Isbell Enterprises, Inc. v. Citizens Casualty Co. of NY

• Decision Date: 10 September 1969
• Docket Number: Civ. A. No. 68-B-50.
• Citation: 303 F. Supp. 549
• Parties: ISBELL ENTERPRISES, INC., Plaintiff, v. CITIZENS CASUALTY COMPANY OF NEW YORK, Defendant, v. MARINE MART, INC., Third-Party Defendant.
• Court: U.S. District Court — Southern District of Texas

303 F. Supp. 549

ISBELL ENTERPRISES, INC., Plaintiff, v. CITIZENS CASUALTY COMPANY OF NEW YORK, Defendant, v. MARINE MART, INC., Third-Party Defendant.

Civ. A. No. 68-B-50.

United States District Court S. D. Texas, Brownsville Division.

September 10, 1969.

Storter, Carinhas & Cunningham, Jack G. Carinhas, Jr., Brownsville, Tex., for plaintiff.

Adams, Graham, Lewis, Jenkins & Briscoe, Gordon L. Briscoe, Harlingen, Tex., for defendant.

Hardy & Sharpe, Benjamin S. Hardy, Brownsville, Tex., for third-party defendant.

GARZA, District Judge.

MEMORANDUM

This is an in personam suit based upon an admiralty and maritime claim pursuant to Rule 9(h), Federal Rules of Civil Procedure.

The Plaintiff, Isbell Enterprises, Inc., sued Defendant, Citizens Casualty Company of New York, upon a hull policy of marine insurance.

The Plaintiff is attempting to recover for the constructive total loss of its fishing vessel CAPTAIN CRACKER.

The Defendant, Citizens Casualty Company of New York, is the insurance carrier for the CAPTAIN CRACKER, and Policy Number M50-10516 was in effect at the time of the loss.

Defendant Citizens interpleaded Third-Party Defendant, Marine Mart, Inc.

The Plaintiff and Third-Party Defendant are both Texas corporations. The Defendant Citizens is a New York state based company.

The following is a summary of the facts developed at the trial, leading up to the loss and subsequent suit:

On or about January 9, 1968, the CAPTAIN CRACKER, a fishing vessel, returned to Port Isabel, Texas, from an unsuccessful shrimping trip.

At the time, the crew consisted of Angel Gomez, captain, Delbert Storey and Julio Puente, rigmen, and Bernardo Estrada, header.

On January 10, 1968, Captain Gomez reported to Plaintiff's general manager, Mr. Elliff, that there were two small holes in the stern hull of the CAPTAIN CRACKER, just above the waterline.

Elliff inspected the damage and thereafter, with the consent of Ansell Isbell, President of Plaintiff, contacted Mr. Zimmerman who worked for Third-Party Defendant, Marine Mart, Inc., about making repairs on the CAPTAIN CRACKER.

Marine Mart, Inc., is a corporation which both repairs and builds fishing trawlers.

Before the incident in question, Marine Mart, Inc., had performed almost all of Plaintiff's repair work and had built five new trawlers for Plaintiff since 1964.

On January 11, 1968, the Plaintiff delivered the CAPTAIN CRACKER to Marine Mart's repair yard. One Tomas Portugal navigated the CAPTAIN CRACKER. Portugal usually navigated Plaintiff's boats to and from Marine Mart because of his familiarity with the channel.

The previously mentioned crew members were also aboard when the delivery was made. The CAPTAIN CRACKER was tied alongside the BARTO NO. II, another one of Plaintiff's boats being repaired at Marine Mart.

Three customary lines held the CAPTAIN CRACKER to the dock.

Marine Mart's trawler WONDERING BOY was docked astern of the other two boats.

Bernardo Estrada, with the approval of Captain Gomez, Elliff and Portugal, remained aboard the CAPTAIN CRACKER.

This procedure was customary when a shrimper had no place to stay or was short of funds.

Estrada had no duties except to be somewhat of a night watchman when he was there, as Marine Mart had no watchman.

Estrada was under no duty to stay aboard, and could come and go at will.

Estrada had no right to move or navigate the CAPTAIN CRACKER or supervise the repairs.

Marine Mart had no objection to crew members staying aboard the vessels while repairs were in progress.

On the afternoon of January 11, 1968, Marine Mart's employees Juan Hurtado, Sr., and Juan Hurtado, Jr., started repairs on the CAPTAIN CRACKER.

Later that afternoon, Elliff and Zimmerman jointly inspected the CAPTAIN CRACKER. Elliff had a short conversation with Estrada, but noticed nothing unusual.

