National Marine Service Incorporated v. Petroleum Service Corporation

Facts

P is an owner and operator of several tank barges and towing vessels. One group of them was designed so that by manipulating a series of valves (called sluice valves) all cargo would flow to the two forward tanks. It was thought desirable for the barge to be designed in this fashion so that a single pump could be used to pump and unload all the cargo from the forward tanks during unloading operations. Due to improper design, the barge trimmed aft instead of forward. The center of gravity was aft of the center line rather than forward of the center line. This caused the cargo to flow to the stern rather than the bow tanks, resulting in what was referred to as 'down by the stern incidents.' To correct this problem P was told to open a sea valve during unloading operations so the rake compartment could be flooded so that the barge would list forward and cause the center of gravity to be toward the bow rather than the stern. Once the rake compartment was flooded and the sluice valves were opened, the liquid cargo would then flow into the bow cargo compartments. It was necessary, of course, to discharge from the forward tanks promptly or the barge would sink bow first when the bow tanks were filled. P had been operating under this procedure for over three years prior to the incident in question. On the contract in question, P telephoned a supervisor with Kaiser Aluminum and advised him that it was necessary to flood the rake compartment before discharging the cargo. The district court concluded that P had failed to demonstrate that Kaiser Aluminum failed to deliver the message to D. D undertook unloading operations. D read the written instructions relative to unloading, but the instructions did not warn of the tendency to have 'down by the stern incidents' nor did the instructions inform D of the need to flood the rake compartment during ordinary unloading operations. Only the sluice valves were open when a hose utilized during discharge operations developed a leak and the operation was immediately shut down to attempt to repair the existing hose or to obtain a replacement hose. D left the sluice valves open while he was ashore for some twenty to twenty-five minutes even though the rake compartment had not been flooded. When D returned to the barge he noticed a severe aft list. He immediately began closing all of the sluice valves but it was too late and the barge sank, stern first. A tank barge carrying 1,920 short liquid tons of concentrated sulfuric acid sank during unloading operations at a dock. The barge was destroyed, resulting in stipulated damages totaling $735,000; plus the value of the entire cargo of sulfuric acid, which was lost. P sued D. D filed third party complaints against St. Louis Ship, designer-manufacturer of the barge, and Allied Chemical, seller of the sulfuric acid. Kaiser Aluminum filed a cross-claim and counterclaim for the loss of the cargo of sulfuric acid aboard the barge at the time of the sinking. The court found that St. Louis Ship had improperly and negligently designed the barge. It found that P had knowledge of the defect for a considerable length of time and continued using the barge in the face of the known risk. The court held that P had assumed the risk of the defective design and could not recover from St. Louis Ship. The trial court concluded that any fault on the part of St. Louis Ship in designing the barge was attributable to P in view of P's assumption of the risk. P was found 65% at fault. D was found 35% at fault for failing to maintain surveillance of the barge after the sluice valves had been opened. The district court concluded that Kaiser Aluminum was guilty of no fault. P appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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