United States District Court, W.D. Pennsylvania
October 5, 2005.
IN THE MATTER OF THE COMPLAINT OF J.A.R. BARGE LINES, L.P., AS OWNER, AND MON RIVER TOWING, INC., AS OWNER PRO HAC VICE, OF THE M/V ROSE G., FOR EXONERATION FROM AND/OR LIMITATION OF LIABILITY.
The opinion of the court was delivered by: WILLIAM STANDISH, Senior District Judge
Pending before the Court is a Motion by J.A.R. Barge Lines,
L.P., Mon River Towing, Inc., and the M/V Rose G.
(collectively, "JAR" or "the JAR parties"), for Judgment on the
Pleadings as to the Claim of Ingram Barge Company ("Ingram.")
(Docket No. 53, "Motion.") For the reasons set forth below, the
Motion is denied without prejudice.
The facts of this case are well known to the parties and
irrelevant to the reasoning herein. In its Motion, JAR seeks to
be dismissed entirely from this case, arguing that inasmuch as
the JAR parties have settled with Mark Allen Smith as to his
claims against them in this or any other suit arising out of Mr.
Smith's accident on January 21, 2003, they are entitled to "be
relieved of the financial and time burdens of remaining in this
litigation in any capacity." (Brief in Support of Motion . . .
for Judgment on the Pleadings, Docket No. 54, "JAR Brief," at
10.) II. STANDARD OF REVIEW; JURISDICTION
The Motion has been filed pursuant to Fed.R.Civ.P.
12(c),*fn1 which may be analyzed as either a Rule 12(b)(6)
motion to dismiss or a Rule 56 motion for summary judgment. See
Fed.R.Civ.P. 12(c): "If, on a motion for judgment on the
pleadings, matters outside the pleadings are presented to and not
excluded by the court, the motion shall be treated as one for
summary judgment and disposed of as provided in Rule 56."
Although the parties disagree on the standard to be used in
reviewing this Motion and have attached various documents to
their pleadings, the Court finds no reason to rely on them and
will analyze the Motion as if it were a motion to dismiss.
Under Rule 12(b) (6), the court allows "the non-movant the
benefit of all reasonable inferences drawn from the allegations
contained in the complaint and . . . accept[s] these allegations
as true. . . . However, we are not required to accept legal
conclusions alleged or inferred in the complaint." Breyer v.
Meissner, 214 F.3d 416, 421 (3d Cir. 2000) (internal citations
omitted.) "A complaint will withstand an attack under . . .
[Rule] 12(b) (6) if the material facts as alleged, in addition to inferences drawn from those allegations, provide a basis for
recovery." Emerson v. Thiel College, 296 F.3d 184, 188 (3d Cir.
2002). In considering a motion to dismiss, the court does not
"inquire whether the plaintiffs will ultimately prevail, only
whether they are entitled to offer evidence to support their
claims." Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996).
There is no dispute between the parties as to the propriety of
this Court's exercise of its admiralty jurisdiction pursuant to
28 U.S.C. § 1333(1).
The Court has two reasons to deny the JAR Motion at this point
in the litigation, the first having to do the Court's prerogative
to manage its cases, the second based on Ingram's legal
At the hearing on April 2, 2004, at which we entertained
argument concerning the settlement agreement between Mr. Smith
and the JAR parties, the Court stated that it would approve the
settlement agreement, "without prejudicing in any way the right
of Ingram Barge to assert any claim it may have against Mon River
Towing or the other parties to this action." (Transcript of
Settlement Proceedings on April 2, 2004, Docket No. 32, "April 2,
2004 Tr.," at 35.) Counsel for the JAR parties subsequently
announced to the Court that following the deposition of Mr.
Smith, they intended to file a motion in which they would ask that under the McDermott [versus]
AmClyde*fn2 and Boca Grande decisions decided by
the U.S. Supreme Court, since Mon River Towing and
J.A.R. Barge Lines have settled for their
proportionate share of liability for this incident,
that they are done and . . . there cannot be a claim
for contribution or indemnity against them if they
are a settling party, even if Mr. Smith goes after
(April 2, 2004 Tr. at 36.)
