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Riverway Co. v. Trumbull River Services Inc.

decided: March 17, 1982.

RIVERWAY COMPANY, PLAINTIFF-APPELLEE,
v.
TRUMBULL RIVER SERVICES, INC., DEFENDANT-THIRD PARTY PLAINTIFF, APPELLEE-CROSS-APPELLANT, V. CAIRO MARINE SERVICE, INC., THIRD PARTY DEFENDANT-APPELLANT.



On Appeal from the United States District Court for the Southern District of Illinois. No. 78-C-5136 -- William Beatty, Judge.

Before Cummings, Chief Circuit Judge, Wood, Circuit Judge, and Grant, Senior District Judge.*fn*

Author: Grant

This action originated with a complaint filed by Riverway Company (hereinafter "Riverway") on July 27, 1978, which alleged that Barge RW-381, owned by Riverway, sunk as a result of the negligence of Trumbull River Services, Inc. (hereinafter "Trumbull"), while the barge was in the care, custody and control of Trumbull. The district court found that the subject matter of the complaint was within its admiralty and maritime jurisdiction under 28 U.S.C. ยง 1333 and Fed.R.Civ.P. 9(h). On October 11, 1978, Trumbull filed an answer to Riverway's complaint and a third-party complaint against Cairo Marine Service, Inc. (hereinafter "Cairo") under Fed.R.Civ.P. 14(c), which alleged that the sinking of the barge "occurred as a result of the primary and active fault, negligence and carelessness of Cairo...."

The action was tried without a jury on January 26 and 27, 1981. Judgment was entered against Trumbull and Cairo jointly and severally in the amount of $111,350.10, plus prejudgment interest in the total amount of $33,329.04. The district court further concluded that Trumbull's negligence was two-thirds responsible for the sinking of the barge and Cairo's negligence was one-third responsible. Ultimate responsibility for the total damages was apportioned according to these percentages. Both Trumbull and Cairo appeal from the district court's decision. Each claims the other should be assessed full liability.

I.

Riverway is a Minnesota corporation with its principal place of business in Minneapolis, Minnesota and its operation offices in St. Louis, Missouri. It is engaged in the business of owning and operating barges on inland rivers of the United States. Trumbull is an Illinois corporation with its only office and place of business in Lacon, Illinois. It operates a fleeting and harbor service business on the Illinois River near Lacon. Cairo is an Illinois corporation with its principal place of business in Cairo, Illinois. It is engaged in the business of marine surveying, consulting and salvage on the inland rivers.

At the time of the events underlying this suit, Riverway was the owner of Barge RW-381 which was used for the transportation of bulk cargo. On January 16 and 17, 1978, about nine miles up the Illinois River from Lacon, Illinois, this barge was loaded with approximately 50,000 bushels of corn. The barge was then transported on January 18, 1978, to one of Trumbull's fleets and moored alongside Barge MWT-122 and fastened to it by a steel cable.

On that same morning, severe ice conditions forced Trumbull to suspend its fleet operations. Before doing so, it sent some employees on a final inspection of all the barges. Nothing unusual was discovered regarding either MWT-122 or RW-381, even though MWT-122 had previously been taking on water. Trumbull suspended all operations as of noon that day. It did institute a radio monitoring system whereby passing towboats were requested to advise Trumbull whether any of the barges were experiencing difficulty. On January 20, 1978, a towboat reported to Trumbull that MWT-122 and RW-381 looked somewhat low in the water. On January 22, 1978, Trumbull was advised that MWT-122 was very low in the water. No reports after January 20, 1978, indicated that RW-381 appeared low in the water.

