                    United States Court of Appeals,

                               Fifth Circuit.

                        Nos. 95-20130, 95-20210.

 ACACIA VERA NAVIGATION CO., LTD., et al., Plaintiffs-Appellees,

                                      v.

              KEZIA, LTD., et al., Claimants-Appellants.

ACACIA VERA NAVIGATION CO., LTD., et al., Plaintiffs-Appellants,

                                     and

                         M/V OMINA, Plaintiff,

                                      v.

              KEZIA, LTD., et al., Claimants-Appellees.

                               March 27, 1996.

Appeals from the United States District Court for the Southern
District of Texas.

Before REYNALDO G. GARZA, WIENER and STEWART, Circuit Judges.

      REYNALDO G. GARZA, Circuit Judge:

                                 BACKGROUND

      This is an appeal from a limitation of liability judgment in

admiralty against appellant the M/V BLUE CLOUD ("BC") for its

collision with the M/V OMINA ("OMINA").1          BC collided with OMINA on

March 30, 1993 at night in a fairway near Galveston.                   OMINA,

travelling 11-12 knots, was inbound to Houston and BC, travelling

18   knots,   was   outbound   and   in    the   process   of   overtaking   an


      1
      In this opinion, the parties are designated by the names of
their respective vessels. The M/V OMINA was owned and/or operated
by Acacia Vera Navigation Co. Ltd. and Seaways Chartering Co. Ltd.
Kezia Ltd. and Ahrenkiel Shipping (H.K.) Ltd. are the owners of the
M/V BLUE CLOUD.

                                      1
unidentified tanker located off its starboard side.              OMINA was in

the middle of the fairway.         BC was to the port side of the fairway

and the tanker was to the starboard side of the fairway.              As OMINA

and BC were passing starboard to starboard at a distance of .30

nautical miles, BC took a sharp starboard turn colliding twice with

OMINA.2      According to the district court, OMINA would have passed

between the      freighter   and    BC   without    incident   had   each   ship

maintained her course.3

     Owners of OMINA filed a Petition for Exoneration from and/or

Limitation of Liability.           The owners of BC made the sole claim

against OMINA and posted a stipulation (corporate surety bond in

admiralty) with the St. Paul Mercury Insurance Co. ("St. Paul") as

surety in the amount of $1,150,000.00 in lieu of the arrest of BC

for damages sustained by OMINA.              The parties stipulated that the

suit involved damages.       Following a trial to the court, the court

made findings of fact and conclusions of law holding BC solely at

fault for the collision and, after determining damages, entered

final judgment in favor of OMINA.

     The district court held that while port to port passing is

typically the rule, "it is the position of the vessels at the time


     2
     One nautical mile equals 6080 feet.             Hereinafter, miles will
refer to nautical miles.
         3
       OMINA made manual plots of its position that the district
court relied on to find that OMINA maintained its position relative
to BC prior to BC's sudden turn. The court found that had each
ship maintained her position in the fairway, there would have been
at least 3/10 of a mile distance between BC and OMINA and at least
4/10 of a mile between OMINA and the tanker, "a clear and
sufficient distance in all respects."

                                         2
they       commence    navigating     with      respect   to   each     other    which

establishes the manner of passing."               Since the vessels approached

starboard to starboard and the pass could have been made safely, BC

was at fault for attempting to make an unreasonable port to port

turn.          The court also held that since the vessels were not on

reciprocal courses, OMINA had no duty under COLREG 14 (Rule 14) to

pass port to port to avoid a non-existent risk.4

       The lower court concluded that the most likely cause of the

accident was confusion on BC as to whether a ship's red port light

observed        in   the   fairway   was   on    the   freighter   or    on     OMINA.5

Believing that OMINA had made a hard starboard turn, BC did so as

well, colliding with OMINA.            The district court found that OMINA

never showed her red port side light to BC.6                    BC disputes this



       4
     COLREGS is an abbreviation for the International Regulations
for Preventing Collisions at Sea.    See 33 U.S.C. foll. § 1602
(1986). Hereinafter, COLREGS will be referred to by rule number.

