CLARK, Circuit Judge:
This is a consolidated appeal involving three cases arising out of the allision of the SUMMIT VENTURE with the Sunshine Skyway Bridge near the mouth of Tampa Bay on May 9, 1980. In No. 82-5733, the district court granted the claimants' motion for partial summary judgment on the issue of exoneration. Hercules has appealed this order but as discussed below the ruling of the district court on Hercules' right to limit its liability pursuant to 46 U.S.C. §§ 183, et seq., has rendered this appeal moot. After entry of partial summary judgment on the exoneration issue, a bench trial was had on the issue of limitation of liability. The district court ruled that Hercules was not entitled to a limitation of liability. Case No. 83-3242 involves Hercules' appeal from this order. After the bench trial Hercules moved for exoneration from liability as to the State of Florida, arguing that the State was collaterally estopped from seeking recovery based upon the negligence of Pilot Lerro because a prior state administrative proceeding had found Pilot Lerro non-negligent and refused to revoke his pilot's license. The district court denied the motion, finding that the doctrine of collateral estoppel did not apply in this case. We affirm the three orders of the district court consolidated in this appeal.
The following facts were stipulated to by the parties and recited by the district court. In re Complaint of Hercules Carriers, Inc., 566 F.Supp. 962 (M.D.Fla.1983):
Hercules, 566 F.Supp. at 966-67.
The following facts were adduced from the evidence at trial and are not contested on appeal:
Hercules, 566 F.Supp. at 967-68.
Second Officer Sun Chi Kong, in the normal course of his duties, made entries in the SUMMIT VENTURE's deck log in English. He also prepared deck log abstracts in English.
After the allision, Hercules Carriers, Inc. (Hercules) filed a limitation action under the Limitation of Liability Act, 46 U.S.C. § 183, et seq., and Rule F of the Supplemental Rules for Certain Admiralty Claims, asking for either exoneration or limitation of liability. The claimants against Hercules included the State of Florida for damage to the bridge, Greyhound Bus Company for loss of a bus that fell off the bridge when it collapsed, wrongful death and personal injury claimants, and other shipping companies whose vessels were delayed in traveling into or out of Tampa Bay as a result of the accident. Hercules filed counterclaims against Florida and Greyhound and brought in the United States as a third-party defendant for allegedly improper weather warnings. The United States counterclaimed against Hercules.
Several of these claims are not before this court. Hercules obtained summary judgment against the delay claimants
I. Limitation of Liability (No. 83-3242)
Title 46 U.S.C. § 183(a) provides:
Under this statute, Hercules is liable beyond the value of the ship if it had privity and knowledge before the start of the voyage of the acts of negligence or conditions of unseaworthiness that caused the accident. Moreover, Hercules is not entitled to limitation if the ship was unseaworthy due to an incompetent crew or faulty equipment. See Horn v. Cia de Navegacion Fruco, S.A., 404 F.2d 422, 431-32 (5th Cir.1968), cert. denied, 394 U.S. 943, 89 S.Ct. 1272, 22 L.Ed.2d 477 (1969).
This burden is not met by simply proving a lack of actual knowledge, for privity and knowledge is established where the means of obtaining knowledge exist, or where reasonable inspection would have led to the requisite knowledge. See China Union Lines, Ltd. v. A.O. Andersen & Co., 364 F.2d 769, 787 (5th Cir.1966) cert. denied, 386 U.S. 933, 87 S.Ct. 955, 17 L.Ed.2d 805 (1967). Thus, knowledge is not only what the shipowner knows but what he is charged with discovering in order to apprise himself of conditions likely to produce or contribute to a loss. See Avera v. Florida Towing Corp., 322 F.2d 155, 166 (5th Cir.1963).
We note that the district court in denying Hercules' entitlement to a limitation of liability made separate findings of negligence and unseaworthiness. In reviewing the petitioner's challenges to these findings, we will necessarily assess the negligence and unseaworthiness of the crew. In doing so the two categories will be merged for purposes of appeal because the test of reasonableness is the primary inquiry under both categories.
The district court properly set forth the applicable legal standards in denying Hercules limitation of liability. However, Hercules asserts that the court misapplied the statutory standards of liability because it was hopelessly antagonistic to the policy behind the Limitation of Liability Act. It is true that the district court expressed some serious reservations about the Limitation Act when it stated:
Hercules, 566 F.Supp. at 978.
The district court, however, is not alone in its view of the Limitation Act. Our court in dicta has previously remarked that the Limitation Act is hopelessly anachronistic. See University of Texas Medical Branch at Galveston v. United States, 557 F.2d 438, 441 (5th Cir.1977), cert. denied, 439 U.S. 820, 99 S.Ct. 84, 58 L.Ed.2d 111 (1978). Moreover, the Supreme Court itself has taken a restrictive view of the statute. In The Main v. Williams, 152 U.S. 122, 14 S.Ct. 486, 38 L.Ed. 381 (1894), the Court stated:
152 U.S. at 132-33, 14 S.Ct. at 489. The Supreme Court has also recognized that
Maryland Casualty Co. v. Cushing, 347 U.S. 409, 437, 74 S.Ct. 608, 623, 98 L.Ed. 806 (1954) (footnote omitted).
Despite numerous judicial reservations about the Act, Congress has not seen fit to remove it from the books and accordingly the courts have a duty to apply the statute as written.
