Court Opinion

ID: 9461200
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:08:20.444735+00
Date Added: 2024-06-11T17:36:56.473478
License: Public Domain

JAMES HUNTER, III, Circuit Judge
(concurring):
I agree with the majority opinion insofar as it reverses the judgment of the district court and remands for consideration of whether, under Ryan and Weyerhaeuser, Global’s conduct might have been such as to preclude recovery in this action. However, rather than try to limit Gilchrist to its facts, I would prefer to have this Circuit call an en banc hearing to reconsider its validity. I believe that the “sole responsible cause” test adopted by Gilchrist is contrary to general principles of indemnity, which permit indemnification for the full loss suffered by the indemnitee. Where the indemnitor’s breach has caused the indemnitee to incur reasonable costs and legal expenses in connection with the defense of the principal action, those costs and expenses are recoverable as part of the loss suffered by the indemnitee. This general principle is explicitly adopted in section 334 of the Restatement of Contracts, cited by the Supreme Court in Ryan, and had been recognized in several other decisions of this Circuit. See A. C. Israel, supra; Brown, supra; Rogers, supra.
Nowhere do any of these authorities carve out a special rule for legal fees and expenses where the fault between the indemnitor and indemnitee is mutually shared, and such a rule is hard to *1179accept logically. So long as the relative faults are such that the shipowner-in-demnitee can still recover the full amount of any judgment paid over to the injured longshoreman,1 there is no reason why he should not be entitled to recover counsel fees and expenses incurred in defending against the principal action, since the incurring of such costs and expenses is a foreseeable result of the stevedore’s breach. This rule does not seem unduly harsh, because the shipowner must still prove that the stevedore breached its warranty of workmanlike performance and that the breach was the proximate cause of the longshoreman’s injury. Gilchrist is thus contrary to general principles of indemnity and to cases from other circuits which awarded counsel fees and expenses despite specific findings of negligence on the part of the shipowner. See, e. g., Guidry v. Texaco, Inc., 430 F.2d 781 (5th Cir. 1970); Nicroli v. den Norske Afrika Og Australielinie, 332 F.2d 651 (2d Cir. 1964); De Gioia v. United States Lines Co., 304 F.2d 421 (2d Cir. 1962). Furthermore, the precedential value of Gilchrist is somewhat weakened by the fact that, as the majority notes, it adopted the “sole responsible cause” test by relying on dicta in the Ellerman case in which the latter court was merely repeating an allegation made in the pleadings.
I agree with the majority that there may be unusual circumstances which would justify the denial of attorney’s fees and expenses despite the right to recover indemnity proper. However, for such circumstances to create “an equitable modification of the normal rule of indemnification,” it would appear necessary that those circumstances be such as to require modification so as to prevent undue hardship to one of the parties. I agree that Farrell, supra, might well be such a case, since it involved two stevedores, both of whom, along with the shipowner, had been found partially negligent. I do not see how the facts in Gilchrist required such a modification, as there was no logical nexus between the unusual circumstances present in that case and any harshness that might result from application of the general rule of indemnification. As the majority notes, the court in Gilchrist applied the “sole responsible cause” test in part to avoid resolving the difficult issues of res judicata and the trial court’s grant of a separate trial. While these unusual circumstances may have motivated the Gilchrist court in reaching its decision, I do not see how they would justify a departure from or a modification of the established law of indemnity. In short, I am concerned that today’s decision does not offer a clear framework as to what kinds of circumstances would justify “an equitable modification of the normal rule of indemnification.”
I concur in the majority’s disposition of this case, however, since it reverses the district court judgment and since I agree that the district court should consider on remand whether Global’s conduct might constitute such unusual circumstances as to affect its right of indemnification. See note 7 supra. While I disagree with the majority’s distinguishing of Gilchrist, I believe that any uncertainty that the majority’s opinion may create for other litigants is minimal in light of the recent amendments to the Longshoremen’s and Harbor Workers’ Compensation Act. Those amendments seem to have mooted the issues raised by this case for accidents occurring after November 26, 1972, by prohibiting shipowner indemnity actions against stevedore/employers.

. While the Supreme Court in Weyerhaeuser held that fault on the part of the shipowner does not necessarily preclude recovery of indemnity from the stevedore, it recognized that conduct by the shipowner may nevertheless be such as to preclude recovery. Weyerhaeuser, supra, 355 U.S. at 567, 78 S.Ct. 438.