# Petition for Writ of Certiorari — City of Milwaukee v. Cement Division

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1991
- **Citation:** 499 U.S. 960

## Text

ae, Supreme Court, U.S.

FILED

on -1299

tan FEB 15 1991

so Vin OFFICE OF THE Clans
Supreme Court of the United States
October Term, 1990
CITY OF MILWAUKEE,
Petitioner,

CEMENT DIVISION, NATIONAL GYPSUM

COMPANY, et al.,

Respondents.

_
aA

Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Seventh Circuit

a
_

PETITION FOR A WRIT OF CERTIORARI

a
—

GRANT F. LANGLEY
City Attorney

Counsel of Record

RupoitrpH M. Konrap
Deputy City Attorney

THomMaS J. BEAMISH

Assistant City Attorney

800 City Hall

200 East Wells Street
Milwaukee, Wisconsin 53202

(414) 278-2601

Counsel for Petitioner

February 14, 1991

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964
OR CALL COLLECT (402) 342-2831

SSE neath tether cea TTI csc

}

QUESTIONS PRESENTED

1. Does a federal court of appeals, which has found
an apportionment of fault by a district court to be clearly
erroneous under Fed. R. Civ. P. 52(a), have the authority
to make new findings of fact, reweigh the evidence and
reapportion fault?

2. Should the admiralty rule that liability for dam-
ages is to be allocated among the parties proportionately
to the degree of their fault be changed so that the relative
cost of avoiding the casualty becomes a substantial factor
in apportioning fault?

ii

LIST OF PARTIES

The parties to the proceedings below were the peti-
tioner City of Milwaukee and the respondents Cement
Division, National Gypsum Company; Reed & Brown,
Inc.; New York Marine Managers, Inc.; Allstate Insurance
Company, c/o American Marine Underwriters, Inc.;
Highlands Insurance Company; Employers Casualty
Company of Texas, c/o Texas Marine Underwriters
Agency, Inc.; Donald H. Miller, Inc.; U.S. Fidelity and
Guarantee Company; Great Lakes Protective Association;
The Atlantic Companies; Lloyds Underwriters, Institute
Companies, including: Commercial Union Assurance Co.
Ltd., “I” A/o. Andrew Weir Insurance Co. Ltd., English &
American Insurance Co. Ltd., “M” 1 A/o., Orion Insur-
ance Co. Ltd., “T” A/o. Yasuda Fire & Marine Insurance
Co. (U.K.) Ltd., “T” A/o., Atlas Assurance Co. Ltd., “T”
A/o., Phoenix Assurance Co. Ltd., British Law Insurance
Co. Ltd., Road Transport and General Insurance Co. Ltd.,
Insurance Company of North America (U.K.) Ltd., “G”
A/o., Insurance Company of North America (U.K.) Ltd.,
“O” A/o., Home Insurance Co. Ltd., “X” A/o., London &
Hull Maritime Insurance Co. Ltd., Hanover Insurance Co.
Ltd., Sphere Insurance Co. Lid., Drake Insurance Co.
Ltd., Bishopsgate Insurance Co. Ltd., “F” A/o., British
Law Insurance Co. Ltd., No. 2 A/o., Minster Insurance
Co. Ltd., No. 2 A/o., Insurance Corporation of Ireland,
“L” A/o., Folksam International Insurance Co. (U.K.)
Ltd., Terra Nova Insurance Co. Ltd. per Andrew Drysdale
Ltd., Economic Insurance Co. Ltd., “GENERAL” A/o.,
c/o Willis, Faber & Dumas Ltd., Ten Trinity Square, Lon-
don EC3P 3AX England.

iii

LIST OF PARTIES — Continued

Petitioner, City of Milwaukee, has no parent com-
panies, subsidiaries, or affiliates to list pursuant to Rule
28.1.

iv

TABLE OF CONTENTS

Page
QUESTIONS PRESENTED ............... eee i
(og REAP eee rae eee eee ee ii
eo EE eee ee ee eee Tere re 1
EC a 0b 6 Whe AGHA w 650.5606 Kee ad te dM 2
ee eee eee ee Te eee eee 3
SEAMS GOP Beem CAI ec ic cc cee eccessicenes 3
REASONS FOR GRANTING THE WRIT ........... 11

I. The Seventh Circuit’s Unauthorized Finding of
Fact and Reapportionment of Fault on Appeal (1)
Conflicts with Decisions of this Court, and (2)
Deprives the Petitioner of an Appeal as a Matter
OE TU Sc cscs ccceevesccvawseecnntccsnassoees 11

A. The Seventh Circuit’s Decision Conflicts
with Decisions of This Court and its Ruling
Exceeds its Appellate Authority ........... 11

B. The Seventh Circuit’s Decision Deprives the
Petitioner of an Appeal as a Matter of Right 23

Il. The “Cost of Avoidance” Standard for Appor-
tioning Fault in an Admiralty Case Formulated
by the Seventh Circuit is Inconsistent with United
States v. Reliable Transfer and with Numerous Cir-
cuit Court Decisions that have Apportioned
Fault Without Reference to the Cost of Avoidance

Terres SEE GARPPAASES SERRA AED CRO Cs SmNeREME NOES OO
ee rere eee eet ee ee eee 30
APPENDIX

Decision of the United States Court of Appeals for
the Seventh Circuit (October 16, 1990)........... la

eS

TABLE OF CONTENTS - Continued

Page
Memorandum of Decision and Order of the
United States District Court for the Eastern Dis-
trict of Wisconsin (June 30, 1989) ................ 15a

Order of the United States Court of Appeals for
the Seventh Circuit Denying Petition for
Rehearing (November 21, 1990)................. 145a

vi

TABLE OF AUTHORITIES

FEDERAL Cases
Afran Transport Co. v. S/T Maria Venizelos, 450

F.Supp. 621 (B.D. Pa. 1976) ..... 6s ccscccseneces

Allied Chemical Corp. v. Hess Tankship Co. of Dela-

ware, 661 F.2d 1044 (5th Cir. 1981).............

Anderson v. Bessemer City, 470 U.S. 564 (1985)
Pins sau nwn dies RODEN RRR ET RS SU eeeee 13, 14, 15,

Boudoin v. ]. Ray McDermott & Co., 281 F.2d 81 (Sth

Ce Wee caved ckecuc cuee ke coke ee

Bremmer v. Shedd, 467 F.Supp. 261 (W.D. Pa. 1979)...

Bunge Co. v. M/V Furness Bridge, 558 F.2d 790 (Sth

Cir.) cert. denied 435 U.S. 924 (1977)............

Canal Barge Inc. v. China Ocean Shipping Co., 770

oe Bk A Be arr re rr rry Tere

Chris-Craft Industries, Inc. v. Piper Aircraft Corp.,
516 F2d 172 (2d Cir. 1975) (en banc), rev'd on
other grounds, 430 U.S. 1, reh’g denied, 430 US.

GEO COUN
is

PETITION FOR A WRIT OF CERTIORARI

— *
vw

The petitioner, City of Milwaukee, respectfully prays
that a writ of certiorari issue to review the judgment and
opinion of the United States Court of Appeals for the Sev-
enth Circuit entered in the above-entitled proceeding on

October 16, 1990.

OPINIONS BELOW

The opinion of the Court of Appeals for the Seventh
Circuit is reported at 915 F2d 1154 (7th Cir. 1990), and is
reprinted in the appendix hereto. [1a]

1

2 |
The memorandum decision and order of the United |
States District Court for the Eastern District of Wisconsin

(Curran, D.J.) has not been reported. It is reprinted in the
appendix hereto. [15a]

,%
—_

JURISDICTION

Invoking federal jurisdiction under 28 U.S.C. § 1333,
the respondents brought this suit in admiralty in the
Eastern District of Wisconsin. The Eastern District bifur-
cated the trial of liability and damages. On June 30, 1989,
the Eastern District, after the issue of liability was tried to
the court, issued a decision and order which held that
both petitioner and respondents were negligent and con-
tributorily negligent and apportioned fault 96 percent

against the respondents and four percent against the
petitioner. [15a]

Respondents appealed the decision of the Eastern “a;

District to the Seventh Circuit under 28 U.S.C.
§ 1292(a)(3). On October 16, 1990, the Seventh Circuit
entered an opinion and judgment reversing the Eastern
District’s allocation and reapportioned fault two-thirds
against the respondents and one-third against the peti-
tioner. [la] The petitioner filed a petition for rehearing en
banc, which was denied by the Seventh Circuit on
Nevember 21, 1990. [145a]

The jurisdiction of this Court to review the judgment
of the Seventh Circuit is invoked under 28 U.S.C.
§ 1254(1).

.

3
STATUTES INVOLVED

Fed. R. Civ. P. 52(a) Findings by the Court

(a) Effect. In all actions tried upon the facts without
a jury or with an advisory jury, the court shall find the
facts specially and state separately its conclusions of law
thereon, and judgment shall be entered pursuant to Rule
58; and in granting or refusing interlocutory injunctions
the court shall similarly set forth the findings of fact and
conclusions of law which constitute the grounds of its
action. Requests for findings are not necessary for pur-
poses of review. Findings of fact, whether based on oral
or documentary evidence, shall not be set aside unless
cleariy erroneous, and due regard shall be given to the
opportunity of the trial court to judge of the credibility of
the witnesses. The findings of a master, to the extent that
the court adopts them, shall be considered as the findings
of the court. It will be sufficient if the findings of fact and
conclusions of law are stated orally and recorded in open
court following the close of the evidence or appear in an
opinion or memorandum of decision filed by the court.
Findings of fact and conclusions of law are unnecessary
on decisions of motions under Rules 12 or 56 or any other
motion except as provided in Rule 41(b).

y%
vr

STATEMENT OF THE CASE

On December 24, 1979, the SS EM FORD, loaded with
5,700 tons of cement, was moored in a slip in Mil-
waukee’s outer harbor on southern Lake Michigan. In the
course of a severe northeasterly winter storm, the FORD,
over a twelve-hour period, broke loose from its moorings,

4

4

battered_against the headwall of the slip, tore holes in its
hull, took on water and sank to the bottom of the slip.

The owners of the vessel, National Gypsum, and its
insurers brought this suit in admiralty pursuant to 28
U.S.C. § 1333 against the City seeking $6.5 million in
damages. The suit alleged, among other things, that the
City had negligently breached its duty as a wharfinger by
failing to warn National Gypsum of a hidden danger in
the berthing slip. The City denied fault and alleged in its
counterclaim that National Gypsum was negligent in
leaving the FORD moored in an outer harbor slip in
winter virtually unmanned, and with no means of mon-
itoring weather or summoning tugs or a pilot for assis-
tance. The City sought to recover $250,000 for damages
caused by the vessel crashing against the dock walls.

The trial was bifurcated, with the liability portion
tried to the District Court without a jury. The District
Court, in a 140-page opinion, found both National Gyp-
sum and the City negligent and contributorily negligent,
and found National Gypsum 96 percent at fault and the
City 4 percent at fault.

National Gypsum, by means of an interlocutory
appeal pursuant to 28 U.S.C. § 1292(a)(2), appealed that
portion of the District Court’s decision apportioning fault
96/4 as well as a separate issue. The Seventh Circuit, in a
2'/2 page discussion in its eleven-page opinion, held that
the District Court’s apportionment of fault was clearly
erroneous and reapportioned fault two-thirds upon
National Gypsum and one-third upon the City. This
eigl t-fold increase of the City’s fault increased the City’s
potential liability from a range of approximately $0 to
$40,000 to a range of approximately $2 million to $4

5

million, depending upon how the unresolved damages
issues will be decided.

