Source: https://law.justia.com/cases/federal/appellate-courts/F2/604/254/7824/
Timestamp: 2019-10-17 21:18:38
Document Index: 518190044

Matched Legal Cases: ['§ 1301', '§ 4', '§ 4', '§ 3', '§ 3', '§ 1303', '§ 4', '§ 3', '§ 4', '§ 4', '§ 3', '§ 4', '§ 4', '§ 1304', '§ 1304', '§ 1304', '§ 1292', '§ 1304', '§ 4', '§ 3']

In the Matter of Intercontinental Properties Management, S.a., As Owner of the Motor Vessel Mimi, Forexoneration from or Limitation of Liability.international Minerals and Chemicals Corp., Strolee Ofcalifornia, Rota Agro, S. A., World Wide Air Marine Freightforwarders, Inc., Roper Sales Corporation; Hasman & Baxt,inc., Jesus Alberto Roman Pernia, Venequelan Supply, S. A.,rony Export Co. Inc., Sun Insurance Company of New Yorkinc., Calvert Fire Insurance Company, Amerven, Inc.,northwestern National Insurance Company, Industriaselectronicas Sharp De Venezuela, Avelax, C. A., Prontooverseas, Inc., Central Madeirense, C. A., Anchor Hockingcorp., C. A., v. Sequros Caracas, 3m Venezuela, C. A., Appellants, v. Intercontinental Properties Management, S. A., Appellee.in the Matter of Intercontinental Properties Management, S.a., As Owner of the Motor Vessel Mimi, Forexoneration from or Limitation of Liability.international Minerals and Chemicals Corp. et al., Claimants, v. Intercontinental Properties Management, S. A., Appellant,all-caribbean Inc. and High Watch Shipping Company, Limited,appellees, 604 F.2d 254 (4th Cir. 1979) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Fourth Circuit › 1979 › In the Matter of Intercontinental Properties Management, S.a., As Owner of the Motor Vessel Mimi, Fo...
In the Matter of Intercontinental Properties Management, S.a., As Owner of the Motor Vessel Mimi, Forexoneration from or Limitation of Liability.international Minerals and Chemicals Corp., Strolee Ofcalifornia, Rota Agro, S. A., World Wide Air Marine Freightforwarders, Inc., Roper Sales Corporation; Hasman & Baxt,inc., Jesus Alberto Roman Pernia, Venequelan Supply, S. A.,rony Export Co. Inc., Sun Insurance Company of New Yorkinc., Calvert Fire Insurance Company, Amerven, Inc.,northwestern National Insurance Company, Industriaselectronicas Sharp De Venezuela, Avelax, C. A., Prontooverseas, Inc., Central Madeirense, C. A., Anchor Hockingcorp., C. A., v. Sequros Caracas, 3m Venezuela, C. A., Appellants, v. Intercontinental Properties Management, S. A., Appellee.in the Matter of Intercontinental Properties Management, S.a., As Owner of the Motor Vessel Mimi, Forexoneration from or Limitation of Liability.international Minerals and Chemicals Corp. et al., Claimants, v. Intercontinental Properties Management, S. A., Appellant,all-caribbean Inc. and High Watch Shipping Company, Limited,appellees, 604 F.2d 254 (4th Cir. 1979)
U.S. Court of Appeals for the Fourth Circuit - 604 F.2d 254 (4th Cir. 1979) Argued Nov. 14, 1978. Decided July 9, 1979
The factual predicate not established according to Shipowner was that Shipowner had entered into a contract of carriage with Cargo. Liability for cargo loss is imposed under COGSA only on those charterers and shipowners who meet the definition of "carrier" contained in 46 U.S.C. § 1301(a), that is, those "who enter() into a contract of carriage with the shipper." In prosecuting a claim for cargo loss under COGSA, the burden of proof to establish this predicate to its coverage is upon the cargo claimant. Associated Metals & Minerals Corp. v. S. S. Portoria, 484 F.2d 460, 462 (5th Cir. 1973); See Yeramex International v. S. S. Tendo, 595 F.2d 943 (4th Cir. 1979). Here Cargo did not offer any proof of the existence of a contract between Cargo and Shipowner.3 Nevertheless the district court found the statute applicable on alternative grounds: (1) that it applied by its terms even though no contract existed; and (2) that Shipowner was estopped by its conduct in the litigation to deny its applicability. There is no basis in law for the first ground.4 The second presents a more difficult problem, but a review of the whole record persuades us that the district court exceeded a proper exercise of its discretion in holding Shipowner estopped on this factual issue.
