Cargill, Inc. v. C & P Towing Co., Inc.

United States District Court, E.D. Virginia, Norfolk Division.

CARGILL, INC., Plaintiff,

v.

C & P TOWING CO., INC., and Northeast Towing, Inc., in personam, and TUG RANDY D.,
her engines, boilers, etc., in rem, Defendants.

Civ. A. No. 89-378-N.

Aug. 16, 1990.

Guilford D. Ware/y/JamesL. Chapman, IV, Crenshaw, Ware & Martin, Norfolk, Va., for
Cargill, Incorporated.

John E. Holloway/y/PhilipN. Davey, Hunton & Williams, Norfolk, Va., for C & P
Towing Co., Inc., Northeast Towing, Inc., & TUG RANDY D.

OPINION AND ORDER

TOMMY E. MILLER, United States Magistrate.

I. Background

*1 On May 10, 1989, plaintiff Cargill, Inc. launched this action in admiralty
against defendants C & P Towing Co., Inc., Northeast Towing, Inc., in personam,
and the tug RANDY D., in rem.   On November 24, 1989, plaintiff filed an  Amended
Complaint, which defendants answered on November 30, 1989.   On January 12, 1990,
in accordance with 28 U.S.C. s 636(c), all parties voluntarily waived their rights
to proceed before a United States District Judge and consented to proceed to trial
before a United States Magistrate.   The parties elected to proceed in the event
of an appeal directly to the United States Court of Appeals for the Fourth
Circuit.   See 28 U.S.C. s 636(c)(3).   The case was tried from January 16  to
January 18, 1990; FN1  upon submission of post-trial memoranda, the Court heard
argument on May 31, 1990.

II. Findings of Fact and Conclusions of Law

Cargill, Inc. entered into an agreement with C & P Towing Co., Inc. under which C
& P Towing agreed to tow a laden barge-the NF-103-that was owned by Cargill from
Cargill’s facility at Seaford, Delaware, to Cargill’s facility in Chesapeake,
Virginia.   Stipulation 4-5; FN2  Pl.Exh. 1.FN3  Similarly, C & P Towing  had
entered into an agreement with Northeast Towing, Inc. under which Northeast Towing
engaged the tug RANDY D. to tow the NF-103.   Stipulation 5.   On February  25,
1989, the RANDY D., with the NF-103 in tow, proceeded south on the Nanticoke River
into the Chesapeake Bay by way of Tangier Sound.   Stipulation 6;  Pl.Exh.  6;
Pl.Exh. 31.   During the voyage, the NF-103 listed severely to starboard,
capsized, righted itself, and eventually sank.   Stipulation 6-7;  Pl.Exh. 31.
At issue is the liability, if any, of the tug to the tow as the result of
defendants’ negligence.   Plaintiff claims total damages of $485,447, including
pre-judgment interest.   The Court has jurisdiction of this case under 28 U.S.C. s
1333.

A. Maritime Negligence Principles

Cargill alleges that defendants were negligent in undertaking the voyage of the
laden NF-103 from Seaford.   Cargill further alleges that defendants were
negligent in proceeding into the open waters of the Chesapeake Bay in adverse
weather with the laden NF-103 and that defendants were negligent in failing to use
due care in handling the listing NF-103.   Finally, Cargill charges that
defendants breached their warranty of workmanlike service.   In asserting its
claims, Cargill argues that defendants failed to provide a seaworthy tug and that,
as a result of such failure, Cargill suffered damages.

In admiralty suits that allege maritime tort, the rules of common law negligence
apply.   Leathers v. Blessing, 105 U.S. 626, 630 (1881);  see   Consolidated
Aluminum Corp. v. C.F. Bean Corp., 833 F.2d 65, 67 (5th Cir.1987), cert. denied,
486 U.S. 1055 (1988).   The mere occurrence of an accident or of casualty to  the
tow does not give rise to a presumption that the tug was at fault.   Southgate  v.
Eastern Transp. Co., 21 F.2d 47, 49 (4th Cir.1927);   Eastern Tar Prods. Corp. v.
Chesapeake Oil Transport Co., 101 F.2d 30, 32, 1939 A.M.C. 58, 63 (4th Cir.1939).
Thus, the owner of a tow bears the burden at trial of proving the tug’s duty to
the tow, the tug’s breach of such duty, and the damages that the tug’s breach
proximately caused.   The WHITE CITY, 285 U.S. at 202.

*2 In The WHITE CITY, the United States Supreme Court held that suit by the owner
of a tow was a cause of action ex delicto and not ex contractu against the tug and
its owner.   The WHITE CITY, 285 U.S. at 201;  see  New Orleans Coal Co. v.  Texas
Co., 122 F.2d 141, 143, 1941 A.M.C. 1463, 1467 (5th Cir.1941);   Simkins v. R.L.
Morrison & Sons, 107 F.2d 121, 122, 1940 A.M.C. 24, 26 (5th Cir.1939);   Pool
Shipping Co., Ltd. v. Moran Towing & Transp. Co., Inc., 65 F.2d 385, 386, 1933
A.M.C. 836, 838 (2d Cir.1933).   In characterizing the suit as sounding in tort,
the Court reasoned that a tug does not serve to insure the tow or to act as bailee
of the tow.   The WHITE CITY, 285 U.S. at 202;   Eastern Tar Prods. Corp.,  101
F.2d at 32, 1939 A.M.C. at 63.   The Court distinguished liability of a tug  from
liability of “common carrier and other bailees.”   The WHITE CITY, 285 U.S. at
200.   The Court reasoned that a tug did not exercise exclusive control over the
tow;  rather, a tug was responsible “only so far as is necessary to enable the tug
and those in charge of her to fulfill the engagement.”  Id.  Thus, the Court
concluded that damage to a tow was similar to a collision case because a tug’s
duties correspond to “those which one vessel owes to others which it may meet.”
Id. at 201.

1. Duties of the Tug

In The WHITE CITY, the Court set forth the duties that a tug owes its tow.  Id. at
202.   The Court ruled that a tug must “exercise such reasonable care and maritime
skill as prudent navigators employ for the performance of similar services.”  Id.
A commentator further defines the duty that a tug owes its tow, stating that a tug
represents that

it possesses sufficient knowledge and skill to perform the [towage] contract
safely;  that it will use its best endeavors, skill and diligence for that
purpose;  that it will provide a seaworthy vessel, properly equipped and manned,
and of sufficient capacity and power to perform the service undertaken, under
conditions which are to be reasonably anticipated.

A. Parks, The Law of Tug, Tow, and Pilotage 135 (1982) [hereinafter A. Parks].

The duty that a tug owes its tow envelops the duty of the tug to furnish a
competent master;  a court analyzes the master’s competence by evaluating the
master’s prudence and reasonableness.   See  Frank Jacobus Transp. Co. v. Steamtug
ALICE MORAN, 67 F.2d 603, 605, 1933 A.M.C. 1626, 1630 (2d Cir.1933).   The master,
however, need not exercise the highest degree of care;  rather, the master is
merely obligated to use reasonable and ordinary care and skill, and a court must
afford the master great discretion in judging the master’s decisions.  Id.  The
master’s discretion extends not only to deciding whether to depart from port given
certain weather conditions, but also to deciding, once underway, what action, if
any, should be taken to protect the tow.  Id.;  see  International Salt Co.,  Inc.
v. Diamond P. Transp. Co., 15 F.Supp. 727, 730, 1936 A.M.C. 1217, 1222
(S.D.N.Y.1936), aff’d,  92 F.2d 65 (2d Cir.1937), cert. denied,  302 U.S. 764
(1938);   S.C. Loveland Co., Inc. v. Pennsylvania Sugar Co., 100 F.2d 971, 974,
1939 A.M.C. 20, 26 (4th Cir.1939).   A court reviewing the alleged breach of a
tug’s duty must measure the allegations of negligence of the master in light of
the circumstances at the time.   See Steamtug ALICE MORAN, 67 F.2d at 605, 1933
A.M.C. at 1630;  Ocean Burning Inc. v. Moran Towing & Transp. Co., Inc., 1974
A.M.C. 2307, 2311 (S.D.N.Y.1974).   After all, as Judge Learned Hand stated in
Steamtug ALICE MORAN, a court “cannot charge a master because it seems to [a
court], who [was] not there, that another choice would have been better.   Only in
case his conduct is outside the range of possible discretion, may [a court] hold
him for lack of seamanship;  error to become fault must be gross and flagrant.”
Steamtug ALICE MORAN, 67 F.2d at 605, 1933 A.M.C. at 1630;  see Eastern Tar Prods.
Corp., 101 F.2d at 33, 1939 A.M.C. at 63 (quoting Steamtug ALICE MORAN and
adopting rule for United States Court of Appeals for the Fourth Circuit).

*3 S.C. Loveland Co., Inc. provides an example of the discretion possessed by a
tug master.   Owners of the barge FRED SMARTLEY, JR. hired the tug COLONNA to  tow
the barge from Baltimore to Norfolk.    S.C. Loveland Co., Inc., 100 F.2d at  972,
1939 A.M.C. at 22.   The barge was manned and laden with a cargo of sugar.   Id.,
1939 A.M.C. at 22.   On November 23, 1935, the tug and tow, along with three  other
barges, left North Point, Maryland.   At the time of departure, “there were no
storm warnings displayed and there was only a strong breeze from north-northwest,
blowing down the [Chesapeake Bay].”  Id., 1939 A.M.C. at 23.   When the  flotilla
reached the mouth of the Potomac River, the hawser connecting the COLONNA and the
FRED SMARTLEY, JR. parted, causing a collision between the FRED SMARTLEY, JR. and
one of the other barges.  Id., 1939 A.M.C. at 22.   As a result of the impact,  the
cargo of sugar was severely damaged.  Id., 1939 A.M.C. at 23.   The wind at  the
time that the hawser parted was, at most, only 18 to 20 miles per hour, which is
considered to be a “moderate breeze.”  Id., 1939 A.M.C. at 23.   The  court
characterized the wind as “favorable for the voyage.”  Id., 1939 A.M.C. at 23.

The court of appeals addressed the issue whether the tug was liable.  FN4  Id.,
1939 A.M.C. at 25.   The trial court had found that the tug was liable because  the
master of the tug was negligent in leaving North Point, Maryland in adverse
weather.  Id. at 973, 1939 A.M.C. at 25.   The court of appeals reversed the  trial
court on this issue, ruling that “[t]he advisability of leaving port under the
conditions that existed was left to the judgment of the master of the tug alone
and that the decision made by him was within the range of discretion properly
allowed to him cannot be successfully disputed.”  Id. at 974, 1939 A.M.C. at 25.

Ocean Burning, Inc. also demonstrates the broad scope of discretion that a master
of a tug exercises.  Ocean Burning, Inc., 1974 A.M.C. at 2309-10.   On April  21,
1969, the tug DIANA L. MORAN contracted to tow the barge OCEAN BURNING NO. 1 to an
area 12 to 20 miles off the Shark River along the New Jersey coast.  Id. at 2308.
The barge was designed to burn old waterfront timbers from dismantled piers and
was engaged for this purpose on April 21-22, 1969.  Id.  The weather for the area
was predicted to bring winds from the south at 10 to 15 miles per hour for the
afternoon of April 21, 1969;  15 to 25 knots for that night, shifting to
west-northwest by April 22, 1969.   An updated forecast called for winds from the
southwest at 15 to 25 knots, with higher gusts;  a small craft warning was in
effect.  Id. at 2309.   The court found that the actual weather was in accord  with
the weather forecast.   Id.

The master of the tug testified that the weather did not necessitate the return to
port because, even though water broke across the bow of the barge, the weather did
not present a hazard.  Id.  On April 22, 1969, however, the master noticed that
the barge had assumed a slight list to port, which he reasonably assumed to have
been the result of uneven burning.  Id.  The master could not inspect the barge
because of the extreme heat of the fire.   Id.  When the fire had died down,  the
tug was informed that it could return.   During the return voyage, the list
increased;  the master shortened the hawser and continued to tow the listing
barge.   The master put a man aboard the barge, who attempted to pump the  barge’s
void tanks.   The master quickly removed the man for his own safety.  Id. at  2310.
Thereafter, the master determined that, in his opinion, he could save the barge by
beaching her.   The barge owner claimed damages sustained as the result of the
beaching.  Id.

