Opinion ID: 354313
Heading Depth: 1
Heading Rank: 3

Heading: the third party appeal

Text: 20 The special master's report, adopted by the district court, allowed United's third party claim for lost profits 16 against Getty Oil, which had subchartered the vessel to United for five years (Getty Oil/United charter). The amount awarded is an estimate of the profits United would have reaped from the Wafra's aborted voyage (Voyage 3), had the vessel not been destroyed, based on United's profits from the first two voyages under its one-year charter with Overseas. 21 We agree with the special master and the district court that there is nothing speculative about the amount that United would have earned on this voyage. 17 Thus, the case falls within the definition of permissible recoveries enunciated in Polar Steamship Corp. v. Inland Overseas Steamship Corp., 136 F.2d 835, 840-41 (4th Cir.), cert. denied, 320 U.S. 774, 64 S.Ct. 83, 88 L.Ed. 464 (1943). See Putnam v. Lower, 236 F.2d 561, 571-72 (9th Cir. 1956); 11 S. Williston, A Treatise on the Law of Contracts §§ 1345-46A (W. Jaeger 3d ed. 1968). Getty Oil argues, however, that it was incorrect to utilize profits solely from the early portion of the five-year Getty Oil/United charter to measure damages. Rather, it asserts, the expected profits (or losses) to be sustained over the remaining four years and seven months of the charter also should have been included in the calculation; United, the assertion continues, having ignored the remaining period, failed to prove any lost profits. 22 The simple response to Getty Oil's argument is two-fold. First, there was evidence tending to show that United would have made profits over the remaining period of its charter with Getty Oil, 18 and though given the opportunity by the special master, Getty Oil failed to produce any contrary evidence. Second, by limiting its claim to profits lost on Voyage 3, United was under no legal obligation to establish that it would have continued to make profits during the remaining period of its charter with Getty Oil. Getty Oil had the burden of establishing that losses over this period would have diminished or eliminated the Voyage 3 profits. See L. Albert & Son v. Armstrong Rubber Co., 178 F.2d 182, 190-91 (2d Cir. 1949). Having failed to produce proof in this regard, Getty is foreclosed from claiming that the damages of United were too speculative or remote. 23 The cases relied on by Getty Oil do not support its position. In fact, The Umbria, 166 U.S. 404, 422-23, 17 S.Ct. 610, 41 L.Ed. 1053 (1897), held that damages occasioned by a vessel's destruction include, in addition to the value of the vessel, what the vessel would have earned on the voyage during which it was lost. Thus, it sustains the award to United. Skou v. United States, 478 F.2d 343, 346-47 (5th Cir. 1973), likewise does not fortify Getty Oil's argument. There the shipowner was precluded from recovering alleged profits lost while making collision repairs unless he could show that he had employment for the ship at the end of the collision voyage. 19 United, however, does not seek estimated profits from subsequent voyages. And it presented concrete evidence of the profits lost on the voyage in question. 24 Judgment on the principal appeal reversed and remanded for findings in accordance with this opinion; judgment on the third party appeal affirmed.