Darnell Hunter, Plaintiff-appellee, Cross-appellant, v. Reardon Smith Lines, Ltd., a Foreign Corporation,defendant-appellant, Cross- Appellee, 719 F.2d 1108 (11th Cir. 1983)

Darnell Hunter, a longshoreman, was injured while working aboard the motor vessel FRESNO CITY in Tampa, Florida. Hunter brought this action for negligence against the shipowner, Reardon Smith Lines. The District Court for the Middle District of Florida entered judgment on a jury verdict for $157,800 in Hunter's favor. Reardon Smith appeals, contending inter alia that the district court's instructions to the jury did not adequately set out the governing law as interpreted by the United States Supreme Court in Scindia Steam Navigation Co. v. Santos, 451 U.S. 156, 101 S. Ct. 1614, 68 L. Ed. 2d 1 (1981). We agree, and thus we reverse and remand for a new trial. In addition, we grant Hunter's cross-appeal and order that the effect of future inflation should be considered in calculating any award for future damages Hunter receives on remand.I. FACTUAL SUMMARY

On July 26, 1978, Hunter was employed as a longshoreman by the Tampa Stevedoring Co. ("the stevedore") and was assigned to a gang of approximately 14 men who were loading bags of phosphate into hold number three on the FRESNO CITY. The bags of phosphate weighed approximately 110 pounds each and previously had been loaded on pallets by the stevedore. Several members of Hunter's gang were on the dock attaching spreader bars to the pallets. One gang member was operating the ship's number three crane, and another member of the gang was on the deck giving signals to the crane operator. The remainder of the gang members, including Hunter, were in hold number three, unloading bags off the pallets and stowing them in the hold.

Longshoremen were working in all five of the FRESNO CITY's holds on July 26, and work began at approximately 8:00 a.m. Within a few minutes, however, the crane which was carrying pallets to the number three hold was taken out of service, apparently because it was leaking oil or hydraulic fluid.¹  The ship's engineers worked on the crane for almost two hours, and the crane was put back into operation sometime between 10:00 and 10:30 a.m. There was conflicting testimony regarding whether the crane was functioning properly after it began operating again.² 

Hunter's accident occurred less than an hour after the crane was put back into operation. Hunter and three other longshoremen were building a runway in the hatch area when two bags fell off a pallet above them. One of the bags landed on the deck, but the other bag fell into the hold and hit Hunter on the back.³  One of the men working with Hunter testified that the bags fell because the crane stopped suddenly and jarred the bags off the pallet. Another man working in the hold testified that the crane "cut off" and dropped the pallet slightly, causing the pallet to hit the edge of the hatch opening and thus knocking the bags loose. Other witnesses testified that the crane did not stop suddenly and that the pallet did not hit anything, and some of the witnesses contended that the bags of phosphate simply were slippery and often fell off without explanation.

Although Hunter was knocked down and momentarily stunned by the blow from the bag, in a few minutes he was able to slowly climb a ladder out of the hold⁴  and was taken to a hospital. The rest of the longshoremen in hold number three continued the loading operation, using the same crane which allegedly had caused Hunter's injury. The ship's engineers did shut down the crane at 11:50 a.m., apparently to make some repairs or to perform some maintenance,⁵  but the crane was back in operation at 1:00 p.m. when the longshoremen returned from lunch and was used without incident for the rest of that day⁶  and the two days which followed.

Hunter spent two days in the hospital in traction. Subsequently, he was treated by several physicians for a variety of problems which he attributed to his injury. The jury awarded Hunter $7,800 for "past damages" (lost wages, medical bills, pain and suffering), $50,000 for future pain and suffering, and $100,000 for loss of future wages.

Reardon Smith's primary contention⁷  on appeal is that the district court did not adequately instruct the jury on the law which governs a shipowner's duty to longshoremen working on board a vessel. Both parties agree that the jury should have been instructed in accord with the rules established by the Supreme Court in Scindia Steam Navigation Co. v. Santos, supra, and we begin our analysis of this issue with a brief review of the Scindia decision.

The facts in Scindia were similar to the facts in this case. A longshoreman was injured when he was struck by a sack of wheat that had fallen from a pallet being held in suspension by one of the ship's winches, which was being operated by another longshoreman. The evidence established that the braking mechanism which slowed the winch's descent had been malfunctioning for several days, but it was not clear whether the sacks which hit the longshoreman had fallen because the braking mechanism slipped or because the suspended pallet was swinging back and forth.