*4 The court ruled that the decision to proceed under the weather forecasts given
on April 21, 1969, was within the master’s discretion.  Id. at 2312.   The  court
reasoned that the master properly relied on the tow’s warranty that the barge was
seaworthy for the purpose of the voyage.  Id.  The court further ruled that the
decision to proceed under the weather forecasts of small craft warnings was within
the master’s discretion.  Id. at 2313 (citing S.C. Loveland Co., Inc., 100 F.2d at
974, 1939 A.M.C. at 25).   Finally, the court ruled that the decision not to
inspect the barge’s list when the list was first observed and the decision not to
return immediately to port were within the master’s discretion.  Id. at 2315.
The court concluded,

Given the constantly increasing list to port, the DIANA L. MORAN was fully
justified in concluding that the OCEAN BURNING NO. 1 was in imminent danger of
capsizing or sinking and in taking appropriate measures to save her.   The
measures which were taken, including the extinguishing of the remaining fire,
placing Walla aboard the barge with pumps and, finally, beaching her as a last
resort, constituted a reasonable exercise of judgment under the circumstances.
Indeed, had the tugs attempted to beach the barge bow first [as the barge’s owners
argued would have been the only reasonable manner in which to proceed], such an
attempt might well have been far more disastrous than the sideways beaching which
occurred.

Id. (emphasis supplied).   The court’s findings are clearly based on the rule that
a court cannot charge a master with negligence for decisions made under the
circumstances as they were occurring merely because the court finds that “another
choice would have been better.”   Steamtug ALICE MORAN, 67 F.2d at 605, 1933
A.M.C. at 1630.

These cases illustrate the substantial deference that a court must afford the
master of a tug.   To be held liable, the decision of the master must  be
unreasonable under the circumstances.   The rationale underlying the rule granting
a master great discretion rests upon the basic principle that a court reviewing
the master’s decisions must judge such decisions at the time they were made and
with consideration for the circumstances that preceded the decisions, not by what
later developed.   See Eastern Tar Prods. Corp., 101 F.2d at 33, 1939 A.M.C. at
63;  S.C. Loveland Co., Inc., 100 F.2d at 974, 1939 A.M.C. at 26;    International
Salt Co., Inc., 15 F.Supp. at 730, 1936 A.M.C. at 1222, aff’d,  92 F.2d 65 (2d
Cir.1937), cert. denied,  302 U.S. 764 (1938).

2. Duties of the Tow

Because a tug does not serve to insure its tow or to act as bailee of its tow, it
is entitled to rely on the presumption that the tow is seaworthy.   See   Kenny
Marine Towing, Inc. v. M/V JOHN R. RICE, 583 F.Supp. 1196, 1198 (E.D.La.1984);
Ocean Burning, Inc., 1974 A.M.C. at 2312.   The reliance arises from the firmly
established rule that the owner of a tow owes an absolute duty to the tug that the
tow is seaworthy.   Tebbs v. Baker-Whiteley Towing Co., 407 F.2d 1055, 1057 (4th
Cir.1969);   Curtis Bay Towing Co. v. Southern Lighterage Corp., 200 F.2d 33, 34,
1952 A.M.C. 2034, 2036 (4th Cir.1952);   Eastern Tar Prods. Corp., 101 F.2d at 32,
1939 A.M.C. at 63;  see  Derby Co., Ltd. v. A.L. Mechling Barge Lines, Inc., 258
F.Supp. 206, 211, 1968 A.M.C. 1436, 1443 (E.D.La.1966), aff’d,  399 F.2d 304 (5th
Cir.1968);   McLain Line, Inc. v. Reading Co., 53 F.Supp. 736, 738, 1944 A.M.C.
157, 159-60 (E.D.N.Y.1944).   A logical consequence of the reliance is that a
court cannot hold liable a tug that does not have notice of the unseaworthiness of
its tow, absent proof of the tug’s failure to use due care.   See  Otto  Candies,
Inc. v. Great Am. Ins. Co., 221 F.Supp. 1014, 1018, 1965 A.M.C. 1028, 1034
(E.D.La.1965) (finding tug not liable where tow’s unseaworthiness manifested
itself too late for tug to prevent list and consequent loss of cargo), aff’d,  332
F.2d 372 (5th Cir.1964);   Bouchard Transp. Co., Inc. v. The Tug GILLEN BROTHERS,
389 F.Supp. 77, 82 (S.D.N.Y.1975).

*5 Courts have defined seaworthiness of the tow to include the requirements that
the tow must be structurally sound and that the tow must be in the proper state of
repair.   Derby Co., Ltd., 258 F.Supp. at 211, 1968 A.M.C. at 1443, aff’d,   399
F.2d 304 (5th Cir.1968);   S.C. Loveland Co., Inc., 100 F.2d at 973, 1939 A.M.C.
at 25;  see  Miller v. Cornell Steamboat Co., 1934 A.M.C. 444, 446 (E.D.N.Y.1934).
Seaworthiness of the tow further requires that the tow be able to endure the
customary hazards of the intended voyage.   See  Gutierrez v. Waterman Steamship
Corp., 373 U.S. 206, 213 (1963);   Consolidated Grain and Barge Co. v. Wisconsin
Barge Line, Inc., 522 F.Supp. 842, 848 (E.D.Mo.1981);   Shebby Dredging Co., Inc.
v. Smith Bros., Inc., 469 F.Supp. 1279, 1284 (D.Md.1979).   At least one court has
defined the absolute duty of the tow to provide a seaworthy vessel in terms of a
warranty that the tow is “sufficiently staunch and strong to withstand the
ordinary perils to be encountered on the voyage.”   South, Inc. v. Moran Towing &
Transp. Co., Inc., 360 F.2d 1002, 1005 (2d Cir.1966) (citing The  EDMUND L. LEVY,
128 F. 683, 684 (2d Cir.1904);   Frederick Snare Corp. v. Moran Towing & Transp.
Co., 195 F.Supp. 639, 644 (S.D.N.Y.1961));   Eastern Tar Prods. Corp., 101 F.2d at
32, 1939 A.M.C. at 61;  see A. Parks at 213 (stating that tow owes tug “implied
warranty of seaworthiness”);  id. at 54 (defining test of “seaworthiness” as
“whether the vessel is reasonably fit to carry the goods which she has undertaken
to transport”).

Any inspection of a tow that a tug might undertake does not supersede the absolute
duty of the tow to provide a seaworthy vessel.    Schuylkill Transp. Co. v.  Banks,
1945 A.M.C. 1500, 1504 (3d Cir.1945);   Newtown Creek Coal & Coke Co. v. Barge
MAURICE R., 1933 A.M.C. 273, 280 (E.D.N.Y.1932);  see A. Parks at 213.   Indeed,  a
tug need not inspect the tow other than to give the tow a cursory investigation
necessary to undertaking the voyage.   In re Steuart Transp. Co., 435 F.Supp. 798,
804 (E.D.Va.1977), aff’d,  596 F.2d 609 (4th Cir.1979); FN5  see  Nat G. Harrison
Overseas Corp. v. American Tug TITAN, 516 F.2d 89, 94 (5th Cir.1975) (ruling that,
because tug is not insurer of tow, tug is under no duty to make detailed
inspection of its tow);   Massman Constr. Co. v. Sioux City & New Orleans Barge
Lines, Inc., 462 F.Supp. 1362, 1369 (W.D.Mo.1979) (holding that tug is “under no
duty to make detailed inspection of the [tow] either prior to the voyage or during
the voyage itself”);   McDonough Marine Serv., Inc. v. M/V ROYAL STREET, 465
F.Supp. 928, 934 (E.D.La.) (holding that tug’s general inspection of tow, which
failed to reveal that manhole covers were not watertight, was adequate and
reasonable), aff’d,  608 F.2d 203 (5th Cir.1979);   Dow Chemical Co. v. M/V  GULF
SEAS, 428 F.Supp. 667, 671-72 (W.D.La.1977) (holding that a “minute and detailed
inspection” by the tug that would have revealed that ballast valve handles were
not secured was not required).   Further, a “tugowner is entitled to rely upon a
statement or representation by the owner or crew of a tow that the vessel is in
proper condition to be towed.”   A. Parks at 213 (citing  A.S. Wikstrom, Inc.  v.
The Tug JULIA C. MORAN, 190 F.Supp. 250, 1961 A.M.C. 536 (S.D.N.Y.1960);
Schuylkill Transp. Co. v. Banks, 1945 A.M.C. 1500, 1504 (3d Cir.1945);   Newtown
Creek Coal & Coke Co. v. Barge MAURICE R., 1933 A.M.C. 273, 280 (E.D.N.Y.1932)).

*6 The absolute duty to provide a seaworthy tow is based upon the fact that the
“tug does not have exclusive control over the tow but only so far as is necessary
to enable the tug and those in charge of her to fulfill the engagement.”    The
WHITE CITY, 285 U.S. at 200.   The owner of a tow has exclusive control over  the
condition of its vessel;  additionally, the owner of a tow is in the best position
to know of the tow’s defects and to inform the tug of those defects.   In  fact,
the owner of a tow has “an affirmative duty to advise the tug of any conditions
which might affect the safety of the towing movement.”   A. Parks at 214 (citing
Triangle Cement Corp. v. The Towboats CINCINNATI AND TURECAMO BOYS, 1968 A.M.C.
892 (2d Cir.1968);   Howard v. Scow GILDERSLEEVE NO. 325, 1934 A.M.C. 338
(E.D.N.Y.1932);   Canada Steamship Lines, Ltd. v. Great Lakes Towing Co., 1932
A.M.C. 563 (N.D.Ohio 1932));  Otto Candies, Inc., 1965 A.M.C. at 1034 (ruling that
“[t]he towing vessel is not liable for the loss occasioned by the unseaworthiness
of the tow unless its unseaworthiness is disclosed, or is so apparent that it
would constitute negligence for the tug to attempt to proceed”).

3. An Implied Warranty of Workmanlike Service

Cargill claims that defendants breached their implied warranty of workmanlike
service under the towage contract, causing Cargill to suffer damages.   Defendants
counter that a court may hold a tug liable only if the tug is negligent and that
an implied warranty that arises from towage contracts does not exist.   Although
Cargill cites  Tebbs v. Baker-Whiteley Towing Co., 407 F.2d 1055 (4th Cir.1969),
in support of its thesis that defendants owed Cargill an implied warranty of
workmanlike service, the Court finds that Tebbs is distinguishable.   See
Fairmont Shipping Corp. v. Chevron Int’l Oil Co., Inc., 511 F.2d 1252, 1258 (2d
Cir.1975); FN6   id. at 1261 (Mansfield, J., dissenting) (stating that tug in the
case did not contract to tow a “dead ship” and that towage contract at issue was
one of “ordinary tug assistance”).

In Tebbs, the ship SANDS POINT was in the custody of the United States Marshal
Service because of a libel for oil pollution.   Tebbs, 407 F.2d at 1057.    The
SANDS POINT was a “dead ship” that was docked at Broadway Pier in Baltimore,
Maryland for one day before the Marshals were required to move it to an anchorage
in the river.   Near the bow of the ship at the dock was a private yacht.    The
Marshals entered into a towage contract to tow the ship to its new anchorage.
During the undocking procedure, one of the tugs assigned to move the SANDS POINT
rammed the ship forward, thus parting the only forward spring line, which had
prevented the ship’s bow from coming into contact with the yacht.  Id.

The trial court found that the Marshal’s failure to place more than one forward
spring line was negligent and that the tug’s master was also negligent in failing
to check the mooring lines of the SANDS POINT or to take other precautions against
straining the line to the point of parting.  Id.  On appeal, the tug argued that
the master was entitled to rely on the tow’s warranty that it was seaworthy.
While the Fourth Circuit agreed that the owner of a tow “ordinarily” was
responsible for its own seaworthiness, the court expressly found that the tug had
knowledge of the fact that the SANDS POINT was a “dead ship” and that “the normal
assumptions concerning a … seaworthy vessel were not justified.”  Id.  The court
continued, “In a situation of this kind, the tug is responsible for both vessels.”
Id.  Therefore, the court ruled that the tug had “a special duty in relation to
the tow to take steps ‘necessary for its safety and the safety of other vessels.’
” FN7  Id.   The court in Tebbs further held that the tug’s liability rested  upon
her exercise of control over a “dead tow,” which was necessary for the tug to
“fulfill the engagement.”   The WHITE CITY, 285 U.S. at 200.