It clearly lies within a trial court's informed discretion to hold a litigant estopped by its litigation conduct to have an issue considered by the trier of fact. See, e. g., Case v. Abrams, 352 F.2d 193 (10th Cir. 1965). Particularly may this be justified when a party has failed to identify an issue for inclusion in a pretrial order while under a clear duty to do so. Id. at 196. We consider this possible basis of estoppel first. Rule 16 of the Federal Rules of Civil Procedure plainly contemplates exactly this consequence and mandates an order "which limits the issues for trial to those not disposed of by admissions or agreements of counsel." Further, it provides that "Such an order when entered controls the subsequent course of the action, unless modified at the trial to prevent manifest injustice." Fed. R. Civ. P. 16 (emphasis added). But "such" an order, within the most obvious meaning of Rule 16, is one in which a Judicial determination of the issues remaining for trial has been made. See Life Music, Inc. v. Edelstein, 309 F.2d 242, 243 (2d Cir. 1962) (per curiam).
Though we conclude that the district court acted beyond its discretion in finding estoppel here, we do not think that the appropriate way to correct the error is now to hold Cargo to the resulting failure of proof. The ambiguity that infected the pretrial issue-defining endeavors operated as well upon Cargo. At the time the failure of proof was first suggested in the district court an appropriate solution would have been to allow Cargo to reopen its case to attempt proof, possibly with a continuance. Cf. Rule 15(b), Fed. R. Civ. P. In view of the remand necessitated by our disposition, that solution may now, though belatedly, be put into effect.
The primary stage of this proof scheme, partly integral to COGSA, and partly the result of judicial gloss, is decisive here and must be summarized. As at common law and under the predecessor Harter Act, a claimant makes out a Prima facie case of liability for loss or damage to his goods10 by the traditional means given to bailors: proof that he delivered the goods to the carrier and that they were not returned, or that he delivered them in good condition and they were damaged upon return. See Mamiye Bros. v. Barber Steamship Lines, Inc., 241 F. Supp. 99, 109 (S.D.N.Y. 1965), Aff'd, 360 F.2d 774 (2d Cir. 1966). On this state of proof standing alone, the unseaworthiness theory has not been directly put in play, and it is possible to take the view that the bailor's Prima facie case goes only to the "due care to prevent loss or damage" theory or that it goes as well to the unseaworthiness theory, with corresponding proof burdens placed upon the carrier to avoid the Prima facie case of liability. Compare Maxine Footwear Co. v. Canadian Government Merchant Marine, Ltd., (1959) A.C. 589, 602-03 (Can.P.C.); Toronto Elevators Ltd. v. Colonial Steamships Ltd., (1950) Can.Exch. 371, 375 (proof of both required), With Firestone Synthetic Fibers Co. v. M/S Black Heron, 324 F.2d 835, 836-37 (2d Cir. 1963) (per curiam); Isbrandtsen Co. v. Federal Insurance Co., 113 F. Supp. 357 (S.D.N.Y. 1952), Aff'd per curiam, 205 F.2d 679 (2d Cir. 1953) (only proof of § 4(2) cause required). See generally W. Tetley, Marine Cargo Claims 153-54 (2d ed. 1978). Under either view it is clear that faced with a bailor's Prima facie case, whether or not it is accompanied by direct evidence of unseaworthiness causing or contributing to loss, a carrier must at least establish one of the exculpating causes of § 4(2) to avoid the fault that is otherwise imputed to him in respect of the obligation imposed by § 3(2). If he cannot do this, any proof related to the unseaworthiness theory that may have been adduced by either party is simply irrelevant to the determination of liability. Because we conclude that liability in this case was established at this stage of the proof scheme, we need not explore here the further ramifications of that scheme,11 and turn now to the proof in this case.
Except for the coverage predicate element discussed in Part II of this opinion, Cargo's Prima facie case of delivery and failure to return was stipulated. Similarly, the actual cause of loss was plain and undisputed: the ship was willfully scuttled by a member of its crew. Cargo adduced a great deal of evidence designed in various ways to establish that Shipowner had breached its obligation under § 3(1) to provide a seaworthy ship and that these breaches proximately caused the loss. This evidence went essentially to failures "properly (to) man" the ship, 46 U.S.C. § 1303(3) (1) (b), by pointing to carelessness in employing Gun Gun Supardi and in providing a crew adequate to have restrained him or otherwise prevented the scuttling. Shipowner countered with evidence designed to establish its § 4(1) "immunity" under the unseaworthiness theory by showing its "due diligence" in manning the ship in all the many respects challenged by Cargo and the lack of proximate causation between any of its acts or omissions respecting its "proper manning" obligation and the loss. The evidence of record supporting these opposing contentions respecting the unseaworthiness theory is voluminous, but its details need not be further described, for decision turns on whether or not shipowner successfully overcame by proof the Prima facie imputation to it of fault in failing under § 3(2) "properly and carefully (to) carry, keep, care for, and discharge the goods carried."