The District Court found the facts to be as follows.
Upon the FORD’s arrival in Milwaukee’s outer harbor on
December 21, 1979, its captain, Captain Patrick Gallagher,
contacted the City’s dock superintendent, Stanley Blawas,
by radio-telephone. Captain Gallagher notified Blawas
that the FORD was instructed to lay up for the winter
beginning on December 23, 1979 at National Gypsum’s
terminal located in the City’s inner harbor. Because
National Gypsum’s terminal was unavailable to the
FORD for the next three days, Blawas offered the captain
a berth at South Slip No. 1 in the outer harbor for a
temporary tie-up. Blawas told the captain that it would
be easier for the FORD to maneuver in and out of that
slip. The captain accepted the slip without making any
inquiry as to its safety and moored the vessel bow in,
starboard side to the dock. [33a-34a]

The next morning, December 22nd, National Gypsum
changed the FORD’s orders and instructed the captain to
leave the vessel berthed in the outer harbor, to discharge
its officers and crew for the holidays, and then to order
their return after Christmas to make one more voyage
before returning to Milwaukee for its winter lay-up. [40a]
Captain Gallagher did not inform the City of this change
in the FORD’s plans. [100a] However, when Blawas hap-
pened to be on the vessel later that day on other business,
the captain did inform Blawas that the FORD would need
to tie up for a number of days and that part of the crew
would be leaving for the holidays. Blawas then told the
captain that the outer harbor could get “heavy” in a
storm; Blawas added that the waves in the slip were
generally one to two feet. [41a] Blawas offered the captain

6

a more sheltered inner harbor berth, which the captain
rejected because the crew had already begun to double
the lines and moving the ship would have cost time and
money. [42a, 101a] Later on the 22nd, the captain dis-
charged the entire crew, but left aboard five crewmen
who agreed to stay as shipkeepers. [42a-43a] Before his
own departure, he also shut down the ship’s radio-tele-
phone as well as the radio which would normally receive
weather reports. [44a-45a]

Although the National Weather Service broadcast
weather forecasts for the port area on December 23rd and
24th, which gave clear warning of the severity and direc-
tion of the approaching storm, no one on the FORD had
been assigned to monitor the weather. At 7:00 A.M. on
December 24th, the United States Coast Guard posted
gale warnings for southern Lake Michigan. None of those
aboard the vessel had heard the forecasts or knew of the
warning. [45a-50a] At approximately 1:00 P.M. on Decem-
ber 24th, a crew member noticed that the FORD was 10 to
15 feet off the dock at the stern and the wind velocity and
wave height had increased markedly; the boarding lad-
der, now off the dock, was then brought on board. After
unsuccessful efforts to tie up the vessel, tugs arrived at
4:00 P.M., but could not help because there was no pilot
aboard the FORD. Tugs returned at 6:00 P.M., but could
not contact the ship by radio. [51a-53a]

A licensed pilot did arrive at 5:30 P.M., saw that the
bow of the ship was pounding against the headwall, and
jumped aboard the FORD, along with three others, to
prepare it to be towed from the slip. At 8:00 P.M., the
pilot successfully summoned tugs, but by that time the
FORD’s rolling actions were too severe and attempts to
remoor the vessel proved unsuccessful. At 11:00 P.M., the

7

pilot found that the ship was taking on water; near mid-
night the ship was abandoned by all hands. That night
the ship sank to the bottom of the slip. [53a-55a]

The District Court found the City negligent in not
adequately warning National Gypsum that wind and
wave conditions could develop in the slip occupied by
the FORD that would endanger the vessel. Moreover,
although the City did not know that the captain planned
to discharge virtually the entire crew, the District Court
found that the City failed to solicit sufficient information
from the captain to decide either to order the vessel to
remain manned while tied up or to move off the berth.
[57a-58a, 102a-103a]

The District Court found the shipowner negligent
because: (1) National Gypsum knew from regulations
published earlier by a marine insurance association that
Milwaukee’s outer harbor was not a safe location to leave
a vessel moored in winter without a crew, [37a-38a, 131a]
(2) it had been specifically warned by a marine surveyor
two weeks before the sinking that Milwaukee’s outer
harbor was subject to heavy surge in northeasterly winds,
[31a-32a] and (3) its captain had been warned by the City
that the weather could get “heavy” in the outer harbor.
[41a] Despite this knowledge, the District Court found
that National Gypsum had failed to follow prudent mar-
itime practices in three significant respects. First,
National Gypsum failed to man the FORD with a captain
or licensed pilot and sufficient crew to operate the vessel;
as a consequence, the FORD could not be moved out of
the slip, either by its own power or with assistance of
tugs once gale warnings were issued early in the day or
later in the day when her lines began to part. [58a,
126a-127a] Second, National Gypsum failed to monitor

8

the weather; as a consequence, no one on the vessel heard
the weather forecasts indicating that gale conditions were
developing on southern Lake Michigan. [59a, 127a-128a]
Third, National Gypsum failed to provide those on board
with ship-to-shore communications; as a consequence,
they did not learn of the i.npending storm until the ship
moved away from the dock, and, once the ship did move
away from the dock, they could not effectively summon
help. [128a]

The District Court held that fault should be appor-
tioned in accordance with the relative culpability of the
parties and found that National Gypsum had to bear a far
greater share of the fault for the casualty than the City.
[135a] National Gypsum, the District Court found, consis-
tently chose a course of action that would save it time
and money, even at the cost of risk to its vessel.
[135a-137a] The District Court found a great disparity in
culpability because: (1) the disparity in tasks and duties
imposed by law on a shipowner is far greater than those
imposed on a wharfinger, (2) the shipowner remained in
complete custody and control of the vessel and, therefore,
bore the ultimate responsibility for ensuring her safety,
and (3) the potential for suffering a large loss was fore-
seeable to the shipowner because of the large cost of the
property — the ship and the cargo — the shipowner had at
risk. [138a-139a]

The Seventh Circuit did not find any particular find-
ing of fact or conclusion of law relied upon by the District
Court in apportioning fault to be erroneous. It described
the District Court’s decision as “thorough and largely
well-reasoned” and “basically correct;” nevertheless, the
Seventh Circuit held that the District Court’s apportion-
ment of fault was clearly erroneous. The Seventh Circuit

9

apparently believed that the District Court might have
apportioned fault in proportion to the alleged value of
the property each party had at risk. The Seventh Circuit
based this conclusion upon a single sentence of the Dis-
trict Court’s 140-page opinion that the potential of the
shipowner incurring a large loss was foreseeable because
of the value of the property it had at risk, and upon its
observation that the District Court’s apportionment of
fault ratio was approximately the same as the ratio of the
amount of damages alleged in the pleadings. The Seventh
Circuit stated that the District Court’s “calculations, how-
ever they were arrived at” left it with a “definite and firm
conviction that a mistake had been committed.” It held
that it could not accept the District Court’s apportion-
ment because either the District Court had considered the
value of the respective property at risk, or the District
Court had failed to adequately explain in its decision how
it had arrived at the apportionment of fault. [10a-11a]

Rather than remand the case to the District Court
either to clarify its opinion or to reapportion fault consis-
tent with the Seventh Circuit’s opinion, the appellate
court decided to reapportion fault based upon the record
before it. In doing so, it focused on isolated facts, while
not accepting the District Court’s evaluation of the entire
record. Rather than accept the District Court’s finding
that the City had inadequately warned the FORD, the
Seventh Circuit found that the City had failed to warn the
FORD or National Gypsum of any possible danger to the
FORD. [4a] The Seventh Circuit also found that the
FORD’s captain had informed Blawas that “most of the
crew would be gone until December 26th or 27th, but that
a skeleton crew would be left aboard the FORD during
the interim.” [4a-5a] This finding charged the City with

10

greater knowledge than that found by the District Court,
which had found that the captain of the FORD told
Blawas only that “part of the crew would go home for the
holiday.” [41a] In addition, the Seventh Circuit appar-
ently afforded other significant findings of the District
Court less weight than the District Court provided in its
decision. [3a-4a]

The Seventh Circuit then applied a new standard of
measure of liability to a maritime case. “The doctrine of
comparative negligence” the court announced “is gener-
ally supposed to be used to assess liability in proportion
to the cost of avoiding the entire accident to each side.”
[1la] The City could have told the captain more about
possible wave conditions in the slip and could also have
asked the captain more searching questions about his lay-
up plans at no cost, and because the captain could have
undertaken some investigation on his own or could have
questioned Blawas more closely at no cost, the Seventh
Circuit concluded that no reasonable trier of fact could
apportion more than two-thirds of liability to National
Gypsum. Although the Seventh Circuit apparently found
the “cost of avoidance” to be equal, it concluded that
National Gypsum must bear a greater share of the fault
than the City because a captain is ultimately responsible
for his ship and, in this case the captain had left the
FORD “a sitting duck.” On this basis the Seventh Circuit
reapportioned fault two-thirds upon National Gypsum
and one-third upon the City. [11a-12a]

La
4

11
REASONS FOR GRANTING THE WRIT

I. The Seventh Circuit’s Unauthorized Finding of Fact
and Reapportionment of Fault on Appeal (1) Con-
flicts with Decisions of this Court, and (2) Deprives
the Petitioner of an Appeal as a Matter of Right.

In violation of a rule this Court has described as
“elementary,” proceeding in a fashion this Court has
described as “incredible,” in direct conflict with three
recent decisions of this Court, without statutory author-
ity, and without hearing the key testimony it relied upon,
the Seventh Circuit appropriated from the District Court
the task of finding the facts in this case. This appropria-
tion has resulted in a decision that was not only rendered
without lawful authority, but also is erroneous and unjust
in result. As a consequence, the City, burdened with a
judgment that will cost it millions of dollars, has in effect
been deprived of the right to appeal an erroneous finding
of fact to a higher court. This unauthorized, drastic and
unjust reordering of the federal judicial process deserves
this Court’s attention.

A. The Seventh Circuit’s Decision Conflicts with
Decisions of This Court and its Ruling Exceeds
its Appellate Authority.

It is not disputed that an apportionment of ‘ault in an
admiralty case is a finding of fact and not a conclusion of

law. This Court held in McAllister v. United States, 348
U.S. 19 (1954), that a finding of negligence in an admi-

ralty case tried to the court is a finding of fact that must
be reviewed under the “clearly erroneous” standard. Id.

12

at 20.1 Accordingly, the “clearly erroneous” standard of
review is applied to an admiralty court’s apportionment
of fault in accordance with comparative negligence prin-
ciples in collision (two or more moving vessels) or alli-
sion (involving fixed objects) cases in all circuits that
have considered the issue.?

In three unequivocal decisions, this Court has held
that federal appellate courts, in reviewing a district
court’s decision pursuant to Rule 52(a), should not make
factual findings on their own. In Pullman-Standard v.
Swint, 456 U.S. 273 (1982), this Court held that findings of
“ultimate fact” - in that case a finding of discrimination -
are subject to review under the “clearly erroneous” stan-
dard of Rule 52(a), and, accordingly, appellate courts are
without authority to make independent findings of “ulti-
mate fact,” even if the “ultimate fact” found is based
upon subsidiary facts found by the district court. Id. at

1 Prior to the decision of this Court in McAllister v. United
States, 348 U.S. 19 (1954), federal appellate courts had the
power to conduct de novo reviews in admiralty cases. In 1966,
the Federal Rules of Civil Procedure were made applicable to
admiralty cases, except for prize proceedings. Fed. R. Civ. P. 1,
81(a)(1).

2 See, e.g, Phillips Petroleum Co. v. Stokes Oil Co., Inc., 863
F.2d 1250 (6th Cir. 1988); In re White Cloud Charter Boat Co., Inc.,
813 F.2d 1513 (9th Cir. 1987); SCNO Barge Lines, Inc. v. Sun
Transp. Co., 775 F.2d 221 (8th Cir. 1985); Ente Nazionala Per
L’Energia Electtrica v. Baliwag Nav. Inc., 774 F.2d 648 (4th Cir.
1985); Canal Barge Inc. v. China Ocean Shipping Co., 770 F.2d
1357 (Sth Cir. 1985); Harbor Tug & Barge, Inc. v. Belcher Towing
Co., 733 F.2d 823 (11th Cir. 1984); Getty Oil Co. (Eastern Opera-
tions) Inc. v. SS Ponce DeLeon, 555 F.2d 328 (2d Cir. 1977). The
Seventh Circuit acknowledged that it was bound by the
“clearly erroneous” standard of review in this case. [10a]

i?

285-87. As a consequence, in cases where a district court
has failed to make a finding because of an erroneous view
of the law, or where the findings are infirm because of an
erroneous view of the law, “a remand is the proper course
unless the record permits only one resolution of the fac-
tual issue.” Id. at 292. All this, the Court noted “is ele-
mentary.” Id. at 293. For an appellate court to proceed to
make its own finding of ultimate fact, as the Seventh
Circuit did in this case by its reapportionment of fault,
was described by this Court as “incredible.” Id. at 293.

The rationale for the limited review permitted under
Rule 52(a) was stated by this Court in Anderson v.
Bessemer City, 470 U.S. 564 (1985):

The rationale for deference to the original
finder of fact is not limited to the superiority of
the trial judge’s position to make determinations
of credibility. The trial judge’s major role is the
determination of fact, and with experience in
fulfilling that role comes expertise. Duplication
of the trial judge’s efforts in the court of appeals
would very likely contribute only negligibly to
the accuracy of fact determination at a huge cost
in diversion of judicial resources. In addition,
the parties to a case on appeal have already
been forced to concentrate their energies and
resources On persuading the triai judge that
their account of the facts is the correct one;
requiring them to persuade three more judges at
the appellate level is requiring too much. As the
Court has stated in a different context, the
trial on the merits should be “the ‘main
event’ .. . rather than a ‘tryout on the road.’ ”
Wainwright v. Sykes, 422 U.S. 72, 90, 53 L.Ed. 2d
594, 97 S.Ct. 2497 (1977).

Id. at 574-75. In Anderson this Court held that the Fourth
Circuit erred when it did not limit its review to a deter-
mination of whether the district court’s findings were

14

clearly erroneous, but instead made findings of fact on its
own by drawing factual conclusions from both the facts
found by the district court and from its own interpreta-
tion of the testimony.

In Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709
(1986), this Court held unequivocally that a federal appel-
late court in reviewing a district court’s decision pur-
suant to Rule 52(a) should not make factual findings on
its own. This Court stated:

If the Court of Appeals believed that the District

Court had failed to make findings of fact essential

to a proper resolution of the legal question, it

should have remanded to the District Court to

make those findings. If it was of the view that the
findings of the District Court were “clearly erro-
neous” within the meaning of Rule 52(a), it could
have set them aside on that basis. If it believed that

the District Court’s factual findings were unassail-

able, but that the proper rule of law was misap-

plied to those findings, it couid have reversed the

District Court’s judgment. But it should not simply

have made factual findings on its own.