A. Hercules' Contentions on Appeal
Most of Hercules' enumerations of error involve the factfindings of the district court regarding negligence and unseaworthiness. Findings of the district court establishing the privity and knowledge of Hercules, which appellant also disputes, are factual findings as well. All of these findings of fact are subject to review under the clearly erroneous standard. See Farrell Lines, Inc. v. Jones, 530 F.2d 7, 12 (5th Cir.1976); Waterman Steamship Corp. v. Gay Cottons, 414 F.2d 724, 738 (9th Cir.1969). Hercules cites Flowers v. Crouch-Walker Corp., 552 F.2d 1277 (7th Cir.1977) in arguing for a higher standard of review because the trial court adopted some of the proposed findings of fact submitted by the claimants. Flowers is not on point, as that case consisted almost entirely of the testimony of a single witness whose credibility was not challenged. Accordingly, the Flowers court held that when appellate review is primarily a matter of drawing inferences from undisputed facts or determining their legal implications, review is much broader than in the instance where disputed evidence and questions of credibility are involved. Clearly, we have the latter situation in this case where disputed evidence and questions of credibility were involved and therefore a "more critical review" of the findings of fact beyond the clearly erroneous standard is not permitted.
B. Negligence and Unseaworthiness
As discussed above, the first step in determining a shipowner's entitlement to limitation of liability is to establish what acts of negligence or conditions of unseaworthiness caused the accident. In this case, negligence involves evidence of careless or improper operation of the ship by the crew. Because the shipowner has a non-delegable duty to provide a competent
The district court held that Captain Liu was negligent in allowing his ship to be directed up the channel by the pilot at speeds ranging from half-speed ahead to full ahead. The district court's findings of fact with regard to speed were as follows: (1) At 0650, in the vicinity of buoy 6, the speed of the vessel was increased to full ahead or 13 knots over the water; (2) One-half mile after passing buoy 12, near buoy 14, and still proceeding full speed ahead, the weather had deteriorated so the bow of the ship could not be seen, indicating visibility was less than 500 feet; (3) Maintaining a speed of 13 knots, the SUMMIT VENTURE traveled from buoys 14 to 16, a distance of 1.25 nautical miles, in approximately five minutes. Just prior to reaching buoy 16 at 0721, the vessel's speed was reduced to half ahead or 9 1/2 to 11 knots. When the lookout, Boatswain Sit, arrived on the bow about 0723, he immediately sighted buoy 16 off the port bow as it passed down the port side of the vessel. The boatswain could not clearly see the color or shape of the sighted buoy because of the heavy fog and poor visibility. At that time the rain and wind increased, and visibility was approximately 300 to 500 feet — less than the ship's length. According to the posted maneuvering characteristics, emergency stopping distance of the vessel was in excess of 3,500 feet; (4) The vessel continued to proceed up Tampa Bay at one-half ahead, even though Pilot Lerro could not visually sight the next set of buoys; 1A and 2A. By the time the vessel was two tenths of a mile from buoys 1A and 2A, Atkins advised that the radar scope had been totally obliterated by heavy rainfall and that radar contact was lost. Although radar contact was momentarily regained for one or two sweeps of the port radar, buoys 1A and 2A were never visually sighted or seen again on radar. The vessel proceeded forward at one-half ahead at approximately 10 knots, toward the critical turning buoy and the bridge, which was less than one mile away; (5) Notwithstanding radar occlusion and virtually zero visibility, the vessel continued to proceed at 9 1/2 to 11 knots through the turn at buoy 2A, just seven-tenths of a mile away from the bridge. Under these conditions, the vessel required approximately 2500 feet to stop its forward motion. Pilots Lerro, Evans
It is clear from the evidence adduced at trial that the excessive speed of the SUMMIT VENTURE was the principal overt act of negligence causing the allision with the bridge. Hercules attempts to circumvent the fact of the SUMMIT VENTURE's excessive speed by citing to the testimony of four witnesses who stated that it would have been imprudent to attempt to stop the SUMMIT VENTURE in the circumstances existing on the morning of May 9, 1980, after the storm broke. The fallacy of this argument is two-fold. First, Hercules claims that the storm broke at buoy 2A when the facts clearly show that the SUMMIT VENTURE had been in a heavy rain storm for approximately two and one-half miles after passing buoy 14. Second, the evidence clearly establishes that the SUMMIT VENTURE's speed far exceeded minimum visibility requirements prior to buoy 2A and that attempts to reduce the vessel's excessive speed after passing buoy 2A had no appreciable effect. It is true that some circumstances would make low speed inappropriate, and Hercules in its appeal suggests that reducing speed below half ahead would have been imprudent because a greater speed was necessary to maintain control of the ship. However, the expert witnesses at trial stated only that an attempt to stop the ship during the heaviest rain after passing buoy 2A would have been imprudent. Significantly, they did not question the propriety of slowing at some point before buoy 2A, when the severity of the rain storm was evident and visibility virtually non-existent. Moreover, had the SUMMIT VENTURE been traveling at a more moderate speed prior to buoy 2A, attempts to slow the vessel after passing buoy 2A would have been more successful. Clearly the success of any attempt to stop the vessel by either backing the engine or dropping the anchors was directly correlated to the vessel's speed at the time these maneuvers were attempted, and certainly appellants cannot argue that stopping a vessel is imprudent when a bridge has been sighted and allision is imminent.
Article 16 of the Inland Rules, subtitled "Speed in Fog" provides: "Every vessel shall, in a fog, mist, falling snow, or heavy rainstorms, go at a moderate speed, having careful regard to the existing circumstances and conditions." 33 U.S.C. § 192.
Though this rule is not directly applicable here because a stationary object, the bridge, was involved, we find that the circumstances of this case clearly demonstrate a violation of the moderate speed rule. The facts show that from buoy 14 to the bridge, a distance of over three miles, Pilot Lerro allowed the vessel to proceed up the channel with visibility of 500 feet or less. With a ship length over 600 feet and visibility less than 500 feet, good seamanship plus the pilot's statutory duty under the moderate speed rule dictated that the ship be stopped by buoy 14 or 16.
