Opinion
Civil Docket No.: CL16-3261-01 Civil Docket No.: CL16-3262-01
05-19-2017
Re: Pridemore v. Hryniewich, et al. v. Willard Marine, Inc. Glover v. Hryniewich, et al. v. Willard Marine, Inc.
Keith L. Leonard, Esq.
Huffman & Huffman
Brothers-in-Law, P.L.L.C.
12284 Warwick Boulevard, Suite 2A
Newport News, Virginia 23606 Mark T. Coberly, Esquire
Vandeventer Black LLP
500 World Trade Center
Norfolk, Virginia 23510 Dear Counsel:
Today the Court rules on the Special Pleas in Bar filed by Third Party Defendant Willard Marine, Inc. ("Willard") against Defendants/Third Party Plaintiffs Richard J. Hryniewich and the City of Norfolk (collectively, "Defendants"). Willard alleges that the Longshore and Harbor Workers' Compensation Act (the "LHWCA" or the "Act") provides the exclusive remedy for any injuries Plaintiffs Timothy B. Pridemore and David L. Glover (collectively, "Plaintiffs") incurred while under Willard's employ and therefore bars the causes of action and recovery sought in Defendants' Third Party Complaints. Although Defendants acknowledge that the LHWCA ordinarily provides exclusive relief to injured employees and prohibits a negligent vessel from shifting liability to an employer, they assert that they nevertheless are entitled to indemnity and/or contribution from Willard for negligence pursuant to the maritime "dual capacity doctrine." Defendants also respond that their breach of contract claim is unrelated to any LHWCA limitation.
The Court holds that (1) the City of Norfolk (the "City"), as a shipowner, cannot invoke the dual capacity doctrine against a non-vessel owner and (2) because Willard was not a vessel for purposes of the doctrine and did not adopt a distinct non-employer persona, the dual capacity doctrine cannot be invoked against it. The Court finds, however, that Defendants have sufficiently alleged a breach of contract claim. The Court therefore SUSTAINS IN PART and OVERRULES IN PART Willard's Pleas in Bar.
Background
In January 2014, the City entered a contract (the "Contract") with Willard to make certain improvements and repairs to the City's 29-foot SAFE Boats police patrol boat, known as MARINE 5, including installation of "new motors . . . new control cable, ignition switch, harnesses and malfunction gauge . . . fuel [system components] . . . and Yamaha stainless steel[] propellers." (Defs.' Third Party Compl. Against Willard Marine, Inc. ("Compl.") ¶ 2 & Ex. A, at 6.) The Contract requires Willard to, inter alia, obtain insurance for workers' compensation, automobile liability, commercial general liability, professional liability, and umbrella/excess liability. (Id. Ex. A, at 10-11.) It further requires that Willard provide the City with certificates of insurance that "shall list the City of Norfolk . . . as the additional insured for the specified project." (Id. Ex. A, at 10.)
The Contract further provides that, in preparation for Willard's redelivery of MARINE 5 to the City, Willard must "[p]erform sea trial with [Norfolk Harbor Patrol] representative" to demonstrate that the Contract work is complete. (Id. ¶ 5 & Ex. A, at 7.) On March 21, 2014, Richard J. Hryniewich ("Hryniewich"), a Norfolk police officer, was at the helm of MARINE 5 during the required sea trials. (Id. ¶¶ 7, 14.) Plaintiffs, who are Willard employees, were on board MARINE 5 during the sea trials as Willard representatives. (Id. ¶¶ 6, 10.) "At approximately three-quarters throttle," Hryniewich "initiated a turn," and MARINE 5 "suddenly and violently capsized." (Id. ¶¶ 19-20.) As a result, Plaintiffs allegedly sustained serious injuries. (Id. ¶ 21.)
Plaintiffs filed personal injury actions against Defendants pursuant to maritime law and the "Saving to Suitors" clause of Article III, Section II of the United States Constitution, alleging negligence and gross negligence. Defendants in turn filed Third-Party Complaints against Willard, alleging breach of contract, contractual indemnity, breach of the warranty of workmanlike service, equitable or common law indemnity and contribution, unseaworthiness, and general maritime negligence.
Willard subsequently filed Pleas in Bar, alleging that the LHWCA provides the exclusive remedy vis-à-vis Willard for any injuries allegedly suffered and that the Third Party Complaints therefore should be dismissed. Defendants responded that, inter alia, although the LHWCA normally provides exclusive relief to injured employees, Defendants are entitled to indemnity and/or contribution from Willard for vessel negligence pursuant to the dual capacity doctrine. The Court held a hearing on March 6, 2017 (the "Hearing"), during which it heard argument from counsel.
It is undisputed that Plaintiffs sought and received compensation from Willard pursuant to the LHWCA.
Positions of the Parties
Willard's Position
Willard asserts that "the Defendants' claims against [Willard] are precluded by law." (Third-Party Def.'s Plea in Bar and Supp. Memo. ("Plea in Bar") 2.) Specifically, it asserts that Defendants' breach of contract, contractual indemnity, breach of the warranty of workmanlike service claims, and equitable or common law indemnity and contribution claims "are all contractual claims brought against Willard, the employer of the injured Plaintiff[s], seeking contractual indemnity in the event that Defendants—as 'vessels'—are found negligent and such negligence caused Plaintiff[s'] injuries." (Id. at 5-6.) Willard contends that this "back door effort to pass liability back to the injured employee[s'] employer, which is already paying workers' compensation to the injured employee[s,] is specifically barred as a matter of statute and public policy." (Id. at 5.) It asserts that Section 905 of the LHWCA "permits the injured longshoreman to sue the vessel and exempts the employer from any liability to the vessel for any damages that may be recovered." (Id. at 8 (emphasis added by Willard) (quoting Edmonds v. Compagnie Generale Transatlantique, 443 U.S. 256, 268 (1979)).)
Defendants in their Pleas in Bar identify their "equitable or common law indemnity and contribution claims" as both contractual claims and tort claims.
Willard argues that Defendants' equitable or common law indemnity and contribution, unseaworthiness, and general maritime negligence claims "are also precluded actions because the [LHWCA] provides the exclusive remedy for non-contractual tort indemnity claims." (Id. at 10.) Willard asserts that such non-contractual indemnity claims "are precluded by the express language of Section 905(a)." (Id. at 12.) It also contends that "[a]s part of the 1972 changes [to the LHWCA], Congress added Section 905(b), which specifically eliminated the right of longshoremen and harbor workers to recover against a vessel on the basis of unseaworthiness." (Id. at 10 (citing Scindia Steam Navigation Co. v. De Los Santos, 451 U.S. 156, 165 (1981); In re Columbia Leasing L.L.C., 991 F. Supp. 2d 722, 730 (E.D. Va. 2014)).)
In response to Defendants' dual-capacity-doctrine argument, Willard argues that it is not a "vessel" for purposes of the LHWCA, and that it specifically is not an owner pro hac vice or an operator. (Reply to Third-Party Pl.s' Br. in Opp. to Plea in Bar 2-6.)
Defendants' Position
As an initial matter, Defendants assert that it is premature for the Court to rule on the Pleas in Bar, as other anticipated motions might make them moot.
