Chan v. Society Expeditions, Inc.

• Citation: 123 F.3d 1287
• Decision Date: 29 August 1997
• Docket Number: Nos. 96-35210,96-35372,s. 96-35210
• Parties: , 97 Cal. Daily Op. Serv. 7012, 97 Daily Journal D.A.R. 11,355 Benny CHAN and; Victoria Chan, as Guardian Ad Litem of Samantha Chan, Plaintiffs-Appellees, and Adventurer Cruises, Inc., a Liberian corporation, Claimant, v. SOCIETY EXPEDITIONS, INC., a Washington Corporation, Discoverer Reederei, GmbH, a West German corporation, in personam, Defendants-Appellants. Benny CHAN and Victoria Chan, individually, and as husband and wife, Victoria Chan, as Guardian Ad litem for Samantha Chan, Plaintiffs-Appellants, v. SOCIETY EXPEDITIONS, INC., a Washington Corporation, et al., Defendants, and World Discoverer, Claimant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1287

123 F.3d 1287

1997 A.M.C. 2713, 97 Cal. Daily Op. Serv. 7012,

97 Daily Journal D.A.R. 11,355

Benny CHAN and; Victoria Chan, as Guardian Ad Litem of

Samantha Chan, Plaintiffs-Appellees, and Adventurer Cruises, Inc., a Liberian corporation, Claimant, v. SOCIETY EXPEDITIONS, INC., a Washington Corporation,

Discoverer Reederei, GmbH, a West German

corporation, in personam, Defendants-Appellants.

Benny CHAN and Victoria Chan, individually, and as husband

and wife, Victoria Chan, as Guardian Ad litem for

Samantha Chan, Plaintiffs-Appellants, v. SOCIETY EXPEDITIONS, INC., a Washington Corporation, et al.,

Defendants,

and

World Discoverer, Claimant-Appellee.

Nos. 96-35210, 96-35372.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted May 29, 1997.

Decided Aug. 29, 1997.

Thomas F. Paul, Le Gross, Buchanan and Paul, Seattle, WA, for defendants-appellants/cross-appellees.

Donovan R. Flora, Sullivan and Golden, Seattle, WA, for plaintiffs-appellees/cross-appellants.

Appeal from the United States District Court for the Western District of Washington; Thomas S. Zilly, District Judge, Presiding. D.C. No. CV 90-01055-TSZ.

Before: GOODWIN, SCHROEDER, and NORRIS, Circuit Judges.

GOODWIN, Circuit Judge:

Defendants Society Expeditions ("Society") and Discoverer Reederei GmbH ("Discoverer") appeal the district court's ruling that they are liable for injuries Plaintiffs Benny and Samantha Chan sustained when an inflatable raft on which they were ferried from a cruise ship to shore capsized in the South Pacific. The Chans cross-appeal the district court's dismissal of their action in rem against the cruise ship WORLD DISCOVERER and the court's ruling that Liberian law, the law of the ship's flag, applies to limit their recoverable damages.

This appeal forces us to consider the obligations and duties that arise from a contract of carriage embodied in a cruise ship passenger ticket. We must also determine the enforceability of terms drafted by the carrier and contained in the ticket. We affirm in part, reverse in part, and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

Benny and Victoria Chan booked passage for themselves and their seven-year-old daughter, Samantha, on the cruise ship, WORLD DISCOVERER. The ship is operated by Discoverer Reederei, a German company. Benny Chan's employer, Society Expeditions, Inc., a Washington corporation which is in the business of marketing and chartering cruise ships, chartered the WORLD DISCOVERER for the cruise at issue. Heiko Klein, a German citizen, is the sole shareholder, chairman, and president of Society Expeditions. At the time of the relevant events, Klein was also the president and sole owner of Adventurer, ¹ the Liberian company that owned the WORLD DISCOVERER, and the sole owner of Discoverer Reederei. The officers and crew of the ship were employees of Columbia Shipmanagement Ltd. ("Columbia"), a Cypriot crewing company. ²

The Chans boarded the ship in Tahiti on March 30, 1990. The next day, passengers were ferried by an inflatable raft called a Zodiac to Makatea, a coral atoll in French Polynesia that was the first stop on the day's travel itinerary. The driver of the Zodiac on which the Chans were transported was Marcelino Tavita, a crew member and employee of Columbia. While ferrying the last group of passengers ashore, the raft turned broadside to a wave and capsized. The passengers were thrown into the surf. Tavita and one passenger died in the accident. Benny Chan sustained severe brain and head injuries and Samantha Chan sustained both physical and emotional injuries.

The district court initially granted Society's motion for summary judgment on the ground that the employer was immune from tort liability under Washington state workers' compensation law and granted Discoverer's motion to dismiss for lack of personal jurisdiction. We reversed those rulings and remanded for further proceedings. See Chan v. Society Expeditions, Inc., 39 F.3d 1398, 1410 (9th Cir.1994).

On remand, the district court tried only the issue of liability, reserving the determination of damages until after this appeal. ³ The court dismissed the in rem action against the ship and held that Liberian law applied to the case to limit the Chans' damages. The court found that Tavita's negligent driving caused the capsizing of the Zodiac and found both Society and Discoverer liable for the Chans' injuries. Both parties timely appealed the respective rulings.

