Federal Circuits, 5th Cir. (January 07, 1970)
Docket number: 26137
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U.S. Court of Appeals for the D.C. Cir. - Plitt v. Stonebraker Et Al., 195 F.2d 39 (D.C. Cir. 1952)
U.S. Court of Appeals for the 9th Cir. - Pellegrino v. Nesbit Et Al., 203 F.2d 463 (9th Cir. 1953)
U.S. Supreme Court - Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365 (1978)
U.S. Supreme Court - NAACP v. New York, 413 U.S. 345 (1973)
U.S. Court of Appeals for the 5th Cir. - Ethel M. Robin, in Her Own Name and as Personal Representative of the Estate of Harry J. Robin, and for the Use and Benefit of Her Minor Child, Brett M. Robin, Plaintiff, v. Sun Oil Company, Defendant, Cross-Claimant Defendant in Cross-Claim, Appellant. Teledyne Movible Offshore, Inc., Third-Party Defendant, Cross-Claimant and Appellant, v. Tidex, Inc. and Tidewater Grand Isle, Inc., Defendants, Third-Party Plaintiffs, Defendants in Cross-Claim, Appellees., 548 F.2d 554 (5th Cir. 1977) in Her Own Name and as Personal Representative of the Estate of Harry J. Robin, and for the Use and Benefit of Her Minor Child, Brett M. Robin, Plaintiff, v. Sun Oil Company, Defendant, Cross-Claimant Defendant in Cross-Claim, Appellant. Teledyne Movible Offshore, Inc., Third-Party Defendant, Cross-Claimant and Appellant, v. Tidex, Inc. and Tidewater Grand Isle, Inc., Defendants, Third-Party Plaintiffs, Defendants in Cross-Claim, Appellees.
Joe H. Daniel, L. F. Sams, Jr., Daniel, Coker, Horton & Bell, Jackson, Miss., for appellees-appellants.
Before COLEMAN and GOLDBERG, Circuit Judges, and SKELTON, Judge of the Court of Claims.*GOLDBERG, Circuit Judge:In this diversity case involving indemnity between Mississippi tortfeasors, we consider the landward thrust of the admiralty doctrine enunciated in Ryan.1 Even with sextant and compass we are unable to sight any estuary leading to Ryan. Looking to the law of Mississippi, we find Ryan rejected and indemnity denied.This case originated as a wrongful death action growing out of an oil field fire which occurred on May 24, 1963. On that day Paul Case, an employee of Smith Petroleum Service, Inc. (Smith), was fatally burned while working atop an oil drilling rig in the Brookhaven Field in Lincoln County, Mississippi. Smith was employed by Monsanto Chemical Company (Monsanto) to perform a workover job on Monsanto's Lucien No. 1 well in the Brookhaven Field. The work at the well was done pursuant to an oral agreement entered into by Monsanto's field superintendent, Marvin McGraw, and Smith's manager, J. L. Francis. This agreement, which included no specific provision for indemnity in the event of an injury, contemplated that Smith would provide the necessary crew, tools, and rig for the job.Work was commenced on May 21, 1963, when the crew changed the pump in an attempt to make the well produce. When this proved unsuccessful, the pump was changed for a second time, but the result was again unsatisfactory. When Charles Barfield, production foreman for Monsanto, was advised of the situation, he ordered a dialog test run to determine whether any tubing in the well leaked or needed to be replaced. On the basis of the dialog test, he decided to have the tubing pulled so that certain lengths of tubing could be replaced.2McGraw and Francis agreed upon a plan to be used in pulling the tubing: salt water would first be poured into the well, then a standing valve would be dropped, and finally the tubing would be filled with salt water. Barfield, however, decided to drop the standing valve first and add fifty barrels of salt water later. At trial Monsanto experts testified that putting the salt water in ahead of the valve would damage the well; Smith experts testified to the contrary.When the actual pulling of the tubing began on May 24, the valve and the salt water had already been inserted in the well under Barfield's direction. At one point on May 24 Barfield ordered the operation shut down temporarily while blowout preventers were installed in the casing and stabbing valves were brought to the derrick. He also instructed the Smith employee who was operating the motor that he was not to exceed a specified pulling power while removing the tubing from the well. After requesting these safety measures, Barfield left the well site for a time. Upon returning he parked his car about 