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In re Complaint of Bankers Trust Co.

December 31, 1984



Author: Higginbotham

Before: SEITZ, Chief Judge, HIGGINBOTHAM and BECKER, Circuit Judges.


HIGGINBOTHAM, A. LEON, JR., Circuit Judge.

We are asked on this appeal to review the proceedings on a petition to vacate and set aside the settlement and release of the admiralty claim of a deceased seaman. Mrs. Prava Chatterjee, the mother of the decedent, appeals from the district court's second denial of her petition and requests that we consider the interrelated questions of whether the shipowners sustained their burden of proving that the settlement and release were validly executed and whether certain evidentiary rulings of the district court in this regard denied her procedural due process and resulted in a miscarriage of justice.

We will vacate the district court's order denying the petition to vacate and set aside the settlement and release of the admiralty claim and we will remand this matter for further proceedings consistent with this opinion.


On January 31, 1975, the chemical carrier S.S. EDGAR M. QUEENY, while making a turn in the Delaware River at Marcus Hook, Pennsylvania, collided with the S.S. CORINTHOS, as she was discharging a cargo of crude oil. The resulting explosion and fire damaged the QUEENY, destroyed and sank the CORINTHOS, and caused numerous deaths and injuries as well as extensive property damage to the BP/Sohio Terminal and to property in the surrounding Marcus Hook area. The owners and operators of the QUEENY, appellees Bankers Truct Company, Monsanto Company and Keystone Shipping Co. (collectively referred to herein as "shipowners"), broght an action for limitation of liability within one week of the accident, pursuant to the Limitations of Liability Act, 46 U.S.C. ยง 183 (1970). In Re Complaint of Bankers Trust Co., 503 F. Supp. 337 (E.D. Pa. 1980), rev'd, 651 F.2d 160 (3d Cir. 1981), cert. denied, 455 U.S. 942, 71 L. Ed. 2d 653, 102 S. Ct. 1436 (1982).

The Louisiana law firm of Due and Dodson ("Respondents"), which represented the survivors of all injured and deceased Indian crewmembers, filed an answer and claim on behalf of petitioner-appellant Prava Chatterjee ("Mrs. Chatterjee"), a resident of the People's Republic of Bangladesh, as survivor of Pratik Kumar Chetterjee, a crewmember killed in the CORINTHOS-QUEENY disaster.*fn1 Due and Dodson's representation was based upon an attorney-client contract, App. at 220a-221a, executed by Anil Ranjan Ghosal ("Ghosal"), the sone-in-low of the petitioner, who purportedly represented Mrs. Chatterjee by virtue of a special power of attorney. The validity and attestation of this special power of attorney is contested by the parties.*fn2

In the United States, Due and Dodson agreed to settle the Chatterjee claim for $87,000.00.Thereafter, to implement the "settlement"*fn3 counsel from Due and Dodson, the attorney for the shipowners, and an associate of Due and Dodson in these claims, Dean Bhishma K. Agnihotri, went to New Delhi, India where on December 17, 1975 Ghosal presented the special power of attorney to the shipowners' lawyer and signed a release of all claims relating to Pratik's death.*fn4

After presentation of the executed special power of attorney and release, counsel for the shipowners wired his client to transfer the settlement funds to Due and Dodson in Louisiana. Abb. App. at 28a-33a. Due and Dodson in turn gave Ghosal a check in the amount of $29,000.00. They allege that he was also given $15,000.00 in cash, without a receipt, to complete the payment of $44,000.00 due to Mrs. Chatterjee, i.e., $87,000.00 less fees and costs. Abb. App. at 25a.

Prava Chatterjee filed her petition in the limitation of liability proceeding on May 7, 1979, three-and-one-half years after Ghosal accepted the settlement and signed the release. In the petition, she asserted that she "was not advised of the death of her son as she was living in Bangladesh and was in mourning over the death of her husband who died January 28, 1975." App. at 10a. She further alleged that she never signed any power of attorney authorizing Ghosal to act on her behalf, she never retained American counsel, and she never received any portion of the settlement proceeds.She claimed to be the only person entitled to receive the funds as Pratik Chatterjee's mother and sole heir under Indian succession law. Additionally, she maintained that the settlement was inadequate and did not represent the fair value of the claim. App. at 11a-12a.

Several months after filing this petition, Mrs. Chatterjee brought a legal malpractice action naming as defendants the law firms which had participated in the settlement*fn5 -- Krusen, Evans, and Byrne, which had represented shipowners, and Due and Dodson, which had represented the claimants. Chatterjee v. Due, 511 F. Supp. 183 (E.D. Pa. 1981). In this separate tort action, Mrs. Chatterjee sought conpensatory and punitive damages in the amount of $3.25 million, alleging that the attorneys negligently entered into the settlement agreement without certification that her son-in-law was authorized to act on her behalf. She further alleged that her son-in-law had forged her name to the special power of attorney and general release. Pursuant to a stipulation of the parties approved by the district court, a Commission was held in Calcutta, India which took the depositions of Mrs. Chatterjee, Ghosal and other members of the family.