With respect to its claims other than its breach of contract claims, Defendants contend they are "not barred because Willard was in possession and control and responsible for the operation of the City's vessel at the time of the accident at issue here, such that it was acting in a dual capacity with respect to the Plaintiffs." (Third Party Pls.' Br. in Opp. to Third-Party Def.'s Plea in Bar ("Br. in Opp. to Plea in Bar") 2.) According to Defendants, "where the employer acts in a 'dual capacity' as both employer and, inter alia, ship owner or operator, at the time the employee's injury was caused . . . , the employer retains tort liability in its capacity as a 'vessel' for acts of negligence involving a vessel owned, operated, or chartered by the employer." (Id.) Defendants also argue that "[w]hen potentially liable to its employees under the dual capacity doctrine an employer also is not immune to contribution or indemnity liability to third parties." (Id.) They specifically assert that Willard met the statutory definition of "vessel" as either an owner pro hac vice or an operator of MARINE 5 (Id. at 6-14.) Defendants alternatively imply that Willard fulfilled some other vessel role, that dual capacity liability depends on "whether the party in question had possession of the vessel and control over the activity that led to the harm alleged," and that Willard had such possession and control. (Id. at 8-9.) Defendants also recognize that Willard would be immune from indemnity and contribution claims if Plaintiffs were involved in "ship repair," but argue that Plaintiffs in fact were not involved in ship repair. (Id. at 14-17.)
Defendants characterize these claims as "a variety of indemnity and contribution theories." (Br. in Opp. to Plea in Bar 4.)
With respect to its breach of contract claim—that Willard breached its contractual obligation to obtain required insurance and/or provide to the City related insurance information—Defendants assert that "LHWCA immunity does not immunize a covered employer from liability for its breach of a contract to name the vessel owner as an additional insured on the employer's liability insurance policy, even if the employer is immune from liability from contribution and indemnity." (Id. at 20 (citing Viosin v. O.D.E.C.O. Drilling Co., 744 F.2d 1174, 1179 (5th Cir. 1984); Price v. Zim Israel Navigation Co., 616 F.2d 422, 429 (9th Cir. 1980)).)
Analysis
Legal Standard
A plea in bar presents a distinct issue that, if proven, creates a bar to the plaintiff's right of recovery. Hilton v. Martin, 275 Va. 176, 177, 654 S.E.2d 572, 574 (2008). The purpose of a plea in bar is "to narrow the litigation by resolving an issue that will determine whether a plaintiff may proceed to trial on a particular cause of action." Hawthorne v. VanMarter, 279 Va. 566, 578, 692 S.E.2d 226, 234 (2010).
The moving party has the burden of proving the dispositive fact raised in a plea in bar. Tomlin v. McKenzie, 251 Va. 478, 480, 468 S.E.2d 882, 884 (1996). As with a demurrer, the facts contained within the complaint are considered true for purposes of a plea in bar. Id.
Section 905(a) of the LHWCA reads, in pertinent part:
Employer liability; failure of employer to secure payment of compensation. The liability of an employer prescribed in section 4 [33 USCS § 904] shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death, except that if an employer fails to secure payment of compensation as required by this Act, an injured employee, or his legal representative in case death results from the injury, may elect to claim compensation under the Act, or to maintain an action at law or in admiralty for damages on account of such injury or death.33 U.S.C. § 905(a) (1984).
Section 905(b) of the Act reads as follows:
Negligence of vessel. In the event of injury to a person covered under this Act caused by the negligence of a vessel, then such person, or anyone otherwise entitled to recover damages by reason thereof, may bring an action against such vessel as a third party in accordance with the provisions of section 33 of this Act [33 U.S.C. § 933], and the employer shall not be liable to the vessel for such damages directly or indirectly and any agreements or warranties to the contrary shall be void. If such person was employed by the vessel to provide stevedoring services, no such action shall be permitted if the injury was caused by the negligence of persons engaged in providing stevedoring services to the vessel. If such person was employed to provide shipbuilding, repairing, or breaking services and such person's employer was the owner, owner pro hac vice, agent, operator, or charterer of the vessel, no such action shall be permitted, in whole or in part or directly or indirectly, against the injured person's employer (in any capacity, including as the vessel's owner, owner pro hac vice, agent, operator, or charterer) or against the employees of the employer. The liability of the vessel under this subsection shall not be based upon the warranty of seaworthiness or a breach thereof at the time the injury occurred. The remedy provided in this subsection shall be exclusive of all other remedies against the vessel except remedies available under this Act.Id. § 905(b).
Discussion
As an initial matter, Defendants assert that it is premature for the Court to rule on the Pleas in Bar because rulings on other pending matters might moot a ruling on the Pleas in Bar. Specifically, Plaintiffs previously submitted proposed non-suit orders related to their initial complaints—to which Defendants objected—and Defendants previously filed but did not notice pleas in bar asserting sovereign immunity. The Court commented at the Hearing that it generally agreed with Defendants that, in the interests of judicial economy, it might be prudent to hear and rule on the other matters prior to ruling on the Pleas in Bar. The parties nevertheless have not noticed any of these matters for a hearing in the two months since the Hearing.
The Court has considered the pleadings, oral argument at the Hearing, and applicable authorities. The Court now rules on the issues before it.
The issues before the Court are anything but straightforward and involve territory infrequently trod by state courts. The Court nevertheless embarks on the labyrinthine path that explores the contours of the maritime dual capacity doctrine as applied to the context of a non-vessel owner/employer performing post-work sea trials with owner representatives onboard, including at the helm. At the outset, the Court is mindful of the following observation by two maritime practitioners:
It could arguably be said that there is not one topic in the entire realm of the legal world that exemplifies the tedious balance between the intentions of Congress and the interpretations of the United States Supreme Court more than admiralty law. In the realm of maritime personal injury, third-party claims under the Longshore and Harbor Workers' Compensation Act are a perfect example of the give and take from Congress and the Supreme Court. Reviewing the legislative history and legal precedent set forth for third-party claims under the LHWCA shows the historical dance of Congress and the Supreme Court as they maneuver through the maritime minefield to find some sort of balance between the injured worker, the employer, and the negligent third-party.Kenneth G. Engerrand & Jonathan A. Tweedy, A Tedious Balance: Third-Party Claims Under the Longshore and Harbor Workers' Compensation Act, 10 Loy. Mar. L.J. 1, 2 (Fall 2011). A. Counts II through VI (Contractual Indemnity, Breach of Warranty of Workmanlike Service, Indemnity and Contribution, Unseaworthiness, and General Maritime Negligence).
The LHWCA establishes a comprehensive compensation scheme for longshore and harbor workers injured during the course of their employment. See, e.g., ADM/Growmark River Sys. v. Lowry, 234 F.3d 881, 886 (5th Cir. 2000). The Act functions in a manner similar to most state workers' compensation laws; employers are held strictly liable for their employees' injuries, but compensation is capped at set amounts. Id. This tradeoff provides workers with certain compensation, protects employers from incurring massive judgments from lawsuits, and increases efficiency for all parties by eliminating the need for many lawsuits. See, e.g., Seabright Ins. Co. v. Matson Terminals, Inc., 828 F. Supp. 2d 1177, 1183 (D. Haw. 2011).
An essential element of the balancing of interests the LHWCA attempts to achieve is that the employer's liability under the Act is "exclusive and in place of all other liability of such employer to the employee . . . and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death." 33 U.S.C.S § 905(a) (1984) (emphasis added). The reverse implication is that, ordinarily, an employee's only remedy for his injury is the compensation paid under the Act.
Section 905(b) of the LHWCA provides an exception to Section 905(a)'s exclusivity provision, however, allowing an injured LHWCA employee to also "bring an action against the vessel" where such vessel's negligence caused the injury. Id. § 905(b). Moreover, the U.S. Supreme Court held in Jones & Laughlin Steel Corp. v. Pfiefer that where an employer is also the vessel owner, the employee may sue that employer for its negligence as a vessel in addition to collecting compensation under the LHWCA. 462 U.S. 523, 532 (1983). The principle that an employee may both collect LHWCA compensation from his employer pursuant to Section 905(a) and bring a negligence action against that same employer pursuant to Section 905(b) is known as the maritime "dual capacity doctrine."