Instead, Pilot Lerro chose to push ahead blindly at a grossly excessive speed when he could not even see the bow of the ship. Between buoys 14 and 16 the ship maintained a speed of 13 knots; at this speed the ship had an emergency stopping distance of 3,500 feet, or approximately seven times Pilot Lerro's actual visibility. Just prior to reaching buoy 16, the ship's speed was reduced to half ahead and upon reaching buoy 2A (which was never sighted), 1.3 miles away, the ship was traveling at 9 ½ to 11 knots. At this point, the bridge was .7 miles away, visibility was zero and the ship's emergency stopping distance was 2,500 feet. Given the ship's speed, even if Pilot Lerro had been able to see the bridge at this point, full emergency stopping measures would have still brought the ship perilously close to the bridge. Pilot Lerro chose to push forward resulting in the tragic allision.
We can think of no greater case of misfeasance or gross negligence than as exemplified by the facts of this case. This strong language not only applies to Pilot Lerro, but also to Captain Liu and Chief Mate Chan who stood by mutely as these events unfolded in their full view. Likewise, we find absurd appellant's suggestion that the storm "suddenly broke" at buoy 2A and caught the crew of the SUMMIT VENTURE by surprise. As established by the facts recited above, the severity of the storm was clearly evident for over three miles prior to reaching the bridge, rendering any defense of surprise ludicrous.
Accordingly, we affirm the district court's finding, as a matter of law, that Captain Liu, as master of the SUMMIT VENTURE was negligent in allowing his vessel to proceed at the speeds ordered by Pilot Lerro under conditions of visibility of less than 500 feet.
(2) Use of Radar
The evidence showed that the two radars on the SUMMIT VENTURE when operated together at short range tended to interfere with one another. The district court found that the interference between the two radars, while not a statutory violation was a well-known fact, and consequently
We find that while negligence existed because the two radars tended to interfere with one another and the owners of Hercules failed to have a crew member with a radar observer certificate aboard the SUMMIT VENTURE, this negligence was not a contributory and proximate cause of the allision. Though none of the crew members of the SUMMIT VENTURE had a radar observer certificate, both Pilot Lerro and Pilot Trainee Atkins had radar observer certificates and the evidence showed that Atkins was monitoring the radar. The evidence also showed that while the radar could detect rain it could not indicate the intensity of a storm. Furthermore, the severity of the storm was visually evident by buoy 14 when the bow could no longer be seen. Soon thereafter, approximately two tenths of a mile from buoys 1A and 2A, the radar scope became completely obliterated. It was at buoy 14 and beyond that the decision of whether to stop or slow the vessel was critical and proximately related to the ultimate allision with the bridge. There is no evidence that the lack of radar observer certificates among the crew members, Captain Liu's inexperience with the radars aboard the SUMMIT VENTURE, or the potential interference between the two radars at short range, had anything to do with the failure of the crew members aboard the SUMMIT VENTURE to properly slow or stop the vessel between buoy 14 and the bridge. That is, there is no evidence to suggest that the negligence with respect to the radar contributed to the series of events occurring between buoy 14 and the bridge. Accordingly, we hold that the district court's findings relating to radar interference and the lack of radar observer certificates as a contributory cause of the allision between the SUMMIT VENTURE and the Sunshine Skyway Bridge to be clearly erroneous.
(3) Posting of Lookouts
The district court found that it was negligent of Captain Liu not to send a lookout forward when the weather began deteriorating. The district court also found that when the lookout was sent forward he failed to perform his functions properly in that although he reported the sighting of a buoy, he did not report the color or whether or not he heard any sounds.
(4) Anchor Watch
The district court found that as a matter of practice for the past 15 years, upon entering and leaving port, Captain Liu failed to insure that the anchors were ready for use so that both anchors could be let go if necessary. The court found this practice violated company regulations and was contrary to sound navigational practice and good seamanship. The district court further found that although Pilot Lerro requested that both anchors on the SUMMIT VENTURE be readied and that three men were required to drop both anchors simultaneously, only two men were on the bow and thus when the order was given only one anchor was dropped. The court found this to be evidence of unseaworthiness.
While the facts found by the district court constitute negligence and unseaworthiness, we find that these facts had no causative relation to the SUMMIT VENTURE's allision with the Sunshine Skyway Bridge. Because of the speed of the vessel and the late dropping of the anchor, it still had not caught hold at the point of allision. The testimony further indicated that given the speed of the ship, the dropping of both anchors would have had no appreciable effect because had they caught hold, the chains would have been ripped from the vessel because of its speed. (TL 571-572)
(5) Bridge Relief
The district court found that Captain Liu acted negligently in failing to follow the prescribed procedures when he relieved Chief Mate Chan as Officer of the Watch. The district court also found that:
566 F.Supp. at 974. Appellant argues that prior to relieving Chan, Liu had been on the bridge observing and monitoring and knew the situation without needing the chief officer to brief him. Appellant further argues that Captain Liu was available to perform any function that may have been required of the chief officer and that there were two other pilots on the bridge with the statutory duty of navigating the SUMMIT VENTURE through the channel, plus a helmsman, and that therefore, there were more
The deposition of Captain Liu indicates that he did not ask any questions of the pilot because he did not want to interfere or disturb the two pilots. Moreover, his testimony indicates that because he was acting as captain and master of the ship and also duty officer on watch when the chief mate went forward to stand by the anchor, that he did not have time to check and follow so many things. Furthermore, Captain Liu felt that with one pilot on the radar and one on the conn, the best thing he could do was to keep quiet and let the two pilots handle the ship. In sum, the evidence shows that Captain Liu was too busy with his dual responsibilities to perform his duty to oversee the pilots and to exercise authority over them when he believed the ship to be in danger. Likewise, with Chief Mate Chan gone from the bridge of the ship, there was no longer a crew member of the SUMMIT VENTURE present who could effectively monitor the course and speed of the ship and exercise his authority to question or override the pilots aboard who were tending to these matters.
