Opinion ID: 552797
Heading Depth: 2
Heading Rank: 4

Heading: Getting Their Two Cents In: Nathaniel's Additional Claim

Text: 60 for Damages and G.E.'s Challenge to the Award of Attorneys' Fees 61 As G.E.'s liability to Nathaniel is substantially reversed, (see Part III) there is no need to review Nathaniel's inherent claim for loss of use of the vessel. Nevertheless, until the case is fully concluded we think it appropriate to rule on these matters.
62 Nathaniel appeals the district's court's refusal to award damages for (i) garbage disposal costs, (ii) the costs of Nathaniel's local agent, and (iii) lost profits. Such findings of fact by the district court are not to be overturned unless found to be clearly erroneous. 39 63 1. Where's the Garbage? --Nathaniel's first claim is straightforward: Nathaniel points out that the district court found that it was entitled to recover for garbage disposal fees in the amount of $19.50 per diem, but failed to include this amount in its actual calculation of damages. G.E. does not dispute this point as a factual matter. Our review of the district court's otherwise careful opinion reveals that Nathaniel is correct. Because this is essentially a clerical error that is manifest on the face of the district court's opinion, we need not remand the matter to the lower court; instead, we find merely that this would properly be a part of Nathaniel's damages, if otherwise allowable. 64 2. Who's the Agent Here? --Second, Nathaniel challenges the district court's finding that the SERENA did not need the services of both Hong Kong Shipping Agencies, its Hong Kong manager, and Biehl & Co., its local agent, arguing that both were erroneously classified as the SERENA's agents. However, the district court's opinion showed that it was aware of the different roles played by the two entities: in its opinion, it noted that Biehl was paid an agency fee, while Hong Kong Shipping received a daily management fee. Nathaniel offers no other evidence sufficient to show that the district court erred in finding that Biehl's costs were not recoverable, and its judgment on this issue is affirmed. 65 3. Where Did the Profits Go? --Third, Nathaniel claims that the district court erred in its calculation of Nathaniel's claim for loss of use of the ship for 56 days by failing to include the average daily earnings of the vessel. The basis of Nathaniel's contention is that the court was misled by the inaccurate testimony of G.E.'s expert witness on damages, who calculated damages according to a time charter method by deducting the expenses incurred on the deadend empty return voyage from Rotterdam to New Orleans. Nathaniel, phrasing it in more likely terms of a voyage chartered method, in which automatically such costs are excluded from profits; however, it claims that, if the former method is used, it must also be entitled to add these costs to its total detention costs, and so reach the same amount of lost profits as calculated under its own method. 66 Because we detect faulty reasoning by the expert for G.E. on which the trial judge seemed to rely, we hold the Court's findings are well within the Plimsoll line of F.R.Civ.P. 52(a) as clearly erroneous. This is shown by Exhibit P-13, which on its face reflects earnings and expenses for the full round voyage from New Orleans to Rotterdam to New Orleans. For that full voyage of 46 days (steaming 32 days, in port 14 days) the earnings were precisely $1,377.86 per day, as claimed. 67 The fact that the vessel returned empty on the return to New Orleans, was not, as asserted by the G.E. expert, ignored or concealed. So, on the face of things Nathaniel supports its claim to the dollar. Consequently, we think it unnecessary that the case be remanded for the District Court, to reconsider the detention claim since our conclusion is fully supported by the principles set out at length in Delta S.S. Lines, Inc. v. Avondale Shipyards, Inc. 40 68
69 For its part, G.E. challenges the district court's award of attorneys' fees to both Nathaniel and LGS. The district court held that attorneys' fees were recoverable by Nathaniel and LGS because they were foreseeable damages resulting from G.E.'s breach of its warranty of workmanlike performance, citing the general Fifth Circuit rule permitting recovery for such damages. In reaching this result, the district court relied on recent circuit precedent that in fact misconstrues the actual rule for recovery of attorneys' fees. To explain the district court's error, we must re-examine the genesis and scope of the rule in this circuit. 70 In 1963, this circuit, in Strachan Shipping Co. v. Koninklyke Nederlandische S.M., 41 created an exception to the traditional American Rule that attorney's fees were generally not recoverable, holding that indemnification for attorney's fees were recoverable as foreseeable damages for breach of a warranty of workmanlike performance from a stevedore to a shipowner for the costs of defending against a claim by a third party. 42 This indemnity rule did not, however, extend to recovery of fees for litigation against the party in breach to actually determine liability. 43 In some cases, the rule was abbreviated to the simple formula that attorneys' fees were recoverable as foreseeable damages resulting from a breach of WWLP, but each of these cases involved claims for fees for defending against claims by third parties; 44 the rule nevertheless remained that attorneys' fees against the defendant to establish liability were not themselves recoverable. 45 71 So matters stayed until 1982, when, in Todd Shipyards Corp., 46 this court relied on the general statement of the rule to authorize recovery of attorneys' fees by a shipowner against its contractor and subcontractor for the litigation that established their liability. 47 This general formulation of the rule was repeated by a later appellate panel after the case was remanded, 48 but this time the only issue was whether such damages were an integral part of the scope of relief for jurisdictional purposes; as with the earlier citations of the short form of the rule, the court did not have to consider against whom, and when, such damages might be recovered. 49 72 Careful examination of the precedents relied upon by the first Todd Shipyards court makes it clear that the court mistakenly changed a specific rule of indemnification into a general rule of admiralty damages, without overruling the holding of the earlier cases that attorneys' fees were not recoverable for suits to establish liability between the indemnitee and the indemnitor. In such a situation of conflicting rules, our choice is clear: [u]nder the principle of stare decisis, the older case law must control. 50 Thus, even if we were to conclude that Todd Shipyards effected a conscious expansion of the Strachan rule, or that the expanded rule was in fact more efficient, we must consider ourselves bound by the more narrow formulation of the rule, under which neither Nathaniel nor LGS may recover its attorneys' fees from G.E. We therefore must reverse the district court's award of fees as to both Nathaniel and LGS.