DANN TOWING COMPANY et al

Filing 98

OPINION. Signed by Judge Noel L. Hillman on 2/15/2018. (rtm, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

1:15-cv-01610-NLH-AMD
In re DANN OCEAN TOWING, INC.
as Owners of the tug CAPTAIN
DANN for Exoneration from or
Limitation of Liability

OPINION

APPEARANCES:
GUERRIC S.D.L. RUSSELL
NICOLETTI, HORNIG & SWEENEY, ESQS.
505 Main Street, Suite 218
HACKENSACK, NJ 07601
JEFFREY S. MOLLER
BLANK ROME, LLP
ONE LOGAN SQUARE
PHILADELPHIA, PA 19103
MICHAEL J. LORUSSO
DUGAN BRINKMANN MAGINNIS & PACE
1880 JFK BOULEVARD
14TH FLOOR
PHILADELPHIA, PA 19103
JAMES JOSEPH QUINLAN
BLANK ROME LLP
WOODLAND FALLS CORPORATE PARK
210 LAKE DRIVE EAST
SUITE 200
CHERRY HILL, NJ 08043
On behalf of Dann Ocean Towing, Inc., as Owners of the tug
CAPTAIN DANN and Buckeye Pennsauken Terminal, LLC
JAMES WILLIAM JOHNSON
RICCI TYRRELL JOHNSON & GREY, PLLC
WILLOW RIDGE EXECUTIVE OFFICE PARK
750 ROUTE 73 SOUTH - SUITE 202B
MARLTON, NJ 08053

KELLY JEANNE CASTAFERO
RICCI TYRRELL JOHNSON & GREY
1515 MARKET STREET SUITE 700
PHILADELPHIA, PA 19102
Vane Line Bunkering, Inc. as Titled Owner of the Barge DS210
RANDY C. GREENE
DUGAN BRINKMANN MAGINNIS PACE
1880 JOHN F. KENNEDY BLVD
14TH FL
PHILADELPHIA, PA 19103
On behalf of Certain Underwriters

HILLMAN, District Judge
This matter concerns a collision of barge with a dock when
a tugboat attempted to moor the barge.

The present issues

before the Court are whether the charterer of the tug can be
held liable for the damages suffered by the dock owner, and
whether the tugboat owner can be liable for the charterer’s
attorney’s fees and costs incurred as a result of the tugboat’s
negligence.
Pending before the Court is the motion of the charterer,
Vane Line Bunkering, Inc. (“Vane”), for summary judgment on the
claims against it by the dock owner, Buckeye Pennsauken
Terminal, LLC (“Buckeye”).

Also pending is Buckeye’s motion for

partial summary judgment on Vane’s indemnification claim against
the tugboat owner, Dann Ocean Towing, Inc. (“Dann Towing”).
the reasons expressed below, both motions will be denied.
2

For

BACKGROUND
On October 5, 2014, Vane contacted Dann Towing to charter
its tug, the CAPTAIN DANN, to deliver one of Vane’s unmanned
tank barges, the DS-210, to the Buckeye Pennsauken Terminal on
the Delaware River.

At 7:50 pm (or 1950 hours), during a strong

“flood tide,” 1 the CAPTAIN DANN, with Captain Robert “Bobby”
Hudnall at the helm and assisted by deckhand Daniel Williams,
set out to retrieve the barge.

Captain Hudnall rigged the barge

to the CAPTAIN DANN in “pushing gear,” which means that the tug
was positioned with its bow to the stern of the barge and
connected by cables.
At 8:50 pm (or 2050 hours), Captain Hudnall attempted a
fair tide 2 landing in order to moor the barge to Buckeye’s Dock
#1 facing upriver, starboard side to the dock, as instructed by
Buckeye.

Because of the tremendous current, the barge collided

with Dock #1, causing significant damage to the dock and loss of

1

As explained in In re Petition of Frescati Shipping Company,
Ltd., 2016 WL 4035994, at *19 n.42 (E.D. Pa. July 25, 2016):
The “tide” is the vertical movement of the water level, and
tides in the Delaware River are semidiurnal (meaning that
there are two high tides and two low tides each day). . . .
The “tidal current” is the “horizontal component of . . .
water movement.” When water flows up-river, this is
referred to as a flood tide; when it moves down-river, it
is referred to as an ebb tide.
2

A “fair tide” is a tidal current in such a direction as to
increase the speed of a vessel.
3

business to Buckeye.
Several actions were instituted arising out of the
collision in this Court and the Eastern District of
Pennsylvania.