150 feet from the well and remained in the car, doing paper work which was apparently unrelated to the work on the well.The Smith crew proceeded to remove the tubing at the well site, and as the thirty-fourth and thirty-fifth joints were pulled to the surface they noticed a brown fluid spilling from the joints. They immediately ceased the operation, and the motor that operated the draw works was shut down. But when the flow from the tubing ceased after a few minutes, Smith's foreman ordered the operation resumed. Then, as the thirty-sixth joint was raised to about fifteen feet above the derrick floor, oil gushed from the tubing into the derrick. Because of the tremendous pressure from the hole the crew was unable to lower the tubing. Oil came in contact with the draw-works motor exhaust and ignited. Mr. Case, who was working on the derrick, was engulfed by the flames and killed.Smith paid workmen's compensation benefits to Case's family, and thereafter Case's widow instituted suit against Monsanto3 in the Circuit Court of Hinds County, Mississippi. Monsanto removed the case to the United States District Court for the Southern District of Mississippi on the ground of diversity of citizenship and filed a third party complaint against Smith.4 On June 28, 1965, Travelers Insurance Company (Travelers), Smith's workmen's compensation carrier, filed a petition to intervene, seeking to recover the sum Travelers had paid to Case's survivors and beneficiaries under the Mississippi Workmen's Compensation Act.On July 10, 1965, Mrs. Case and Monsanto entered into a provisional settlement for $25,000.00. They then moved the district court to approve the settlement. The court did approve the settlement on August 27, 1965, dismissing Mrs. Case's claim against Monsanto without prejudice to the right of Travelers to pursue its subrogation claim. The case proceeded to trial with Monsanto's claim against Smith and Travelers' claim for reimbursement still to be decided.5Hearing the case without a jury, the district court found "that Monsanto and Smith were equally guilty of negligence"6 and held that Smith should bear one-half the cost of Monsanto's settlement and attorney's fees and expenses. The court further held that Travelers was entitled to recover from Monsanto the amount of compensation benefits it had paid. Smith appeals the judgment against it in favor of Monsanto, and Monsanto cross appeals. Monsanto also appeals the judgment against it in favor of Travelers. We reverse in part and remand.I.Monsanto asserts that it is entitled to indemnity from Smith, and in support of this claim Monsanto invokes two theories. The first is that Smith in carrying out its duties at the well breached its implied warranty to perform in a workmanlike manner, giving rise to indemnity under the Ryan doctrine. The second is that on the facts of this case Smith was actively negligent while Monsanto was only passively negligent, and thus Smith must indemnify Monsanto because of Smith's more serious tortious conduct.A.We consider first the Ryan issue. In Ryan Stevedoring Company v. Pan-Atlantic Steamship Corporation, 1956, 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133, the stevedoring company (Ryan) by informal agreement had contracted with the steamship company (Pan-Atlantic) to perform all its coastal stevedoring operations. While unloading cargo on one of Pan-Atlantic's ships, a Ryan employee was injured when he was struck by a heavy roll of pulpboard which had been improperly stowed. The employee brought suit against the shipowner and recovered because the ship was found to be unseaworthy. The shipowner in turn sued the stevedore, seeking reimbursement for the damage paid to the injured employee. The Supreme Court held that the shipowner's action for indemnity could be maintained. In reaching this result, the Court held that the action was not barred by the exclusive-liability provision of section 5 of the Longshoremen's and Harbor Workers' Compensation Act:7"While the Compensation Act protects a stevedoring contractor from actions brought against it by its employee on account of the contractor's tortious conduct causing injury to the employee, the contractor has no logical ground for relief from the full consequences of its independent contractual obligation, voluntarily assumed to the shipowner, to load the cargo properly." 