The district court had granted summary judgment for the shipowner, reasoning that the shipowner was not liable for dangerous conditions created by the stevedore, the longshoreman's employer, while the stevedore was in exclusive control of the loading operation. The Court of Appeals for the Ninth Circuit had reversed, ruling that a shipowner had to exercise "reasonable care under the circumstances" and that there were factual questions about the shipowner's conduct which had to be resolved by a jury. The Supreme Court affirmed the Ninth Circuit's judgment, but set forth a somewhat different standard regarding the duty the shipowner has to longshoremen working on board a vessel.

The Supreme Court ruled that at the outset of cargo operations the shipowner's duty

extends at least to exercising ordinary care under the circumstances to have the ship and its equipment in such condition that an expert and experienced stevedore will be able by the exercise of reasonable care to carry on its cargo operations with reasonable safety to persons and property, and to warning the stevedore of any hazards on the ship or with respect to its equipment that are known to the vessel or should be known to it in the exercise of reasonable care, that would likely be encountered by the stevedore in the course of his cargo operations and that are not known by the stevedore and would not be obvious to or anticipated by him if reasonably competent in the performance of his work.

451 U.S. at 166-67, 101 S. Ct. at 1622. Once cargo operations have begun, however, the scope of the shipowner's duty usually is somewhat limited.⁸  According to the Supreme Court: [A]bsent contract provision, positive law, or custom to the contrary ... the shipowner has no general duty by way of supervision or inspection to exercise reasonable care to discover dangerous conditions that develop within the confines of the cargo operations that are assigned to the stevedore. The necessary consequence is that the shipowner is not liable to the longshoremen for injuries caused by dangers unknown to the owner and about which he had no duty to inform himself.

Id. at 172, 101 S. Ct. at 1624. Nevertheless, addressing the situation where a shipowner learns that an apparently dangerous condition has developed during the cargo operations, the Supreme Court held that "there are circumstances in which the shipowner has a duty to act where the danger to longshoremen arises from the malfunctioning of the ship's gear being used in the cargo operations." Id. at 175, 101 S. Ct. at 1626. Thus, although the court noted that the determination of whether problems with the ship's gear pose an unreasonable risk of harm to the longshoremen is "a matter of judgment committed to the stevedore in the first instance," id., the court held that if the shipowner is aware that the ship's gear is malfunctioning, that the stevedore is nonetheless continuing to use it, and that the stevedore's continued use of the gear is "obviously improvident," then the shipowner has a duty to intervene and repair the ship's gear. Id. at 175-76, 101 S. Ct. at 1626-27.

In this case, Hunter argued at least two theories of liability to the jury.⁹  First, Hunter argued that Reardon Smith's employees negligently turned over a malfunctioning crane to the stevedore, thus breaching the duty to have the ship and its equipment in proper condition so that the stevedore could carry on cargo operations with reasonable safety. Second, Hunter argued in the alternative that a dangerous condition arose during the course of the cargo operations, that Reardon Smith's employees were aware of the dangerous condition,¹⁰  and that Reardon Smith's employees failed to intervene even though they knew or should have known that the stevedore's continued use of the crane to load bags of phosphate created an unreasonable risk of harm to the longshoremen, thus breaching the shipowner's duty to act when the stevedore's actions are obviously improvident.

Although the district court properly instructed the jury regarding the shipowner's duty to have the ship and its gear in proper condition for the stevedore,¹¹  we conclude that the court did not adequately inform the jury about the limited nature of the shipowner's duty once the stevedore has commenced, and assumed primary responsibility for, the cargo operations. The only instructions the district court gave regarding the shipowner's duty after cargo operations have begun were as follows:

[O]nce the stevedore's cargo operations have begun, absent positive law or custom to the contrary, the shipowner has no general duty by way of supervision or inspection to exercise reasonable care to discover dangerous conditions that develop within the confines of the cargo operations that are assigned to the stevedore. Thus, the shipowner is not liable to the longshoremen for injuries caused by dangers unknown to the shipowner and about which he had no duty to inform himself.

