Sea King Corp. v. Eimskip Logistics, Inc. (367 F. Supp. 3d 529, 2019)

Mark S. Davis, CHIEF UNITED STATES DISTRICT JUDGE

This maritime matter is before the Court following a bench trial, and involves a contract dispute between third-party plaintiff CMA CGM, S.A. ("CMA") and third-party defendant Marine Repair Services of Virginia ("MRS"). Although a trial was necessary in this case, the majority of the facts are not in dispute, and the primary legal issue is whether CMA is entitled to complete indemnity from MRS pursuant to the "warranty of workmanlike performance" that has been recognized in this Circuit to apply in maritime stevedoring contracts, ship repair contracts, and at least some towage contracts.

I. Findings of Fact

A. Stipulated Facts

The Court adopts, and incorporates herein by reference, the forty-five stipulations of fact set forth in the final pretrial order. ECF No. 94, at 3-13. Reproduced immediately below is an abbreviated version of such stipulations.

CMA is a French ocean carrier with its headquarters in France, and CMA conducts business in the United States through its agent, CMA CGM (America), LLC ("CMA America"). MRS is a Virginia corporation that, among other things, maintains and services refrigerated cargo containers ("reefers") at various terminals in the Port of Virginia.

In October of 2016, plaintiff Sea King Corporation ("Sea King") contacted defendant Eimskip Logistics Inc. ("Eimskip") to arrange for the transport of a cargo of frozen conch meat from Sea King's facility in Atlantic, Virginia to Hong Kong. On October 14, 2016, Eimskip made a "web booking" for such shipment with CMA America. Such booking indicated that the cargo was "frozen seafood" to be shipped from Virginia International Gateway terminal ("VIG") to Hong Kong, in a refrigerated container set at -20° Celsius, vents closed. CMA sent Eimskip a booking confirmation reflecting such shipping requirements, and Eimskip sent a follow up email to Sea King confirming the booking for shipment through CMA. After Sea King was paid in full for the cargo by the Hong Kong buyer, it executed a written contract with Eimskip for shipment of the frozen conch meat (valued at over $ 250,000) to Hong Kong in a 40-foot reefer set to an internal temperature of -20° Celsius. Sea King paid Eimskip approximately $ 5,500 for ocean freight, pre-carriage transport, and insurance.

Virginia International Terminals ("VIT"), the entity that operates the VIG terminal, has an "electronic data interface" ("EDI") system that permitted CMA to electronically forward the electronic booking made by Eimskip to the terminal. However, VIT had an EDI server issue beginning on October 25, 2016 that delayed certain booking entries from posting in the system until late on October 27, 2016.

As a result of the booking with Eimskip, CMA sent an email order to MRS requesting that MRS prepare a reefer for release, listing the required preset temperature as -20° Celsius. A reefer is an insulated container with a refrigeration unit powered either by an external source (plugged into shore or ship power) or by a portable generator attached to the container (commonly known as a "genset"). A genset is attached to a reefer when it is being transported by truck, and the genset is generally removed when the reefer is stored at a facility that has power or when it is loaded onto a ship. A reefer container is readily distinguishable from a standard cargo container because reefers have smooth sides and dry cargo containers have corrugated sides.

Based on CMA's email request, MRS "pre-tripped" reefer Container No. TRIU8137918 (the "Container"), which was leased by CMA and stored at MRS's "depot" in Chesapeake, Virginia. The pre-trip inspection, performed by MRS in Chesapeake, confirmed that the Container's refrigeration system was operating properly.

As of October 2016, CMA and MRS had a general course of dealing under which MRS agreed to: (1) pre-trip CMA's containers as needed; and (2) monitor CMA's export container temperatures twice per day after a live container with temperature requirements was in-gated at the VIG terminal. The purpose of the monitoring was to confirm that the temperature stayed within a designated range and to protect the integrity of the cargo. As a matter of practice, when MRS identifies a discrepancy between the booking temperature and the actual temperature of a reefer, it immediately notifies the ship line (here CMA) as a failsafe against cargo damage.

On October 26, 2016, third-party defendant Leighton Trucking, LLC ("Leighton"), a company hired by Eimskip to transport the empty pre-tripped Container from MRS's Chesapeake facility to Sea King's facility for loading, and then transport the loaded Container to VIG, picked up the Container in Chesapeake. On the morning of October 27, 2016, Leighton brought the Container to Sea King's facility, and the properly functioning reefer was loaded with frozen conch meat and sealed.

That same morning, Eimskip contacted CMA to inform it that the Container was actively being loaded, but that there was not a booking for such reefer in VIT's computer system (a fact that resulted from the EDI server issue). In response to this email, a CMA employee manually input the booking data into VIT's system, and although such booking identified the Container as a loaded reefer for export, it failed to reflect a temperature requirement for the Container.

VIG is an automated terminal that minimizes personal contact with containers moving through the terminal facility. The gate-in process is handled remotely, with inspection of incoming and outgoing containers performed though video and photographs. With respect to "live" reefer containers, however, VIT reefer mechanics ensure that reefers are visually checked at VIG before a delivering driver is released from the terminal. The steamship lines, like CMA, also take special precautions to ensure that human or mechanical failures do not compromise frozen cargo. At VIG, all gensets are removed by MRS employees and MRS charges all carriers, such as CMA, for genset removal services.

The Leighton truck arrived at the VIG gate and entered the terminal at 2:55 p.m. on October 27, 2016. The genset mounted on the Container was operating and the Container displayed a digital temperature of -20° Celsius. However, because of CMA's error in omitting the temperature requirement from the manual booking, VIT's booking information indicated that the Container was a reefer with no temperature requirement, i.e. not a "live" container. Although VIT inspected the Container upon arrival at VIG by video and photographs, its clerks did not notice the discrepancy between the booking information and the "live" reefer that appeared at the gate. The Container was admitted to VIG and the driver received a routing ticket from the unmanned kiosk at the gate, instructing him to take the Container to "yard location 08L." Although it is not indicated on the ticket, yard location 08L is a non-powered"stack" of containers that is not suitable for storing a "live" reefer with a temperature requirement. The Routing Ticket instructed the driver that:

If you are dropping off reefer in the stacks, proceed to 407 row first to have the genset removed.