The significance of the failure to utilize proper turnover procedures is evidenced by the testimony of Captain Liu and Chief Mate Chan regarding their concern over the handling of the ship by Pilot Lerro. Captain Liu stated that he was concerned about the safety of the ship for ten minutes prior to the allision. Chief Mate Chan testified that he thought the SUMMIT VENTURE should have been anchored at buoy 16. However, both failed to convey their concerns to Pilot Lerro or to each other.
Had the two officers gone through the appropriate turnover procedures, a discussion of the ship's speed and course along with the presence of other vessels and the location of the bridge would obviously have occurred. Moreover, it seems inevitable that during the ensuing discussion their mutual concerns over the piloting of the ship would have surfaced and been brought to the attention of Pilot Lerro. While the content of this non-existent conversation is speculative, the hypothetical exchange illustrated above, when compared with the absolute failure of Captain Liu and Chief Mate Chan to adequately communicate, demonstrates the total abdication by the two officers of their duties on board the ship. The failure to follow established procedures for turnover on the bridge resulted in critical communications never being exchanged — communications that very well may have averted the accident.
We affirm the district court's finding that Captain Liu acted negligently in allowing Chief Mate Chan to leave the bridge without briefing Captain Liu on the matters that Chief Mate Chan had been monitoring, and further failing to make provision for replacement of Chief Mate Chan before his departure.
(6) Captain Liu's Reliance on the Pilots
The district court found that Captain Liu was negligent in relying on the pilots and failing to remonstrate with them. The IMCO rules
Furthermore, the Supreme Court in The China, 74 U.S. (7 Wall.) 53, 67-68, 19 L.Ed. 67 (1869) noted:
The district court found unequivocably that the circumstances surrounding the approach to the bridge made out such a case of great necessity that it was blatant negligence on the part of Captain Liu to allow the ship to proceed under the control of Pilot Lerro after Captain Liu became aware or should have become aware of the inevitable risk of accident. Indeed, Captain Liu testified that he had been concerned about the safety of the vessel for approximately ten minutes before the allision. Moreover, while on paper, the shipowner followed the IMCO rules and recommendations, the evidence showed that the actual practice of the company was to permit all navigational decisions to be made by a pilot when on board and that the master could only relieve the pilot if he was acting in a drunken or crazy manner. According to Port Captain Chaing the shipowner's policy was that the pilot is in command and in charge. Accordingly, the district court found that Captain Liu's adherence to the company's policy constituted negligence when he relinquished to Pilot Lerro his responsibility for the safety of the ship.
Chief Mate Chan, who later went forward to monitor the anchor watch, testified that he believed the SUMMIT VENTURE should have anchored at buoy 16. However, he said nothing to Pilot Lerro about his concerns. The district court found that because of the company's unwritten policy against interfering with compulsory pilots that neither Chief Mate Chan nor Captain Liu realized that when a vessel is being piloted by a compulsory pilot that the master and officers of the vessel are not relieved of their ultimate responsibility to insure the safety of the vessel.
The appellant's principal defense is based upon testimony of Captain Liu that as captain of the ship he had authority to give an order to the pilot and that no one from the company had ever told him that the pilot was in command of the ship when he was aboard. Captain Liu further testified that he would principally rely on the pilot but that in the final analysis the captain had the final responsibility and that if the pilot was doing something wrong, he should overrule him.
However, there was conflicting testimony by Captain Liu at deposition and at trial concerning his understanding of his authority to question or overrule Pilot Lerro. At deposition, Captain Liu stated that he was concerned about the ship's position for ten minutes prior to the allision but that he gave no consideration whatsoever to stopping his vessel because he thought it was a one-man show, referring to the fact that the pilot had total control of the ship. (TB 147-148). At trial Captain Liu stated he did not think he had the authority to say "I want to stop and anchor the vessel" to the pilot or to anyone else. (TL at 104). Furthermore, Port Captain Chaing, the company officer in charge of insuring that the IMCO regulations were followed, testified on numerous occasions in his deposition that the pilot was in command of the ship. While this interpretation is completely contrary to the IMCO rules and the company's written regulations, the evidence showed that Port Captain Chaing's interpretation was, in actual practice, the
Hercules insists that the district court made inconsistent findings regarding Captain Liu's comprehension of the company policy toward compulsory pilots, and that given Captain Liu's admitted comprehension of official company policy, the court was precluded from finding the owners were in privity with the negligence resulting from Captain Liu's failure to remonstrate with the pilots.
The passages from the district court opinion cited by Hercules read:
Hercules, 566 F.Supp. at 974.
Hercules, 566 F.Supp. at 979.
These two passages when read within the entire context of the opinion do not reflect inconsistent findings by the district court. They demonstrate the basis for the district court's ruling that Captain Liu ignored the written company policy in favor of the inconsistent, unwritten company policy to defer to a pilot who is navigating. The evidence adduced at trial and through deposition clearly demonstrated that Captain Liu had adopted the unwritten company policy as his own official operating policy.