*7 Under the Dead Ship Doctrine, a well established principle in admiralty, a
“dead ship” is “incapable of navigation and unable to serve any of the purposes of
a vessel in navigation.”   Johnson v. Oil Transport Co., Inc., 440 F.2d 109, 112
(5th Cir.1971);   Goodman v. 1973 26 Foot Trojan Vessel, Arkansas Registration No.
AR1439SN, 859 F.2d 71, 73 (8th Cir.1988) (defining “dead ship” as one that “loses
its status as a vessel when its function is so changed that it has no further
navigation function”);  see  Noel v. Isbrandtsen Co., Inc., 287 F.2d 783, 785 (4th
Cir.1961).   In the case of a barge, a barge that is “actually used as a barge  and
transporting a cargo” is not a “dead ship.”   Roper v. United States, 368 U.S.  20,
24 (1961) (Douglas, J., dissenting).   Particular rules apply to “dead ships.”
For example, a “dead ship” owes no warranty-express or implied-of seaworthiness to
any person.   See, e.g.,  West v. United States, 361 U.S. 118, 122 (1959) ;
Fairmont Shipping Corp. v. Chevron Int’l Oil Co., Inc., 511 F.2d 1252, 1258 (2d
Cir.1975);   Davis v. Chas. Kurz & Co., Inc., 483 F.2d 184, 186 (9th Cir.1983);
Dean v. United States, 418 F.2d 1236, 1238 (9th Cir.1969);   American Export Lines
v. Norfolk Shipbuilding & Drydock Corp., 336 F.2d 525, 527 (4th Cir.1964);   Noel,
287 F.2d at 785.   Another consequence of possessing “dead ship” status is that a
“dead ship” is not liable in admiralty suits in rem.    Amoco Oil v.  M/V
MONTCLAIR, 766 F.2d 473, 475 (11th Cir.1985).   The Court determines that the
definition of a “dead ship” and the distinguishing characteristics of the law
governing a “dead ship” amply demonstrate that this case does not involve a “dead
ship.”   See infra s D (describing use of NF-103).

The Court concludes that the Fourth Circuit’s use of language in Tebbs such as
“ordinarily,” “normal assumptions concerning … a seaworthy vessel,” “[i]n a
situation of this kind,” and “a special duty” demonstrate the intent of the court
to limit the application of an implied warranty of workmanlike service to cases
involving “dead tows.”   The Court concludes that the court’s placement of
quotation marks around the term “dead tow” demonstrates the court’s intent to
signify the distinct condition of a “dead tow.”   See WEBSTER’S THIRD NEW INT’L
DICTIONARY OF THE ENGLISH LANGUAGE, UNABRIDGED 1868 (1986) (stating that authors
use quotation marks “to enclose technical terms expected to be unfamiliar to the
reader”).   Based upon the court’s rhetoric and grammar in Tebbs, therefore, this
Court finds that Tebbs is limited to the specific situation where a tug tows a
“dead vessel.”

The Court has not found any opinions in the Fourth Circuit applying an implied
warranty to an ordinary towage contract.   The Court will not extend an implied
warranty of workmanlike service to towage contracts, except to the extent that any
implied warranty of workmanlike service is subsumed by negligence principles.
The definition of an implied warranty of workmanlike service employs the words
“diligence” and “due care.”   These words denote and connote the concept of
negligence.

*8 The Court rules that a breach of any implied warranty of workmanlike service
necessarily involves a finding of negligence.   See, e.g.,  Tebbs, 407 F.2d  at
1059;   S.C. Loveland, Inc. v. East West Towing, Inc., 415 F.Supp. 596, 604-05
(S.D.Fla.1976);   Bouchard Transp. Co. v. The Tug GILLEN BROTHERS, 389 F.Supp. 77,
82 (S.D.N.Y.1975);  cf. The WHITE CITY, 285 U.S. at 202.   Therefore, the  Court
rules that use of the term “warranty” in the context of towage contracts merely
restates the law of maritime negligence as applied to towage contracts.   United
States v. Tug MANZANILLO, 310 F.2d 220, 226 (5th Cir.1962) (holding that “a towing
agreement gives rise to a ‘warranty of workmanlike service’ which is breached by
negligence on the part of the operator of the tug”).

A noted commentator has attacked the ruling of courts applying an implied warranty
of workmanlike service to towage contracts:

In a strange line of cases, seemingly without reference to the well-established
rule in Stevens v. The White City, some courts have held a tug company to a
warranty of workmanlike service …   It is submitted that a warranty of
workmanlike service is not applicable to a towage situation and, if extended by an
erroneous belief in its applicability would fly in the face of the rule in The
White City;  would preclude limitation of liability under the ‘personal contract’
doctrine;  and create confusion in the industry which has come to rely upon the
principle that damage actions under towage contracts are ex delicto and not ex
contractu.

A. Parks at 29-30 (citations omitted).   The Court finds this reasoning
persuasive.

Generally, an implied warranty of workmanlike service provides that a person who
contracts to perform a service impliedly agrees to perform the service in a
diligent and workmanlike manner.   Cargill, however, asserts that the Court can
find a breach of the warranty of workmanlike service without finding negligence on
behalf of the tug.   In support of its proposition, Cargill cites Fairmont
Shipping Corp., where the Second Circuit found that a “warranty of workmanlike
performance may be breached by non-negligent conduct as well as by negligent
conduct.”   Fairmont Shipping Corp., 511 F.2d at 1260.   Even if the Court  accepts
Cargill’s argument that an implied warranty should be applied to towage contracts,
the Court rejects Cargill’s expansive interpretation of such a warranty.

In Fairmont Shipping Corp., the court relied solely upon the rule enunciated in
Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124 (1956), in extending
an implied warranty of workmanlike service from stevedoring contracts to towage
contracts.FN8   Fairmont Shipping Corp., 511 F.2d at 1255-60.   Prior to  the
decision in Ryan, a longshoreman who was injured as the result of an unseaworthy
condition on a ship, which was caused solely by a stevedore’s negligence, could
seek damages against the shipowner, who could be held liable despite lack of any
fault.   See generally  Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp.,  342
U.S. 282 (1952);   Seas Shipping Co. v. Sieracki, 328 U.S. 85 (1946).   In  Ryan,
the Supreme Court provided shipowners relief by allowing them to seek indemnity
from the stevedore under the theory in contract law that the stevedore impliedly
agreed to perform its services in a workmanlike manner.   The Court ruled,

*9 The … agreement to perform all of the shipowner’s stevedoring operations at
the time and place where the cargo in question was loaded … necessarily includes
[the stevedore’s] obligation not only to stow the pulp rolls [that injured a
seaman], but to stow them properly and safely.   Competency and safety of stowage
are inescapable elements of the service undertaken.   This obligation is not a
quasi-contractual obligation implied in law or arising out of a noncontractual
relationship.   It is of the essence of [the] stevedoring contract.   It is  [the
stevedore’s] warranty of workmanlike service that is comparable to a
manufacturer’s warranty of the soundness of its manufactured product.

Ryan, 350 U.S. at 133-34.

In Ryan, the Supreme Court relied upon a limited number of bases to formulate its
rule.   For example, progeny of Ryan acknowledge that the decision is based upon
the “shipowner’s strict liability for unseaworthiness,”  Fairmont Shipping Corp.,
511 F.2d at 1257 (citing  Schwartz v. Compagnie General Transatlantique, 405 F.2d
270, 276 (2d Cir.1968), and that Ryan was designed to allow shipowners to seek
indemnity against the stevedore, thus rectifying the inequitable rule that
shipowners could be held liable without fault.   Bosnor, S.A. v. Tug L.A. BARRIOS,
796 F.2d 776, 784 (5th Cir.1986).

Courts find those in the business of selling manufactured goods strictly liable
for selling defective or hazardous goods that reach a consumer without substantial
change in the condition in which they are sold and that harm such a consumer.
Restatement (Second) of Torts s 402A (1977).   The underlying policy of imposing
strict liability rests upon the exclusive control that a manufacturer exercises
over its product and that no intervening forces have interfered with the safety of
the product.   See id.

Cargill contends that the Court can find a tug strictly liable for the loss of its
tow.   The Court rejects Cargill’s contention.   Many variables exist in  the
towage situation that may exonerate the tug from responsibility for loss of its
tow.   Foremost among these factors is the seaworthiness of the tow itself.
Imposition of strict liability on a tug abrogates the absolute duty of a tow to
provide a seaworthy vessel and unfairly foists upon the tug the burden of insuring
the tow despite the fact that it does not exercise exclusive control over the
tow’s condition of seaworthiness and only exercises as much control over the tow
“as is necessary to enable the tug and those in charge of her to fulfill the
engagement.”   The WHITE CITY, 285 U.S. at 200.   Furthermore, a rule of  strict
liability provides no incentive for the owner of a tow to ensure that its vessel
is seaworthy.   Cf.  Bosnor, 796 F.2d at 786 (citing  Smith & Kelly Co. v. The  S/S
CONCORDIA TADJ, 718 F.2d 1022, 1029 (11th Cir.1983)).

The primary issue that the Supreme Court in Ryan addressed was whether shipowners
were entitled to indemnity from stevedoring companies because the stevedore had
breached its warranty of workmanlike service through its negligence.   See  Ryan,
350 U.S. at 133-34.   Indemnification is not at issue in this case,FN9 see   Todd
Shipyards Corp. v. Moran Towing & Transp. Co., Inc., 247 F.2d 626, 628 (2d
Cir.1957) (holding that tug-general contractor and tug-subcontractor would both be
liable to tow for negligence), and the Court fails to find persuasive the
conclusion in Fairmont Shipping Corp. that different factors are considered in
“determining whether a contract includes a warranty of workmanlike performance
[and in determining] whether that warranty encompasses an obligation to
indemnify.”   Fairmont Shipping Corp., 511 F.2d at 1259.   The Court holds  that
Fairmont Shipping Corp. is an anomaly because it does not recognize that an
implied warranty of workmanlike service necessarily includes a finding of
negligence on the part of the tug.   Absent negligence on the part of the tug,  the
party best suited to prevent damage to the tow is the tow itself because the tow
retains exclusive control over the seaworthiness of its vessel.  Ryan was designed
to provide specific redress for a specific classification of persons and the rule
has no logical correlation to the towage context.   Thus, the Court finds that the
history and circumstances of the rule in Ryan are inherently and fundamentally
different from the tug-tow context.   Even the nature of the services provided by
a stevedore is inherently different from the nature of the services provided by a
tug.

*10 Finally, none of the reasoning that supports the application of an implied
warranty of workmanlike service to a stevedore’s contract similarly supports the
application of an implied warranty of workmanlike service to a towage contract.
Courts have limited Ryan to its facts.   See  Bosnor, 796 F.2d at 785, 786.    The
Court holds that the policy and rule in Ryan are inapplicable in a case such as
this, where the owner of the tow is in the best position to care for, maintain,
and warrant the seaworthiness of its own vessel and where indemnification is not
an issue.   Because of the Court’s conclusions regarding Tebbs, Fairmont Shipping
Corp., and Ryan, because of the inherent and fundamental differences between a
towage contract and stevedoring services, and because of the Court’s conclusions
of law regarding negligence in the maritime context, the Court rules that Tebbs is
distinguishable and that a warranty of workmanlike service is not implied in the
context of towage contracts, except insofar as such a warranty is already set
forth in the allocation of the duties of a tug and a tow.   Compare The  WHITE
CITY, 285 U.S. at 202 (ruling that a tug must “exercise such reasonable care and
maritime skill as prudent navigators employ for the performance of similar
services”) and A. Parks at 135 (stating that tug “will use its best endeavors,
skill and diligence for … purpose [of performing towage contract safely]”) with
Fairmont Shipping Corp., 511 F.2d at 1257 (stating that the owner of tow may
properly rely upon the tug’s “expertise, control, supervision and ability to
prevent accidents …”) and  Tebbs, 407 F.2d at 1059 (ruling that tow relies on
tug’s “expertise in conducting safe towing operations”).

