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In re Complaint of Bankers Trust Co.

May 13, 1985

IN THE MATTER OF THE COMPLAINT OF BANKERS TRUST COMPANY AS OWNER-TRUSTEE AND MONSANTO COMPANY AS CHARTERED OWNER, AND KEYSTONE SHIPPING CO., AS CHARTERED OWNER AND OPERATOR OF THE SS. EDGAR M. QUEENY, FOR EXONERATION FROM AND LIMITATION OF LIABILITY AND VILLANEUVA COMPANIA NAVIERA, S.A., AMOCO OVERSEAS OIL COMPANY AND AMOCO TRANSPORT COMPANY., THIRD-PARTY PLAINTIFFS
v.
BETHLEHEM STEEL CORPORATION, GENERAL ELECTRIC COMPANY AND THE WILLIAM POWELL COMPANY, THIRD-PARTY DEFENDANTS, BP OIL, INC. AND SOHIO PETROLEUM COMPANY, APPELLANTS IN 84-1051; BANKERS TRUST COMPANY, MONSANTO COMPANY AND KEYSTONE SHIPPING CO., APPELLANTS IN 84-1052



On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civ. No. 75-0364).

Hunter, Higginbotham, Circuit Judges, and Debevoise, District Judge*fn*

Author: Higginbotham

Opinion OF THE COURT

A. LEON HIGGINBOTHAM, JR., Circuit Judge:

Presently before this court is a consolidated appeal (No. 84-1052) and cross-appeal (No. 84-1051) in a protracted admiralty proceeding for limitation of or exoneration from liability pursuant to the Limitation of Liability Act, 46 U.S.C. §§ 181-195 (1982), arising out of a disastrous vessel collision which occurred over ten years ago. The shipping interests and certain property damage claimants now seek review of a final order of the United States District Court for the Eastern District of Pennsylvania denying claimants' motion to vacate a prior order of the district court which, following a bifurcated trial on damages and entry of judgment in favor of the claimants, determined the rate and schedule for payment of pre- and post-judgment interest, set the value of the damaged vessel for purposes of establishing the amount of the limitation fund, and calculated the interest on the fund.*fn1

Despite previous complicated appeals from both the liability and damages components of this bifurcated litigation,*fn2 this action is once more before us and again we face the troublesome task of reversing the district court and remanding this matter for further proceedings. Yet, we hasten to note that we reverse not because we find that the district court incorrectly decided the damages issues raised on this appeal and cross-appeal*fn3 but because we find that the judgment in the limitation of liability action has been entered prematurely. On remand, following our reversal of its original denial of limitation of liability, the district court apparently misconstrued the scope the mandate set forth in Complaint of Bankers Trust Co., 651 F.2d 160 (3d Cir. 1981), and thus failed to make specific factual findings on several unresolved liability issues which, in our view, have a direct bearing on the property of limitation in this case.

I.

This limitation action, and hence these appeals, are the offshoots of the January 31, 1975 collision of the American chemical carrier S.S. EDGAR M. QUEENY ("QUEENY") and the Liberian steam tanker S.T. CORINTHOS ("CORINTHOS") on the Delaware River in Marcus Hook, Pennsylvania. The resulting explosion and fire contaminated the Delaware River, claimed 26 lives, damaged the QUEENY, destroyed the CORINTHOS, and caused numerous personal injuries and extensive property damage to the BP Oil, Inc. and Sohio Petroleum Company pier and refinery as well as to neighboring properties.*fn4

The owners and operators of the QUEENY, appellants/cross-appellees Bankers Trust Company (owner/trustee), Monsanto Company (chartered owner) and Keystone Shipping Company (chartered owner/operator) (collectively referred to as "Keystone") filed a petition for exoneration from or limitation of liability, in accordance with the Limitation of Liability Act, 46 U.S.C. § 183(a).*fn5

The issue of Keystone's right to limit liability was tried non-jury from July 18, through August 27, 1979. On February 19, 1980, the district court issued an opinion in the limitation action in which it held that Keystone was not entitled to limit liability. Complaint of Bankers Trust Co. 503 F. Supp. 337 (E.D. Pa. 1980). Keystone appealed. This court reversed on May 15, 1981 and remanded "for further proceedings consistent with this opinion". Complaint of Bankers Trust Co., 651 F.2d 160, 173, 175 (3d Cir. 1981). We are primarily concerned here with the district court's treatment of this action following our May 15, 1981 reversal and remand.*fn6

The issue of the amount of damages to be awarded property damage claimants, appellees/cross-appellants BP Oil, Inc. (operator/lessee of the Marcus Hook facility) and Sohio Petroleum Company (owner/lessor of the Marcus Hook facility) (collectively referred to as "BP/Sohio"), had been bifurcated from the trial of the liability issues and tried separately on April 21, 1980.

At the conclusion of the damages trial on July 18, 1980, the district court entered judgment in favor of BP/Sohio in the amount of $16,188,531.00 as per the stipulation of the parties.*fn7 However, the district court concluded that BP/Sohio was not entitled to pre-judgment interest. The court then applied the legal rate of interest in Pennsylvania to the post-judgment interest award. Complaint of Bankers Trust Co., 503 F. Supp. 350, 353 (E.D. Pa. 1980). BP/Sohio appealed. On August 13, 1980, then Chief Judge Seitz, speaking for this court, remanded for further proceedings specifically on the questions of when pre-judgment interest should begin to run on the individual items of damages and the appropriate award of post-judgment interest. Matter of Bankers Trust Co., 658 F.2d 103, 112 (3d Cir. 1981).

On remand, the district court issued a July 5, 1983 memorandum opinion and order in which it awarded pre-judgment interest to BP/Sohio and entered judgment in favor of BP/Sohio for post-judgment interest.*fn8 The district court also set a value for the QUEENY at the time of collision at $19.05 million dollars.*fn9 Petition of Banker 's Trust Co., 569 F. Supp. 386, 393 (E.D. Pa. 1983).*fn10

BP/Sohio subsequently moved to vacate the July 5th ruling. In an unpublished opinion and order dated December 27, 1983, the district court:

(1) denied BP/Sohio's motion to vacate the July 5th order, unpersuaded by

BP/Sohio's insistence that a number of material issues impacting on

the ultimate disposition of the case were still unresolved;

(2) denied BP/Sohio's outstanding November 15, 1982 Motion for Action Consistent with the Court of Appeals' Mandate on Remand on the ground that this court's May 15, 1981 reversal of the earlier denial of limitation in effect granted limitation, explicitly or implicitly, as to all issues raised; and

(3) denied BP/Sohio's pending Motion to Set Time Limits for Filing Pro Tanto claims.*fn11 Appendix ("App") at 448a-451a.

Keystone appeals the district court's reaffirmation of its July 5th valuation determination.*fn12 BP/Sohio cross-appeals, again asserting, inter alia, that the district court deviated from our mandate by failing to rule on outstanding limitation issues on remand. In reviewing the action of the district court, we address only the latter assignment of error.*fn13

Our analysis of whether the district court proceeded in accordance with our mandate must necessarily begin with a review of the district court's disposition of the liability phase of this matter in its February 1980 decision, an examination of our May 1981 decision on appeal, and clarification of the scope of our mandate. We will then proceed to briefly consider seriatim the issues which BP/Sohio maintains have been left undecided.

II.

The gravamen of the instant dispute concerns the scope and execution of our mandate and turns on an evaluation of certain factual findings made by the court below as they relate to the underlying limitation issues of negligence and unseaworthiness. Thus, the only point in issue is whether this court's May 1981 reversal of the district court's denial of ...


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