350 U.S. at 131, 76 S.Ct. at 236, 100 L.Ed. at 140.Moreover, in the absence of an express indemnification agreement, the Court held that a stevedore's contract with a shipowner includes an implied warranty of workmanlike performance:"The shipowner here holds petitioner's uncontroverted agreement to perform all of the shipowner's stevedoring operations at the time and place where the cargo in question was loaded. That agreement necessarily includes petitioner's obligation not only to stow the pulp rolls, 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 petitioner's stevedoring contract. It is petitioner's warranty of workmanlike service that is comparable to a manufacturer's warranty of the soundness of its manufactured product." 350 U.S. at 133-134, 76 S.Ct. at 237, 100 L.Ed. at 141-142.In construing Ryan, we note at the outset that the shipowner's remedy is grounded conceptually in the contract with the stevedore and not in the negligence of the stevedore.8 See Italia Societa v. Oregon Stevedoring Company, 1964, 376 U.S. 315, 84 S.Ct. 748, 11 L. Ed.2d 732; Waterman Steamship Corporation v. Dugan & McNamara, Inc., 1960, 364 U.S. 421, 81 S.Ct. 200, 5 L. Ed.2d 169; Crumady v. Joachim Hendrik Fisser, 1959, 358 U.S. 423, 79 S.Ct. 445, 3 L.Ed.2d 413; Weyerhaeuser Steamship Company v. Nacirema Operating Company, 1958, 355 U.S. 563, 78 S.Ct. 438, 2 L.Ed.2d 491. This court has repeatedly recognized the contract rationale underlying Ryan and its progeny. Grigsby v. Coastal Marine Service of Texas, Inc., 5 Cir. 1969, 412 F.2d 1011, 1040; Loffland Brothers Company v. Roberts, 5 Cir. 1967, 386 F.2d 540, 548-549, cert. denied, 389 U.S. 1040, 88 S.Ct. 778, 19 L.Ed.2d 830; Centraal Stikstof Verkoopkanter, N. V. v. Walsh Stevedoring Company, 5 Cir. 1967, 380 F.2d 523, 529; Ocean Drilling & Exploration Company v. Berry Brothers Oilfield Service, Inc., 5 Cir. 1967, 377 F. 2d 511, 512-513, cert. denied, 389 U.S. 849, 88 S.Ct. 102, 19 L.Ed.2d 118; Lusich v. Bloomfield Steamship Company, 5 Cir. 1966, 355 F.2d 770, 775-776; see Tri-State Oil Tool Industries, Inc. v. Delta Marine Drilling Company, 5 Cir. 1969, 410 F.2d 178, 184; Halliburton Company v. Norton Drilling Company, 5 Cir. 1962, 302 F.2d 431, 434-435, cert. denied, 374 U.S. 829, 83 S.Ct. 1870, 10 L.Ed.2d 1052.Moreover, we deem it of fundamental importance to recall that Ryan was conceived as an admiralty concept to meet special problems which had arisen in the law of admiralty.9 Mindful of its origins in the realm of admiralty law, this court has consistently refused to extend its application to non-maritime situations. We have held on numerous occasions that Ryan stops at the water's edge.For example, in General Electric Company v. Cuban American Nickel Company, 5 Cir. 1968, 396 F.2d 89, 92, Judge Wisdom wrote:"The complexities and nuances involved in application of the Ryan doctrine in admiralty do not now concern us: The instant case turns on Louisiana law, not on federal admiralty law. We consider the Ryan doctrine inapplicable to the present case."In the same vein, Ryan was declared to be waterborne and not landbased in the words of Judge Tuttle in General Dynamics Corporation v. Adams, 5 Cir. 1965, 340 F.2d 271, 279:"We are here concerned with the Florida rule with respect to the right of indemnity for, while the right to proceed in a third party action is established by Federal rule, such right depends upon the existence of a state created liability. Thus, the Supreme Court decisions in Maritime cases, * * * recognizing the right of a shipowner to recover against a stevedoring company when successfully sued by an employee of the stevedoring concern, are not in point here." (Case citations omitted.)Compelling policy reasons for confining Ryan to the admiralty domain where it achieved its nascence were convincingly articulated by Judge Gewin in Centraal Stikstof Verkoopkanter, N.V. v. Walsh Stevedoring Company, 5 Cir. 1967, 380 F.2d 523, 529:"The Ryan doctrine establishes a severe and harsh rule which imposes a substantial and heavy burden on the stevedore or one similarly situated. * * * Because of the weight of this burden, and because of the far reaching implications of the doctrine if applied outside its original context, we have been slow to expand the scope of the doctrine beyond the original factual