The two remaining actions, pending here and

consolidated for all purposes, concern Vane’s liability for the
accident. 3

Vane has filed for summary judgment in its favor on

Buckeye’s claims that Vane is liable for the negligence of Dann
Towing in causing the damage to Buckeye’s dock and business, and
it is independently liable for its own negligence arising out of
its charter of the CAPTAIN DANN.

Buckeye has moved for partial

summary judgment on Vane’s claim that it is entitled to its
attorney’s fees and costs relating to this action.

Both parties

have opposed each other’s motions.
DISCUSSION
A.

Subject matter jurisdiction

This Court may exercise subject matter jurisdiction over
the remaining tort and business loss claims because the injuries
suffered on land were caused by a vessel on navigable water
affecting maritime commerce.

See 28 U.S.C. § 1333(1); Jerome B.

3

The first action was commenced by Dann Towing Company and Dann
Ocean Towing as the Owners of the tug CAPTAIN DANN under Civil
Action No. 15-1610; the second action was filed by BB&T
Equipment Finance Corporation and Vane as the Titled Owner and
Owner pro hac vice of the barge DS-210 under Civil Action No.
15-2313. The two limitations proceedings were consolidated on
June 25, 2015.
4

Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527,
531 (1995); Matter of Christopher Columbus, LLC, 872 F.3d 130,
134 (3d Cir. 2017).
B.

Standard for Summary Judgment

Summary judgment is appropriate where the Court is
satisfied that the materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations, admissions, or
interrogatory answers, demonstrate that there is no genuine
issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.

Celotex Corp. v.

Catrett, 477 U.S. 317, 330 (1986); Fed. R. Civ. P. 56(a).
An issue is “genuine” if it is supported by evidence such
that a reasonable jury could return a verdict in the nonmoving
party’s favor.
248 (1986).

Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

A fact is “material” if, under the governing

substantive law, a dispute about the fact might affect the
outcome of the suit.

Id.

In considering a motion for summary

judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence;
instead, the non-moving party's evidence “is to be believed and
all justifiable inferences are to be drawn in his favor.”
Marino v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir.
2004)(quoting Anderson, 477 U.S. at 255).
5

Initially, the moving party has the burden of demonstrating
the absence of a genuine issue of material fact.
v. Catrett, 477 U.S. 317, 323 (1986).

Celotex Corp.

Once the moving party has

met this burden, the nonmoving party must identify, by
affidavits or otherwise, specific facts showing that there is a
genuine issue for trial.

Id.

Thus, to withstand a properly

supported motion for summary judgment, the nonmoving party must
identify specific facts and affirmative evidence that contradict
those offered by the moving party.
57.

Anderson, 477 U.S. at 256-

A party opposing summary judgment must do more than just

rest upon mere allegations, general denials, or vague
statements.

Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir.

2001).
C.

Analysis
1.

Vane’s motion for summary judgment
(Docket No. 86)

Buckeye claims that Vane is liable for the damage caused to
its dock because Vane had extensive control over the CAPTAIN
DANN, and because Vane failed to exercise due diligence and
reasonable care in selecting a safe and competent tugboat to tow
Vane’s barge to Buckeye’s dock.

Vane argues that it cannot be

liable for Dann Towing’s actions because the parties were
operating under a traditional time charter, whereby Vane, as the
time charterer, had no operational control over the CAPTAIN

6

DANN, and assumed no liability for the vessel’s unseaworthiness
or damage due to the crew’s negligence.

Vane further argues

that it, as a time charterer, did not have an independent duty
to vet whether the CAPTAIN DANN was capable of safely docking
its barge.
As explained in Dougherty v. Navigazione San Paolo, S.P.A.
Medafrica Line, 622 F. Supp. 1, 3–4 (E.D. Pa. 1984), there are
three types of charter parties under general maritime law - the
voyage charter, the time charter, and the demise or bareboat
charter:
In a voyage charter the ship is engaged to carry a full
cargo on a single voyage. The owner retains all control
over the vessel. In a time charter the ship's carrying
capacity is taken by the charterer for a fixed time for the
carriage of goods on as many voyages as can fit into the
charter period. Again, the owner retains all control for
management and navigation. In a demise or bareboat
charter, the charterer takes over full control of the ship
and becomes the owner pro hac vice. The charterer thus
assumes control of management and navigation. See
generally, G. Gilmore and C. Black, The Law of Admiralty
193–94 (2d ed. 1975).
Dougherty, 622 F. Supp. at 3–4 (some internal citations
omitted).
Under a traditional time charter, “‘possession and control
remain with the owner and the ship is operated by its regular
crew, but the charterer determines the ship's routes and
destinations.’”

