Celeste v. Prudential-Grace Lines, 35 N.Y.2d 60 (1974)
In maritime cases, a cause of action for indemnity does not accrue until the indemnitee’s liability is fixed by a judgment against or payment by the indemnitee.
Summary
Carmine Celeste, a longshoreman, sued Prudential-Grace Lines (Prudential) for negligence and unseaworthiness. Prudential initiated a third-party action against American Stevedores, Celeste’s employer, seeking indemnification for breach of warranty of workmanlike service. American Stevedores argued the indemnity claim was time-barred by the six-year statute of limitations. The New York Court of Appeals reversed the lower courts, holding that under federal maritime law, the indemnity claim did not accrue until Prudential’s liability to Celeste was fixed by judgment or payment. The court emphasized the need for uniformity in maritime law and the application of federal laches, not state statutes of limitations, once liability is established.
Facts
Carmine Celeste, an employee of American Stevedores, was injured on November 8, 1965, while working on Prudential-Grace Lines’ ship, the S.S. Biddeford Victory.
Celeste sued Prudential, alleging negligence in the maintenance of the ship’s deck and the vessel’s unseaworthiness.
Prudential then brought a third-party action against American Stevedores, claiming breach of its warranty of workmanlike service and seeking indemnification for any judgment against Prudential in Celeste’s action.
Procedural History
Special Term dismissed Prudential’s third-party complaint, finding it was essentially an indemnity action that accrued when the breach occurred (Celeste’s injury) and was therefore barred by the six-year statute of limitations (CPLR 213).
The Appellate Division affirmed without opinion.
The New York Court of Appeals granted leave to appeal.
Issue(s)
Whether, in a maritime indemnity action brought in state court, the cause of action accrues at the time of the underlying injury or when the indemnitee’s liability is fixed by judgment or payment.
Holding
No, because under federal maritime law, a cause of action for indemnity does not accrue until the indemnitee’s liability is fixed by a judgment against or payment by the indemnitee.
Court’s Reasoning
The court emphasized that maritime actions in state court are governed by federal maritime principles. Federal law dictates that an indemnity cause of action accrues only when the indemnitee’s liability is established, either by judgment or payment. The court cited several federal cases, including United New York Sandy Hook Pilots Assn. v. Rodermond Ind., which directly addressed the issue and held that an indemnity claim does not accrue until the indemnitee’s liability is fixed.
The court distinguished the Ryan Co. v. Pan-Atlantic Corp. case, clarifying that its analogy of a breach of warranty of workmanlike service to a manufacturer’s warranty was only to emphasize the contract nature of the cause of action, not to determine the applicable statute of limitations.
The court noted that once liability is fixed, federal laches, rather than the state’s six-year statute of limitations, would govern the continued viability of the indemnity action.
The court quoted Matter of Rederi (Dow Chem. Co.), stating that state rules of procedure cannot be applied in maritime cases if they significantly affect the outcome of the litigation. Requiring state courts to apply federal law ensures a uniform body of maritime law.
“The general rule, applicable to this case, is that a claim for indemnity does not accrue until the indemnitee’s liability is fixed by a judgment against or payment by the indemnitee” (United New York Sandy Hook Pilots Assn. v. Rodermond Ind.).