B. Structural Design of the NF-103

The NF-103, hull number 1267, was built in 1964 by Jefferson Boat Works in
Jeffersonville, Indiana.   Stipulation 2.   The NF-103 was an unmanned,  all-welded
steel constructed covered hopper barge that measured 195 feet in length, 35 feet
in width, and 12 feet in depth;  empty, the NF-103 had approximately 10 feet
freeboard or, conversely, a 2 foot draft.   Stipulation 2-3;  Pl.Exh. 28;   Pl.Exh.
29.   The NF-103 was equipped with steel rolling hatch covers and was divided by
five transverse bulkheads into a raked bow, a square stern, and four athwartships
double bottom wing tanks that extended from port to starboard.   Stipulation 2-3;
Pl.Exh. 28;  Pl.Exh. 29.   Collectively, the wing tanks are identified as  void
tanks;  the four void tanks are referred to by number, beginning with number one
forward port and number one forward starboard.   Stipulation 3.   From port  to
starboard, the void tanks were not discrete and there was free communication of
air and water;  from forward to aft, however, the void tanks were discrete,
separated by watertight bulkheads.   Trial III 275; FN10  see Pl.Exh. 28.

Access to the void tanks was gained through manhole covers, which were located at
the forward end of each tank on the port side and at the stern end of each tank on
the starboard side.   Stipulation 3;  Pl.Exh. 28.   These manhole covers sat  flush
with the deck and were secured by twistlock mechanisms.   Stipulation 3.
Entrance to the bow and stern tanks was gained through manhole covers, which were
located approximately in the center of each tank.   Stipulation 3;  Pl.Exh.  28.
These manhole covers were hinged on coamings and each was secured by four boltdown
toggles, known as “dogs.”   Stipulation 3.  The manhole covers were designed to  be
watertight.   Pl.Exh. 28.

*11 The void tanks encased the hopper, an interior cargo compartment, whose floor
was 15 inches above the hull.   Stipulation 3;  Pl.Exh. 28.   The hopper’s  sides
were located 3 feet from the exterior walls of the barge and formed a coaming that
rose 3 1/2  feet above the deck of the barge.   Stipulation 3;  Pl.Exh. 28.    The
hopper had 8 hatch covers, numbered from the bow to the stern.   Stipulation 3.
The hatch covers rolled on rails and were not watertight.   Pl.Exh. 28.    Rather,
they were weathertight, allowing rainwater to drain off the top, but permitting
entry of waves and sea spray through the sides.   Stipulation 3.

C. Condition of the NF-103

In August 1988, Continental Grain Co., Inc. sold the NF-103 to Cargill as part of
a bulk sale of assets.   Trial II 139;  Stipulation 2.   Prior to  Cargill’s
acquisition of the barge, Continental Grain employed the barge in the
transportation of grain in the Chesapeake Bay and along the Atlantic Intracoastal
Waterway in North Carolina.   Stipulation 2.   A short while after  Cargill
purchased the NF-103, Ken Kiefer, logistics manager of Cargill’s Norfolk facility,
contacted George C. Lyon Jr. of Lyon Shipyard in Norfolk to inspect the NF-103 and
to arrange for any repairs of the NF-103.   Trial II 187;  Trial II  202-03.

In October 1988, Lyon placed the barge in drydock to analyze the hull, making a
visual inspection, testing the strength of the hull by tapping it with a hammer,
and taking audiogauge readings of the barge.FN11  Trial II 203-04;  see Pl.Exh.
51.   Audiogauge readings establish the thickness of a barge’s shell.    According
to the design plans of the barge, the hull thickness of the bottom plate of the
barge should be  3/8  inches, or .375 inches, thick.   Pl.Exh. 28.    The
audiogauge readings of the bottom plates and side plates below the water line
taken at Lyon Shipyard on October 12, 1988, depict the shoddy condition of the
bottom of the NF-103.   For example, on the starboard side the readings indicate
that the bottom plates ranged anywhere from .231 inches to .301 inches, with the
average reading being .2709 inches.   See Pl.Exh. 60.   Thus the bottom  plates
averaged .1041 inches less than the design specification of .375 inches.   See
Pl.Exh. 60.   The side plates of the barge were also listed at .375 inches  thick.
Pl.Exh. 28.   The audiogauge readings, however, showed that the side plates
extended from .270 inches to .351 inches thick, averaging .3104 inches thick.
See Pl.Exh. 60.   Notably, the readings indicate that the starboard bottom plates
were thinner than the port bottom plates.   See Pl.Exh. 60.   Furthermore, the  aft
half of the starboard bottom plates averaged .101 inches less than .375 inches.
See Pl.Exh. 60.

Additionally, Lyon found the entire barge to be in poor condition because of dents
in the hull where the barge had probably run aground.   Trial II 204.   Lyon  found
the hull to have heavy pitting, which was caused by rusting of the barge over a
great length of time, without proper maintenance.   Trial II 204.   Lyon  related
the poor condition of the barge to Kiefer and Howard J. Bohlander Jr., facility
manager of Cargill’s operations in Tidewater, and discussed with Kiefer and
Bohlander the amount of repair work needed by the NF-103 and two other barges.
Trial II 205.   Kiefer and Bohlander allocated approximately $40,000 per barge for
repairs.   Trial II 206.

*12 In November and December 1988, the NF-103 was drydocked at Lyon Shipyard for
repairs.   Trial II 207-11;  Pl.Exh. 52.   Of the $40,000 allocated to repair  the
NF-103, Cargill wanted Lyon Shipyard to use $21,500 to sand-sweep and paint the
barge.   Trial II 123.   The sand-sweep and painting were cosmetic in nature. FN12
Trial II 220.   Lyon Shipyard was to use the remaining $18,500 to make substantive
repairs.   Lyon Shipyard discovered that the NF-103 was in worse shape than
anticipated and that the estimate of repair work would cost more than $40,000.
After discussions with Charles W. Kight, job superintendent of Lyon Shipyard,
Kiefer agreed to allot $3,000 more to repair the NF-103, but cautioned Kight, ”
‘Don’t let it go over $43,000.’ ”  FN13  Trial II 124.

The Court finds that, given the poor condition of the NF-103, $40,000 was not a
substantial amount of money to repair the barge and apportioning approximately 54%
of that money for paint and other cosmetics is startling.   The supplemental
$3,000 that Bohlander and Kiefer was inconsequential in light of the repairs Lyon
Shipyard recommended.

Lyon Shipyard detected holes in the hull of the NF-103 that required the placement
of doublers.FN14  Trial II 207.   Lyon Shipyard placed approximately eight
doublers on the hull of the NF-103 in November and December 1988.   Trial II  207;
Trial II 125.   Lyon Shipyard also attempted to patch the cargo hold, which was  in
the worst shape.   Trial II 207.   In fact, Lyon characterized the cargo hold  as
being a cancer that “just kept growing and growing and growing.”   Trial II 220.
The cargo hold housed eight holes and the chine, the joint between the floor of
the cargo hold and the walls of the cargo hold, was thin and wasted.   Trial  II
127.   The chine area was so wasted that Kight could fit his hand through one  of
the holes.   Trial II 127.   Because Cargill needed the NF-103 to haul grain,  it
required Lyon Shipyard to stop work on the barge and to return her to Cargill.
Trial II 208;  Trial II 221.   Lyon Shipyard, therefore, did not have  an
opportunity to test the repairs that it had made on the barge.FN15  Trial II 208;
Trial II 220-21.

Subsequent to the repairs completed in November and December 1988, Cargill used
the NF-103 to transport soybeans from Bellhaven, North Carolina to Norfolk in
January 1989.   Stipulation 4.   Upon completion of the voyage, Cargill  discovered
that 20% of the grain was water-damaged because water in the void tanks had leaked
into the cargo hold.   Trial II 50-51;  Trial II 125;  Trial II 187-88;  Trial  II
210-11;  Pl.Exh. 55;  Pl.Exh. 61;  Pl.Exh. 63.FN16  Lyon, in conjunction  with
Robert L. Bradford Jr., of Tidewater Marine Services, Inc.,FN17 examined the
NF-103 and found 7 holes in the exterior plating of the barge.   Pl.Exh. 61.
Bradford further concluded that water remained in the void tanks.   Pl.Exh. 61.
The cargo hold itself revealed 8 holes in addition to leakage from places where
Lyon Shipyard had previously placed doublers, but had not had the opportunity to
test because of Cargill’s demand that Lyon Shipyard return the barge.   Pl.Exh.
61.

*13 Lyon Shipyard and Bradford discussed the necessary repairs that the NF-103
should undergo.   Specifically, because the manhole covers were not watertight,
Trial III 214-15;  Trial III 218;  Trial III 202-12;  Trial I 52, Lyon  and
Bradford recommended that Cargill repair the manhole covers.   Both Lyon and
Bradford further determined that the placement of sounding tubes was essential;
Cargill, however, “didn’t have the time or the money to perform [the recommended]
work.”   Trial II 224.   Lyon Shipyard repaired the NF-103 in accordance  with
Bradford’s survey and to the extent that Cargill ordered.   Indeed, even after
Lyon Shipyard completed repairs on the barge, water testing revealed even more
holes that Lyon Shipyard had not found through visual inspection.   See Pl.Exh.
61.   Lyon Shipyard water tested the NF-103 because the condition of the plating
of the barge would not allow air testing.   Trial II 211;  see supra note  15
(describing air testing).   After the repairs were made, Lyon again explicitly
stated to Cargill through Kiefer that the NF-103 was in “very bad shape” and that
the barge “should be checked daily for any signs of leakage or damage.”   Def.Exh.
64.FN18  Lyon warned Kiefer that Cargill would continue to have problems with the
barge unless the company was willing to spend more money for repair.   Trial II
212.   Kiefer’s supervisor, Bohlander, and Ron Laumbach, with Cargill’s Law
Department in Minneapolis, Minnesota, also had knowledge of the problems that the
NF-103 was having.  FN19  Pl.Exh. 56;  Pl.Exh. 57.

The Court expressly finds that the condition of the NF-103 was poor.   The barge
was not seaworthy.   See S.C. Loveland, 1939 A.M.C. at 24.   Cargill was  negligent
in failing to maintain a seaworthy NF-103.   See  In re Steuart Transp. Co.,  435
F.Supp. at 803 (finding that barge owner had no established procedure for
inspection of its own barges and stating that barge owners, “to operate
responsibly, must implement systems which delegate necessary duties to specific
individuals, so that one is able to ascertain that needed precautions have in fact
been carried out”), aff’d,  596 F.2d 609 (4th Cir.1979).   The plating of  the
sides and the hull was thin and wasted, often worn completely away.   Lyon
Shipyard extensively repaired the barge;  nevertheless, each time the barge
undertook a voyage, she acquired new leaks.   Cargill knew of the dilapidated
state of the NF-103, yet persisted in using the barge without heeding the advice
from Lyon Shipyard to check the barge daily for leakage.   The Court determines
that such continued use was both perilous and precarious.  Id.

D. Loading of the NF-103 in Seaford

On February 19-20, 1989, in accordance with the terms of the agreement between C &
P Towing and Cargill, the tug ANNE K., under the guidance of Jerald Tillett, towed
the NF-103 light from Cargill’s Norfolk facility to Cargill’s Seaford facility.
Stipulation 4;  Trial I 153;  Trial I 161;  Pl.Exh. 32.   The voyage  lasted
approximately 17 1/4  hours, Pl.Exh. 32;  cf. Trial I 153, during which time
Tillett did not notice any problems with the NF-103.   Trial I 153;  Trial I  161.
When the ANNE K. arrived in Seaford on February 20, 1989, Cargill’s plant was not
operating.FN20  Stipulation 5;  Pl.Exh. 32.   Therefore, loading of the  NF-103
could not begin until the next day.   On February 21, 1989, the ANNE K.  departed
Seaford.   Pl.Exh. 32.

