Fairest–knight v. Marine World Distributors Inc.

• Decision Date: 15 July 2011
• Docket Number: No. 10–1409.,10–1409.
• Citation: 652 F.3d 94
• Parties: Richard S. FAIREST–KNIGHT; Valerie A. Fairest–Brooke; Conjugal Partnership Fairest–Fairest; A.S. F–B, Minor; M.A. F–B, Minor, Plaintiffs, Appellees,v.MARINE WORLD DISTRIBUTORS, INC., Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

652 F.3d 94

Richard S. FAIREST–KNIGHT; Valerie A. Fairest–Brooke; Conjugal Partnership Fairest–Fairest; A.S. F–B, Minor; M.A. F–B, Minor, Plaintiffs, Appellees,

v.MARINE WORLD DISTRIBUTORS, INC., Defendant, Appellant.

No. 10–1409.

United States Court of Appeals, First Circuit.

Heard March 11, 2011.Decided July 15, 2011.

Manuel Fernández–Bared, with whom Toro, Colón, Mullet, Rivera & Sifre, P.S.C., was on brief for appellant.Antonio Juan Bennazar–Zequeira, with whom Bennazar, García, Robles & Milián, CSP, was on brief for appellees.Before TORRUELLA, SILER,^* and HOWARD, Circuit Judges.

TORRUELLA, Circuit Judge.

This case, involving the saga of an extremely frustrated boat owner, provides further support for the occasionally expressed view that the two happiest days of a boat owner's life are the day he buys his boat and the day he sells it. Appellees will have to remain satisfied with this allotment of joy, as we now reverse the district court and hold that there was insufficient proof of causation to support finding the appellant liable.

I. Background and prior proceedings

Appellant Marine World Distributors, Inc. (“Marine World”) does business in the sale, service and repair of marine vessels, with its principal offices in San Juan, Puerto Rico. In 2004, Marine World offered for sale a previously owned twenty-six foot 2001 Bayliner Ciera 2655 motorboat (the “boat”). On March 29, 2004, Mr. Carlos Suárez, a certified marine surveyor, inspected and appraised the boat, noting that the engine could not be tested because no cooling water was available. Nevertheless, Suárez concluded that the boat was good for intended cruising around Puerto Rico and coastal waters. On August 13, 2004, Appellee Richard S. Fairest–Knight (“Fairest–Knight”) purchased the boat from Marine World for $38,000.¹ Fairest–Knight had no previous boating experience, and this was his first boat purchase. The boat was purchased “as is,” as expressly provided in the Sales Order, and Fairest–Knight was aware that no express or implied warranty resulted from Marine World's sale of the boat. Fairest–Knight insured the boat and contracted with a company that provides emergency towing assistance.

While operating the boat on January 22, 2005, approximately five months after he purchased it, Fairest–Knight observed that the boat's oil alarm was triggered and that oil had drained from the engine into the motor compartment. On January 27, 2005, Marine World inspected the engine, and on February 8, 2005, it performed the work necessary to correct the oil leakage, as authorized by Fairest–Knight. This incident would become one in a series of periodic breakdowns and other problems with the boat over the next several years. On each occasion, Fairest–Knight would bring the boat back to Marine World to be repaired, at which point Marine World would inspect the problem, tender a diagnosis and perform the indicated repairs. Marine World frequently performed sea trials to confirm that the problem had been corrected. No other person or entity serviced the boat during this time. Over the years, the repairs performed by Marine World included the following:

a) cleaning the engine room and replacing the oil sender thread, oil sensor and various other corroded fittings (February 8, 2005);

b) performing a tune up, replacing the impeller, and sanding and painting pulleys (June 6, 2005);

c) replacing the sea water pump and serpentine belt (August 23, 2005);

d) removing the engine, disassembling the manifolds and elbows, starter, engine points, power steering pump, and pulleys, as well as cleaning and painting those parts and the oil pan, followed by a sea trial (October 26, 2005);

e) installing a missing power steering pump bracket (November 19, 2005);

f) reconnecting GPS terminals, performing a tune up, and conducting a sea trial (May 17, 2006); g) replacing the electric fuel pump, cleaning the carburetor, and conducting a sea trial (May 27, 2006);

h) conducting a sea trial (June 5, 2006);

i) removing and charging the batteries (August 10, 2006);

j) replacing the fuel tank vent (August 12, 2006);

k) conducting a sea trial (August 15, 2006);

l) replacing the fuel pick-up assembly (August 30, 2006);

m) overhauling the engine, replacing the manifolds and elbows, and conducting a sea trial (November 6, 2006);

n) replacing the exhaust flappers (December 13, 2006);

o) replacing the engine longblock (February 15, 2007);

p) replacing the impeller kit and flappers (May 14, 2007).