On January 23, 1978, a towboat advised Trumbull that RW-381 had little freeboard. With some improvement in the weather conditions and the sighting of a greater number of towboats passing through Lacon that morning, Trumbull decided to temporarily resume operations and dispatched the M/V NIANTIC to check the fleet, primarily RW-381. The NIANTIC arrived at RW-381 around 12:30 p. m. The barge was boarded and inspected. Although one compartment had taken on some water, it was characterized as normal condensation. The most troublesome discovery was that MWT-122 was completely submerged immediately to the port side of RW-381. The cable connecting the two barges was under strain and appeared to be pulling or holding down RW-381's port stern corner. Apparently, RW-381 was not in any imminent danger of sinking at that time.

No crew member of the NIANTIC took any action regarding the cable connecting the two barges. Edward Trumbull, Trumbull's general manager, was soon informed of RW-381's condition. He immediately notified Riverway and advised it that Trumbull would not assume any further responsibility for the safety of RW-381 under those conditions. Trumbull, in fact, did not take any further action with respect to RW-381.

After receiving Trumbull's report of RW-381's condition, its disclaimer of responsibility and refusal to take necessary action, Riverway quickly hired Cairo to act as its representative with respect to RW-381. More specifically, the district court found that Cairo was hired "to send a surveyor to Trumbull, take charge of the situation, inspect RW-381, determine what needed to be done, and do whatever needed to be done or arrange for others to do whatever needed to be done to keep RW-381 from sinking."

Late in the afternoon of January 23, 1978, Cairo called and informed Trumbull that it had been hired by Riverway and that a surveyor would arrive that evening. Edward Trumbull told his employees that they were to transport the surveyor to RW-381 and to provide him with their full cooperation. He specifically highlighted his view that the surveyor was to be in charge of the situation.

The surveyor who arrived on the scene was Peter Rukes. At about 7:30 p. m. that evening he was taken on the NIANTIC to RW-381 where he conducted an inspection of the barge. The condition of the barge at that time was described as follows by the district court:

At this time, the port stern corner of the barge was approximately 3 under water, and there was about 1 foot of freeboard at the starboard stern corner. Rukes and Roberts inspected the void compartments of the RW-381. They observed that there was no appreciable water in the stern compartment. The starboard # 3 compartment contained about 9' of water; the port # 3 compartment apparently was nearly full of water, because the barge was listing to port and water was entering through the submerged manhole cover of that compartment. The # 2 port compartment contained approximately 18 -24 of water, which was entering through a fracture in the bulkhead between the # 3 compartment and the # 2 compartment. Rukes obtained several wooden shingles from aboard the NIANTIC and drove them into the bulkhead fracture, apparently stopping the leak. Inspection of the other void compartments did not reveal any water in them.

When Rukes and Adams, a Trumbull employee, returned to the NIANTIC they discussed the barge's condition. The two versions were in conflict and the district court credited the testimony of Adams. Adams told Rukes that the mooring cable should be cut so that the sunken MWT-122 would not pull down or hold down the port stern corner of RW-381. Adams also advised Rukes that an ax was aboard the ship to perform the task and that he would even do it. Rukes stated that he was not concerned with the possibility RW-381 would sink that night and that he would attend to it the next morning. Adams offered to pump the water out of RW-381's compartments, but Rukes stated that it would not be necessary and reiterated that he would attend to it the next morning. An important finding by the district court was that "since Rukes had been sent by Riverway as the "expert' and the man in charge of the situation on behalf of Riverway Company, Adams deferred to Rukes' judgment." The court also found in light of conflicting testimony that Rukes had failed to even report to Riverway the results of his on-site inspection of RW-381. Upon returning to shore, Rukes immediately left for his motel.

The next morning Rukes, along with some Trumbull employees, proceeded to RW-381. They discovered that the situation had drastically changed for the worse in that the barge was now approximately 1/2 to 2/3 sunk at its stern end. In this condition, it was impossible to prevent total sinking. Upon his initial observation, the district court found that Rukes:

began swearing at himself, stated that the wire should have been cut the night before, stated that it was no one's fault but his own that the wire had not been cut, and, in his own words "blamed myself for the whole situation." The men then returned to the Trumbull office where Rukes, in an apparent state of ...


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