923 F.

2d 1045
1991 A.M.C. 1032

Thomas COOPER
v.
Irving W. LOPER; and Michael Loper, Third Party Plaintiffs,
v.
AXELSSON & JOHNSON, INC., Third Party Defendants.
Appeal of Irving W. LOPER and Michael Loper.
Thomas COOPER
v.
Irving W. LOPER; and Michael Loper, Third Party Plaintiffs,
v.
AXELSSON & JOHNSON, INC., Third Party Defendant.
Appeal of AXELSSON & JOHNSON, INC.
Nos. 90-5373, 90-5374.

United States Court of Appeals,

Third Circuit.
Argued Nov. 13, 1990.
Decided Jan. 17, 1991.

Michael D. Wilson (argued), William E. Bell, Kirlin, Campbell &

Keating, Caldwell, N.J., for Irvin W. Loper and Michael Loper.
William M. Honan, Daniel J. Saul (argued), Horn, Kaplan, Goldberg,
Gorny & Daniels, P.C., Atlantic City, N.J., for Axelsson & Johnson, Inc.
Before STAPLETON, HUTCHINSON, and ROSENN, Circuit Judges.
OPINION OF THE COURT
STAPLETON, Circuit Judge:

Plaintiff Thomas Cooper was injured while off-loading a ship; after bringing
this action, he received compensation in exchange for settling his claim against

the shipowners. These cross-appeals arise from the efforts of the shipowners,
third-party plaintiffs, Irving W. Loper and Michael Loper ("shipowners"), to
secure indemnification or contribution from the dockowner, third-party
defendant, Axelsson & Johnson, Inc. ("dockowner"). Both parties appeal from
the district court's entry of final judgment after a bench trial of the third-party
claims. The shipowners argue that the district court erred in awarding only 80%
of the amounts paid by them in settlement and in refusing to award attorneys'
fees. The dockowner argues that the district court lacked subject matter
jurisdiction, that the case should have been tried to a jury, and that the district
court's findings of fact are clearly erroneous. We hold that the district court had
jurisdiction, that it could hear this case as a bench trial, and that its findings of
fact are not clearly erroneous. We further hold, however, that full indemnity
and attorneys' fees should have been awarded. Therefore, we will remand this
case for entry of a judgment in accordance with this decision.
I.
2

Cooper, an employee of the shipowners, was injured when he was hit with a
large bucket of fish suspended from the boom of a shoreside crane. Cooper had
been filling the bucket on the ship and then swinging it to dock employees on
land. The district court found that the dock employees failed to catch the bucket
and that it swung back to the ship, hitting Cooper who had bent down to clear
fish and other debris from the deck around his feet.

Cooper brought this case under the Jones Act and "General Maritime Law"
against the shipowners. The shipowners impleaded the dockowner pursuant to
Rule 14(c) of the Federal Rules of Civil Procedure, demanding a judgment in
favor of the plaintiff, as well as asserting their own claim for contribution or
indemnity. After a jury was empaneled, but before trial, the shipowners settled
with Cooper. The dockowner was given the opportunity to approve the
settlement or assume defense of Cooper's claim against the shipowners.

After the settlement was announced, the judge proposed that he conduct a
bench trial of the remaining claims against the dockowner. He conferred with
counsel, and because there was ultimately no objection, he proceeded to trial.
The judge determined that Cooper had been adequately compensated by the
settlement and so made no award in Cooper's favor against the dockowner. He
further concluded that the shipowners were not entitled to indemnification, but
that they were entitled to contribution in the amount of 80% of their settlement
together with prejudgment interest from the date of the settlement. Finally, the
district court held that the shipowners were not entitled to recover from the
dockowner any part of the attorneys' fees spent in defending against Cooper's

claim. These cross-appeals followed.II.

5

The dockowner argues that the indemnity claim was not within the district
court's admiralty jurisdiction and that therefore the district court lacked subject
matter jurisdiction over that claim. It bases this argument on the requirement of
Rule 9(h) of the Federal Rules of Civil Procedure1 that, in certain cases, an
admiralty claim must be specifically identified as such in the pleadings. Even
assuming the dockowner is correct in asserting that the shipowners did not
comply with Rule 9(h), this argument is without merit.