Weeks Marine, Inc. v. Hanjin Shipping, 2005 WL

1638148, at *3 (D.N.J. 2005) (quoting Migut v. Hyman-Michaels

7

Co., 571 F.2d 352, 355 (6th Cir. 1978)) (citing G. Gilmore & C.
Black, The Law of Admiralty, § 4-1, at 194 (2d. ed. 1975))
(“[T]he charterer directs the commercial activities of the boat,
but the owner's people continue to navigate and manage the
vessel . . . . The time charter is used where the charterer's
affairs make it desirable for him to have tonnage under his
control for a period of time, without undertaking the
responsibilities of ship navigation and management or the longterm financial commitments of vessel ownership.”).
Thus, who has control over the vessel determines whether a
charter is a time charter or a demise or bareboat charter:
The first problem is of course distinguishing the demise
from the regular time and voyage charters. The test is one
of “control”; if the owner retains control over the vessel,
merely carrying the goods furnished or designated by the
charter, the charter is not a demise; if control of the
vessel itself is surrendered to the charterer, so that the
master is his man and the ship's people are his people,
then we have to do with a demise.
Dougherty, 622 F. Supp. at 3–4 (quoting G. Gilmore and C. Black,
The Law of Admiralty 240 (2d ed. 1975)).
In addition to a situation where a purported time charterer
retains control over the vessel and therefore does not fully
shift liability to the vessel owner, a time charterer may be
held liable for its independent negligent acts even when the
time charter entered between the time charterer and the vessel
owner was a traditional time charter party.

8

See Weeks Marine,

2005 WL 1638148, at *3 (citing Helaire v. Mobil Oil Co., 709
F.2d 1031, 1041-42 (5th Cir. 1983) (time charterer liable for
injury resulting from decision to continue unloading operations
in extremely dangerous weather); Graham v. Milky Way Barge,
Inc., 824 F.2d 376, 388 (5th Cir. 1987) (court upheld a finding
that, under the circumstances, the time charterer was liable for
death and injury because the charterer sent vessel into unsafe
waters and failed to broadcast weather information); Offshore
Logistics Services, Inc. v. Mutual Marine Office, Inc., 462 F.
Supp. 485, 490 (E.D. La. 1978) (time charterer liable for injury
to passenger during navigation in rough seas when time charterer
affirmatively decided to encounter the weather); Turner v. Japan
Lines, Ltd., 651 F.2d 1300 (9th Cir. 1981) (under clause of
charter party, the time charter is responsible for the “load,
stow, trim and discharge,” time-charterer was responsible for
injuries sustained by off-loading longshoreman, who was severely
injured when a defective stow collapsed); Fernandez v. Chios
Shipping, 542 F.2d 145 (2d Cir. 1976) (improper discharge of
cargo was within scope of responsibilities shifted from
shipowner to time charterer by clause of time charter, and time
charterer was obligated to indemnify shipowner)).
Here, Vane argues that the time charter between it and Dann
Towing was a traditional time charter - that is, the parties’
time charter agreement was formed to be in line with black9

letter maritime law and Vane exercised no control over the
CAPTAIN DANN.

Therefore, Vane argues that it can have no

liability for the allision of the CAPTAIN DANN with Buckeye’s
dock.

Vane also argues that a time charterer has no duty for

which it may be held liable regarding the investigation into the
vessel owner’s safety procedures.
In contrast, Buckeye argues that in addition to the fact
that the time charter was only an oral agreement, Vane’s actions
refute Vane’s contention that it did not control the CAPTAIN
DANN.

Buckeye argues that the charter was more like a demise

charter, and Vane’s control over the CAPTAIN DANN evidences that
the parties did not intend to fully shift liability to Dann
Towing like a traditional time charter.

Moreover, Buckeye

argues that Vane was independently negligent by failing to
safely control the maneuvers and activities of the CAPTAIN DANN,
and by failing to make any inquiry into the substance of Dann
Towing’s safety protocols, procedures, or systems.
This Court concludes that material disputed facts preclude
the entry of summary judgment as to:
1.

The terms of the charter party between Vane and
Dann Towing

The standard written agreement for a time charter party
contains 48 clauses spanning 15 pages, and it includes
provisions regarding which party is responsible for the safe

10

management of the vessel, the shipboard personnel, the duty to
maintain the vessel, the duration of the time charter, the
owner’s duties versus the charterer’s duties, and the terms of
payment.

(See Docket no. 90-14.)

