In re Wechsler
| Decision Date | 20 October 2000 |
| Docket Number | No. Civ.A. 97-264.,Civ.A. 97-264. |
| Parties | In the Matter of the Complaint of Robert I. WECHSLER, Owner of the Motor Vessel ATLAS, for Exoneration from or Limitation of Liability. |
| Court | U.S. District Court — District of Delaware |
Michael B. McCauley, Palmer, Biezup & Henderson LLP, Wilmington, Delaware, for petitioner, Robert I. Wechsler.
William J. Cattie, Cattie & Fruehauff, Wilmington, Delaware, of counsel, Carter B.S. Furr, McGuire, Woods, Battle & Boothe LLP, Norfolk, Virginia, J. Paul Mullen, Kathleen M. Bustraan, Lord & Whip P.A., Baltimore, Maryland, for claimant Georgetown Yacht Basin, Inc.
John D. Balaguer, White & Williams LLP, Wilmington, Delaware, of counsel, Edgar A. Jaeger, Jr., White & Williams LLP, Philadelphia, Pennsylvania, for claimants George and Jacqueline Axilbund, Federal Insurance Company, American Eagle Group, Inc., Royal Insurance Company, Bateau, Inc., and Tracy's Miracle Corp.
Raymond W. Cobb, Raymond W. Cobb LLC, Wilmington, Delaware, of counsel, George N. Styliades, Cherry Hill, New Jersey, for claimants Edward R. Dudlik, Sr. and The St. Paul Fire and Marine Insurance Company.
Carl N. Kunz, III, Murphy, Spadaro & Landon, Wilmington, Delaware, of counsel, Alfred J. Will, Badiak, Will & Ruddy, LLP, New York City, for claimant Great American Insurance Company.
Lee C. Goldstein, Lee C. Goldstein, Wilmington, Delaware, of counsel, Faustino Mattioni, Stephen J. Galati, Mattioni, Ltd., Philadelphia, Pennsylvania, for claimants Sandra J. Larsen, Sandlar Corp., and James and Steven DePaul.
Robert I. Wechsler once owned a vessel named the ATLAS. On November 23, 1996, this ship caught fire while it was docked at the Georgetown Yacht Basin. The fire damaged a portion of the dock and destroyed several of the surrounding boats. The resulting losses are estimated at over $1 million. Wechsler subsequently filed an action in admiralty with this court to limit his liability to cost of the only salvageable item left from the ATLAS after the fire — a brass propeller worth approximately $500. See 46 App. U.S.C.A. § 181 et seq. (West Supp.2000).
Several of the claimants have filed motions for sanctions as a result of certain actions taken by Wechsler in the aftermath of the fire. In their submissions, they essentially argue that Wechsler's lawsuit should be dismissed and, as a consequence, the cap on his liability removed because he failed to preserve (if not intentionally destroyed) the ATLAS. In opposition, Wechsler argues that these claimants had an opportunity to preserve the vessel when the ship was raised but declined to do so. Wechsler further contends that the ATLAS was preserved for a sufficiently lengthy period of time to allow all of the interested parties to conduct an appropriate inspection.
Wechsler has also moved for summary judgment. In his motion, he argues that no party has been able to introduce sufficient evidentiary support for their claims that the fire started onboard the ATLAS. This inability, ironically, appears to be due in large part to the destruction of the vessel. Finally, the Georgetown Yacht Basin has moved for summary judgment on the claims for negligence, breach of contract and common law bailment which Wechsler and another boat owner have brought against the marina.
After considering these submissions in light of the governing law, the court has decided to impose a dispositive sanction against Wechsler for his destruction of the ATLAS. Given the record evidence, the court concludes that the vessel was destroyed in an attempt to prevent the claimants from conducting further inspections of the remains and, thus, possibly determining the cause and origin of the fire. Because the disposal of the ATLAS has substantially prejudiced the claimants by preventing them from establishing their claims, a dispositive sanction is necessary to not only punish Wechsler for his culpable conduct but also deter others from engaging in similar misconduct in the future. In light of this ruling, Wechsler's motion for summary judgment will be denied as moot. Finally, the court will grant Georgetown's motion for summary judgment because the exculpatory language contained within its slip rental agreement absolves the marina from any liability due to its negligence. In addition, given the unrestricted access which was afforded to the owners of the two vessels in question, the court cannot conclude that they were bailed articles. The following sections explain the basis for these rulings in greater detail.
