Appeal from the Circuit Court of Cook County; the Hon. James
S. Quinlan, Jr., Judge, presiding.
JUSTICE JIGANTI DELIVERED THE OPINION OF THE COURT:
This is a maritime personal injury action arising under the Longshoremen's and Harbor Worker's Compensation Act (LHWCA) (33 U.S.C. § 901 et seq. (1976)). Jurisdiction in this court is predicated upon 28 U.S.C. § 1333(1) (1976).
The plaintiff, Edward L. Carrillo, was injured on July 3, 1978, while working as a longshoreman, during the course of loading grain onto a barge moored alongside a grain elevator on Lake Calumet. The third-party defendant, Ohio River Company (the shipowner), is the owner of the barge. The defendant/third-party plaintiff, Indiana Grain Division, Indiana Farm Bureau Cooperative, Inc. (the stevedore), is the owner of the grain elevator where the loading was taking place. Hired by the shipowner, the stevedore had the responsibility of opening, moving, and securing the covers on the barge. Carrillo, an employee of Chicago Grain Trimmers, was hired to actually load the barge with grain from the elevator. Carrillo's injury occurred when the No. 7 hatch cover, upon which he was standing, rolled forward, causing him to fall onto the deck of the barge.
The stevedore, Indiana, filed a cross-claim for indemnity and contribution against the shipowner, Ohio. The shipowner subsequently filed a cross-claim against the stevedore for indemnity based on its breach of its implied warranty of workmanlike performance. Prior to trial, Carrillo dismissed the shipowner and the shipowner withdrew its cross-claim for indemnity, reserving the issue of attorney fees. Following a jury trial, a verdict was rendered in favor of Carrillo and against the stevedore. The jury also found in favor of the shipowner on the stevedore's action for indemnity and contribution. Thereafter, the court awarded the shipowner $46,326.47 in attorney fees and expenses against the stevedore incurred in defending both Carrillo's action and the third-party action filed against it by the stevedore.
The stevedore raises three issues on appeal: (1) whether the jury instructions concerning the stevedore's burden of proof on its third-party complaint against the shipowner properly set forth the applicable law; (2) whether the award of attorney fees and expenses against the stevedore was erroneous; and (3) whether the trial court erred in denying the stevedore's motion to quash the use at trial of a statement of an employee of the stevedore on the basis the statement had been obtained in violation of the attorney-client privilege.
The barge had eight interlocking hatch covers which permitted access to the cargo hold. Carrillo's job was to load the barge with grain delivered by spouts from the grain elevator. He accomplished his work by standing on top of a barge hatch cover and directing the spout to different areas of the cargo hold to permit an even distribution throughout the hold in the barge. Upon the date of the injury, the center of the barge had been loaded first, and then the hatch covers were moved by the stevedore's employees. The covers at the center of the barge were closed, and the No. 7 hatch cover was rolled over the No. 8 hatch cover at the afterend of the barge. The No. 7 hatch cover was unsecured at the time Carrillo was standing on top of it, thereby causing the cover to roll, resulting in Carrillo's injuries.
Each barge hatch cover was equipped with two locking devices that operated by sliding a 14-inch long "drop latch" into a slot. Both locking devices had to be operating properly in order for the hatch covers to be secured. If both locking devices were not operating properly, the covers could slide open. Several months prior to the accident, the shipowner had a condition survey performed on the barge, which involved an inspection and report on the condition of the vessel. The condition survey stated that a new drop latch with a holding pin should be installed on cover No. 7. Although certain repairs were then made based on the results of the condition survey, there was no indication that the drop latch on cover No. 7 was replaced at any time prior to the accident.
• 1 Before addressing the first issue concerning jury instructions, a discussion of the relevant Federal law to be applied would be beneficial. As Carrillo was injured while working as a longshoreman on navigable waters, the substantive law to be applied in the instant case is Federal admiralty law. (Pope & Talbot, Inc. v. Hawn (1953), 346 U.S. 406, 409, 98 L.Ed. 143, 151, 74 S.Ct. 202, 205.) The standard of care which shipowners owe to longshoremen is governed by the LHWCA. Before the enactment of the 1972 amendments to the LHWCA, injured longshoremen could recover against shipowners for the unseaworthiness of a vessel. (Seas Shipping Co. v. Sieracki (1946), 328 U.S. 85, 90 L.Ed. 1099, 66 S.Ct. 872.) A duty of seaworthiness is a duty to guarantee the safety of the vessel without regard to the shipowner's fault, thereby imposing strict liability upon the shipowner. Consequently, a shipowner was liable, as a third party, for injuries suffered by longshoremen as a result of "unseaworthy" conditions even though the unseaworthiness was caused, created, or brought into play by the stevedore or an employee of the stevedore. However, in such instances, the shipowner could get indemnity from the stevedore on the theory that the stevedore had breached an express or implied warranty of workmanlike performance to the vessel. Ryan Stevedoring Co. v. Pan-Atlantic Steamship Corp. (1956), 350 U.S. 124, 100 L.Ed. 133, 76 S.Ct. 232.
