Anderson v. Whittaker Corp.

• Decision Date: 18 January 1990
• Docket Number: 88-1900,Nos. 88-1898,s. 88-1898
• Citation: 894 F.2d 804
• Parties: , 29 Fed. R. Evid. Serv. 1033 Jacqueline ANDERSON, Martha Brower, Mary E. Miller, and Marvie C. Willsey, Plaintiffs-Appellees, Plaintiffs-Appellees, Cross Appellants, v. WHITTAKER CORPORATION, Defendant-Appellant, Defendant-Appellant, Cross Appellee, Defendant-Appellee, Claude C. Boles, Third Party Defendant-Appellant, Bay Haven Marina, Inc., Ottawa Beach Marina, Inc., Third Party Defendants-Appellees. , and 88-1901.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 804

894 F.2d 804

1990 A.M.C. 2308, 29 Fed. R. Evid. Serv. 1033

Jacqueline ANDERSON, Martha Brower, Mary E. Miller, and Marvie C. Willsey, Plaintiffs-Appellees Plaintiffs-Appellees, Cross Appellants, v. WHITTAKER CORPORATION, Defendant-Appellant Defendant-Appellant, Cross Appellee, Defendant-Appellee Claude C. Boles, Third Party Defendant-Appellant Bay Haven Marina, Inc., Ottawa Beach Marina, Inc., Third Party Defendants-Appellees.

Nos. 88-1898, 88-1900, and 88-1901.

United States Court of Appeals, Sixth Circuit.

Argued Nov. 8, 1989.

Decided Jan. 18, 1990.

John L. Cote (argued), Raymond J. Foresman, Jr., Curtis R. Hadley, Willingham & Cote, East Lansing, Mich., for plaintiffs-appellees.

Richard B. Baxter (argued), Robert N. Hammond, Dykema, Gossett, Spencer, Goodnow & Trigg, Joel E. Krissoff, Farr & Oosterhouse, Grand Rapids, Mich., for Whitaker Corp. and Trojan Yacht.

Bruce P. Rissi (argued), Smith, Haughey, Rice & Roegge, Grand Rapids, Mich., for Bay Haven Marina, Inc.

Gary P. Bartosiewicz, Piatt, Bartosiewicz & Tiderington, Kalamazoo, Mich., for Ottawa Beach Marina, Inc.

Charles E. Barbieri (argued), John L. Collins, Foster, Swift, Collins & Coey, Lansing, Mich., for Claude C. Boles.

Before KENNEDY and RYAN, Circuit Judges, and CELEBREZZE, Senior Circuit Judge.

KENNEDY, Circuit Judge.

This case involves a general maritime action for wrongful death arising out of the sinking of a boat known as the Sea Mar III ("Sea Mar") in Lake Michigan. The manufacturer of the boat, the Whittaker Corporation, appeals the District Court's finding that the negligent design of the boat was a proximate cause of the sinking. It also appeals the award of damages for pre-death terror, fright and shock in the absence of eyewitness evidence regarding the deaths as well as certain evidentiary issues. The owner of the boat appeals from the finding that his negligence contributed to the sinking. He also appeals the refusal of the court to limit his liability pursuant to 46 U.S.C.App. Sec. 183. The decedents appeal the denial of prejudgment interest and denial of parents' claims for loss of society of adult, sons upon whom the parents are not dependent. All of the parties appeal various damage issues. We AFFIRM in part and REVERSE in part.

Plaintiffs commenced this products liability action in the United States District Court for the Western District of Michigan, Southern Division, against the manufacturer of the boat based on alleged defects. Specifically, plaintiffs' action against defendant Whittaker included claims of negligence and breach of implied warranties in that the boat had air scoops located on both sides of the hull at the stern that were negligently designed. Plaintiffs alleged that this defect permitted substantial amounts of water to enter and accumulate in the bilge, making the boat unreasonably dangerous.

During 1978 and 1979, all 1974 model Trojan F-32's, including the Sea Mar, were the subject of a manufacturer's recall and retrofit campaign in the course of which the manufacturer sent out letters stating that the boats' air vents, as designed, allowed water to enter and accumulate in the stern of the boat. The recall notice stated that sustained operation under certain conditions of wave height, direction, attitude, speed and other variables could allow water to enter through the forward-facing aft vents in sufficient quantities to "disable the engines and eventually swamp the boat." The letters were sent only to authorized Trojan dealers and to first purchasers and subsequent purchasers known to the manufacturer. Because defendant Whittaker ultimately conceded that the boat was defective, the principal factual issue at the liability trial was whether the defect was a proximate cause of plaintiffs' injuries.