Id. at 714.

Had the Seventh Circuit followed the decisions of
this Court in Pullman-Standard, Anderson, and Icicle Sea-
foods, it would have reviewed the record as a whole to
determine if the allocation of fault was clearly erro-
neous.? If it concluded that the apportionment was

3 Review of the whole record is required even if the district
court relied upon a wrong ground in arriving at its decision,
because that alone does not justify reversal. It is a settled rule of
law that in reviewing a decision of a lower court, the appellate
court must affirm if the result is correct, “although the lower court
relied upon a wrong ground or gave a wrong reason.” Securities &
Exchange Commission v. Chenery Corp., 318 U.S. 80, 88 (1943) (quot-
ing, Helvering v. Gowran, 302 U.S. 238, 245 (1937)).

15

clearly erroneous, it should have remanded the case to
the District Court for reapportionment in light of its
decision. If the Seventh Circuit could not determine the
basis of the District Court’s decision, then it should have
remanded the case for clarification. Landau v. ].D. Barter
Const. Co., 657 F.2d 158, 164 n.12 (7th Cir. 1981). Instead,
the Seventh Circuit, after deciding the District Court
might have applied an incorrect legal standard, pro-
ceeded to decide the case itself by engaging in the kind of
fact finding this Court held in Pullman-Standard, Ander-
son, and Icicle Seafoods, that circuit courts are without
authority to do.* The Seventh Circuit reached into the
record to find facts different from those found by the
District Court, placed less weight on certain facts found
by the District Court, weighed all the evidence in accor-
dance with a new standard of measure, and indepen-
dently made the “ultimate finding” in the case: the
apportionment of fault.

In reviewing the conversation that was the basis for
the finding of liability against the City, the Seventh Cir-
cuit, without specifically finding it to be “clearly erro-
neous,” ignored the District Court’s finding that Blawas
“warned that the outer harbor could get ‘heavy’ if a
storm came up.” [41a] Instead, the Seventh Circuit, rely-
ing upon its own interpretation of the transcript, found

4 Title 28 U.S.C. § 2106, empowering the federal appellate
courts to modify judgments, decrees, and orders of the lower
courts does not empower them to exercise authority in the
course of a Rule 52(a) review beyond the limits defined in Rule
52(a). Felder v. United States, 543 F.2d 657, 671 (9th Cir. 1976).
Otherwise, the appellate courts in Pullman-Standard, Anderson,
and Icicle Seafoods would have had free reign to decide the
cases as they did.

16

that “the City failed to warn” the FORD or National
Gypsum of “any possible danger to the FORD.” [4a] In
interpreting Blawas’ testimony, the Seventh Circuit
apparently gave no credence to the testimony of an
impartial witness, Walter Heckl, who described the con-
versation as a warning and whose testimony was found
to be credible and relied upon by the District Court.
[101a] Instead, the Seventh Circuit gave greater weight to
what Blawas might have meant when he told the captain
that waves in the outer harbor could “get a little rough.”
In addition, the Seventh Circuit considered the conversa-
tion in an isolated fashion and, not, as the District Court,
in the context of the record as a whole.> [5a]

The Seventh Circuit found that on the morning of
December 22, 1979, the captain of the FORD informed
Blawas that “most of the crew would be gone until
December 26th or 27th, but that a skeleton crew would be
left aboard the FORD during the interim.” [4a-5a] In
contrast, the District Court found that the captain of the
FORD stated only that “part of the crew would go home
for the holiday.” [41a] The Seventh Circuit’s finding
charged the City with greater knowledge of the make-up
of the remaining crew than found by the District Court,
which specifically found that the City was not fully
informed of the undermanning of the FORD when it
noted that “unbeknownest [sic] to the City - the entire

> The captain did not call Blawas to the ship; Blawas was
on the ship by chance on other business. [41a, 100a] Blawas
testified that the captain called Blawas forward to discuss
access to shore power; the discussion of weather was an aside.
The captain was anxious to go home for the holidays. [40a] He
was unreceptive to the “heavy” weather warning and did not
question Blawas further. [101a]

Ee

17

crew was being discharged and the captain was going on
vacation.” [100a-101a, n.29] Yet the Seventh Circuit did
not find the District Court’s finding on this point to be
clearly erroneous.

In reference to other significant findings of the Dis-
trict Court, the Seventh Circuit did not find any to be
clearly erroneous, but apparently gave them less weight
than did the District Court. The District Court found (1)
that the FORD’s captain “knew or should have known of
any dangers which could have developed due to wind
and wave action” in Milwaukee’s outer harbor and South
Slip No. 1 due to his training and experience as a Great
Lakes ship master and his experience with similar har-
bors [36a], (2) that it was “open and obvious” that the slip
had little breakwall protection from wave action from the
northeast, [37a], (3) that National Gypsum knew that
Milwaukee’s outer harbor was not a safe location to leave
a vessel moored in winter without a crew [37a-38a, 131a],
and (4) that National Gypsum was specifically warned of
the danger in reference to the mooring of the FORD at
that location. [31a-32a] The Seventh Circuit’s watered-
down descriptions of these District Court findings indi-
cate that the Seventh Circuit placed less weight on them
than did the District Court. In describing these findings,
the Seventh Circuit stated that National Gypsum was
“aware” of the regulations that prohibited winter moor-
ing in Milwaukee’s outer harbor because of the dangers
of wave surges from northeasterly winds, that National
Gypsum had been “informed” in December of 1979 that
ships berthed in Milwaukee’s outer harbor were subject
to heavy surges during storms with northeasterly winds,
and that the District Court “thought” that the FORD’s
captain could have predicted the possibility of wave

18

surges based on the construction of the berth and his
experience in general. [3a-4a]

The Seventh Circuit then, in order to apportion fault,
weighed the evidence in accordance with its own pre-
cepts. Rather than apportion fault solely on culpability,
the Seventh Circuit initially apportioned fault based upon
the “cost of avoidance” to each party. It concluded that
the “cost of avoidance” was the same for each party
because both the City and the captain could have avoided
the entire accident by being more fo~thright and asking
more questions. Nevertheless, the Seventh Circuit agreed
with the District Court that National Gypsum must bear
more fault than the City because its captain was ulti-
mately responsible for the ship and he had left it “a
sitting duck.” Based upon these precepts and the facts as
found by the Seventh Circuit, it apportioned fault two-
thirds upon National Gypsum and one-third upon the
City. [11a-12a]

The Seventh Circuit apparently believed that it had
authority to reapportion fault itself rather than remand
the case to the District Court for a redetermination of
fault because (1) “on the facts of this case, no reasonable
trier of fact could apportion more than two-thirds of the
liability to National Gypsum,” (2) “the trier of fact dis-
played a willingness to apportion at least this much of the
award to National Gypsum,” and (3) its decision “merely
confine[d] the decision of the district judge to the upper
limit of his discretion.” [12a-13a]

The rationale stated by the Seventh Circuit does not
withstand either legal or logical scrutiny. Although it
cited no authority in support of its rationale, the Seventh
Circuit’s statements are an apparent reference to cases
where an appellate court appropriately may exercise its

19

authority to reduce or increase damages awarded by a
district court. The Seventh Circuit apparently relied

6 Since this Court adopted the pure comparative negli-
gence rule in admiralty in United States v Reliable Transfer, 421
U.S. 397 (1975), only one other federal circuit court has reap-
portioned fault on appeal, Hellenic Lines Ltd. v. Prudential Lines,
Inc., 813 F.2d 634 (4th Cir. 1987). In all other cases, the appel-
late courts either affirmed the apportionment of fault or, if they
found it to be in error, remanded the case to the district court
to reapportion fault. Abston and Kunz, Collision Survey 1988:
Survey of Reported Collision Decisions in the Federal Courts, 13
Tul. Mar. L.J. 355 (1989).

In Hellenic Lines, the Fourth Circuit reversed the district
court’s allocation of fault and reapportioned fault on appeal.
The decision does not provide well-reasoned precedent for the
Seventh Circuit’s decision because the Fourth Circuit in reap-
portioning fault relied upon its authority to decrease or
increase the amount of damages awarded by the trial court. Id.
at 638. As pointed out in this petition, the appellate authority
to decrease or increase damages does not legally or logically
include the authority to apportion fault on appeal. See infra pp.
20-22. Of particular significance is the Fourth Circuit’s mis-
placed reliance upon Chris-Craft Industries, Inc. v. Piper Aircraft
Corp., 516 F.2d 172 (2d Cir. 1975) (en banc), rev'd on other
grounds, 430 U.S. 1, reh’g denied, 430 U.S. 976 (1976). In that case
the Second Circuit held that it had the authority to modify the
judgment to increase the award of compensatory damages
because (1) the critical evidence was largely documentary, id. at
186, and (2) the court could do so without having to evaluate
the testimony of witnesses. Id. at 186 n.16. Neither justification
cited by the Fourth Circuit applies in this case because (1) Rule
52(a) was amended after Chris-Craft Industries was decided,
thereafter providing that findings of fact based upon documen-
tary evidence must be reviewed in accordance with the same
“clearly erroneous” standard applied to findings of fact based
upon oral testimony, and (2) the Seventh Circuit in this case,
unlike the Fourth Circuit in Chris-Craft Industries, had to evalu-
ate oral testimony, rather than documentary evidence, to
apportion fault.

20

upon that authority, although in this case damages had
not yet been tried.

The authority of federal appellate courts to decrease
the amount of damages awarded below does not include
the authority to apportion fault because apportionment of
fault is a question of fact, whereas the question of
whether damages are excessive is a question of law. Dag-
nello v. Long Island R.R. Co., 289 F.2d 797, 806 (2d Cir.
1961); See generally 11 C. Wright & A. Miller, Federal
Practice and Procedure: Civil § 2820 (1973). Because of this,
an appellate court that concludes that damages awarded
by a trial judge are excessive cannot exercise its indepen-
dent judgment and reduce the award to a level it believes
to be appropriate, but can only reduce the damages to a
level that would not have mandated reversal had the trial
court awarded that amount of damages originally. Peti-
tion of United States Steel Corp., 479 F.2d 489, 501 (6th Cir.),
cert. denied, 414 U.S. 859 (1973). The reduction permitted
is not the result of a reweighing of the evidence, but the
result of the court’s legal conclusion that the awarding of
the “excessive” portion of damages was erroneous. That
portion of the damage award found not to be legally
excessive is a finding of fact of the lower court, not the
appellate court.

In this case, the Seventh Circuit’s finding of 33'/s
percent fault against the City has no basis in the findings
of the District Court. The District Court apportioned fault
96/4 and the appellate court 667/3/33'/3. Although the
District Court displayed a willingness to apportion at
least 667/3 percent against National Gypsum [because 96
is greater than 66?/s], the District Court did not display a
similar willingness to apportion 331/3 percent against the
City. The additional 29 percent of fault attributed to the

21

City by the Seventh Circuit was a finding of fact made by ~
the appellate court alone. The Seventh Circuit’s conclu-
sion that 331/3 percent against the City represents the
upper limit of the court’s discretion is not rooted in, or in
any way supported by, the finding of 4 percent made by
the District Court. Reapportionment of fault on appeal,
unlike the reduction of damages found to be excessive, by
its very nature creates a gap between the degree of fault
found below and the degree of fault found on appeal in
reference to one of the parties, in this case, the City.

In spite of the statement by the Seventh Circuit that
“no reasonable trier of fact could apportion more than
two-thirds of the liability to National Gypsum,” it cannot
be seriously argued that the Seventh Circuit’s allocation
is the only allocation permitted by the record. Had the
District Court apportioned fault 90/10, or 85/15, or
80/20, it is doubtful that the Seventh Circuit would have
found the District Court’s apportionment clearly erro-
neous based upon the reasons the Seventh Circuit stated
in its decision. To state that no reasonable trier of fact
could apportion fault differently than the appellate court
did in this case is simply to find facts under the rubric of
a conclusion of law and to ascribe to the process of
apportioning fault a degree of precision that does not
exist. In certain circumstances, a record does compel one
conclusion only. For example, if an appellate court con-
cludes that a finding of discrimination is clearly erro-
neous, then a finding of no discrimination logically
follows, and it is of little consequence if the judgment is
entered by the appellate court or the district court.
Apparently, it is the Seventh Circuit’s position that 667/3
/33'/3 is the opposite of 96/4 as a matter of law.

22

The rationale employed to permit appellate courts to
increase damages under limited circumstances is equally
inapplicable to the reapportionment of fault. When appel-
late courts have increased damages, they have done so
only when they were certain that they were not under-
mining the integrity of the trial process. For example, in
Simpson v. United States, 322 F.2d 688 (5th Cir. 1963), the
court increased the damages when it found that “there
are firm guidelines establishing the basic elements of the
award and it can be computed with some degree of
certainty as easily by the appellate court as by the trial
judge ...” Id. at 693. In Dale Benz, Inc. Contractors v.
American Casualty Co., 303 F.2d 80 (9th Cir. 1962), the
court increased the damages where it was “in as good a
position to determine the issues involved on the record
before us as would be the trial judge on remand,” and the
“issues arise out of and are concerned with figures and
arithmetical calculations.” Id. at 82. In Felder v. United
States, 543 F.2d 657, 671 (9th Cir. 1976), the court confined
its modification to a recalculation of damages under cir-
cumstances where most of the changes made involved
arithmetic calculations that the appellate court could per-
form as easily as the trial court.