The Court responded:
I'm not going to agree to that. I'm not going to do
anything until we find out what recovery, if any Mr.
Smith makes against Ingram, and then we'll deal with
it. So you might as well not file that motion until
the matter is resolved. I'll deny it until we can get
to the final resolution of this matter.
We fail to see how this directive could have been more
explicit, but JAR has filed just such a motion. While there is still any viable legal basis on which to allocate liability among
Mr. Smith, the JAR parties, Ingram, and/or the Tri-River parties,
and while discovery is incomplete, the Court concludes that
retaining all the parties will expedite settlement or trial.
Although we recognize, as JAR points out, that the decision in
McDermott promotes settlements and facilitates judicial economy
(JAR Brief at 10), we also believe that by seeking "freedom from
the threat of `back-door claims' for contribution and/or
indemnity," and relying on the remaining parties' ability to
argue that the JAR parties were exclusively responsible for the
injury to Mr. Smith, JAR may seek more freedom than that to which
it is justifiably entitled at this stage of the litigation.
Moreover, pursuant to Orders entered only a few days ago
(Docket Nos. 92 and 93), the Court granted in part a motion by
JAR to enforce the indemnification clause (paragraph 11) of the
settlement agreement, dismissing Mr. Smith's claims against the
JAR parties and requiring Mr. Smith to defend, indemnify and hold
harmless the "Releasees" (as defined therein) against claims
brought by Ingram in Civil Action Nos. 03-163 and 03-180. We
specifically ordered that such dismissal would "in no way, now or
in the future, be construed to affect the claims and/or defenses
of Ingram or J.A.R. or the defenses in Mr. Smith, in Civil Action
Nos. 03-180, 04-753 and 04-1611." (Order of Court, Docket No. 93,
¶ 4.) Since it is not yet entirely clear what those claims and/or defenses might be, dismissing JAR entirely from this case
would be precipitous.
As to the second reason not to grant JAR's Motion at this time,
the Court concludes that Ingram has alleged material facts that
provide an alternative basis for recovery against JAR and it
should be entitled to offer evidence to support its claims. That
is, Ingram has alleged that there is a contractual agreement
between itself and Mon River Towing, pursuant to which Ingram is
entitled to "full protection, defense and indemnification" plus
interest, costs, and attorney fees. (Ingram's Claim and Answer,
Docket No. 11, ¶¶ 9-10.) If Ingram is able to show that such a
contractual relationship exists, it may also pursue a claim of
contractual indemnity under Ryan Stevedoring Co. v. Pan-Atlantic
S.S. Corp., 350 U.S. 124 (1956), as it proposes in its response
to JAR's Motion. (Response to Motion . . . for Judgment on the
Pleadings, Docket No. 56, at 17-19.)
In Ryan, the shipping company, Pan-Atlantic, and Ryan, a
stevedorer, agreed that Ryan would perform all loading and
unloading operations for the shipper's boats used along the
Atlantic seaboard. The two parties did not enter into a formal
contract, but relied on a series of letters which did not contain
an express indemnity agreement. Ryan, 350 U.S. at 125-126.
Pursuant to that agreement, Ryan loaded a Pan-Atlantic boat with
large rolls of pulpboard which should have been immobilized by "chocking" the bottom tier of rolls with wedges and "nesting"
upper tiers of rolls in the troughs between them. It was the
usual practice that Ryan's longshoremen stowed the cargo under
the immediate direction of Ryan foremen, while cargo officers
employed by Pan-Atlantic supervised the loading of the entire
ship and had authority to reject unsafe stowage. Id. at 126.
