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United New York Sandy Hook Pilots Association v. Rodermond Industries Inc.

decided: March 22, 1968.

UNITED NEW YORK SANDY HOOK PILOTS ASSOCIATION, A CORPORATION OF THE STATE OF NEW YORK, AND FULTON P & I UNDERWRITING AGENCY, INC., APPELLANTS,
v.
RODERMOND INDUSTRIES, INC., A CORPORATION OF THE STATE OF NEW JERSEY, AND K. & S. ELECTRIC, INC., A CORPORATION OF THE STATE OF NEW JERSEY



Staley, Chief Judge, and Kalodner and Forman, Circuit Judges.

Author: Staley

Opinion OF THE COURT

STALEY, Circuit Judge.

This is an appeal by United New York Sandy Hook Pilots Association (hereinafter "Pilots Assn") and its insurer, Fulton P & I Underwriting Agency, Inc., plaintiffs in the district court, from a judgment of dismissal, rendered at the close of their case, directing verdicts against the plaintiffs and in favor of each of the defendants, Rodermond Industries, Inc (hereinafter "Rodermond") and K. & S. Electric, Inc. (hereinafter "K. & S."). Appellants request reversal of the district court's denial of their motion for a directed verdict and of an order granting the appellees' motions to dismiss. We are asked to enter judgment in favor of appellants, or alternatively, to grant a new trial.

The Pilots Assn in September of 1951, brought its pilot boat "New Jersey" to Rodermond's repair yard in Jersey City, New Jersey. Rodermond had contracted with the Pilots Assn to perform certain overhaul and repair work aboard this vessel. Included in the repair specifications were electrical repairs. Rodermond, however, had no facilities for performing electrical work and it subcontracted the electrical repairs to K. & S.

Part of this subcontract called for K. & S. to clean the boat's generators by use of carbon tetrachloride. The latter is a volatile liquid which, when sprayed, will effectively remove grease and dirt, but whose fumes, unless their density is carefully controlled, may be deadly. In 1951, it was customary to use carbon tetrachoride for cleaning generators, and the Pilots Assn specified that this substance be used. Because of the danger involved, Rodermond made arrangements for K. & S. to clean the generators on Saturday, September 29, 1951, when no other workers would be on the vessel.

The equipment used by K. & S. to clean the generators and to ventilate the engine room was brought aboard and assembled on Friday, September 28, 1951, by Donald Doidge and Walter Halecki, employees of K. & S., under the supervision of George Kuntz, president of K. & S. These three electricians were familiar with the use of carbon tetrachloride; they had used it many times in the past. Blowers owned by Rodermond were set up by the K. & S. employees. K. & S. supplied the gas masks and the carbon tetrachloride, while air hoses and electric power were supplied by Rodermond, as the vessel itself had no power. No one but K. & S. employees took part in setting up the equipment.

Aside from the specified use of carbon tetrachloride, the method and manner in which the generators were to be cleaned was within the discretion of Doidge; only he and Halecki engaged in the cleaning operation on September 29, 1951. The only other person continuously aboard the vessel while the two electricians were working was the Pilots Assn's watchman, who did not enter the engine room. During the time that the generators were being cleaned, the vessel was moored, in navigable waters, at Rodermond's pier.

Following the completion of this work, Walter Halecki became ill, and he died shortly thereafter on October 12, 1951, of carbon tetrachloride poisoning. The decedent's administratrix brought suit against the Pilots Assn in the United States District Court for the Southern District of New York to recover damages for Halecki's death. That action, based upon the New Jersey wrongful death act, N.J.Stat.Ann. 2A:31-1, was brought in the federal court by reason of diversity of citizenship. At the first New York trial in December, 1956, the administratrix alleged that Halecki's death was caused by the negligence of the Pilots Assn and the unseaworthiness of the New Jersey. Over the objections of the Pilots Assn, the case was submitted to the jury on the basis of both unseaworthiness and negligence, and a verdict was returned in favor of the administratrix. Halecki v. United New York & N. J. Sandy Hook Pilots Ass'n, 251 F.2d 708 (C.A.2, 1958)*fn1 The Supreme Court granted certiorari, and in a five to four opinion the Court held that the decedent was not entitled to the warranty of seaworthiness. United New York & N. J. Sandy Hook Pilots Ass'n v. Halecki, 358 U.S. 613, 79 S. Ct. 517, 3 L. Ed. 2d 541 (1959). The judgment in favor of the decedent's estate was vacated and the cause remanded to the district court with instructions that a new trial be held on the sole question of negligence.

The case was retried in October, 1959, and the jury rendered a verdict in favor of the then defendant Pilots Assn. For reasons not relevant here, the Second Circuit reversed and remanded for a new trial. Halecki v. United New York and N.J. Sandy Hook Pilots Ass'n, 282 F.2d 137 (C.A.2, 1960). At the third trial in June of 1961, the jury was instructed that the Pilots Assn was liable if it did not take reasonable steps to be sure, insofar as it could, that the manner and method employed by either Rodermond or K. & S. was reasonably proper to keep the place in which Halecki had to work reasonably safe under all the circumstances. A verdict was returned and judgment entered in favor of the administratrix; the Court of Appeals for the Second Circuit affirmed, 302 F.2d 840 (C.A.2, 1962), and the Supreme Court denied certiorari. 371 U.S. 825, 83 S. Ct. 46, 9 L. Ed. 2d 64 (1962).