Defendant Whittaker filed a third-party complaint in admiralty pursuant to Fed.R.Civ.P. 14(c), asserting liability against Claude Boles, the owner of the Sea Mar, as well as Bay Haven Marina and Ottawa Beach Marina, which were alleged to be liable as employers of some of the decedents. ¹

A nonjury trial was held before the District Court. The court bifurcated the proceedings and tried the issues of liability and damages separately. The court found that plaintiffs had met their burden of proving proximate causation and thus found defendant Whittaker liable. 692 F.Supp. 734 (W.D.Mich.1987). The court also concluded that Boles failed to exercise reasonable care by turning the boat over to decedents without advising them of the latent defects in the boat of which he had knowledge. The court found such negligence to be a proximate cause of decedents' injuries. The court found Bay Haven Marina and Ottawa Beach Marina not liable.

The court reduced plaintiffs' recovery, finding that decedents were negligent in setting out on the trip without making specific inquiry into the weather conditions before departing. The court found each plaintiff to be 20 percent negligent, Whittaker to be 55 percent negligent, and Boles to be 25 percent negligent, and apportioned damages accordingly.

The court awarded damages for loss of society to two of the plaintiffs, those who were spouses of a decedent. 692 F.Supp. 764. The court found that the non-dependent parents of the other two decedents, who left no surviving spouses or children, could not recover damages for loss of society. The court awarded damages for pre-death terror, fright and shock to all of the plaintiffs. 692 F.Supp. 764.

Plaintiffs also sought prejudgment interest from the date of decedents' deaths on all damages awarded other than the damages that compensated for loss of future earnings. The District Court, without determining whether the rule in this circuit provides for prejudgment interest in a general maritime case, ruled that plaintiffs were not entitled to prejudgment interest.

Thus, there are numerous issues before us on appeal. Plaintiffs argue that they are entitled to prejudgment interest on their award from the date of decedents' deaths. Those plaintiffs who are the non-dependent parents of decedents argue that they should be able to recover for loss of society. Defendants challenge the District Court's findings regarding proximate cause, and make several challenges regarding the admissibility of certain evidence. Defendants also argue that the court below erred in awarding damages for pre-death terror, fright and shock. Defendant Boles argues that the court erred in finding him liable as an owner of the boat. He also argues that his liability should have been limited pursuant to 46 U.S.C.App. Sec. 183. Finally, Boles argues that the trial court erred in calculating a recovery for lost future earnings.

I. Prejudgment Interest

As noted above, the District Court denied plaintiffs' request that prejudgment interest be applied to their award from the date of decedents' deaths. The court did not find it necessary to determine whether prejudgment interest was available as a matter of law in the case before it. ² Rather, the court found that even if prejudgment interest were available, the circumstances of the present case weighed strongly against such an assessment on the award:

In particular, the Court notes the age of this case, which is not due to the actions of any one party, but to a combination of factors including the complexity of the issues, the myriad of legal questions that have been raised, and the scope of the discovery that was conducted. It also notes that crucial factual issues including causation, apportionment of fault, and the extent of damages have been zealously disputed, all the way down the line. To say that this case is one in which very close questions, both legal and factual, have been involved is a gross understatement; resolution of the issues posed here has been an extraordinarily complex process for all involved. Under these circumstances the Court finds that an award of prejudgment interest would be patently unfair.

In those cases where prejudgment interest is available, the trial judge has discretion to deny such an award where there are " 'peculiar circumstances' that would make it inequitable for the losing party to be forced to pay prejudgment interest." Oglebay Norton Co. v. CSX Corp., 788 F.2d 361, 368 (6th Cir.), cert. denied, 479 U.S. 849, 107 S.Ct. 173, 93 L.Ed.2d 109 (1986) (quoting Noritake Co. v. M/V Hellenic Champion, 627 F.2d 724, 728 (5th Cir.1980)). In a later case, the Fifth Circuit listed several situations where "peculiar circumstances" exist:

Peculiar circumstances may be found where plaintiff improperly delayed resolution of the action, where a genuine dispute over a good faith claim exists in a mutual fault setting, where some equitable doctrine cautions against the award, or where the damages award was substantially less than the amount claimed by plaintiff.

Reeled Tubing, Inc. v. M/V Chad G, 794 F.2d 1026, 1028 (5th Cir.1986) (emphasis added).

The present case arguably involves a "genuine dispute over a good faith claim ... in a mutual fault setting." Id. This seems to be the basis upon which the District Court based its decision to deny plaintiffs' request for prejudgment interest. Because we question whether the "mutual fault" rationale remains a viable basis on which to rest a denial of an award of prejudgment interest, we find it necessary to reach the issue of whether prejudgment interest is available in this case.

With respect to Jones Act cases, this Court has noted that "[i]n a seaman's action to recover for personal injury or death, the general rule is that interest is awarded 'from the date that the damages have been judicially determined,' and not prejudgment interest from the date of injury." Oglebay, 788 F.2d at 367 (quoting Cleveland Tankers, Inc. v. Tierney, 169 F.2d 622, 626 (6th Cir.1948)). By contrast, in admiralty cases where recovery for property damage is sought, prejudgment interest is awarded absent "peculiar circumstances." Oglebay, 788 F.2d at...