I. THE APPEAL

A. Standard of Review

The parties dispute which aspects of the trial court's holdings involve determinations of fact entitled to deference. See Exxon Co. v. Sofec, Inc., 54 F.3d 570, 576 (9th Cir.1995) (factual findings of a district court sitting in admiralty are reviewed for clear error), aff'd, 517 U.S. 830, 116 S.Ct. 1813, 135 L.Ed.2d 113 (1996). While the determination of liability in admiralty is a question of law reviewed de novo, see Howard v. Crystal Cruises, Inc., 41 F.3d 527, 529 (9th Cir.1994), the district court's determination of negligence in an admiralty case is a finding of fact. See Exxon, 54 F.3d at 576.

We have also labeled as factfinding an admiralty court's determination that a party conducted itself as an entity charged with particular legal obligations under admiralty law. For example, we reviewed for clear error a district court's determination that the plaintiff shipped goods by sea as an "independent seller" rather than as a "buying agent." See C-ART, Ltd. v. Hong Kong Islands Line Am., S.A., 940 F.2d 530, 534 (9th Cir.1991). We also review for clear error the determination that a party is a "carrier" within the meaning of the Carriage of Goods by Sea Act (COGSA). See Mori Seiki USA, Inc. v. M.V. Alligator Triumph, 990 F.2d 444, 450-51 (9th Cir.1993); Pacific Employers Ins. Co. v. The M/V Gloria, 767 F.2d 229, 234-35 (5th Cir.1985).

Similarly, the district court's characterization of Society as a carrier and Discoverer as an operator/owner in this case constitutes factfinding entitled to appellate review under the clearly erroneous standard. Our review of these findings is thus "significantly deferential, requiring a definite and firm conviction that a mistake has been committed" before we will reverse. See Exxon, 54 F.3d at 576 (internal quotation omitted).

B. Society's Liability

We have long recognized that the carrier-passenger relationship, as established in the contract of carriage, yields significant legal consequences. We have held that " 'by the sale of the ticket there [arises] a contractual relationship between the company and the passenger, to which relationship the law by its own force annexe[s] certain implied obligations and duties.' " Morton v. De Oliveira, 984 F.2d 289, 290 (9th Cir.1993) (quoting Pacific S.S. Co. v. Sutton, 7 F.2d 579, 580 (9th Cir.1925)).

The contract of carriage imposes a duty on the carrier to transport passengers safely, see id., and to exercise reasonable care under the circumstances of each case. See Kermarec v. Compagnie Generale Transatlantique, 358 U.S. 625, 632, 79 S.Ct. 406, 410, 3 L.Ed.2d 550 (1959); Keefe v. Bahama Cruise Line, Inc., 867 F.2d 1318, 1321 (11th Cir.1989). We have held that in discharging this duty of reasonable care, a carrier of passengers "must maintain a reasonable, safe means for a passenger to disembark" and must "render such services as are reasonably necessary to get a passenger safely ashore." Marshall v. Westfal-Larsen & Co., 259 F.2d 575, 577 (9th Cir.1958).

Although these cases generally involve defendants who are both the shipowner and the carrier, the principles of carrier liability are not limited to shipowners. Because the carrier's duties are born from the contractual relationship with the passenger, they apply with equal force to non-owners. See Stanga v. McCormick Shipping Corp., 268 F.2d 544, 551 (5th Cir.1959) ("[I]t is the contract of carriage as a water-borne passenger which gives rise to the high degree of care exacted of a carrier of passengers...."). Thus, if, as the district court found, Society held itself out and conducted itself as a carrier of passengers, it owed the Chans a duty to transport them safely from the cruise ship to shore.

We find ample support in the record for the district court's finding that Society represented itself as a carrier and assumed the duties of a carrier for the Chans' cruise. First, the charter agreement entered into between Adventurer, the shipowner, and Society provides that Society must "issue to passengers the Owners' standard form of ticket as per Schedule II ... and shall embody the same in any contract of carriage with the passengers." The Schedule II form ticket describes the carrier's and the passenger's duties and responsibilities. The "Contract of Carriage" Society issued to passengers tracks the language of Schedule II almost identically, but substitutes the name "Society" for each instance of the term "Carrier" in Schedule II.

Second, Society is the only company mentioned by name in the contract of carriage, which constitutes the passenger's ticket. The contract of carriage defines the term "Society" to include "the Ship, its owner, its operator or charterer, all affiliated companies and the sales representatives and all employees of such individuals and companies." This contract of carriage is the only document the passenger is required to sign with any party involved in the cruise. In issuing this contract of carriage in its own name, Society was holding itself out as the carrier and embodying its willingness to be seen by passengers as the carrier for purposes of this cruise.

Society contends that, despite this evidence, it acted merely as an agent for the other service providers involved in the Chans' cruise. Citing Lavine v. General Mills, Inc., 519 F.Supp. 332 (N.D.Ga.1981), and Weade v. Dichmann, Wright & Pugh, Inc., 337 U.S. 801, 69 S.Ct. 1326, 93 L.Ed. 1704 (1949), Society argues that its participation in the...