With the 1972 amendments to the LHWCA, negligence was substituted for seaworthiness as the standard of liability in actions by longshoremen against shipowners and the shipowners' right of indemnity against the stevedore who employed the longshoremen was abolished. (33 U.S.C. § 905(b) (1976); H.R. Rep No. 1441, 92d Cong., 2d Sess. 3, reprinted in 1972 U.S. Code Cong. & Admin. News 4698, 4703, 4704.) The purpose of the amendments was to place a longshoreman-employee injured aboard a vessel in the same position he would be in if he were injured in nonmaritime employment ashore. Hence, the old no-fault concept of seaworthiness was eliminated and the new standard of reasonable care was imposed on the shipowner. H.R. Rep. No. 1441, 92d Cong., 2d Sess. 3, reprinted in 1972 U.S. Code Cong. & Admin. News 4698, 4704.
• 2 The first issue raised on appeal concerning jury instructions raises the question of the shipowner's duty. We are guided by Scindia Steam Navigation Co. v. De Los Santos (1981), 451 U.S. 156, 68 L.Ed.2d 1, 101 S.Ct. 1614. In Scindia, the United States Supreme Court outlined the duties a shipowner owes to the stevedore and its longshoremen. Initially, before the loading or unloading operations begin, the shipowner must at least exercise "ordinary care under the circumstances to have the ship and its equipment in such condition that an expert and experienced stevedore will be able by the exercise of reasonable care to carry on its cargo operations with reasonable safety." The shipowner may rely on the stevedore to perform its work with reasonable care, but must warn the stevedore of "any hazards on the ship or with respect to its equipment that are known to the vessel or should be known to it in the exercise of reasonable care, that would likely be encountered by the stevedore in the course of his cargo operations and that are not known by the stevedore and would not be obvious to or anticipated by him if reasonably competent in the performance of his work." 451 U.S. 156, 167, 68 L.Ed.2d 1, 12, 101 S.Ct. 1614, 1622, citing Federal Marine Terminals, Inc. v. Burnside Shipping Co., Ltd. (1969), 394 U.S. 404, 416 n. 18, 22 L.Ed.2d 371, 381 n. 18, 89 S.Ct. 1144, 1151 n. 18.
• 3 Once the work starts, the shipowner has no general duty to monitor the stevedoring operation "absent contract provision, positive law, or custom to the contrary," and it may rely on the stevedore's judgment that equipment is reasonably safe for continued use during the work. "The shipowner, within limits, is entitled to rely on the stevedore and owes no duty to the longshoremen to inspect or supervise the cargo operations." (Emphasis in original.) Scindia Steam Navigation Co. v. De Los Santos (1981), 451 U.S. 156, 172, 68 L.Ed.2d 1, 15, 101 S.Ct. 1614, 1624-25.
• 4 However, the shipowner is entitled to rely on the stevedore's judgment only until the shipowner becomes aware of a hazard on the ship, and if the stevedore is unreasonably failing to protect the longshoremen against that hazard, at which time it has a "duty to intervene" and remedy the hazard. The shipowner must have actual knowledge of hazards which develop during the cargo operation but is deemed to have knowledge of hazards which exist before the work begins. Scindia Steam Navigation Co. v. De Los Santos (1981), 451 U.S. 156, 175-76, 68 L.Ed.2d 1, 17-18, 101 S.Ct. 1614, 1626.
• 5 Applying Scindia to the facts of this case, we believe that the jury was properly instructed as to the stevedore's burden of proof in its third-party action against the shipowner. The instruction provided as follows:
"1. That on July 3, 1978, there existed on Barge ORG 2515, a defect in the drop latch pin of the seventh hatch cover which was known to Ohio River Company or discoverable by it in the exercise of ordinary care, but which was a hidden or latent defect insofar as Indiana Grain Division's employees were concerned, and which could not have been ...