       5
     BC's own expert witness Freehill concluded on deposition that
the second mate's confusion was the cause of the collision though
at trial he offered this scenario as "one of the possibilities."
           6
       Rule 23 requires all power-driven vessels longer than 50
meters to display two masthead lights, a sternlight, and two
sidelights (a red light mounted on the port side, and a green light
mounted on the starboard side). In this way, if one ship sees a
red light approaching from a distance, that ship can be certain
that the oncoming vessel is located to her port side, and vice
versa for the sighting of an approaching green light. Masthead
lights are white and must be placed along the forward-to-aft
centerline of the vessel, one each at the forward and aft of the
vessel. The aft masthead light is placed higher than the forward
masthead light. The appearance of both red and green sidelights
simultaneously or both masthead lights in line indicates that the
two ships face a risk of head-on collision. Rule 23, 33 U.S.C.
foll. § 1602.

                                           3
characterization of the events.7

     The district court finally concluded that

          The fault of the M/V Blue Cloud in making her sudden and
     unexplained turn to starboard and the confusion demonstrated
     by the second mate of the [BC] who was in charge of her
     navigation are clear and sufficient explanations for the
     collision.     There being a complete and satisfactory
     explanation, and there being no outstanding fault of the
     [OMINA] which apparently caused or contributed to the
     collision, no fault is attributable to the [OMINA].
     Navigazione Alta Italia v. Keystone Shipping Co., 365 F.2d 422
     (5th Cir.1966).

Accordingly, BC became liable for the roughly $700,000 of damage to

OMINA, as found in the second part of the bifurcated proceeding.

After the damages were set, BC moved to reduce the amount of

damages to the appropriate level and to substitute a letter of

undertaking    ("LOU")   from    the       Steamship   Mutual   Underwriting

Association (Bermuda), Ltd. (the "Club") for the St. Paul Mercury

corporate surety bond.8     The court granted the motion to reduce

security and substitute the Club for St. Paul.

     BC made a timely appeal of the judgment.             OMINA's separate

appeal of the substitution order followed and was consolidated with

BC's appeal.   For the reasons stated below, we affirm.

                                DISCUSSION

     BC finds numerous errors in the district court's findings and

conclusions.    Specifically, BC contests the legal method through


          7
        BC claimed at trial that OMINA herself made a sudden
starboard turn which prompted BC's turn and that both ships could
see the other's masthead lights in line.
      8
      A letter of undertaking (LOU) is another form of security
allowed to secure the release of a vessel in an in rem action under
Fed.R.Civ.P. Supp. Rule E(5)(a).

                                       4
which the district court determined liability for the collision,

the underlying factual findings, and the decision of the district

court to allow OMINA's claim for damages.         OMINA challenges the

substitution of the LOU for the corporate surety bond though it did

not raise the arguments below.       These arguments will be dealt with

in turn.

A. Standard of Review

         This Court reviews conclusions of law made by the district

court de novo.      Dow Chemical Co. v. M/V ROBERTA TABOR, 815 F.2d

1037,     1042   (5th   Cir.1987).   Factual   findings   will   only   be

overturned if clearly erroneous.         Id.

B. The Court's Findings and Conclusions

1. The Application of Rule 14.9

         The lower court held that because OMINA was never meeting the

Blue Cloud on a reciprocal or nearly reciprocal course so as to

involve a risk of collision, she had no duty under Rule 14 to make

a starboard turn.       Rule 14 provides:

             Head-on Situation

          (a) When two power-driven vessels are meeting on a
     reciprocal course or nearly reciprocal courses so as to
     involve risk of collision each shall alter her course to
     starboard so that each shall pass on the port side of the
     other.

          (b) Such a situation shall be deemed to exist when a
     vessel sees the other ahead or nearly ahead and by night she
     could see the masthead lights of the other in line or nearly
     in a line and/or both sidelights and by day she observes the
     corresponding aspect of the other vessel.