** If parking reefer in the reefer rows WAIT WITH THE CONTAINER UNTIL

REEFER MECHANIC ARRIVES TO CHECK THE CONTAINER IN!**

** DO NOT GO TO THE STACK WITH GENSET ATTACHED**

At the time, VIT's Operations Manual provided detailed instructions for the handling of live export reefers assigned to the "reefer rows," where the truck chassis, with reefer attached, would be parked in an assigned slot. The driver was required to wait with the reefer in the reefer rows until a VIT reefer mechanic verified the container temperature. If the temperature was acceptable, VIT would plug the container into shore power and the driver would be released. At VIG, VIT is the entity responsible for plugging reefer containers into both shore power and vessel power. Because live export reefers were not ordinarily stored in "the stacks," VIT's Operations Manual provided no procedure for sending live export reefers to the stacks. The practice of sending a live export reefer to the stacks was considered by VIT to be unusual and abnormal and only done when the reefer rows were full. Only rows 3, 6, 9, 12, and 15 of the stacks contained reefer slots (i.e., these rows had shore power).

In accordance with the instructions on the printed VIG gate ticket, the Leighton driver drove to "row 407," where two of MRS's reefer mechanics confirmed (from looking at the gate ticket) that the Container was headed for the stacks, and not the reefer rows, and it therefore had to have its genset removed at that time. The Container's refrigeration unit was switched off by MRS at 4:41 p.m. that day (Oct. 27, 2016), and the genset was removed. The Container was then taken to the stacks and was never connected to shore power at VIG, nor to ship power during oversees transport. Although the Container was powered-off on October 27, 2016, the cargo remained frozen and undamaged at the VIG terminal through at least October 28, 2016. The cargo was discovered to be a total loss upon delivery in Hong Kong in December of 2016.

When pre-tripping the reefer in Chesapeake, MRS posted a placard on the Container next to the control panel at eye level stating the booked temperature (-20° Celsius). Both MRS reefer mechanics working at VIG on the day the Container arrived have testified that they did not know that stack 8 at VIG had no powered reefer slots. At a corporate level, MRS was aware that row 8 of the stacks did not contain reefer slots. MRS Reefer Mechanic Glen Carpenter filled out a Reefer Receive/Release Log showing that the Container had been received at VIG (identified by container number) and that the temperature setting was -20° Celsius. This was the only CMA reefer received at VIG on October 27 and this log page included just one entry. Carpenter turned the log page into his MRS foreman at the end of his shift on October 27, 2016. The MRS foreman, Leo Castellanos, was responsible for preparing a Refrigerated Tracking and Monitoring log. Castellanos, or occasionally other MRS reefer mechanics, would check the temperature on CMA containers twice per day and record them in this log.

VIT's server problem was fixed late on October 27, and at 7:38 p.m., the VIT system finally showed the original booking made by CMA back on October 25, which included the proper temperature setting for the Container. Such updated booking did not, however, change any container-specific information in the VIT system, meaning that if MRS accessed VIT's system for information regarding the Container (as opposed to searching the system based on the booking number) the system would indicate that the Container was a loaded export reefer but would not indicate a temperature requirement.

The parties agree and stipulate that the contract or contracts between CMA and MRS involved in this case were maritime contracts within the meaning of that term for purposes of the Court's admiralty jurisdiction and choice of law in this case. The original plaintiffs settled their maritime claims against Eimskip, and CMA and Eimskip settled its third-party claims with VIT and Leighton. CMA settled with Plaintiffs by agreeing to pay them $ 260,000 in consideration of complete releases.

B. Facts Determined by the Court as Factfinder

1. MRS and CMA's business relationship is not governed by a written contract, but rather, such entities have established, through a long-term course of dealing, that MRS provides CMA with three distinct services relevant to this case: (a) MRS "pre-trips" reefer containers for CMA and arranges for their release; (b) MRS provides CMA with genset mounting and dismounting services at VIG, a service that is also provided to all other carrier companies that move reefers through VIG; and (c) MRS provides reefer temperature monitoring and container repair for CMA's reefers at VIG, although unlike the mounting/dismounting services, such monitoring service is not provided to all other carriers, as some carriers contract directly with VIT for similar monitoring services.

2. Although MRS monitors CMA's live reefers twice daily while they are stored at VIG, unlike other terminals in the area, MRS is not responsible for, nor is it permitted, to intake such containers at VIG and plug them into shore power. Such intake duties, which include both confirming that the reefer is operating at the time of intake within an acceptable temperature range, and connecting the reefer to shore power, are borne solely by VIT.

3. MRS bills CMA separately for each aspect of its services as they are performed. Accordingly, an invoice is issued when MRS's storage facility in Chesapeake, Virginia releases a pre-tripped container, an invoice is issued for genset removal after gensets are installed or removed from CMA's containers at VIG, and an invoice is issued for the twice daily monitoring of the CMA reefers at VIG. No written contracts govern such services beyond the emails/orders sent by CMA to MRS to arrange for the pre-tripping/release of reefers needed for upcoming exports.

4. In order to conduct its monitoring services at VIG, the MRS foreman maintains a handwritten monitoring log. Each morning, and each afternoon, the foreman accesses the on-terminal "SPARCS" computer database maintained by VIT and prints a list of all CMA reefer containers that have been in-gated with temperature requirements. The SPARCS information is "live" and updates constantly, including updates to the current location of each container at VIG, and this system can only be accessed by MRS while physically at the terminal. MRS cross-references the updated SPARCS list to its handwritten log twice a day to ensure that CMA's reefers are accounted for and being monitored. Pursuant to its course of dealing with CMA, MRS visually inspects each CMA reefer container with an assigned temperature requirement twice a day to ensure that the reefer is maintaining a temperature consistent with the booking information (the temperature requirement is available in the SPARCS system and is printed on the MRS "sticker" that is affixed to the exterior of the reefer when it leaves MRS's Chesapeake depot). Should there be any issues with a reefer, MRS performs necessary repairs without further guidance from CMA (and bills CMA for such repairs) except in those cases where the repair is major, in which case MRS contacts CMA to work out a plan for addressing the issue.

5. When a pre-tripped reefer is released from the MRS depot, certain MRS employees are aware of the intended local export terminal as well as the approximate date that the reefer will arrive at such terminal. However, because MRS turns over custody of the reefer, and because CMA does not notify MRS of any changes to the shipping timeframe, to include changes to the export vessel, export terminal, or the number of days that the container will be stored at the terminal prior to export, MRS does not "track" the released container. CMA failed to present evidence at trial demonstrating that MRS had an obligation, whether express, implied, or through "course of dealing," to track a reefer after it is pre-tripped and released. Rather, MRS merely reacts when a CMA reefer is in-gated at a local terminal.