circumstances in which it arose. * * * The implied warranty established in Ryan is a product of the admiralty courts and a creature of admiralty law. It is tied closely to the duties and obligations which the admiralty law imposes on shipowners with respect to those employed by and who work on a ship. * * * Those cases in which the doctrine has been applied have been admiralty cases which presented substantially similar circumstances to those existing in Ryan. * * * We are accordingly hesitant to apply the doctrine to this, a non-maritime case, which is controlled by Alabama and not federal maritime law. * * *" (Case citations omitted.)Aware of these reasons, this court in other recent cases has reiterated the conviction that Ryan should not be extended beyond the scope of the admiralty situations in which it arose. See, e. g., Grigsby v. Coastal Marine Service of Texas, Inc., 5 Cir. 1969, 412 F.2d 1011, 1041 (Brown, C. J.) ("* * * the Ryan theory is conceptually unrelated to local tort principles * * *."); United States v. Seckinger, 5 Cir. 1969, 408 F.2d 146, 153, cert. granted, 396 U.S. 815, 90 S.Ct. 104, 24 L.Ed.2d 67 (Brown, C. J.) ("So far this Court has kept this newly formed concept strictly confined to salt water or at least amphibious applications."); Loffland Brothers Company v. Roberts, 5 Cir. 1967, 386 F. 2d 540, 549, cert. denied, 389 U.S. 1040, 88 S.Ct. 778, 19 L.Ed.2d 830 (Gewin, J.) ("Recognizing this unique obligation on the part of a shipowner, we have held that the Ryan doctrine is closely tied to a vessel and this obligation which the shipowner owes to those employed on the vessel. * * * We are accordingly extremely hesitant to extend the burdensome Ryan doctrine to situations not substantially similar to those which gave birth to the doctrine."); Ocean Drilling & Exploration Company v. Berry Brothers Oilfield Service, Inc., 5 Cir. 1967, 377 F.2d 511, 513, cert. denied, 389 U.S. 849, 88 S.Ct. 102, 19 L.Ed.2d 118 (Thornberry, J.) ("While freely implementing this contractual obligation of the stevedore to indemnify the shipowner in accordance with the liberal spirit of Ryan, we have hesitated, however, to extend it beyond those controversies involving the `special rules governing the obligations and liability of shipowners' which necessitated its formulation and justify its application.").In short, Ryan was conceived as an admiralty concept, and its explicatory progeny have not denied its paternal thesis. We find nothing in the wake of Ryan to lead us to apply its principles to landlubbers. It is abundantly clear that no tributary of Ryan reaches the Brookhaven Oil Field in Lincoln County, Mississippi, which is many miles inland from both the Mississippi River and the Gulf of Mexico.Consequently, in deciding this issue we cannot distill Mississippi law through a federal sieve; we must completely abandon the admiralty domain and repair to Mississippi's inland terrain. Looking solely to Mississippi's independent jurisprudence, we are unable to find any authority clearly indicating that Mississippi recognizes a Ryan-type implied contract of indemnity in a situation such as the case before us.10 Accordingly, we must conclude that Monsanto is not entitled to indemnity on the basis of its contract theory. The trial court's conclusion to the contrary was erroneous.B.Monsanto's second theory in support of its claim of indemnity is a tort theory. Monsanto contends that Smith is liable to Monsanto under the common law theory of indemnity because Smith's negligence was "active" while Monsanto's negligence was only "passive." As we view the facts, however, this contention has no merit. Monsanto and Smith were in pari delicto; each was guilty of acts or omissions which could have proximately caused the death of Paul Case. We have examined the record and find adequate support for the trial court's conclusion "that Monsanto and Smith were equally guilty of negligence."11Even if this were not the case, Smith would be shielded from liability to Monsanto on a tort theory by the exclusive-remedy provisions of the Mississippi Workmen's Compensation Act. The statute's remedial exclusivity is set forth in section 5 of the Act, Mississippi Code § 6998-05:The liability of an employer to pay compensation shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband or wife, parents, dependents, next-of-kin, and