A finding apportioning fault, unlike a damage
award, has no quantifiable component readily subject to
recalculation, but is dependent upon the application of
law to facts which are as rich and diverse as human
experience. This exercise of judgment is more accurately
done by the trier of fact because “[c]old records rarely
reflect the look, the touch or the feel of the witness... . ”

Mitchell v. Evelyn C. Brown, Inc., 310 F.2d 420, 425 (1st Cir.
1962).

23

B. The Seventh Circuit’s Decision Deprives the
Petitioner of an Appeal as a Matter of Right.

The most dire consequence of an appellate court
engaging in fact-finding is that the regular appellate pro-
cess is so reordered as to deprive litigants of their ordi-
nary right to have findings of fact reviewed by an
appellate court. In this case, the City chose not to appeal
the District Court’s findings of four percent fault against
it because of the relatively small cost of the decision. Had
the District Court, however, found the City to be one-
third at fault, the City, facing the specter of a multi-
million dollar judgment, would have appealed the find-
ing of liability and the apportionment to the Seventh
Circuit.

When an appellate court makes an erroneous finding
of fact on appeal, the party against whom the facts are
found is left with no appeal as a matter of right. A party’s
only recourse is to attempt to convince this Court to
accept its petition for a writ of certiorari. A petition,
however, is not a certain remedy because it is not an
appeal as a matter of right. It is a difficult task to per-
suade this Court to accept a petition solely to review facts
found by the appellate court because this Court, the
supreme interpreter of the law and the Constitution, is
not easily fettered to the petty detail of factfinding. “We
do not grant a certiorari to review evidence and discuss
specific facts.” United States v. Johnston, 268 U.S. 220, 227
(1925).

It cannot be argued that no further appeal is needed
because the facts were found in the course of appellate
review. Facts found on appeal are not based upon the
testimony itself, but upon the record of the testimony, a
sterilized version of a trial, cleansed of all nuance and

24

subtlety. This Court has noted that such a record does not
provide an accurate basis for fact finding. Anderson, 470
U.S. at 574-75. The appeal is further limited by the stan-
dard of review — in this case the “clearly erroneous”
standard. Neither party presents the appeal to the court
in the same manner as the case was presented to the trial!
court. Rather, their energies and arguments are directed
to persuading the court that the appeal should be decided
one way or another based upon the standard of review.
Such argument, by its nature, omits the nuanced analysis
of testimony and exhibits that characterizes post-trial
argument and briefing.”

The Seventh Circuit, by appropriating the role of fact
finder from the District Court, has left the City with no
remedy unless this Court grants the petition to review in
this case.

Il. The “Cost of Avoidance” Standard for Apportion-
ing Fault in an Admiralty Case Formulated by the
Seventh Circuit is Inconsistent with United States
v. Reliable Transfer and Numerous Circuit Court
Decisions that have Apportioned Fault Without
Reference to the Cost of Avoidance.

The Seventh Circuit has formulated a new standard
by which to apportion fault in maritime collision and
allision cases. The new standard - cost of avoidance - is
inconsistent with this Court’s decision in United States v.
Reliable Transfer, 421 U.S. 397 (1975), and numerous circuit
court decisions which have apportioned fault without
reference to “cost of avoidance.” Moreover, apportioning

? Requiring litigants to persuade an appellate court in the
same fashion as a trial court has been described by this Court
as “requiring too much.” Anderson, 470 U.S. at 575.

——eEEE=—=—-

25

fault based upon “cost of avoidance” is illogical and will
interject uncertainty into an area of the law that routinely
involves large damages.

In Reliable Transfer, this Court held “that when two or
more parties have contributed by their fault to cause
property damage in a maritime collision or stranding,
liability for such damage is to be allocated among the
parties proportionately to the comparative degree of their
fault... .” Under this standard, fault is apportioned in
accordance with the relative culpability of the parties.
Harbor Tug & Barge, Inc. v. Belcher Towing Co., 733 F.2d 823,
825 (11th Cir. 1984); Gele v. Wilson, 616 F.2d 146, 148 (5th
Cir. 1980).

Numerous federal appellate courts have reviewed
apportionments of fault by district courts without any
reference to or consideration of the cost of avoidance. See,
e.g., Inland Oil and Transport Co. v. Ark-White Towing Co.,
696 F.2d 321 (5th Cir. 1983); Complaint of Interstate Towing
Co., 717 F2d 752 (2d Cir. 1983); Getty Oil Co. (Eastern
Operations), Inc. v. SS Ponce DeLeon, 555 F.2d 328, 335 (2d
Cir. 1977); Portacci v. Moran Towing & Transport Co., 615
F.2d 293 (5th Cir. 1980); Allied Chemical Corp. v. Hess
Tankship Co. of Delaware, 661 F.2d 1044, 1057 (Sth Cir.
1981). In addition, numerous district courts have allo-
cated fault or reviewed allocations of fault by juries in
admiralty cases without reference to or consideration of
the “cost of avoidance.” Red Star Towing & Transport Co.,
Inc. v. “Ming Giant”, 552 FSupp. 367 (S.D. N.Y. 1983);
Complaint of Flota Mercante Grancolombiana, S.A., 440
F.Supp. 704, 726 (S.D. N.Y. 1977); Bremmer v. Shedd, 467
F.Supp. 261, 267 (W.D. Pa. 1979); Afran Transport Co. v. S/T
Maria Venizelos, 450 F.Supp. 621, 623 (E.D. Pa. 1978); Com-
plaint of B.F.T. No. Two Corp., 433 F.Supp. 854, 875 (E.D. Pa.

a

26

1977). No federal court has used the “cost of avoidance”
standard advocated by the Seventh Circuit in apportion-
ing fault in an admiralty case. Abston and Kunz, Collision
Survey 1988: Survey of Reported Collision Decisions in the
Federal Courts, 13 Tul. Mar. L.J. 355 (1989) (compiling
federal collision and allision decisions reported within
the last fifteen years).

In Reliable Transfer, this Court noted that prior to the
decision in that case, the United States was virtually
alone among the world’s major maritime nations not to
adhere to the Brussels Collision Liability Convention of
1910 that provides for the apportionment of damages on
the basis of degree of fault whenever it is possible to do
so.8 This Court noted in deciding Reliable Transfer that the
fact that the United States did not adhere to the conven-
tion rule had encouraged trans-Atlantic forum shopping.
Id. at 404.

“Cost of avoidance” is a standard quite different
from culpability. The former is an economic standard
which can be measured and compared. The latter reflects
the judge or jury’s considered judgment as to the quality
and gravity of each party’s negligence. Adoption of the
“cost of avoidance” standard in the United States would

8 Article 4 of the Brussels Collision Liability Convention of
1910 provides in part: “If two or more vessels are in fault the
liability of each vessel shall be in proportion to the degree of
the faults respectively committed. Provided that if, having
regard to the circumstances, it is not possible to establish the
degree of the respective faults, or if it appears that the faults
are equal, the liability shall be apportioned equally.” United
States v. Reliable Transfer, 421 U.S. 397, 403 n.6; 6 M. Cohen,
Benedict on Admiralty Doc. No. 3-2 (rev. 7th ed. 1990).

27

once again create in the United States a rule for appor-
tioning fault significantly different from the rule
throughout most of the world and would risk the rein-
troduction of the forum shopping this Court sought to
end in Reliable Transfer.

The precept that the burden of precaution or, to
restate it in economic terms as did the Seventh Circuit,
the “cost of avoidance” is to be considered in deciding
whether a party’s conduct was negligent was suggested
by Judge Learned Hand in United States v. Carroll Towing
Co., 159 F2d 169, 173 (2d Cir. 1947). Under the “Hand
formula,” i.e., B There was no other

15 Robert Malaski, the oiler left aboard the E.M. FORD,
had been a radioman first class in the United States Coast
Guard. See Exhibit 203 (Deposition of Robert J. Malaski at 5-6).
Malaski made no attempt to operate the E.M. FORD’s equip-
ment on December 24, 1979.

45a

ship-to-shore telephone aboard the E.M. FORD during
December 22-25, 1979. Captain Gallagher expected the
crew to use a pay telephone on shore in case of emer-
gency. See Statement of Uncontested Facts at ¥ 15; Tran-
script at 670, 617-18 (Testimony of Patrick Gallagher).

38. When its ships were temporarily laid up,
Cement Division’s practice was not to require them to
maintain any type of radio contact. See Transcript at
654-55 (Testimony of Patrick Gallagher), 248 (Testimony
of Eugene Stafford). See also Transcript at 1661 (Testimony
of Louis Carter).

Weather

39. The E.M. FORD was a ship which reported
actual weather and water conditions to the United States
Coast Guard. However, its practice was not to monitor or
report weather conditions while in port. See Transcript at
634, 630-31, 552-65 (Testimony of Patrick Gallagher),
247-48 (Testimony of Eugene Stafford), 145-49 (Testimony
of Robert Brissette); Exhibits 643, 641 & 526. See also
Transcript at 1661 (Testimony of Louis Carter).

40. The National Weather Service at Chicago, Illi-
nois broadcasts periodic weather forecasts for the area
which includes the Port of Milwaukee. From the evening
of December 21, 1979, when the E.M. FORD tied up at the
Port of Milwaukee, through December 24, 1979, when
attempts to rescue the FORD ceased, these forecasts
included:

(a) 9:39 p.m., Central Standard Time, Friday,
December 21, 1979: south-to-southeast winds 15

46a

to 25 knots the remainder of the night, diminish-
ing to 10 to 20 knots Saturday, with waves 2 to 5
feet, decreasing Saturday. This forecast was
broadcast to mariners as a marine forecast
(MAFOR)'¢ at midnight, Central Standard Time,
on that date.

(b) 9:34 a.m., Central Standard Time, Satur-
day, December 22, 1979: southerly winds 12 to 22
knots in the afternoon, becoming southeasterly
15 to 25 knots later that night and continuing
Sunday, with waves 1 to 3 feet. This MAFOR
was broadcast at noon, Central Standard Time,
on that date.

(c) 3:39 p.m., Central Standard Time, Satur-
day, December 22, 1979: southeast-to-south winds
10 to 20 knots that night, increasing to 15 to 25
knots Sunday, with waves 1 to 3 feet. This
MAFOR was broadcast at 6:00 p.m., Central
Standard Time, on that date.

(d) 9:39 p.m., Central Standard Time, Satur-
day, December 22, 1979: southeast-to-south winds
10 to 18 knots the remainder of the night,
becoming southwesterly 10 to 20 knots. This
MAFOR was broadcast at midnight, Central
Standard Time, on that date.

16 MAFORs are weather forecasts and synopses broadcast
by the National Weather Service four times a day. MAFORs
give the predicted weather for each of the Great Lakes for a
twenty-four hour period. They also give the position of pres-
sure areas and their predicted movements.

Great Lakes mariners also receive LAWEBs twice a day.
These reports give the actual weather at shore installations like
Milwaukee. They also give wind direction, the height of the
water and barometer readings. See Transcript at 1700-01,
1565-58, 1520-21 (Testimony of Louis Carter), 630-39 (Testi-
mony of Patrick Gallagher).

47a

(e) 3:39 .a.m., Central Standard Time, Sunday,
December 23, 1979: south-to-southeast winds 12
to 22 knots that day, becoming northeasterly
that night, with waves 1 to 3 feet. This MAFOR
was broadcast at 6:00 a.m., Central Standard
Time, on that date.

(f) 9:34 a.m., Central Standard Time, Sunday,
December 23, 1979: southeast winds 12 to 22
knots that afternoon and early that night,
becoming northeasterly 12 to 22 knots later that
night and northerly winds 18 to 28 knots Mon-
day, with waves 1 to 3 feet. This MAFOR was
broadcast at noon, Central Standard Time, on
that date.

(g) 3:39 p.m., Central Standard Time, Sunday,
December 23, 1979: southerly winds 10 to 17
knots early that night, becoming east-to-north-
easterly 12 to 22 knots later that night and
northeast-to-north winds increasing to 20 to 30
knots Monday, with waves 1 to 3 feet increasing
to 4 to 7 feet by morning. This MAFOR was
broadcast at 6:00. p.m., Central Standard Time,
on that date.

(h) 9:39 p.m., Central Standard Time, Sun-
day, December 23, 1979: southerly winds 10 to 17
knots early that night, becoming east-to-north-
easterly 12 to 22 knots later that night and
northeast-to-north winds increasing to 20 to 30
knots Monday, with waves 1 to 3 feet increasing
to 4 to 7 feet by morning. This MAFOR was
broadcast at 6:00 p.m., Central Standard Time,
on that date.

(i) 3:39 a.m., Central Standard Time, Mon-
day, December 24, 1979: east-to-northeast winds
15 to 25 knots, becoming northeasterly 25 to 35
knots that afternoon and northeast-to-north 30
to 40 knots that night, with waves 2 to 4 feet,
increasing to 6 to 12 feet that night. This

48a

MAFOR was broadcast at 6:00 a.m., Central
Standard Time, on that date.!7

(j) 9:34 a.m., Central Standard Time, Monday,
December 24, 1979: northeast-to north winds 30
to 40 knots that afternoon and early that night
and northerly 25 to 35 knots later that night and
north-to-northwesterly 15 to 25 knots Tuesday,
with waves 6 to 12 feet. This MAFOR was
broadcast at noon Central Standard Time, on
that date.