In contrast, the time charter

agreement between Vane and Dann Towing was never reduced to
writing, 4 it was for an unspecified duration, and its terms are
based on the testimony of Vane and Dann Towing principals and
employees.

At summary judgment, this Court cannot assess the

credibility of that testimony to determine the nature of the
parties’ agreement, as that testimony could be – depending on
how it is assessed by the fact-finder – either viewed to
demonstrate a traditional time charter arrangement, or viewed to
be a self-serving effort to cast the parties’ agreement into
that type of arrangement and hide its true nature.
2.

The extent of Vane’s control over the
CAPTAIN DANN

In the same vein as the dispute over the terms of the
agreement between Vane and Dann Towing, Vane’s interaction with

4

It is not disputed that a time charter may still be valid even
when it is only an oral contract. See Tarstar Shipping Co. v.
Century Shipline, Ltd., 1979 A.M.C. 1096, 1108–09 (2d Cir. 1979)
(citing Kossick v. United Fruit Co., 365 U.S. 731, 734, 1961 AMC
833 , 836 & n.4 (1961)) (other citations omitted) (“[M]aritime
contracts are valid and enforceable even if not in writing. The
critical issue is not whether the charter party was signed by
the party sought to be charged * * *, but whether there was a
meeting of the minds as to the essential terms of the agreement,
even though unsigned by one party.”). Rather, Buckeye disputes
the content of Vane and Dann Towing’s oral agreement.
11

Dann Towing and the CAPTAIN DANN is subject to credibility
assessments.

Buckeye has presented evidence that Vane

controlled the CAPTAIN DANN’s every movement on the date of the
accident.

Vane first directed the CAPTAIN DANN to pick up and

deliver the DS 210 barge, but redirected the vessel to
temporarily dock the barge and perform other jobs, only to
return to the DS 210 later during a flood tide.
Buckeye has also presented evidence that Vane’s use of the
CAPTAIN DANN could be found to be akin to how it used its own
fleet.

For example, Vane’s fleet of barges exceeded the

capacity of its tugboats, and it contracted with Dann Towing to
assist in the movement of its barges.

Buckeye has presented

evidence that on a day-to-day basis, Dann Towing management only
checked in once a day with the CAPTAIN DANN crew, and they were
otherwise managed by Vane.

Indeed, Vane utilized the CAPTAIN

DANN for over 900 movements from 2006 through October 2, 2014.
Vane disputes Buckeye’s characterization of its actions, but
Buckeye has met its burden at summary judgment to show the
existence of genuine material disputes as to Vane’s control of
the CAPTAIN DANN.
3.

Vane’s duty to investigate Dann Towing’s safety
procedures

Buckeye contends that Vane had an independent duty, which
it breached, to educate itself about Dann Towing’s safety

12

procedures and safety history, to be sure it satisfied the
safety protocols Vane had set for its own fleet.

This argument

also depends on the nature of the agreement between Vane and
Dann Towing, and the extent of Vane’s control over the CAPTAIN
DANN.
As Vane points out, under a true time charter, a charterer
has no liability for the chartered vessel’s acts, and it
correspondingly has no duty to discover the chartered vessel’s
safety procedures or potential for creating hazards.
Where, however, as discussed above, a charter exercises a
certain degree of control over the hired vessel, a charterer may
be liable for its independent negligence.
Moreover, the general maritime law is “an amalgam of
traditional common-law rules, modifications of those rules, and
newly created rules,” which incorporates a body of maritime tort
principles.

East River S.S. Corp. v. Transamerica Delaval,

Inc., 476 U.S. 858, 864–65 (1986) (citing Kermarec v. Compagnie
Generale Transatlantique, 358 U.S. 625, 630 (1959)) (other
citations omitted).

This includes holding a charterer liable

for the actions of an independent contractor over which the
charterer otherwise holds no duty.

See, e.g., Matter of P & E

Boat Rentals, Inc., 872 F.2d 642, 647 (5th Cir. 1989) (“We agree
that a time charterer who has no control over the vessel,
assumes no liability for negligence of the crew or
13

unseaworthiness of the vessel absent a showing that the parties
to the charter intended otherwise.