6. MRS has no functions at the VIG gate, nor does it have any direct communications with the gate regarding which containers have entered the terminal. MRS also has no role in: (a) assigning the VIG location where truck drivers should deliver a reefer designated for export; or (b) moving, or directing the movement of, reefers at VIG. Rather, VIT controls the movement of all containers at VIG. If a reefer being monitored by MRS is repositioned by VIT, VIT does not communicate with MRS either before or after the container is moved, and MRS is only "informed" of the move through accessing the real-time SPARCS system.

7. Because MRS has no control over where containers are stored at the VIG terminal, it has no ability to group containers by client in order to facilitate more efficient/effective monitoring.

8. As established through the deposition of CMA's Rule 30(b) (6) representative, CMA believed that MRS knew when a live reefer arrived at VIG through two channels: (1) MRS received a "printout" of the reefers that arrived each day (the SPARCS information); and (2) MRS created its own log from the "temperature check" it performed in "the lane" as part of the receiving function at VIG. CMA believed that MRS would cross-check these lists to ensure that all live CMA reefers were accounted for.

9. Although CMA's representative may have accurately summarized how MRS tracks reefers at other local terminals where MRS does in fact perform initial intake temperature checks, he was mistaken as to the procedure at VIG. Notably, at VIG, the initial temperature check is performed by VIT personnel, rather than MRS personnel, and MRS therefore does not create a log of live reefers passing through a temperature check "lane" that it can later cross check against the SPARCS "printout." MRS's 30(b) (6) representative testified that MRS does maintain a log of the CMA reefers visually identified (twice daily) in the reefer rows and powered reefer stacks and cross checks that log against the SPARCS list. MRS would, of course, investigate the matter if its employees discovered a CMA reefer parked in the reefer rows, or powered reefer stacks, that did not appear on the SPARCS list; however, the Container at issue was not assigned to, nor stored in, either of these two appropriate areas.

10. Reefer containers are sometimes used to ship dry goods that do not require refrigeration, including situations where there are humidity concerns and when there is a surplus of reefers in the area.

11. MRS reefer mechanics perform genset install and removal for all reefers that arrive or depart VIG regardless of whether the carrier contracts with MRS for any monitoring services. MRS creates a genset "Mount Dismount Log" and a "Reefer Receive/Reefer Release" log when it installs or dismounts a genset at VIG, but MRS does not cross-check either of these logs with its monitoring log.

12. Because the Container at issue was in-gated without a temperature requirement (due to the EDI server issue, the CMA manual input error, and the failure of the VIT gate inspection to discover that the Container was "live") VIT never performed an initial temperature check nor did it take any steps to plug the container into shore power. The Container never appeared on the relevant SPARCS list, and MRS never attempted to locate it or monitor it.

13. Based on CMA and VIT's errors, which dictated/controlled the handling of the Container at VIG, the Container was placed in a dry stack where: (1) there was no available power; and (2) it was essentially impossible for MRS, or anyone else, to visually "discover" the Container, and/or see the MRS "sticker" while monitoring other reefers because the unpowered stacks are physically inaccessible, rendering such misfiled Container effectively "hidden" once it entered the unpowered stacks.

14. CMA was aware of the disappearance/non-existence of the booking in the VIT system before the Container was "hidden" at VIG, yet it failed to take precautions to ensure that such reefer was properly accounted for. Specifically, CMA did not notify MRS about the fact that it had to make a manual entry on October 27 to allow the Container entry to the VIG terminal.

15. If it had more robust procedures in place, and/or more knowledgeable reefer mechanics that knew which rows in the VIG stack were powered, MRS clearly "could have" discovered the error caused by CMA's and VIT's conduct. Had such error been discovered, MRS would have been obligated to investigate such issue on behalf of CMA because, within reason, MRS acts as CMA's "eyes and ears" at VIG. That said, if it had more robust procedures in place, CMA likewise clearly "could have" discovered the error caused by its erroneous manual booking.

16. Although MRS had an established "course of dealing" with CMA aimed at protecting CMA's cargo, there was not a course of dealing that rendered MRS the virtual insurer of CMA's cargo. MRS did not operate VIG, did not assign container locations, and most notably, did not "intake" reefers to confirm temperature settings and/or "plug in" live reefers to shore power. MRS was clearly obligated through course of dealing to have procedures in place to monitor the integrity of CMA's refrigerated cargo at VIG, but its primary role was to ensure that the refrigeration units continued to function properly. The trial evidence failed to establish that course of dealing required MRS to adopt the best possible procedures, regardless of the cost or likelihood that such procedures were necessary. Stated differently, the Court rejects CMA's suggestion that MRS was obligated to act as a "failsafe" against all errors, including booking errors committed by CMA.

17. Consistent with MRS's post-trial argument, through course of dealing, MRS was obligated to monitor all CMA reefers at VIG that were in-gated with a temperature requirement (and thus appeared on the relevant SPARCS printout), and it had the further duty to "discover" any CMA live reefer parked in the powered reefer stacks, or the reefer rows, that displayed a MRS "sticker" reflecting a temperature requirement.

II. Conclusions of Law

As set forth in the Final Pretrial Order, CMA asserts that MRS breached its contract with CMA, that such breach caused the damage for which CMA faced liability to other parties, and that MRS is liable, under maritime law, to indemnify CMA for the entire $ 260,000 settlement paid by CMA. MRS agrees that maritime law governs the instant dispute, but asserts that it did not commit any breach of contract or violate any existing course of dealing.

MRS further asserts that indemnity is not appropriate even if there was a contractual breach. The key legal disputes center on whether the maritime "warranty of workmanlike performance" applies and was breached, and whether indemnity is an available remedy.