(k) 3:39 p.m., Central Standard Time, Mon-
day, December 24, 1979: northeast-to-north winds
40 to 55 knots early that night and northerly 35
to 45 knots later that night and north-to-north-
westerly 20 to 30 knots and gradually diminish-
ing during Tuesday, with waves 6 to 12 feet.
This MAFOR was broadcast at 6:00 p.m., Central
Standard Time, on that date.

(1) 9:39 p.m., Central Standard Time, Monday,
December 24, 1979: northeast-to-north winds 35
to 45 knots with gusts to 50 knots the remainder
of that night, becoming north-to-northwest 28 to
40 knots Tuesday morning, diminishing to 22 to
32 knots Tuesday afternoon, with waves 6 to 12
feet. This MAFOR was broadcast at midnight,
Central Standard Time, on that date.

See Answers to Plaintiff's Requests for Admissions of
Facts and Genuineness of Documents at 7] 31-42; Tran-
script at 1659-60, 1520-46 (Testimony of Louis Carter),
654-59, 592-602 (Testimony of Patrick Gallagher); Exhibits
211 (Deposition of Robert Francis Bowes at 26-33), 515.

17 At 7:00 A.M., on December 24, 1979, the United States
Coast Guard posted gale warnings for southern Lake Michi-
gan.

49a

41. On December 24, 1979, the actual wind veloc-
ities recorded for Milwaukee were:

6:00 A.M. 20 knots-per-hour
8:00 A.M. 22 knots-per-hour
10:00 A.M. 24 knots-per-hour
12:00 P.M. 35 knots-per-hour
2:00 P.M. 30 knots-per-hour
4:00 P.M. 40 knots-per-hour
6:00 P.M. 35 knots-per-hour
8:00 P.M. 30 knots-per-hour
12:00 A.M. 24 knots-per-hour

See Exhibits 138, 211 (Deposition of Robert Francis Bowes
at 33-40), 516.

42. The significant wave heights'® measured by the
United States Coast Guard at the entrance to Milwaukee’s
harbor at periodic intervals on December 24, 1979, were:

6:00 A.M. 3.4 feet
12:00 P.M. 7.4 feet
6:00 P.M. 13.6 feet

43. Had he been aboard the E. M. FORD, Captain
Gallagher, using his training and experience as a ship’s
master, could have monitored and evaluated the weather
data which was available on December 23 and 24 to
anticipate that gale-force winds from the northeast were
developing on southern Lake Michigan which could pose

18 A wave’s height is the vertical distance between its
trough and its crest as measured by reference to the mean
water level. The “significant wave height” is the average of the
highest one third of the waves. See Transcript at 816-17 (Testi-
mony of Robert Sorenson).

eee

50a 7

as a danger to the ship. See Transcript at 1832-33 (Testi-
mony of Thomas Doyle), 1541, 1545-46 (Testimony of
Louis Carter); Exhibits 641, 642 & 643.

44. Although the City of Milwaukee Board of Har-
bor Commissioners maintains a courtesy weather watch
during regular business hours, it does not offer weather
watch services to users of its facilities. The City’s custom
and practice is to notify users of its harbor facilities if
winds arise in excess of 30-knots-per-hour. Regular busi-
ness hours do not include weekends and holidays. At
those times no one is on duty at the Port of Milwaukee
except a security watchman. See Transcript at 1195-96,
1158-59 (Testimony of Stanley Blawas), 1133, 1128 (Testi-
mony of Roy Hoffman), 941 (Testimony of Wright Gar-
vey).

45. Cement Division did not plan to rely on the
City’s courtesy weather watch when it agreed to tie up
the E.M. FORD at Terminal Pier No. 1 in South Slip No. 1.

46. Cement Division’s ship, the S.T. CRAPO arrived,
unloaded and departed from Cement Division’s dock on
December 23, 1979. The CRAPO’s log shows that it expe-
rienced 32-38 knots-per-hour winds on the eastern side of
Lake Michigan at noon on December 24. Even though it is
a standard custom or practice for ships in a shipowner’s
fleet to communicate with each other regarding weather,
see Transcript at 1594 (Testimony of Louis Carter), the
CRAPO made no attempt to warn the E.M. FORD of these
conditions. See Transcript at 1594-97 (Testimony of Louis
Carter); Exhibit 644.

5la

Breakaway and Sinking of the E.M. FORD

47. The E. M. FORD remained tied up to the dock at
Terminal Pier No. 1 in South Slip No. 1, Milwaukee Outer
Harbor, until about noon Central Standard Time on
December 24, 1979. See Statement of Uncontested Facts at
q 29.

See Transcript at 815-19 (Testimony of Robert Sorenson);
Exhibit 138.

48. At approximately 1:00 P.M. on December 24,
1979, Third Assistant Engineer James Sheridan, who was
aboard the E.M. FORD, noticed that the ship was 10-15
feet off the dock at the stern and that the wind velocity
and wave height had increased markedly. Sheridan and
another crew member brought the boarding ladder
aboard and Sheridan assigned one of the crew to go on
deck and call for help. See Exhibit 202 (Deposition of
James Sheridan at 120-32, 162-68).

49. At approximately the same time Salvatore Gum-
ina, a foreman with the Edward E. Gillen Company,
decided to drive around Jones Island in the outer harbor
where he had been renovating Gillen offices. Gumina had
not seen the FORD since his meeting with Captain Gal-
'agher on December 22. When Gumina stopped his vehi-
cle on the dock, he heard a crewman aboard the E.M.
FORD calling for help and saw that the FORD had moved
away from the dock. See Statement of Uncontested Facts
at 4 30; Transcript at 2040-43, 2027-37, 2011-12, 1976-79
(Testimony of Salvatore Gumina), 1875-76 (Testimony of
Stanley Catarozoli).

52a

50. Gumina then drove to the United States Coast
Guard station where the duty officer and junior officer of
the day informed him that there was nothing the Coast
Guard could do because it was a holiday and no one was
available to render assistance. See Statement of Uncon-
tested Facts at J 31; Transcript at 1988-89, 1978 (Testi-
mony of Salvatore Gumina).

51. Gumina returned to the Gillen office where he
obtained manilla lines ana attempted to contact other
Gillen employees. He was able to reach five men who
agreed to return to work to assist the EM. FORD. Gum-
ina also informed Don Jackson, an officer of the Gillen
Company, and Stanley Blawas of the FORD’s plight. After
spending at least two hours at the Gillen office, Gumina
and the other employees returned to the dock at approx-
imately 3:30 P.M. and attempted to throw lines aboard the
E.M. FORD. See Statement of Uncontested Facts at 7 32,
33 & 35; Transcript at 2040-45, 2030-37, 1976-2002 (Testi-
mony of Salvatore Gumina), 783 (Testimony of Andrew
LaBorde).

52. Staniey Blawas drove to the dock where some-
one on board the E.M. FORD called out the telephone
number of first assistant engineer Joseph Zolnierek who
was at home in Alpena, Michigan. Blawas called
Zolnierek for authority to call for the services of tug
boats. Zolnierek, in turn, called Captain Gallagher, who
was also in Alpena. Later Blawas called Captain Gal-
lagher to tell him that a licensed pilot was needed and
suggested some names, including that of Captain Thomas

53a

Parks, a resident of Milwaukee. See Statement of Uncon-
tested Facts at {YJ 38 & 39; Transcript at 1209-13 (Testi-
mony of Stanley Blawas), 684-85 (Testimony of Joseph
Zolnierek), 481-88 (Testimony of Patrick Gallagher).

54. Captain Gallagher contacted the Great Lakes
Towing Company to ask for assistance.

(a) At approximately 4:00 P.M. on Decem-
ber 24, after receiving Cement Division’s call for
help, the Great Lakes Towing Company dis-
patched its harbor tug WASHINGTON to assist
the E.M. FORD. But, because there was no pilot
aboard, Captain Robert MacLaren could not ren-
der assistance, so he returned to the dock with
the WASHINGTON.

(b) At approximately 6:00 P.M. on Decem-
ber 24, Great Lakes Towing Company dis-
patched its harbor tugs TEXAS and
WASHINGTON to the E.M. FORD for a second
time. The tugs could not communicate with the
ship, so they returned to their dock.

See Statement of Uncontested Facts at 43; Transcript at
963-93 (Testimony of Robert MacLaren); 481-88 (Testi-
mony of Patrick Gallagher); Exhibits 202 (Deposition of
James Sheridan at 179), 127 & 128.

55. Captain Gallagher also contacted Captain Parks
who agreed to join in the efforts to rescue the E.M. FORD.
Captain Parks arrived at the dock at approximately 5:30
P.M. on December 24. He observed that the bow of the
ship had broken loose from the dock on the north side of
the slip and had swung to the south side of the slip
against the wallhead where it was pounding against the
dock. He noted that there was damage to the FORD’s port
side, including a hole, and that there was a hole in the

54a

stern. He estimated the waves to be 12-15 feet and the
wind velocity to be 30 knots-per-hour. Captain Parks and
Captain Gallagher remained in contact throughout the
evening by means of a shore telephone. See Statement of
Uncontested Facts at {9 35 & 41; Transcript at 1006-19
(Testimony of Thomas Parks), 481-88 (Testimony of
Patrick Gallagher).

56. Captain Parks and three Gillen employees
jumped aboard the E.M. FORD and attempted to prepare
the vessel to be towed from the slip. See Statement of
Uncontested Facts at 77 35 & 42; Transcript at 2035
(Testimony of Salvatore Gumina), 1006-19 (Testimony of
Thomas Parks), 806-10 (Testimony of Andrew LaBorde).

57. At approximately 8:00 P.M. on December 24,
after being summoned by Captain Parks who had acti-
vated the radiotelephone aboard the FORD, the harbor
tugs TEXAS and WASHINGTON were again dispatched
to the E.M. FORD. The tugs remained in the area until
9:30 P.M. when they were released by Captain Parks who
had decided that the tugs should not attempt to tie on to
the ship because the rolling action of the FORD might
endanger the lives of those aboard both vessels. See State-
ment of Uncontested Facts at J 43; Transcript at 1012-17
(Testimony of Thomas Parks), 963-93 (Testimony of
Robert MacLaren); Exhibits 202 (Deposition of James
Sheridan at 179), 127 & 128.

58. While Captain Parks and Gillen employees
manned the power winches and attempted to remoor the
E.M. FORD, members of the FORD crew brought up the
steam on the boilers, put power on the winches, operated
the engine and pumps and took soundings. The cook

55a

proceeded with the preparation of the crew’s turkey din-
ner. See Statement of Uncontested Facts at 47 35, 37 & 42;
Transcript at 2035, 1995-2001 (Testimony of Salvatore
Gumina), 1902-20 (Testimony of Keith Iverson), 1021-36,
1008-18 (Testimony of Thomas Parks); Exhibits 202
(Deposition of James Sheridan at 133, 138-43, 148-50,
169-87), 203 & 203A (Deposition of Robert Malaski at 6-7,
9, 34-44, 62, 63, 66).

59. Although Captain Parks was able to move the
E.M. FORD about 100 feet back into the slip, he and the
Gillen men were not able to remoor the ship for any
length of time. Lines continued to part. At approximately
11:00 P.M. on December 24, Captain Parks found that the
ship was taking on water and was failing to return from
her starboard rolls. Near midnight Captain Parks ordered
the crew to shut down the boilers and generator. The
Captain then ordered everyone off the ship. See Statement
of Uncontested Facts at J] 37 & 44; 1999-2003 (Testimony
of Salvatore Gumina), Transcript at 1028-30, 1016-20 (Tes-
timony of Thomas Parks); Exhibits 202 (Deposition of
James Sheridan at 184-87), 203 (Deposition of Robert Mal-
aski at 44-45).

60. After the persons on board went ashore, the
E. M. FORD settled to the bottom of the slip on December
25, 1979. See Statement of Uncontested Facts at { 45;
Transcript at 1180 (Testimony of Stanley Blawas), 1019-20
(Testimony of Thomas Parks), 936 (Testimony of Wright
Garvey), 786-87 (Testimony of Andrew LaBorde), 686-87
(Testimony of Joseph Zolnierek), 490 (Testimony of
Patrick Gallagher), 311-12 (Testimony of Norman Martin-
son); Exhibits 165 & 180.

56a

61. The City of Milwaukee’s pier and surrounding
property at Terminal Pier No. 1 in South Slip No. 1 was
injured by the E.M. FORD’s repeated pounding against
the dock and its headwall on December 24, 1979. See
Statement of Uncontested Facts at 4 36; Transcript at
1793-1804, 1785-86, 1733-77 (Testimony of Dean Honadel);
Exhibit 552. ‘

62. The City of Milwaukee’s dock structure at Term-
inal Pier No. 1 in Slip No. 1 and its cleats and bollards did
not fail and was not a cause of the damage to the £.M.
FORD or the property of the City of Milwaukee on
December 24, 1979. See Transcript at 1793-1804, 1785-86,
1733-77 (Testimony of Dean Honadel); Exhibit 552.