The dockowner's argument confuses admiralty as a source of procedural rules

with admiralty as a basis for federal subject matter jurisdiction. Rule 9(h) states
that when an alternate basis for federal jurisdiction exists, admiralty procedures
will be followed only if the pleadings identify the admiralty claim as such. If a
claim can only be brought as one in admiralty, there is no need to specify that
admiralty procedures will be used. Nothing in Rule 9(h) speaks to subject
matter jurisdiction.

Whether a particular claim is an admiralty claim for purposes of federal subject

matter jurisdiction pursuant to 28 U.S.C. Sec. 1333,2 depends solely on the
nature of the claim. A "stevedoring contract is a maritime contract" and a
federal district court has jurisdiction over a claim for breach of such a contract
under Section 1333. A & G Stevedores v. Elleman Lines, 369 U.S. 355, 359, 82
S.Ct. 780, 783, 7 L.Ed.2d 798 (1962). As we shall hereafter see, the
shipowners' claim for indemnity under the doctrine of Ryan Stevedoring Co. v.
Pan-Atlantic S.S. Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956) is a
claim for breach of a warranty implied in such a contract. As a result, Ryan 's
indemnity claims have uniformly been regarded as admiralty claims. See, e.g.,
Humble Oil & Refining Co. v. Philadelphia Ship Maintenance Co., 444 F.2d
727, 729 (3d Cir.1971) ("the shipowner instituted this action in admiralty,
seeking indemnification [from the stevedore] for the damages awarded [to the
injured employee]"). Hamburg-Amerika Linie v. Gulf Puerto Rico Lines, 579
F.2d 115, 118 (1 Cir.1978) ("[I]n a case such as this, where the claim is
bottomed on indemnity for damages paid in an unseaworthiness action to a
longshoreman hurt in the process of unloading cargo purportedly faultily
stowed, the stevedoring contract, with its implied warranty of workmanlike
performance, is of maritime nature and character.").

The dockowner cites cases in which indemnity claims have been tried to a jury
as evidence that such claims are not necessarily within admiralty jurisdiction.
See, e.g., Fitzgerald v. United States Lines, 374 U.S. 16, 83 S.Ct. 1646, 10
L.Ed.2d 720 (1963). This also confuses admiralty procedure with admiralty

subject matter jurisdiction; that non-admiralty procedure is applied does not

demonstrate that the claim has ceased to be an admiralty claim. All of those
cases involved at least one other claim that created a right to a jury trial; the
indemnity claims were tried to the jury, not because the indemnity claim ceased
to be an admiralty claim, but because there is no bar to trying an admiralty
claim to a jury and conducting two separate trials in the same case "unduly
complicates and confuses a trial, creates difficulties in applying the doctrines of
res judicata and collateral estoppel, and can easily result in too much or too
little recovery." Id. at 19, 83 S.Ct. at 1649. None of these cases demonstrates
that federal courts lack subject matter jurisdiction over such claims.
III.
9

The parties dispute whether the dockowner had a right to a jury trial on the
indemnity claim. But even assuming that the dockowner was entitled to a jury
trial, that right was waived by its participation without objection in the bench
trial. In answer to the court's inquiry, "Doesn't the Waterman [S.S. Corp. v.
Dugan & McNamara, Inc., 364 U.S. 421, 81 S.Ct. 200, 5 L.Ed.2d 169 (1960) ]
case clearly bring this under admiralty?", counsel for the dockowner replied, "I
think so, your Honor, yes sir." The court then continued "Therefore, all agreed
that we won't need a jury or we shouldn't have a jury?" [counsel for
shipowners, "Yes Sir."] "If there is any question I can do this, because I don't
like to try cases over again, it is like watching a bad movie over again, if there
is any doubt, I will let the jury be advisory only." Appendix at 162-63a.
Counsel for the dockowner made no objection at any point.

