Joseph v. J.P. Yachts, LLC, Civil Action No. 04-11173-MBB.

• Citation: 436 F.Supp.2d 254
• Decision Date: 09 June 2006
• Docket Number: Civil Action No. 04-11173-MBB.
• Parties: Ralph JOSEPH d/b/a New Bedford Marine Rescue, Plaintiff, v. J.P. YACHTS, LLC, Defendant.
• Court: U.S. District Court — District of Massachusetts

Page 254

436 F.Supp.2d 254

Ralph JOSEPH d/b/a New Bedford Marine Rescue, Plaintiff, v. J.P. YACHTS, LLC, Defendant.

Civil Action No. 04-11173-MBB.

United States District Court, D. Massachusetts.

June 9, 2006.

Angela H. Magary, John E. Sutherland, Brickley, Sears & Sorett, P.A., Boston, MA, for Plaintiff.

William Hewig, III, Kopelman & Paige, PC, Boston, MA, for Defendant.

MEMORANDUM AND ORDER

BOWLER, United States Magistrate Judge.

This action relates to the grounding of the M/Y Lady Mazie ("the Lady Mazie"), owned by defendant J.P. Yachts, LLC ("J.P.Yachts"), that occurred in Cuttyhunk's outer harbor in the early morning of September 2, 2003. Plaintiff Ralph Joseph d/b/a New Bedford Marine Rescue ("New Bedford Marine") rendered services to the ship and successfully freed the vessel from its grounding. Characterizing the services as pure salvage, New Bedford Marine seeks a substantial damages award of $350,000. J.P. Yachts, however, maintains that it entered into a contract salvage agreement with New Bedford Marine at the hourly rate of $125 per assist boat. Acknowledging its lack of payment, J.P. Yachts seeks a relatively small damages award either based upon this hourly rate or quantum meruit. Having conducted a two day trial and received the parties' post trial submissions, the issues are ripe for review.

BACKGROUND

Plaintiff Ralph Joseph ("Joseph"), a New Bedford resident, started New Bedford Marine with one boat in 1995. The company expanded such that by 2003 it had three communications centers consisting of towers, computer equipment and VHF marine radio antennae. The company also had five boats, two pick-up trucks and 12 to 13 Coast Guard licensed captains associated with the company.

The first of the New Bedford Marine boats involved in the September 2, 2003 rescue of the Lady Mazie was an aluminum bodied boat with an inflatable collar around it which served as a fender. Worth slightly more than $100,000, the boat had a towing drum and a tow line attached to the pilot house. This boat was the first to arrive on the scene and, notably, was "custom built for towing." (Tr. 1, p. 149).¹

The second boat involved in the rescue was a KenCraft 21 foot commercial hull vessel with a 130 horse power engine. Of all the boats available to New Bedford Marine at the time, it was the one best designed for work in shallow water. The second boat, which sustained damages as a result of capsizing during the rescue, was worth an estimated $40,000 to $45,000 prior to the rescue.

New Bedford Marine provides emergency services primarily to pleasure crafts in the Buzzards Bay and Martha's Vineyard area that experience difficulty at sea. In 2003, the company responded to an estimated 300 rescues. The company's "busy season" runs from the end of June to Columbus Day. Of those 300 rescues, only nine to 12 of them amounted to salvage operations.

Beginning in 1995, New Bedford Marine became affiliated with Tow Boat U.S. ("Boat U.S.") as an assistance provider for Boat U.S. members.² In 2003, New Bedford Marine remained affiliated with Boat U.S. Like other approved assistance providers, New Bedford Marine was a party to an annual license service agreement with Boat U.S. Towing companies, such as New Bedford Marine, enter into annual licenses with Boat U.S. and thereby receive the benefit of being recommended to Boat U.S. members in need of towing and ungrounding services for soft, as opposed to hard, groundings using one, as opposed to two, assist boats.

New Bedford Marine receives a significant amount of business as an approved Boat U.S. assistance provider. In fact, almost two thirds of New Bedford Marine's assist operations come about through referrals from Boat U.S. to service Boat U.S. members.³ Over the years, New Bedford Marine has "never had a complaint from a Boat U.S. member." (Tr. 2, p. 61).

Boat U.S. members, in turn, who need assistance in towing or soft groundings involving one assist boat can telephone a toll free number and obtain a list of towing companies in a particular geographic area.⁴ Every Boat U.S. member receives a Boat U.S. On The Water Towing Service Agreement ("Boat U.S. Towing Agreement") with a membership card.