63. Once the violent surging began to develop in
South Slip No. 1, there were no measures which could
have been taken, short of immediately removing the E.M.
FORD from the slip, which would have prevented or
substantially lessened the injuries which were sustained
by the E.M. FORD and the City’s dock on December 24
and 25, 1979. The FORD could not be removed because
Cement Division failed to retain a master and adequate
crew. See Transcript at 1574-90 (Testimony of Louis Car-
ter), 659-60 (Testimony of Patrick Gallagher), 164-65, 151
(Testimony of Robert Brissette); Exhibit 213 (Deposition
of True LeMon at 97).

64. The complete reliance which Cement Division
purported to place on the City of Milwaukee and the
Edward E. Gillen Company to warn, rescue and protect
the safety of the E.M. FORD was unreasonable under the
following circumstances:

’

57a

(a) When entering into the agreements at
issue with the City of Milwaukee and the
Edward E. Gillen Company, Cement Division
failed to divulge that the S.S. EM. FORD would
be laid up for a period of days without a pilot,
without a crew, without ship-to-shore communi-
cations and without a weather watch.

(b) Without any prior course of dealing,
Cement Division, in the person of Captain
Patrick Gallagher, failed to apprise the Edward
E. Gillen Company of the services it would need
and, at the same time, failed to ascertain
whether Gillen had the equipment and man-
power needed to render these services.

(c) Crew members remained aboard the
S.S. E.M. FORD at all times and should have
been in the best position to observe any weather
conditions which might affect the vessel and to
notify Cement Division personnel in case of an
emergency. See Transcript at 1850, 1834-35 (Testi-
mony of Thomas Doyle), 1695-98, 1581-87 (Testi-
mony of Louis Carter), 1408-09, 1401-02, 1348-49
(Testimony of James Sherman), 1127-28 (Testi-
mony of Roy Hoffman), 1037-41 (Testimony of
Thomas Parks), 588-91 (Testimony of Patrick
Gallagher); Exhibits 207 (Deposition of Mark
Presper at 57-59), 209 (Deposition of James
Haskell at 14 & 17), 210 (Deposition of John
Burke at 109).

D. LIABILITY —
1. Negligence

65. The City of Milwaukee, acting through its
employees and agents, breached its duty of due care for
the safety of its own dock and other property and for the
safety of the plaintiff’s vessel, the S.S. E. M. FORD, by

58a

allowing the E. M. FORD to remain tied up at Terminal
Pier No. 1 in South Slip No. 1 for a period of days
without adequately warning Cement Division that wind
and wave conditions could develop which would endan-
ger the vessel and the City’s property with which it
would come into contact. Despite its superior knowledge
of this hazard, the City failed to exercise its power to
order the vessel to remain manned or move off berth.

66. The defendant's breach of its duty of due care,
as described in Finding of Fact No. 65, above, was a
cause-in-fact of the injury to the S.S. E.M. FORD and of
the injury to its own property which occurred on Decem-
ber 24 and 25, 1979.

67. Cement Division, acting through its employees
and agents, breached its duty of due care for the safety of
its own vessel, the S.S. E.M. FORD, and for the safety of
the property of the City of Milwaukee by choosing to tie
up the S.S. E.M. FORD for a period of days at Terminal
Pier No. 1 in South Slip No. 1 in the outer harbor at the
Port of Milwaukee during the month of December despite
warnings and knowledge that wind and wave conditions
could develop which would endanger the vessel and any
property with which it would come into contact. The
plaintiff further breached its duty of due care by its
captain’s failure to take reasonable precautions to ensure
the safety of the vessel before departing for a vacation.
Captain Gallagher failed to employ a standby master or
pilot and crew members who would be capable of remov-
ing the vessel or taking any other measures necessary
should an emergency arise, failed to employ a crew mem-
ber to remain aboard who would be capable of operating

’ |

59a

ship-to-shore communications facilities, and failed to
assign a crew member to monitor the weather.

68. The plaintiff’s breach of its duty of due care, as
described in Finding of Fact No. 67, above, was a cause-
in-fact of the injury to the S.S. E. M. FORD and of the
injury to the dock and other property of the City of
Milwaukee which occurred on December 24 and 25, 1979.

69. The plaintiffs and the defendant failed to show
by a preponderance of the evidence that the acts or
omissions of defendant Edward E. Gillen Company were
a cause-in-fact of the injury to the S.S. E.M. FORD.

70. Assuming the total fault which caused the injury
to the E. M. FORD to be one hundred percent (100%), the
court attributes ninety-six percent (96%) of the total fault
to the plaintiff Cement Division and four percent (4%) of
the total fault to the defendant City of Milwaukee.

71. Assuming the total fault which caused the injury
to the City of Milwaukee’s dock and other property at
Terminal No. 1, South Slip No. 1 to be one hundred
percent (100%), the court attributes ninety-six percent
(96%) of the total fault to the plaintiff Cement Division
and four percent (4%) of the total fault to the defendant
City of Milwaukee.

2. Warranty

72. By the acts described in Finding of Fact No. 65,
above, the defendant City of Milwaukee breached a
wharfinger’s implied warranty to provide a safe berth for
plaintiff Cement Division’s vessel the S.S. E.M. FORD.

60a .

73. The plaintiff Cement Division, National Gypsum
Company, did not establish by a preponderance of the
evidence that the defendant City of Milwaukee expressly
warranted Terminal Pier No. 1 in South Slip No. 1 to be a
safe berth for a vessel temporarily laid up with no deck
crew aboard capable of moving the ship in an emergency.

74. The defendant City of Milwaukee did not breach
any express warranties to provide a safe berth at Termi-
nal No. 1, South Slip No. 1 in the Milwaukee Harbor for

the plaintiff Cement Division’s vessel, the S.S. E.M.
FORD.

II. CONCLUSIONS OF LAW
A. JURISDICTION AND JOINDER

1. The district courts have original jurisdiction,
exclusive of the courts of the States, of any civil case of
admiralty or maritime jurisdiction, saving to suitors, in
all cases all other remedies to which they are otherwise
entitled. See 28 U.S.C. § 1333(1).

2. When torts have occurred on navigable waters
within the United States and the alleged wrongs bear a
significant relationship to traditional maritime activity,
the claims fall within a federal court’s admiralty jurisdic-
tion. See East River Steamship Corporation v. Transamerica
DeLeval, Inc., 476 U.S. 858, 863-64 (1986); Complaint of
SISSON, 867 F.2d 341, 343 (7th Cir. 1989).

3. The admiralty and maritime jurisdiction of the
United States extends to and includes all cases of damage
or injury, to person or property, caused by a vessel on
navigable water, notwithstanding that such damage or

61a

injury be done or consummated on land, including ship-
caused injuries to a pier. See 46 U.S.C. § 740. See also
Nacierma Operating Company, Inc. v. Johnson, 396 U.S. 212,
222 (1969); Gutierrez v. Waterman Steamship Corporation,
373 U.S. 206, 209-10 (1963); S.C. Loveland, Inc. v. East West
Towing, Inc., 608 F.2d°160, 165 (5th Cir. 1979), cert. denied
sub nom. St. Paul Mercury Insurance Company v. East West
Towing, Inc., 446 U.S. 918 (1980).

4. Third-party defendant Edward E. Gillen Com-
pany, Inc. has properly been made a party pursuant to
Federal Rule of Civil Procedure 14(c), which provides
that: 7

When a plaintiff asserts an admiralty or
maritime claim within the meaning of Rule 9(h),
the defendant or claimant, as a third-party
plaintiff, may bring in a third-party defendant
who may be wholly or partly liable, either to the
plaintiff or to the third-party plaintiff, by way of
remedy over, contribution, or otherwise on
account of the same transaction, occurrence, or
series of transactions or occurrences. In such a
case the third-party plaintiff may also demand
judgment against the third-party defendant in
favor of the plaintiff, in which event the third-
party defendant shall make any defenses to the
claim of the plaintiff as well as to that of the
third-party plaintiff in the manner provided in
Rule 12 and the action shall proceed as if the
plaintiff had commenced it against the third-
party defendant as well as the third-party plain-
tiff.

Federal Rule of Civil Procedure 14(c). See also Seal Off-
shore, Inc. v. American Standard, Inc., 777 F.2d 1042, 1045
(Sth Cir. 1985); Riverway Company v. Trumbull River Ser-
vices, Inc., 674 F.2d 1146, 1154-55 (7th Cir. 1982); United

62a

States v. Isco, Inc., 463 F. Supp. 1293, 1294-95 (E.D. Wis.
1979); Ohio River Company v. Continental Grain Company,
352 F. Supp. 505, 511-13 (N.D. Ill. 1972).

5. This court has admiralty subject matter jurisdic-
tion over the claims made by the plaintiff in the Amended
Complaint and by the defendant in its Counterclaim and
in its Third-Party Complaint.

B. CAPACITY OF THE CITY OF MILWAUKEE TO
SUE AND BE SUED

6. Where a municipality is engaged in a proprietary
function, as distinguished from a governmental function,
it is answerable for its negligent acts, or those of its
agents, just as would an individual or a private corpora-
tion. See Bagrowski v. American Export Isbrandtsen Lines,
Inc., 440 F.2d 502, 509 (7th Cir. 1971); Leemon v. South
Jersey Port Commission, 145 F. Supp. 828, 831 (D.N.J. 1956).

7. Operations of a pier by a port district established
under state law for the loading and unloading of com-
modities is a “proprietary function” and makes a public
corporation responsible for any negligence committed by
its employees in the course of corporate work. See
Bagrowski v. American Export Isbrandtsen Lines, Inc., 440
F.2d 502, 509 (7th Cir. 1971); Leemon v. South Jersey Port
Commission, 145 F. Supp. 828, 831 (D.N.J. 1956).

8. The City of Milwaukee, in operating harbor and
dock facilities, functions as a general wharfinger. In oper-
ating its municipal port, the City of Milwaukee engages
in a proprietary function. In the exercise of these func-
tions the City is regarded as having the capacities of a

63a

private corporation which can sue and be sued. See
Bagrowski v. American Export Isbrandtsen Lines, Inc., 440
F.2d 502, 509 (7th Cir. 1971); Paper Makers Importing Com-
pany v. City of Milwaukee, 165 F. Supp. 491, 503 (E.D. Wis.
1958).

C. APPLICABLE LAW

9. In federal maritime actions, federal courts sit as
“pure” federal courts, governed by federal procedural
rules and federal substantive law. See Daughtry v. Dia-
mond M Company, 693 F. Supp. 856, 861 (C.D. Cal. 1988).

10. When admiralty jurisdiction is invoked, sub-
stantive admiralty law must be applied. Absent a relevant
statute, the general maritime law, as developed by the
judiciary, applies. Drawn from state and federal sources,
ce general maritime law is an amalgam of traditional
common-law rules, modifications of those rules, and
newly created rules. See East River Steamship Corporation v.
Transamerica DeLaval, Inc., 476 U.S. 858, 864-65 (1986);
Kermarac v. Compagnie Generale Transatlantique, 358 U.S.
625, 628 (1959).

11. If admiralty law fails to provide a standard,
marine collision liability turns on traditional tort law
principles. See East River Steamship Corporation v. Trans-
america DeLaval, Inc., 476 U.S. 858, 864-65 (1986); Floyd v.
Lykes Bros. Steamship Company, Inc., 844 F.2d 1044, 1046-47
(3d Cir. 1988); Daigle v. Point Landing, Inc., 616 F.2d 825,
827 (Sth Cir. 1980); S.C. Loveland, Inc. v. East West Towing,
Inc., 608 F.2d 160, 165 (5th Cir. 1979), cert. denied sub nom.
St. Paul Mercury Insurance Company v. East West Towing,

64a

Inc., 446 U.S. 918 (1980); People’s Natural Gas Company v.
Ashland Oil, Inc., 604 F. Supp. 1517, 1524 (W.D. Pa. 1985).

12. Allisions between a moving ship and a station-
ary or fixed object are governed by the same rules as
admiralty collision cases. See People’s Natural Gas Company
v. Ashland Oil, Inc., 604 F. Supp. 1517, 1523 (W.D.Pa. 1985).

D. MARITIME TORT LAW

13. Negligent conduct on the navigable waters that
causes loss to another constitutes a maritime tort. See
United States v. M/V BIG SAM, 681 F.2d 432, 443 (5th Cir.
1982), cert. denied, 462 U.S. 1132 (1983).

14. Negligence traditionally has four elements:

1. A duty or obligation recognized by the law
requiring the actor to conform to a certain
standard of conduct for the protection of
others against unreasonable risks;

2. A failure on the actor’s part to conform to
the standard required;

3. A reasonably close causal connection
between the conduct and the resulting injury
(proximate, cause);

4. Actual loss or damage resulting to the inter-
ests of another.

United States v. M/V BIG SAM, 454 F. Supp. 1144, 1148
(E.D. La. 1978) (citing W. Prosser, Law of Torts § 30 (4th ed.
1971)) rev’d on reconsideration on other grounds, 480 F.
Supp. 290 (E.D. La. 1979), aff'd in part, rev'd in part on other
grounds, and remanded, 681 F.2d 432 (5th Cir. 1982), cert.
denied, 462 U.S. 1132 (1983).