After the tort action was filed, the district court in the limitation of liability proceeding denied Mrs. Chatterjee's petition to set aside and vacate the settlement and release. A petition for mandamus was denied on July 1, 1982 (No. 82-3030) but an appeal was allowed and this court vacated the order of the district court and remanded for further proceedings, concluding that the district court erroneously held that Mrs. Chatterjee's tort action was duplicative of the instant proceeding to vacate the settlement and release and further held that denial of the petition was an inappropriate attempt to control its docket. In re Complaint of Bankers Trust Co., 636 F.2d 37 (3d Cir. 1980).

On remand, the district judge denied several of petitioner's pending motions,*fn6 and fixed a date for hearing on October 18, 1982.In denying petitioner's October 4, 1982 Motion for Invocation of Commission in India to Take Testimony or In the Alternative to Use the Transcript of the Previous Commission, the district court ruled that

we will not permit at the trial, the use of the transcript of a commission used in another matter involving this petitioner before Judge Giles of this Court. The parties in the case before us, Bankers Trust Company, Monsanto Company and Keystone Shipping co. are not parties in the action before Judge Giles, nor did they have the opportunity to cross examine the petitioner or witnesses at the commission in India.

App. at 7a-9a. (emphasis added).

The district court did not act on this motion until October 14, 1982, and it was not filed and mailed by the Clerk unitl the following day, a Friday.

At the Monday, October 18, 1982 hearing, counsel for the petitioner read portions of the former testimony of Mrs. Chatterjee taken before the Calcutta Commission on February 17, 1981 in connection with the malpractice suit. Transcript of October 18, 1982 Hearing ("Tr.") at 26-34. No reference was made to the October 6 denial of the above-mentioned motion by the district court during the hearing on October 18, 1982. According to counsel for petitioner, he did not learn of the denial of the motion until he returned to his office following the October 18 hearing, which commenced at 9:30 A.M. and concluded at 11:20 A.M. (Appellant's Brief at 8,*fn5).

On November 29, 1982 the district court again denied Prava Chatterjee's petition to vacate and set aside the settlement and release. In re Bankers Trust Co., 551 F. Supp. 609 (E.D. Pa. 1982). In so ruling, the district court first concluded that Prava Chatterjee's allegations concerning Ghosal's lack of authority to settle the maritime death claim on her behalf had not been presented through in-court testimony by her and that the allegations of her attorney to that effect did not constitute competent evidence. Finding that Mrs. Chatterjee was not "unavailable" under Rule 804 of the Federal Rules of Evidence, the district court held that the allegations fell within no exception to the hearsay rule and were "not evidence which [could] be considered by [the] court in making its determination." 551 F. Supp. at 610.

The district court then proceeded to deny Mrs. Chatterjee's Second Motion for the Invocation of a Commission in India to Take Testimony or, in the Alternative, to Accept Into Evidence the Transcripts of the Depositions Taken by the Previous Calcutta Commission, for the reasons articulated in connection with the motion denied on October 14. Id. at 611.

Finally, the district court held that the shipowners had met their burden of proving under federal maritime law that the release of the admiralty claim was freely executed with full understanding and without deception or coercion under the standard articulated in Garrett v. Moore-McCormack Co., 317 U.S. 239, 246, 87 L. Ed. 239, 63 S. Ct. 246 (1942).

Petitioner filed a timely motion for reconsideration. This appeal followed on December 28, 1982.*fn7


One can readily lose sight of the fundamental question raised in this case, given the subtleties of the subsidiary issues on which scholars of conflicts of law, contracts, agency, and maritime law could write voluminously. Despite the fact that we must explore collateral aspects of this case in several different fields of law, ultimately, when stripped to its essence, the critical inquiry before us is a simple one of fairness: was Prava Chatterjee denied a fair trial?

The petitioner strenuously asserts that the district court deprived her of due process by denying the use of the transcript of the November 30, 1981 Calcutta Commission, as well as by denying the invocation of a new commission in India to take additional testimony. Therefore, we must consider whether the exclusion of the record of the earlier fact-finding Commission in a separate federal law suit involving Mrs. Chatterjee and some of the same parties deprived her of due process. We must then turn to the question of whether the refusal to invoke a new commission to take testimony on the circumstances surrounding the execution of the special power of attorney and the release denied Mrs. Chatterjee a fair trial -- particularly in view of the fact that another federal tribunal had granted such a request as to intimately related aspects of this case.

However, before we can reach the ultimate issue of procedural fairness, we must take a lengthy journey through the related fields of conflicts of law, contracts, agency and maritime law -- as a condition precedent to our assessment of whether petitioner is entitled to receive the relief requested. Our review of the district court's conclusion that the shipowners satisfied their burden of proving the validity of the settlement and release must begin with an analysis of certain preliminary questions: (a) what law ...

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