Gionis v. Russo's Marine Mart, Inc.
| Decision Date | 19 November 2012 |
| Docket Number | WWMCV096000903S. |
| Court | Connecticut Superior Court |
| Parties | George GIONIS et al. v. RUSSO'S MARINE MART, INC. |
UNPUBLISHED OPINION
In this case, the plaintiffs, George Gionis and Richard J Burke, seek money damages, punitive damages, attorneys fees and costs and/or rescission of their contract over their purchase of a 38-foot, 2006 model Rampage powerboat in 2007 that was represented to be a " new demo." At the time of sale, the defendant, dealer-seller, Russo's Marine Mart, Inc. of Medford, Massachusetts, did not disclose that the boat had been repaired after it was damaged in a grounding accident. The Amended Complaint is in ten counts encompassing claims for breach of contract (Counts One and Two), breach of warranty (Count Three), fraud and intentional misrepresentation (Counts Four and Five), violation of the Connecticut Unfair Trade Practices Act (CUTPA) (Counts Six and Seven), negligent misrepresentation (Counts Eight and Nine) and negligence (Count Ten). The defendant denies that it had a duty to disclose the grounding accident and repairs denies any liability, and pleads four special defenses. For the following reasons, the court enters judgment in favor of the plaintiffs on the breach of warranty count only (Count Three), and awards them $15, 000. Judgment enters for the defendant on all other counts.
The case was tried to the court on December 20 and 21, 2011, and on February 29, June 19, and August 9, 2012. Testimony was given by George Gionis and Richard Burke, the plaintiffs Jesse Marden of Breakwater Marine Repair Co.; Robert Scanlan expert witness, marine surveyor; Charles McCauley, expert witness, marine surveyor; Larry Russo, president of the defendant, Russo's Marine Mart; and Norman LeBlanc expert witness, marine surveyor. The court also accepted numerous documents, reports, photographs and deposition transcripts into evidence. The parties also filed briefs and reply briefs in support of their respective positions.
The court finds the following facts: The plaintiffs are friends and business partners who also bought boats together for recreation. In 2006 they owned a boat called the " Egg Harbor" and desired to trade up. They saw a 38-foot 2006 model Rampage powerboat at a boat show in Massachusetts in the winter of 2006, and liked it. It appeared to fit their interest in using it on the ocean for fishing and overnight trips. The boat was owned by a dealership, Russo's Marine Mart, Inc. of Medford, Massachusetts (" Russo's"). The plaintiffs knew the boat was not new. It was a 2006 model, and it was described in the paperwork as a " new demo." The plaintiffs knew that Russo's had used the boat extensively in the summers of 2005 and 2006 to promote its business on a television sports show called " On the Hook." They knew it had been filmed participating in fishing tournaments and had over 450 hours of use on the twin engines. When they went to view it, the boat was stored outdoors for the winter. It was shrink wrapped and the bottom of the boat was obscured by the snow so its exterior was not entirely visible. They were able to enter the interior through a doorway, and they inspected the interior.
On February 28, 2007, they negotiated to purchase the boat for the sales price of $400, 000, which was a considerable savings off the $607, 204 manufacturer's suggested retail price for the boat when it was new. They gave a $10, 000 deposit. They also conveyed ownership of the Egg Harbor to Russo's, and Russo's gave them a trade-in allowance of $100, 000 for that boat. The balance was financed with a loan from KeyBank, NA of Brooklyn, Ohio, arranged by Russo's. The sales agreement expressly stated that boat and motors were covered by " 5-year Caterpillar warranties and Rampage structural warranties." Despite the fact that they knew the boat had been used extensively, the plaintiffs did not inquire about its service history; they did not ask if it had been in any accidents or had been repaired; nor did they have it inspected by a marine surveyor. They could have made those inquiries and inspection, but did not do so. No one prevented them from doing any of those things. Mr. Gionis testified that he had purchased several used boats in the past, and most of time had them inspected by a marine surveyor in advance of purchase. The plaintiffs did not do so in this case, Gionis testified, because he thought it was not necessary because " it was a new boat" and because it was covered by warranties. Mr. Burke testified that the bank that financed the boat did not require a survey as part of their loan application, either, because, he said, " [I]ts a new boat ... It was on our application; new demo ."