Built in 1964, the ATLAS was a fifty-seven foot wooden yacht. At the time of the fire, Wechsler was storing the vessel at the Georgetown Yacht Basin. He rarely used the boat after having moved to Florida. In fact, for the two years which preceded the fire, Wechsler had been trying to sell the ship and had only been onboard it twice. During this time, it seems that any maintenance on the vessel was performed by Skipjack Cove Marina.
Insurance records from the relevant time period show that the ATLAS was not in peak condition. For example, a 1987 survey found that "the electrics, wiring, and systems were in a very poor condition" and did not comply with National Fire Protection Association ("NFPA") standards. A 1991 survey reached a similar conclusion, finding that the battery terminals were not clean and that there was loose and obsolete wiring throughout the vessel. This survey also recommended that ground fault breakers should be installed in several outlets and that all circuits should be protected by fuses or breakers so that the ATLAS could come into compliance with the standards annunciated by the American Boat and Yacht Council ("ABYC"). Given the general condition of the ATLAS and its electrical system in particular, the 1991 survey concluded that the vessel was not a good insurance risk. In 1993, another survey was conducted. It reached the same conclusion concerning the electrical system. Among other things, this survey found that:
the AC [alternating current] power supply for the air conditioner water pump has been spliced without a junction box using twist-on wire connectors and the pump has lost its grounding connection; there is an ungrounded AC receptacle inside the forward hanging locker on the starboard side of the main cabin along with an AC receptacle which has been removed from its mounting box and left unsecured; a two conductor lamp cord has been wired into this receptacle and also one in the midship guest cabin receptacle; light gauge AC power feed wires have been improperly installed on the main AC feeder cables inside the AC distribution box; the AC grounding has been connected to the AC neutral side of the hot water heater breaker box....
The DC [direct current] wiring has numerous unsecured and improperly routed wires under the flybridge console and in the engine compartment. There are some unhooked and abandoned wires. There has been a[n] unfused 12 volt power supply improperly tapped into the center bank of batteries.
Based on these findings, the 1993 survey concluded that "[t]he vessel should be attended to by a qualified marine electrician knowledgeable of proper marine wiring practices and ABYC standards." The report further explained that both the AC and DC wiring "should have [the] necessary revisions and repairs made in order to bring the vessel's wiring to current ABYC standards."
All these surveys show that, prior to the fire, there were several problems with the AC and DC electrical systems onboard the ATLAS. The insurance inspectors concluded that these systems fell below the applicable safety standards which governed in this particular area. These inspectors also found that several repairs to the ATLAS needed to be made before it could be considered a "good marine [insurance] risk."
Despite these findings, it appears that Wechsler did not ask Skipjack to perform any electrical work on the vessel. While Wechsler claims that these problems were in fact corrected, none of Skipjack's work orders or invoices contain any mention of anyone performing any work on the electrical systems onboard the ATLAS. Although Wechsler claims that Skipjack's records from this time are incomplete, he has not produced any canceled checks or receipts from any repair service which show that the work was actually completed.
Nevertheless, during discovery, a letter dated August 25, 1994 was produced by Wechsler. The letter was seemingly authored by the individual who conducted the 1993 survey of the ATLAS on behalf of Wechsler's insurance company (Windsor-Mount Joy). It appeared to confirm that the necessary repairs had in fact been made to the vessel's electrical system. This one-sentence letter stated that "the recommendations addressed in the ... 1993 survey have been completed."
On March 10, 1998, the surveyor who supposedly wrote the August 25th letter (Woodrow W. Loller) was deposed. He testified that, at Wechsler's request, he conducted a survey of the ATLAS in August of 1994 and found that "the problems [mentioned in the 1993 survey] had been corrected." Loller also testified that he spent three hours on board the vessel making these verifications. He further stated that he was alone while he conducted his inspection. Finally, while still under oath, Loller testified that he had summarized his conclusions in the August 25, 1994 letter which he sent to Wechsler.
Thus, even though there were no billing records or other notes in Loller's files to support his claim that he actually visited the ATLAS in August of 1994 and even though there were no photographs or reports which documented the findings that he made during his inspection, Loller remained steadfast in his claim that he actually inspected the vessel and found that the recommended repairs had been made....
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