APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
Before: SEITZ, Chief Judge, ALDISERT and GIBBONS, Circuit Judges
Villaneuva Compania Naviera, S.A. (Villaneuva) appeals from an order of the district court setting the market value of the ship CORINTHOS at $2.73 million and denying Villaneuva prejudgment interest. BP Oil, Inc. and Sohio Petroleum Company (BP/Sohio) appeal from an order of the district court denying BP/Sohio prejudgment interest and applying the legal rate of interest in Pennsylvania to the postjudgment interest award.
On January 31, 1975, the chemical tanker S. S. EDGAR M. QUEENY struck the crude oil tanker S. T. CORINTHOS in the Delaware River at Marcus Hook, Pennsylvania. The CORINTHOS, which was discharging a cargo of crude oil at the BP/Sohio terminal in Marcus Hook, exploded and caught fire. Twenty-six persons were killed, and the CORINTHOS was destroyed. In addition, the BP/Sohio terminal sustained extensive damage.
Soon after the collision, the owners and operators of the QUEENY, Bankers Trust Company, Monsanto Company, and Keystone Shipping Company (the QUEENY interests), filed a petition for exoneration from or limitation of liability pursuant to 46 U.S.C. § 183 et seq . (1976). Villaneuva, owner of the CORINTHOS, filed a similar petition a few months later. The district court bifurcated the proceedings, holding separate trials on the liability and damage issues. In its decision on the liability issues, the court denied the petition for limitation of liability filed by the QUEENY interests. It concluded, however, that Villaneuva was entitled to limited liability even though it negligently failed to use an inert gas system while unloading the CORINTHOS. The court found that an act of Congress preempted it from finding liability on this ground.
After the trial on the damage issues, the district court found that the market value of the CORINTHOS at the time of the collision was $2.73 million, not $7.98 million as Villaneuva contended. The court also found that Villaneuva's total damages were $3.07 million, and it entered judgment against the QUEENY interests in that amount. Pursuant to a stipulation between BP/Sohio and the QUEENY interests, the court also entered judgment in favor of BP/Sohio and against the QUEENY interests in the amount of $16.19 million. The court found, however, that neither Villaneuva nor BP/Sohio were entitled to prejudgment interest on the damages awarded to them. Finally, the court held that postjudgment interest would be at the legal rate of interest in Pennsylvania.
The parties filed separate appeals from the liability and damage orders of the district court. On May 15, 1981, a panel of this court reversed the district court's denial of the limitation of liability petition filed by the QUEENY interests. See In re Bankers Trust Co ., Nos. 80-1405/1450/1494/1495/1496/1497 (3d Cir. May 15, 1981). The panel also reversed the district court's holding that an act of Congress preempted it from finding that Villaneuva was at fault. Nevrtheless, the panel found that the district court's alternative holding that the CORINTHOS was unseaworthy was erroneous. The present appeals concern the district court's damage award. We must determine whether the district court erred in (1) finding that the market value of the CORINTHOS at the time of the collision was $2.73 million, (2) denying Villaneuva and BP/Sohio prejudgment interest, and (3) awarding postjudgment interest at the legal rate of interest in Pennsylvania.
Villaneuva's damages for the loss of the CORINTHOS must be measured by the fair market value of the ship at the time of its destruction. Fair market value "is established by contemporaneous sales of like property," Standard Oil of New Jersey v. Southern Pacific Co ., 268 U.S. 146, 155 (1925), but in the absence of such a market, a court should consider other factors to determine "the sum that in all probability would result from fair negotiations between an owner willing to sell and a purchaser desiring to buy," id . at 155-56. The parties agree that the district court's finding that the value of the CORINTHOS was $2.73 million on the date of the collision cannot be overturned unless it was clearly erroneous. We therefore will proceed on the assumption that Federal Rule of Civil Procedure 52(a) is applicable. We emphasize that our role when reviewing a district court's factual findings under rule 52(a) is not to "substitute findings we could have made had we been the fact-finding tribunal; our sole function is to review the record to determine whether the findings of the District Court were clearly erroneous, i.e., whether we are 'left with the definite and firm conviction that a mistake has been committed.'" Speyer, Inc. v. Humble Oil & Refining Co ., 403 F.2d 766, 770 (3d Cir. 1968), cert. denied, 394 U.S. 1015 (1969) (quoting United States v. United States Gypsum Co ., 333 U.S. 364, 395 (1948)).
Villaneuva contends that the district court's valuation finding was clearly erroneous because it was based upon a contemporaneous sales market established by the sale of only one ship, the GOLAR MARTITA. According to Villaneuva, the evidence established that there was no market for a ship like the CORINTHOS on January 31, 1975. Therefore, it asserts, the district court should have determined the value of the CORINTHOS by considering factors such as the amount of insurance on the ship, its reputation for dependability, its life expectancy, the opinions of qualified ship appraisers, and the value of the ship's charter. Villaneuva also argues that the district court erred even if it only used the sale of the MARTITA for comparison purposes because the MARTITA was not similar to the CORINTHOS and its sale was not an arm's length transaction.
Villaneuva characterizes the district court's reliance on the sale of the MARTITA as a finding by the court that a contemporaneous sales market for ships like the CORINTHOS existed at the time of the collision. It contends that a contemporaneous sales market cannot be established by the sale of only one ship. Cf. Barton v. Borit, 316 F.2d 550, 553 (3d Cir. 1963) (sales of like vessels must be "numerous enough to afford reliable evidence of the value of such vessels"). Villaneuva asserts that the district court erred because in the absence of a contemporaneous sales market it must consider other relevant factors.
We cannot say, however, that the district court's apparent finding that a contemporaneous sales market existed was clearly erroneous. Evidence in the record demonstrated that there was a market, albeit a poor market, for ships like the CORINTHOS at the time of the collision. The expert witnesses for Villaneuva and the QUEENY interests based their valuations on an examination of a number of sales of similar vessels close in time to the destruction of the CORINTHOS. Moreover, we believe that Villaneuva is incorrect in arguing that the district court based its valuation finding solely on the existence of a contemporaneous sales market. The court emphasized that it had to determine what the CORINTHOS "probably" could have been sold for by taking into consideration all appropriate factors. Thus, the court considered the opinions of qualified ship appraisers and the value of the CORINTHOS' charter as well as factors differentiating the CORINTHOS from the MARTITA. The district court did not expressly examine factors such as the amount of insurance on the CORINTHOS and its ...