When the boat arrived in New York, one of Ryan's employees was
severely injured when a 3200-pound roll of pulpboard broke loose
and struck him. The evidence showed that the longshoreman was not
negligent and that the rolls had been insufficiently secured when
they were loaded. Ryan satisfied the maintenance and cure of the
injured longshoreman, who then sued Pan-Atlantic, claiming that
the unsafe stowage or the shipowner's negligence when the cargo
was stowed created an unseaworthy condition of the ship. The
longshoreman received a verdict in his favor for $75,000. Ryan,
350 U.S. at 126-128.
The case eventually found its way to the Supreme Court where
one of the questions was whether, in the absence of an express
agreement of indemnity, a stevedoring contractor is obligated to
reimburse a shipowner for damages caused by the contractor's
improper stowage of cargo. The Court first noted that if the
shipowner held an express agreement of indemnity such as through
insurance or a formal contract with the stevedorer, there would
be no question that it would be enforceable. Ryan, id. at
132. On the other hand, the agreement in question provided only that
Ryan would perform stevedoring operations, including stowage of
the pulpboard rolls which caused the injury. The Court concluded
that such an
agreement necessarily includes [Ryan's] obligation
not only to stow the pulp rolls, but to stow them
properly and safely. Competency and safety of stowage
are inescapable elements of the service undertaken.
This obligation is not a quasi-contractual obligation
implied in law or arising out of a noncontractual
relationship. It is of the essence of [the]
stevedoring contract. It is [Ryan's] warranty of
workmanlike service that is comparable to a
manufacturer's warranty of the soundness of its
manufactured product. The shipowner's action is not
changed from one for a breach of contract to one for
a tort simply because recovery may turn upon the
standard of the performance of [Ryan's] stevedoring
Ryan, 350 U.S. at 133-134.
As the Second Circuit Court of Appeals has explained, Ryan
indemnity comes into play when
a shipowner, relying on the expertise of another
party (contractor), enters into a contract whereby
the contractor agrees to perform services without
supervision or control by the shipowner; the
improper, unsafe or incompetent execution of such
services would foreseeably render the vessel
unseaworthy or bring into play a pre-existing
unseaworthy condition; and the shipowner would
thereby be exposed to liability regardless of fault.
Fairmont Shipping Corp. v. Chevron International Oil Co., Inc.,
511 F.2d 1252
, 1258 (2d Cir.), cert. denied, 423 U.S. 838
The rationale for implying a warranty of workmanlike service by
a contractor who takes control of a ship is that the contractor
is better situated to avoid accidents while the vessel is under his control than is the shipowner who, at that time, is
"powerless to minimize the risk." Italia Societa per Azioni di
Navigazione v. Oregon Stevedoring Co., 376 U.S. 315, 324 (1964).
JAR rejects Ingram's indemnity claim, describing Ryan as "a
49-year old doctrine [which] many courts and commentators believe
is outdated and not [in] keeping with comparative fault
principles now prevalent in the general maritime law." (Reply
Brief of JAR, Docket No. 61, "JAR Reply," at 2.) However, while
one holding of Ryan (not relevant here) was subsequently
superseded by amendments to the Longshore and Harbor Workers'
Compensation Act, 33 U.S.C. § 905(b), the Supreme Court has
revisited the "warranty of workmanlike service" holding on
numerous occasions. See, e.g., Weyerhaeuser S.S. Co. v.
Nacirema Co., 355 U.S. 563, 567-568 (1958); Crumady v. The
Joachim Hendrik Fisser, 358 U.S. 423, 417 (1959); Waterman S.S.
Corp. v. Dugan & McNamara, Inc., 364 U.S. 421, 423-425 (1960);
Italia Societa, 376 U.S. at 318-319; Edmonds v. Compagnie
Generale Transatlantique, 443 U.S. 256, 262 (1979). As recently
as 1996, the Court referred to Ryan, stating that
We think petitioner's reliance on Ryan . . . is
likewise misplaced; there, in an action between
private parties, we held that the stevedore was
liable to the shipowner for the amount the latter
paid in damages to an injured employee of the former.
