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Montauk Oil Transportation Corp. v. Sonat Marine Inc.

decided: March 17, 1989.

MONTAUK OIL TRANSPORTATION CORP., PLAINTIFF-APPELLEE,
v.
SONAT MARINE, INC., AND GETTY REFINING AND MARKETING COMPANY, DEFENDANTS, SONAT MARINE, INC., DEFENDANT-APPELLANT



Appeal from a judgment of the United States District Court for the Southern District of New York (Carter, J.) awarding appellee $496,660.80 for the unpaid charter hire of two barges and tugs. Remanded with instructions to reduce award to $307,522.10 and in other respects affirmed.

Author: Van Graafeiland

VAN GRAAFEILAND, Circuit Judge:

Sonat Marine, Inc. appeals from a judgment in favor of Montauk Oil Transportation Corp. which followed a non-jury trial before Judge Carter in the United States District Court for the Southern District of New York. The judgment, which was for charter hire, was in the total amount of $496,660.80, representing a principal amount of $317,274.61 and interest of $179,386. 19. For the reasons that follow, we affirm that part of the judgment which imposes liability on Sonat but remand to the district court with instructions to reduce the amount of the principal award to $196,274 and the interest to $111,248.10 for a total award of $307,522.10, otherwise the judgment to remain the same.

In 1981, both Montauk and Sonat were engaged in the transportation of petroleum products by tug and barge. Montauk's employees were members of Local 333 of the United Marine Division of the International Longshoremen's Association. Sonat's employees were members of the Seafarers International Union. On July 1, 1981 Sonat's employees went on strike. On July 2, 1981 Glenn Shaw, a Montauk supervisor, hearing of the strike, offered William Schade, a Sonat manager, the charter hire of two tugs and barges during the strike. The offer was accepted. Although the charter party was completely oral, it is undisputed that it provided for a daily rate of $11,500 plus fuel and port charges, delivery and return at New York City. Unfortunately, the charter party contained no exceptions relating to the strike, and it was that failure which led to this litigation.

Getty Refining and Marketing Company, one of Sonat's regular customers, had a refinery in Delaware City, Delaware, and on July 7, 1981 Getty was expecting the arrival of a load of oil on its ship, the M/T HERON. Because the HERON's draft was too deep to permit direct unloading, Sonat was hired by Getty to perform the necessary lightering services. Sonat directed Montauk's barges to undertake this task on its behalf.

In an effort to avoid possible confrontations with Sonat's striking union, Shaw instructed his supervisory personnel to represent that Montauk's agreement of hire was with Getty, not Sonat. Montauk also indicated on its records that Getty was the other contracting party. However, Seafarers International was not misled. When the first of Montauk's two barges, the NORFOLK, took on a load of fuel from the HERON and headed for port, it was met by Seafarers' picket boat and was forced to anchor when NORFOLK's crew refused to cross Seafarers' "picket line". At about the same time, the other barge, the SAVANNAH, which was in the process of lightering the HERON, discontinued the unloading process on instructions from Local 333. Shaw ordered the SAVANNAH to pump the oil back into the HERON and return to New York, which it did. The NORFOLK remained at anchor until July 29.

On July 21, relying on Shaw's false averment that Montauk was employed by Getty, Montauk filed charges with the N.L.R.B. claiming that Seafarers was engaged in a secondary boycott in violation of 29 U.S.C. ยง 158(b)(4)(i), (ii)(B). On July 29, Local 333 permitted the NORFOLK to proceed to the Getty refinery in exchange for Montauk's agreement to withdraw its charges. As appears from the caption in this suit for charter hire, Montauk named Getty as a party defendant. The district court not only dismissed the claim against Getty; it also awarded Getty attorneys' fees on the ground that the suit against Getty was "baseless".

The claim against Sonat, which is reflected in the district court's judgment, may be broken down as follows:

Charter hire for the SAVANNAH -- $38,763.21

Charter hire for the NORFOLK -- 265,737.40

Fuel charges -- 12,774.00

Total $317,274.61

Sonat denied the claim for the SAVANNAH in toto on the ground that it "did not perform at any time under the charter." It offered to pay $2,421.89 for fuel consumed in towing the NORFOLK to and from the HERON and $34,451.70 for the NORFOLK's work prior to and following the extended anchorage, i.e., lightering the HERON and discharging at the terminal. Sonat's check for ...


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