Fanok v. Carver Boat Corp., LLC

• Decision Date: 15 September 2008
• Docket Number: No. CV-07-1921 (BMC)(CLP).,CV-07-1921 (BMC)(CLP).
• Citation: 576 F.Supp.2d 404
• Parties: Jeffrey FANOK, Plaintiff, v. CARVER BOAT CORPORATION, LLC and Staten Island Yacht Sales, Inc., Volvo Penta of the Americas, Inc. and Volvo Penta, Defendants.
• Court: U.S. District Court — Eastern District of New York

576 F.Supp.2d 404

Jeffrey FANOK, Plaintiff, v. CARVER BOAT CORPORATION, LLC and Staten Island Yacht Sales, Inc., Volvo Penta of the Americas, Inc. and Volvo Penta, Defendants.

No. CV-07-1921 (BMC)(CLP).

United States District Court, E.D. New York.

September 15, 2008.

COPYRIGHT MATERIAL OMITTED

Edward C. Radzik, Matthew Todd Loesberg, McDermott & Radzik, New York, NY, for Plaintiff.

Jeffrey D. Smith, Varnum, Riddering, Schmidt & Howlett, LLP, Kalamazoo, MI, Francis Turner, Hill Betts & Nash LLP, Elliot R. Polland, Hoffman, Polland & Furman, Patrick Corbett, Rubin Fiorella & Friedman LLP, New York, NY, for Defendants.

MEMORANDUM DECISION AND ORDER

COGAN, District Judge.

Jeffrey Fanok brings this action against Carver Yacht Corporation, L.L.C., Staten Island Yacht Sales, Inc. ("SIYS"), Volvo Penta of the Americas, Inc., and Volvo Penta (together, "Volvo"), which arises from his 59-foot Marquis yacht catching fire and sinking off the coast of Sandy Hook, New Jersey. Defendants were responsible for the manufacture, sale, and maintenance of the yacht or its component parts. The case is for economic damages only, the price of the yacht and attendant expenses, as fortunately no one was injured in the fire (save a family dog which apparently was killed). Each of the defendants has moved for summary judgment.

Plaintiff has produced no evidence that there was anything wrong with the yacht or any of its components that caused the fire. This may be because his insurance carrier made the decision to economize on salvage costs and therefore salvaged it through a method that destroyed most of the vessel instead of retrieving it so that it could be inspected to determine the cause of the fire. The carrier's contemporaneous notes attending this decision are laudably candid in recognizing that the decision to salvage the burned vessel in this matter could well doom its effort to prevail in this case, yet here it is anyway, as it has paid Mr. Fanok on his insurance claim and is the most interested party on the plaintiffs side by way of subrogation. (Mr. Fanok's stake is his relatively small deductible).

Plaintiff combines two legal principles in an effort to survive summary judgment: first, that a plaintiff in a strict products liability action need not prove a specific defect when the circumstantial evidence shows that the product did not function as it should have; and, second, that expert testimony, of which he has none, is not necessary to reach a jury in certain cases.

Neither of these principles is adequate to warrant denial of defendants' motions. This is not a strict liability action and in any event, although plaintiff does not have to prove a specific defect, he has to offer some evidence that something was wrong. Putting this case to a jury would be an invitation to speculate, not just as to what the defect was, but more fundamentally, whether there was in fact a defect.

Alternatively, plaintiff asserts various theories against SIYS under the Uniform Commercial Code ("UCC") relating to the delivery of non-conforming goods, and further asserts that the risk of loss remained on SIYS at the time of the fire. These claims are without merit and are also rejected.

BACKGROUND

On April 22, 2006, plaintiff entered into a purchase agreement with Staten Island Yacht SIYS for a 59-foot Marquis Yacht for the 2005 model year. The purchase price was $1,376,940, inclusive of six percent tax.¹ It appears that plaintiff, at the time of the incident, had paid $1,202,940. The yacht was equipped with two engines, manufactured by MTU Detroit Diesel, and model SP-1300 bow and stern thrusters, manufactured by Volvo. Thrusters are additional propellers, usually used on larger yachts or ships. They are helpful in tight maneuvers, where they can propel the yacht sideways (such as into a dock). The engines and thrusters were sold to, and installed by, Carver. SIYS had used the yacht before, apparently for testing purposes, and the engines had 90 to 100 hours of engine time on them at the time of the sales agreement.

Carver inspected the yacht in accordance with its manufacturing and quality control procedures prior to its transfer to SIYS. It passed all inspections. It was then shipped, on October 25, 2004, in parts, to SIYS, where it was assembled. Upon receipt of the yacht, SIYS completed a "Pre-Delivery Service Record," confirming the proper operating condition and seaworthiness of the yacht. When plaintiff and SIYS signed the purchase agreement, SIYS agreed to install some after-market features (aft cockpit controls, a flybridge grill, and a video camera) and make certain repairs. The yacht remained located at SIYS' facility, although plaintiff had access to and use of it as he wished.

