show that the cargo was received without apparent defect or damage and marine surveyor's reports made in regular course of business at each port to demonstrate no damage or apparent change during the voyage. One reasonable and permissible inference to draw from these occurrences was that the pallet contained a latent defect from the manufacturing process that caused it to disintegrate when it was hoisted from the hold.
To support a claim for negligent manufacture, a preponderance of the evidence must show that the product was defectively designed or manufactured, that the defect was a proximate cause of the injury, that the defect existed when the manufacturer parted with possession and that the manufacturer failed to make any reasonable inspection or test to discover the defect. The manufacturer thus has the "affirmative duty to make such tests and inspections, during and after the process of manufacture, which are commensurate with the dangers involved in the intended use of the product." Nicklaus v. Hughes Tool Company, supra,
This Court has previously noted that, particularly in admiralty suits, the "non-production of material evidence which is in the control of a party raises an inference that the evidence is unfavorable to that party. . . . The inference raised has been said to be sufficient to decide a close case." Tupman Thurlow Co., Inc. v. S.S. Cap Castillo,
Finally, although the jury's verdict for the longshoreman was generous, it was not so excessive as to shock the court's conscience, Williamson v. Compania Anonima Venezolana De Navigacion,
Affirmed.
Notes
In contrast, another method of cargo transport utilizes heavy oak "stevedore" pallets upon which goods are loaded, secured, moved and then unloaded. Stevedore pallets are owned by the stevedoring company and designed for reuse
The negligence claim was dismissed by the court
Shipowner ultimately settled with plaintiff Fernandez for the sum of $75,000
The jury also found that the Stevedore did not breach its warranty in improperly loading the pallets onto the forklift or by failing to comply with applicable safety regulations. Further, the jury determined that the captain of the crew should not have known of the condition and that the ship's agents did not acquiesce in the longshoreman's working conditions
Stevedore also raises questions about the apportionment of damages between Shipper and Stevedore. This issue was not raised before the district court after verdict and, thus, is not properly before us
Judge Smith thoroughly analyzed the historical development of the Ryan doctrine in Fairmont, supra,
The jury specifically found that he was not contributorily negligent in so doing
Thus, Scott v. SS Ciudad de Ibague,
The district court's charge, in pertinent part, stated:
Now, as I have said, in their claims against the stevedoring company the shipowner and these other parties have the burden of establishing that claim by a fair preponderance of the credible evidence. Thus, even though you have found in favor of the plaintiff in an action against the shipowner, you may not find in favor of the shipowner against the stevedoring company unless you find by a fair preponderance of the evidence that the plaintiff met with his accident because of the failure of the stevedoring company to perform its job of providing a place for plaintiff to get out of the way or failed in its duty of properly unloading the pallet from the ship in a workmanlike manner and with reasonable safety to persons and property.
If the shipowner or these parties have sustained this burden of proof, then, as I said, the parties are entitled to recover against the stevedoring company.
The full text of Clause 8 reads as follows:
That the Captain shall prosecute his voyages with the utmost dispatch and shall render all customary assistance with ship's crew and boats. The Captain (although appointed by the owners) shall be under the orders and directions of the charterers as regards employment and agency; and the charterers are to load, stow, trim and discharge the cargo at their expense under the supervision of the Captain who is to sign Bills of Lading for Cargo as presented in conformity with the Mate's or Tally Clerk's receipts without prejudice to this Charter Party.
Under Cogsa, the liability to the carrier is based on fault only. Where the shipper makes out a prima facie case under the statute by proving loss or damage to the goods while they were in the hands of the carrier, the burden shifts to the carrier to either disprove negligence or establish that the loss was occasioned by one of the statutory exceptions. Thus, in Nichimen, for example, both the shipowner and the time charterer were found to be liable as carriers under Cogsa. The real question was whether one or the other could shift the burden of the loss. Gilmore & Black, The Law of Admiralty, supra, § 3-43 at 183-184
In support of his argument, Time Charterer extensively quotes from Mondella v. S.S. Elie V.,
The Stevedore was entitled to partial indemnification, since it and the Shipper were held jointly liable for the amount of the judgment
One part of the court's charge to the jury does discuss breach of implied warranty. The court noted that if the jury found that the Shipper breached its implied warranty it "will return an answer appropriate as set forth on this questionnaire." However, the only questions relating to the Shipper were the three described above. A finding of a latent defect does not require the conclusion that the manufacturer breached its implied warranty, since the jury must also find that the defect was present when the pallet left the manufacturer's control. Moreover, the district court also used the term "latent defect" in its discussion of negligence. Thus we cannot conclude that the court submitted the indemnity claims to the jury on the warranty or strict liability theories. However, we note that since a products liability claim requires only proof of a defect in the product when it leaves the manufacturer's possession which proximately causes injury, all of which the Shipowner sufficiently proved in his negligence claim, it is likely the jury would have reached the same result on a products liability theory
Shipper also raises claims of procedural errors which have no merit
In cases relied upon by Shipper, J. Howard Smith, Inc. v. S.S. Maranon,
The record is not clear as to whether the Shipper ever produced a pallet of the same type and kind used on the Chios
The Shipper also was unable to recall when the pallets were designed and could not locate or produce the design or a mock up model