Despite these repairs, Fairest–Knight experienced repeated malfunctions while using the boat, often involving complete engine failures that required towing the boat back to port.

The culmination of these incidents occurred on April 14, 2007 when Fairest–Knight, together with his wife and two sons, also appellees, embarked on a trip to Costa Bonita, located on the island of Culebra, approximately twenty miles east of Puerto Rico. After several engine failures, large amounts of smoke began to emanate from the engine compartment. Fearing that the boat might ignite, sink and/or explode, the family donned life jackets and prepared to abandon the vessel. Fairest–Knight opened the engine compartment and the smoke began to dissipate. The boat was then towed back to Puerto del Rey in Fajardo, where the boat has since remained, unused. Between May 14 and May 22, 2007, Marine World performed repairs to the boat without charge to Fairest–Knight, who was unaware that this work had been completed until after proceedings in this case had begun.

Between August 2004, when the boat was first delivered to Fairest–Knight, until he last used it in April 2007, Fairest–Knight incurred expenses totaling $16,139.34 for repairs, $3,195.20 for towage and $2,990.00 for wharfage and insurance. During this time, a period of 32 months, the boat was undergoing service or was otherwise unuseable for 276 days, or approximately 9 months.

On August 8, 2007, Fairest–Knight filed a complaint against Marine World in the District Court of Puerto Rico, raising claims under admiralty law and Article 1802 of the Puerto Rico Civil Code. After a four-day bench trial, the district court found that Marine World “breached its duty to a workmanlike performance upon which plaintiffs had a right to rely.” The district court found that the “repeated repairs which had to be done to the boat over an extended period of time” was evidence of Marine World's breach, noting that “there was a repeated failure to identify the source of the engine's failure despite representations to plaintiffs that the boat was in a seaworthy condition,” and that “Marine World was the only entity which serviced the boat during the period of time at issue.” The district court rejected Marine World's theory that Fairest–Knight failed to properly maintain the boat as not credible, given that the evidence at trial showed that Fairest–Knight “followed the recommendations made by Marine World as to replacement of parts and the boat's maintenance,” and that, given how much time the boat spent in its shop, the onus was on Marine World to notice and inform Fairest–Knight of any need for maintenance. The district court awarded Fairest–Knight $15,739.96 for the faulty repairs; $3,195.20 for towage expenses; $2,990 for storage and insurance expenses up to June 20, 2007, and $13 per day thereafter until the entry of judgment; $55,000 to Fairest–Knight and his family for the negligent infliction of emotional distress and pain and suffering; and costs and attorneys' fees. Marine World appealed on March 5, 2010.

II. Discussion

A. Standard of review

“ ‘Where, as here, the district court conducts a bench trial and serves as the factfinder, its determinations of negligence, proximate cause, and similar issues are entitled to considerable deference.’ Specifically, such review is for clear error.” N. Ins. Co. of N.Y. v. Point Judith Marina, LLC, 579 F.3d 61, 67 (1st Cir.2009) (quoting Jackson v. United States, 156 F.3d 230, 232 (1st Cir.1998)). A finding qualifies as “clearly erroneous” when our review of the record leaves us “with the definite and firm conviction that a mistake has been committed.” United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948).

B. Was Marine World liable?

Marine World contends that the district court erred in finding it liable to appellees for having breached its duty to carry out the agreed-upon repairs in a workmanlike fashion. Marine World insists that there was insufficient evidence that their repairs were the cause of the repeated problems experienced by appellees' boat. Fairest–Knight argues that a party does not need to act negligently to be in breach of the implied warranty, and that Marine World's inability to finally resolve the various problems plaguing his boat shows that it was in breach of its implied warranty of workmanlike performance.

“[C]ontracts for repairs to a vessel ... come under the scope of admiralty jurisdiction.” La Esperanza de P.R., Inc. v. Pérez y Cía. de P.R., 124 F.3d 10, 16 (1st Cir.1997). This brings such a case under federal jurisdiction. See U.S. Const. art. III, § 2. “Admiralty jurisdiction brings with it a body of federal jurisprudence, largely uncodified, known as maritime law.” Ballard Shipping Co. v. Beach Shellfish, 32 F.3d 623, 625 (1st Cir.1994). “In the absence of a relevant statute, the judicially-developed norms of the general maritime law, ‘an amalgam of traditional common-law rules, modifications of those rules, and newly created rules,’ governs actions in admiralty.” La Esperanza, 124 F.3d at 16 (quoting East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 865, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986)). Although state law may supplement federal maritime law when the latter is silent or where a local matter is at issue, it “may not be applied where it would conflict with [a federal] maritime law.” Floyd v. Lykes Bros. S.S. Co., 844 F.2d 1044, 1047 (3d...