65a

14. A useful framework for determining negligence
in a maritime case has been formulated by designating by
“B” the burden of the precautions necessary to avert an
accident, by “L” the magnitude of the loss of the accident
occurred, and by “P” the probability that if the precau-
tions were not taken the accident would occur. An alleged
tortfeasor is negligent if B l Weather
Bureau would have indicated to an experienced mariner
that gale conditions could be developing on southern
Lake Michigan. See Transcript at 592-602 (Testimony of
Patrick Gallagher). The forecast developed into a near
certainty by 7:00 A.M. on December 24 when the Coast
Guard posted gale warnings for an area including the
Port of Milwaukee. But the volunteers aboard the FORD
had no means of receiving these reports. The Captain had
locked the radio cabinet and left those aboard with no

128a

means of receiving communicatio.s from shore. See Tran-
script at 617-19 (Testimony of Patrick Gallagher).

The Captain’s failure to provide anyone to monitor
the weather and maintain ship-to-shore communications
was a contributing cause of the disaster. The weather
warnings would have given Cement Division ample time
to seek a safe place for the FORD to wait out the gale.
Instead, those aboard knew nothing of the impending
danger until the ship had begun to move away from the
dock.

In addition to failing to make any provision for a
weather watch, the Captain failed to instruct the five
volunteers about what measures to take in case of an
emergency. He merely left them a note with the telephone
number of Gillen foreman Salvatore Gumina. See Exhibit
132. See also Transcript at 682-83 (Testimony of Joseph
Zolnierek). He expected the crew members to jump
ashore to use a pay telephone near the dock to summon
help.

Captain Gallagher’s failure to instruct the five volun-
teers42 about what measures to take should an emergency
arise shows an aititude of indifference for the safety of

42 It is significant to note that none of the five volunteers
testified at trial, although portions of the deposition testimony
of Third Assistant Engineer James Sheridan and oiler Robert
Malaski were introduced as evidence. It is a general maritime
rule that the failure to produce an important witness in an
admiralty action may raise the inference that the testimony
would have been unfavorable to the party by whom the wit-
ness should have been called. See Amerada Hess Corporation v.
M/T MARIAM, 533 F. Supp. 158, 166 (S.D. Ala. 1982).

129a

his ship, but the City was unable to show how the cap-
tain’s failure to instruct was causally related to the disas-
ter. Given the fact that the volunteer crew consisted only
of a third assistant engineer, an oiler, a wiper, a porter
and an acting steward, it is unclear what measures they
were capable of taking.‘

The evidence at trial also failed to establish that
Captain Gallagher was at fault for mooring the E.M.
FORD improperly. There was some testimony that the
mooring would have been more secure had the captain
used an anchor chain, but there was also countervailing
testimony that the anchor chain would not have held the
ship and might have caused additional damage to the
dock. See, e.g., Transcript at 1582-83 (Testimony of Louis
Carter), 1035-36 (Testimony of Thomas Parks), 664, 477
(Testimony of Patrick Gallagher), 151 (Testimony of
Robert Brissette). There was no lay or expert testimony
that any mooring configuration could have held the ship
at the dock for the duration of the violent surging.

The City argues that mooring the FORD with her
bow facing out of the slip would have made it easier for
the ship to leave the berth under her own power or with
the assistance of tugs. But assuming that this theory has

43 The City does not fault the five crew members for
anything they did or did not do to aid the rescue effort.
Witnesses observed one or two of the FORD crew joining in the
effort to secure the ship, but others were seen preparing a
turkey dinner while the winds raged. See Transcript at 1915
(Testimony of Keith Iverson), 1880 (Testimony of Stanley Cata-
rozoli), 804-05 (Testimony of Andrew LaBorde).

130a

merit,44 the direction in which the ship was facing was
not a cause of this disaster because, without a pilot, the
ship could not be moved no matter which way it was
facing.

Throughout the trial Captain Gallagher and the other
Cement Division officials attempted to imply that the
City should have assumed the responsibility for protect-
ing the ship. They pointed out that the City maintains a
weather watch and a security guard and that it employs a
licensed pilot and owns a tug boat, but Cement Division
was unable to prove that the City had agreed to provide
any of these services to the E.M. FORD. The E.M. FORD
was not bailed to the City; the owner remained in cus-
tody and control at all times. Therefore, it was negligent
for the owner to rely on the wharfinger to protect or
rescue the ship. In another case in which a ship was
damaged after being cast adrift by a hurricane, the court
ruled that: “When the captain of the TRADE CARRIER
secured his radio shack and thereafter failed to keep track
of the course and fury of the storm, he was negligent and
he breached his duty to his ship. He was not entitled to
rely solely on others to keep him posted as to the course
and strength of the storm.” Trade & Transport, Inc. v.
Caribbean Steamship Company, 384 F. Supp. 782, 787 (S.D.
Tex. 1974), aff'd in part, rev'd in part on other grounds, 521
F.2d 229 (5th Cir. 1975).

44 Captains Doyle and Carter were of the opinion that, if
the E.M. FORD had been backed into the slip, she would have
been easier to handle. See Transcript at 1861-62 (Testimony of
John Doyle), 1567-68 (Testimony of Louis Carter).

|

131la

Cement Division also attempts to exonerate itself by
claiming that the City’s breach of its duty to warn was the
sole cause of the disaster. Although the court has con-
cluded that, under the unusual facts of this case, the City
did have some obligation to warn or refuse to let the E.M.
FORD remain tied up at South Slip No. 1 without an
adequate crew, this duty on the part of the City in no way
relieves the master of his duty to obtain crucial informa-
tion. As the Fifth Circuit has observed:

A captain’s duty to possess hiinsel’ of
essential knowledge exists independently of
whether there is present another person who
has a duty to inform the captain. Such a person
might have a duty to inform the captain without
being asked, but the captain still has a duty to
ask. The duty of each does not negate the duty
of the other or excuse the failure of each to carry
out his duty.

Petition of M/V ELAINE JONES, 480 F.2d 11, 23 (5th Cir.
1973), cert. denied sub nom. Canal Barge Company, Inc. v.
Griffith, 423 U.S. 840 (1975).

Cement Division had actual knowledge of the United
States Salvage Association’s prohibition against winter
mooring, in the outer harbor in Milwaukee and had been
warned by independent marine surveyor William Wade
before the FORD left Alpena that Milwaukee’s outer har-
bor is subject to heavy surge. Moreover, as soon as Cap-
tain Gallagher apprised the City of the plan to leave the
FORD tied up for a number of days so that part of the
crew could go home for the holiday, Stanley Blawas
warned him that the weather could get “heavy” in the
outer harbor. Without acknowledging that he received
this warning, Captain Gallagher testified at trial that:

132a

I might make my reply that I would have loved
io have been given a reason that I could have
went back again called our fleet engineer, |
would have loved, I was looking for informa-
tion, or to use the word “ammunition” that I
could say to him, “Hey, we can’t lay here, this
dock is a dangerous dock, we got to get out of
here, we should go up and go up to the Huron
Cement dock and unload and leave,” or “We
should take it up there and lay the ship up”. |
would have been glad to get that information.

Transcript at 671-72 (Testimony of Patrick Gallagher). The
court finds this testimony wholly incredible. Not one
witness to the Blawas-Gallagher meeting testified that
Captain Gallagher questioned Blawas about the “heavy”
weather warning or sought additional information of any
kind.

Besides trying to shift the blame to others, Cement
Division attempts to show that it was merely following
accepted customs and practices in the maritime industry
by allowing Captain Gallagher to leave the ship with the
radio locked up; by providing those left aboard with no
means of ship-to shore communication; by failing to mon-
itor the weather while in port; and by discharging the
entire crew leaving only five volunteers (none of whom
were part of the deck crew) aboard. However, a ship-
owner cannot relieve itself of responsibility by blindly
adhering to customs and practices when circumstances
warrant a departure from routine procedures. See Tug
Ocean Prince, Inc. v. United States, 584 F.2d 1151, 1156-57
(2d Cir. 1978) (“A party cannot by his own continued
negligence establish a custom by which he is exempt from
liability; nor is legal responsibility for negligence miti-
gated by the fact that others had also been negligent.”),

133a

cert. denied, 440 U.S. 959 (1979); United Barge Company v.

Notre Dame Fleeting & Towing Service, Inc., 568 F.2d 599,
604 (8th Cir. 1978).

In this case it was foreseeable that leaving the ship
tied up in the outer harbor without a captain, crew or
communications entailed a risk, if not from surge, then
from any number of other events. See Complaint of Her-
cules Carriers, Inc., 566 F. Supp. 962, 978 (M.D. Fla. 1983),
aff'd sub nom. Hercules Carrier, Inc. v. Claimant State of
Florida, 768 F.2d 1558 (11th Cir. 1985) (it is sufficient that a
danger from any number of probable causes is reasonably
apparent); Petition of Kinsman Transit Company, 338 F.2d
708, 725-26 & n.11 (2d Cir. 1964), cert. denied sub nom.
Continental Grain Company v. City of Buffalo, 380 U.S. 944
(1965) (unforeseeability of the exact developments and of
the extent of the loss will not preclude liability). Under
these circumstnaces [sic] it was not reasonable to rely on
customs and practices of the industry. Cement Division’s
unreasonable reliance constitutes fault because these
practices were among the causes of the disaster. See Com-
plaint of Paducah Towing Company, Inc., 692 F.2d 412, 426
(6th Cir. 1982); United States Fidelity & Guaranty Company
v. Jadranska Slobadna Plovidba, 683 F.2d 1022, 1028 (7th Cir.
1982).

The court has no doubt that, under the well-estab-
lished law, Cement Division was at fault for leaving the
E.M. FORD temporarily tied up at South Slip No. 1 with-
out a captain, crew, any means of ship-to-shore communi-
cations or weather monitoring capability and that the
captain abdicated his duties by failing to obtain sufficient
information about the berth and the changing conditions
in the harbor. Application of the Hand formula confirms

134a

this conclusion. As discussed above, the magnitude of ihe
potential loss was great, while the probability of such a
loss occurring was low. Yet, the burden of the precautions
necessary to avert the disasier was also low. The com-
pany would have had to keep the ship operating, pay a
sufficient number of the crew holiday pay, and retain a
master — at least on stand-by. In the alternative, the
company could have reverted to its original plan, ordered
Captain Gallagher to wait for the S.T. CRAPO to unload,
then moored the E.M. FORD at Cement Division’s own
dock well within the inner harbor. This course of action
would also have involved paying holiday wages to the
crew, but these costs pale in comparison to the multi-
million dollar loss of the ship and its cargo.

4. Comparative Fault

In United States v. Reliable Transfer Company, Inc., 421
U.S. 397, 411 (1975), the United States Supreme Court
held that, in admiralty, when two or more parties have
contributed by their fault to cause property damage in a
maritime allision, liability for such damage is to be allo-
cated among the parties proportionately to the compara-
tive degree of their fault. See Id. at 411. In admiralty law,
contributory negligence operates as comparative negli-
gence. See S.C. Loveland, Inc. v. East West Towing, Inc., 608
F.2d 160, 166 (5th Cir. 1979), cert. denied sub nom. St. Paul
Mercury Insurance Company v. East West Towing, Inc., 446
U.S. 918 (1980). Contributory negligence does not bar a
plaintiff’s claim but only serves to lessen its recoverable
damages in proportion to its fault as compared to that of
the defendant. See Id. at 168.

135a

Under this standard it is culpability, not the degree of
physical causation, on which liability is apportioned. See
Harbor Tug & Barge, Inc. v. Belcher Towing Company, 733
F.2d 823, 825 (11th Cir. 1984); Cumberland County Utilities
Authority v. M/T DELBAR, 604 F. Supp. 383, 389 (D.N.J.
1985). Fault which produces liability must be a contribut-
ing or proximate cause of the allision. See Id. at 826.

Clearly, the plaintiffs must bear the greater share of
fault for this disaster. From the time the E.M. FORD
departed on its final voyage to Milwaukee until the time
the captain and crew departed for the holiday, Captain
Patrick Gallagher consistently chose the course of action
which would save money for Cement Division and time
for himself and the crew — even at the cost of risk to the
ship.4*°

Upon arriving in Milwaukee with orders to wait fora
sister ship to unload before mooring at the Cement Divi-
sion dock, the captain put in at Terminal Pier No. 1 in
South Slip No. 1 —- the first available berth in the outer
harbor. He rejected the City’s offer of an inner harbor
berth, in part, because it would have required two more
hours of travel in the river. See Transcript at 208 (testi-
mony of Eugene Stafford). In addition, the City was char-
ging its cheaper winter mooring rate at South Slip No. 1,
while it would have charged its regular rate for an inner
harbor berth. See Transcript at 1191-93 (Testimony of
Stanley Blawas).

45 Not all the acts or omissions mentioned throughout this
section were legal causes of the disaster. They are merely
illustrative of Cement Division’s general pattern of conduct.

136a

The next day, having received the unwelcome news
that the FORD would have to make another delivery after
Christmas, the Captain chose in [sic] remain in South Slip
No. 1. Then, without notifying the City of this change in
plans, he ordered the crew to double the lines without
taking the time to turn the ship so that the bow was
facing out of the slip. If the ship had been facing out-
ward, it would have been easier for the ship to leave the
berth in case of emergency. However, turning the ship
would have involved the expense of using tugs. See
Exhibit 210 (Deposition of John Burke at 45).