             (c) When a vessel is in doubt as to whether such a

     9
        Rule 14, 33 U.S.C. foll. § 1602.

                                     5
     situation exists she shall assume that it does exist and act
     accordingly.

Thus, at night, should a ship see either both sidelights or both

masthead lights in line or nearly in line of another ship, that

ship should presume that both ships are on a reciprocal course and

alter the course to starboard to avoid collision.           The Court

concluded that the ships were not on reciprocal courses under Rule

14 because, prior to the time the Blue Cloud made her hard to

starboard turn, neither of the vessels had exhibited her red light

to the other.

          BC argues on appeal that the District Court erred by holding

that Rule 14 did not apply to the situation as it existed that

night.     According to BC, the lower court considered only that both

sidelights were not visible in concluding that the two vessels were

not on a reciprocal course.10           BC claims that uncontroverted

evidence shows that the masthead lights of both ships were in line

or nearly in line and that the two ships were on a collision

course.11     According to BC, OMINA had a duty to alter the course to

     10
      The court was aware that Rule 14 provided an alternative for
deeming ships to be on reciprocal course as noted in the Joint
Pretrial Order.
     11
      BC points to one relevant record reference, a sketch made on
deposition by the lookout stationed on the Omina, that arguably
shows that the Omina could see the masthead lights in line or
nearly in line. However, the ambiguous sketch also showed that
only the green light of BC was visible, indicating that the ships
were not on reciprocal courses.

          BC additionally claims that the ships were only 2.5
     degrees apart and thus on a reciprocal course according to
     Farwell's Rules of the Road. The district court relied on
     OMINA's radar plottings to find that the vessels in fact
     remained on parallel courses .30 miles apart until BC's turn.

                                    6
starboard.12

     We find no error in the court's finding that no risk of

collision was presented and its attendant conclusion that Rule 14

did not apply.     While the lower court found that the ships were not

on reciprocal courses primarily from the fact that neither vessel

had exhibited her red (port) sidelight to the other, the court's

general finding was that the two ships were not on reciprocal

courses and would have safely cleared one another had the BC not

made the sharp starboard turn.     Implied in that finding is that the

masthead lights were not in line or nearly in line.      We also note

that COLREG Rule 7 deems a risk of collision to be present when the

bearing of an approaching vessel does not appreciably change as the

range decreases.13     The record shows that as range decreased, the

bearing of the BC changed, indicating that the vessels faced no

risk of collision.

     We do recognize that the lower court could have made clearer

that the ships' positions met none of the scenarios envisioned by

Rule 14.     However, given the amount of evidence that the ships were

not in fact on reciprocal courses and that no risk of collision was

presented until BC made its turn to starboard, the lower court's



     We see no error in the court's reliance on these plottings to
     conclude that no risk of collision was presented.
     12
       BC also argues that alteration of course to starboard was
required even if there was doubt as to the existence of possible
reciprocal courses under Rule 14(c). However, the record shows no
doubt on the part of OMINA, which maintained its course until BC
struck it.
     13
          Rule 7, 33 U.S.C. foll. § 1602.

                                    7
lack of specificity is hardly reversible error.             Rule 14 applies

when there is a risk of collision.            Since the court specifically

found no such risk, OMINA did not violate the rule when it

maintained its course.

2. OMINA's culpability in the collision.

       BC challenges the lower court's failure to consider possible

violations on the part of OMINA before concluding that the OMINA

was free of fault.      According to BC, the district court erred as a

matter of law by failing to include conclusions of law on whether

OMINA violated Rules 2, 6 and 8(a) and (e) before implicitly

concluding that OMINA had met its burden of proving under the

Pennsylvania Rule that alleged violations of these COLREGS could

not have contributed to the collision.