A. Implied Warranty of Workmanlike Performance

1. Background

The implied warranty of workmanlike performance, as applicable under maritime law, is a contractual warranty rooted in the Supreme Court's decision in Ryan Stevedoring Co. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956). In furtherance of its power to develop federal maritime law, the Supreme Court in Ryan adopted a rule shifting the shipowner's entire liability for personal injuries suffered by a longshoremen unloading cargo at a destination port, a liability grounded in the "seaworthiness" doctrine, to the stevedore company that had improperly secured such cargo at the origination port. Id. at 132-34, 76 S.Ct. 232 ; see Pryor v. Am. President Lines, 520 F.2d 974, 977 n.2 (4th Cir. 1975) (indicating that the constitutional grant of maritime jurisdiction to Article III courts "has been interpreted ... as empowering federal courts to draw on and develop the substantive admiralty law"); Franza v. Royal Caribbean Cruises, Ltd., 772 F.3d 1225, 1231-32 (11th Cir. 2014) (discussing the grant of authority to all federal courts "to shape" and "develop" federal maritime law, to include the formulation of "flexible and fair remedies") (citations omitted). The Ryan Court explained that the stevedore's agreement to perform "all of the shipowner's stevedoring operations" during loading activities "necessarily includes" the obligation to stow the cargo "properly and safely," further indicating that "[c]ompetency and safety of stowage are inescapable elements of the service undertaken." Ryan, 350 U.S. at 133, 76 S.Ct. 232. Although " Ryan indemnity" for personal injuries suffered by longshoremen has been superseded by changes to the federal Longshoremen's and Harbor Workers Compensation Act, Ryan indemnity remains a valid maritime doctrine in this Circuit in at least some contexts. See Heyman v. Puerto Rico Marine Mgmt., Inc., 1992 A.M.C. 2654, 2656, 966 F.2d 1442 (4th Cir. 1992) (table) ("[E]ven though congressional action has made Ryan indemnity inapplicable to cases involving injuries to longshoremen, it is still a viable doctrine in cases such as this involving an injury to a seaman." (citing Campbell Indus., Inc. v. Offshore Logistics Int'l, Inc., 816 F.2d 1401, 1404-05 (9th Cir. 1987) ).

CMA and MRS acknowledge the discord among the circuits regarding the breadth of the maritime "warranty of workmanlike performance," to include disagreements over the circumstances in which such warranty applies only as a theory of liability (i.e., a violation only establishes a contractual breach) and those where a violation of the warranty requires the violator to indemnify the other party to the contract, or a foreseeable third party. Cf. Marie R. Yeates Phillip, Contribution and Indemnity in Maritime Litigation, 30 S. Tex. L. Rev. 215, 230-39 (1989) (discussing the difference between using a violation of the warranty as a means to establish "fault" and using a violation to secure " Ryan-type indemnity"). As highlighted by CMA, the Fourth Circuit applies the warranty in a manner that permits indemnity under a broader test than that espoused by most legal commentators, although questions remain, even in this Circuit, as to whether the indemnity doctrine should be further extended beyond the few "special relationships" already recognized by the Fourth Circuit.

For the reasons explained below, this Court finds that, even under the broader approach applied in the Fourth Circuit, the implied warranty of workmanlike performance does not implicate the right to indemnity when the claimed breach results in cargo damage, prior to delivery to a stevedore, that was allegedly caused by a company that services and provides shore-based monitoring of refrigerated cargo containers. Alternatively, even if Fourth Circuit law recognizes a carrier's right to indemnity from a container company in such circumstances, here, CMA fails to demonstrate either that MRS had "custody" over the Container such that the warranty of workmanlike performance (and the associated right to indemnity) "attached," or that MRS violated its established course of dealing and/or violated the warranty by failing to perform its tasks with "reasonable care, skill, and diligence." Matter of Robbins Maritime, Inc., 906 F.Supp. 309, 314 (E.D. Va. 1995) (quoting Thomas J. Schoenbaum, Admiralty & Maritime Law § 5-8 (2d ed. 1994) ) ).

2. Duty to Indemnify under the Implied Warranty of Workmanlike Performance

As suggested above, the continued viability of the warranty of workmanlike performance has been called into question by numerous courts and commentators, at least to the extent that it is applied in a manner that allows for complete indemnity as a remedy for its violation. See 1 Thomas J. Schoenbaum, Admiralty & Maritime Law § 5:15 (6th ed. 2018) (arguing that the far better view is that the contractual maritime warranty of workmanlike performance "is very much alive" and is generally implied in any maritime services contract; however, "[a]s an indemnity theory, the Ryan [warranty of workmanlike performance] is a withered doctrine of extremely limited application"); George R. Alvey, Jr., The Implied Warranty of Workmanlike Performance in Towage: A Viable Theory?, 7 Mar. Law. 1, 17 (1982) (explaining that the " Ryan warranty is conceptually distinguishable from Ryan indemnity" and that the "reasoning which is the basis for the Ryan warranty is not the same as that which is the basis for Ryan indemnity"); David W. Robertson & Michael F. Sturley, Developments in Admiralty and Maritime Law at the National Level and in the Fifth and Eleventh Circuits, 35 Tul. Mar. L.J. 493, 532 (2011) (broadly referencing "the concept of an implied warranty of workmanlike performance" as doing "no useful work in current maritime law; it is just potentially confusing clutter"). The view held by such commentators is often supported, at least in part, by reference to Fairmont Shipping Corp. v. Chevron Int'l Oil Co., 511 F.2d 1252 (2d Cir. 1975), a case where the Second Circuit opined that the existence of the warranty as a general maritime contract principle is unremarkable, but that a distinction must be drawn between the existence of the warranty and the subset of cases where a violation of the warranty requires indemnification.

As explained by Professor Schoenbaum, consistent with the established law of multiple circuits, "the best view is that Ryan indemnity should be denied except in a very limited class of cases," as the genesis of the doctrine was to shift the shipowner's liability resulting from a vessel being in an "unseaworthy condition," a liability that attaches without fault, to the stevedore that created such unseaworthy condition. 1 Schoenbaum, Admiralty & Mar. Law § 5:15. As to maritime contract disputes that do not implicate a shipowner's strict liability, Schoenbaum posits that "principles of comparative fault apply." Id. at n.43; see Fairmont Shipping, 511 F.2d at 1256-57 (noting that the Second Circuit has repeatedly recognized that "it is the shipowner's strict liability for unseaworthiness that rests at the heart of Ryan indemnity"

and that other Circuits have reached similar conclusions, including a Ninth Circuit case that found that indemnity was unavailable where a subcontractor was injured while repairing a vessel classified as a "dead ship" because such classification removed the issue of seaworthiness from the case) (citing Davis v. Chas. Kurz & Co., 483 F.2d 184, 187-88 (9th Cir. 1973) ). While the availability of Ryan indemnity has been predicated on seaworthiness by various courts and commentators, such interpretation of the law is not universal, as recognized by the Second Circuit in Fairmont Shipping:

Other decisions ... have rested Ryan on the elements of expertise, control, supervision and ability to prevent accidents: The shipowner, relying on the stevedore's expertise, entrusts loading operations to its supervision and control, thereby putting the stevedore in the best position to prevent accidents. The same reasoning has been applied to 'dead tows,' Tebbs v. Baker-Whiteley Towing Co., 407 F.2d 1055, 1058 (4th Cir. 1969) ; and ship repairs, H & H Ship Service Co. v. Weyerhaeuser Line, 382 F.2d 711, 712-713 (9th Cir. 1967). While these factors are certainly important, Italia [Societa per Azioni di Navigazione v. Oregon Stevedoring Co.], 376 U.S. [315,] 322-23, 84 S.Ct. 748 [11 L.Ed.2d 732 (1964) ], they omit the most significant aspect: the fact that the absolute duty of seaworthiness requires shipowners, regardless of their fault, to pay for accidents caused by stevedores.

