Gonzalez v. Sea Fox Boat Co.

• Decision Date: 28 January 2022
• Docket Number: CASE NO. 2:19-CV-00130 LEAD
• Parties: Hugo GONZALEZ v. SEA FOX BOAT CO. INC.
• Court: U.S. District Court — Western District of Louisiana

582 F.Supp.3d 378

Hugo GONZALEZ

v.SEA FOX BOAT CO. INC.

CASE NO. 2:19-CV-00130 LEAD

United States District Court, W.D. Louisiana, Lake Charles Division.

Signed January 28, 2022

Timothy J. Young, Joseph B. Marino, III, Megan Cole Misko, Tammy Dianne Harris, Young Firm, New Orleans, LA, Todd A. Townsley, Townsley Law Firm, Lake Charles, LA, for Hugo Gonzalez.

David R. Frohn, MG+M Law Firm, Lake Charles, LA, Joseph G. Glass, Duplass Zwain et al., Metairie, LA, Meghan Brianne Senter, MG+M Law Firm, New Orleans, LA, Raul Julio Chacon, Jr., Pro Hac Vice, MG+M, Miami, FL, for Sea Fox Boat Co. Inc.

MEMORANDUM RULING

JAMES D. CAIN, JR., UNITED STATES DISTRICT JUDGE

Before the Court is "Defendant, Yamaha Motor Corporation, U.S.A.’s Motion for Partial Summary Judgment on Plaintiffs’ Claims for Punitive Damages" (Doc. 165). Yamaha Motor Corporation, U.S.A. ("Yamaha") maintains that the pleadings, answers to interrogatories, depositions, affidavit, and other record evidence conclusively demonstrates as a matter of law that Yamaha's actions and/or omissions relating to the subject incident do not rise to the level of egregious misconduct required to sustain a claim for punitive damages. As such, Yamaha moves to dismiss Plaintiff's punitive damages claims.

FACTUAL STATEMENT

On July 29, 2018, an explosion and fire occurred on a 2014 Sea Fox Commander (the "vessel") owned by Defendant, Daniel Henderson.¹ At the time of the explosion, Plaintiffs Hugo Gonzales, Jeremy Eades and Galloway Outlaw-Knight² were changing out the vessel's batteries.³ Plaintiffs were injured; Mr. Eades has since died from mixed drug intoxication.⁴

The vessel was equipped with two 2013 Yamaha F150XA engines and two 2015 Yamaha MAR-FUELF-IL-TR 10-Micron Water/Fuel Separating Filters 90GPH (the "filter(s)"). The filters were designed to filter particulate matter and water out of the fuel before it reached the engines.⁵ Defendant, Sea Fox Company, Inc. ("Sea Fox") designed and manufactured the vessel; the design included the placement of the water/fuel separators.⁶

Yamaha⁷ asserts that the filters were designed, manufactured and tested by Dometic Corporation/Sierra International, Inc. ("Sierra") and the Engines were manufactured by Yamaha Motor Corporation.⁸ Plaintiffs dispute who designed and manufactured the engines and filters.

Since 2005, Yamaha has administered and continues to administer warranty claims and customer complaints involving and/or arising out of the use of Yamaha products, including, but not limited to the filters and engines.

The engines were shipped to Yamaha, on October 2, 2013, who in turn sold them to Sea Fox on November 26, 2013.⁹ Sea Fox sold the vessel, equipped with the engines to Paradise Marine Center ("Paradise"),¹⁰ who sold the vessel to Daniel Henderson on or about November 29, 2013.¹¹ Mr. Henderson took possession of the vessel on February 25, 2014.¹²

On three (3) separate occasions, Mr. Henderson returned the vessel to Paradise for warranty work.¹³ On December 7, 2017, the vessel was taken to Olmstead Shipyard to repair damage to its hull and engines.¹⁴ In either May or June 2018, Olmstead completed repairs to the damaged engines and hull.¹⁵ The vessel remained at Olmstead until a few days prior to the incident (i.e. , approximately 3 to 4 months).¹⁶

Yamaha contracted with Sierra to design and manufacture water/fuel filters and estimates from 2011 to 2020. Yamaha sold approximately 2,386,460 filters.¹⁷ Yamaha asserts that it has received a total of 48 warranty claims related to leaking and/or corrosion with the filters;¹⁸ Plaintiffs aver that Yamaha has not produced all related warranty claims. None of the 48 warranty claims involved a claim of personal injury, death or damage to property from fire or an explosion, nor has the subject filter been the subject of a complaint for personal injury or wrongful death.¹⁹

The subject filter was manufactured on December 25, 2015,²⁰ and Mr. Henderson believes he installed the filters on the vessel in March or April 2017.²¹

SUMMARY JUDGMENT STANDARD

A court should grant a motion for summary judgment when the movant shows "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56. The party moving for summary judgment is initially responsible for identifying portions of pleadings and discovery that show the lack of a genuine issue of material fact. Tubacex, Inc. v. M/V Risan , 45 F.3d 951, 954 (5th Cir. 1995). The court must deny the motion for summary judgment if the movant fails to meet this burden. Id.