Section 905(b) also provides that "[t]he liability of the vessel under this subsection shall not be based upon the warranty of seaworthiness or a breach thereof at the time the injury occurred." 33 U.S.C. § 905(b) (1984). Defendants' unseaworthiness claim therefore is precluded.
The Court's rationale was that its ruling put the dual capacity employee on equal footing with an injured employee whose employer was not a vessel owner, who could both recover under the LHWCA and sue the vessel owner for negligence pursuant to Section 905(b). Without the dual capacity doctrine, a longshoreman employed directly by the vessel would be at a distinct disadvantage.
The parties raise several issues regarding whether Defendants may invoke the dual capacity doctrine against Willard in this case: (1) whether a third-party, i.e., someone other than a LHWCA employee, is permitted to invoke the dual capacity doctrine; (2) whether Willard is a "vessel" for purposes of the dual capacity doctrine; and (3) if Willard was a vessel, whether Willard performed any allegedly negligent acts in its capacity as a vessel, as opposed to its capacity as an employer. If the Court resolves any of these issues in the negative, the dual capacity doctrine cannot be invoked and the Court must grant Willard's Pleas in Bar with respect to the related third-party claims.
It is undisputed that Willard did not own Marine 5, so Defendants' successful invocation of the dual capacity doctrine therefore requires that Willard was, at the time of the incident, a vessel by virtue of some other role qua MARINE 5.
Even if the Court answers each of the above dual capacity inquiries in the affirmative, there remains an additional potential hurdle for Defendants to overcome in order to pursue this suit against the City. Section 905(b) precludes an employee from suing a vessel where he "was employed to provide shipbuilding, repairing, or breaking services and such person's employer was the owner, owner pro hac vice, agent, operator, or charterer of the vessel." The upshot is that—even if, arguendo, the Court resolves the other inquiries in Defendants' favor, an additional finding that Pridemore and Glover were regularly employed as shipbuilders or repair workers would nevertheless preclude the third-party action at bar. As discussed infra, the nature of Pridemore's and Glover's employment presents a related factual inquiry for the factfinder.
Whether Willard performed any allegedly negligent acts in its capacity as a vessel—assuming it was a vessel—involves factual issues that cannot be resolved at this stage of the proceedings. The Contract provision stipulating that Willard must perform sea trials with a City representative aboard, taken together with the facts pleaded—in particular, that Hyrniewich was at the helm of MARINE 5—are insufficient for the Court to rule definitively on the matter. The Court therefore cannot grant Willard's Special Pleas on this basis without further fact finding.
1. Defendants Are Not Entitled to Invoke the Dual Capacity Doctrine.
Whether the dual capacity doctrine can properly be invoked given the roles of the parties under the LHWCA is a question of law. Defendants assert that—assuming Willard was a vessel and was negligent in its capacity as a vessel—because Plaintiffs can invoke the dual capacity doctrine against Willard, their employer, Willard may also be liable to a third party sued by those employees via indemnity or contribution. In other words, Defendants take the position that if the dual capacity doctrine is available to an employee, it also is available to other parties. Willard, on the other hand, argues that Section 905(b)'s indemnity and contribution proscription—that "the employer shall not be liable to the vessel for such damages" where an employee sues a vessel—precludes Defendants from bringing this third-party suit because such an action would make an employer (e.g., Willard) potentially liable to vessels (e.g., the City and Hryniewich). Willard argues that the dual capacity doctrine cannot override this unambiguous statutory language.
It appears undisputed that Hryniewich was a vessel by virtue of being a crew member and/or owner agent.
A review of the applicable case law reveals two germane components of the inquiry regarding the context in which the dual capacity doctrine applies: (1) who may invoke the doctrine and (2) against whom may the doctrine be invoked. Although courts are not entirely in agreement on the former question, there appears to be consensus on the latter.
a. The City, as a vessel owner, cannot invoke the dual capacity doctrine against Willard, a non-vessel owner.
Prior to the 1972 amendments to the LHWCA, the U.S. Supreme Court ruled in Reed v. S.S. Yaka that, despite the Act's seemingly express prohibition of employee suits against employers, the LHWCA did not bar an employee from suing his employer based on the employer's "liability as a shipowner." 373 U.S. 410, 415 (1963), superseded by statute on other grounds. The Court's holding in Reed is the genesis of the dual capacity doctrine—that an employer can be liable for both LHWCA benefits and damages an employee incurs.
Although Section 905(b), which was added by the 1972 amendments, prevented the specific suit at issue in Reed—a vessel unseaworthiness claim—the Court subsequently held in Jones & Laughlin Steel Corp. v. Pfeifer that Section 905(b) permits an employee to bring a negligence-based suit against the vessel "even when . . . the longshoreman is employed directly by the vessel owner." 462 U.S. 523, 530 (1983). In short, the dual capacity doctrine survived the 1972 amendments.
Although Reed and Jones & Laughlin expressly permitted employees to invoke the dual capacity doctrine against their employer-vessels—constituting an exception to Section 905(a)'s provision that "[t]he liability of an employer prescribed in [Section 904] shall be exclusive . . . of all other liability of such employer to the employee"—neither case explicitly forbade a third-party (i.e., someone other than an employee) from invoking the doctrine against an employer-vessel. And in fact, Tran v. Manitowac explicitly held that "a third party claim for joint tort feasor contribution against a vessel owner/stevedore employer for negligent acts as a vessel owner is not barred by the LHWCA." 767 F.2d 223, 227 (5th Cir. 1985), superseded by statute on other grounds.
The proposition that a shipowner—such as the City in the instant case—can bring a contribution and/or indemnity suit against a dual capacity employer-vessel is a dubious one, however. Such an action certainly appears to contravene the plain wording of Section 905(b), which permits an LHWCA-employee to sue a vessel but in turn states that the employer shall not be liable to the vessel. In Hapag-Lloyd v. Lavino Shipping, the U.S. District Court for the Eastern District of Pennsylvania held that "the dual capacity doctrine under the LHWCA applies only to the situation where a vessel owner is also a stevedore employer and is sued by its employee in its capacity as vessel owner." 1989 U.S. Dist. LEXIS 15402, at * 13, 1990 AMC 969 (E.D. Pa. Dec. 21, 1989) (emphasis added). Acknowledging that numerous cases had recognized the right of employers to waive their right to immunity from suit vis-à-vis some third parties, the Hapag-Lloyd court stated, "[t]he crucial element in cases allowing indemnity from [a dual capacity] employer is the claimant's status as an entity other than a shipowner." Id. at * 10-11.
As is appropriate, the Court does not consider unpublished opinions to hold precedential value. The Court instead considers the rationale offered by the courts to the extent that the Court finds it persuasive, which is permissible. See Fairfax Cty. Sch. Bd. v. Rose, 29 Va. App. 32, 39 n.3, 509 S.E.2d 525, 528 (1999).
The court further explained why shipowners cannot invoke the dual capacity doctrine: "Although the 1972 amendments to the LHWCA eliminated the vessel owner's liability for unseaworthiness in exchange for surrender of indemnity rights against the employer, no such trade off occurred with respect to a non-vessel owner." Id. at * 11. Stated differently, Section 905(b) provides vessel owners a benefit—unique to them—to justify their being precluded from suing LHWCA-employers even in that entity's vessel capacity.
