Stevens v. F/V Bonnie Doon

• Decision Date: 01 May 1984
• Docket Number: No. 82-4286,82-4286
• Citation: 731 F.2d 1433
• Parties: Lewis F. STEVENS and Elvira B. Stevens, Plaintiffs-Appellants, v. F/V BONNIE DOON, her engines, machinery, tackle, etc.; Gene Koblick, an individual, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1433

731 F.2d 1433

1985 A.M.C. 363

Lewis F. STEVENS and Elvira B. Stevens, Plaintiffs-Appellants, v. F/V BONNIE DOON, her engines, machinery, tackle, etc.; Gene Koblick, an individual, Defendants-Appellees.

No. 82-4286.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Jan. 11, 1983.

Decided May 1, 1984.

Stanley L. Gibson, Derby, Cook, Quinby & Tweedt, San Francisco, Cal., for plaintiffs-appellants.

Richard E. Damon, Santa Cruz, Cal., for defendants-appellees.

Appeal from the United States District Court for the Northern District of California.

Before TRASK, KENNEDY, and POOLE, Circuit Judges.

PER CURIAM:

The case is before us a second time for review of the proper measure of damages when a vessel sustains a collision at sea. We affirm.

The Carolyn F., a fishing vessel owned by appellants Stevenses, and the Bonnie Doon, a fishing vessel owned by one Koblick, collided off the coast of California on August 6, 1978. Following the collision, the Bonnie Doon proceeded to port and obtained temporary repairs costing $1,787.67. At that time, the repair yard estimated that it would cost another $5,000 to refasten the ship.

In September 1978, the Bonnie Doon was arrested by U.S. Marshals on a warrant pursuant to a libel filed by the Stevenses. In February 1980, while the vessel was still under seizure, Koblick obtained an estimate of $20,005.68 from the Seabreeze Yacht Center to repair the Bonnie Doon.

At the first trial, the district court apportioned 70 percent of the fault of the collision to the Carolyn F. and 30 percent to the Bonnie Doon. The court found total damages to the Bonnie Doon were $21,793.35, comprised of $1,787.67 for temporary repairs immediately after the collision, and the $20,005.68 for full repairs, based on the estimate obtained eighteen months after the collision. The district court entered judgment in favor of the Bonnie Doon for $53,755.36. This constitutes 70 percent of each of two amounts, i.e., $21,793.35 for repair costs to the Bonnie Doon, $55,000 for loss of use during the lawful arrest of the Bonnie Doon.

The Stevenses appealed the judgment. While affirming on most issues, we held the district court erred in awarding damages for loss of use during lawful arrest, and further that it may have erred if it included in the damage award any repair costs resulting from the Bonnie Doon's deterioration while under lawful arrest prior to the first trial. Stevens v. F/V Bonnie Doon, 655 F.2d 206, 209 (9th Cir.1981) ("Bonnie Doon I "). We remanded for further proceedings to determine what the costs of repairs were and directed exclusion of repair costs resulting from deterioration. Id.

On remand the district court held a further hearing on damages and heard expert testimony presented by Koblick to establish the cost of repair of the Bonnie Doon. The district court increased from $21,793.35 to $36,230.97 the amount of damages to the Bonnie Doon that it found had been proximately caused by the collision. The larger amount did not include damage due to the deterioration of the Bonnie Doon while in custody. The Stevenses again appeal, now contesting the new finding on damages.

In reviewing the action of the district court on remand, we consider two grounds of error: first, whether the district court could properly take new evidence in the second trial on damages, consistent with the court's order of remand; and, second, whether the damages were fixed under proper legal standards.

1. Terms of the Remand Order

On remand for further proceedings after decision by an appellate court, the trial court must proceed in accordance with the mandate and the law of the case as established on appeal. Firth v. United States, 554 F.2d 990, 993 (9th Cir.1977). The mandate is controlling as to all matters within its compass, but leaves to the district court any issue not expressly or impliedly disposed of on appeal. Id.; Kearns v. Field, 453 F.2d 349, 350-51 (9th Cir.1971).

The mandate issued in Bonnie Doon I did not forbid taking new evidence on the question of damages. ¹ As the language suggests, this court was primarily concerned with an apportionment of the damage award between repair costs associated with the accident itself and those associated with the later deterioration of the vessel while under arrest. The district court could have taken evidence based on an analysis of its prior award. But it was no abuse of discretion for the court instead to take new evidence on the costs of repairs, as long as that evidence excluded costs for repair of damage due to deterioration during the Bonnie Doon's lawful detention.

