Petition of Kristie Leigh Enterprises, Inc.

United States Court of Appeals,
Fifth Circuit.
No. 94-60551.
In re In the Matter of the Libel and Petition of KRISTIE LEIGH
ENTERPRISES, INC., as Owner of M/V KRISTIE LEIGH, et al., for
Exoneration from or Limitation of Liability
In the Matter of the Libel and Petition of KRISTIE LEIGH
ENTERPRISES, INC., as Owner of M/V KRISTIE LEIGH, et al.,
Plaintiffs.
GATEWAY TUGS, INC., as Owner Pro Hac Vice, of the M/V KRISTIE
LEIGH, Plaintiff-Appellant,
v.
AMERICAN COMMERCIAL LINES, INC., Defendant,
Norma L. Castillo, Individually and as surviving spouse of Daniel
Castillo, and as personal representative of the estate of Daniel
Castillo, Deceased, and for and on behalf of all persons entitled
to recover for the wrongful death of Daniel Castillo, and as next
friend to Alisha Danielle Castillo, et al., Claimants-Appellees.
Jan. 12, 1996.
Appeal from the United States District Court For the Southern
District of Texas.
Before KING, DAVIS and SMITH, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
Following a collision between the tow of the M/V KRISTIE LEIGH
and two outboard pleasure fishing vessels, resulting in loss of
life and injury, Gateway Tugs, Inc., sought exoneration from or
limitation of its liability.1 Following a bench trial, the
district court denied Gateway both exoneration and limitation.
1
Kristie Leigh Enterprises, Inc., the owner of the tugboat,
and Valley Line Co., the owner of the barges, were also parties
to the litigation. The district court exonerated both companies
at the close of trial. They are not involved in this appeal.
1
Gateway appeals only the latter decision. We reverse the district
court's denial of limitation and remand for further proceedings.
I.
On May 9, 1992, the M/V KRISTIE LEIGH was pushing three empty
barges through the Intracoastal Waterway (ICW) from Brownsville to
Harlingen. Rather than lashing the barges end to end, Captain
Robert F. Rogers, Jr., the master of the tug, arranged them
three-abreast with the tug pushing the center barge. In this
configuration, the KRISTIE LEIGH's tow was 105 feet wide and 195
feet long. Its width, however, made it easier to maneuver in the
strong crosswinds customary at that time of year. The collision
occurred just south of the intersection of the ICW with the Arroyo
Colorado. The navigable portion of the ICW is 150 feet wide at
this point.
Because the wind forced the KRISTIE LEIGH's tow to travel at
an angle, the barges filled the bulk of the channel. Also, the
position of the tow created a 500 to 600 foot blind spot for the
operator stationed in the wheelhouse.
At approximately 7:30 a.m., Captain Rogers first spotted the
two fishing boats anchored near the western edge of the channel,
just south of marker 4. They were more than a mile ahead. As the
KRISTIE LEIGH approached the boats from the south, Rogers estimated
that he would miss the boats by only five or six feet. Although he
had two experienced deckhands available and a considerable blind
spot, the captain did not post a lookout. Nor did he signal a
warning with his horn. At approximately 7:45 a.m., the tow of the
2
KRISTIE LEIGH struck the fishing boats.
The district court denied exoneration to Gateway. The court
concluded that Captain Rogers' violations of Rules 5, 9, and 34 of
the Inland Navigational Rules (INR), 33 U.S.C. §§ 2001-73 (1987),
constituted fault which caused the accident. Specifically, Rogers
failed to post a lookout under circumstances requiring such action.
See 33 U.S.C. § 2005 (Rule 5). He did not keep as far to the
starboard side of the channel as possible. See 33 U.S.C. §
2009(a)(i) (Rule 9). And he did not sound a danger signal to warn
the pleasure craft to take evasive action. See 33 U.S.C. § 2034
(Rule 34). Despite ruling that Captain Rogers' negligence caused
the accident, the district court did not find him incompetent.
The district court, nonetheless, denied Gateway limitation.
It charged the company with constructive knowledge of Captain
Rogers' negligence on grounds that neither its president nor its
port captain possessed enough expertise to determine whether the
ships' masters they employed acted reasonably. The court found
they were in no position to evaluate how tows should be configured
or whether additional crew were needed for a larger-than-usual
load. The company, moreover, "made no efforts to ensure compliance
with [the INR] by its captains." Finally, the court found Gateway
negligent for failing to hold safety meetings, enact safety
policies, or make any inquiry into their captains' operational
decisions. Therefore, the district court concluded, Gateway bore
" "complicity in the fault' for Captain Rogers' negligence" and was
not entitled to the protection of the Limitation of Liability Act.
3
II.
The only question this case presents is whether the district
court erred by denying Gateway the right to limit its liability.
Section 183(a) of the Limitation of Liability Act provides in
relevant part:
The liability of the owner of any vessel ... for any loss,
damage, or injury by collision ... incurred, without the
privity or knowledge of such owner or owners, shall not,
except in the cases provided for in subsection (b) of this
section, exceed the amount or value of the interest of such
owner in such vessel, and her freight then pending.