10

Rule 39(a)(1) of the Federal Rules of Civil Procedure provides that once a
timely demand is made for a jury trial, the parties may waive that right only if "
[they] or their attorneys of record, by written stipulation filed with the court or
by an oral stipulation made in open court and entered in the record, consent to
trial by the court sitting without a jury[.]" However, all courts of appeals that
have addressed the issue have established a general rule that "participation in a
bench trial without objection constitutes waiver of the jury trial right." Royal
American Managers, Inc. v. IRC Holding Corp., 885 F.2d 1011, 1018 (2d
Cir.1989) (collecting cases).3

11

The facts in this case closely resemble those in Molett v. Penrod Drilling Co.,
826 F.2d 1419 (5th Cir.1987), vacated on other grounds, 872 F.2d 1221 (5th
Cir.), cert. denied sub nom. Columbus-McKinnon, Inc. v. Gearench, Inc., --U.S. ----, 110 S.Ct. 563, 107 L.Ed.2d 558 (1989). There, the main action
settled--after a trial to the jury, but before the verdict was announced--and the
third-party defendants failed to object to the judge's announcement that he

would determine the merits of the third-party action. The court of appeals
concluded that the third-party defendant had waived any jury trial, noting that,
12
[Third-party
defendant's] silence on the matter at trial and until now certainly
suggested to the trial court and opposing parties that it acquiesced in the court's
proposed plan. [It] may not now deny that it waived its right to a jury trial and
demand a new trial only after it has lost on the merits and failed to make a timely
objection before the district court.
13

Molett, 826 F.2d at 1424. We similarly find that the dockowner may not wait
until after it has lost on the merits to assert its alleged right to a jury trial and
that therefore its failure to object to the bench trial at any time prior to this
appeal waived any such right it may have had.

IV.
14

The dockowner challenges four of the district court's findings of fact: that the
dock's employees performed negligently, that Cooper was not contributorily
negligent, that the $200,000 settlement was reasonable, and that Captain Loper,
one of the shipowners, was not in control of the unloading operation.4 We
review findings of fact only to determine if they are clearly erroneous. Bell v.
United Princeton Properties, Inc., 884 F.2d 713, 718 (3d Cir.1989). We find no
clear error in any of the findings.

15

In challenging the finding that its employees were negligent, the dockowner
relies on the testimony of its expert that, once pushed up to the dock, the bucket
would not have swung back as far as Cooper. It points, as well, to the testimony
of the dock employees that they had never seen a bucket swing back in that
manner. However, Cooper offered testimony tending to show that the bucket
did swing back as he contended, and the district court was free to choose among
the versions offered to it. The dockowner also stresses that no one actually saw
the dock employees fail to catch the bucket. In the absence of any direct
evidence, however, the district court was entitled to draw its own conclusion
about the accident's cause from the available circumstantial evidence, and the
record does not show that its conclusion here was clearly erroneous.

16

Similarly, the dockowner speculates that Cooper could have caused the
accident by standing on the tag line. But no evidence indicates that Cooper did
that. The dockowner's only other claim of contributory negligence is that
Cooper should have prevented the accident by paying more attention. The
district court reasonably concluded, however, that Cooper had a right to rely on
the dock employees to either catch the bucket or warn him that they had

missed.
17

The dockowner next challenges the reasonableness of the settlement, claiming

that Cooper's future earnings were overestimated because Cooper had an
uneven employment history and his seasickness might have prevented him from
continuing as a fisherman. The economist who testified about Cooper's future
earnings based his calculations on the salary that Cooper had actually earned as
a fisherman during the year before the accident and the first portion of the year
in which the accident occurred. When cross-examined about why he did not
take Cooper's erratic employment into account, the economist responded that
Cooper had worked very hard as a gas station attendant for at least a portion of
the time since the accident and that Cooper would have been more likely to
have continued full time employment as he matured. Thus, the evidence about
Cooper's future earnings provided a rational basis for the district court's
conclusion that the settlement was reasonable.5

18

Finally, the dockowner challenges the finding that the ship's captain did not
have control of the unloading. It points to the captain's testimony that one of the
men "was definitely not intoxicated enough where I would take him from the
job or ask the foreman to take him from the job ...[.]" Appendix at 342a. But,
Captain Loper also testified that he did not have authority over the dock's
employees and that it was "more or less the foreman's authority" to tell dock
employees not to drink. Appendix at 328a. Thus, the district court's finding that
the dockowner had control of the unloading was not lacking in evidentiary
support.