       BC alleges that OMINA violated four COLREG provisions:                Rule

2 (the general prudence rule);           Rule 6 (failure to proceed at safe

speed to avoid collision);         and Rule 8(a) (failure to take timely

action to avoid collision) and (e) (failure to slacken speed to

avoid collision). In The Steamship Pennsylvania, 86 U.S. (19 Wall)

125, 22 L.Ed. 148, 151 (1874), the Supreme Court held that where a

vessel at the time of collision is in violation of a statutory rule

designed to prevent collisions, in order to avoid liability, she

must   show   not    only   that   her   violation   of   the   rule   did   not

contribute to the collision but also that it could not have

contributed.        Thus, according to BC, the lower court erred by

failing to consider OMINA's alleged COLREG violations.

        There is a problem with this argument.                  BC's statutory


                                         8
allegations assume that the ships were on a reciprocal (collision)

course, an assumption contrary to the court's finding.14        Since the

lower court's finding that the ships were not on reciprocal courses

is supported by the record, BC's allegations are without merit.

Without risk of collision, the OMINA would have had no duty to

slacken speed, make radio contact, etc., and therefore violated no

statutory mandate.      No evidence of statutory violations by OMINA

was presented under the circumstances.         Therefore, the district

court correctly concluded that OMINA was not at fault in the

collision.

         Nonetheless, we feel it necessary to discuss one troubling

issue of law present in the court's conclusion. The district court

apparently    applied   the   major-minor   fault   rule,   discussed   in

Navigazione Alta Italia v. Keystone Shipping Co., 365 F.2d 422 (5th

Cir.1966).    The district court stated that BC's starboard turn was

"clear and sufficient explanation for the collision" and that

because there was no "outstanding fault" by OMINA, no fault would

be attributed to her.    This suggests that de minimis fault by OMINA

could be overlooked. Under the major-minor rule, where one party's

glaring fault sufficiently explains the entire collision, the court

can assign all fault for the collision to that party.         Id. at 425.

    14
     For example, BC attacks OMINA's failure to make radio contact
before passing within .30 miles as a violation of Rule 2's
requirement of prudent seamanship.      BC's authority for this
assertion rests on a holding that prudent seamanship requires a
vessel to attempt radio contact with an approaching vessel on a
reciprocal course.   G & G Shipping Co., Ltd. of Anguilla, 767
F.Supp. 398, 411 (D.P.R.1991). As noted above, the ships were not
on reciprocal courses; thus, Rule 2 and the regulations meant to
prevent collisions are inapplicable.

                                    9
The court need not intensively scrutinize the other ship's actions

for contributory fault.

     This major-minor rule arose as a corrective to the often harsh

divided damages rule, whereby parties who were both at fault in a

collision split damages evenly despite the degree of fault. Thomas

J. Schoenbaum, Admiralty and Maritime Law § 14-4 (2d ed.1994).               The

Supreme Court rejected the divided damages rule and required use of

a comparative fault analysis in U.S. v. Reliable Transfer Co.,

Inc., 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975).                This

Court regularly applies comparative fault in admiralty cases.

Coats v. Penrod Drilling Co., 61 F.3d 1113, 1128 (5th Cir.1995);

Pennzoil Producing Co. v. Offshore Exp., 943 F.2d 1465, 1469 (5th

Cir.1991).   The rejection of divided damages and enshrinement of

the comparative fault doctrine allows for no application of the

major-minor fault rule.       Nunley v. M/V Dauntless Colocotronis, 727

F.2d 455, 463 (5th Cir.1984).       If we did not say it clearly enough

before, we say it now:        the major-minor fault rule is dead.        A de

minimis   fault   rule   is   contrary    to   the   intent   and   notion    of

comparative fault. See Hercules, Inc. v. Stevens Shipping Co., 765

F.2d 1069, 1075 (11th Cir.1985) (discussing effect of Reliable

Transfer on major-minor rule and similar doctrines). If a party is

slightly at fault, that party would be partially liable for the

collision.

     Despite the lower court's use of the major-minor rule and our

holding, remand is unnecessary in the instant case.            BC has simply

made no meritorious allegations of statutory fault on the part of


                                     10
OMINA.    The lower court properly concluded that OMINA was not at

fault (statutory or otherwise) though it stated such in the terms

of a now-obsolete rule.15

3. Distance between BC and OMINA prior to the starboard turn of the
     BLUE CLOUD.

      BC challenges the district's court finding that the vessels

were at least .30 miles apart.        The district court explicitly

relied on OMINA's manual radar plots that showed that the vessels

were at least .30 miles apart just prior to BC's turn to starboard.