Hapag-Lloyd's ruling also has the merit of preventing the types of "circular suits" the 1972 amendments were designed to preclude. The Supreme Court of Oregon explained the problematic result of two pre-1972 U.S. Supreme Court decisions, Seas Shipping Co. v. Sieracki and Ryan Co. v. Pan-Atlantic Corp., as follows:
The circularity of the lawsuit occurred thusly: The longshoreman would sue the shipowner for damages for personal injuries resulting from the unseaworthiness of the vessel. If the unseaworthiness resulted from a breach of the stevedore's implied warranty to perform stevedoring services in a safe and workmanlike manner, the shipowner would either implead the stevedore or, after judgment for the longshoreman, seek indemnity from the stevedore.Shepler v. Weyerhaeuser Co., 569 P.2d 1040, 1046-47 (Or. 1977). The court went on to explain that, by preventing the shipowner from receiving indemnification against the stevedore, "the circular liability lawsuit is laid to rest" by the 1972 amendments. Id. at 490.
The U.S. Court of Appeals for the Fifth Circuit arguably drew a different conclusion about a shipowner's ability to invoke the dual capacity doctrine in ADM/Growmark River System v. Lowry. There, Lowry, a LHWCA employee, alleged negligence against the owners of two different vessels, Kostmayer and ADM—the former being Lowry's employer. ADM, 234 F.3d 881, 884 (5th Cir. 2000). Kostmayer, as employer-vessel, sought contribution from ADM in contravention of the two vessels' "covenant not to sue." Id. at 885. The court agreed with Kostmayer that, were it prohibited—per the terms of the contract between the two entities—from seeking contribution from ADM, Kostamayer in effect could be forced "to bear responsibility for the negligence of ADM." Id. at 889. Stated differently, the result of upholding the covenant would result in a LHWCA employer (e.g., Kostmayer) potentially being liable for the negligence of a vessel (e.g., ADM), the outcome seemingly proscribed by the plain language of Section 905(b).
The Fifth Circuit nevertheless found that "[n]othing in the legislative history of Section 905(b) suggests that the prohibition on contractual indemnity between employers and vessels should be extended to protect dual capacity employers facing direct liability in their vessel capacity." Id. (emphasis added). The court went on to say that its decision "will allow ADM to seek indemnification from Kostmayer, as a liable vessel owner." Id. (emphasis added). The court in effect permitted a vessel owner to avail itself of the dual capacity doctrine against an employer-vessel owner. It is not entirely clear, however, whether the scope of ADM extends beyond the unique context of that case: a liability allocation agreement between two vessel owners. The court's commentary that "as vessel owners, neither party needs Congress' protection because both share equal bargaining power," id. at 889, paid heed to Congress's rationale for not allowing employers to waive their statutory immunity from liability against vessel owners—despite employers being permitted to waive such immunity against other third parties, ADM, 234 F.3d at 888 (quoting S. Rep. No. 92-1125, at 10 (1972)). The Fifth Circuit therefore appears to have limited the reach of its ruling by averring that "we feel comfortable refusing to extend the scope of Congress' prohibition of liability allocation provisions to include those provisions negotiated between vessel owners, at least so far as the effect of the provision is solely to prevent one vessel owner from seeking contribution from another." Id. at 889 (emphasis added).
The Court has not come across—nor have the parties cited to—any case wherein a shipowner has been permitted to sue a non-shipowner employer by invoking the dual capacity doctrine. The Court therefore is inclined to follow the holding in Hapag-Lloyd and therefore finds that the City, as a vessel owner, cannot invoke the dual capacity doctrine against Willard, a non-vessel owner. Of course, this ruling does not preclude Hryniewich's suit against Willard under such a theory, as Defendants have not alleged that Hryniewich is a shipowner.
Even assuming that a shipowner can invoke the dual capacity doctrine against a non-shipowner, arguendo, the Court nevertheless finds other grounds that proscribe both the City's and Hryniewich's dual capacity suits against Willard.
b. The dual capacity doctrine cannot be invoked against Willard because Willard was not a vessel and did not take on a distinct non-employer role for purposes of the doctrine.
As Defendants themselves acknowledge, their overarching argument—that, as third parties, they can invoke the dual capacity doctrine—is premised upon the underlying assumption that Plaintiffs themselves can invoke the doctrine against Willard, their employer. The Court finds that this assumes too much. A broad review of cases analyzing the dual capacity doctrine informs the Court regarding whether the doctrine applies at all to the circumstances of the instant case. For the reasons that follow, the Court holds that the dual capacity doctrine cannot be invoked against Willard because Willard was not a vessel and did not take on a distinct non-employer role for purposes of the doctrine.
Pridemore and Glover in fact have not sued Willard under the dual capacity doctrine.
(1) For purposes of the dual capacity doctrine, Willard was not a vessel by virtue of being an "owner pro hac vice" of MARINE 5.
The original intent of the dual capacity doctrine was to hold an employer liable for its negligence as a vessel owner. Jones & Laughlin Steel Corp. v. Pfiefer, 462 U.S. 523, 530-31 (1983) (permitting dual capacity "negligence suits against owner-employers"). It is well established that the doctrine also applies to employers who also are vessel "owners pro hac vice." See, e.g., Olsen v. Todd Shipyards Corp., 435 F. Supp. 568, 570 (W.D. Wash. 1977) (opining that the LHWCA "has been authoritatively construed to present no bar to an independent action at law by such employee to recover actual damages from his employer in those cases where the latter is the owner or owner pro hac vice of the vessel involved" (emphasis added)). Although Defendants do not allege that Willard was the owner of MARINE 5, they argue that Willard was an owner pro hac vice.
The availability of dual capacity negligence arose from legislative action specifically targeted at vessel owners. As one court pointed out, "[t]he 1972 amendments [to the LHWCA] limited the liability of shipowners to longshoremen to land-based negligence rather than unseaworthiness," for which a vessel owner is responsible." Hapag-Lloyd v. Lavino Shipping, 1989 U.S. Dist. LEXIS 15402 at * 8, 1990 AMC 969 (E.D. Pa. Dec. 21, 1989) (emphasis added); see also DeArmond v. Southwire Co., 109 Fed. Appx. 722, 724 (6th Cir. 2004) (noting that "the 'dual capacity' model is aimed principally at shipowners who run their own stevedoring operation" (emphasis added)).
Bernier v. Johns-Manville Sales Corp. appears to answer the specific question of whether an employer conducting vessel sea trials constitutes an owner pro hac vice of the vessel. 547 F. Supp. 389 (D. Me. 1982). The putative dual capacity employer in Bernier was Bath Iron Works ("BIW"), a shipbuilder and repairer. Id. at 390. Because the employee allegedly sustained injuries from long-term exposure to asbestos while working on ships being built or overhauled by BIW, the suit implicated numerous vessels. Id. Plaintiffs brought a dual capacity suit against BIW, alleging that it was an owner pro hac vice of the vessels at issue. Id. In addition to the control exerted by BIW work crews over the vessels while work progressed at the shipyard, BIW employees served as the captain and crew of many of the vessels during a customary series of sea trials. Id. at 391. Although vessel owner representatives were also on board during the sea trials, a BIW captain and crew actually controlled the vessel during these tests. Id. at 391-93.
Of note, the subsequent 1984 amendments to the LHWCA now preclude shipbuilders and repairers from bringing dual capacity negligence claims against their employers.