*14 Ann Gouverneur, plant supervisor of Cargill’s Seaford facility, testified that
she was responsible for loading, shipping, and receiving grain on barges and that
she was further responsible for employees who loaded barges.   Trial I 42-43.
Gouverneur explained the procedure for loading a barge.   Trial I 43-45;  Trial  I
49-51.   Cargill employees first ensure that the barge is secured and will move
the barge into position using a cable winch.   Trial I 44.   Cargill  employees
then open the hatch covers, moving them to the stern of the barge and securing
them there with a chain.   Trial I 44.   Prior to loading, Cargill employees  weigh
the grain on hopper scales.   Trial I 43.   Cargill employees then conduct  the
grain via conveyer belt to a spout, which feeds the grain directly onto the barge.
Trial I 43.   The spout telescopes, allowing the operator to let the spout out  and
retract it, to raise and lower it, and to pull it fore and aft.   Trial I  44.
The operator of the spout starts loading grain in the bow, trimming the grain port
to starboard up to the edge of the coaming of the cargo hold.   Trial I  45.
Because the spout does not reach the entire length of the barge, Cargill employees
move the barge forward, using the cable winch.   Trial I 43;  Trial I 44.    After
loading, Cargill employees secure the cargo hatch covers by placing pins that are
attached to the covers themselves through brackets that are welded to the railing.
Trial I 50.   During the loading process, Cargill has sole control of the barge,
requiring tugboat crews and tugboats to “stay away, parked at another dock …”
See Trial I 53.

On February 21, 1989, Cargill commenced loading the NF-103 with winter wheat.
Stipulation 5.   Because of rain, however, Cargill ceased loading the NF-103 after
approximately 2 1/2  hours.   Stipulation 5;  see Trial I 47.   Cargill  employees
then closed the rolling hatch covers to preserve the wheat from the rainwater.
Stipulation 5;  Trial I 47.   Cargill could not resume loading the NF-103  until
Thursday, February 23, 1989.   Stipulation 5;  Trial I 47.   When  Cargill
completed loading the barge at approximately 4:00 p.m. on February 23, 1989,
Stipulation 5;  Trial I 47-48;  Trial I 67, the NF-103 carried 52,796.25 bushels
of wheat, Stipulation 5, which had a test weight of 61.8 pounds of wheat per
bushel.   Pl.Exh. 73;  Trial I 68.FN21  Again, Cargill employees secured the  hatch
covers.   Stipulation 5.   The laden NF-103 had a draft of approximately 10  feet
forward and 10 feet 4 inches aft.FN22  Stipulation 5.   Hence, the NF-103 had  a
freeboard of 2 feet forward, 1 foot 8 inches aft, and the distance from the water
to the top edge of the coaming was 5 feet 6 inches forward, 5 feet 2 inches aft.
Stipulation 5.   The laden NF-103 also listed approximately 2 inches to starboard,
which the Court determines to be a de minimis list.FN23  Trial III 10;  Trial I
109;  contra Trial I 53.

When the NF-103 arrived at Cargill’s docks in Seaford and before she departed with
the RANDY D., Gouverneur only made a cursory inspection of its condition and
readiness for sea.   Trial I 51;  Trial III 182.   She did not inspect the  void
tanks to make sure they were clear of water, nor did she physically inspect the
manhole covers to make sure they were watertight.   See Trial I 51-52.   In  fact,
Gouverneur would only check the manhole covers if she saw that they were loose.
Trial I 52.   Gouverneur’s inspection, however perfunctory, had the effect of
guaranteeing to the tug that the barge was seaworthy.  FN24  A. Parks at 213
(citing  A.S. Wikstrom, Inc. v. The Tug JULIA C. MORAN, 190 F.Supp. 250, 1961
A.M.C. 536 (S.D.N.Y.1960);   Schuylkill Transp. Co. v. Banks, 1945 A.M.C. 1500,
1504 (3d Cir.1945);   Newtown Creek Coal & Coke Co. v. Barge MAURICE R., 1933
A.M.C. 273, 280 (E.D.N.Y.1932)).

E. The Voyage of the RANDY D. and the NF-103

*15 The RANDY D. was built in 1942 in Port Arthur, Texas.   Pl.Exh. 40;   Pl.Exh.
41;  Stipulation 4.   She is owned by Northeast Towing and was issued  a
Certificate of Documentation on April 28, 1983, in Norfolk.   Pl.Exh. 41;
Stipulation 4.   The tug is classified to trade the coast;  she is a single  screw
tug, with plumb stem, has a rounded mid-body, with an elliptical stern and steel
deckhouse.   Pl.Exh. 40;  Pl.Exh. 41;  Stipulation 4.   The RANDY D. is 87.8  feet
in length, has a beam of 23.1 feet, and is 9.7 feet in depth.   Pl.Exh.  40;
Stipulation 4.   The RANDY D. has a minimum operating freeboard of 1 1/2  feet  and
is propelled by a diesel fueled GM/567 engine.   Stipulation 4.  Stored on  the
tug’s stern deck is an 8 inch circumference nylon towing hawser, which the crew
may manually retrieve by using a capstan on the deck.   Trial III 60;  Trial  III
63;  Stipulation 4.   Positioned on the stern is a floodlight that illuminates  the
stern of the tug, enabling the crew to place a hawser and to tie lines.   Trial  I
96;  Trial III 20.   The illumination of the flood, however, could not reach  a
barge that the tug was towing on a 250 feet hawser.   Trial III 20.

On February 22, 1989, Thomas R. Douglas, captain of the RANDY D., arrived at
Cargill’s Chesapeake facility to tow the light NF-102, a Cargill barge, to
Seaford.   Pl.Exh. 6.   Accompanying Douglas as crewmembers of the RANDY D.  were
Diane Bandelean, Timothy O. Smith, Steven Mitchell, and Cecil Nelson.   Pl.Exh. 6.
Bandelean served as mate, Trial I 75;  Smith served as deckmate.   Trial III  82.
Mitchell served as engineer;  Nelson, the cook.   Pl.Exh. 13.   Smith,  as
deckmate, was responsible for handling lines on the barges that the RANDY D.
towed, which required him to walk along the deck of the barges.   Trial III  85-86.
As a general rule, Smith would visually inspect the barge before handling lines so
that he did not trip over unsecured manhole covers or anything else.   Trial III
89.   The purpose of Smith’s inspection did not involve examination of the barge
for seaworthiness, although he would report peculiarities.   Trial III 89.    In
any event, Smith’s inspection was not required to be detailed and extensive.   See
Nat G. Harrison Overseas Corp., 516 F.2d at 94;   Massman Constr. Co., 462 F.Supp.
at 1369;   McDonough Marine Serv., Inc., 465 F.Supp. at 934, aff’d,  608 F.2d  203
(5th Cir.1979);  Dow Chemical Co., 428 F.Supp. at 971-72.

The RANDY D. reached Seaford on February 23, 1989, at approximately 11:30 a.m.,
while Cargill was still loading the NF-103.   Pl.Exh. 6;  Trial III 6;  Trial  III
82.   Douglas placed the NF-102 alongside the NF-103 at Cargill’s pier and placed
the RANDY D. next to the NF-102.   Pl.Exh. 31;  Trial III 6;  Trial III  82.
After Cargill completed loading the NF-103, the RANDY D. moved the NF-103 upriver
to another dock and shifted the NF-102 into the loading berth at Cargill.
Pl.Exh. 31;  Trial III 6;  Trial III 8.   At 6:30 p.m. on February 23, 1989,  the
RANDY D. finished shifting the barges and prepared to tow the NF-103 from Seaford
to Norfolk.   Pl.Exh. 6;  Trial III 8.   At 6:40 p.m., however, Douglas  decided
not to proceed because of inclement weather and stayed in Seaford overnight.
Pl.Exh. 6;  Trial III 9.   On February 24, 1989, due to continuing snow and  high
winds, the RANDY D. remained in Seaford for most of the day.   Pl.Exh. 6;   Pl.Exh.
19;  Trial III 9;  see Trial I 55.   During this time, the deck of the  barge
accumulated approximately 8 to 9 inches of snow.   Pl.Exh. 15.

*16 The applicable weather forecast FN25 changed favorably on February 24, 1989,
and the weather increasingly bettered.   From the Patuxent River south to Windmill
Point, the National Weather Service posted a small craft advisory,FN26 with winds
gusting from the north at 25 to 30 knots and occasionally heavy snow.   Pl.Exh.
19.   Waves were forecast for this region at near 3 feet.   Pl.Exh. 19.    Winds
for the night of February 24, 1989, were forecast to diminish to 15 to 25 knots
from the northwest and the waves were expected to range from 2 to 3 feet.
Pl.Exh. 19.   Saturday, the forecast was even more favorable.   Winds out of  the
west were anticipated at near 15 knots;  waves were forecast at 1 to 2 feet.
Pl.Exh. 19.

In addition to the improving weather and weather forecast was the fact that the
RANDY D. with the NF-103 in tow would need a substantial amount of time to travel
south on the protected Nanticoke River to the Chesapeake Bay.   Pl.Exh. 6;   Trial
III 14.   Even that portion of the Chesapeake Bay that the RANDY D. and the  NF-103
were to travel was protected from north winds and northwest winds to some extent
because it was in the lee of Bloodsworth Island, South Marsh Island, Smith Island,
and Tangier Island.   Pl.Exh. 7.   Thus, at 5:20 p.m. on February 24,  1989,
Douglas reasonably decided to quit Seaford during flood tide with the NF-103 in
pushing gear.   Pl.Exh. 6;  Trial III 11;  see Trial I 172;  Stipulation 6.    The
decision to proceed was within his discretion as master.   S.C. Loveland Co.,
Inc., 100 F.2d at 974, 1939 A.M.C. at 26;  see Steamtug ALICE MORAN, 67 F.2d at
605, 1933 A.M.C. at 1630 (requiring courts to test decisions of tug masters at
time decisions were made).

The tug and barge proceeded south on the Nanticoke River for approximately 5 hours
without incident to either the tug or to the barge.   Douglas then ordered the
crew of the RANDY D. to place the NF-103 on a 250 foot hawser.   Stipulation  6.
Throughout the testimony, no evidence was presented that the crew released more of
the hawser line or that the hawser strained to the point of parting.FN27  By this
time, the RANDY D. and the NF-103 travelled only so far as the town of Nanticoke,
somewhere in the vicinity of what was then buoy number 4.   Trial III 14.    While
the RANDY D. was still in pushing gear, the wind was blowing approximately 25 or
30 knots.FN28  Trial III 14.   By the time the crew of the RANDY D. placed  the
barge on the hawser, the wind had subsided to 20 or 25 knots and the seas were
approximately 1 1/2  feet.   Trial III 14.   Douglas maintained close watch  over
the weather and the weather forecast.   Trial III 10.

At 11:30 p.m. on February 24, 1989, the RANDY D. and the NF-103 passed the number
1 buoy on the Nanticoke River.   Pl.Exh. 6;  Stipulation 6.   Bandelean took  over
the watch from Douglas at 11:30 p.m. and stood watch from 11:30 p.m., February 24,
1989, until 5:30 a.m., February 25, 1989.   Stipulation 6;  Trial I 86;  Trial  I
89.   Douglas, however, remained in the wheelhouse until approximately 2:30 a.m.,
February 25, 1989, at which time the tug and barge had reached a point between the
number 10 buoy and the number 9 buoy in Tangier Sound, near Janes Island.    Trial
III 17;  Pl.Exh. 38.

*17 Although Douglas made the decision to proceed through Tangier Sound, Bandelean
set the course for the tug and the barge for this portion of the journey by using
charts.   Trial I 87-88;  Trial I 91;  see Pl.Exh. 8;  Pl.Exh. 38.    Bandelean
noted that, when she assumed the watch, the waves were from 1 1/2  to 2 feet in
height, Trial I 88, and the winds were 25 or 30 knots.   Trial I 106.   As the  tug
and the barge moved southward, the seas increased somewhat to approximately 3 feet
in height.   Trial I 88.