     The court concluded that

     The M/V OMINA had maintained radar plotting of the courses and
     speed of the several vessels at all times and was well aware
     of her own position and relative positions of the other
     vessels.

BC and OMINA contest how often these plottings were taken.       BC

claims that the last plotting was taken fifteen minutes before the

collision and OMINA claims that the last one (its fourth radar

plot) was taken nine minutes before the crash.   BC contests this to

show that, contrary to the court's conclusion, OMINA was not aware

of its position at all times.     BC misstates the record in this

instance.   OMINA's captain testified to the fourth plot being made

nine minutes prior to the collision.     This argument lacks merit.

     BC also makes a technical argument regarding the turning

radius of the BC when put hard to starboard.     BC claims that this

radius is .24 miles, according to her sea trials.    Therefore, the


     15
      Convincing us of the propriety of our conclusion is another
of the district court's findings of fact stating that "[t]he M/V
OMINA was free from any fault which caused or contributed to the
collision."

                                 11
OMINA must have been within .24 miles when BC made her sharp

starboard turn.     However, there is no evidence that the BC was hard

to starboard.      As the district court stated, the only person (BC's

quartermaster) who would know whether the BC was hard to starboard

was relieved of duty and sent out of the country before his

deposition could be taken.      Additionally, there is nothing in the

record showing that conditions were similar as those conducted at

BC's sea trials.

      BC has not shown the Court that this finding is clearly

erroneous.    OMINA made several plots before the collision showing

her to be .30 miles from BC and she did not change her course.            The

court was entitled to accept OMINA's radar plots as accurate.             The

court's conclusion that the ships were at least .30 miles apart

prior to the starboard turn of BC is not a mistake.            We will not

retry this case on appeal and upset the finding.

4.   Sufficiency of distance       between   the   ships   prior   to   BC's
      starboard turn.

       The district court found that

      From the moment the M/V BLUE CLOUD and the M/V OMINA commenced
      navigating with respect to each other, each remained in its
      original relative position with respect to the boundaries of
      the designated fairway. The courses of the several vessels
      were such that if each had held its own course and speed, the
      vessels would have passed well clear of each other and without
      incident.   There would have been at least 3/10 of a mile
      distance between the M/V BLUE CLOUD and the M/V OMINA.... a
      clear and sufficient distance in all respects.       (emphasis
      added).

BC   makes   one   technical   argument   and   one   hollow   argument   in

attacking the court's finding that the ships would have passed at

a clear and sufficient distance.         BC argues simply that given the


                                    12
speed and size of the vessels, the limited distance between them

was hardly clear and sufficient.          BC claims that the vessels would

have closed the distance between them in 7.2 seconds.                          BC also

states that the fact that the collision occurred was compelling

evidence of the lack of prudence of OMINA.                Ships should not be so

close together when possible.

       The record demonstrates that while the fairway was narrow, the

vessels would have safely passed without BC's sudden turn.                          As

discussed above, the vessels were not on a collision course.                      That

the collision occurred does not mean both parties were imprudent.

Such is not the law.       The record supports the trial court's finding

that   the     ships   would    have   passed   at   a    clear   and    sufficient

distance.

5. Most likely explanation for the collision.

         BC    contests   the   court's   finding        that   the    "most    likely

explanation" was BC's second mate's confusion of the unidentified

tanker's red light with the red light of the OMINA.                   BC claims that

the ships' relative positions made it impossible for the second

mate to see the tanker's red light.              BC also states that their

experienced mate would not have made such a mistake.                   BC maintains

that the cause of the accident was a sudden port-to-port turn by

OMINA.        These arguments do not cause us to disturb the lower

court's finding.