However, this general rule

does not exempt a time charterer from liability if it is
negligent in conducting its activities as time charterer.”
(internal quotations and citations omitted)); Viser v. Trinity
Catering, Inc., 2007 WL 4206879, at *3 (E.D. La. 2007) (denying
summary judgment, finding that the language in the time charter
agreement removing responsibility from I.G. Petroleum for
management, navigation, operation and control of the M/V Dewitt
did “not summarily eliminate a finding of tort liability”
because “a principal can be held liable for the torts of an
independent contractor if the principal exercises operational
control over the independent contractor's actions,” and the
plaintiff “presented facts that Mr. Goins, I.G. Petroleum's
consultant, was under the direct control of I.G. Petroleum and
taking his orders from I.G. Petroleum as to the operations of
the M/V Dewitt” (internal quotations and citations omitted));
Alexander v. U.S., 63 F.3d 820, 822 (9th Cir. 1995) (noting that
even when the charter is unambiguous that the ship owner
retained operational control of the vessel under the time
charter, the plaintiff, an injured crewman of the vessel, could
still prevail on his claim against the time charterer if he
could show that despite the language of the charter, the time
charterer actually exerted operational control over the vessel);
14

cf. Smolnikar v. Royal Caribbean Cruises Ltd., 787 F. Supp. 2d
1308, 1318 (S.D. Fla. 2011) (“Though cruise ship owners, such as
Royal Caribbean, cannot be held vicariously liable for the
negligence of an independent contractor, it is well-established
that they may be liable for negligently hiring or retaining a
contractor.”); Joyce v. Joyce, 975 F.2d 379, 385 (7th Cir. 1992)
(noting that “the essential thrust of the tort of negligent
entrustment is that a shipowner can be held liable for negligent
entrustment only if he knows or has reason to know that the
person being entrusted is incapable of operating the vessel
safely”).
Thus, because maritime law contemplates that Vane could be
liable for its actions relative to the hiring of the CAPTAIN
DANN, and that liability depends on the nature of the charter
and the relationship between the charterer and vessel owner,
summary judgment must be denied on this issue as well.
2.

Buckeye’s motion for partial summary judgment
(Docket No. 85)

During the course of this case, Buckeye settled its claims
against Dann Towing for the damage it caused to Buckeye’s dock
and for Buckeye’s lost business expenses.

As part of the

settlement, Buckeye agreed to indemnify Dann Towing from Vane’s
cross-claims against Dann Towing.

At the time of settlement,

Dann Towing affirmed that it had no written or oral agreement

15

with Vane as to indemnification.
Vane’s cross-claims against Dann Towing include a claim for
indemnification.

Vane argues that it is entitled to implied

indemnification from Dann Towing for the attorney’s fees and
other costs it has expended in this litigation because Dann
Towing breached the warranty of workmanlike performance when,
despite holding itself out as capable, it failed to safely dock
Vane’s barge at Buckeye’s dock.

Buckeye, as indemnitor of Dann

Towing for Vane’s cross-claims against it, has moved for summary
judgment on this one cross-claim of Vane’s.
The Court finds that any implied indemnification claim for
Dann Towing’s breach of the warranty of workmanlike performance
is intertwined with the resolution of Buckeye’s claims against
Vane, which all center on the relationship between Vane and Dann
Towing, as well as Vane’s independent duties as charterer.
Thus, the Court will deny Buckeye’s motion for partial summary
judgment at this time. 5

5

It is important to point out that in this procedural posture,
if Buckeye prevails on its claims against Vane, and Vane’s
indemnification cross-claim is cognizable, Buckeye’s
indemnification of Dann Towing for Vane’s cross-claims against
Dann Towing would make Buckeye responsible for Vane’s attorney’s
fees and costs for the very claims on which Buckeye has won
against Vane. On the flip side, if Vane prevails against
Buckeye, the result will effectively impose a fee shifting
arrangement in Vane’s favor that violates the American rule.
See Baker Botts L.L.P. v. ASARCO LLC, 135 S. Ct. 2158, 2164
(U.S. 2015) (internal quotations and citation omitted) (“Our
basic point of reference when considering the award of
16

CONCLUSION
As the Fifth Circuit noted, “it may be unusual for a time
charterer to be held liable for an incident concerning the
vessel under charter,” Graham, 824 F.2d at 388, but where
disputed material facts exist as to the nature of the charter
party, the extent of the charterer’s control over the chartered
vessel, and the charterer’s own independent acts, the Court
cannot determine at summary judgment whether this is an unusual
case or not.

Additionally, based on the same disputed facts,

the Court cannot determine whether Vane is entitled to
indemnification by Dann Towing for its attorney’s fees and costs
arising out of this litigation.

The disputed facts must be

resolved by the fact-finder at trial before the relevant legal
principles are applied.
An appropriate Order will be entered.

Date: February 15, 2018
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

attorney's fees is the bedrock principle known as the American
Rule: Each litigant pays his own attorney's fees, win or lose,
unless a statute or contract provides otherwise.”). The Court
is skeptical of the propriety of either result.
17