Opinion ID: 465038
Heading Depth: 1
Heading Rank: 2

Heading: the united states' claim for indemnity

Text: 15 We now consider the possible legal bases for the United States' recovery of judgment against the Academy; the district court did not identify the grounds on which it allowed the third-party claim to proceed. In doing so, we are governed by federal rather than state law because we are dealing with a maritime agreement. See United New York Sandy Hook Pilots Association v. Rodermond Industries, Inc., 394 F.2d 65, 70 (3d Cir.1968). To hold otherwise would be to ignore both the general constitutional doctrine of federal supremacy in maritime affairs, Article III, Sec. 2, United States Constitution, and the need for uniformity in the administration of admiralty law. Id. at 70-71 (citing, inter alia, Southern Pacific Co. v. Jensen, 244 U.S. 205, 37 S.Ct. 524, 61 L.Ed. 1086 (1917); Panama R.R. Co. v. Johnson, 264 U.S. 375, 44 S.Ct. 391, 68 L.Ed. 748 (1924)). 16 The law of tort indemnity offers no support for the third-party claim because tort indemnity does not apply where the party seeking indemnity was itself guilty of acts or omissions proximately causing the plaintiff's injuries. See Maritime Overseas Corp. v. Northeast Petroleum Industries, Inc., 706 F.2d 349, 355 (1st Cir.1983) (citing Cooper Stevedoring, Inc. v. Kopke, Inc., 417 U.S. 106, 94 S.Ct. 2174, 40 L.Ed.2d 694 (1974)). We do not decide whether contribution would lie. Contribution between joint tortfeasors in a maritime action for personal injuries is only allowed where neither tortfeasor's liability is limited by statute. See Maritime Overseas Corp., 706 F.2d at 351 (quoting Araujo v. Woods Hole, Martha's Vineyard, Nantucket Steamship Authority, 693 F.2d 1, 3 (1st Cir.1982)). The eleventh amendment makes the Academy immune from liability to Parks and we regard it as an open question whether the amendment operates as a statute so as to preclude contribution. We find solid support for the third-party claim, however, in the law of contractual indemnity. 17 A contractual right to indemnity may be implied when 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. Maritime Overseas Corp. v. Northeast Petroleum Industries, Inc., 706 F.2d at 353 (quoting Araujo v. Woods Hole, Martha's Vineyard, Nantucket Steamship Authority, 693 F.2d at 2-3). This theory of implied contractual indemnity was first applied in the maritime context in Ryan Stevedoring Co., Inc. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed.133 (1956). Ryan involved a suit on an oral agreement between a shipowner and stevedore under which the stevedore had agreed to perform all the stevedoring operations required by the shipowner. One of the stevedore's longshoremen, who was injured while unloading cargo pursuant to that agreement, sued the shipowner under the Longshoreman and Harbor Workers' Compensation Act, 33 U.S.C. Secs. 901 et seq., 6 for failing to provide him a safe place of work. The shipowner then filed a third-party complaint against the stevedore. 18 The district court awarded damages to the longshoreman, an award upheld on appeal, but dismissed the third-party complaint. The court of appeals reversed that dismissal and directed that judgment be entered for the shipowner. The stevedore appealed to the Supreme Court. It advanced two arguments: (a) that the shipowner's claim for indemnity was barred by Sec. 5 of the Longshoreman's Act, 33 U.S.C. Sec. 905, which makes the statutory liability of an employer the exclusive remedy for an employee or anyone claiming under or through an employee on account of injury or death arising out of employment; and (b) that a stevedore should not be obliged to reimburse a shipowner in the absence of an express agreement of indemnity. 19 The Court rejected both arguments. It held that the Longshoreman's Act was no bar to the shipowner's third-party claim because the claim was not founded upon a duty owed by the stevedore to its employee but rather, upon the stevedore's breach of its purely consensual obligation owing to the shipowner to stow the cargo in a reasonably safe manner. Ryan, 350 U.S. at 131-32, 76 S.Ct. at 236. The Court reasoned that an express agreement to indemnify was unnecessary because the accident occurred as a result of the stevedore's failure to meet its consensual obligation. Id. at 133-34, 76 S.Ct. at 237. Liability to indemnify could, therefore, be established on the basis of that breach of contract alone. Id. The Court also emphasized that the stevedore could not use the shipowner's failure to discover and correct the breach of warranty as a defense in an action by the shipowner, whatever the respective obligations of the stevedore and shipowner to the longshoreman. Id. at 134-35, 76 S.Ct. at 237-38. 20 As stated by the Second Circuit in Fairmont Shipping Corp. v. Chevron International Oil Co., Inc., 511 F.2d 1252 (2d Cir.), cert. denied, 423 U.S. 838 (1975), Ryan, by necessary implication, confirmed the applicability to maritime service contracts of the hornbook rule of contract law that one who contracts to provide services impliedly agrees to perform in a diligent and workmanlike manner. 511 F.2d at 1259 (citations omitted). And see Weyerhaeuser S.S. Co. v. Nacirema Co., 355 U.S. 563, 565, 78 S.Ct. 438, 439-40, 2 L.Ed.2d 491 (1958) (stevedoring contract containing no express indemnity clause, but requiring stevedore to faithfully furnish such stevedoring services as may be required, and to provide all necessary labor and supervision for the proper and efficient conduct of the work, constitutes a contractual undertaking to perform with reasonable safety and to discharge  'foreseeable damages resulting to the shipowner from the contractor's improper performance'  (citation omitted)). 