The reverse side of the purchase agreement provided:

DEALER MAKES NO WARRANTIES EXPRESS OR IMPLIED OF, IN ANY YACHT OR ITEM PURCHASED HEREUNDER AND NO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARE INTENDED. WARRANTY, IF ANY, OF ANY ITEM PURCHASED HEREUNDER SHALL BE SOLELY THE WARRANTY GIVEN BY THE MANUFACTURER.

Carver provided a limited express warranty. This document included, among other things, Carver's warranty that the yacht "will be free from defects in material and workmanship for one (1) year from delivery to the original retail owner...." It further stated that "for this limited warranty to be valid, Carver must receive a Warranty Registration Form, duly completed and signed by the Owner, within fifteen (15) days of delivery" of the yacht, and that the retail dealer (here, SIYS) is responsible for sending the signed registration form to Carver. Finally, this express warranty excluded all implied warranties, including merchantability and fitness for a particular purpose, and stated that "[y]our acceptance of delivery of the warranted Marquis yacht constitutes your acceptance of the terms of this limited warranty."

While the yacht was at SIYS, plaintiff was permitted, and evidently encouraged, to sail it. Plaintiff requested training on the yacht, so SIYS provided him with a captain who tutored him, onboard, for five to six hours. Plaintiff used the yacht four or five times, for a maximum of fifteen hours, before the incident in question. The stern thruster was not functioning at times while plaintiff had use of the yacht and SIYS performed repairs on it.

Plaintiff never had title to the yacht, nor did he sign Carver's "Warranty Registration," SIYS' "Notice of Owner's Acceptance of Vessel," or SIYS' "Customer Warranty Acknowledgment." The yacht was never registered. He did sign SIYS' "Purchase Agreement," which, as noted above, had SIYS' warranty exclusion in it.

On July 15, 2006, plaintiff, with his wife Susan, his teenage son, Jeff, one of Jeffs friends, and their two dogs, left SIYS' facility around 11:00 a.m. The group arrived at Horseshoe Cove a short time later, where they intended to have lunch and swim. At the point of anchorage, the water depth was approximately ten to fourteen feet and the yacht's draft (the distance between the water's surface and the bottom of the yacht) was five feet.

When the time came to move from their spot, plaintiff put the engine to idling speed to ensure that the propellers were not rotating. His son, Jeff, used a yacht hook to position the anchor into the bow, but lost his grip on the hook and dropped it into the water. As the others on the yacht went to retrieve it, the yacht began to drift. By the time they returned to the cockpit, the yacht had come into contact with a sandbar, causing the bow to swing around. Plaintiff stated that he cut off the engines and engaged both the stern and bow thrusters. He testified at deposition that he engaged the stern thruster "three or four times" for fifteen seconds at the most. He does not know firsthand if the stern thruster responded (his wife could not see any water churning as a result of the thruster operating and he therefore concludes that it was not), but in any event, the yacht was still unable to move. At least a minute later, plaintiffs wife and the children smelled something burning and saw smoke rising out of the port engine vent. At that point, plaintiff entered the main salon and shut down the electrical system and generator.

Returning to the controls, plaintiff called the Coast Guard for help. In the meantime, he directed everyone on board to put on life jackets and gather on the stern platform. Plaintiffs wife scoured the yacht in search of one of the dogs, which was missing. As the floors were beginning to melt, the family was taken from their yacht by another vessel.

Within ten minutes of their departure from the yacht, it became engulfed in flames. Less than a half hour after the initial call, the Coast Guard arrived and worked to put out the fire. Its efforts were to no avail, and the yacht burned down to the waterline. After two hours and 42 minutes, the fire was extinguished, at which point the skeleton of the yacht drifted into a rock pile and grounded. It was estimated that 20 gallons of fuel remained on board, indicating that approximately 380 gallons burned in the fire.

The yacht was equipped with a Kidde FM200 ECS series fire suppression system in the forward engine bulkhead in the engine room. This was the only fire suppression system on the yacht, and was designed to extinguish fires in the engine room. A fire alarm and strobe light were also installed in the engine room, although plaintiff is uncertain whether the alarm went off or not.

The night of the fire, the Coast Guard directed plaintiff to place a $100,000 bond or to remove the wreckage that night. Whichever route he chose, he was advised that the wreckage needed to be removed immediately. Plaintiff personally gave that bond. The Coast Guard called plaintiff multiple times each day for the next few days, inquiring as to his removal plan.

SIYS learned of the accident by Sunday, July 16, 2006, the day after the incident. SIYS notified...