The boat sailed into New London harbor on March 22, 2007, for delivery. The plaintiffs had an opportunity to view the boat again at that time. Being in the water, they could not inspect the bottom of the boat. Nevertheless, they accepted it at that time. They named it the " Dorado."
The plaintiffs enjoyed using the boat in 2007 for fishing and overnight trips on the ocean. They put another 20 or 30 hours of use on the motors, which was typical use for them. They winterized and dry docked the boat that winter. In 2008, they again enjoyed using the boat, putting another 20 or 30 hours of use on the engines. Once, in 2008, while they were out about 60 miles from shore on an overnight trip, they encountered rough seas. The experience permanently soured Burke on ocean boating. He decided he would not go out on the ocean again after that bad experience. Consequently, the plaintiffs put the boat up for sale in 2008. They winterized the boat and dry docked it again that winter.
In the spring of 2009, while preparing the boat for the next season of use, their maintenance serviceman, Jesse Marden, pointed out that there were cracks in the keel, and it appeared that it had been patched in spots. Marden advised that more patching work was needed, and that would cost approximately $1, 500. The plaintiffs asked him to investigate the cause of the cracks. His inquiries revealed that the boat had been involved in a grounding accident in 2005, before the plaintiffs had purchased the boat. While it was on its way to a fishing tournament on the night of August 19, 2005, in connection with its use for the television sports show called " On the Hook, " it was pulled off course by the current in a channel off the coast of Woods Hole, Massachusetts. The bottom of the boat ran aground on a rock ledge outcropping while going 4 to 8 knots. The keel was scraped and parts of the propulsion system were damaged. The captain at the time, who was also the show's producer and host, was alone, but he was able to push the boat off the rocks with an extension pole. With the permission of Russo's, he drove the boat to a local repair yard, MacDougalls Cape Cod Marine Service, Inc. of Falmouth, Massachusetts. There, the keel and hull were patched and various parts of the propulsion system, i.e., shafts, struts propellers and rudders, were repaired or replaced for a total cost of approximately $15, 000. It was paid for by insurance. After the repairs, the captain found " nothing wrong with it at all" and resumed using it for the show. However, Russo's never obtained Rampage authorization for the repairs, thus voiding the warranty for that work under the terms of the warranty. The fact that the damage occurred due to an accident and during commercial use also put the repair work outside the warranty under its terms. Russo's had never mentioned this history to the plaintiffs prior to the sale of the boat to them in 2007.
The plaintiffs contacted Russo's about their discovery. Russo's authorized the $1, 500 repair proposed by plaintiffs' service man, but, by that time, plaintiffs became concerned about other cracks discovered on the hull. Russo's authorized no further assistance and eventually the parties stopped communicating with each other.
The plaintiffs did not use the boat at all in 2009. They took the boat off the market, and commenced this lawsuit, in November 2009. Mr. Gionis testified that if Russo's had told him about the grounding, he would not have bought the boat.
The plaintiffs had the boat thoroughly reviewed by a marine surveyor for this lawsuit. Their surveyor, Mr. Scanlan, testified at trial that when he inspected the boat on September 16, 2009, he found numerous problems with cracks, including delamination of the keel (the exposed edge running along the middle of the bottom of the boat). He testified that the keel was cored with balsam or foam that had become water logged. He also opined that the repair work done on the keel and propulsion system was of inferior quality. His survey was not complete. He advised that significant and costly disassembly of the boat would be necessary to investigate any other interior structural damage. Nevertheless, he estimated that it would cost about $85-90, 000 to properly repair the boat, and that with such repairs it would be valued at $245, 000. He estimated that if it had not been in need of those repairs, it would have had a value of $289-305, 000. Nevertheless, there was no evidence that the vessel was not seaworthy in its present condition.
The plaintiffs declined to disassemble the boat at that time to investigate further. While the plaintiff, Burke, continues to avoid using the boat due to his reticence about using it on the ocean, the plaintiff, Gionis, resumed normal usage. He had some of the keel defects repaired for $475 and put the boat back in the water in 2010 and 2011. He used approximately 20-30 hours of engine time in each of those years. He received an estimate that it would cost $12, 720 to perform further...
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