Edward Leasing Corp. v. Uhlig & Associates, Inc.
| Decision Date | 04 March 1986 |
| Docket Number | Nos. 84-5346,84-5867,s. 84-5346 |
| Citation | 1987 AMC 2268,785 F.2d 877 |
| Parties | EDWARD LEASING CORPORATION, a Delaware Corporation, Plaintiff-Appellant, v. UHLIG & ASSOCIATES, INC., etc., et al., Defendants-Appellees. EDWARD LEASING CORPORATION, a Delaware Corporation, Plaintiff-Appellee, Cross-Appellant, v. UHLIG & ASSOCIATES, INC., a Florida Corporation, Defendant-Appellant, Cross-Appellee, Universal Technology Services, Inc., et al., Defendants. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
James A. Dixon, Jr., Dixon, Dixon, Hurst & Nicklaus, Miami, Fla., for Uhlig & Associates, Inc.
Eric J. Goldring, Goldring & Goldring, Maplewood, N.J., for Edward Leasing Corp.
Appeals from the United States District Court for the Southern District of Florida.
Before VANCE and HATCHETT, Circuit Judges, and ATKINS *, Senior District Judge.
Edward Leasing Corporation ("Edward Leasing"), owner of the Motor Yacht Janette ("M/Y Janette"), filed suit in Admiralty, under Rule 9(h), Fed.R.Civ.P., and pursuant to 28 U.S.C. Section 1333, against Uhlig & Associates, Inc. ("Uhlig & Assoc."), Universal Technology Services, Inc. ("UTEC"), and Ulf Uhlig ("Uhlig"), alleging breach of maritime contract to repair two main engines of the M/Y Janette. Edward Leasing also alleged an alter ego relationship among the defendants. Uhlig & Assoc., in its Answer, asserted a counterclaim for unpaid repair bills. At the close of Edward Leasing's case in chief, the district court granted Uhlig's and UTEC's Motion for Involuntary Dismissal. Final Judgment (as corrected) was entered in favor of Edward Leasing and against Uhlig & Assoc. in the amount of $200,047.52, because the court reduced the damage award by 40 percent based on Edward Leasing's own negligence. Uhlig & Assoc. filed a notice of appeal from that judgment against it, and Edward Leasing filed a cross-appeal from the final judgment in favor of Uhlig and UTEC and from that part of its final judgment as to the amount the damages were reduced.
Edward Leasing argues that the trial court (a) abused its discretion in not enforcing certain discovery orders or delaying the trial until discovery could be completed; (b) was clearly erroneous in finding there was no evidence of an alter ego relationship among Uhlig & Assoc., Uhlig and UTEC; (c) was clearly erroneous in finding that no evidence of a contractual relationship or misconduct existed regarding UTEC and/or Uhlig; and (d) was clearly erroneous in reducing the damages by 40% because of Edward Leasing's alleged negligence.
We find that (a) the district court did not abuse its discretion in its rulings upon the discovery motions and the motions for continuance; and (b) the district court was not clearly erroneous in any of its findings. We affirm.
The parties are in agreement that the standard of review is whether the district court abused its discretion in ruling upon the discovery motions and motions for continuance. Bell v. Swift & Co., 283 F.2d 407 (5th Cir.1960). Similarly, Under Rule 52(a), Fed.R.Civ.P., the district court's Findings of Fact will "not be set aside unless clearly erroneous."
The parties agree that the relevant facts are not in dispute. During October 1982 the M/Y Janette, (a 118-foot aluminum-hulled yacht of United States registry), while traveling from New Jersey to South Florida, encountered a violent storm off the coast of Cape Hattaras, which resulted in damage to her MTU 493TY V12 diesel marine engines. After weathering 50-foot seas, she eventually arrived at the New River Marina in Fort Lauderdale, Florida. The M/Y Janette 's chief engineer, who knew Uhlig previously, then contacted Uhlig & Assoc. regarding the repairs necessary on the two engines.
Uhlig represented to Edward Leasing that it had large facilities and the ability, knowledge, and experience to rebuild the MTU engines. Uhlig further stated he had experience and background with MTU engines. Uhlig also represented that he, along with his two companies (Uhlig & Assoc. and UTEC), could adequately complete the job. Uhlig then conducted a preliminary investigation of the engines and determined they should be completely rebuilt. On January 3, 1983, Edward Leasing, through its president, Edward A. Cantor, entered into a written contract with Uhlig & Assoc., through its president, Uhlig, for the removal, disassembly, correction, or replacement of all defective parts, reassembly, testing, and reinstallation of the engines. This work was to be performed at a fixed price. The agreement required that the engines, as well as any other work performed by Uhlig & Associates, be approved by Lloyd's Register of Shipping.