2. Damages

The basic principle applied by courts in admiralty cases in ascertaining damages, restitutio in intergrum, requires that the injured party should be fully compensated for the loss sustained. Delta Marine Drilling Co. v. M/V Baroid Ranger, 454 F.2d 128, 129 (5th Cir.1972) (citing The "Potomac," 105 U.S. 630, 15 Otto. 630, 26 L.Ed. 1194 (1882)). See also 15 C.J.S. Collision Sec. 175 (1967). Damages are measured by the diminution in value of the property, that is, "the difference between the value of the vessel before and after the collision." Bouchard Transportation Co. v. Tug Ocean Prince, 691 F.2d 609, 611 (2d Cir.1982). See also Restatement of Torts (Second) Sec. 928. Where the destruction of property has not been total and repairs are possible, the costs of repairs may be used as evidence of the diminution in value. Pinto v. Fernwood, 507 F.2d 1327, 1331 (1st Cir.1974); Delta Marine Drilling Co. v. M/V Baroid Ranger, 454 F.2d 128, 129 (5th Cir.1972); The Pocahontas, 109 F.2d 929, 931 (2d Cir.), cert. denied sub nom., Eagle Transportation Co. v. United States, 310 U.S. 641, 60 S.Ct. 1088, 84 L.Ed. 1409 (1940).

To the extent possible, the diminution in value should be determined as of the moment of injury. See Standard Oil Co. v. Southern Pacific Co., 268 U.S. 146, 155, 45 S.Ct. 465, 466, 69 L.Ed. 890 (1925); The Baltimore, 75 U.S. (8 Wall.) 377, 385, 19 L.Ed. 463 (1869); Shipowners & Merchants Tugboat Co. v. United States, 205 F.2d 352 (9th Cir.), cert. denied, 346 U.S. 829, 74 S.Ct. 51, 98 L.Ed. 353 (1953); Detroit & Cleveland Navigation Co. v. The Elbert H. Gary, 161 F.Supp. 570, 577 (E.D.Mich.1958), aff'd sub nom., United States Steel Co. v. Detroit & Cleveland Navigation Co., 264 F.2d 247 (6th Cir.1959). The rule has the salutary effect of fixing damages at a specific time, keeping the influence of market fluctuations and price changes to a minimum. See United States v. Shipowners & Merchants Tugboat Co., 103 F.Supp. 152, 153 (N.D.Cal.1952), aff'd, 205 F.2d 352 (9th Cir.), cert. denied, 346 U.S. 829, 74 S.Ct. 51, 98 L.Ed. 353 (1953).

The trial court is not required to ascertain damages as of the date of collision in every case, however. The ease and practicabilities of obtaining expert valuation testimony, or testimony from each party that is subject to comparative evaluation by the trial court, may dictate setting a different date for valuation, such as the date for close of discovery or the date of trial. The district judge has wide discretion in this regard. Cf. In the Matter of Bankers Trust Co., 658 F.2d 103, 106-08 (3d Cir.1981), cert. denied, 456 U.S. 961, 102 S.Ct. 2038, 72 L.Ed.2d 485 (1982); Rivera Morales v. Benitez de Rexach, 541 F.2d 882, 886 (1st Cir.1976); Hysell v. Iowa Public Service Co., 534 F.2d 775, 786 (8th Cir.1976); Drake v. E.I. DuPont deNemours & Co., 432 F.2d 276, 279 (5th Cir.1970); Harry Alter Co. v. Chrysler Corp., 285 F.2d 903, 906-07 (7th Cir.1961).

The complaint in this action alleged $6,787.67 in damages. This was based on $1,787.67 for temporary repairs and a $5,000 estimate made in September 1978, approximately one month after the accident. Koblick introduced in the first damage trial an estimate made in February 1980 of $20,005.68 for repairs. There was testimony that the $5,000 estimate did not include the costs of full repairs to the Bonnie Doon. Faced with a $5,000 estimate that may not have included all repairs and a $20,005.68 estimate that, according to testimony, did include all repairs, it was not error for the district judge to adopt, in the first trial, the higher figure as the appropriate measure of damages, even though the higher figure was arrived at using an estimate made eighteen months after the accident.

At the hearing after remand, defendant introduced new evidence to show the cost of repairs to the Bonnie Doon, based on an estimate made in December 1981, forty months after the accident. In accordance with our instructions on remand, the estimate excluded costs for any deterioration during the lawful detention. The expert testified that cost of repairs in 1981 would be $34,443.80 and, in response to questions on direct examination, stated that this cost had risen probably some 50 percent from what repairs would have been in 1978, the time of the accident.

Stevens made two motions to limit the effect of this evidence. The first was a motion to limit damages to $6,787.67, the sum set forth in the pleadings. There was no error in denial of the motion. See Fed.R.Civ.P. 15(b). The second motion was to exclude the evidence entirely on the ground that the only proper measure of damage was the repair cost at the time of the collision, not the repair cost forty months later. As we have indicated, the optimum point for assessment of damages is the amount of loss at the time of the collision, but the district court has discretion to fix a different time to accord with the practicalities of obtaining reliable...