Fairmont Shipping, 511 F.2d at 1257-58.

3. Indemnity in the Fourth Circuit

Turning to the law in this Circuit, as acknowledged in Fairmont Shipping, the Fourth Circuit has historically taken a somewhat more expansive view of Ryan indemnity that is not linked to "seaworthiness." That said, it has been nearly twenty years since the Fourth Circuit discussed Ryan indemnity with any degree of detail. Chisholm v. UHP Projects, Inc., 205 F.3d 731 (4th Cir. 2000). Moreover, the discussion of the warranty in Chisholm occurred in a "seaworthiness" case involving personal injuries occurring on a vessel, thus removing from the calculus the issue of whether complete indemnity is available in cases outside the seaworthiness context. Id. at 733-34.

It appears that the next most recent substantive discussion of Ryan indemnity in a maritime case before the Fourth Circuit occurred nearly a decade earlier, but it too was a "typical" Ryan indemnity case as it involved both a stevedore and personal injuries occurring on a vessel during cargo loading operations. Heyman, 1992 A.M.C. 2654. Consistent with the Second Circuit's characterization of the Fourth Circuit's Tebbs decision, the unpublished Heyman opinion highlighted the fact that "the stated purpose of Ryan indemnity ... is to place liability 'upon the party best situated to adopt preventive measures and thereby to reduce the likelihood of injury.' "

Id. at 2657 (quoting Italia Societa, 376 U.S. at 324, 84 S.Ct. 748 ). The Fourth Circuit further clarified that a shipowner's negligence does not preclude it from recovering in indemnity from the stevedore (who is in the best place to avoid the injury) unless the "shipowner's actions prevented or seriously handicapped the stevedore from performing its duties." Heyman, 1992 A.M.C. at 2657 ; cf. Matter of Robbins Maritime, 906 F.Supp. at 314-16 (concluding that indemnity was appropriate for the stevedore's breach of the warranty to "provide workmanlike stevedoring service," and expressly rejecting a "comparative fault" approach in "the Ryan context" based on Fourth Circuit precedent).

Preceding Heyman by nearly ten years was Little Beaver Enterprises v. Humphreys Railways, Inc., 719 F.2d 75 (4th Cir. 1983), a Fourth Circuit ship repair case that did not involve a stevedore or personal injuries, in which the Fourth Circuit described the maritime warranty of workmanlike performance as a "broad" warranty. Id. at 78 ; see De Carli v. Crusoe's Rivertown Motors, Inc., 68 F.3d 474 (6th Cir. 1995) (table) ("General maritime law requires that a contractor perform [vessel] repairs in a workmanlike manner.") (citing Little Beaver, 719 F.2d at 77-78 ). Specifically, the Fourth Circuit explained:

This warranty need not be express to bind the ship repairer to use the degree of diligence, attention and skill adequate to complete the task. The warranty of workmanlike service, of course, does not make the repairer a guarantor of the results. Where it has performed its tasks as a skillful workman should, or where its efforts have been hindered by the actions of the other contracting party, the repair firm will not be held responsible for defects attributable to faulty workmanship. However, the warranty is otherwise very broad. It is comparable to a manufacturer's warranty of the soundness of its manufactured product. It has been applied to find fault where repair jobs are improperly performed; see, e.g., Booth Steamship Co.[ v. Meier & Oelhaf Co., 262 F.2d 310 (2d Cir. 1958) ] (engine repair contractor); where the misdelivery of goods has caused monetary damages to shipowners, see, e.g., David Crystal, Inc. v. Cunard Steam-Ship Co., 339 F.2d 295, 299 (2d Cir. 1964) ;[ ] and where efforts intended to prevent damage to a ship have been ineffective, see, e.g., Fairmont Shipping Corp. v. Chevron Int'l Oil Co., Inc., 511 F.2d 1252 (2d Cir. 1975)....

The significance admiralty law has historically attached to the repairer-shipowner relationship weighs heavily against Humphreys' narrow interpretation of its duties to Little Beaver. Limitations on the warranty of workmanlike service are not looked upon with favor and are strictly construed. Viewed in this light, the trial court's finding that Humphreys' selection and installation of an inadequate steering system constituted defective workmanship easily survives the clearly erroneous standard of review ....

Little Beaver, 719 F.2d at 78 (emphasis added) (some internal quotation marks and citations omitted). Although Little Beaver discussed the warranty of workmanlike performance through reference to prior indemnity cases, it did not involve an indemnity claim, nor did it involve any dispute as to whether the party seeking damages was partially responsible for the loss, thus eliminating consideration of relative fault. Id. at 78.

A year-and-a-half earlier, in Salter Marine, Inc. v. Conti Carriers & Terminals, Inc., 677 F.2d 388 (4th Cir. 1982), the Fourth Circuit rejected a stevedore's contention that it owed no duty to the owner and charterer of a tug hired to move an improperly loaded and "listing" barge that sunk during towing, finding instead that controlling law established that the stevedore's warranty of workmanlike performance extends to "foreseeable third parties," and that "it was unquestionably foreseeable that the owner and charterer of the tug might be injured if the stevedore performed improperly." Id. at 390. The Fourth Circuit's opinion went on to affirm the district court's finding that the owner and charterer of the tug were entitled to indemnity from the stevedore in a case that did not appear to involve any personal injuries. Id. at 390-91.