The engines were removed from the M/Y Janette and brought to UTEC because Uhlig & Assoc. did not have any facilities to make the engine repairs. As the repairs at UTEC's facilities were being finished, the M/Y Janette 's engines were reassembled and tested in a "test cell" up to 600 rpm (or idle speed). After this testing, the engines were reinstalled in the M/Y Janette in June 1983.
During the rebuilding of the M/Y Janette 's engines, UTEC directly billed Edward Leasing for work it performed on the M/Y Janette 's port and starboard engines, including its turbochargers and the rebuilding and cleaning of the engine valves, cylinder heads, and fuel injectors. UTEC also billed other work performed on the engines.
On August 15, 1983, after some preliminary work was completed on the M/Y Janette's hull, she was lowered into the water for dock trials. During these trials, both the port and starboard engines were tested; however, the port engine failed and the crankshaft cracked. The port engine was later removed from the M/Y Janette and returned to UTEC's facilities where it was partially disassembled. After some work on the engines, the vessel, under her own power, moved to the duPont Plaza Hotel docks. On August 16, 1983, additional dock trials of both the starboard and port engines were conducted. During these trials, Uhlig & Assoc. asserts the port engine oil pressure fluctuated between 5-13 kg/cm., even though the test notations only reflect fluctuation from 5-7 kg/cm.
Despite the warnings of Uhlig & Assoc., against the contemplated voyage to New York, Edward Leasing ordered the M/Y Janette out for a sea trial. The captain of the vessel acknowledged that any risk involved in that voyage would be the risk of Edward Leasing and not that of Uhlig & Assoc. If the trial proved successful the M/Y Janette was to continue up to New York using only the starboard engine. While attempting to navigate out of the channel from the duPont Plaza Hotel docks to the Atlantic Ocean, the M/Y Janette lost propulsion from the starboard engine, because the starboard propellor had fallen off. 1 The only means of propulsion of the yacht at this point was through use of the port engine. While in Government Cut (a portion of the channel) the Scandinavian Sun, a cruise ship, radioed the M/Y Janette stating it was overtaking her from astern. The captain of the M/Y Janette accelerated the port engine to aid in maneuvering the vessel. During the maneuver a large quantity of acrid smoke was seen to be coming from the crankcase of the port engine of the M/Y Janette. After the cruise ship passed the M/Y Janette, the port engine speed was reduced to idle and the vessel was maneuvered into deep water.
It was determined by a diver that the starboard propellor had fallen off. This information was relayed to Uhlig & Assoc. who advised that the port engine should not be used under any circumstances and that tugs should be sent to the M/Y Janette where she lay in the Atlantic Ocean. Despite this warning, the port engine was restarted and the vessel cruised, and returned at low speed to the harbor where the M/Y Janette was towed back to Jones Boat Yard. During this portion of the voyage, more smoke was observed to be coming from the crankcase of the port engine.
Upon the arrival of the vessel at Jones Boat Yard, Uhlig & Assoc. began to disassemble the port engine to determine the cause of its malfunction. Uhlig & Assoc. then notified Edward Leasing that it would rebuild the engine, with no labor charges, but it would charge Edward Leasing for all necessary parts. Uhlig & Assoc. also attempted to complete the other work on the M/Y Janette which had not been previously performed.
Shortly after the work was begun, Uhlig & Assoc. advised Edward Leasing that no further work would be performed until it was paid in full. A dispute arose over certain bills and Uhlig & Assoc. refused to perform any further work on the engines. As a result, this litigation was instituted, the parts bonded out, and the port engine, partially disassembled, was shipped to MTU of North America in Sugar Land, Texas for rebuilding.
MTU of North America determined that the engine block required line boring, 60% of the cylinder valves required replacement, as did three connecting rods and 100% of the connecting rod bolts. Those needed parts were in addition to two connecting rods, two bearings, and the crankshaft which were irreparably damaged. The port engine was rebuilt at MTU, installed in the M/Y Janette and sea-trialed by approximately January 17, 1984.
The metallurgical analysis of the M/Y Janette 's port crankshaft showed that it was actually cracked on three separate occasions with a substantial cooling period between each. Working backwards, the last cracking event occurred during the navigation of the vessel from the duPont Plaza through the sea trial and the vessel's return to Jones Boat Yard. The second event occurred during the dock trials at duPont Plaza, and the first occurred at Jones Boat Yard. Once the crankshaft had cracked, it required replacement regardless of the later cracks.
After its suit was filed on October 4, 1984, Edward Leasing began discovery requests promptly, serving Requests for Production and...
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