The RANDY D. and the NF-103 reached Tangier Light at 4:45 a.m., February 25, 1989.
Pl.Exh. 6;  Trial I 90.   Toward the end of Bandelean’s watch, at  approximately
5:30 a.m., Bandelean noticed that the barge had assumed a list of approximately 4
inches to starboard.   Trial I 88-90.   Bandelean reported the list to  Douglas,
who relieved her at 5:40 a.m.   Trial I 92-93.   With the exception of noting  the
list, Bandelean did not report any other occurrences.

During the course of the trial, the Court heard a substantial amount of testimony
from tugboaters about listing of barges.   See, e.g., Trial I 98-100;  Trial  I
157-159;  Trial I 162;  Trial III 94-97.   The testimony revealed that barges  that
have slight lists are not uncommon and that a 2 to 4 inch list is not significant.
Trial III 102;  Trial I 158.   In particular, Jerald Tillett and Bryan A.  McGowan
provided the most credible testimony on the subject.   Tillett was licensed by the
United States Coast Guard to operate 200 miles offshore and inland approximately
15 years ago;  he has served as a tug captain for 6 years.   Tillett has  towed
barges that started voyages with 6 to 8 inch lists from the southern end of
Tangier Sound to the open Chesapeake Bay.   Trial I 157.   Such lists,  he
testified, did not disturb him.   Trial I 157.   Tillett further testified  that,
if a barge developed a list over 6 to 8 inches during a voyage, he would attempt
to hold up to investigate the barge’s condition but only if he were in a position
to do that.   Trial I 159.

McGowan has held a license as master for freight and towing vessels up to 1,000
gross tons since 1971.   He has 33 to 35 years experience as a tugboater and  is
presently a tugboat captain.   McGowan testified that a 3 to 4 inch list would  not
cause great concern, but that, if possible, he would turn back to investigate the
problem.   Trial III 111.   Both witnesses conditioned their decisions to  turn
back to investigate a listing barge on safety factors.   See Trial III 111-112;
Trial III 114;  Trial I 158.

Therefore, the Court finds that, at the time the NF-103 had a 4 inch list, Douglas
properly did not perceive a problem severe enough to turn back to the barge to
investigate.   See Steamtug ALICE MORAN, 67 F.2d at 605, 1933 A.M.C. at 1630
(affording tug masters wide range of discretion).   The Court further finds that,
at the time the NF-103 had a 4 inch list, Douglas would have endangered the tug,
the barge, the crew, or all three by turning back to investigate the list.
Specifically, Douglas risked losing the barge completely at that time for not
maintaining tension on the hawser, puncturing the barge with the tug, or losing a
crew member.FN29  Trial III 27.   Douglas’ actions in continuing the journey  were
based on 42 years experience travelling the Chesapeake Bay as a tugboater and were
based on safety concerns.   The Court concludes that these actions were prudent
under the circumstances.   S.C. Loveland Co., Inc., 100 F.2d at 974, 1939 A.M.C.
at 26;  see Steamtug ALICE MORAN, 67 F.2d at 605, 1933 A.M.C. at 1630;  cf. Ocean
Burning, Inc., 1974 A.M.C. at 2315 (finding that tug master who did not turn tug
back to investigate cause of barge’s list was “clearly not negligent”).

*18 When Douglas assumed the watch from Bandelean the waves were 2 to 2 1/2  feet
and the wind was, at most, 25 knots from the northwest.   Trial III 22.    Because
of the season, day broke at approximately 6:45 a.m. on February 25, 1989.   Trial
III 22.   Thus, Douglas determined to continue on course and await daylight to see
what, if anything, he should or could do about the listing barge.   Trial III  22;
see  International Salt Co., Inc., 15 F.Supp. at 730, 1936 A.M.C. at 1222, aff’d,
92 F.2d 65 (2d Cir.1937), cert. denied,  302 U.S. 764 (1938).   The RANDY D.  was
riding smoothly in the water, although water ran across her stern because she was
low.   Trial III 23.   No water came across the tug’s bow, which sat 8 to 9  feet
above the water.   Trial III 23.

When dawn arrived at approximately 6:45 a.m., see Trial III 23, Douglas saw that
the NF-103 was even lower in the starboard stern than she had been at 5:40 a.m.
Trial III 23.   In fact, the list increased to approximately 10 to 12 inches,
leaving as little as 8 inches of freeboard on her starboard side and permitting
approximately 1 1/2  to 2 feet of sea to roll over her stern quarter.   Trial  III
58.   To cushion the buffet of the waves, which were rising to 2 1/2  to 3  feet,
Douglas changed course to due south, Trial III 24, and slowed the tug from
approximately 5 to 6 knots to 3 to 3 1/2  knots.   Trial III 25;  Trial III  59.
The effect of changing course placed the seas to the stern of the barge, which
allowed the barge less movement port to starboard.

The Court determines that, given a barge that has the potential of capsizing
suddenly and without warning and given the celerity with which the barge assumed
such a dramatic list, Douglas’ decision not to turn back to investigate the 10 to
12 inch list of the NF-103 and to place a crew member aboard the barge was
reasonable.   See Steamtug ALICE MORAN, 67 F.2d at 605, 1933 A.M.C. at 1630.    The
Court further determines that Douglas’ decision not to return to Tangier Sound to
beach the barge was sound.   Trial III 104.   The evidence established  that
Douglas did not have time to beach the barge, see Otto Candies, Inc., 1965 A.M.C.
at 1034 (finding tug not liable where tow’s unseaworthiness manifested itself too
late for tug to prevent list and consequent loss of cargo).   Such a measure  would
probably have endangered the barge more because Douglas would have had to maneuver
the barge considerably, allowing it to roll port to starboard, and would have
placed the bow of the barge directly into the seas, possibly allowing it to gather
ice.   Trial III 101;  see supra note 28 (discussing Dail’s northward  journey).
Douglas would have probably beached the tug as well.   Trial III 101.   The  Court,
therefore, rejects counsel for plaintiff’s suggestion that the only reasonably
prudent action for Douglas was to have beached the barge, but see Curtis Bay
Towing Co. of Virginia, Inc., 200 F.2d at 35, 1952 A.M.C. at 2036 (holding that,
where facts allowed, good seamanship required beaching of barge);  although not a
common occurrence, the act of towing a barge that had capsized was well within
Douglas’ discretion.   See Steamtug ALICE MORAN, 67 F.2d at 605, 1933 A.M.C. at
1630 (requiring courts to test reasonableness of tug masters’ decisions at time
they were made).

*19 At 7:10 a.m. on February 25, 1989, the NF-103 rolled to starboard at 37’36’07”
longitude, 76’06’07” latitude;  the position on charts of the area shows this to
be due west of the Rappahanock River.   Pl.Exh. 6;  Pl.Exh. 8;  Stipulation  6-7;
Trial III 25.   The barge turned completely over at this time, releasing its cargo
into the Chesapeake Bay;  Douglas, worried that the bridles holding the hawser to
the barge would fall off their bits, which would permit the barge to sink,
increased power, straining the towing gear so the barge would not sink.   Trial
III 25.   From 5:40 a.m. until 7:10 a.m., the RANDY D. travelled approximately 5.7
nautical miles at approximately 3.4 knots.   Trial III 50;  Trial III 249.    At
7:30 a.m., Douglas contacted the United States Coast Guard at Milford Haven,
Virginia.   Pl.Exh. 6.   At 8:40 a.m., the NF-103 righted herself and her  stern
immediately settled to the bottom of the Chesapeake Bay.   Pl.Exh. 6;  Trial  III
61.   The coordinates where the NF-103 ran aground are 37’32’04” longitude,
76’06’05” latitude, or due west of the northern point of the mouth of the
Piankatank River.   Stipulation 7;  Pl.Exh. 8.

At 12:30 p.m., February 25, 1989, Douglas requested that the Coast Guard give
notice to mariners of the navigational hazard of the barge by placing a buoy.
Pl.Exh. 6.   Douglas maintained a taut hawser until the Coast Guard arrived at
2:00 p.m., at which time the bow of the barge remained out of the water.    Pl.Exh.
6;  Pl.Exh. 12; FN30  Trial III 63;  Stipulation 7.   After questioning  Douglas
and his crew, at 2:40 p.m., the Coast Guard carried Smith with them to retrieve
the towing bridles and the hawser from the barge.   Pl.Exh. 13;  Pl.Exh. 14.    The
Coast Guard also placed two lights on the barge and a lighted buoy in the water to
warn mariners.   Pl.Exh. 13;  Pl.Exh. 14.   The Coast Guard released the RANDY  D.
at 4:00 p.m., which then set course for Norfolk, arriving at 9:00 p.m.   Pl.Exh.
13;  Pl.Exh. 14.

F. Salvage of the NF-103

On February 26, 1989, Cargill contacted Alyn Fife to superintend the salvage of
the NF-103.   Trial III 254.   Fife approached Lane A. Briggs of Rebel  Marine
Service, Inc. to survey the wreck of the NF-103.   Trial III 254;  Pl.Exh.  16.
At 4:00 a.m., when Briggs passed the NF-103 to assemble the diving crew, he
noticed the bow of the barge still protruding from the water.   Pl.Exh. 16.    At
12:45 p.m., Briggs returned to the site of the sunken NF-103, which had completely
submerged.   Pl.Exh. 16.   Because of poor visibility in the water, the  diving
crew was unable to gather much information about the barge except that the cargo
hold was completely empty of cargo and that all of the hatch covers were missing.
Pl.Exh. 16.

Fife then contacted Ellsworth Salvage, Inc. to raise the NF-103.   See Trial III
255;  Walling Dep. 4; FN31  Def.Exh. 58.   Ritner E. Walling, president  of
Ellsworth Salvage, Inc. testified that he had a diver inspect the barge prior to
raising it.   Walling Dep. 8.   Walling holds an engineering degree from  the
Massachusetts Institute of Technology and has been in the salvage business for
over 30 years.   Walling Dep. 32.   The diver corroborated the account of  the
condition of the barge that Rebel Marine Service, Inc. had given.   Compare
Walling Dep. 8-9 with Pl.Exh. 16.   On May 12, 1989, Walling raised the barge,
using the procedures that he normally would where a barge is generally
structurally intact.   Walling Dep. 10.   Specifically, Walling raised the  bow
with compressed air and raised the stern with a derrick.   Walling Dep. 10.
Walling could not raise the stern with compressed air because of the amount of
leaks in the area.   Def.Exh. 58.

*20 After the NF-103 was raised, Walling inspected the barge’s condition while it
was in drydock in Newport News, Virginia.   Def.Exh. 58;  see Pl.Exh. 49.   On  May
30, 1989, Walling related to Cargill that the NF-103 was a total loss.   Walling
found holes in the hull of the bow, near the curve of the rake, which he plugged
with wooden plugs approximately  3/16  to  1/4  inch large.   Walling Dep.  11-12;
see Trial III 256.   Walling further found severe rusting in the rake compartment,
which existed prior to the sinking.   Walling Dep. 11-13;  Walling Dep.  26;
Walling Dep. 28;  Def.Exh. 58.   Walling also determined that the barge  had
numerous holes throughout the hull plating.   Walling Dep. 20-21;  Walling Dep.
24;  Def.Exh. 58.   Some of these holes were as much as a couple of inches  wide,
Walling Dep. 33, and some caused heavy damage in the form of rusting to the area
of the two stern void tanks.   Def.Exh. 58.   The Court determines that  such
rusting existed prior to the capsize and sinking of the NF-103.   See supra s  C
(relating poor condition of NF-103).

In addition to the general rusting of the barge and thinness of the plating,
post-salvage inspection revealed that all of the manhole covers were missing,
except for those on the bow rake, stern compartment, and on starboard void tanks 2
and 3.   Def.Exh. 58;  see Pl.Exh. 49.   Photographs expose the deteriorated  and
corroded nature of the manholes.   Pl.Exh. 48-A;  Pl.Exh. 48.   The  Court
determines that the severity of rusting of the manholes indicates that the
condition existed prior to the sinking.   See supra s C (describing condition of
NF-103).   Many of the crossbars FN32 securing the manhole covers were also
missing.   Trial III 200-01;  Trial III 204;  Trial III 209;  see Pl.Exh.  48-A;
Pl.Exh. 48.   Those crossbars that were missing were either not present at the
time of the capsize of the NF-103 or were not present at the time the NF-103 left
Lyon Shipyard in January 1989.   Trial III 213.   Because of the missing  crossbars
and because of the severely rusted condition of the manholes, the Court finds that
the manhole covers were not watertight at the time of the voyage from Seaford in
February 1989.   Trial III 215;  Trial III 229.

