Crown Zellerbach Corp. v. Ingram Industries, Inc.

745 F.2d 995, 1985 A.M.C. 305, 1984 U.S. App. LEXIS 16821

Opinions

PER CURIAM;

What took 16 years for our answer in Nebel Towing¹ to the enigmatic 4-1-4 riddle of the Jane Smith², is now back again in part 13 years later. Based presumably on Nebel Towing the District Court granted judgment against the excess P & I Underwriter for nearly $2,000,000 in excess of the owner’s judicially declared limited liability. Faithful as we are and must be to Nebel Towing, the Court, by divided vote holds that the trial court was correct in this judgment and we affirm as to this issue.

Footnotes

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* As to all other issues the Court unanimously affirms the judgment of the District Court.

This appeal grows out of an allision between the tow in tow of the tug F.R. BIGE-LOW and Crown Zellerbach’s (CZ) water intake structure on the Mississippi River above Baton Rouge. Involved also was the tug’s (and owners’) maritime limitation of liability proceeding in which CZ brought a Louisiana direct action against the prime and excess P & I Underwriters of the vessel owner/operator. After trial, the District Court held that Ingram, the tug owner/operator, was liable, but was entitled to limit its liability to the value of the vessel and the pending freight. The excess P & I underwriter was held liable for nearly $2,000,000 of the portion of the CZ’s damages that exceeded the limited liability of the vessel owner. We find no error in the court’s holdings (i) of no “privity or knowl edge” by the tug owner, (ii) the valuation of the vessel, (iii) the computation of CZ’s damages, and (iv) the award of pre-judgment interest from a date later than the accident. However, the Court by divided vote determines that the District Court was free of error in holding the tug owner’s underwriter liable beyond the dollar limits fixed, or ascertainable, in the P & I policy. Accordingly, we affirm.

a -i ah u ,7 How it All Happened

On February 3, 1979, the tugboat F.R. BIGELOW owned (or bareboat chartered) by Ingram Industries,' Inc. (Ingram), while pushing 15 loaded barges down the Mississippi River in heavy fog and rain, caused its forward lead barge to come into contact with and damage Crown Zellerbach’s (CZ) water intake structure, on the Mississippi above Baton Rouge. Shortly after this incident, CZ began to repair the structure, but these repairs were interrupted on May 18, 1979, when another tugboat collided with the structure and damaged the remaining portion. The structure was not rebuilt in kind, but was rebuilt in a different form.

Suit was filed by CZ against the tugboat F.R. BIGELOW, and Ingram, her bareboat charterer, in April of 1979. Subsequently, the complaint was amended to include Cherokee Insurance Company, the prime P & I insurer of Ingram, with a policy limit of $1,000,000, and London Steam-Ship Owners’ Mutual Insurance Association, excess P & I insurers of Ingram, with a deductible franchise of $1,000,000.

In its answer to the suit based upon the accident of February 3, 1979, Ingram, the J Dt chartered-owner/operator of the F.R. BIQELOW sought limitation of its liability to the value of the vessel plus freight then pending. 46 U.S.C. § 183. Ingram stipulated liability for striking the structure, and the issues of damages and limitation of liability were tried. Following trial, the District Court entered judgment in favor of CZ in the “total sum” of $3,948,210.31, with pre-judgment interest from December 11, 1980. The District Court granted Ingram’s prayer for limitation of liability, valued the vessel at $2,134,918.88 and limited the owner’s liability to that amount. Cherokee’s prime P & I policy was for $1,000,000. In tabular form, the District Court decreed the total sum of CZ’s judgment as follows:

(a) Total Damages to CZ $3,948,210.31

(b) Payable by Owner and Cherokee

Prime P & I $1,025,000.00

(c) Payable by Owner and London Steam

Excess P & I 1,109,918.88

(d) Owner’s Limited Liability 2,134,918.88

(e) Balance by London. Steam Excess P & I $1,813,291.44

Following the judgment, Ingram and its two P & I underwriters made payments up to the limits of Ingram’s fixed liability ($2,134,918.88).

On appeal, CZ raises several issues as errors in the District Court’s judgment, all of which we affirm. London Steam-Ship Owners’ Mutual Insurance Association challenges that portion of the District Court’s judgment holding that underwriter liable for the amount ($1,813,291.44) of the plaintiff’s claim over and above Ingram’s fixed limited liability ($2,134,918.88). Affirming the District Court by a divided vote on that issue obviously warrants publication of our opinion.

1.

Limitation of Liability **

2.

Limitation: Valuation of the Vessel **

3.

Effect of Stipulation of Damages**

4.

Pre-Judgment Interest " *

5.

P & I Underwriter Liable in Excess Limited Liability Amount

For its protection against claims for damage to piers and other fixed (non-vessel) structures, Ingram, as chartered owner of the tug BIGELOW had two P & I covers. The prime cover was with Cherokee, the amount of insurance being specified as $1,000,000. London Steam-Ship Owners’ Mutual Insurance Association, Ltd. (London Steam-Ship), through A. Bilbrough and Company, as managers, dove-tailing Cherokee’s cover with a deductible franchise $1,000,000 supplied an excess P & I cover in accordance with the Rules of the Association.

Without specific articulation of the reasons for its decision, the trial court — obviously feeling bound by Nebel Towing — held the P & I underwriter liable for approximately $2,000,000 more than the owner’s limited liability.

Despite the dissent to the denial of rehearing en banc in Nebel Towing and criticism of that opinion³ we are bound by that decision and to justify a different result in this case the Court would have to demonstrate that this case and the rationale presented here is different from that in Nebel Towing.

Unable to find any valid distinction, and bound by Nebel Towing, we are both bound and persuaded that the District Court was correct in holding the P & I underwriter liable for this excess amount.

Conclusion

The upshot is that the Court affirms the holding of the District Court.

AFFIRMED.

1

. Olympic Towing Corp. v. Nebel Towing Co., Inc., 419 F.2d 230, 1969 A.M.C. 1571 (5th Cir. 1969) cert, denied, 397 U.S. 989, 90 S.Ct. 1120, 25 L.Ed.2d 396 (1970); see id., 419 F.2d at 238 (Brown, C.J., dissenting from denial of rehearing en banc).

2

. Maryland Casualty Co. v. Cushing, 347 U.S. 409, 74 S.Ct. 608, 98 L.Ed. 806, 1954 A.M.C. 837 (1954).

Only this issue has precedential value. Local Rule 47.5 provides

The publication of opinions that have no prec-edential value and merely decide particular cases on the bases of well-settled principles of law imposes needless expense on the public and burdens on the legal profession.

Pursuant to that Rule the Court has determined that the non-precedential portions of this opinion should not be published. The places at which the published opinion omits parts of the lengthy unpublished opinion are specifically indicated by an **.

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Not to be published. See note * supra.

3

. See Biezup & Abeel, The Limitation Fund And Its Distribution, 53 Tul.L.Rev. 1185 (1979); Bu-glass, Limitation of Liability From A Marine Insurance Viewpoint, 53 Tul.L.Rev. 1364 (1979); Kierr, The Effect Of Direct Action Statutes On P & I Insurance, On Various Other Insurances Of Maritime Liabilities, And On Limitation On Shipowner’s Liability, 43 Tul.L.Rev. 638 (1969).