Once a claimant proves that negligence or unseaworthiness2
caused an accident, an owner seeking limitation must show it lacked
privity or knowledge of the condition. Cupit v. McClanahan
Contractors, Inc., 1 F.3d 346, 348 (5th Cir.1993), cert. denied, --
- U.S. ----, 114 S. Ct. 1058, 127 L. Ed. 2d 378 (1994). A corporate
owner, however, will not satisfy its burden by merely demonstrating
ignorance. It is charged with the knowledge of any of its managing
agents who have authority over the sphere of activities in
question. Cupit, 1 F.3d at 348 (quoting Coryell v. Phipps, 317
U.S. 406, 410, 63 S. Ct. 291, 293, 87 L. Ed. 363, 367 (1943)).
The case before us raises a narrow question. The appellant
does not contest the district court's finding that Captain Rogers'
negligence caused the collision. And both parties accept the
court's determination that Rogers did not occupy a high enough
position in Gateway's organization so that Rogers' negligence is
2
Unseaworthiness is not an issue in this case. The district
court concluded that the duty to provide a seaworthy vessel did
not extend to these claimants because they were not doing
seaman's work. That holding has not been appealed.
4
imputed to it. The only issue we address, therefore, is whether
the district court erred in concluding that Gateway could not limit
because it failed to exercise reasonable diligence in discovering
similar navigational errors Captain Rogers had made earlier and
because it did not provide better training and supervision.
We have found no decision of the Supreme Court or this court
that supports denial of limitation under the facts as found by the
district court. In Coryell v. Phipps, 317 U.S. 406, 412, 63 S. Ct.
291, 294, 87 L. Ed. 363, 368 (1943), the Court held that "[o]ne who
selects competent men ... and who is not on notice ... cannot be
denied the benefit of ... limitation." In Mac Towing, Inc. v.
American Commercial Lines, 670 F.2d 543, 548 (5th Cir.1982), we
noted that "[o]rdinarily "errors in navigation or other negligence
by master or crew are not attributable to (the shipowner) for
limitation purposes.' "
In Continental Oil Co. v. Bonanza Corp., we stated: "[N]o
court has previously denied a corporate shipowner limitation of
liability for a master's navigational errors at sea when the owner
has exercised reasonable care in selecting the master."
Continental Oil Co. v. Bonanza Corp., 706 F.2d 1365, 1377 n. 15
(5th Cir.1983) (en banc) (Rubin, J.).
In Tittle v. Aldacosta, 544 F.2d 752, 756 (5th Cir.1977), we
stated that:
Ordinarily [limitation] is to afford protection to the
physically remote owner who, after the ship breaks ground, has
no effective control over his waterborne servants. Thus the
errors in navigation or other negligence by master or crew are
not attributable to him on respondeat superior for limitation
purposes. In the typical situation of a corporate owned ocean
5
vessel the privity and knowledge scrutiny focuses in on
whether the shore-based high-levelled management is aware (or
should have been) of the likelihood of the occurrence
happening after the ship is underway.
The district court did not find that Captain Rogers was an
incompetent master, and the record would not support such a
finding. Captain Rogers was a properly licensed tug captain with
over thirty years of experience. With the exception of one
accident, Captain Rogers had a clean record.3 No evidence
suggested that Gateway knew or should have known that Captain
Rogers had previously committed navigational errors. Without
knowledge by Gateway that its captain was inadequate or unsafe the
record does not support a conclusion that Captain Rogers was
incompetent and needed additional training or instruction in
performing his duties. Language of the Ninth Circuit in The G.K.
Wentworth, 67 F.2d 965, 966 (9th Cir.1933) is particularly
instructive in this respect:
It seems to us that the fact that the G.K. Wentworth was a
river towboat navigating inland waters does not place it in a
different light, and an owner who has appointed a competent
shipmaster is entitled to rely on his judgment in the
navigation of the ship, and should not hamper the further
exercise of his judgment with instructions and orders....
The ability and experience of the captain and the other
officers of the Wentworth are not challenged. It was proper
for the owners to entrust the management of the vessel to
them. The appellant had the right to rely upon the fact that
this competent master would observe the rules of navigation,
which he well knew....
The principal authority appellees rely on, Hercules Carriers,
3
Captain Rogers' license was once suspended for one month
after he allowed his tow to collide with the Brazos Locks
floodgates, believing them to be open.
6
Inc. v. Claimant State of Florida, 768 F.2d 1558 (11th Cir.1985) is
readily distinguishable. In that case, before the vessel put out
to sea the owner should have known that the crew failed to meet the
licensing requirements. As the Fourth Circuit points out, the fact
that the vessel's crew was not properly licensed was imputable to
the owners and put it on notice that its vessel was unseaworthy.
Hellenic Lines, Ltd. v. Prudential Lines, Inc., 813 F.2d 634, 639
(4th Cir.1987). In contrast, Gateway had no knowledge that Captain
Rogers was in any way inadequate as a master. The record does not
suggest that any complaints were ever filed against him or that
anyone ever reported to Gateway that Captain Rogers had improperly
navigated his vessel. An employee's negligence at sea, without
more, is not enough to deny limitation. See Grant Gilmore &
Charles L. Black, Jr., The Law of Admiralty 894-95 (2d ed. 1975)
("So long as the Limitation Act is on the books, the owner will of
course be entitled to limitation for events which occur during the
voyage which lie beyond the possibility of his control.")
In short, the record presents no justification for departing
from the well established rule that, for limitation purposes, an
owner may rely on the navigational expertise of a competent ship's
master. We therefore reverse the district court judgment denying
Gateway's petition to limit its liability and remand this case for
further proceedings consistent with this opinion.
REVERSED and REMANDED.
7