Having carefully considered the above authorities, as well as other earlier-in-time Fourth Circuit opinions, including Tebbs, a case involving property damage caused to a yacht by a deficient "dead-tow" operation, this Court agrees with CMA that the Fourth Circuit has permitted litigants to secure indemnity based on a breach of the maritime warranty of workmanlike performance, to include indemnity for property damage, without requiring the underlying claim to be grounded in seaworthiness, or another similar "no-fault" doctrine. This Court remains bound by such opinions notwithstanding the "recent trend" in favor of limiting Ryan indemnity to personal injury cases and/or seaworthiness cases. See 2 Benedict on Admiralty § 11c. (2018) (indicating that the "more recent trend" in maritime law "seems to be that breach of [the] warranty of workmanlike service under Ryan is not a proper basis for indemnity in property damage cases"); 1 Schoenbaum, Admiralty & Mar. Law § 5:15 n.43 ("Ryan indemnity is available only where a shipowner is exposed to strict liability for unseaworthiness ...."); LCI Shipholdings, Inc. v. Muller Weingarten AG, 153 F. App'x 929, 932 (5th Cir. 2005) ("To the exten[t] that [the] WWLP as recognized in Ryan Stevedoring Co. still exists in this Circuit, it has been questioned, if not wholly displaced, as the appropriate model for indemnification of cargo damage."). That said, this Court finds that controlling case law does not clearly resolve whether Ryan indemnity should apply beyond cases involving stevedores, ship repairs, or towage contracts involving dead ships. Cf. 1 Schoenbaum, Admiralty & Mar. Law § 5:15 (describing the warranty of workmanlike performance as "one of the most ambiguous and controversial concepts in all of admiralty law"). Stated differently, while this Court is not in a position to question the right to indemnity in this Circuit in previously recognized circumstances, the Court does question CMA's effort to extend the indemnity remedy to a new class of case that does not involve bodily injuries to persons while aboard a vessel, property damage resulting from a stevedore's failure to safely secure cargo, damage caused by a tug pilot towing a dead ship, or a case involving some other maritime contractor (such as a shipyard) assuming responsibility over the safety of a vessel, or a portion of a vessel. In sum, just as the Fourth Circuit in Tebbs needed to carefully analyze whether the right to indemnity recognized in stevedore cases extends to a towage contract involving a dead ship (and concluded that it did), this Court carefully analyzes whether such right extends to a contract governing the shore-based monitoring of a reefer (and concludes that it does not).

B. Ryan Indemnity does not apply to the Facts of the Instant Case

Returning to the context of the instant case, MRS cites Maersk Line Ltd. v. Care, 271 F.Supp.2d 818 (E.D. Va. 2003) for the proposition that the " Ryan duty" does not extend outside the context of stevedores to a case involving a purely economic loss. In Maersk, another judge of this Court favorably cited Schoenbaum for the proposition that the warranty of workmanlike performance can be a contract warranty (an avenue not applicable in Maersk based on the relationship, or lack thereof, between the plaintiff and the party from whom indemnity was sought) or it could alternatively be based on an implied indemnity theory, as established in Ryan. Id. at 826. The Ryan indemnity doctrine was explained in Maersk as "typically ... protect[ing] against actions causing unseaworthiness," with the court further finding that the cases cited by Maersk demonstrated that, outside the stevedore context, Ryan indemnity has only been applied in cases involving "physical injuries," and it therefore does not apply to a "purely economic loss." Id. Such holding was repeated, and arguably expanded, in City of Norfolk v. Safe Boats Int'l, LLC, No. 2:17cv159, 2017 WL 4112364, at *1 (E.D. Va. Aug. 25, 2017), report and recommendation adopted sub nom. City of Norfolk, Virginia v. Safe Boats Int'l, LLC, No. 2:17cv159, 2017 WL 4108933 (E.D. Va. Sept. 15, 2017), which held that, "at least in the Fourth Circuit, Ryan only applies where a party is seeking indemnity for personal injury liability, not liability for breaching a contract (i.e., economic loss)" (citing Maersk, 271 F.Supp.2d at 826 ) ).

CMA responds to MRS's attempt to limit Ryan indemnity by citing Little Beaver, 719 F.2d at 77-79, and Tebbs, 407 F.2d at 1058-59. As discussed above, Little Beaver is a ship repair case where a shipyard's installation of an inadequate steering system required the vessel to undergo additional costly repairs. While the Fourth Circuit found that the warranty of workmanlike performance was applicable and was breached, the discussion therein focuses on whether the ship repairer was at fault for selecting and installing the inadequate steering system, and at no point addresses "indemnity," instead referring to the "warranty of workmanlike service" as a "ground for liability." Little Beaver, 719 F.2d at 77-79. The analysis in Little Beaver did, however, highlight the "significance admiralty law has historically attached to the repairer-shipowner relationship." Id. at 78.

Turning next to Tebbs, such case involved property damage to a yacht from a maritime allision between a "dead ship" being undocked by three tugs and the moored yacht. Tebbs, 407 F.2d at 1056-57. The allision during undocking was caused by errors committed by the United States and the towing company, the former of which was responsible for securing inadequate mooring lines to the dead ship. Id. at 1057. In finding that the implied warranty of workmanlike performance was applicable to the towing company's performance, that it was breached, and that it required such company to indemnify the United States even though the United States was also at fault, the Court described the warranty as being "most frequently applied" in the stevedoring context, but noted that "[a] similar warranty has been implied in other service contracts involving comparable relationships." Id. at 1058 (emphasis added). The Court then cited to six cases as examples of such relationships, id. at 1058 n.1, with the first five involving personal injuries to workers while on board, or disembarking; a ship (performing repairs, painting, cleaning, etc.) and the last, Barbey Packing Corp. v. The S.S. Stavros, 169 F.Supp. 897 (D. Or. 1959), involving damages from a allision caused by a negligent pilot. Having considered such examples, the Fourth Circuit concluded in Tebbs that the warranty typically applicable to stevedores, and the associated remedy of indemnity, should also extend to a "contract of towage," noting that the vessel is turned over "to the control of the tug owner" and the shipowner relies on the tug captain's "expertise in conducting safe towing operations." Id. at 1059. Importantly, the Fourth Circuit's extension of Ryan indemnity to the towage context appeared to turn on the fact that the tug captain knew that the barge to be towed was a "dead ship," and thus, the tug was "responsible for both vessels" and had a "special duty in relation to the tow to take steps necessary for its safety and the safety of other vessels." Id. at 1057 (emphasis added) (internal quotation marks and citation omitted).

Synthesizing the above cases, and acknowledging the evolving interpretations of maritime law that distinguish between the general applicability of a contract-based warranty of workmanlike performance in all maritime service contracts, and a warranty arising out of a "special relationship" that brings with it a right to indemnity, this Court rejects CMA's efforts to extend Ryan indemnity to a property damage case outside the stevedoring/ship repair/dead-ship towage context in which the party from whom indemnity is sought did not have a "special relationship" with the party seeking indemnity. Such "special relationships" appear to occur when a maritime contractor exercises control over a vessel, or a portion of a vessel, with the implied promise of performing loading/unloading services, repairs, or towage services of a dead ship in a safe and competent manner. Outside these scenarios involving a "special relationship" between the shipowner and the maritime contractor, a duty of workmanlike performance is still owed, but a violation of such duty is subject to resolution through traditional contract-law remedies rather than implied indemnity, particularly in property damage cases. Cf. Parks v. United States, 784 F.2d 20, 25 (1st Cir. 1986) ("A contractual right to indemnity may be implied when there are unique special factors demonstrating that the parties intended that the would-be indemnitor bear the ultimate responsibility for the plaintiff's safety, or when there is a generally recognized special relationship between the parties.") (internal quotation marks and citation omitted).

