Opinion ID: 417960
Heading Depth: 1
Heading Rank: 3

Heading: Contractual Indemnity

Text: 19 A contractual right to indemnification is implied if there are unique special factors demonstrating that the parties intended that the would-be indemnitor bear the ultimate responsibility for the plaintiff's safety, or when there is a generally recognized special relationship between the parties. Araujo, supra, 693 F.2d at 2, 3 (citations omitted). Beginning with the seminal case of Ryan Stevedoring Co. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1955), the special relationship between a stevedoring company and a shipowner has been held to imply that the stevedoring company warrants performance of its services in a workmanlike manner and will indemnify the shipowner for any liability resulting from a breach of that warranty of workmanlike service. 5 20 The rationale for this implied indemnity arises from the shipowner's nondelegable duty to provide a seaworthy vessel coupled with the fact that a stevedoring company which takes control of the ship to unload it is, during the course of that operation, more capable than the shipowner of avoiding accidents. See Italia Societa per Azoni di Navigazione v. Oregon Stevedoring Co., 376 U.S. 315, 324, 84 S.Ct. 748, 754, 11 L.Ed.2d 732 (1964). The shipowner's negligence does not bar such indemnity. 21 [R]ecovery in indemnity for breach of the stevedore's warranty is based upon an agreement between the shipowner and the stevedore and is not necessarily affected or defeated by the shipowner's negligence, whether active or passive, primary or secondary. Id. at 321, 84 S.Ct. at 752; see also Weyerhaeuser Steamship Co. v. Nacirema Operating Co., 355 U.S. 563, 567, 78 S.Ct. 438, 440, 2 L.Ed.2d 491 (1958). 22 But negligence on the part of the shipowner which prevents the stevedore from doing a workmanlike job, see Gator Marine Towing Inc. v. J. Ray McDermott & Co., 651 F.2d 1096, 1100 (5th Cir.1981), may preclude indemnity. 23 Indemnity arising from an implied warranty of workmanlike service has also been applied to non-stevedoring service contracts with a shipowner. See, e.g., Tebbs v. Baker-Whiteley Towing Co., 407 F.2d 1055, 1058 (4th Cir.1969) (towing contract); United N.Y. Sandy Hook Pilots Ass'n v. Rodermond Industries, 394 F.2d 65, 71 (2d Cir.1968) (Ryan principles frequently extended to non-stevedore maritime contractors); American Export Lines v. Norfolk Shipbuilding & Dry Corp., 336 F.2d 525 (4th Cir.1964) (shipyard service contract). Application of Ryan indemnity has rested ... on elements of expertise, control, supervision and ability to prevent accidents. Fairmont Shipping Corp. v. Chevron International Oil Co., Inc., 511 F.2d 1252, 1257 (2d Cir.), cert. denied, 423 U.S. 838, 96 S.Ct. 66, 46 L.Ed.2d 57 (1975). 24 Maritime argues that as a marine terminal operator Northeast was bound to perform its services in a workmanlike manner. It is unclear, however, from what contract between what parties such duty arose. While it is true that a shipowner seeking indemnity need not have privity with the contractor against whom it seeks indemnity, see Waterman Steamship Corp. v. Dugan & McNamara, 364 U.S. 421, 81 S.Ct. 200, 5 L.Ed.2d 169 (1960), the nature and extent of an implied warranty of workmanlike service and any resulting indemnity depend upon the terms of the contract which gave rise to that warranty. See, e.g., H & H Ship Service Co. v. Weyerhaeuser Line, 382 F.2d 711, 712 (9th Cir.1967) (warranty is a part of the contract ... and is implied to the extent of the work done and the contract exercised by the ship repairer). 25 The most we can assume from the record before us is that there was an agreement by which Northeast would receive at its terminal a cargo of light grade oil. There is no evidence in the record that Northeast had a contractual duty to control or supervise the operation of unloading that cargo. The record shows that, in fact, apart from Northeast's sending connecting hoses onto the deck of the OVERSEAS EVELYN, Maritime was in complete control of the unloading operation insofar as it took place on the ship's deck with responsibility for connecting the hoses to the ship's manifold and discharging the ship's hold of oil. The injured seaman, Kennedy, was at all times directly under the supervision and control of Maritime and its employees. 26 The closest factual situation that we have found in which indemnity was held to arise from breach of a warranty of workmanlike service is that described in Hartnett v. Reiss Steamship Co., 421 F.2d 1011 (2d Cir.), cert. denied sub nom. Grain Handling Co., Inc. v. Hartnett, 400 U.S. 852, 91 S.Ct. 49, 27 L.Ed.2d 90 (1970). In that case grain was unloaded from a ship to a grain elevator primarily by use of a mechanical 'leg', essentially a series of buckets on an endless belt which scoop up the grain, which had been lowered from the grain elevator into the hold of the ship. The shipowner was sued by a longshoreman who was injured while entering the hold of the ship to move grain within reach of the mechanical leg. The shipowner successfully sought indemnity from the owner of the grain elevator. 27 International [the owner of the grain elevator] contends that by means of its mechanical leg, it was merely accepting delivery of the cargo in its latter capacity [cosignee of the cargo], and was not engaged in unloading the ship with the Elevator's mechanical equipment. The argument does not persuade us. We feel that the concept of stevedore should embrace anyone who by his acts can create--or avoid the creation of--those special risks which justify holding a stevedore to a warranty of super-carefulness to a ship, whose own liability to injured workers approaches strict liability. International was engaged in operating unloading machinery--the leg--inside the hold of the ship; more importantly, in order to operate the machinery it was necessarily in partial control of the ship. These actions carried with it a concomitant duty to exercise that control so as to protect the ship and those who must be exposed to the hazards of the work. Id. at 1016. 28 It might be argued that Northeast by sending its hoses on board was unloading the ship's oil and was thus in the position of a stevedore. But unlike the grain elevator company in Hartnett, Northeast did not supervise the unloading operation from aboard the vessel. Once the hose was on board the entire unloading operation was in the control of Maritime and was conducted by its employees, including the injured seaman Kennedy. We cannot say that the nature of the unloading operation shows that the parties intended that Northeast should bear ultimate responsibility for the safety of those conducting the unloading operation or that Northeast was in a better position than Maritime to prevent accidents during that operation. We find no implied contract of indemnity.