G. Proximate Cause of the Capsize and Sinking of the NF-103

The Court finds that the unseaworthiness of the NF-103, which was caused by
Cargill’s negligence, was the sole proximate cause of the capsize and sinking of
the barge.   See  In re Steuart Transp. Co., 435 F.Supp. at 805-06, aff’d,   596
F.2d 609 (4th Cir.1979).   Specifically, the condition of the plating of the hull
and of the manhole covers permitted the ingress of water into the void tanks.
See supra s C (describing condition of NF-103);  Trial III 129.   Hendrik F.  van
Hemmen provided the most credible testimony on the causation issue.FN33  See Trial
III 128-70.   Van Hemmen is an engineering and marine consultant with Francis A.
Martin and Ottaway, Inc., specializing in forensic engineering, surveying, and
computer designing.   Resume of Hendrik F. van Hemmen.FN34  Van Hemmen is  a
professional engineer in the state of New York, having earned a Bachelor of
Science degree in Aerospace and Ocean Engineering from the Virginia Polytechnic
Institute and State University in Blacksburg, Virginia.   He is a member of the
Society of Naval Architects and Marine Engineers and of the American Institute of
Aeronautics and Astronautics.   Resume of Hendrik F. van Hemmen.

*21 The Court concludes that the void tanks filled with water as the result of any
one of, or a combination of, three scenarios.   Trial III 129.   First, when  the
NF-103 was delivered to Cargill in Seaford, she already had approximately 50 tons
of water in the void tanks.   The NF-103 arrived in Seaford with a 2 feet of  draft
in the stern, a little more in the bow.   After Cargill completed loading the
NF-103 with grain, the barge’s draft was approximately 10 feet forward, 10 feet 4
inches aft.   Stipulation 5.   Using a computer program, van Hemmen  determined
that the fresh water displacement FN35 of the laden NF-103 was approximately 2000
tons.   Trial III 132-33.   Thus, given the draft of the laden barge, the  barge
had excess weight of approximately 100 tons.   Trial III 133-34.   This  excess
weight was in the form of water, which was located primarily in void tank number 2
starboard and which caused the barge to list approximately 2 inches to starboard.
Trial III 147.

Second, during the voyage of the NF-103 under tow from Seaford, wave water entered
the void tanks through the rusty, non-watertight manhole covers.   Cf.  S.C.
Loveland Co., Inc., 100 F.2d at 973, 1939 A.M.C. at 24 (holding that leak was
result of “the extreme thinness of the [barge’s] plates resulting from corrosion,
a condition that could have been discovered by proper inspection”).   Wave water
would not have entered the cargo hold because the seas could not reach that high.
Trial III 137.   The maximum height of the waves was four feet and the  maximum
speed that the wind attained was 35 knots, which was mostly wind gusts.   See
supra notes 26 and 27 and accompanying text (finding that wind speed did not
exceed 35 knots).   The effect of the wind on the water was to create waves  that
were regular in shape.   Trial III 138.   From the surface of the water to the  top
edge of the coaming was 5 feet 6 inches forward, 5 feet 2 inches aft.
Stipulation 5.   In calm seas, the NF-103 would have been supported evenly by
water.   See Trial III 138.   In 4 foot seas, the NF-103 was supported by  waves,
which lifted the barge, adding displacement.   Trial III 138.   The trough of  the
wave dropped the barge, decreasing displacement.   Trial III 138.   The effect  of
such a decrease in displacement allowed half of the height of the waves to rise
above the freeboard, which still was below the top edge of the coaming.   Trial
III 138-39.

The waves, however, did wash along the deck of the barge where the manhole covers
were located.   Because the manhole covers were not watertight or were not secured
properly by Cargill, water entered the void tanks.   Trial III 143-44.    Because
the barge already had a list to starboard, the water entering the void tanks
flowed to starboard and caused the barge to settle in the stern.   Trial III  144;
Trial III 164.   The water in the void tanks at the start of the voyage caused  the
NF-103 to list to starboard;  the waves entering the void tanks during the voyage
caused list of the NF-103 to increase;  the increased list of the NF-103 allowed
more water into the void tanks;  more water in the void tanks caused the list of
the NF-103 to increase.   Trial III 142-44;  Trial III 149-50.   The cycle  finally
ended when enough water entered the void tanks to cause the waves to immerse the
barge on the starboard side, capsizing her.   Trial III 144.

*22 Third, water entered the void tanks through holes in the plating of the hull.
The Court has already determined that the plating of the NF-103 was rusty and had
numerous holes.   See supra s C (discussing condition of NF-103).   When the  barge
arrived in Seaford, she had approximately 50 tons of water in the void tanks.
Trial III 167.   After Cargill completed loading on February 23, 1989, and after
the RANDY D. commenced travel on the voyage to Norfolk, an additional 50 tons of
water entered the void tanks.   Trial III 168.   Van Hemmen reasoned that  that
amount of water would enter the void tanks in 48 hours, which is approximately the
amount of time from the loading of the barge to the capsize and sinking of the
barge.   See Trial III 168.   The water would be able to flow through a hole  as
small as a man’s thumb at the rate of approximately 33 pounds per minute.    Trial
III 167-68.

The Court accepts van Hemmen’s conclusions regarding the cause of the capsize and
sinking of the NF-103 as its own conclusions.   Water existed in the void tanks  at
the time the NF-103 arrived in Seaford, or entered through the void tanks through
holes in the plating or through the manhole covers, or by any combination of these
three conditions of unseaworthiness of the NF-103.

III. Conclusion

The Court finds that Douglas and the crew of the RANDY D. acted reasonably in
departing Seaford.   S.C. Loveland Co., Inc., 100 F.2d at 974, 1939 A.M.C. at 26.
They also acted prudently while on the voyage and when they noticed the list of
the barge and when they noticed the list increase.  Id., 1939 A.M.C. at 26;  Ocean
Burning, Inc., 1974 A.M.C. at 2311-15.   Consequently, the Court holds that
Douglas and the crew were not responsible for the capsize and sinking of the
NF-103.   Plaintiff’s theory of liability requires the Court to view defendants’
actions with perfect hindsight.   The Court is not willing to do so;   defendants’
actions were prudent under the circumstances.    Steamtug ALICE MORAN, 67 F.2d  at
605, 1933 A.M.C. at 1630.

The Court holds that the sole proximate cause of the capsize and sinking of the
NF-103 was the unseaworthiness of the NF-103.   The barge was rusting and leaky.
She took on water prior to loading in Seaford and accumulated more during the
course of her journey south on the Nanticoke River and into the Chesapeake Bay.
Cf. Otto Candies, Inc., 1965 A.M.C. at 1034 (finding no negligence on part of tug
where unseaworthiness of tow manifested itself “much too late, even with the
exercise of due diligence and reasonable care, to prevent the damage to the barge
and the loss of a portion of its cargo”).   The great accumulation of water
entered through the non-watertight manhole covers or through holes in the thin and
wasted plating of the hull, either or both.   Defendants were not responsible for
the capsize and sinking of the NF-103.

The Court holds that towage contracts do not contain an implied warranty of
workmanlike service.   Even if such a warranty existed, the Court rejects the
notion that a tug may be held strictly liable for the loss of its tow.    The
existence of an implied warranty is unnecessary because the language of the
warranty is embodied in the concept of maritime negligence, which requires tugs to
exercise due diligence and reasonable care.   The Court determines that broadening
the scope of a tug’s liability ad infinitum is wholly unwarranted under the
concept of an implied warranty of workmanlike service.   The concept of negligence
enunciated in The WHITE CITY has served courts well and no logical reason exists
to abandon the rule.

*23 Therefore, the Court ORDERS the Clerk to enter judgment in this case in favor
of defendants in accordance with this Opinion and Order.   The Clerk shall mail a
copy of this Opinion and Order to all counsel of record.

FN1. The Court has reviewed the entire record in this case, including
testimony that occupies over 800 pages of transcript and over 70 exhibits
introduced at trial.

FN2. References in this form are to the Order on Final Pre-Trial Conference,
filed December 20, 1989.

FN3. References in this form are to evidence introduced at trial as
Plaintiff’s Exhibits.

FN4. The court of appeals also addressed the issue whether the tug was
liable for the damage to the cargo of the FRED SMARTLEY, JR. as a result of
the collision.    S.C. Loveland Co., Inc., 100 F.2d at 973, 1939 A.M.C.  at
24.   The court found that the FRED SMARTLEY, JR. was unseaworthy prior to
the fateful voyage.   Specifically, the barge had two leaks, of which one
“could not have been caused by the rubbing of [the other barge] against the
SMARTLEY but was the result of the extreme thinness of the SMARTLEY’S plates
resulting from corrosion, a condition that could have been discovered by
proper inspection.”  Id., 1939 A.M.C. at 24.   The court held that  the
inspection rested with the owner of the FRED SMARTLEY, JR., who “was
responsible for the seaworthiness of that barge.”  Id., 1939 A.M.C. at 24.
For this Court’s discussion of the condition of the NF-103 and the proximate
cause of the capsize and sinking of the NF-103, see infra ss C and G.

FN5. In In re Steuart Transp. Co., the trial court stated:

The tug captain should not be expected to follow the [person in charge of
the barge] and check to see that each dog or fitting is secure.   Nor
would it be reasonable for the captain to inspect the barge in every
detail for seaworthiness.   He is entitled to rely on the expectation that
he has been furnished a sound vessel …

In re Steuart Transp. Co., 435 F.Supp. at 804, aff’d,  596 F.2d 609 (4th
Cir.1979).

FN6. In Fairmont Shipping Corp., the court cited Tebbs and, in so citing,
used explicit language that an implied warranty of workmanlike service had
been applied to “dead tows.”   Fairmont Shipping Corp., 511 F.2d at 1258.
The Court finds that the use of such restrictive language demonstrates that
the court in Fairmont Shipping Corp. recognized the limited application of
the rule in Tebbs.

FN7. In Tebbs, the trial court made its ruling based upon the specific
findings of fact that the master of the tug had knowledge of or should have
known of the placement of the lines running from the dock to the SANDS
POINT, that the lines would not prevent forward movement of the ship until
she after she had travelled a substantial distance, that the yacht was less
than that distance, and that the ship was “dead.”   Tebbs, 407 F.2d at
1057-58.   In this case, the Court makes no findings that the master had
knowledge or should have known of the unseaworthy condition of the NF-103 or
any other such fact.

FN8. Interestingly, the court in Fairmont Shipping Corp. addressed a fact
pattern similar to that in Tebbs in that the trial court had found that the
tow was a “dead ship.”   Fairmont Shipping Corp., 511 F.2d at 1257.    The
trial court’s finding in Fairmont Shipping Corp. was not appealed.  Id.  The
Court finds that the rule enunciated in Fairmont Shipping Corp. is
necessarily based upon the finding that the tow was a “dead ship.”   In
accordance with its ruling regarding the limited scope of Tebbs, the Court
rules that the scope of Fairmont Shipping Corp. is similarly limited.

FN9. In Tebbs, indemnification was at issue.   Tebbs, 407 F.2d at 1057.
Applying an implied warranty of workmanlike service to the towage contract
in this case would unfairly shift liability from the tow, who is legally
responsible for its vessel, to the tug, who is responsible only for breach
of its duty to act prudently.   Such an application would hold the tug
liable for a loss that it did not create and would impose too high a
standard upon the tug.

FN10. References in this form are to the transcript of the trial by volume
number.

FN11. In October 1988, Lyon Shipyard also repaired one hole in the bottom
plates of the NF-103, which was the size of a pencil.   Trial II 115.