anyone otherwise entitled to recover damages at common law or from such employer on account of such injury or death, except that if an employer fails to secure payment of compensation as required by this act, an injured employee, or his legal representative in case death results from the injury, may elect to claim compensation under this act, or to maintain an action at law for damages on account of such injury or death. In such action the defendant may not plead as a defense that the injury was caused by the negligence of a fellow servant, nor that the employee assumed the risk of his employment, nor that the injury was due to the contributory negligence of the employee.In considering this provision of the Act, we acknowledge that no Mississippi court has passed on the precise question before us. In this jurisprudential void, after we have engaged in futile searching to find the law, Erie requires us to surrogate for Mississippi until it speaks authoritatively. In fulfilling the Erie mandate, we hold that, because of the provisions of Mississippi Code § 6998-05, a third party which has been held liable to an employee may not receive indemnity from the employer on a tort theory.We are aided in reaching this conclusion by similar holdings concerning workmen's compensation statutes in other jurisdictions. See, e. g., General Electric Company v. Cuban American Nickel Company, 5 Cir. 1968, 396 F.2d 89 (Louisiana law); O'Steen v. Lockheed Aircraft Corporation, N.D.Ga.1968, 294 F. Supp. 409, followed in Central of Georgia Railway Company v. Lester, 1968, 118 Ga.App. 794, 165 S.E.2d 587; cf. General Dynamics Corporation v. Adams, 5 Cir. 1965, 340 F.2d 271, 278 (Florida law). These decisions are grounded in the concept that the workmen's compensation scheme has "completely abolished an employer's tort liability for injuries to his employees." Halliburton Company v. Norton Drilling Company, 5 Cir. 1962, 302 F.2d 431, 434, cert. denied, 374 U.S. 829, 83 S.Ct. 1870, 10 L.Ed.2d 1052. A workmen's compensation scheme is, in effect, a state-enforced "bargain" between employee and employer, in which each party gains something: "The injured employee is provided with a certain recovery, [and] the employer is * * * shielded from any tort action arising from the injury." General Electric Company v. Cuban American Nickel Company, supra, 396 F.2d at 100.The Mississippi Legislature has clearly denied to an employee the right to bring an action in tort directly against his employer. Mississippi Code § 6998-05. See L. B. Priester & Son, Inc. v. Dependents of Bynum, 1962, 244 Miss. 185, 137 So.2d 907, 141 So.2d 246, 142 So.2d 30, 31. Courts construing Mississippi law should not allow an employee to do indirectly (through a third party) what he has been forbidden to do directly. "[H]aving paid compensation for an injury to its employee one time, the [employer] cannot be liable again in tort." O'Steen v. Lockheed Aircraft Corporation, supra, 294 F.Supp. at 412. Thus, even if Monsanto were correct in asserting that its negligence was "passive" while Smith's was "active," the exclusive-liability provision of the Workmen's Compensation Act would stand as a Horatio at the bridge to bar Monsanto's claim to indemnity from Smith.C.In our consideration of the indemnity issue, one confusing aspect of the trial court's opinion is deserving of comment. The court concluded "that Smith should bear one-half the cost of Monsanto's settlement and attorney fees and expenses." 277 F.Supp. at 292. This apportionment of damages might seem to indicate that the trial court was awarding contribution rather than indemnity.12 However, the remainder of the trial court's opinion deals with the concept of indemnity; all the cases cited in the trial court's opinion are indemnity cases; and the parties involved in this appeal have briefed and argued the case in terms of indemnity rather than contribution. Consequently, despite the trial court's rather confusing award of damages, we are firm in our conviction that the concept of contribution is not involved in this case, and we do not reach any issue related to that concept. Viewing this case as one involving the concept of indemnity, we hold that Monsanto is entitled to recover nothing from Smith.II.In a separate appeal Monsanto contests the judgment rendered against it