The U.S. District Court for the District of Maine held that BIW was not an owner pro hac vice of the vessels in question. Id. at 394. The court explained that an owner pro hac vice "has complete—though perhaps only temporary—dominion over the vessel entrusted to him" and that "[h]e commands her navigation and is entitled to avail himself fully of her services." Id. (quoting Olsen v. Todd Shipyards Corp., 435 F. Supp. 568, 571 (W.D. Wash. 1977). Borrowing language from the U.S. Supreme Court's holding in Guzman v. Pichirilo, 369 U.S. 698, 700 (1962), the Bernier court stated that pro hac vice ownership "is therefore tantamount to, though just short of, an outright transfer of ownership." Bernier, 547 F. Supp. at 394; see also id. (holding that an "owner pro hac vice is one who assumes by charter or otherwise 'exclusive possession, control, command, and navigation' of a vessel for a specific period of time" (citations omitted)). Noting that "BIW's dominion over these vessels was confined to the narrow sphere of carrying out its obligations under its construction or repair contracts," the court found that BIW was not an owner pro hac vice. Id. The court further observed that ultimate control of the vessels remained with their owners, as "BIW could not, for example, use a vessel for its own commercial ventures or for any other purpose normally within the prerogative of an owner." Id.
The circumstances of the instant case are analogous to those present in Bernier. Willard's dominion and control over MARINE 5 was circumscribed by the Contract, which specified repairs and upgrades. There is no allegation that Willard could have availed itself of MARINE 5's services for its own purposes—commercial or otherwise. As Defendants themselves point out, the sea trials were being conducted pursuant to the Contract to verify completion of the contractual services Willard provided to the City prior to redelivery of MARINE 5 to the City. Moreover, considering that the City's agent (Hryniewich) was at the helm of MARINE 5, whatever control Willard exerted was almost certainly less than the control exerted by BIW in Bernier.
DeArmond v. Southwire Co. is one of a plethora of cases that cite Bernier for the proposition that an owner pro hac vice must have complete dominion and control over the vessel. 109 Fed. Appx. 722, 725 (6th Cir. 2004). The DeArmond court summarized the relevant case law as follows:
Generally speaking, the cases hold that those who exercise control over a vessel for a particular purpose such as repairing, cleaning or unloading are not considered to be owners pro hac vice. This is so because they have not been granted complete dominion and control over the vessel. Although they control, command and navigate the vessel while it is in their possession to accomplish the designated task, the owner of the vessel has not relinquished complete dominion and control of the vessel tantamount to a demise of the vessel.Id.; see also Bossard v. Port Allen Marine Serv., Inc., 624 F.2d 671, 673 (5th Cir. 1980) ("Though the ship repairer is a bailee, . . . he plainly does not have the degree of control over the vessel that the charterer, the owner pro hac vice, has."); Butcher v. Dravo Corp., 2009 U.S. Dist. LEXIS 25128, at *55-63 (W.D. Pa. Mar. 25, 2009) (relying on Bernier, DeArmond, and Bossard to support its finding that an employer was not an owner pro hac vice of a barge over which its control was merely incidental to its stevedoring operations).
See supra note 8.
The Court finds that Bernier, DeArmond, Bossard, and numerous other cases with similar analyses definitively settle this issue: because Defendants have not sufficiently alleged that Willard assumed a level of dominion and control "tantamount to ownership" or was "granted complete dominion and control over the vessel"—nor could they, based on the Contract they attached to their Third Party Complaints—Willard was not a pro hac vice owner of MARINE 5.
(2) For purposes of the dual capacity doctrine, Willard was not a vessel by virtue of being an "operator."
The determination that Willard was not an owner pro hac vice for purposes of the dual capacity doctrine does not end the inquiry. Defendants argue that Willard also, or alternatively, qualifies as a vessel because it was the "operator" of MARINE 5—operators being included amongst the enumerated vessel roles in LHWCA Section 902(21). At least one court has held that dual capacity suits can be pursued against employers in vessel roles other than owner and owner pro hac vice. See Kerr-McGee Corp. v. Ma-Ju Marine Servs., Inc., 830 F.2d 1332 (5th Cir. 1987) (applying the dual capacity doctrine to a LHWCA employer whose vessel role was a time charterer).
Bernier appears to resolve the issue of whether Willard was a vessel by virtue of its being an "operator" during sea trials, however. Having decided that BIW was not an owner pro hac vice, the Bernier court concluded—without further explanation—that "BIW was not a 'vessel' within the meaning of Section [90]2(21) of the LHWCA; and that therefore BIW is not subject to liability . . . for contribution and indemnity under Section [90]5(b) of the Act." Bernier, 547 F. Supp. at 394. If the Court applies the Bernier reasoning to the case at bar, Willard similarly is not a vessel for purposes of the dual capacity doctrine.
The Bernier court's holding begs a question, however: Would not BIW have qualified as a vessel by acting as the operator of the vessels in question? After all, the court explicitly stated that "the BIW captain and crew actually operate the vessel during a trial." Id. at 391 (emphasis added). The seeming implication is that, for purposes of the LHWCA, "operator" does not carry the colloquial sense of the word advocated by Defendants—i.e., one who is responsible for the operation of the vessel. The court has not located any case that specifically defines "operator" as used in Section 902(21). The language of several cases, however, suggests that "operator" actually involves a degree of vessel control more akin to ownership than to mere use and temporary control of the craft. For example, in Koernschild v. W.H. Streit, Inc., the U.S. District Court for the District of New Jersey held that, under the LHWCA, an employer may be sued "'qua vessel' (that is, as the owner or operator of the vessel) for its acts of negligence." 834 F. Supp. 711, 715 (D.N.J. 1993) (emphasis added). Beyond merely linking the terms "owner or operator," the court went on say that "[o]ffenses 'qua vessel' include failure to maintain the ship's gear, equipment, and work space in a condition that allows a reasonably prudent employee to conduct operations free from unreasonable risks." Id. (emphasis added). The duty the court describes, of course, would not inhere in anyone who briefly assumes operational control of a vessel. Though not conclusive, the linking of the terms "owner" and "operator" in numerous LHWCA cases likely indicates that "operator" connotes commercial operation of a vessel akin to pro hac vice ownership. See, e.g., Kerr McGee, 830 F.2d at 1341 ("[T]he parties contemplated that the owner-operator would be responsible for the condition of the vessel"); Ponce v. M/V Altair, 493 F. Supp. 2d 880, 893 (S.D. Tex. 2007) ("A longshoreman . . . may recover fully from a negligent shipowner and/or operator even if: (1) the employer is partly at fault for the accident; and (2) the shipowner is otherwise barred from seeking contribution from the employer."); Salazar-Torres v. GMD Shipyard Corp., 881 N.Y.S.2d 366, 366 (N.Y. Sup. Ct. 2009) (holding that "claims based on New York Labor Law against the barge owner and operator are preempted by the LHWCA.").
According to their briefs, the parties also apparently were unable to find a case in which "operator" is defined for purposes of the Act.
Defining "operator" in a manner similar to owner pro hac vice also may explain the numerous cases wherein courts ended their analyses after determining that the employer in question was not an owner pro hac vice—despite the fact that the employer maintained (sometimes exclusive) operational control of the vessel. Bernier, discussed supra, is one such case. DeArmond v. Southwire Co., 109 Fed. Appx. 722 (2004), is another. In DeArmond, the plaintiff claimed that Southwire Co. ("Southwire"), a LHWCA employer, was also the owner pro hac vice of the barge whereon her deceased husband was working when he was fatally injured. Id. at 723. Southwire ran an aluminum smelting operation, which required unloading "a constant flow of raw materials" delivered via barge by American Barge ("American"). Id. Southwire tugboats moved the barges from the drop-off cells where American had delivered them to the nearby dock from which Southwire unloaded the materials. Id. Although Southwire unquestionably maintained operational control over the barge in question, the court held that Southwire's limited right to utilize the barge fell short of pro hac vice ownership. Id. at 726. According to the court, "it is readily apparent from this [contract] language that [the parties] did not intend for Southwire to exercise the type of dominion and control that would allow Southwire the ability to use the barge in its commercial activity for any purpose. Southwire's use was limited to unloading the barge and returning it." Id. The court concluded that "[b]ecause the undisputed facts indicate that Southwire was not the owner pro hac vice of the barge . . . there is no legal basis for the plaintiff's claim of tort liability under 33 U.S.C. § 905(b)." Id. at 727.