Here petitioner claims a breach of warranty by its
customer, not by its seller and supplier.
Hercules, Inc. v. United States, 516 U.S. 417 (1996). Had the Court considered the breach of warranty holding of
Ryan to no longer be good law, it would presumably have said
so, rather than distinguishing between Hercules and Ryan on
the basis of who allegedly breached the warranty of workmanlike
The Third Circuit has explicitly adopted but not subsequently
rejected the doctrine of Ryan indemnity. See Cooper v.
Loper, 923 F.2d 1045, 1051 (3rd Cir. 1991), concluding that
Ryan-type indemnity actions are not resolved by tort principles
of contribution because Ryan actions are based on contract,
citing Italia Societa, 376 U.S. at 321; also SPM Corp. v.
M/V Ming Moon, 22 F.3d 523, 526 (3d Cir. 1994), describing
Ryan indemnity as a "long-standing, judicially created,
doctrine that stevedores and other contractors give shipowners an
implied warranty of `workmanlike' services." We find no reason to
depart from these precedents and reject the Ryan doctrine as
JAR urges us to do.
JAR also argues that because neither J.A.R. Barge Lines nor Mon
River Towing is a stevedore, and because none of the other
parties involved in Mr. Smith's accident are in roles similar to
those of the parties in Ryan, Ingram's assertion that it is
potentially entitled to relief on the basis of that case is
"factually and/or legally inapposite." (JAR Reply at 5-6.) We
need not dwell on this argument inasmuch as Ryan
indemnification principles have been applied in numerous cases
involving maritime contractors other than stevedores. In United N.Y. Sandy Hook
Pilots Ass'n v. Rodermond Industries, 394 F.2d 65, 71 (3d Cir.
1968), where precisely this argument was raised, the Court noted
that the Ryan doctrine has been "frequently extended to
non-stevedore maritime contractors." See, for example, the
types of contracted services in American Export Lines v. Norfolk
Shipbuilding & Drydock Corp., 336 F.2d 525 (4th Cir. 1964)
(shipyard service); H & H Ship Serv. Co. v. Weyerhaeuser Line,
382 F.2d 711 (9th Cir. 1967) (cleaning and painting); In re
Oil Spill by Amoco Cadiz, 699 F.2d 909, 915 (7th Cir.),
cert. denied sub nom Astilleros Espanoles, S.A. v. Standard
Oil Co., 464 U.S. 864 (1983) (ship design and construction);
Universal Am. Barge Corp. v. J-Chem, Inc., 946 F.2d 1131
(5th Cir. 1992) (cargo fumigation); La Esperanza de P.R. v.
Perez y Cia. de P.R., 124 F.3d 10 (1st Cir. 1997) (ship
repairs); and Vierling v. Celebrity Cruises, Inc.,
339 F.3d 1309 (11th Cir. 2003) (port authority responsible for loading
passengers aboard a cruise ship). In sum, the general consensus
among courts which recognize the Ryan doctrine is that
questions as to the scope of the rule are to be "liberally
construed . . . in favor of the shipowner." Lusich v. Bloomfield
S.S. Co., 355 F.2d 770, 776 (5th Cir. 1966).*fn3 JAR also contends that the "vast majority of courts" hold that
towing companies do not owe a contractual duty but only a duty of
reasonable care to shipowners. (JAR Reply at 6.) While we have
been unable to identify any case from the Third Circuit Court of
Appeals to refute that position,*fn4 a case from the Fourth
Circuit has explicitly held that
a contract of towage . . . gives rise to an implied
warranty of workmanlike service. The shipowner turns
his vessel over to the control of the tug owner and
relies on the latter's expertise in conducting safe
towing operations. The tug does not of course become
an insurer against accidents; the extent of the
warranty depends on the circumstances of the case
relating to control, supervision, and expertise.
