In an ironic twist on January 31, 2011, the U.S. Court of Appeals for the 2nd Circuit in "In re: DG Harmony,"1 affirmed the district court's ruling that by settling with cargo plaintiffs and "... not pursuing its indemnity claims at trial, Cho Yang forfeited its indemnity claim." The circuit court further affirmed the lower court's finding that PPG, the manufacturer and shipper of the calcium hypochlorite (hydrated) was 100 percent at fault for failing to warn, and Cho Yang 0 percent, in causing the 1998 explosion aboard the DG Harmony.
The issue on remand was whether a warning, if given, would have prevented the explosion by changing the carrier's stowage decision. PPG unsuccessfully argued that the vessel would not have followed standard IMDG Code and would not have changed the stowage. Cho Yang argued that in settling, it simply wanted to cap its exposure and more importantly cut off its attorney's fees. The court noted as "unwise"
Cho Yang's settlement with cargo plaintiffs if Cho Yang wanted to pursue its cross claims for indemnification, but took no affirmative steps to assert or preserve their cross claims at trial.
Footnotes
1 For the full text of the Second Circuit's summary order, click here
www.cozen.comThe content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