The case now before this court concerns the New Jersey indemnity action brought by the Pilots Assn, and its insurer, against Rodermond and K. & S.*fn2 Appellants contend in this diversity suit that the appellees, in undertaking to perform the work aboard the New Jersey, impliedly warranted to perform the work in a safe and proper manner, to keep the shipowner free from harm, and to indemnify it for any damage caused by the contractors' negligence. The district court, in its oral opinion dismissing this action, first determined that the Supreme Court's decision in United New York & N.J. Sandy Hook Pilots Ass'n v. Halecki, supra, required the application of New Jersey law rather than federal maritime principles. Notice was then taken of the fact that a New York jury had found the Pilots Assn guilty of negligence in not providing Halecki with a safe place to work. The court concluded that the shipowner could not recover indemnity against either Rodermond or K. & S. because the plaintiff was a joint tortfeasor, and under New Jersey law an indemnitee may not recover indemnity where the creation of the liability results exclusively or concurrently from the wrongdoing of the indemnitee. The court also held that the Pilots Assn could not prevail against K. & S. for the additional reason that K. & S. had paid workmen's compensation to Halecki's widow. Under New Jersey law, the court noted, the existence of the workmen's compensation restriction respecting remedies between the employer and employee operates reciprocally for the benefit of both, entitling the employer to the exclusivity provisions of the Act as opposed to the claim of a joint tortfeasor. See Workmen's Compensation Act, N.J. Stat.Ann. 34:15-8; Public Service Electric & Gas Co. v. Waldroup, 38 N.J.Super. 419, 119 A.2d 172 (1955).

The threshold question on this appeal is whether the district court erred in applying New Jersey law to the instant controversy rather than maritime principles. The answer depends, in part, upon the breadth of the Supreme Court's decisions in Halecki, supra, and The Tungus v. Skovgaard, 358 U.S. 588, 79 S. Ct. 503, 3 L. Ed. 2d 524 (1959), a case decided the same day as Halecki. Both these cases involved suits brought by the decedent's administratrix under the New Jersey wrongful death act. The state statute was invoked because maritime law itself confers no right of action for wrongful death in state territorial waters. Hess v. United States, 361 U.S. 314, 80 S. Ct. 341, 4 L. Ed. 2d 305 (1960); The Harrisburg, 119 U.S. 199, 7 S. Ct. 140, 30 L. Ed. 358 (1886);*fn3 instead, admiralty courts entertain such an action by permitting the wrongful death statute of the state in which the death occurred to supplement the general maritime law. Western Fuel Co. v. Garcia, 257 U.S. 233, 42 S. Ct. 89, 66 L. Ed. 210 (1921). In these situations, maritime law adopts the state statute, and enforces it "as it would one originating in any foreign jurisdiction." Levinson v. Deupree, 345 U.S. 648, 652, 73 S. Ct. 914, 916, 97 L. Ed. 1319 (1953); Western Fuel Co. v. Garcia, 257 U.S. supra, at 242, 42 S. Ct. 89.

Mindful of the role played by state law in this area, the Supreme Court in Halecki held that the Court of Appeals for the Second Circuit correctly viewed "its basic task as one of interpreting the law of New Jersey." 358 U.S. at 615, 79 S. Ct. at 518. Thus the Court sanctioned the view "that in an action for wrongful death in state territorial waters the conduct said to give rise to liability is to be measured not under admiralty's standards of duty, but under the substantive standards of the state law." Hess v. United States, supra, 361 U.S. at 319, 80 S. Ct. at 345. The Court in Halecki based its holding on "the reasons stated in The Tungus v. Skovgaard." In the latter case, the Court reiterated its long established rule "that when admiralty adopts a State's right of action for wrongful death, it must enforce the right as an integrated whole, with whatever conditions and limitations the creating State has attached." 358 U.S. at 592, 79 S. Ct. at 506.

As noted, the district court concluded that the Halecki decision required a ruling that New Jersey law controlled this indemnity action. We, however, do not read Halecki as impelling the conclusion that because the initial suit was brought pursuant to a state wrongful death act, the shipowner is precluded from pressing its maritime claim for indemnity against the contractors. We think such a ruling would directly conflict with Supreme Court decisions holding that state law cannot deprive a litigant of admiralty rights arising out of an accident upon navigable waters. Pope & Talbot v. Hawn, 346 U.S. 406, 74 S. Ct. 202, 98 L. Ed. 143 (1953); Garrett v. Moore-McCormack Co., 317 U.S. 239, 63 S. Ct. 246, 87 L. Ed. 239 (1942); Great ...


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