Tebbs v. Baker-Whiteley Towing Co., 407 F.2d 1055
(4th Cir. 1969) (internal quotation omitted), citing cases
from the Second, Fifth and Ninth Circuits.
Nor is the Fourth Circuit alone in this position. See, e.g., Dunbar v. Henry DuBois' Sons Co., 275 F.2d 304 (2d Cir.
1960) (towing company owed contractual implied warranty of
workmanlike performance to derrick owner for the death of the
latter's employee during towing); United States v. Tug
Manzanillo, 310 F.2d 220, 222 (9th Cir. 1962) (affirming
decision against owners of the tug who allowed unsafe conditions
to exist, deeming such conditions a violation of the contract
with the shipper). As the court pointed out in Singer v. Dorr,
in towage contracts,
there is an implied warranty of workmanlike service,
that is, an implied obligation to tow properly and
safely, owed by a tug to a barge the very nature of
the towing agreement necessarily implies an
obligation to tow properly and safely, and competency
and safety are essential elements of the towing
Singer v. Dorr, 272 F. Supp. 931, 935 (E.D. La. 1967).
JAR denies that there is any contract which would give rise to
Ryan indemnity; if that is true, the issue is moot. However, at
this juncture, the Court will not preclude Ingram from pursuing
this legal theory.
JAR further argues that under the holding of Stevens v. The
White City, 285 U.S. 195 (1932), the duty of a tug to its tow is
exclusively a matter of tort law, as opposed to a "duty endowed
with any contractual or warranty-like attributes." (JAR Reply at
6.) JAR bases this argument on a statement in Stevens where the
Court noted, "It has long been settled that suit by the owner of a tow against her tug to recover for an injury to the tow caused
by negligence on the part of the tug is a suit ex delicto and
not ex contractu." Id. at 201. While we need not consider
this argument in detail, we do note that Stevens involved a
claim for property damage. As one court has pointed out that case
"did not reject a warranty theory or even discuss a warranty
theory; the Court did not have that issue before it. White City
did not involve joint tortfeasors or theories of indemnity, and
that the case did not involve a personal injury claim seems
noteworthy, too." Walters v. Tidewater Fleet, 847 F. Supp. 464,
469 (E.D. La. 1994); see also Fraser River Pile & Dredge Ltd.
v. Empire Tug Boats, Ltd., T-1631-93, 1995 AMC 1558, 1568 (Fed.
Ct. Can. Mar. 21, 1995), describing Stevens as a "strange"
decision in which the reasoning may have hinged on the fact that
the tugboat operators did not have full possession and control of
the tow. The facts on which the Walters court distinguished
Stevens may also be present here. Again, while discovery in
this matter is underway, the Court declines to dismiss the JAR
parties until the full scope of the claims raised by Ingram and
Mr. Smith has been determined.
Finally, JAR argues that Ingram's indemnity claim fails because
Ingram did not owe Mr. Smith a warranty of seaworthiness, without
which it has no liability to him. (JAR Reply at 8-9, citing
Kermarec v. Compagnie Generale Transatlantique, 358 U.S. 625 (1959), together with cases from the Fifth and Ninth
Circuits.) However, as Ingram points out, Kermarec is
distinguishable on its facts,*fn5 and the Third Circuit has
not yet specifically adopted the position that a seaman cannot
assert an unseaworthiness claim against a non-employer's vessel.
(Ingram Barge Company's Sur-reply to Reply Brief, Docket No. 64,
at 11-12.) Moreover, both Mr. Smith and the JAR parties have
explicitly asserted claims of unseaworthiness and negligence
against Ingram. (Id. at 12-14.) As noted above, the Court
premised its approval of the settlement agreement and its
subsequent enforcement of the indemnification clause therein on
the understanding that the claims and/or defenses of parties
other than JAR would not be negatively affected. JAR may, if
appropriate, revisit this argument when those claims and defenses
have been more clearly identified.
The Motion for Judgment on the Pleadings is therefore denied without prejudice. An appropriate Order follows.
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