Record on Appeal, vol. 11, at 484 (emphasis added). These instructions were in accord with Scindia, but they dealt only with Reardon Smith's duty, and the limits thereon, with respect to unknown dangers. The instructions did not give the jury any guidance about the scope of the shipowner's duty when there is a problem with the ship's gear that is known to both the shipowner and the stevedore. Such guidance was necessary for the jury to properly consider Hunter's second theory of liability. In other words, there are two potential duties on the part of the shipowner once cargo operations have begun: the potential duty to discover unknown dangers, and the potential duty with respect to dangers which are known to the shipowner. The trial court here, in the instruction quoted above, properly charged the jury that the shipowner has no general duty to discover unknown dangers. However, the quoted instruction does not address the shipowner's second potential duty, i.e., with respect to dangers which are known to the shipowner. With respect to this potential duty the Supreme Court in Scindia precisely defined the very limited duty of the shipowner:

Yet it is quite possible, it seems to us, that ... [the stevedore's] judgment in this respect was so obviously improvident that ... [the shipowner], if it knew of the defect and that ... [the stevedore] was continuing to use it, should have realized the winch presented an unreasonable risk of harm to the longshoremen, and that in such circumstances it had a duty to intervene and repair the ship's winch.

451 U.S. at 175-76, 101 S. Ct. at 1626 (footnote omitted) (emphasis added). The Court also defined the primary responsibility of the stevedore:

[W]hether it could be safely used or whether it posed an unreasonable risk of harm to ... [the longshoremen] was a matter of judgment committed to the stevedore in the first instance.

Id. at 175, 101 S. Ct. at 1626. The Supreme Court went on to rule:

[T]he legal duties placed on the stevedore and the vessel's justifiable expectations that those duties will be performed are relevant in determining whether the shipowner has breached its duty. The trial court and where appropriate, the jury, should thus be made aware of the scope of the stevedore's duty under the positive law.

Id. at 176, 101 S. Ct. at 1626.

Although the trial court here may have properly charged the jury as to the primary nature of the stevedore's responsibility during cargo operations with respect to the discovery of unknown dangers, it failed to instruct the jury that the stevedore retains the primary responsibility even with respect to dangers which are known to the shipowner. Reardon Smith requested, and was entitled to, such instructions. We thus conclude that the district court erred. The error is significant because the trial focussed on Reardon Smith's duty with respect to known dangers. The Supreme Court in Scindia expressly held that the jury should be made aware of the "duties placed on the stevedore and the vessel's justifiable expectations that those duties will be performed." Id. at 176, 101 S. Ct. at 1626.

The error was magnified by a paragraph early in the jury charge which suggested to the jury that the shipowner had a duty to supervise the cargo operations. The district court instructed the jury:

In this case, the plaintiff claims that the defendant was negligent and that such negligence was a legal cause of damage sustained by the plaintiff. Specifically, the plaintiff alleges that the crane on the M/V FRESNO CITY was malfunctioning before the accident and that the defendant was negligent in failing to properly maintain and repair the ship's crane at hatch number three or to properly supervise cargo operations. In order to prevail on this claim, the plaintiff must prove by a preponderance of the evidence, one, that the defendant was negligent, and two, that such negligence was a legal cause of damage sustained by the plaintiff.

Record on Appeal, vol. 11, at 482-83 (emphasis added). We recognize that this instruction merely told the jury that "the plaintiff alleges ... that the defendant was negligent in failing ... to properly supervise cargo operations." Id. (emphasis added). However, the last sentence might have given the jury the impression that the plaintiff could prevail on his claims--including the "failure to supervise" claim--merely by proving negligence and proximate cause. Such an impression would have been reinforced by comments Hunter's counsel made during closing argument¹²  which also suggested that Reardon Smith had a duty to supervise the cargo operations.¹³ 

We conclude, therefore, that the district court did not adequately instruct the jury on the law relevant to Hunter's second theory of liability. Further, although the court properly instructed on Hunter's first theory of liability, the jury returned only a general verdict and we are unable to determine from the record which theory the jury relied upon in reaching that verdict.¹⁴  Accordingly, we reverse the judgment rendered below and remand for a new trial.¹⁵ 

On cross-appeal, Hunter contends that the district court erred when it refused to permit expert testimony or to instruct the jury regarding the effect of future inflation on the award for future damages. In ruling on this matter, the district court relied on Johnson v. Penrod Drilling Co., 510 F.2d 234 (5th Cir.), cert. denied, 423 U.S. 839, 96 S. Ct. 68, 46 L. Ed. 2d 58 (1975), which proscribed consideration of inflation in making awards for future damages. Developments since the trial of this case indicate that Penrod is no longer viable law. See Culver v. Slater Boat Co., 688 F.2d 280 (5th Cir. 1982) (en banc);¹⁶  see also Jones & Laughlin Steel Corp. v. Pfeifer, --- U.S. ----, 103 S. Ct. 2541, 76 L. Ed. 2d 768 (1983). Accordingly, if a new trial is necessary, the effect of future inflation on any award Hunter receives for future damages should be accounted for in an appropriate manner.

REVERSED and REMANDED.