Robert Crosson v. N. v. Stoomvaart Mij "Nederland," and Third-Party v. International Terminal Operating Co., Inc., Third-Party

409 F.2d 865, 1969 U.S. App. LEXIS 12777
CourtCourt of Appeals for the Second Circuit
DecidedApril 16, 1969
Docket422, Docket 31372
StatusPublished
Cited by12 cases

This text of 409 F.2d 865 (Robert Crosson v. N. v. Stoomvaart Mij "Nederland," and Third-Party v. International Terminal Operating Co., Inc., Third-Party) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Robert Crosson v. N. v. Stoomvaart Mij "Nederland," and Third-Party v. International Terminal Operating Co., Inc., Third-Party, 409 F.2d 865, 1969 U.S. App. LEXIS 12777 (2d Cir. 1969).

Opinions

FEINBERG, Circuit Judge:

International Terminal Operating Co., Inc., stevedore and third-party defend[866]*866ant, appeals from an order of Jacob Mishler, J., in the United States District Court for the Eastern District of New York, which awarded counsel fees and expenses of $1,750 to appellee N. V. Stoomvaart Mij "Nederland,” shipowner and third-party plaintiff, in the action below. 266 F.Supp. 409. Appellant stevedore claims that the shipowner is not entitled to this sum. For reasons given below, we affirm Judge Mishler’s order.

The issue arises out of the familiar seaman-shipowner-stevedore trilogy. Plaintiff in this case is a longshoreman, entitled under accepted doctrine to receive from the ship the same protection against unseaworthiness or negligence as a seaman. After plaintiff sued the shipowner, the latter impleaded the stevedore, claiming a right to indemnity because the stevedore had failed to perform its duties in a workmanlike manner. The ease was vigorously litigated and both aspects of it went to the jury, although Judge Mishler followed the sensible course of withholding submission of the third-party claim to the jury until it had decided plaintiff’s. Thus charged seriatim, the jury found for plaintiff against the shipowner in the sum of $12,500 and for the shipowner against the stevedore on the indemnity claim. Since there is no appeal from these determinations, we may assume that the stevedore did breach its obligations to the ship. We may also accept the reasonable value of the legal services and disbursements at issue to be $1,750 because the parties have so stipulated.

The issue before us, which was reserved for Judge Mishler, is whether the shipowner is entitled to recover this sum from appellant stevedore; there is no question about the stevedore’s obligation to indemnify the shipowner against the $12,500 jury verdict. Appellant concedes that the shipowner’s right to indemnity ordinarily includes counsel fees, but claims that this case is unique because the shipowner neither defended itself nor directly incurred the expense of defense. Under the shipowner’s policy with Hartford Insurance Company, relevant portions of which are set forth in the margin,1 the insurer was obligated to furnish those services. Since Hartford did do exactly that, the question is whether an item of the stevedore’s normal liability was thus eliminated.

We put the question that way because it must be emphasized that we are dealing with federal law in the national sense. A shipowner’s indemnity action against a stevedore is a creature of maritime law, judicially fashioned in Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L. Ed. 133 (1956), and carefully nurtured since. See, e. g., Crumady v. The Joachim Hendrik Fisser, 358 U.S. 423, 79 S.Ct. 445, 3 L.Ed.2d 413 (1959); Weyerhaeuser S.S. Co. v. Nacirema Operating Co., 355 U.S. 563, 78 S.Ct. 438, 2 L.Ed. 2d 491 (1958). The federal courts have now made clear that in a proper case a [867]*867stevedore is liable to a shipowner for the latter’s counsel fees in defending the main action brought against the ship. See, e. g., Guarracino v. Luckenbach S.S. Co., 333 F.2d 646 (2d Cir.), cert. denied, 379 U.S. 946, 85 S.Ct. 439, 13 L.Ed.2d 543 (1964); Paliaga v. Luckenbach S.S. Co., 301 F.2d 403, 409-410 (2d Cir. 1962). Liability has not been placed on the stevedore casually, but as a matter of policy, national in impact. Thus, in Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Co., 376 U.S. 315, 324, 84 S.Ct. 748, 754, 11 L.Ed.2d 732 (1964), the Supreme Court stated:

[W]e deal here with a suit for indemnification based upon a maritime contract, governed by federal law, * * in an area where rather special rules governing the obligations and liability of shipowners prevail, rules that are designed to minimize the hazards encountered by seamen, to compensate seamen for the accidents that inevitably occur, and to minimize the likelihood of such accidents. By placing the burden ultimately on the company whose default caused the injury, * * we think our decision today is in furtherance of these objectives.

The contours of the indemnity doctrine have been developed in a series of skirmishes between shipowners and stevedores, which will doubtless continue. But it must be remembered that the theory of burdening the stevedore has been that it is in the best position to “minimize the likelihood” of the accident. It has been suggested that when both shipowner and stevedore are at fault apportionment between them of the ship’s liability to the plaintiff would be better than the current all-or-nothing rule. See G. Gilmore & C. Black, The Law of Admiralty 373-374 (1957); Stover, Longshoreman-Shipowner-Stevedore: The Circle of Liability, 61 Mich.L.Rev. 539, 564 (1963). But those considerations are not before us. We must decide instead whether this stevedore, found blameworthy by the trier of fact, should bear the expense of defending this shipowner against the plaintiff.

Appellant stevedore argues that it should not be so charged because the shipowner did not incur the liability for legal fees itself. There is no' doubt that a shipowner is frequently required, as a practical matter, to obtain representation in an action a longshoreman brings against it. In theory, a shipowner can use house counsel to defend itself if it has any lawyers as employees. Cf. Bailey v. United States, 260 F.Supp. 48 (E.D.Va.1966). Another course for a shipowner is to retain counsel; had the shipowner done so here and been reimbursed by its insurer, appellant apparent ly concedes that it would be liable for the $1,750. See United States Lines Co. v. E. J. Lavino & Co., 198 F.Supp. 483, 489 (E.D.Pa.1961), aff’d without discussion of the point, 303 F.2d 295 (3d Cir.), cert. denied, 371 U.S. 876, 83 S.Ct. 148, 9 L. Ed.2d 114 (1962). The shipowner here did not incur an obligation for legal fees because it had taken the precaution of buying insurance that provided it with counsel. Whether the shipowner obtained a particular type of insurance should not determine the stevedore’s liability for the expense of the shipowner’s defense. Cf. Wiseman v. North Central Airlines, Inc., 370 F.2d 129, 134-135 (8th Cir. 1966); Safway Rental & Sales Co. v. Albina Engine & Machine Works, Inc., 343 F.2d 129, 133-135 (10th Cir. 1965); Lesmark, Inc. v. Pryce, 118 U.S.App.D.C. 194, 334 F.2d 942, 945 (1964). As indicated, that liability is placed upon the stevedore for reasons of policy.

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409 F.2d 865, 1969 U.S. App. LEXIS 12777, Counsel Stack Legal Research, https://law.counselstack.com/opinion/robert-crosson-v-n-v-stoomvaart-mij-nederland-and-third-party-v-ca2-1969.