Declining to further extend Ryan indemnity beyond cases involving the "special relationship" between a shipowner and a stevedore, ship-repair contractor, or tug pilot towing a "dead ship," is both sensible and equitable. See In re Columbia Leasing L.L.C., 991 F.Supp.2d 722, 729-30 (E.D. Va. 2014) (indicating that indemnity was the proper remedy in Ryan based on the Supreme Court's recognition of "the inequity of shifting the entire burden of a third party's negligence onto the shipowner"); see also TransDulles Ctr., Inc. v. USX Corp., 976 F.2d 219, 228 (4th Cir. 1992) (noting, outside the maritime context, that "[a]lthough an implied right to indemnity may be read into some contracts, only unique factors or a special relationship between the parties give rise to such a right"); Int'l Fidelity Insurance Co. v. W. Virginia Water Auth., No. 7:11cv441, 2012 WL 5364196, at *3 (W.D. Va. Oct. 30, 2012) (describing Ryan indemnity as arising out of the "unique relationship between two parties" and indicating that such relationship "supplie[s] a right to indemnification not expressly stated in the parties' contract"). When stevedoring, repairs, or similar services are performed onboard a vessel, the maritime contractor's "special relationship" with the ship/shipowner, special position of expertise, control over at least a portion of the vessel, ability to cause an unseaworthy condition, and potential to cause physical harm to persons onboard, generally warrant indemnity. Cf.

Chisholm, 205 F.3d at 733. As to towage cases, at least in scenarios involving a "dead ship" where the tug captain has exerted complete control over the tow operation, the Fourth Circuit has elected to extend the right to indemnification based on the complete control exerted over the vessel by the tug captain-which is another form of "special relationship" directly involving the vessel. See Cargill, Inc. v. C & P Towing Co., 1991 A.M.C. 101, 111-12, 1990 WL 270199, at *7 (E.D. Va. Aug. 16, 1990), aff'd, 1992 A.M.C. 392, 943 F.2d 48 (4th Cir. 1991) (table) (explaining that the Fourth Circuit's language in Tebbs evidences its intent to "limit the application of an implied warranty of workmanlike service to cases involving 'dead tows' "); Tebbs, 407 F.2d at 1057 (discussing the "special duty" applicable when towing a "dead ship").

In contrast, when a land-based container company agrees to "pre-trip" a cargo container to ensure that its refrigeration system is operating, and agrees to later verify, through simple visual inspection, that such container's refrigeration system is both set to the proper temperature and maintaining such temperature while stored at a terminal awaiting transfer to the stevedore, the facts do not implicate any special duties or any "special relationship" involving a vessel. Rather, the essence of the contract at issue in this case was simply for MRS to ensure that reefer containers stay cold while awaiting transfer to the carrier/stevedore-a task unrelated to seaworthiness, vessel safety, safety to other vessels or the public, or safety to crewmembers or anyone else onboard a vessel. Cf. Calmar S.S. Corp. v. Nacirema Operating Co., 266 F.2d 79, 80 (4th Cir. 1959) (recounting the district court's characterization of the duty owned by a stevedore under Ryan as being based on the fact that the service contract "implies a promise by the expert stevedore to perform 'with reasonable safety' ") (emphasis added); Frasca v. S/S Safina E. Ismail, 413 F.2d 259, 261 (4th Cir. 1969) (discussing Ryan indemnity as a "ship's right," indicating that the warranty of workmanlike service is a "duty to the ship" that is "comparable to a manufacturer's warranty of merchantability" and noting that a contractor breaches such "warranty when he fails to remedy hazards tolerated by the shipowner") (emphasis added). Accordingly, acknowledging that a maritime "course of dealing" contract to monitor live export reefers requires "workmanlike performance," i.e., performance with reasonable skill and diligence, the appropriate remedy for a breach of such contractual obligation is not complete indemnity. See Hanover Ins. Co. v. Corrpro Companies, Inc., 312 F.Supp.2d 816, 821 (E.D. Va. 2004) (explaining, in a non-maritime case, that "[i]n the contracts context, equity is more hesitant to imply an indemnity right, because if the parties desired to create an indemnitor-indemnitee relationship, they could have done so expressly in the contract").

Although the Fourth Circuit has, on multiple occasions, described Ryan indemnity as grounded in the effort to shift liability to the party in the best place to avoid the injury/damage, such cases necessarily involve "special relationships" that justify the total shift in liability. See Int'l Surplus Lines Ins. Co. v. Marsh & McLennan, Inc., 838 F.2d 124, 127 (4th Cir. 1988)

(indicating that a "special relationship" was recognized in Ryan"since the stevedoring company had agreed to perform all the shipowner's stevedoring operations" yet the shipowner retained a non-delegable duty to provide a seaworthy vessel). In the absence of such a special relationship, complete liability cannot be shifted merely because one entity is in a better position to avoid a contractual breach; notably, the breaching party in any contractual relationship, inside or outside of maritime law, is the party in the best position to avoid its own breach.

For these reasons, this Court is unwilling to expand the list of defined "special relationships" that give rise to an implied right of complete indemnification far enough to reach the facts of the instant case. See id. (indicating, in a case that did not involve a maritime dispute, that the Court's task was to decide "whether there is a special contractual relationship between the parties that gives rise to an implied right to indemnification") (emphasis added); see also Franza, 772 F.3d at 1231-32 (discussing federal district courts' authority "to shape" and "develop" federal maritime law); cf. Franklin Stainless Corp. v. Marlo Transp. Corp., 748 F.2d 865, 867 n.1 (4th Cir. 1984) (finding it unnecessary to re-examine Ryan and its progeny, but expressly noting that "a purpose of the 1972 amendments to the Longshoremen's and Harbor Workers Compensation Act ... was to abrogate" the "aspect of Ryan" providing for contractual indemnity). CMA's claim seeking indemnity from MRS, based on MRS's alleged violation of the Ryan warranty of workmanlike performance, fails as a matter of law.