If the movant makes this showing, however, the burden then shifts to the non-moving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (quotations omitted). This requires more than mere allegations or denials of the adverse party's pleadings. Instead, the nonmovant must submit "significant probative evidence" in support of his claim. State Farm Life Ins. Co. v. Gutterman , 896 F.2d 116, 118 (5th Cir. 1990). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson , 477 U.S. at 249, 106 S.Ct. 2505 (citations omitted).

A court may not make credibility determinations or weigh the evidence in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc. , 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). The court is also required to view all evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Clift v. Clift , 210 F.3d 268, 270 (5th Cir. 2000). Under this standard, a genuine issue of material fact exists if a reasonable trier of fact could render a verdict for the nonmoving party.

Brumfield v. Hollins , 551 F.3d 322, 326 (5th Cir. 2008).

LAW AND ANALYSIS

Plaintiffs filed this lawsuit against Yamaha and other Defendants claiming, among other things, that: (1) the filters are defective in design and/or manufacture; and (2) that Yamaha is liable for negligence for failure to warn or, alternatively, failing to properly warn consumers, including Plaintiffs of the alleged defects. Specifically, Plaintiffs allege that the filters are defective in that: (1) the cannister that contains the filtering device is manufactured using materials that, over time, will rust or corrode when submerged in water; (2) the filters are located in an area of the vessel that allows them to be submerged in water; (3) the end users are not warned that there is a risk that fuel and fuel vapors can be released in the event that the cannisters rust to the point where their integrity is compromised.

Plaintiffs allege that Yamaha's misconduct of failing to test for corrosion prior to the sale of the product was willful, grossly negligent, and highly reckless, considering the potential for fuel leakage and given the absence of detailed information regarding the coating that was intended to prevent corrosion. Plaintiffs further allege that Yamaha's conduct was willful, or grossly negligent, and highly reckless because it failed to perform an initial design failure modes and affects analysis on the filter to identify potential failures for the filter, and how to design out such failures. Specifically, Plaintiffs assert that Yamaha knew that if the filter were to rust, it would corrode and leak fuel, and it also knew the filter would be mounted in the bilge area. Plaintiffs also maintain that the two warnings placed on the box that contained the filter, and the filter itself failed to warn of the effects of corrosion and/or rust.

Plaintiffs argue that there is a genuine issue of material fact for trial as to whether Yamaha acted with callous disregard when it removed its original requirement that the filter undergo corrosion testing despite knowing that it would be mounted inside the hull of boats in the bilge area, and that if the filter did rust and corrode, it would leak fuel into the hull. Plaintiffs argue that there is a genuine issue of material fact for trial as to whether Yamaha's knowledge of corrosion in the filters, through its warranty claim system, and its failure to make any subsequent changes to the filter, constitutes gross negligence or reckless conduct.

In addition, Plaintiffs assert that Yamaha's claim of a six-month replacement schedule may be relevant because that schedule was not based on corrosion factors or concerns. Finally, Plaintiffs argue that there is a genuine issue of material fact for trial as to whether or not Yamaha failed to properly warn of the danger of corrosion on either the packaging or the filter itself.

Plaintiffs’ claims for punitive damages arise under general maritime law. In re Crosby Marine Transportation, L.L.C. , 2021 WL 1931168 (E.D. La. 5/13/2021). Under general maritime law, punitive damages may be available if the plaintiff proves that the defendant's "behavior ... is more than merely negligent," but rather was so egregious as to constitute gross negligence, reckless or callous disregard for the rights of others, or actual malice or criminal indifference. Maritrans Operating Partners v. Diana T , 1999 WL 144458, at *7 (E.D. La. 3/15/1999) (citing In re Marine Sulphur Queen , 460 F.2d 89, 105 (2d Cir. 1972) ). "The theory of a punitive damage award is that the defendant has committed the civil equivalent of a crime."

1 THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW § 5:10 (6th ed. 2020). "Punitive damages are awarded both to punish the particular defendant and to deter similar conduct by others." Id. "Punitive damages are limited to cases of ‘enormity,’ that is, where a defendant's conduct is outrageous, owing to gross negligence, willful, wanton, and reckless indifference for others’ rights, or even more deplorable conduct. Exxon Shipping Co. v. Baker , 554 U.S. 471, 492, 128 S.Ct. 2605, 171 L.Ed.2d 570 (2008).

Yamaha...