Conspicuously absent from the DeArmond court's analysis is any discussion of Southwire's status as an "operator"—arguably suggesting that maintaining operational control is insufficient to render one an "operator." The DeArmond analysis clearly undermines Defendant's assertion that, pursuant to the dual capacity doctrine, liability attaches "to any entity responsible for the operation of a vessel"—as Southwire clearly satisfied such a condition.
Courts have issued similar holdings in other cases. See, e.g., Bossard v. Port Allen Marine Service, Inc., 624 F.2d 671 (5th Cir. 1980) (affirming summary judgment in favor of an employer who was, in performing service work on a barge, a bailee and not an owner pro hac vice) (first emphasis added); Olsen v. Todd Shipyards, 435 F. Supp. 568 (W.D. Wash. 1977) (precluding a Section 905(b) suit where an employer that performed inspection and repairs was a bailee and not an owner pro hac vice) (first emphasis added); Butcher v. Dravo Corp., 2009 U.S. Dist. LEXIS 25128 (W.D. Pa. Mar. 25, 2009) (holding that a Section 905(b) suit failed because the stevedore's control over barges was incidental to its stevedoring operations and did not rise to the level of pro hac vice ownership). In each of these cases, the respective court's finding that the employer was not an owner pro hac vice—although exercising some level of dominion and control over the vessel—was dispositive regarding the question of whether a dual capacity suit could be pursued.
Defining "operator" as a role akin to an owner pro hac vice also makes sense of the litany of cases wherein courts that have, ala Bernier, summarily concluded that the dual capacity doctrine was inapposite after explaining why an LHWCA employer was not an owner pro hac vice. See, e.g., Bernier, 547 F. Supp. 389; DeArmond, 109 Fed. Appx. 722; Butcher, 2009 U.S. Dist. LEXIS 25128. Courts have done so even where there were ample facts in evidence that the LHWCA employer was "operating" the vessel in the more colloquial sense.
In light of the above, the Court finds that—for purposes of the dual capacity doctrine—Willard was not a vessel by virtue of being an "operator" of MARINE 5.
(3) For purposes of the dual capacity doctrine, Willard was not a vessel by virtue of filling a role outside Section 902(21)'s enumerated vessel-roles.
Defendants provide an additional rationale for contending Willard was a vessel for dual capacity purposes. They claim that vessel status is not limited to the enumerated roles listed in the Section 902(21) definition of "vessel" and that "whether the party in question had possession of the vessel and control over the activity that led to the harm alleged" instead is the gravamen of vessel designation for dual capacity purposes. In support of this proposition, Defendants cite Kerr-McGee Corp. v. Ma-Ju Marine Services, Inc., wherein the U.S. Court of Appeals for the Fifth Circuit found that an LHWCA employer's dual capacity as a time charterer rendered it liable for negligent acts against its employees qua time charterer. 830 F.2d 1332 (1987). This was despite the fact that, although the Section 902(21) list of "vessels" includes "charter or bareboat charterer," the list does not include "time charterer." The Kerr-McGee court began its analysis by explaining that a time charterer exerts significantly less control over a vessel than does a bareboat charterer. Whereas a bareboat charterer takes "full possession and control of the vessel" for a period of time and mans the ship with its own vessel and crew, id. at 1342, a time charterer does not "undertak[e] the responsibilities of ship navigation and management or the long-term financial commitments of vessel ownership," id. at 1341 (quoting G. Gilmore & C. Black, The Law of Admiralty § 4-1, at 194 (1975)). Kerr-McGee's holding thus supports the proposition that the dual capacity doctrine is not limited to only owners and owners pro hac vice.
The LHWCA defines "vessel" as "any vessel upon which or in connection with which any person entitled to benefits under this chapter suffers injury or death arising out of or in the course of his employment, and said vessel's owner, owner pro hac vice, agent, operator, charter or bare boat charterer, master, officer, or crew member." 33 U.S.C. § 902(21) (1984).
Defendants contend, however, that Kerr-McGee (and other cases it cites) stands for a bolder proposition as well: that Section 902(21)'s definition of "vessel" for purposes of the dual capacity doctrine includes not just the vessel roles listed therein, but also "any entity responsible for the operation of a vessel" whose negligence caused harm to a LHWCA employee. Claiming that the inquiry of an entity's status as a vessel turns largely on "whether it owed a duty of care to the plaintiff," Defendants would extend Willard's liability to all situations in which Willard possessed "the right and duty of control of the aspects of the vessel from which negligence arose"—including the conduct of sea trials.
The Court finds Defendants' argument flawed on several grounds. First, although Section 902(21) does not list "time charterer" as a vessel entity, it does list "charter or bare boat charterer," indicating that some charterers who are not bare boat charterers are "vessels"; time charterers, in other words, very well may be among the class intended to be designated as vessels. Second, because the dual capacity doctrine represents an exception to the LHWCA's exclusivity provision, the doctrine must be applied sparingly, and the list of vessel roles therefore must be read narrowly. Comm'r v. Clark, 489 U.S. 726, 739 (1989) (holding that a provision exception "is usually read narrowly in order to preserve the primary operation of the provision"). Third, Bernier and its progeny do not support applying an expanded definition of "vessel" to Willard in this case; if having "control over the activity that led to the harm alleged" was sufficient to render an entity a vessel, those cases could not have ended their analyses after determining the LHWCA employers in question were not owners pro hac vice.
The Court therefore finds that for purposes of the dual capacity doctrine, Willard was not a vessel by virtue of filling a role outside Section 902(21)'s enumerated vessel-roles.
(4) Willard was not a vessel for purposes of the dual capacity doctrine because it did not adopt a distinct non-employer persona.
Preceding LHWCA Section 902(21)'s definition of "vessel"—which includes a list of vessel roles—is the phrase, "Unless the context requires otherwise." 33 U.S.C. § 902(21) (1984). Most of the cases discussed supra seem to imply that—in the context of the dual capacity doctrine—vessel is defined more narrowly than in Section 902(21). See, e.g., DeArmond, 109 Fed. Appx. 722 (6th Cir. 2004); Bernier, 547 F. Supp. 389 (D. Me. 1982). Defendants, on the other hand, suggest that Kerr-McGee's holding demonstrates that the definition of vessel includes roles beyond those enumerated in Section 902(21). These competing viewpoints notwithstanding, regardless of how broad the definition of vessel, the Court considers a fundamental principle articulated in Roach v. M/V Aqua Grace, 857 F.2d 1575 (11th Cir. 1988). In that case, the U.S. Court of Appeals for the Eleventh Circuit held that—with respect to dual capacity liability—"in order to impose liability independent of a statutorily described role, the alleged tortfeasor must possess a second persona so completely distinct from and unrelated to his apparent status that by established standards the law recognizes it as a separate legal entity." Id. at 1580. The Court finds that Willard did not assume such a distinct second persona.
