Norfolk Shipbuilding & Drydock Corp. v. The M/Y La Belle Simone

537 F.2d 1201, 1976 A.M.C. 2062
CourtCourt of Appeals for the Fourth Circuit
DecidedJune 2, 1976
DocketNos. 75-1492, 75-1493
StatusPublished
Cited by6 cases

This text of 537 F.2d 1201 (Norfolk Shipbuilding & Drydock Corp. v. The M/Y La Belle Simone) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Norfolk Shipbuilding & Drydock Corp. v. The M/Y La Belle Simone, 537 F.2d 1201, 1976 A.M.C. 2062 (4th Cir. 1976).

Opinion

MERHIGE, District Judge:

Norfolk Shipbuilding & Drydock Corporation (Norfolk) contracted with Channel Enterprises, Ltd. (Channel) to perform repairs and make other additions on Channel’s then new 236-foot luxury yacht La Belle Simone (SIMONE). The record reveals that Norfolk personnel performed services in connection with the contract on the vessel from about April 6,1972 until June 30,1972 when the vessel was taken to New York City for other unassociated work and outfitting. Thereafter, further payments on the outstanding balance of over $300,000 were delayed because of alleged overcharges and faulty workmanship. After trial on both liability and damages, the district court found that Norfolk had proved its invoice in the amount of $311,693.06, but that Channel was due a setoff of $80,527.07 because of the unworkmanlike services performed under teak forecastle. The district court also allowed interest on the judgment at the rate of twelve (12%) percent per annum from December 1, 1972 until final payment pursuant to the judgment is tendered. Channel noted an appeal and Norfolk thereafter noted a cross-appeal.

The standard of review in admiralty cases has been clearly prescribed by the Supreme Court:

“In reviewing a judgment of a trial court, sitting without a jury in admiralty, the Court of Appeals may not set aside the judgment below unless it is clearly erroneous. No greater scope of review is exercised by the appellate tribunals in admiralty cases than the exercise under Rule 52(a) of the Federal Rules of Civil Procedure .
A finding is clearly erroneous when ‘although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed.’ ”

McAllister v. United States, 348 U.S. 19, 20, 75 S.Ct. 6, 7, 99 L.Ed. 20 (1954), citing United States v. Oregon Medical Society, 343 U.S. 326, 339, 72 S.Ct. 690, 96 L.Ed. 978 (1951) and United States v. United States Gypsum Company, 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1947).

Applying the review standard to this case, we conclude that the district court’s rulings on the validity of the invoices, and on the setoff allowed Channel for the poorly constructed teak deck are not “clearly erroneous.” The record reveals that Norfolk produced computer printouts containing billing totals, testimony of several workmen and supervisors who verified the printout totals, and a mass of payroll records, time cards, material slips and course sheets that substantially verified the printout totals although a group of the time cards were found to be missing. The evidence offered by Channel to rebut the correctness of the billing was speculative, and the district court correctly opted for the amounts contained in the Norfolk business records.

The record also contains testimony from several witnesses on the poor workmanship [1204]*1204performed on the planking of the teak forecastle. The planks were not symetrically laid, the widths of the seams between the planks were not uniform and some seams were excessively wide. While Norfolk argues that the deck could have been routed to a uniform width of 6/i6 of an inch, the record was clear that such a width would have been unsatisfactory to Channel, and the agreement between the parties was understood as specifying that the deck be completed to the satisfaction of the owner. Finally, evidence was presented that indicated a complete stripping of the deck was necessary to correct the improper seam widths; in effect, the work hours and materials put into the deck by the Norfolk personnel were worthless. Accordingly, we concur in the district court’s cancellation of that part of Norfolk’s bill relating to the deck.

Norfolk argues, however, that it did not receive timely written notice of the alleged defective workmanship on the deck in accordance with a clause in its “Red Letter” and, thus, Channel is precluded from recovering for the faulty work. This contention is grounded in the language of one of the conditions contained in the letter addressed to the President of Channel from Norfolk which advised the yacht owner that all work performed on the yacht was “subject to the terms and conditions of our standard clause quoted on the enclosed letterhead.”

“In case of defective workmanship or material, our liability is limited strictly to the cost of repair, correction or replacement thereof, and only where such defects are reported to us in writing within thirty (30) days after completion of the work.” (Emphasis added.)

The district court found the contents of the letter to be a valid part of the agreement between the parties, based in large part upon the testimony of a Channel agent that Channel had received and was satisfied with the terms and conditions prescribed in the letter. The trial court held that the clause did not affect the replacement of the teak deck, however, by reason of the fact that the work on the deck was never completed or accepted as a finished product. The record indicates that prior to the time that the SIMONE left Norfolk, Norfolk had been advised of the difficulties with the deck installation, and, through its agent, had agreed that the work was not progressing properly. Prior to the SIMONE sailing from New York, it was mutually agreed that the vessel would return to Norfolk to permit Norfolk Ship to finish the work. Channel apparently later abandoned any hope of having the work finished correctly by Norfolk personnel and took the vessel to an alternate shipyard. The evidence indicating that the work had not been completed is substantial, and the ruling below that the clause did not, therefore, apply to the complaint about the teak forecastle was not “clearly erroneous.”

The remaining issue in the case deals with the correctness of the district court’s award of pre-judgment interest on the modified invoice balance found due. Channel argues that an allowance of prejudgment interest is not appropriate in this ease because the amount owed to Norfolk was unliquidated and uncertain until the moment of judgment. In admiralty actions, however, pre-judgment interest is frequently allowed; the matter rests within the sound discretion of the trial court in its effort to award full and fair compensation. See Grace Line, Inc. v. Todd Shipyards Corp., 500 F.2d 361, 366 (9th Cir. 1974); Mid-American Transp. Co., Inc. v. Cargo Carriers, Inc., 480 F.2d 1071, 1074 (8th Cir. 1973); Chagois v. Lykes Bros. S. S. Co., 432 F.2d 388, 395 (5th Cir. 1970), vacated on other grounds, 404 U.S. 1009, 92 S.Ct. 667, 30 L.Ed.2d 656 (1971).1 We find no abuse [1205]*1205of that discretion in the allowance of interest in the instant case.

The rate of interest allowed was the same as that stipulated in a clause contained in the “Red Letter”:

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Bluebook (online)
537 F.2d 1201, 1976 A.M.C. 2062, Counsel Stack Legal Research, https://law.counselstack.com/opinion/norfolk-shipbuilding-drydock-corp-v-the-my-la-belle-simone-ca4-1976.