Having reviewed the entire testimony on this subject and given the blatant negligence of Captain Liu and Chief Mate Chan in failing to intervene when both had serious concerns over the safety of the vessel, we find that the trial court was correct in concluding that the failure of Captain Liu and Chief Mate Chan to intervene was proximately related to the allision and that their failure to intervene resulted from the unwritten policy of the company to defer completely to the pilot on board.
(7) Dissemination of Crew Training Information
The district court found that Captain Liu was negligent in failing to instruct or train the crew of the SUMMIT VENTURE and failed to disseminate to them critical company and navigational information. Captain Liu admitted that he had never shown the company regulations or the IMCO rules to his deck officers before the allision, nor had he inquired whether any of his mates had read or periodically reviewed these regulations. The district court found that this particularly affected Chief Mate Chan who had never had the company policies and binding regulations outlined for him. The district court found that the failure to properly instruct Chief Mate Chan was a proximate cause in his failure to exercise his authority over the pilot when he perceived that the ship was in obvious danger. In other words, had Chief Mate Chan been instructed on the IMCO rules and the shipowner's manual, he would have realized his responsibility to take action when he believed the vessel was in danger. The district court was correct in holding that the failure of Captain Liu to properly instruct his crew was an act of negligence and was proximately related to the allision.
(8) Invalid Licenses
The district court found that Chief Mate Chan and Second Mate Kong
The appellant argues that there was no evidence that the underlying Chinese licenses were obtained by fraud and that the only evidence of invalidity was that the Liberian authorities were unable to validate the underlying Chinese licenses upon the strength of which the reciprocal Liberian licenses were granted. Appellant's principal contention is that there was no indication of any causal connection between the invalid Chinese licenses and the allision. Appellant also contends that the company had received from the Liberian government a list of suspect license numbers and the names of suspected licensees. The Chief Mate and Second Officer were not on this list and therefore appellant argues that it had no reason to suspect that these licenses were invalid.
However, the evidence shows that the shipowner had the capability of checking on the validity of the underlying Chinese licenses but failed to check with respect to the licenses of Chief Mate Chan or Second Mate Kong before or after hiring them. Moreover, prior to the allision on May 9, 1980, Hercules was aware of a continuing problem in its fleet with the use of counterfeit and fraudulent licenses. However, the company policy was that if a man had been employed by Wah Kwong for several years, the company accepted the license at face value. (TL 392-395).
The courts have noted that it is possible to estimate the competency of a vessel's crew by examining their licenses. See In re Ta Chi Navigation (Panama) Corporation, S.A., 513 F.Supp. 148, 159 (E.D.La.1981), aff'd, 728 F.2d 699 (5th Cir.1984). Licensing requirements are promulgated to insure that seamen are properly trained and will know their duties and responsibilities when aboard a vessel at sea. The district court in finding that Wah Kwong Company was negligent in not validating its officers' licenses did not relate this particular negligence to any specific fact contributing toward the accident. However, we find that the invalid license of Chief Mate Chan is further evidence that he was ill-equipped to perform the duties necessary for the safe navigation of the vessel. The incompetency of this unlicensed crew member was manifested by his failure to (1) inform the lookout as to his duties, (2) maintain his position on the bridge until a relief officer was present, (3) insure the navigation of the vessel by requiring compliance with the rules of the road in restricted visibility, and (4) seek clarification from or countermand Pilot Lerro when Chan thought the vessel should have been anchored at buoy 16 or before.
It is clear from the facts enumerated above that the district court was correct in finding that the crew on board the SUMMIT VENTURE was negligent and unseaworthy on the date of the allision with the Sunshine Skyway Bridge and that their negligence and unseaworthiness was a proximate cause of that allision.
C. Privity and Knowledge
Having reviewed the acts of negligence and conditions of unseaworthiness which proximately caused the accident, we conclude the claimants have met their burden of proof. Thus, the second element in determining whether the petitioner is entitled to a limitation of liability must be addressed. The petitioner is not entitled to a limitation of liability if it is shown that the shipowner had knowledge or privity of the specific acts of negligence or conditions of unseaworthiness which caused the accident. As stated by the district court:
Hercules, 566 F.Supp. at 977. Before trial the petitioner admitted that the shipowner
(1) Hercules' Allegations of Error
Hercules argues that the effect of the district court holding is to make the shipowner liable without limitation for errors of navigation and management of the vessel, unless the owner adopts a failsafe method of monitoring performance. Hercules points out that such a ruling would be contrary to law and public policy. Hercules cites Farrell Lines, Inc. v. Jones, 530 F.2d 7 (5th Cir.1976) as authority claiming that, there, as here, the predominating cause of the accident was held to be navigation error. Hercules contends that in both cases the predominating error occurred without the privity or knowledge of the shipowner. In Farrell Lines, the court of appeals in holding that the shipowners were entitled to limitation of liability, concluded that although the elimination of the personnel and equipment errors "might have reduced the possibility of collision, that is not the standard by which we are to determine ... limitation. Rather, we must ask whether the procedures and equipment utilized rendered the vessel reasonably fit under the circumstances." Farrell Lines, supra, 530 F.2d at 12 (footnote omitted) (emphasis in original). The appellant argues that the district court failed to apply this standard and erred in not finding that the procedures and equipment utilized by Hercules rendered the vessel reasonably fit under the circumstances.
