## Facts

- Pan-Atlantic operated the cargo vessel *Canton Victory* and orally contracted with Ryan Stevedoring to perform all required stevedoring operations in Pan-Atlantic’s coastwise service.
- At Georgetown, South Carolina, Ryan’s employees loaded mixed cargo, including heavy rolls of pulpboard, and improperly stowed at least one roll by failing to secure it safely.
- During unloading at Brooklyn, New York, a pulpboard roll broke loose and injured Palazzolo, a longshoreman employed by Ryan.
- Ryan (through its compensation carrier) paid Palazzolo benefits under the Longshoremen’s and Harbor Workers’ Compensation Act (LHWCA).
- Palazzolo sued Pan-Atlantic, alleging unseaworthiness and failure to provide a safe place to work, and obtained a substantial judgment.
- Pan-Atlantic impleaded Ryan, seeking indemnity on the theory that Ryan’s improper stowage breached its contractual obligation to perform stevedoring safely and properly.
- The district court dismissed Pan-Atlantic’s third-party complaint; the court of appeals reversed and ordered judgment for Pan-Atlantic against Ryan; the Supreme Court granted rehearing and reviewed the indemnity issue.

## Issues

1. Whether LHWCA § 5’s exclusivity provision bars a shipowner’s contractual indemnity claim against the stevedore-employer for amounts the shipowner must pay to the injured longshoreman.
2. Whether a stevedoring contract, absent an express indemnity clause, includes an implied obligation requiring the stevedore to indemnify the shipowner for losses caused by the stevedore’s improper loading and stowage.
3. Whether the shipowner’s duty or ability to supervise and reject unsafe stowage bars or reduces the shipowner’s right to indemnity.

## Decision

- The Supreme Court affirmed the court of appeals.
- LHWCA § 5 did not bar Pan-Atlantic’s indemnity claim because it was based on Ryan’s independent contractual duty to Pan-Atlantic, not on Ryan’s liability to its employee.
- Ryan’s agreement to perform stevedoring operations carried an implied warranty of workmanlike performance, including proper and safe stowage.
- Ryan’s breach of that implied warranty required it to indemnify Pan-Atlantic for the damages Pan-Atlantic paid due to the unseaworthy condition caused by Ryan’s improper stowage.
- Pan-Atlantic’s failure to exercise its right to supervise or reject unsafe stowage did not bar recovery of full indemnity from Ryan.

## Legal Principles

- LHWCA exclusivity limits the employer’s liability to the employee, but does not eliminate the employer’s separate contractual liability to a third party.
- A stevedore’s service contract includes an implied warranty that the stevedore will perform its work in a reasonably safe and workmanlike manner.
- When a shipowner’s liability to an injured longshoreman results from an unseaworthy condition created by the stevedore’s breach of the implied warranty, the shipowner may obtain full contractual indemnity from the stevedore.
- A shipowner’s general power or duty to supervise or reject unsafe work does not, by itself, defeat contractual indemnity for loss caused by the stevedore’s breach.

## Conclusion

The Court held that a stevedore’s contract contains an implied warranty of workmanlike service and that breach of this warranty required the stevedore to indemnify the shipowner for longshoreman-injury damages, notwithstanding LHWCA exclusivity and despite the shipowner’s failure to reject the unsafe stowage.


Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124 (1956)