United States v. Tug Ramrod

509 F.2d 713, 21 Cont. Cas. Fed. 83,830, 1975 U.S. App. LEXIS 15626
CourtCourt of Appeals for the Fifth Circuit
DecidedMarch 17, 1975
DocketNo. 73-3984
StatusPublished
Cited by3 cases

This text of 509 F.2d 713 (United States v. Tug Ramrod) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Tug Ramrod, 509 F.2d 713, 21 Cont. Cas. Fed. 83,830, 1975 U.S. App. LEXIS 15626 (5th Cir. 1975).

Opinion

GODBOLD, Circuit Judge:

This case involves liability for damage to two special-purpose barges owned by the United States. The damage was incurred in a collision with a bridge when the barge was in tow, concededly caused by the negligence of the towing tugs. The owners of the tugs brought actions for limitation of liability. The United States, which had libeled one of the tugs, counterclaimed against the owners for damages of $94,000. All cases arising from the collision were consolidated for trial, and in all actions summary judgments were given for the tugs and their owners. The United States appeals, and we affirm.

In early 1966 the National Aeronautics and Space Administration sought bids on a contract for towing Saturn rocket boosters and special barges containing liquid oxygen and liquid hydrogen between the Michoud Assembly Plant in New Orleans, Louisiana, and the Mississippi Test Facility located on the East Pearl River in Mississippi. Gulf Coast Towing Company, a small owner-operated company which had a prior contract for doing similar work, was awarded the contract in May 1966 following an exchange of letters and subsequent negotiations.

In August 1966 a giant liquid oxygen tank used in Saturn test flights from Cape Kennedy, Florida, collapsed. This caused a delay in a test flight program, the losses amounting to $1,000,000 per day. In an attempt to cut losses, NASA decided to obtain additional liquid oxygen tanks for Cape Kennedy from the Mississippi Test Facility. Operating under a provision in the Gulf Coast contract concerning “shifting service,” NASA officials procured the services of Gulf Coast1 to tow four liquid oxygen barges from the Mississippi site to Carrabelle, Florida, the first leg of the movement to Cape Kennedy. Cape Kennedy was unable to produce other tugs for the second leg, and later for the third leg, so in conditions of high emergency Gulf Coast arranged at NASA’s request to make the tow all the way to Cape Kennedy. In the words of the government’s counsel, Gulf Coast “saved NASA’s bacon not once but three times.” On the return trip, however, the tugs towing two of the barges permitted them to collide with a highway bridge of the State of Florida, damaging both bridge and barges.2 The litigation arose from this casualty.

The court below held that as a matter of law Gulf Coast was not liable even if it were negligent.

Exactly what the contract was that was applicable at the time of the casualty is not free from doubt. Despite voluminous NASA papers and records to the contrary, the U.S. denies there was any modification of the original May 1966 contract, relying solely on that contract. Considering the issues in terms of the original contract, we affirm the judgment in favor of Gulf Coast. Thus we need not consider the details of the modification, which was at least as favorable to Gulf Coast on the issue of liability, if not more so, than the May 1966 contract.

The contract in question consisted of ten pages of “schedule articles,” a total of 15 articles drafted specifically for this particular contract. They set out the acts to be done by each party and related duties of both the towers and NASA, concerning both the conduct of the tow and the facilities to be provided. Attached to these schedule articles are some 20 pages of form contract provisions inserted by NASA into its contracts. One such form is the “Government-furnished Property Form (October 1963),” called the Long Form, inserted into all NASA fixed-price contracts and [717]*717applicable because the barges were government-furnished property. The schedule article concerning contractor’s liability3 and the relevant portion of the Long Form4 are printed in the margin.

The District Court concluded that the government through use of this Long Form agreed to shift the risk of loss to itself. It also treated the liability provisions of Art. I.B.2(h) as inapplicable to any government-owned property, Conclusion of Law No. 7, rendering Gulf Coast free from liability under the facts of this case. We agree with the result, but arrive at it by somewhat different means.

The parties do not dispute that a tower is normally liable in tort for loss resulting from negligent acts or omissions in the course of a tow.5 The first two questions concern whether certain provisions of this contract which were clearly intended to affect allocation of the risk of loss are applicable to the facts of this case. The government raises two subsequent questions of public policy regarding waivers of liability.

[718]*718At the outset it is clear that the two provisions in question must be read in pari materia. This is so not only because of their intimate relation to common subject matter but also because the Long Form specifically provides for exceptions in the schedule, and the schedule article, drafted after the Long Form was made part of the contract, specifically refers to the Long Form.

Broadly speaking, the Long Form partially shifts the risk of loss to government property from the contractor to the government by providing that the contractor shall not be liable for loss caused by “any peril” off the contractor’s premises, and by certain listed perils when the property is on the contractor’s premises. Gulf Coast asserts that “any peril” as used in this provision includes the peril of collision, whether or not there is negligence on the part of the crew. Thus the first question is whether the loss in this case is one the risk of which was shifted to the government by this Long Form.

The Long Form provides for contractor non-liability “except as specifically provided in the clause or clauses of this contract designated in the Schedule.” Art. I.B.2(h) is clearly such an exception because of its internal reference to the Long Form, combined with its clear placement of certain risks on the contractor. The parties do not dispute this but disagree on the meaning of the provision. Art. I.B.2(h) says Gulf Coast must indemnify the government against loss “arising from . . . the unseaworthiness of the tug or tugs, or by deficiency in, or failure of, the equipment, machinery or personnel on board.” Gulf Coast says this provision, insofar as pertinent here, provides for indemnity for loss or liability arising only from unseaworthiness of the tugs, which is not in issue. The government insists that the language “failure of personnel on board” includes common negligence.

To carry its point that it is not liable for its negligence because the contract shifts the risk to the government, Gulf Coast must establish both points — that it otherwise is within the non-liability provision in the Long Form, and that it is not excepted from non-liability by the agreement to indemnify.

The government finally asserts two public policy arguments. First, it says that even if there is a waiver of liability, the Long Form is so ambiguous that it lacks the clarity required of such an agreement and that it must be construed strictly against the party asserting it. Second, it also says that the provision should not be enforced because it runs afoul of the public policy against waivers of liability of towers.

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509 F.2d 713, 21 Cont. Cas. Fed. 83,830, 1975 U.S. App. LEXIS 15626, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-tug-ramrod-ca5-1975.