The appellant next points to passages in the district court opinion where the court used the word "insure" and argues that the use of this language clearly indicates that the district court was imposing on Hercules the obligation of an insurer rather than the obligation of reasonable care or due diligence. The appellant also contends that the allision was not caused by insufficient personnel on the bridge or on the bow, the failure to follow formal turnover procedures, the master being on the bridge without a watch officer, or the fact that the Chinese licenses of two of the three mates could not be validated. Appellant claims that the district court erred in placing failsafe requirements upon the shipowner to guarantee that the above infractions not occur as a prerequisite to a grant of limitation of liability. Finally, the appellant generally argues that the cases cited by the district court in support of its finding of privity and knowledge are not on point because those cases involve negligent acts or conditions of unseaworthiness obviously within the knowledge of the owners, whereas in this case failure to slow or come to anchor sooner was obviously the result of operational decisions made exclusively on the bridge of the ship, negating any possibility of privity or knowledge on the part of the owners.
(2) The District Court Correctly Found Privity and Knowledge
First, Hercules' citation to Farrell Lines is unavailing because that case is distinguishable upon its facts. In Farrell Lines, the parties agreed that the primary cause of the allision was a navigational error not within the privity or knowledge of the owner. "In this case, all agree that the predominating cause of the accident was the navigational error of the helmsman in improperly executing his orders. There is also agreement that this navigational error was without privity or knowledge of Farrell." Farrell Lines, supra, 530 F.2d at 10. The above situation is simply not Hercules' case, for the district court found numerous acts of negligence and conditions of unseaworthiness as contributing to the allision. While Hercules argues that the cause of the allision was the combination of a sudden storm and the navigational and operational errors of Pilots Lerro and Atkins, all beyond the privity and knowledge of Hercules, as we recite below we find it indisputable that the negligence and unseaworthiness of the crew of the SUMMIT VENTURE proximately caused the ultimate allision of the vessel with the Sunshine Skyway Bridge and that such negligence and unseaworthiness was within the privity and knowledge of the owners.
In reference to the above acts, we AFFIRM the district court's finding that the petitioner failed to demonstrate that the company's unwritten policy of putting the pilot rather than the master in complete command was beyond its privity and knowledge. As found by the district court:
Hercules, 566 F.Supp. at 979.
Thus, Hercules has failed to establish its lack of privity and knowledge of the negligence of its crew members where the crew's failure to countermand the obvious negligence of Lerro resulted in the accident. That failure of the crew resulted from Hercules' policy of instructing its crews not to countermand the actions of a pilot. Nothing could better illustrate an owner's privity and knowledge than its direction to its crew to disregard an IMCO regulation.
The evidence is clear that Wah Kwong was on notice that there was a potential problem with fraudulent licenses in its fleet but failed to properly investigate and ascertain the validity of Chief Mate Chan's or Second Mate Kong's licenses. Privity and knowledge is established where a shipowner could have obtained the information through reasonable and prudent inspection. See China Union Lines, Ltd. v. A.O. Andersen & Co., 364 F.2d 769, 787 (5th Cir.1966), cert. denied, 386 U.S. 933, 87 S.Ct. 955, 17 L.Ed.2d 805 (1967).
The evidence adduced also supported the conclusion by the district court that the shipowner's failure to provide an adequate training program for the crew of the SUMMIT VENTURE proximately contributed to the allision. For instance, due to the lack of training, Chief Mate Chan was uninformed as to the Inland Rules of the Road, IMCO regulations, and his duties as officer of the watch. As found by the district court, this inadequate training led to the following negligent acts of Chief Mate Chan: (1) failure to post or properly inform a diligent lookout who had no other duties; (2) leaving the bridge of the vessel without a relief officer and without informing Captain Liu of the position and speed of the SUMMIT VENTURE; (3) failure to plot or reaffirm the position of the SUMMIT VENTURE; (4) failure to insure the safe navigation of the SUMMIT VENTURE by requiring compliance with the rules of the road in restricted visibility; and (5) neglecting to inquire or intervene when it was apparent that Pilot Lerro was placing the SUMMIT VENTURE in peril. We agree with the district court's finding that the above-listed negligent acts contributed to the accident and are directly attributable
Because of the petitioner's privity and knowledge as to the crew's negligence and unseaworthiness as enumerated above, it cannot claim that it is entitled to a limitation of liability because the accident was purely the result of an erroneous navigational judgment. As stated in In re Ta Chi Navigation (Panama) Corporation, S.A., 513 F.Supp. 148, 158 (E.D.La.1981), aff'd, 728 F.2d 699 (5th Cir.1984):
The negligent navigation by Lerro became the responsibility of the owner when it failed to train its crew and authorized crew members to ignore the IMCO regulation and its own manual with respect to the officers' right to take command of the vessel from Lerro.
The appellant contends that the court's use of the word "insure" in its discussion of privity and knowledge was tantamount to making Hercules an insurer, rather than requiring it to use reasonable care or due diligence. This argument is untenable. Taken in context, it is obvious that the court was not using the word insure in the sense of requiring Hercules to be an absolute insurer of all acts by its crew, but in the context of "to make sure" that Hercules' responsibilities as owner were fulfilled, that is; exercising due diligence to furnish a competent, trained crew, provided with necessary information. The use of the word insure by the district court is not a fatal flaw; indeed, our court has previously used this term in holding that the shipowner has a duty of "insuring" that the vessel has an adequate and competent crew. See Horn v. Cia de Navegacion Fruco, S.A., 404 F.2d 422, 432 (5th Cir.1968), cert. denied, 394 U.S. 943, 89 S.Ct. 1272, 22 L.Ed.2d 477 (1969).