The Roach court cited Wright v. United States, 717 F.2d 254 (6th Cir. 1983), a case that analyzed the use of the dual capacity doctrine in the context of another workers' compensation scheme, the Federal Employees Compensation Act (the "FECA"). Similar to the design of the LHWCA, the FECA generally provides the exclusive remedy for covered employees vis-à-vis their employers. Id. at 256-57. The U.S. Court of Appeals for the Sixth Circuit explained why the dual capacity doctrine permits employees' negligence claims against their employers, as follows:
Workmen are entitled to compensation for injuries sustained in the performance of their duties. The compensation is based not upon any act or omission of the employer, but upon the existence of the employer-employee relationship. The dual capacity doctrine merely allows the employee to sue his employer where the employer-employee relationship does not exist because the employer is acting in a second persona unrelated to his status as employer.Id. at 259 (emphasis added) (citations omitted). Applying this reasoning in the LHWCA context conforms with the Act's design to limit an employer's liability in most cases to the prescribed compensation amount. See Parker v. McDermott, Inc., 1990 U.S. Dist. LEXIS 17374, at *6 (E.D. La. Dec. 18, 1990) (citing Wright's recognition of a second, independent persona as a requirement to apply the dual capacity doctrine to a LHWCA case). Where the employer does not inhabit two discrete roles, the policy imperative of limiting employer liability to compensation provided by the Act governs.
This analysis also is consistent with court holdings that limit an employer's dual capacity liability to negligent acts performed in its non-employer capacity, i.e., qua vessel. The court in Kerr-McGee aptly summarized this notion:
As applied to a defendant which is a "vessel" under section [90]2(21) because it is the vessel's owner, the section 5(b) liability is "only for negligence in its 'owner' capacity." Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 531 n.6 (1983) (emphasis added). See also Tran v. Manitowoc Eng'g Co., 767 F.2d 223, 226, 227 (5th Cir. 1985) (same; vessel owner liable under section 5(b) "only for vessel owner negligence" or "only for its negligent acts as barge owner"); Smith v. E. Seaboard Pile Driving, Inc., 604 F.2d 789, 795 (2d Cir. 1979) ("in order to determine whether a shipowner-employer may be held liable" under section 5(b) "a court must decide if the negligence that caused the accident was 'owner occasioned'"). By a parity of reasoning, Kerr-McGee, which is a vessel under section 5(b) only because it was the vessel's time-charterer, is subject to liability under section 5(b) only for negligence in its "time-charterer" capacity.
See supra note 8.
The case law applying the dual capacity doctrine—and particularly the numerous cases discussed supra—implicitly affirms this principle. The requirement of a distinct persona can be easily reconciled with the many cases that apply the dual capacity doctrine to an employer that is also a shipowner or owner pro hac vice. Such a vessel ownership role has always carried substantial duties under maritime law—including the duty of seaworthiness—and per se suggests a role distinct from the longshore or harbor work activities that render an entity a LHWCA employer.
In many cases—including Bossard, Olsen, and Butcher, discussed supra—the LHWCA-employer's role qua vessel was inseparable from its longshore or harbor work operations, i.e., the operations that bring the entity with the purview or scope of the Act. In Bossard and Olsen, that role was the servicing or repair of vessels themselves—similar to the instant case. In Butcher, the stevedoring work was the unloading of the barge at issue. Whatever control these entities may have had over the vessels in question, the LHWCA employer's vessel role did not establish a distinct persona because that role was part and parcel of its longshore or harbor work operations.
The distinct persona requirement also serves to distinguish Kerr-McGee from the case at bar. Kerr-McGee represents the rare case in which a vessel role that did not rise to the level of an owner or an owner pro hac vice nevertheless subjected an employer to a Section 905(b) dual capacity suit. See generally Kerr-McGee Corp. v. Ma-Ju Marine Servs., Inc., 830 F.2d 1332 (5th Cir. 1987). As a time-charterer, Kerr-McGee appears to have exercised less control over the vessel in question than that exercised by putative employer-vessels in other dual capacity cases; although Kerr-McGee designated the cargo and directed the ship's course, the ship's owner supplied the master and crew. Id. at 1341-42. Kerr-McGee's assumption of two distinct roles—one land-based and one sea-based—elucidates the Fifth Circuit's holding. Kerr-McGee was a LHWCA employer by virtue of its operation of a gas field off the Louisiana coast. Id. at 1334. It time chartered boats to transport workers, including the plaintiff, between gas wells. Id. Although transporting employees by charter boat was related to the operation of gas fields, it was by no means an integral part of the work. If, for example, transportation by helicopter were feasible, operation of the gas fields would not be substantially altered. Kerr-McGee's role as time charterer was thus distinct from its role as an LHWCA employer.
In contrast, Willard's participation in the MARINE 5 sea trials was an express requirement of the Contract. As in Bernier, the sea trials were not merely related to Willard's harbor work operations; they were an essential element of the activity that made Willard a LHWCA employer. Simply put, the Court finds that—based on Defendants' allegations—Willard did not assume a distinct persona beyond its role as LHWCA employer.
In summary, the City, as a shipowner, cannot invoke the dual capacity doctrine against Willard, a non-vessel owner. For purposes of the doctrine, Willard was not an owner pro hac vice or an operator of MARINE 5. Because the dual capacity doctrine represents an important exception to the LHWCA's exclusivity provision, the Court is not inclined to expand dual capacity vessel roles beyond those listed in Section 902(21) and, even if it were, Willard did not have exclusive dominion and control over MARINE 5 during the sea trials. Additionally, the holding in Bernier, whose germane facts are similar, strongly suggests that the doctrine does not apply to the case at bar. The Eleventh Circuit's holding in Roach—that the dual capacity doctrine only applies where an entity inhabits two distinct personae—renders Bernier all the more persuasive.
Because the Court finds that Willard was not a vessel, it need not determine whether Willard's putative negligent acts during the sea trial were committed in its employer or vessel role. The impossibility in this case of demarcating a boundary between these roles, however, provides further support for the Court's ruling that Willard did not assume two distinct personae in the first place.
For the above reasons, the Court finds that the dual capacity doctrine is inapplicable to this case. Defendants therefore are precluded from recovering based on Counts II through VI, and the Court dismisses these counts with prejudice.
2. Even if Defendants Can Invoke the Dual Capacity Doctrine. Arguendo, Defendants' Claims Against Willard Nevertheless Are Precluded if Plaintiffs Were Performing—and Regularly Perform—Shipbuilding or Repair Work.
The third sentence of Section 905(b) prohibits employees from suing their vessel-employer "[i]f such person was employed to provide shipbuilding, repairing, or breaking services." 33 U.S.C.S. § 905(b) (1984). In determining whether an employee is precluded from bringing a dual capacity suit, courts "look not only at what the employee was doing at the moment he was injured, but also "whether the employee 'regularly performs some portion of what is indisputably [ship-repair] work,' or has been assigned for an appreciable period of time to do 'substantial [ship-repair] work.'" Gay v. Barge, 915 F.2d 1007, 1010 (5th Cir. 1990) (quoting Boudloche v. Howard Trucking Co., 632 F.2d 1346, 1347-48 (5th Cir. 1980); Barrett v. Chevron, U.S.A., Inc., 781 F.2d 1067, 1073 (5th Cir. 1986) (en banc)).
Whether Plaintiffs regularly perform shipbuilding or repair work for Willard ultimately is a question of fact about which the Court has insufficient information to reach a conclusion. The Court therefore cannot definitively say whether Plaintiffs are precluded from bringing a dual capacity suit on the ground that they regularly perform shipbuilding or repair work. The Court can state, however, that Plaintiffs were engaged in either shipbuilding or repair work at the time of the incident.