FN12. The purpose of a sandblast is to determine the condition of the metal
plate that the shipyard is to repair.   Trial II 219.   A sandblast is  a
normal procedure, but the NF-103 could not withstand a sandblast because of
the condition of the metal.   Trial II 230.   Thus, Lyon Shipyard was  forced
to resort to the less damaging process of sweeping sand across the metal of
the barge.   Trial II 219.

A comparison of pictures of the NF-103 taken while Continental Grain still
owned the barge with pictures of the NF-103 after the repairs at Lyon
Shipyard illustrates the general rusted condition of the barge.   Compare
Pl.Exh. 62 with Pl.Exh. 2.

FN13. Kiefer testified that, until he was involved in the acquisition of the
NF-103 and the other barges formerly owned by Continental Grain, he “had
absolutely no experience in handling barges …” Trial II 187.   The NF-103
underwent at least $65,000 worth of repairs at Lyon Shipyard and probably
could have withstood substantially more.   Trial II 192.   Consequently,  the
Court finds that Kiefer’s lack of experience with barges in late 1988 and
early 1989 combined with the fiscal constraints that Cargill imposed,
resulting in the miscalculation of the funds necessary to properly repair
the barge.

FN14. A doubler is a steel patch that is placed over the existing plate and
welded to that plate.   Trial II 129.   The shipyard worker knows to place  a
doubler over a hole by tapping a hammer around the hole and listening to the
sound, which indicates the thickness of the plate.   Trial II 129.    A
doubler covers not only the hole, but also the steel around the hole.
Trial II 129.

A doubler is contrasted with an insert, by which a shipyard worker removes
the wasted metal, replacing it with a new plate.   Trial II 228.    An
insert is recognized to be more effective than a doubler, but a shipyard
must comply with the customer’s request, Trial II 228, although the Coast
Guard does not prefer use of doublers.   Trial II 132.

FN15. Such tests might have included an air test, which involves the
application of 2 pounds per square inch of air pressure on the repaired
area, which would be sealed airtight and watertight.   Subsequently, the
tester soaks the area to inspect for leaks and takes a pressure gauge
reading.   Trial II 208-09.   Even if Cargill had not hastily retrieved  the
NF-103 from Lyon Shipyard, the shipyard could not have performed this
particular test because of the wasted condition of the barge’s plating.
Trial II 211;  see infra s C (describing condition of NF-103).

FN16. The NF-103 also transported wheat from Seaford to Norfolk in early
February 1989, which voyage was made without incident.   Stipulation 4.

Although the parties stipulated that the NF-103 made both the voyage in
January 1989 and the voyage in early February 1989 without misfortune, the
Court recognizes its inherent power to conform the evidence presented at
trial to stipulated facts.   Morrison v. Genuine Parts Co., 828 F.2d 708
(11th Cir.1987), cert. denied,  484 U.S. 1065 (1988);   Coastal States
Marketing, Inc. v. Hunt, 694 F.2d 1358, 1369 (5th Cir.1983);   Del Rio
Distributing, Inc. v. Adolph Coors Co., 589 F.2d 176, 178 (5th Cir.1979).

FN17. Cargill hired Bradford to determine the cause of the leakage into the
cargo hold.   Pl.Exh. 61.

FN18. References in this form are to evidence introduced at trial as
Defendant’s Exhibits.

FN19. Cargill knew of the pathetic condition of the NF-103.   In fact,
Cargill thought that the NF-103 was not even worth insuring;  the deductible
for the barge would have been $100,000.   Trial II 157.

FN20. Cargill apparently honored Monday, February 20, 1989, as the
observance of Washington’s Birthday.   See Pl.Exh. 6;  Pl.Exh. 32.

FN21. The total weight of the wheat equals 3,262,808.2 pounds, or 1,631.4
tons.   Trial I 68.

In the transcript of the trial, counsel for defendants transposed the
figures regarding the stipulated number of bushels, Trial I 68, line 9;
the witness, however, used the correct figures in her calculations.
Trial I 68.

FN22. Tugboat captains find that barges laden with grain sail more smoothly
when they have some drag in the stern.   Trial III 6-7;  Trial I  54.

FN23. The Court rejects counsel for plaintiff’s suggestion that, because
Douglas and Bandelean omitted mention of the 2 inch starboard list in their
reports to the Coast Guard of the accident, their credibility is suspect.
There was no evidence that the Coast Guard asked Douglas and Bandelean about
the possibility of a 2 inch list and because tugboaters do not regard such
lists to be significant, Trial III 102;  Trial I 158, the Court determines
that the exclusion in the Coast Guard reports is inconsequential.

FN24. As a matter of general practice, excluding visible signs indicating
matters awry with a barge, Cargill employees do no more than to ensure that
the manhole covers on the deck of the barge are not loose.   Trial I  51-52.
If the manhole covers are loose, the employee would be expected to put them
into place or to tighten them.   Trial I 52.   The employee would further  be
expected to make a walk-around inspection of the laden barge to see “if
there was anything out of place …”   Trial III 182.   If the  employee
indeed found something amiss with the barge, the employee would be expected
to report it to Cargill, which of course has the duty to repair problems
with its own barges.   Trial III 184.   In  In re Steuart Transp. Co.,  435
F.Supp. at 803, aff’d,  596 F.2d 609 (4th Cir.1979), the court ruled that
the barge owner was negligent in failing to implement procedures by which it
could ensure the seaworthiness of its vessels.

Because Gouverneur only performed a cursory inspection and because Cargill
failed to implement procedures for inspection of its own barges,
Gouverneur failed to fulfill her obligation of providing the RANDY D. with
notice that the NF-103 was unseaworthy.   Such failure to notify supports
the Court’s conclusion that defendants are relieved of liability because
of their reliance upon the apparent seaworthiness of the freshly painted
NF-103.   See Otto Candies, Inc., 1965 A.M.C. at 1034.

FN25. The National Weather Service maintains three antennae that broadcast
weather conditions and forecasts for the Chesapeake Bay at approximately
162.55 megahertz.   Trial II 205;  Trial I 173.   The information is  taped,
with updates approximately every four hours.   Trial I 173;  Trial II  38.
Douglas and the crew of the RANDY D. listened to these forecasts and weather
reports.   Trial I 172-73.

FN26. The Court takes judicial notice that the National Weather Service
posts small craft advisories where winds approach sustained speeds of 15 to
25 knots.   The Court further takes judicial notice that one knot equals
1.15 miles per hour.   Finally, the Court takes judicial notice that wind
speeds at sea create larger waves than wind speeds in the Chesapeake Bay.

A “small craft” is a vessel whose maximum length ranges from 35 feet in
length,  In re Hechinger, 890 F.2d 202, 205 (9th Cir.1989), to 50 feet in
length,  Barbe v. Drummond, 507 F.2d 794, 796 (5th Cir.1974), to 65 feet
in length,  Seaboard Properties, Inc. v. Bunchman, 278 F.2d 679, 680 (5th
Cir.1960).   Even assuming the largest of these small crafts, both the tug
and the barge in this case are substantially larger than small crafts.
Therefore, the Court finds that Douglas’ decision to undertake and proceed
on a voyage during a small craft advisory was not negligent.  Ocean
Burning, Inc., 1974 A.M.C. at 2309-10 (holding that master’s decision to
proceed where wind speeds at sea were 15 to 25 knots, with higher gusts,
was not negligent);  see S.C. Loveland Co., Inc., 100 F.2d at 974, 1939
A.M.C. at 26 (holding that proceeding on voyage with wind speeds of 18 to
20 miles per hour was not negligent).

FN27. The Court finds that at no time during the voyage of the NF-103 from
Seaford to Norfolk were the seas above 4 feet in height and at no time were
the winds above 35 knots.   Despite the volume of testimony by an expert
from the NASA Goddard Space Flight Center in Maryland and by an expert who
served as a captain with the United States Coast Guard and although the
Court was impressed by the witnesses’ credentials, the overwhelming weight
of evidence demonstrated that, in seas above 4 feet in height and winds
above 35 knots, the hawser would certainly have parted.   See Trial III 27;
Trial I 215-16.   It did not part.   Moreover, the Court finds that the  best
evidence of the weather conditions was presented by those persons who were
on the Chesapeake Bay from February 23, 1989 to February 25, 1989.

Even if the waves were as much as 7 feet, the Court finds that a seaworthy
NF-103 would not have capsized and sunk because the volume of the void
tanks was greater than the weight of the steel of the barge.   Trial III
145;  see infra s G (discussing cause of capsize and sinking of NF-103).

FN28. On February 24, 1989, Lonnie Dail, captain of the tug HOLLY S., was
travelling north on the Nanticoke River with a light fuel barge.   Trial III
70-73.   Because he was headed northbound into the wind and waves, both the
barge and the tug gathered ice.   Trial III 72-73;  Trial III 74.    Dail
decided, therefore, to wait alongside the southern bank of Chapter Point.
Trial III 73;  Pl.Exh. 38.   Although Dail saw Douglas pass with the  NF-103,
he does not remember speaking with Douglas.   Trial III 73;  Trial III  79;
cf.   Trial III 16.   Had Dail spoken with Douglas, however, he  testified
that he would have advised Douglas that, at least for the type of tow that
he had, the conditions on Tangier Sound were safe to proceed.   Trial III
80.

Dail reported that the winds at Chapter Point were 15 or 20 knots, that
the weather conditions did not prevent them from continuing their journey,
and that a reason that the HOLLY S. did not renew the journey was because
of the accumulation of ice on the tug and barge.   Trial III 73.    There
was no evidence presented at trial that the RANDY D. or the NF-103
accumulated ice.

FN29. Even if Douglas had turned back, discovered water in the void tanks,
and attempted to pump the water, more water would enter the manhole than
could ever be pumped out.   Trial III 65.   Even if Douglas  further
discovered water in the cargo hold and attempted to pump the water, he would
have risked worse exposure to water and would have destroyed the pump
because he then would have been pumping grain as well as water.   Trial III
65.

FN30. Photographs taken at the scene of the Coast Guard crew and Smith
releasing the bridles and hawser from the barge reveal that the hatch covers
were either missing or had rolled open to the stern.   Pl.Exh. 12.   By  the
time salvage divers inspected the wreck of the NF-103, all cargo hatch
covers were missing.   Pl.Exh. 16;  Pl.Exh. 49.   Also at the time  the
photographs were taken, Smith noticed that the bow rake tank manhole cover
was open;  Smith closed the cover.   Stipulation 7.

FN31. References in this form are to the deposition of Ritner E. Walling
which was filed in open court on January 17, 1990.

FN32. Since the design of the twistlock manhole covers that were on the
NF-103, marine architects discovered that the design of the covers often
allowed leakage because they become loosened over time.   Consequently,
marine architects designed crossbars to provide security, thwarting leakage
from this type of manhole cover.   Trial III 200.

FN33. The Court rejects the hypothesis propounded by Szilard V. Pantyik and
Alyn Fife that water entered the cargo hold.   Pantyik and Fife’s opinion is
based upon the inaccuracy of the underlying assumptions about variables,
such as the weather and the height of the waves.   Moreover, Pantyik’s
testimony relied too heavily on speculation and was implausible.   For
instance, Pantyik testified that 520 tons of water would have had to enter
the cargo hold in order to sink the NF-103.   Trial III 308.   Assuming  a
constant ingress of water into the cargo hold from 12:30 a.m. to 7:30 a.m.
on February 25, 1989, approximately 1.24 tons of water per minute would have
had to have entered the cargo hold through the weathertight hatch covers,
which sat approximately 5 feet above the water line.   Trial III 308;   see
infra (discussing displacement of laden barges in waves of certain heights).
Because Pantyik and Fife’s underlying assumptions were not supported by the
evidence and because the theory is factually implausible, the Court does not
find their opinions on the issue of causation to be reliable.

FN34. References in this form are to the resume of Hendrik F. van Hemmen,
filed in open court on January 18, 1990.

FN35. The difference between fresh water displacement, salt water
displacement, and brackish water displacement is approximately one percent
and, for the purposes of this opinion, nonexistent.

E.D.Va.,1990.

Cargill, Inc. v. C & P Towing Co., Inc.

Not Reported in F.Supp., 1990 WL 270199 (E.D.Va.), 1991 A.M.C. 101

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