Likewise, as Hercules cannot avoid full liability by claiming simple navigational error beyond its privity and knowledge, it also cannot claim that the inadequate training and unwritten company policies that were violative of the inland rules and IMCO regulations were beyond its privity and knowledge. See Avera v. Florida Towing Corporation, 322 F.2d 155, 166 (5th Cir.1963) (measure of knowledge that fulfills the duty of inquiry is not simply what the owner knows but what he is charged with finding out); In re Ta Chi Navigation (Panama) Corporation, S.A., 513 F.Supp. 148, 158-159 (E.D.La.1981), aff'd, 728 F.2d 699 (5th Cir.1984) (incompetency of the crew demonstrated by their actions and limitation defeated when the shipowner failed to demonstrate adequate inquiry into competency or provision of adequate training).
In sum, Hercules had a duty to make inquiry as to the competency of the SUMMIT VENTURE's crew and to verify that its written instructions were being followed. Privity and knowledge exists where the owner has actual knowledge, or could have and should have obtained the information by reasonable inquiry or inspection. Hercules is not entitled to a limitation of liability as it has failed to establish that it did not have actual knowledge of the crew's negligence and conditions of unseaworthiness or in the alternative failed to prove that it could not have obtained the information by reasonable inquiry or inspection.
II. Collateral Estoppel (No. 83-3591)
Soon after the accident occurred, the Department of Professional Regulation (DPR), an administrative agency of the
A. Unavailability or Impropriety of Collateral Estoppel Against the State Government
In United States v. Mendoza, 464 U.S. 154, 104 S.Ct. 568, 78 L.Ed.2d 379 (1984), the Supreme Court held that nonmutual offensive collateral estoppel may not be invoked against the government. While the collateral estoppel sought in this case is defensive and the petitioner seeks to invoke it against a state government rather than the federal government, we hold that the policy rationale behind Mendoza applies to the facts of this case.
Under the doctrine of collateral estoppel, the resolution by a court of an issue of fact or law necessary to its judgment precludes the relitigation of that issue in a subsequent suit based on a different cause of action involving a party to the prior litigation.
Mendoza, 104 S.Ct. at 571, quoting Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 415, 66 L.Ed.2d 308 (1980) (footnote omitted).
However, the Supreme Court has long recognized that the government is not in the same position as a private litigant, given the geographical breadth of government litigation and the nature of the issues litigated by the government. See Mendoza, 104 S.Ct. at 572. In ruling that nonmutual collateral estoppel should not be applied against the government, the Supreme Court in Mendoza cited several considerations. The Court noted that not only is the government frequently involved in legal questions of substantial public importance but that the government is more likely than private litigants to be involved in lawsuits against different parties that involve the same legal issues. Moreover, the Court
The Court was also cognizant of the fact that the Executive Branch over the course of time may find it prudent to take differing positions with respect to resolution of a given issue, stating:
Mendoza, 104 S.Ct. at 573.
We hold that the rationale outlined by the Supreme Court in Mendoza for not applying nonmutual collateral estoppel against the government is equally applicable to state governments. Indeed, we take notice that the Supreme Court in reaching its holding did not differentiate between federal governmental interests and state governmental interests, nor was there anything to suggest that the concerns expressed by the Supreme Court were peculiar to the federal government. Nor do we see any substantive difference between nonmutual offensive collateral estoppel which the Supreme Court addressed and nonmutual defensive collateral estoppel; in each instance the concerns expressed by the Supreme Court are applicable here:
Mendoza, 104 S.Ct. at 574 (footnote omitted).
The petitioner tries to distinguish Mendoza by claiming that mutuality is present in this case even though Hercules was not a party to the revocation proceeding because Hercules under the doctrine of respondeat superior is vicariously liable for any negligence of Lerro. Although we note that this argument is inconsistent with Hercules' claim in Appeal No. 82-5733, even assuming that Hercules and Lerro are the same parties for collateral estoppel purposes,
First, the DPR in the license revocation proceeding was not acting as a party seeking affirmative relief from Lerro. Rather, the DPR was acting as a regulatory body to insure that a person holding a license was competent to serve the public and that if such person was incompetent, the DPR had the responsibility to seek revocation of his license in the public interest. Thus, the state in the license revocation proceeding was carrying out its function as parens patriae to insure that those authorized by it to serve the public were competent to do so. On the other hand, in its civil action, where it sought monetary damages, the state, through the DOT, was performing its function as protector of the public fisc and its interest in establishing the negligence of Pilot Lerro was not penal in nature but rather sought monetary recovery for the damage caused by his negligence. The policy reasons for not applying the doctrine of nonmutual collateral estoppel to these two state agencies are obvious. Collateral estoppel would cast doubt on the ability of the DPR to follow its usual procedures in regulating pilots, for the risk of collateral estoppel would cause it to consult with the DOT, and perhaps postpone the proceedings or change its strategy to accommodate the DOT. These concerns would necessarily impair the proper functioning of the state government and would hinder it in fulfilling its duties to the state citizenry.
Second, the circumstances of this case present stronger reasons than those present in Mendoza for not applying nonmutual collateral estoppel. In Mendoza, the relevant government agency, the Immigration and Naturalization Service (INS), was a party to both proceedings, and in the second proceeding sought to litigate the identical issue involved in the first proceeding. As noted above, this case involves two wholly separate state agencies with different interests and functions. The distinction is a critical one given the varied interests a governmental body must pursue; if Mendoza stands for anything, it must stand for the proposition that a government's agencies in pursuing their stated goals must not be put in the untenable position of collaterally estopping one another when they pursue the same issue for wholly different purposes.
Finally, the most significant consideration in determining whether to invoke collateral estoppel is whether the party had a full and fair opportunity to litigate the issue to be estopped. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 328, 99 S.Ct. 645, 650, 58 L.Ed.2d 552 (1979). Having reviewed the administrative proceedings before the Board of Pilot Commissioners, we conclude that the issues before the administrative agency and the district court were substantively distinct, making collateral estoppel inappropriate.