C. No Duty to Monitor Attached in this Case because Control/Supervision was not Relinquished to MRS

Alternatively, even if Fourth Circuit law permits a carrier to invoke Ryan to secure complete indemnity from a shore-based container company that contributes to cargo damage in its possession while awaiting transfer to a stevedore, the Court finds that CMA is not entitled to indemnity in this case. Importantly, CMA's evidence failed to demonstrate that CMA turned the "[Container] over to the control of [MRS] and relie[d] on the latter's expertise in conducting safe [monitoring] operations." Tebbs, 407 F.2d at 1059. Rather, as discussed below, the Court agrees with MRS that the trial record demonstrates that, because of the booking error committed by CMA, "control" over the Container was never effectively turned over to MRS for twice daily monitoring.

Although it is clear that the Container was briefly encountered by MRS at the VIG terminal for the limited purpose of genset removal, such removal function was properly performed, and the Container was then taken to an area of the VIG terminal that was not accessible to MRS. The trial evidence establishes that no duty to monitor the Container arose unless there was: (1) an actual transfer of custody to MRS, or at a minimum, a transfer of the Container to the "reefer rows" or physically accessible powered reefer stacks at VIG; (2) proper notice to the MRS personnel responsible for monitoring CMA's containers that a "live" reefer with a temperature requirement had arrived at VIG (i.e., notification through "SPARCS"); or (3) proof of an established course of dealing requiring MRS to use its genset mount/dismount area at VIG to double as an "intake verification" area such that MRS was obligated to ensure that CMA/VIT had not mis-booked and misclassified a live reefer. At trial, CMA failed to demonstrate that any of such triggers occurred in this case, and thus, MRS's duty to monitor was never triggered.

CMA's 30(b) (6) representative, who did not testify at trial, but instead appeared through deposition, indicated under oath that he believed that MRS was responsible for performing the initial temperature verification during the intake process at VIG. CMA later stipulated that it was actually VIT personnel who perform such duties at VIG; however, CMA's earlier-in-time mistaken understanding of MRS's role/responsibilities at VIG illustrates the absence of a "meeting of the minds" regarding the scope of MRS's monitoring services. More specifically, the Court finds that there was not a meeting of the minds, or otherwise an "implied" obligation for MRS to: (1) track a CMA reefer from the time it leaves the MRS depot in Chesapeake until the time it is transferred to the stevedore for loading on a vessel at VIG; (2) track, verify, or inspect, every CMA reefer container that entered VIG, irrespective of whether the VIG SPARCS booking information for such container included a temperature requirement; and (3) utilize its genset removal lane to verify that two separate business entities with their own respective roles and responsibilities (CMA and VIT), including roles performed solely to ensure the safekeeping of refrigerated cargo, properly completed their booking, intake, and storage assignment duties.

Such finding is not tantamount to a finding that MRS had no duty to "troubleshoot" known or suspected incidents at VIG and/or that it had no duty to act as CMA's "eyes and ears" at the terminal. Although VIT was the entity responsible for both verifying the arrival temperature of live export reefers and plugging such containers into shore power, it would be improper to conclude that MRS's monitoring obligation was never "triggered" unless a reefer was properly booked and/or that it was not triggered until a reefer was plugged in by VIT. Rather, MRS's obligation typically began when a container was in-gated with a temperature requirement in its electronic booking and allowed to remain at the VIG terminal-had a truck driver parked such container in the wrong place, and/or had VIT failed to plug such container in, MRS would still be on notice from the SPARCS data that it was on the premises and would have an obligation to locate it and ensure that it continued to operate properly. Similarly, even if a proper booking did not exist, if a CMA reefer with the MRS "sticker" on its exterior was parked in the reefer rows, or the powered reefer stacks, yet did not appear on the SPARCS list, MRS would have been obligated to investigate the situation in order to protect CMA's cargo. However, neither of such factual scenarios occurred in this case, and CMA failed to demonstrate that the abnormality that did occur "should have" been identified by MRS on these facts.

Consideration of which entity was "best situated" to avoid the loss, a factor referenced in multiple Ryan indemnity cases from this Circuit, further supports such analysis. VIT's server error caused the initial proper booking to be ineffective for several days, an error that VIT was "the party best situated" to control for and/or avoid. Tebbs, 407 F.2d at 1058. CMA then failed to enter the critical temperature requirement into the replacement "manual booking," an error that CMA was the party "best situated" to control for and/or avoid. Even assuming, for the sake of argument, that it would have been difficult for CMA to discover its manual booking error after it occurred, CMA was still fully aware of the "missing" electronic booking, the need for the manual entry, and it later discovered the EDI server issue, yet CMA never contacted MRS to share the fact that there may be a problem with the SPARCS data, data that CMA knew that MRS used to facilitate MRS's monitoring services. CMA therefore arguably remained in the best position to avoid cargo damage because, unlike MRS, CMA had, at a minimum, a reason to question the accuracy of the "live" SPARCS data before the cargo damage occurred.

After the above errors were committed, a MRS employee performed his genset removal responsibilities as required under a course of dealing between CMA and MRS that was separate and distinct from monitoring services. MRS disconnected all gensets for all carriers at VIG irrespective of whether MRS had an independent agreement to perform monitoring for such carrier. MRS also billed its genset install/removal separately from its monitoring services.

After disconnecting the genset in a manner fully consistent with MRS's established course of dealing, and fully consistent with the "real-time" instructions the MRS mechanic received from VIT through the VIG gate ticket, the MRS mechanic reasonably assumed, within the scope of his responsibilities and within the scope of MRS's course of dealing with CMA, that VIT performed its obligations to assign the Container to a proper location and plug it in to shore power. MRS's genset mechanic surely "could" have discovered the booking/stack assignment errors had he been more knowledgeable about the layout of the VIG "stacks," and MRS likewise "could" have discovered the error had its foreman reviewed the records prepared by the genset mechanic. However, in the absence of evidence suggesting that MRS was hired by CMA to perform "screening" at the genset removal lane in order to advance the efficacy of their monitoring services, its mechanic's physical proximity to the "live" reefer at VIG is insufficient to convince the Court that MRS was "in the best position" to avoid the damage in this case. Stated differently, even if MRS was in the best location to avoid the damage (because its employees were physically at the terminal), CMA fails to demonstrate that the parties' course of dealing contemplated that MRS would perform the "cross-check" monitoring that CMA now asserts was deficiently omitted. Because the Container was never parked in the VIG reefer rows or powered reefer stacks, and because it was not