in favor of Travelers, Smith's workmen's compensation carrier. The trial court allowed Travelers to intervene and awarded Travelers a judgment in the amount of $3,117.05, the amount Travelers had paid in compensation benefits. Monsanto contends that the trial court erred in several respects concerning Travelers' intervention. First, Monsanto asserts that the district court erred in assuming jurisdiction over Travelers' claim. Second, Monsanto argues that Travelers' petition to intervene should have been dismissed on the ground that it was not timely filed. Finally, Monsanto contends that the district court erred in failing to dismiss Travelers' suit at the conclusion of the evidence offered by Travelers. For the reasons hereinafter given, we find no merit in any of these contentions.A.Monsanto's first assertion of error is that the trial court lacked jurisdiction to entertain the claim of Travelers. Characterizing Travelers' intervention as permissive intervention under Rule 24(b),13 Monsanto relies on the rule that such permissive intervention requires an independent jurisdictional basis, i. e., that the jurisdictional requirements of 28 U.S.C.A. § 1332 must be pleaded and proved. These requirements are, of course, (1) an amount in controversy in excess of $10,000.00, and (2) diversity of citizenship. Here these requirements were not met because (1) the amount in controversy was clearly less than $10,000.00, and (2) there was no showing of the existence of diversity.Travelers contends, however, that what is involved here is not permissive intervention under Rule 24(b), but rather intervention as a matter of right under Rule 24(a).14 If Travelers is correct in its characterization of its intervention, no jurisdictional problem exists, because no independent ground of jurisdicdiction need be shown to support intervention as a matter of right. Lenz v. Wagner, 5 Cir. 1957, 240 F.2d 666, 669; 3B Moore, Federal Practice ¶ 24.18 (2d ed. 1969); 2 Barron & Holtzoff, Federal Practice and Procedure § 593 (Wright ed. 1961). On the facts of this case, we agree with Travelers that this intervention comes within the purview of Rule 24(a).Rule 24(a) allows a party to intervene as a matter of right"when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties."It is clear that Travelers possessed a right of subrogation under Mississippi law by virtue of section 30 of the Mississippi Workmen's Compensation Act, Mississippi Code § 6998-36.15 See Merchants Company v. Hutchinson, Miss. 1967, 199 So.2d 813; Richardson v. United States Fidelity & Guaranty Company, 1958, 233 Miss. 375, 102 So.2d 368. It has been held that where the state workmen's compensation law permits subrogation of a compensation carrier, the carrier is entitled to intervene as a matter of right. Black v. Texas Employers Insurance Association, 10 Cir. 1964, 326 F.2d 603; see Kelley v. Summers, 10 Cir. 1954, 210 F.2d 665, 672-674.Since Travelers was intervening as a matter of right under Rule 24(a), there was no requirement that Travelers plead and prove an independent basis of jurisdiction. The trial court clearly had jurisdiction over Travelers' claim.B.Even if the trial court had jurisdiction, Monsanto contends that Travelers' application to intervene should have been rejected because it was not "timely." This contention is based primarily on the fact that more than a year and a half elapsed between the filing of the original action on November 25, 1963, and the filing of Travelers' petition to intervene on June 28, 1965.It is true, of course, that an application for intervention, whether as a matter of right or permissive, must in every case be timely; Rules 24(a) and 24(b) provide for intervention "upon timely application." See 2 Barron & Holtzoff, Federal Practice and Procedure § 594, at 364 (Wright ed. 1961); 3B Moore, Federal Practice ¶ 24.13, at p. 24-521 (2d ed. 1969). The determination as to whether an application to intervene is timely, however, is a matter within the sound discretion of the trial court. Lumbermens Mutual Casualty Company v. Rhodes, 10 Cir. 1968, 403 F.2d 2, 5, cert. denied, 394 U.S. 965, 89 S.Ct. 1319, 22 L.Ed.2d 567; Tesseyman v. Fisher, 9 Cir. 1955, 231 F.2d 583, 584; Washington Gas Light Company v. Baker, 90 U.S.App.D.C. 98, 195 F.2d 29, 32; Simms v. 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