21 The rationale for allowing indemnity on the basis of this implied contractual undertaking arises from a combination of two factors: (a) the shipowner's nondelegable duty to provide a seaworthy vessel, see Hubbard v. Faros Fisheries, Inc., 626 F.2d 196, 199 (1st Cir.1980), and (b) 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 Maritime Overseas Corp., 706 F.2d at 353 (citing Italia Societa per Azoni di Navigazione v. Oregon Stevedoring Co., Inc., 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. 706 F.2d at 353 (quoting Italia Societa, 376 U.S. at 321, 84 S.Ct. at 752). 7 22 Indemnity arising from an implied warranty of workmanlike service has also been applied to nonstevedoring contracts with a shipowner. In H & H Ship Service Co. v. Weyerhaeuser Line, 382 F.2d 711 (9th Cir.1967), the Ninth Circuit allowed a shipowner indemnity from a ship repair contractor when the shipowner had to compensate one of the contractor's employees who was injured while working on the ship. The court found that the circumstances of supervision, expertise and control and the fact that the contractor was the party best situated to take measures to avoid the accident were sufficient to imply a warranty of workmanlike service on the part of the contractor. Id. at 713. It went on to hold that the shipowner could obtain indemnity from the contractor for liability incurred as a result of the contractor's breach of this warranty. Id. 23 The Third Circuit reached a similar conclusion in United New York Sandy Hook Pilots Association v. Rodermond Industries, Inc., 394 F.2d at 74. And in Tebbs v. Baker-Whiteley Towing Co., 407 F.2d 1055 (4th Cir.1969), the Fourth Circuit read an implied right of indemnity in favor of a shipowner into a contract of towage on the ground that it had surrendered supervision and control of the towing operations to the tug owner, and relied on the latter's expertise. 407 F.2d at 1059. As summed up by this court in Maritime Overseas Corp. v. Northeast Petroleum Industries, Inc., application of Ryan indemnity rests on elements of expertise, control, supervision and ability to prevent accidents, the nature and extent of the implied warranty of workmanlike service and any resulting indemnity, depending upon the terms of the contract giving rise to the warranty. 706 F.2d at 354 (quoting Fairmont Shipping Corp. v. Chevron International Oil Co., 511 F.2d at 1257; H & H Ship Service Co. v. Weyerhaeuser Line, 382 F.2d at 712.) 8 24 Careful examination of the agreement in the present case reveals all the key factors on which Ryan indemnity has been based. As shipowner, the United States had an absolute duty to furnish the crew of T.S. BAYSTATE with a seaworthy vessel, Hubbard v. Faros Fisheries, Inc., 626 F.2d 199, and the implementing regulations of the Maritime Academy Act, 46 C.F.R. Secs. 310 et seq. (1985), incorporated into the agreement, place the maintenance and supervision of the vessel squarely within the control of the Academy. Those regulations required the Academy to exercise reasonable care to safeguard the interests of the [Maritime] Administration, and to avoid injury to any person aboard the T.S. BAYSTATE and loss and damage of every nature, with respect to the vessel. Sec. 310 4(a). The regulations also required the Academy to: (1) conduct a condition survey with representatives of the United States, prior to the vessel's release, and then to sign a receipt for the vessel to indicate that it had been found in order, Sec. 310 4(d); (2) to undertake usual preventive maintenance of the vessel at its own expense, Sec. 310 4(e)(2)(i); and (3) to advise the Administration (United States) and obtain its approval of other necessary repairs, Sec. 310 4(e)(1)(i)-(iv). 25 The district court found that the Academy was in breach of several of its contractual obligations. Specifically, the court found that the gap between the guard and the auxiliary diesel machinery should have been discovered and remedied in the course of the condition survey. Since the Academy had signed a certificate of delivery for the vessel, the court concluded that the Academy had either not done the required condition survey, or that it had done it negligently. The court also found that the placement of a mesh over the gap was a safety measure which the Academy had the authority to undertake. The court concluded that the Academy had been negligent and that Parks' injuries could have been avoided if the Academy had fulfilled its obligations of inspection and repair. 26 In light of these findings, we see no reason why the United States should not recover from the Academy on the basis of Ryan indemnity. Admittedly, the agreement between the United States and the Academy is not a service contract and, in that respect, differs from those in which this theory of indemnity has previously been implied. We do not, however, regard this difference as material. The Academy assumed the same degree of supervision of training operations and control of the vessel as was assumed by any of the contractors against whom such indemnity has been implied. 9 Further, as the district court's findings make clear, the Academy could have prevented the accident. In these circumstances, the Academy's obligation to indemnify the United States follows from its contractual obligation to discharge foreseeable damages resulting from its improper performance. Weyerhaeuser SS v. Naciraema, 355 U.S. at 565, 78 S.Ct. at 439-40. The district court assessed the damages caused by the Academy's breach at $23,455.34.