The two Hurtados also observed Estrada that afternoon and thought he acted deranged. The Hurtados failed to advise anyone of their suspicion.

Later the same day, Portugal was aboard the CAPTAIN CRACKER and saw Estrada, but noticed nothing unsual.

Upon finishing their day's work, the Hurtados left their welding equipment upon board the CAPTAIN CRACKER because they had not finished the repairs.

At 7:00 a. m. the next day, January 12th, the Hurtados returned to the CAPTAIN CRACKER to complete the repairs.

When the Hurtados arrived on board, they noticed that the engine of the CAPTAIN CRACKER was running and that their equipment had been thrown overboard into the water.

The Hurtados found Estrada in a bunk with his head in his hands and acting unusual.

When asked why he had thrown the equipment overboard, Estrada replied because he was hungry and wanted to go fishing.

Estrada helped the Hurtados retrieve their equipment.

Shortly after this, Zimmerman told the Hurtados to stop work on the CAPTAIN CRACKER because of bad weather. The Hurtados were sent to work on the BARTO II because the work was inside out of the bad weather which prevailed on that day.

It was raining and high winds were blowing.

A few minutes later, the Hurtados and Zimmerman noticed that this man Estrada was at the controls of the CAPTAIN CRACKER, with the engines running.

Two of the lines had been released and the boat was swaying forward and backward. The CAPTAIN CRACKER scraped against the BARTO II, but caused no serious damage.

Zimmerman, being worried about the unusual behavior of the CAPTAIN CRACKER and the bad weather, was afraid other trawlers in the yard would be damaged.

Zimmerman inquired of the Hurtados if the CAPTAIN CRACKER was going fishing. The Hurtados replied that the man (Estrada) said he wanted to go fishing.

Zimmerman then cut the remaining line holding the CAPTAIN CRACKER, and the trawler left the yard.

Zimmerman made no effort to ascertain anything from Estrada, and did not call Isbell or Elliff. The Hurtados never told Zimmerman of Estrada's strange behavior.

About a half hour later, Elliff came to Marine Mart to inspect the repairs, and discovered the vessel was gone.

Elliff immediately contacted the Coast Guard who refused to give chase without a warrant. By the time a warrant was obtained, Estrada was already heading for Mexican waters.

The idea of a chase was abandoned because of Estrada's head start, the bad weather, and possible danger if Estrada was armed.

Elliff immediately notified the Defendant's agent in Jacksonville, Florida, of the occurrence.

On January 12, 1968, the CAPTAIN CRACKER went aground and sank off the coast of Mexico some 180 miles south of Port Isabel.

The CAPTAIN CRACKER was a constructive total loss and insured value was $20,000.00.

The Plaintiff also expended some $203.32 in locating the CAPTAIN CRACKER.

Estrada was later captured and was returned to the Cameron County jail. Subsequently Estrada was committed to a Texas mental institution in San Antonio, Texas.

The Plaintiff submitted a proof of loss to Defendant Insurance Company and a demand upon Third-Party Defendant, Marine Mart, Inc., for the loss of the CAPTAIN CRACKER.

Both Defendants have refused to admit liability. This lawsuit is a result of those refusals.

This Court must decide:

(1) If Defendant Citizens Casualty is liable for the loss of the CAPTAIN CRACKER;

(2) If Third-Party Defendant, Marine Mart, Inc., is liable for the loss of the CAPTAIN CRACKER; and

(3) If both defendants are found to be liable, what relationship they have to each other.

Each of these issues will be examined separately.

First, we examine the liability, if any, of Defendant, Citizens Casualty Company.

It is stipulated that the insurance policy in question was in full force and effect at the time of the loss, and that the premium had been paid.

The question then is, "Was the loss of the CAPTAIN CRACKER the result of a peril or perils insured against?"

Plaintiff is claiming coverage under several perils insured against. One of these perils is barratry. The Plaintiff is claiming that the loss of the CAPTAIN CRACKER was due to the barratrous acts of Estrada.

Barratry is an act committed by the master or mariners of a vessel for some fraudulent or unlawful purpose contrary to their duty to the owner and resulting in injury to the owner.

To constitute barratry it is necessary that the act be fraudulent or criminal, willful, and against the interests of the owner.

Barratry is one of the perils insured against by the policy in question.

Our evidence shows that one Bernardo Estrada was a crew member of the CAPTAIN CRACKER at the time of its loss.

As previously mentioned, Estrada had no authority to take the CAPTAIN CRACKER any place or even start the engine.

The evidence further shows that while the CAPTAIN...