V.
19

Under a judicially created doctrine, first enunciated in Ryan Stevedoring Co. v.

Pan-Atlantic S.S. Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956),
stevedores and other contractors give shipowners an implicit warranty that their
services will be performed in a "workmanlike" manner. In the landmark Ryan
case, a longshoreman was injured on board ship when a 3200 pound roll of pulp
board broke loose because the loading stevedore had not properly secured it.
The shipowner was found liable for the longshoreman's injuries. However, the
Supreme Court held that a stevedore's contract with a shipowner includes an
implied "warranty of workmanlike service that is comparable to a
manufacturer's warranty of the soundness of its manufactured product[,]" id. at
134, 76 S.Ct. at 237, and that because the stevedore breached this warranty, it
must indemnify the shipowner for its liability to the injured longshoreman.

20

A stevedore does not impliedly contract to provide indemnity under all

circumstances, however. If a stevedore can prove that the shipowner's conduct

prevented or seriously impeded the stevedore from performing in a
workmanlike manner, then indemnity will be denied. Weyerhaeuser S.S. Co. v.
Nacirema Operating Co., 355 U.S. 563, 567, 78 S.Ct. 438, 440, 2 L.Ed.2d 491
(1958); Humble Oil & Refining Co. v. Philadelphia Ship Maintenance Co., 444
F.2d 727, 733 (3d Cir.1971).
21

Because Ryan indemnity rests on the theory that the stevedore has an implied
contractual duty to render workmanlike service, tort principles of contribution
do not apply. Italia Societa Per Azioni Di Navigazione v. Oregon Stevedoring
Co., 376 U.S. 315, 321, 84 S.Ct. 748, 752, 11 L.Ed.2d 732 (1964). Indemnity
actions are not resolved by apportionment of fault:

22 Ryan doctrine is not, however, a precision instrument for allocating the burden
The
according to the relative amounts of fault, but a rough all-or-nothing device. Even
where the shipowner and the contractor are both at fault, under the Ryan warranty
doctrine indemnity will be allowed wholly or not at all ...
23

Parfait v. Jahncke Service, Inc., 484 F.2d 296, 302 (5th Cir.1973); Dobbins v.
Crain Bros., Inc., 567 F.2d 559 (3d Cir.1977) (reversing lower court's 75%25% apportionment of damages); Gilchrist v. Mitsui Sempaku K.K., 405 F.2d
763, 768 (3d Cir.1968) ("The law of indemnity is not concerned with
comparison or degree of fault of the shipowner and the [stevedore]."), cert.
denied sub nom. Jarka Corp. v. Mitsui Sempaku K.K., 394 U.S. 920, 89 S.Ct.
1195, 22 L.Ed.2d 453 (1969).

24

Applying these principles to the district court's findings of facts in this case, we
conclude that the court erred in only awarding the shipowners 80%
contribution. Because the court found that the dockowner breached its duty of
workmanlike service through the conduct of its employees, it should have
awarded the shipowners full indemnity. Although the court also found that the
boat's slippery deck contributed to the accident, the deck in no way prevented
the dockowner from fulfilling his warranty. Thus, the condition of the deck was
not the sort of active interference "sufficient to preclude [the shipowner's]
recovery." Weyerhaeuser, 355 U.S. at 567, 78 S.Ct. at 441. Accordingly, the
shipowners should be granted full indemnity from the dockowner, including
prejudgment interest from the date of the settlement.6

VI.
25

The district court erred in not awarding the shipowners their legal expenses for
defending against Cooper's claim.7 As this court has held,

It ... appears that in creating the shipowner's right to sue for indemnification, the
26
[Supreme] Court contemplated that the shipowner's litigation expenses would be
part of the damages. This view is consistent with the ordinary law of
indemnification, and has been adopted repeatedly in decisions of this court and other
circuits subsequent to Ryan.
27