Captain Gallagher also decided not to lower the
ship’s anchors. Instead, he spent considerable time check-
ing to find out if an anchor chain was required at the Port
of Milwaukee. After being unable to verify that there was
any requirement for a chain and learning that attaching
an anchor chain during the weekend would entail paying
overtime to a Gillen crew for at least_half a day’s work,
Captain Gallagher decided to forego the anchor chain for
the present and left it to Gillen’s foreman Salvatore Gum-
ina to decide whether to put out an anchor chain on the
next regular work day. See Transcript at 2009-10 (Testi-
mony of Salvatore Gumina), 682 (Testimony of Joseph
Zolnierek), 570-78 (Testimony of Patrick Gallagher);
Exhibit 210 (Deposition of John Burke at 49). There is no
evidence that the Captain considered whether an anchor
chain might be needed even though it was not required.

When Captain Gallagher finally informed Stanley
Blawas that Cement Division wanted the FORD tied up at
South Slip No. 1 until after Christmas, Blawas did not
object, but suggested that the vessel move to the City’s
heavy left [sic] dock in the inner harbor. Captain

137a

Gallagher rejected this proposal because the crew had
already started to double the lines and all aboard were
anxious to depart for their holiday destinations.

A short time later, in order to save Cement Division
holiday pay,46 the Captain discharged the entire crew,
leaving only five “volunteers” aboard with a note bearing
the telephone number of Salvatore Gumina. He left the
five with no means of receiving weather service reports,
no ship-to-shore communications, and, most critically, no
pilot or deck officer who could remove the ship to safety.
Captain Gallagher failed to retain a stand-by master, even
though he himself planned to be vacationing in Alpena,
Michigan on the shores of Lake Huron. Instead of taking
any of these precautions, he entered into a loose arrange-
ment with Salvatore Gumina to watch the lines.

The company attempts to justify all Captain Gal-
lagher’s time and money saving conduct as customary
business practices. If these were Cement Division’s usual
business practices, the company’s experience must have
been that the cost savings justified the degree of risk. If
Cement Division had experienced an unacceptable inci-
dence of loss, it would undoubtedly have had to change
these practices or be driven out of the marketplace.

On December 24, 1979, however, the risk became a
reality. With no captain or deck crew aboard the E.M.
FORD broke loose from her moorings, battered the dock,
then sank with a full cargo aboard. Having reaped the

46 See Transcript at 517 & 458-59 (Testimony of Patrick
Gallagher), 154 (Testimony of Robert Brissette); Exhibits 527 &
528.

138a

cost saving benefits of its business practices, Cement
Division must now assume the greater share of fault for
the losses caused by these practices to its own property
and to the property of the City of Milwaukee.

The court has concluded that the acts and omissions
of both Cement Division and the City of Milwaukee were
contributory or proximate causes of the allision between
the E.M. FORD and the dock at Terminal Pier No. 1 in
South Slip No. 1. Theoretically, either party could have
prevented the disaster by ensuring that the FORD was
moved out of this berth. However, this situation it [sic]
better viewed as a case of joint rather than alternative
care. The fact that both parties possessed the duty to
accomplish the same result does not relieve either party
of liability. Each were concurrent and independent causes
of the allision. See Riverway Company v. Trumbull River
Services, Inc., 674 F.2d 1146, 1152 (7th Cir. 1982); Hirsch
Lumber Company v. C. Ottaviano & Company, Inc., 18 F.2d
952, 952-53 (2d Cir. 1927).

Because of the disparity in tasks and duties the law
imposes on Cement Division as the shipowner and on the
City of Milwaukee as the wharfinger, there is a vast
disparity in culpability. Cement Division remained in
total custody and control of its vessel and, therefore, it
retained the ultimate responsibility for ensuring her
safety. The plaintiffs also had the costlier property at risk
with the foreseeable result being that the damages
claimed by the plaintiff are twenty-six times as great as
those claimed by the defendant.

Even if the City had assumed the burden of pro-
viding an adequate warning or had ordered the E.M.

139a

FORD to remain manned or move off berth, Cement
Division’s cost of precautions would not have been
reduced. The shipowner would still have had to employ
crew members at holiday rates or expend the time and
money necessary to move the ship to another berth.
Therefore, any warning or order from the City was
merely an added cost of assuring the safety of the prop-
erty involved in the allision. Under these circumstances
the court has assigned ninety-six percent of the causal
fault to Cement Division and the other plaintiffs and four
percent of the causal fault to the defendant City of Mil-
waukee.

C. WARRANTY

Cement Division is also making claims against the
City for breach of a wharfinger’s express and implied
warranties of workmanlike service and a safe berth.

The express warranty claim is not supported by the
facts. Although the City’s Dock Superintendent Stanley
Blawas may have assured Cement Division’s Fleet Cap-
tain Eugene Stafford that Terminal No. 4 at Slip No. 2 was
a safe berth when they entered into a winter mooring
agreement for the E.M. FORD on November 15, 1979,47
the FORD never used this berth. There is no testimony in
the record that the City subsequently made any express
warranties to Cement Division when it agreed to allow

47 Although the agreement to rent the berth was memori-
alized in a letter from Stafford to Blawas, see Exhibits 106 &
130, the alleged express warranty to provide a safe berth was
not memorialized.

140a

the ELM. FORD to remain at Terminal Pier No. 1 in South
Slip No. 1 on December 22, 1979. Moreover, Cement
Division is claiming that the turbulent conditions arose
on December 24 due to the “unique characteristics” of
South Slip No. 1. If South Slip No. 1 is “unique,” the
plaintiff could not have relied on “warranties” made
concerning any other outer harbor berth. Consequently,
there is no basis for Cement Division’s breach of express
warranty claim.

The implied warranties of a wharfinger are coexten-
sive with the wharfinger’s duties under tort law. Compare
Sims v. Chesapeake and Ohio Railway Company, 520 F.2d 556,
561 (6th Cir. 1975) (implied warranties of wharfinger)
with United States v. Mowbray’s Floating Equipment
Exchange, Inc., 601 F.2d 645, 646 (2d Cir. 1979) (standard
of care of wharfinger). Thus, the City breached its
implied warranties to the same extent it breached its
maritime law duties as a wharfinger.

After trial, the plaintiffs called the court’s attention to
the opinion of the Sixth Circuit in Oglebay Norton Com-
pany v. CSX Corporation, 788 F.2d 361 (6th Cir.), cert.
denied, 107 S. Ct. 173 (1986), in which the court ruled that
a shipowner was entitled to indemnity from a wharfinger
for breach of the wharfinger’s implied warranty of work-
manlike service. The plaintiffs say that Oglebay shows
“under what circumstances a breach of that warranty
results in a shipowner’s entitlement to full indemnifica-
tion even in the face of the shipowner’s own negligent
conduct.” Letter of Attorney Harney B. Stover, Jr. to
Judge Thomas J. Curran (June 20, 1986).

141la

In Oglebay a member of the ship’s crew was crushed
to death when he slipped or tripped on the dock and fell
between the vessel and the dock face. The shipowner
settled the wrongful death claim, then looked to the
wharfinger for indemnity. The appellate court affirmed
the trial court’s findings that the wharfinger had
breached its implied warranty of workmanlike service
because the dock was strewn with wet coal; because there
was no emergency lighting; and because the dock struc-
ture was inherently dangerous. Consequently, the court
concluded that the shipowner was entitled to indemnity
even though the ship’s captain may have been negligent
by failing to provide lighting or by failing to anchor
elsewhere. The court noted that suing on a warranty is a
contract action, so “comparative fault has no meaning in
an indemnity action.” Id. at 367 n.13.

According to the Oglebay court, “a shipowner is enti-
tled to indemnity when a breach of the warranty of
workmanlike performance results in loss ‘absent. conduct
on [the shipowner’s] part sufficient to preclude recovery.’ ” Id.
at 366 (quoting Weyerhaeuser Steamship Company v.
Nacirema Operating Company, 355 U.S. 563, 567 (1958)). In
the Sixth Circuit “conduct sufficient to preclude recov-
ery” is “conduct which prevented or seriously hampered
[a contractor’s] performance of its duty in accordance
with its warranty.” Oglebay Norton Company, 788 F.2d at
366 (quoting Turner v. Global Seas, Inc., 505 F.2d 751,
753-54 (6th Cir. 1974)). The Oglebay court refused to deny
indemnity based on other types of negligent conduct on
the part of the vessel owner because to do so “ignores the
nature of the wharfinger’s warranty to maintain a safe
berth and the wharfinger’s control over the dock.”

142a

Oglebay Norton Company, 788 F.2d at 367. See also Ammes-
maki v. Interlake Steamship Company, 342 F.2d 627, 632 (7th
Cir. 1965). The court pointed out that, although Oglebay
was in control of the mortally injured seaman and the
mooring, the wharfinger was under an obligation to the
shipowner to cure the dangerous conditions of the dock
which caused the injury. Id.

The doctrine of indemnity shifts the entire amount of
the loss from one party to another. See Hillier v. Southern
Towing Company, 714 F.2d 714, 719-21 (7th Cir. 1983).
There are three different bases for indemnification in
admiralty: implied indemnity because of the relationship
of the parties, contract indemnity, and tort-based indem-
nity. Oglebay is a case of indemnity implied because of the
relationship of the parties and because one party had
control over the instrumentality of the injury. Implied
indemnity has also been recognized in relationships
involving vessels and contractors, see, e.g., Waterman S.S.
Corporation v. Dugan & McNamara, Inc., 364 U.S. 421,
424-25 (1960), and between the parties to charter party
contracts. See, e.g., Venore Transportation Company v.
Oswego Shipping Corporation, 498 F.2d 469 (2d Cir.), cert.
denied sub nom. Banco Do Brasil v. Venore Transportation
Company, 419 U.S. 998 (1974).

Cement Division has cited no authority for the prop-
Osition that the law has recognized that the relationship
between a wharfinger and a vessel owner in an allision
case involving property damage warrants a shifting of
the entire loss to the wharfinger regardless of the conduct
of the vessel owner. The sinking of the E.M. FORD does
not present a situation in which the wharfinger had the
total responsibility for avoiding the risk or total control

143a

over the property at issue. Without this critical element of
control by the proposed indemnitor, the legal underpin-
nings of the implied indemnity award in Oglebay do not

apply.

Cement Division and the City of Milwaukee did not
negotiate any indemnity provision as part of the agree-
ment to allow the E.M. FORD to use the berth at South
Slip No. 1, so there is no basis for contractual indemnity.
Tort-based indemnity is similarly inapplicable in this
case. Before the rule of comparative fault, total-based
indemnity was employed where there was a great dis-
parity in the fault of the parties liable to the plaintiff. The
theory is that the indemnitor is guilty of active negligence
while the indemnitee is guilty only of passive fault with
passive fault being restricted to situations in which the
tortfeasor is merely vicariously liable or in which liability
is based upon a technical reason unrelated to personal
fault. See T. Schoenbaum, Admiralty and Maritime Law
§ 4-15 (West 1987). In the case at hand the plaintiff’s fault
is much greater than that of the defendant and the defen-
dant’s conduct does not fit the narrow definition of “pas-
sive fault.” Consequently, the court concludes that the all-
or-nothing approach of indemnity is inappropriate in this
case and that the traditional principles of comparative
fault must be used to apportion liability among the par-
ties. See Gator Marine Service Towing v. J]. Ray McDermott &
Company, 651 F.2d 1096, 1100 (5th Cir. 1981).

ORDER

By agreement of the parties and order of the court,
only the liability issues were tried before the court during

144a

the first phase of this bifurcated trial. Consequently, the
court has made no determination of damages. Accord
ingly, the court ORDERS that, within thirty (30) days of
the date of this Decision and Order, Cement Division and
the City of Milwaukee shall file a stipulation of damages.
Failing this, a second phase of this trial will be scheduled
to determine damages.

Done and Ordered in Chambers at the United States

Courthouse, Milwaukee, Wisconsin this 30th day of June,
1989.

/s/ Thomas J. Curran
Thomas j. Curran
United States
District Judge

145a

UNITED STATES COURT OF APPEALS
For the Seventh Circuit
Chicago, Illinois 60604

November 21, 1990.
Before

Hon. RICHARD D. CUDAHY, Circuit Judge
Hon. RICHARD A. POSNER, Circuit Judge
Hon. JOEL M. FLAUM, Circuit Judge

CEMENT DIVISION, NATIONAL ) Appeal from the
GYPSUM COMPANY, REED & ) United States
BROWN, INC, et al., ) District Court
Plaintiffs-Appellants on cea
ppe ‘’ ) Eastern District of
No. 89-2631 V. ) Wisconsin.
CITY OF MILWAUKEE, No. 80 C 1001
: Thomas J. Curran,
Defendant-Appellee. | Judge.

ORDER

On consideration of the petition for rehearing and
suggestion for rehearing en banc filed in the above-enti-
tled cause by defendant-appellee, no judge in active ser-
vice has requested a vote thereon, and all of the judges on
the original panel have voted to deny a rehearing
Accordingly,

IT IS ORDERED that the aforesaid petition for
rehearing be, and the same is hereby, DENIED.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_1671%3A1. Public record. Not legal advice.
