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JOHNSON v. NATIONAL STEEL & SHIPBUILDING CO.

July 3, 1990

CARGE JOHNSON, JR., et al., Plaintiffs,
v.
NATIONAL STEEL & SHIPBUILDING COMPANY, et al., Defendants. AND ALL CONSOLIDATED ACTIONS



The opinion of the court was delivered by: GILLIAM

 EARL B. GILLIAM, UNITED STATES DISTRICT JUDGE

 The motion by National Steel and Shipbuilding Company (NASSCO) for summary judgment came on for hearing in Courtroom 7 before the Honorable Earl B. Gilliam on June 4, 1990 at 10:30 a.m. Stutz, Gallagher & Artiano (Sidney Stutz and Mark Schwartz of counsel) appeared for NASSCO, the moving party. Gray, Cary, Ames & Frye (Regina Petty of counsel) and Adams & Reese (Kirk Gasperecz of counsel) appeared for AMCA International Corporation (AMCA). Borton, Petrini & Conron (Roberta Fairbanks and David Olan of counsel) appeared for Microdot, Incorporated (Microdot). Post, Kirby, Noonan & Sweat (David Oberholtzer of counsel) appeared for Cleveland Machine Controls. Preston Easley appeared for the Johnson, Miller, Wilson, Pulley and Magana plaintiffs. Palmieri, Tyler, Wiener, Wilhelm & Waldron (Richard Rawls of counsel) appeared for the Unser plaintiffs. Jennings, Engstrand & Henrikson (Susan Stevenson of counsel) appeared for plaintiff Carlos Martin Ortiz. John Schau appeared for plaintiff George Sumner. Virginia Nelson and Kathleen Cuffaro appeared for the Estrella and Delgadillo plaintiffs.

 At the conclusion of the hearing, the court took NASSCO's motion under submission. The court now issues its ruling denying the motion for summary judgment without prejudice to renew. The court instead construes the motion as a motion to dismiss with leave to amend and hereby dismisses the cross-claims against NASSCO by AMCA, Minnesota Liquidating and Microdot.

 FACTS

 On July 10, 1987, the U.S.S. Sacramento was shifted from a drydock to Berth 5 in NASSCO's shipyard. The operation was performed under the supervision of the United States Navy and a San Diego Harbor pilot. Plaintiffs and their decedents were employees of NASSCO with various duties relating to moving the U.S.S. Sacramento. After the U.S.S. Sacramento was shifted, a personnel basket was lowered by crane to retrieve the NASSCO employees to transport them to the dock. The personnel basket was attached to the whip line of a Clyde Whirley crane, C-W number 3864, NASSCO number 7 ("Crane No. 7"). As the basket moved over the U.S.S. Sacramento, it suddenly fell to the deck of the ship. Of the twelve workers in the basket, six were killed and six were injured.

 Plaintiffs (the workers and their families) filed a complaint against various defendants under numerous theories, including the Jones Act, common law negligence, products liability and breach of warranty. The defendants have filed numerous cross-claims against each other. The defendants at issue in this motion are NASSCO, AMCA, Microdot, Minnesota Liquidating and Cleveland Machine Controls. As stated above, NASSCO was the employer of plaintiffs and their decedents at the time of the accident. Cleveland Machine Controls is a successor in interest to Randtronics, the company which allegedly manufactured and installed the control system for the electric motor used to hoist the whip line of Crane No. 7.

 The role of the other three defendants, Microdot, Minnesota Liquidating and AMCA, is somewhat more complicated. Crane No. 7 was manufactured by Clyde Iron Works, Inc. in 1964 or 1965. Sometime around 1970, Clyde Iron Works became a wholly-owned subsidiary of Microdot. In 1973, Microdot sold the business of Clyde Iron Works to Dombrico, Inc. Under the sales agreement, Microdot kept all of the sales proceeds and changed the name of Clyde Iron Works to Minnesota Liquidating Company. Minnesota Liquidating remained a shell corporation and for all intents and purposes ceased business activity. After purchasing Clyde Iron Works in 1973, Dombrico used the factory to continue to produce the same line of cranes under the name "Clyde Iron." AMCA is the successor corporation of Dombrico. *fn1"

 AMCA, Microdot and Minnesota Liquidating have filed cross-claims against NASSCO for full or partial equitable indemnity, full or partial comparative indemnity and declaratory relief. NASSCO is seeking summary judgment on these cross-claims.

 DISCUSSION

 NASSCO submits that the cross-claims for indemnity are barred by the exclusive liability provisions of the Longshore and Harbor Workers' Compensation Act (LHWCA). See 33 U.S.C.A. § 901 et seq. (West 1986 & Supp. 1990). The LHWCA provides a workers' compensation scheme for maritime employees such as longshoremen and certain other harbor workers. See 33 U.S.C.A. §§ 902(3), 904. NASSCO has paid benefits to the deceased and injured workers and their families under the LHWCA, and it submits that those payments are the employer's exclusive liability. NASSCO relies on Sections 5(a) and 5(b) of the LHWCA for this proposition. Section 5(a) provides in pertinent part:

 Section 5(b) provides in pertinent part:

 
In the event of injury to a person covered under this chapter caused by the negligence of a vessel, then such person, or anyone otherwise entitled to recover damages by reason thereof, may bring an action against such vessel as a third party. . . and the employer shall not be liable to the vessel for such damages directly or indirectly and ...

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