As indicated in our general analysis of the proof scheme, this could only have been done by proof that established the cause of loss as one of those specifically excepted in § 4(2) (a)-(p), or as "(a)ny other cause arising without the actual fault . . . of the carrier and without the fault or neglect of the agents or servants of the carrier," under § 4(2) (q) (the "Q-clause"). In attempting to carry this burden, the Shipowner was of course constrained by indisputable evidence that the direct cause was the willful act of its seaman employee.
In attempting to exculpate itself from the breach of its general duty of care under § 3(2) that had been established Prima facie, Shipowner expressly relied upon both § 4(2) (a) (errors in management) and § 4(2) (q) (the omnibus clause). The district court rightly rejected the "errors in management" exception and Shipowner has abandoned any reliance upon it on appeal. When the court then turned to the "Q-clause" omnibus exception, it revealed its critical misapprehension of the proper application of COGSA to the facts of the case, saying:
The exception provided in § 1304(2) (q) appears to provide the same burden given in 46 U.S.C. § 1304(1), namely, that (Shipowner) prove that its fault, if any, did not contribute to or proximately cause the loss complained of. Thus, the one question before this Court is whether (Shipowner) has successfully proven that the cargo loss sustained from the sinking of the MIMI was not proximately caused by its negligence, if any."
Rightly applied to the undisputed facts of the case, COGSA posed a narrow question of law that the district court failed to identify as decisive. It is whether the loss of the MIMI's cargo by Supardi's act resulted from a cause "arising without the fault or neglect of the agents or servants of the carrier" within the meaning of the Q-clause, 46 U.S.C. § 1304(2) (q). Stated more abstractly, the question, apparently one of first impression under COGSA, is whether under the "Q-clause" a seaman's willful act of scuttling a ship is an excepted cause of cargo loss that exculpates the carrier/employer from liability.
Recognizing the problem posed for it by the literal language of this critical provision, Shipowner on this appeal argues that such a "scope of employment" qualification should be read into the Q-clause, citing an English case, Leesh River Tea Co. v. British India Steam Navigation Co., (1966) 2 Q.B. 250 (C.A.), as persuasive authority for the proposition. Because the question is novel and because of the general policy favoring uniformity of interpretation of the various national counterparts to the Hague Rules, See Robert C. Herd & Co. v. Krawill Machinery Corp., 359 U.S. 297, 301, 79 S. Ct. 766, 3 L. Ed. 2d 820 (1959), we have given careful consideration to the Leesh River decision.
We are reinforced in this construction of the Q-clause by two other considerations than the plain meaning analysis. First, we think the result dictated by this construction conforms to the general policy that must underlie COGSA's careful allocation of proof burdens in respect of loss of goods at sea. In the proof scheme earlier analyzed appears a frequently used procedural device to force a preferred substantive result where proof is in equipoise or unavailable, or where only very specific exceptions to generally assumed liability are to be recognized. Where such a device is used it ordinarily reflects an intention that in the case where both parties are without direct fault but one must suffer the loss, it is ordinarily fairer that the loss shall fall upon the party in the better position to have controlled, and to produce evidence of, the operative facts. The device used is the evidentiary presumption (Prima facie case, Res ipsa loquitur) that casts the burden, hence the loss, on that disfavored party. That such a policy may well also cast the loss upon the disfavored party in some situations not precisely contemplated nor adequately described in a statute is itself likely to be an intended consequence. As between carrier and shipper of goods by sea, carrier is obviously the party more likely to be in control both of events and of evidence of events. So, we think is the result dictated by our construction of the Q-clause likely to conform to congressional policy in enacting COGSA.
Shipowner also took a "protective" appeal in respect of its dismissed indemnification claim against Charterers. Despite the fact that some claims in this multi-claim limitation proceeding were unadjudicated when the appeals were taken, we have jurisdiction under 28 U.S.C. § 1292(a) (3). Fed. R. Civ. P. 54(b) does not override the cited section despite its applicability to admiralty cases. 9 Moore's Federal Practice, P 110.19(3) (2d ed. 1970)
46 U.S.C. § 1304(2) (a), . . . (c), . . . (d), . . . (q).
These become exceedingly complicated, and are by no means clearly worked out, once the carrier has successfully established an exculpating cause under § 4(2). See, generally G. Gilmore & C. Black, Supra § 3-43. Because of our disposition of the appeal, we also need not address a contention by Cargo that it was entitled to the so-called "Pennsylvania presumption." This rule that originated in The Pennsylvania, 86 U.S. (19 Wall.) 125, 22 L. Ed. 148 (1874), would wrench the COGSA proof scheme described in the body of the opinion. Upon proof by Cargo of any condition of unseaworthiness constituting a breach of statutory duty, it would fix upon the carrier a burden of persuasion that the condition could not reasonably have contributed to the loss. We express no view as to whether that presumption has survived the COGSA codification