Burris v. Global Bulk Carriers, Inc., 505 F.2d 1173, 1175 (3d Cir.1974)
(citations omitted); see also Guarrancino v. Luckenbach S.S. Co., 333 F.2d 646,
648 (2d Cir.), cert. denied, 379 U.S. 946, 85 S.Ct. 439, 13 L.Ed.2d 543 (1964).
This court has limited attorneys' fees in at least one other case, Gilchrist, supra,
but that case was a departure from the general rule, involving unusual facts not
present here.8

VII.
28

The district court had subject matter jurisdiction in this case. By participating in
a bench trial without objection, the dockowner waived any right it might have
had to a jury trial. None of the district court's findings of fact was clearly
erroneous. However, it misapplied the law in failing to award the shipowners
full indemnity including attorneys' fees for defending against Cooper's claims
and prejudgment interest from the date of the settlement. Accordingly, we will
reverse the judgment of the district court and remand this case to the district
court for the entry of a judgment consistent with this opinion.

Rule 9(h) states in relevant part, "A pleading or a count setting forth a claim for
relief within the admiralty and maritime jurisdiction that is also within the
jurisdiction of the district court on some other ground may contain a statement
identifying the claim as an admiralty or maritime claim for [procedural
purposes]. If the claim is cognizable only in admiralty, it is an admiralty or
maritime claim for those purposes whether so identified or not."

28 U.S.C. Sec. 1333 states in relevant part, "The district courts shall have
original jurisdiction, exclusive of the courts of the States, of: (1) Any civil case
of admiralty or maritime jurisdiction, saving to suitors in all cases all other
remedies to which they are otherwise entitled."

The few precedents to the contrary have been limited or overruled. See White v.
McGinnis, 903 F.2d 699, 702 (9th Cir.) (en banc), cert. denied, --- U.S. ----, 111
S.Ct. 266, 112 L.Ed.2d 223 (1990) (overruling as "rigid" and "formalistic"
Palmer v. United States, 652 F.2d 893 (9th Cir.1981)). See also Royal
American Managers, 885 F.2d at 1018-19; United States v. 1966 Beechcraft

Aircraft Model King Air, 777 F.2d 947, 951 (4th Cir.1985)
4

The shipowners challenge the district court's finding that the dock was slippery.
However, we need not reach that issue because even assuming that the dock
was slippery, that condition does not effect the distribution of liability between
the parties

Because we find that the settlement itself was reasonable, we need not reach
the issue of whether the shipowners properly tendered the defense of this action
to the dockowner and what effect such a tender would have

"The rule in admiralty is that prejudgment interest should be awarded unless

there are exceptional circumstances that would make such an award
inequitable." In re Bankers Trust Co., 658 F.2d 103, 108 (3d Cir.1981), cert.
denied sub nom. Bankers Trust Co. v. BP Oil, Inc., 456 U.S. 961, 102 S.Ct.
2038, 72 L.Ed.2d 485 (1982) cited with approval in Bermuda Express, N.V. v.
M/V Litsa, 872 F.2d 554, 564 (3d Cir.), cert. denied sub nom. M/V Litsa v.
Southeastern Maritime Co., --- U.S. ----, 110 S.Ct. 73, 107 L.Ed.2d 40 (1989).
Because prejudgment interest compensates the indemnified party for the use of
its money between settlement and reimbursement, interest accrues from the
settlement date

Because the attorneys' fees are awarded on the theory that the indemnified
party bore a burden belonging to the indemnifier, only attorneys' fees related to
the defense of the main action are awarded, not the fees incurred in obtaining
indemnification. Burris, 505 F.2d at 1178 n. 8; Simko v. C & C Marine
Maintenance Co., 594 F.2d 960, 969 (3d Cir.), cert denied, 444 U.S. 833, 100
S.Ct. 64, 62 L.Ed.2d 42 (1979)

Burris found Gilchrist limitation of fees to be the result of "the extraordinary

circumstances of that case"--in which there had been extreme delays and entire
separate proceedings on fees--and noted that "[t]he only cases which have
followed Gilchrist have similarly involved exceptional circumstances which
required the courts to create an 'equitable modification of the normal rule of
indemnification.' " 505 F.2d at 1176