       In our estimation, the court below used its common sense in

concluding that confusion of lights was the most likely explanation

for the collision.        We first note that the district court was not


                                         13
attempting to say with scientific certainty why BC made the sharp

turn to starboard, only what the most likely reason was.        BC stated

that it believed OMINA had turned starboard when the evidence

showed OMINA had maintained a steady course.            If BC saw a red

light, it most likely was the tanker's.            Even BC's own expert

witness offered confusion of red lights as "what happened" on

deposition, though at trial, this conclusion changed to "one of the

possibilities."

     BC presented no evidence other than the testimony of the

mate's that OMINA attempted a port-to-port passing.             The court

found that BC's mate was confused and careless as BC was overtaking

the tanker ahead of it.     Accordingly, the lower court gave little

credit to this testimony.    On review, we must give "due regard ...

to the opportunity of the trial court to judge of the credibility

of the witnesses."    Fed.R.Civ.P. 52(a).      Doing so, we discern no

clear error in the district court's finding.

6. OMINA's recovery of damages.

      BC argues that the district court erred in entering judgment

against the BC for damages because the OMINA did not file a

counterclaim against BC.      BC claims that the lack of a formal

counterclaim by OMINA deprived BC of sufficient notice of their

potential liability exposure and thus prejudiced them.                This

argument is without merit.

     A   formal   counterclaim   is    typically   necessary   to   receive

damages as part of a limitation of liability action.                British

Transport Commission v. U.S., 354 U.S. 129, 141, 1109, 1 L.Ed.2d


                                      14
1234 (1957).   However, as the district court noted in this case, BC

signed a stipulation on May 21, 1993, that stated that "Petitioners

[OMINA] have made a claim against the M/V Blue Cloud, in rem, and

her owners, and/or managers, Ahrenkiel Shipping (H.K.) Ltd., for

damages to the M/V OMINA as a result of a collision between the M/V

OMINA and the M/V BLUE CLOUD."    (emphasis added).   OMINA did file

a formal claim for damages against BC after the trial on liability.

The document was received by the lower court and ruled upon without

objection from BC. Given the stipulation and lack of objection, BC

cannot be heard now to argue contrary to the stipulation or to

claim lack of notice with regard to a damage claim by OMINA.

     As the Eleventh Circuit noted in Cioffe v. Morris, 676 F.2d

539 (11th Cir.1982), prejudice involves issues not raised, not

demands or prayers for relief.      All of the issues of fault that

would have a bearing on damages were raised by the pleadings and

were tried.    The lower court did not err in entering the judgment

for damages.

                     OMINA's CONSOLIDATED APPEAL

     OMINA, as appellant in this consolidated appeal questions the

lower's court's power to substitute a letter of undertaking from

the Club in lieu of St. Paul Mercury Insurance Co.'s corporate

surety bond then on file.   OMINA also contends that the court erred

by substituting a form of security which provides less security

than the original bond. OMINA did not raise these arguments before

the district court.     OMINA's sole objection to BC's Motion to

Reduce Security reads as follows:


                                 15
     Claimants have failed to confer with Petitioners regarding the
     Motion to Reduce Security. Said Motion fails to address all
     issues that should be considered by Petitioners and this Court
     in determining its merit.    Accordingly, Petitioners cannot
     state at present whether they are opposed to Claimants' Motion
     or not.

     Never having heard the substantive arguments made on this

appeal,   the    district   court   granted   the   motion   to   substitute

security.       BC argues that the Court should not address these

arguments.      We agree.     As this Circuit stated in F.D.I.C. v.

Mijalis, 15 F.3d 1314, 1327 (5th Cir.1994),

     [I]f a litigant desires to preserve an argument for appeal,
     the litigant must press and not merely intimate the argument
     during the proceedings before the district court.       If an
     argument is not raised to such a degree that the district
     court has an opportunity to rule on it, we will not address it
     on appeal.

This Court will not disturb the lower court's order substituting

forms of security.

                                CONCLUSION

     For the above reasons, this Court AFFIRMS in their entirety

the judgment and orders entered by the district court.




                                     16