Defendants characterize Plaintiffs' contractual services as a "vessel modification" and assert that Plaintiffs were not involved in ship repair as envisioned by Section 905(b), even were they to have "fix[ed] some things along the way." The California Court of Appeals came to a different conclusion in Jones v. Dutra Construction Co., which the Court finds instructive. 67 Cal. Rptr. 2d 411 (1997). There, the work at issue was "the modification of two scows to accommodate toxic waste from a dredging operation." Id. at 413 (emphasis added). Specifically, the construction firm fabricated "T-shaped bulkheads" and welded them onto the scows. Id. The court noted that the ordinary meaning of repair is "to restore to a sound or healthy state." Id. at 418 (emphasis added). Although the court acknowledged that the vessels generally were in a sound condition before the work commenced, it found that because "[t]he modification to the scow was necessary . . . to make it sound for the purpose for which it was about to be used," the work was "thus analogous to the definition of 'repair' described above." Id.
Moreover, the Jones court went on to say that "modification of an existing vessel can constitute 'shipbuilding.'" Id. at 883 (relying on Garret v. Dean Shank Drilling Co., 799 F.2d 1007 (5th Cir. 1986)). In Garret, the work at issue was the addition of a "superstructure, fixtures, and appurtenances—such as crew's quarters" to a barge whose "initial construction" had already been completed at another location. 799 F.2d at 1008. The U.S. Court of Appeals for the Fifth Circuit ultimately held that work on these fixtures was shipbuilding work. Garret, 799 F.2d at 1010.
The idea that a substantial modification of a vessel constitutes either shipbuilding or repairs is strongly supported by case law. A common theme in cases discussing the shipbuilding/repair provision of Section 905(b) involves whether the work is maintenance or shipbuilding/repair. See, e.g., Heise v. Fishing Co., 79 F.3d 903, 907 (9th Cir. 1996) (finding that work including "rebuilding the main engine and welding cracked fuel tanks" was repair work and not merely maintenance); Gay, 915 F.2d at 1011 (finding that "pumping water from a barge is routine and expected maintenance, and not 'repair' work under § 905(b)"); New v. Assoc. Painting Servs., Inc., 863 F.2d 1205, 1210 (5th Cir. 1989) (defining "repair" as "to restore to a sound or healthy state" and "maintenance" as "to preserve the vessel's current condition"); cf. Monroe v. Great Lakes Dredge & Dock Co., LLC, 2014 U.S. Dist. LEXIS 107506, at * 11, 12 (E.D. Va. 2014) (holding that the plaintiff had a "potentially viable argument" that replacing drag heads with new drag heads that possessed a "turtle excluder" was maintenance and not repair work). The U.S. Court of Appeals for the Ninth Circuit described maintenance as "preserv[ing] the vessel's current condition." Heise, 79 F.3d at 907.
See supra note 8.
If vessel work is placed on a spectrum based upon the nature of the work involved—where maintenance is on the "low" end, shipbuilding is on the "high" end, and repair is somewhere in between—a significant upgrade or modification of a vessel would fall between repair and shipbuilding. In enacting the repair/shipbuilding preclusion of Section 905(b), Congress extended immunity to vessel-employers where their employees engaged in significant work to the vessel. The evidence currently before the Court demonstrates that the purpose of the Contract—which included installation of "new motors . . . new control cable, ignition switch, harnesses and malfunction gauge . . . fuel [system components] . . . and Yamaha stainless steel[] propellers"—was not to merely preserve MARINE 5's current condition but rather to engage in shipbuilding or repair work.
For these reasons, the Court agrees with the following assessment of the California Court of Appeal: "There is no imaginable reason Congress would have wished to preclude negligence actions by workers employed to build, repair or break ships but allow such actions by workers employed to modify or alter an existing vessel." Jones, 57 Cal. App. 4th at 883. Hence, although whether Pridemore and Glover regularly performed repair ultimately is a factual question, if they regularly perform the type of work described in the Contract, the Court is convinced that Defendants' Section 905(b) claims against Willard would be precluded.
B. Count I (Breach of Contract).
Count I of the Third-Party Complaints alleges a breach of contract. The Contract requires Willard to obtain insurance for workers' compensation, automobile liability, commercial general liability, professional liability, and umbrella/excess liability. The Contract also includes a provision requiring that the certificates of insurance list the City as an additional insured, i.e., an additional insured provision. The City alleges that Willard either did not obtain such insurance or failed to provide the required certificates of insurance.
Defendants argue that, even if they cannot invoke the dual capacity doctrine, they nonetheless can pursue a breach of contract claim against Willard based on Willard's failure to satisfy the required insurance requirements. Defendants further assert that the claim is not being brought "on account of" Plaintiffs' injuries and that LHWCA Section 905(a)'s exclusivity of remedy provision therefore does not apply. Willard, on the other hand, characterizes Count I—like Counts II and III—as an indemnity claim and argues that such a claim by a shipowner against a LHWCA employer is proscribed by Section 905(b).
The Court need not address whether Count I's cause of action is "on account of" Plaintiffs' injuries, as several courts have expressly held that additional insured clauses between a vessel and an employer do not violate Section 905(b)'s proscription of direct or indirect employer liability. See, e.g., Voisin v. O.D.E.C.O. Drilling Co., 744 F.2d 1174, 1177 (5th Cir. 1984) (holding that "[n]either the statute nor its legislative history suggest that additional assured clauses . . . are a proscribed form of indirect liability"); Price v. Zim Israel Navigation Co., 616 F.2d 422, 429 (9th 1980) (holding that "insurance procurement provisions . . . do not make [an employer] liable to [a] vessel"); Foulk v. Donjon Marine Co., 963 F. Supp. 427, 430 (D.N.J. 1997) (citing Voisin and Price in support of its holding that "a vessel owner may recover from a LHWCA-employer on the grounds that the employer failed to procure insurance to protect the vessel owner in case of an accident"). The U.S. Court of Appeals for the Fifth Circuit explained that insurance procurement provisions—whose purpose "may well be merely to allocate initially the burden of procuring insurance"—do not give substance to Congress's concern that vessels could use their superior bargaining power to shift liability to employers by requiring indemnification for employee injuries. Voisin, 744 F.2d at 1178-79 (quoting Price, 616 F.2d at 429). The court also addressed the policy goal of prohibiting vessels from contracting against their own fault, calling it an "erroneous assumption that an additional insured clause is by definition exculpatory." Id.
The cases the Court cites in this section arguably can be read to imply that a suit based upon an additional insured clause is not "on account of" the LHWCA employees' injury. --------
The Court sees no reason to depart from the holdings in Price, Voisin, and Foulk. The Court therefore finds that the LHWCA does not prohibit Count I of Defendants' Third-Party Complaints.
Conclusion
The Court holds that the City, a vessel owner, cannot invoke the dual capacity doctrine against Willard, a non-vessel owner. Additionally, because the Court finds that—for purposes of the dual capacity doctrine—Willard was not a vessel and did not adopt a distinct non-employer persona, Defendants cannot invoke the doctrine against Willard. The Court therefore SUSTAINS Willard's Pleas in Bar with respect to Defendants' claims for Contractual Indemnity, Breach of Warranty of Workmanlike Service, Indemnity and Contribution, Unseaworthiness, and General Maritime Negligence (Counts II, III, IV, V, and VI) and dismisses these counts with prejudice. The Court finds that Defendants have sufficiently alleged that Willard breached the Contract and therefore OVERRULES Willard's Pleas in Bar with respect to Defendants' claim for Breach of Contract (Count I).
The Court directs counsel for Willard to prepare and circulate an Order consistent with the ruling in this Opinion and submit it to the Court for entry within fourteen days.
Sincerely,
/s/
David W. Lannetti
Circuit Court Judge DWL/jmk c: David H. Sump, Esq.
William A.M. Burke, Esq.
Kerr-McGee Corp. v. Ma-Ju Marine Servs., Inc., 830 F.2d 1332, 1339 (1987).