Kenosha Auto Transport Corp. v. Algoma Central Railway

577 F. Supp. 542, 1984 A.M.C. 2899, 1983 U.S. Dist. LEXIS 10841
CourtDistrict Court, E.D. Wisconsin
DecidedDecember 14, 1983
DocketCiv. A. No. 81-C-1171
StatusPublished

This text of 577 F. Supp. 542 (Kenosha Auto Transport Corp. v. Algoma Central Railway) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kenosha Auto Transport Corp. v. Algoma Central Railway, 577 F. Supp. 542, 1984 A.M.C. 2899, 1983 U.S. Dist. LEXIS 10841 (E.D. Wis. 1983).

Opinion

FINDINGS OF FACTS, CONCLUSIONS OF LAW AND DECISION AND ORDER

REYNOLDS, Chief Judge.

This is an action in tort and in contract arising out of the collapse of a dock at the Port of Kenosha. The dock collapsed under the weight of approximately 20,000 tons of salt. The plaintiff Kenosha Auto [544]*544Transport Corporation owns the dock and has brought this action for damages to recover the moneys it spent to clean the harbor of debris and to repair its dock. The plaintiff has sued the operator of the dock, the carrier vessel that unloaded the salt cargo, the owner of the cargo, and the trucking firm that received and transported the salt to a permanent storage site. Each defendant has cross claimed against the other for contribution. Additionally, Atlantic Mutual Insurance Company, which indemnified the owner of the salt for its property loss, has brought claims against every party as an intervening defendant to recover that loss.

This court has admiralty and maritime jurisdiction under 28 U.S.C. § 1333 to hear at least the claims lodged against the carrier vessel. The claims asserted against each of the other parties are properly before the Court under either its admiralty or its pendent jurisdiction.

On October 3, 1983, a trial to the Court in this matter was commenced. The issues as to each party’s insurance coverage were severed from trial and reserved for later determination. In the matter at bar, the Court is asked to decide which parties are legally responsible, either in contract or in tort, for the damages sustained as a result of the collapse. The Court must determine what sum in damages is reasonable and, if more than one party is found liable, what share of the cost each party is to bear. The matter was taken under advisement on October 13, 1983. The following constitutes my findings of fact and conclusions of law.

1. On June 10, 1981, Kenosha Auto Transport Corporation (“KAT”), a wholly-owned subsidiary of the Jupiter Transportation Company (“Jupiter”), owned dock property which stretched for approximately 1,863 lineal feet along the south side of Kenosha Harbor which is an east-west channel inlet from Lake Michigan. This property is held out to the public as the Port of Kenosha. The property was originally acquired by Jupiter in 1964 when Jupiter purchased all the assets of several affiliated companies, including the Kenosha Harbor Development Corporation which then owned the dock property. The entity that purchased the dock property was Jupiter Kenosha, a subsidiary of Jupiter Transportation Company. Sometime after the purchase of the dock property, Jupiter Kenosha, Inc., was renamed KAT. KAT is primarily engaged in the business of overland transportation of cars, trucks, and boats.

2. KAT operated the dock from the time it purchased the dock on June 1, 1964 until March 31, 1967. During that time, KAT leased the premises adjacent to the dock property to Morelli Overseas Export Services of Wisconsin, Inc. (“Morelli”). From March 31, 1967, until after the collapse of the dock on June 10, 1981, Morelli leased from KAT both the premises adjacent to the dock property and the dock itself.' On June 10, 1981, Morelli held the dock property under a one year lease from KAT.

3. On June 11, 1980, Morton-Norwich Products, Inc. (“Morton”) entered into a contract with Algoma Central Railway (“Algoma”) whereby Algoma would deliver salt owned by Morton to various Great Lakes ports. Sometime in late 1980 or early 1981, S.L.T., Inc. (“SLT”) and Morton began negotiations to arrange for dock space for the delivery of Morton’s salt, a permanent storage site for the salt, and the transportation of the salt from the dock to the permanent storage site.

4. SLT entered into a contract, dated March 27, 1981, with Morelli whereby Morelli set aside a portion of its dock for the reception and temporary storage of Morton’s salt. This has been referred to as a “lease” but was more akin to a through-put agreement. More specifically, Morelli allowed SLT to use a 100 by 400 foot area of the dock for twenty consecutive days of the year as a storage area for cargo to be discharged from a vessel and to be moved almost immediately by a third party consignee. Morelli, of course, had access to the entire dock while SLT was using it.

[545]*5455. SLT’s “sublease” agreement with Morelli contained two indemnity provisions. Paragraph 4 provided:

S.L.T. shall indemnify and hold Lessor [Morelli] harmless from and against any and all damage, loss, liability, cost, expenses, claim or demand or account of any injury to or death of any person, or injury to or loss of any property, however caused, resulting from or arising in connection with or from the performance or nonperformance by S.L.T. of its obligations hereunder or the maintenance or operation of the Subject Location. S.L.T. shall maintain and keep in force, at its own expenses, all such forms of insurance, including, but not limited to, general public liability and contractual liability against claims for bodily injury, death or property damage and Worker’s Compensation.

Paragraph 17, added at the end of the agreement, contained identical language and imposed a reciprocal obligation running from Morelli to SLT. I find from the evidence adduced at trial that paragraph 4 was meant to require SLT to indemnify Morelli for damages caused by SLT’s own negligence; conversely, paragraph 17 was intended to require Morelli to indemnify SLT for injuries resulting from Morelli's own negligence.

6. SLT also contracted with R.R. Bird-sail & Sons, Inc., for use of a permanent storage site for the salt. Starline Trucking Corporation (“Starline”) was to haul the salt from the dock to the permanent storage site. SLT and Starline are separate corporate entities even though each has Michael O’Kane as its owner and president. SLT was separately incorporated to function simply as a terminal operation and thus to avoid regulation as a motor carrier.

7. After Morton approved the arrangements made by SLT, Morton and SLT entered into a contract dated April 21, 1981. The contract called for 40,000 tons or more of salt to be received at the Morelli dock and then transported to the permanent storage site.

8. A Morton employee visited the Kenosha dock in March of 1981 to see if the size and quality of its surface area was adequate to meet the company’s unloading and storage needs. No investigation of the dock’s structural capacity or anchorage system was made by Morton.

9. Morton’s salt was delivered to the Kenosha dock in two shiploads. The first delivery of 21,250 tons was made on May 22, 1981, by the “Algorail,” a vessel owned by Algoma. This shipment was discharged onto the dock and transported to the permanent storage site without incident. The marine vessel “Agawa Canyon,” also owned by Algoma, arrived in Kenosha Harbor with the second delivery of 20,620 tons of salt on June 10, 1981.

10. Michael O’Kane, President of SLT and Starline, was informed by Morton of the arrival date of the ship into Kenosha Harbor for the May 1981 unloading. Mr. O’Kane then contacted Mr. Robert Smith, the Kenosha County surveyor, to have Mr. Smith survey the salt to be discharged in May 1981 to be sure that SLT was receiving the amount of salt that Starline was to transport for stockpiling and ultimate distribution. O’Kane was present at the dock when the first shipment arrived.

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577 F. Supp. 542, 1984 A.M.C. 2899, 1983 U.S. Dist. LEXIS 10841, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kenosha-auto-transport-corp-v-algoma-central-railway-wied-1983.