We have thoroughly reviewed the factual findings of the Administrative Hearing Officer and the approval of those findings by the Board of Pilot Commissioners. The administrative findings regarding Pilot Lerro's negligence were very narrowly drawn and in no way approximated the detailed findings of negligence made by the district court, which we have approved this day.
It is clear that the Administrative Hearing Officer focused almost exclusively on the events occurring just prior to buoys 1A and 2A and thereafter; and found nothing unusual about the SUMMIT VENTURE's speed or the weather conditions prior to reaching buoys 1A and 2A. For instance, the hearing officer found that:
R.E. at 131.
With regard to the so called "sudden onset" of the storm the hearing officer found:
R.E. at 132.
Given this expert testimony, the hearing officer concluded:
R.E. at 134.
The hearing officer ultimately concluded:
R.E. at 139.
The above excerpts establish conclusively that while the legal issue negligence, may have been similar, the facts at issue before the two proceedings differed substantially. Most significantly, our affirmance of the district court's findings of negligence principally rests upon the failure of Pilot Lerro to slow sufficiently or anchor between buoys 14 and 16. A review of the administrative record shows that the hearing officer found nothing unusual about Pilot Lerro's actions at those points. The evidence adduced at trial indicated otherwise. The scope of the two proceedings was fundamentally different.
Moreover, at the limitation trial, the district court not only made findings as to the negligence of Pilot Lerro, but also made specific findings as to the negligence of Captain Liu, Chief Mate Chan and the crew members of the SUMMIT VENTURE. Clearly, the State of Florida is in no way collaterally estopped from asserting the liability of Hercules for the negligence of Captain Liu, Chief Mate Chan and the crew members of the SUMMIT VENTURE.
We find this case to be very similar to Frederick E. Bouchard, Inc. v. United States, 583 F.Supp. 477 (D.Mass.1984), where the court held that an Administrative Law Judge's ruling, in a license revocation proceeding, that the master of the subject tug was not negligent, did not preclude the United States from asserting a negligence claim against the tug and its owners and operators. As noted by the court:
Bouchard, 583 F.Supp. at 482. We are faced with the same situation here, the findings of negligence by the district court went well beyond Pilot Lerro and established the fault of both the crew members and owners of the SUMMIT VENTURE. We further note that as to Pilot Lerro the proof of negligence was different at the state administrative level given the penal nature of the proceeding and the requirement of substantial evidence. See Bowling v. Department of Insurance, 394 So.2d 165, 171 (Fla. 1st Dist.Ct.App.1981).
The trial court is vested with broad discretion in deciding questions of fairness, and Hercules has not established that the district court abused its discretion in refusing to apply collateral estoppel in this case. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 331, 99 S.Ct. 645, 651, 58 L.Ed.2d 552 (1979). The equities of the present case support the district court's refusal to allow Hercules the benefit of collateral estoppel. For the above-stated reasons, we affirm the district court's denial of Hercules' motion to collaterally estop the State of Florida from relitigating the issue of negligence before the district court.
III. Exoneration (No. 82-5733)
Before the trial on limitation, all the claimants moved for partial summary judgment against Hercules on the issue of exoneration. In order for Hercules to achieve complete exoneration under the Limitation of Liability Act it would have to prove that the accident was not attributable to the negligence of its crew or the pilot. Otherwise, Hercules is vicariously liable up to the amount of the value of the SUMMIT VENTURE for any negligence. The district court granted the motion on the ground that there was no genuine issue of fact as to whether Pilot Lerro was negligent, and therefore the claimants were entitled as a matter of law to prevent Hercules from attaining complete exoneration. Hercules appealed this order before the start of the limitation trial.
In light of our affirmance of the district court in Appeal No. 83-3242, we find it unnecessary to reach the petitioner's claim that summary judgment on the exoneration issue was improper — the question is now moot given the district court's finding that Hercules was not entitled to a limitation of liability, and our affirmance of that finding. Likewise, the petitioner's motion that the State of Florida be barred from benefiting from the grant of summary judgment on the exoneration issue because of the finding by one of its administrative tribunals
Accordingly, the orders of the district court encompassing Appeal Nos. 82-5733, 83-3242 and 83-3591 are hereby AFFIRMED.
530 F.2d at 10 n. 2, citing Walker v. Harris, 335 F.2d 185 (5th Cir.) (emphasis in original), cert. denied, 379 U.S. 930, 85 S.Ct. 326, 13 L.Ed.2d 342 (1964).
This recent amendment demonstrates that Congress has reconsidered the Limitation of Liability Act and found its original purpose to still be viable.
Pub.L. No. 96-591, § 2 (Dec. 24, 1980).
Deweese v. Town of Palm Beach, 688 F.2d 731, 733 (11th Cir.1982) (citations omitted). As detailed below Hercules' collateral estoppel claim fails under the first two tests because the limitation trial involved a different state agency that sought to establish not only the negligence of Pilot Lerro but also Hercules' crew members aboard the ship.
Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S.Ct. 645, 649, 58 L.Ed.2d 552 (1979).
This court has previously held that when the scope of the administrative hearing is much narrower than a subsequent lawsuit, collateral estoppel will not be applied. Garner v. Giarrusso, 571 F.2d 1330, 1336 (5th Cir.1978). The issue in the administrative hearing was Lerro's competence to continue as a licensed pilot. The issue before the district court was whether Lerro was negligent from the time he took over the conn. Acts of negligence on a given occasion by a professional person do not necessarily require that his license be revoked.