Jerry Prescott ("Prescott") together with his wife Mary Lou Prescott own J.P Yachts, the company that owns the Lady Mazie. The Lady Mazie is an 85 foot long motor yacht that the Prescotts purchased in 2000, the year the vessel was built, for $2,960,000. They did not make any major additions to the vessel after they purchased it. Prescott testified that there was no damage to the Lady Mazie after the grounding.

Notably, Prescott is a Boat U.S. member and therefore received the Boat U.S. Towing Agreement. He knew the details of the brevis agreement at the time he telephoned the Boat U.S. toll free number on September 2, 2003, to obtain the name of a service provider. He was provided with New Bedford Marine's telephone number.⁵

Prescott telephoned New Bedford Marine at around 5:00 a.m. and spoke with Joseph. Prescott waited until that time to make the telephone call in order to obtain the less expensive daytime Boat U.S. member towing rate of $125 an hour as opposed to the more expensive nighttime rate.

During the conversation with Joseph, Prescott identified himself as a Boat U.S. member and described his situation as having dragged the Lady Mazie's anchor but further represented that the anchor was still holding. Prescott knowingly did not advise Joseph that the ship was aground⁶ or that he needed more than one boat. An experienced businessman and proprietor of a number of companies as well as a 30 year boating veteran who once held Coast Guard licenses for a master of motor vessels of not more than 50 and then not more than 100 tons, Prescott knew the significance of and the danger posed by a rescue of a vessel under the circumstances faced by the Lady Mazie on September 2, 2003. Rather than advising Joseph of the important facts of the grounding precipitously close to the rocky beach with the strengthened wind and two to three foot waves pushing the vessel toward the beach, Prescott misled Joseph about the extent of the problem. Describing the situation as a simple dragged anchor, Prescott requested assistance to keep the boat's stern from going onto the beach and emphasized that he needed only one boat. It is common in the area of Cuttyhunk for anchors to run afoul of sea grass. (Tr. 2, p. 65). Prescott also asked how much such services would cost. Joseph then asked Prescott "if his anchor was still holding." (Tr. 2, p. 65). Prescott answered that the anchor was still holding even though the original anchor was not holding.⁷

Having been led to believe that the situation required the towing services of only one boat and that the vessel was not in immediate danger, including that she was not aground and would not require the services of more than one vessel,⁸ Joseph quoted Prescott the discounted Boat U.S. member daytime rate of $125 an hour for one boat and one captain for the captain to de-anchor the boat, pull it into deeper water and reset the anchor. Prescott agreed and consistent with the agreement Joseph sent out Allen with a boat that was custom built for towing.⁹

Two documents form the background for the parties' oral agreement.¹⁰ The first is the aforementioned Boat U.S. Towing Agreement which Boat U.S. members, including Prescott, receive and which defines the members' towing service. The second is the aforementioned license service agreement between Boat U.S. and its licensee, New Bedford Marine. Each document distinguishes between soft and hard groundings and between services requiring the assistance of more than one vessel. The Boat U.S. rate and towing services apply only to soft groundings and only to services that do not require the assistance of more than one vessel. The discounted rate and towing or ungrounding services also do not apply to salvage situations.

Thus, the Boat U.S. Towing Agreement, a one page document, states that, "This Service does not apply to ... salvage, including but not limited to, hard groundings, or any assistance requiring more than one vessel, pumps, divers, airbags or other special equipment . . . ."¹¹ (Ex. 9). Likewise, the license service agreement states "that `Towing/Ungrounding' is covered" and that "`Salvage' is not covered." (Tr. 2, p. 77). The document defines "`Towing/Ungrounding" as "any operation not involving immediate danger to the boat ... and requiring only one towing vessel with lines attached to the grounded boat . . .." (Tr. 2, p. 78). In contrast, "Salvage" is defined as "operations involving immediate peril to the grounded boat, multiple towing vessels or special salvage equipment (pumps, airbags, dredging equipment, cranes etc.)." (Tr. 2, p. 78). The situation faced by the Lady Mazie required more than one boat and involved an immediate danger to the vessel which was listing and aground.

Given the foregoing, the parties entered into a contract for towing at the Boat U.S. daytime rate of $125 per hour for one boat and one captain for a vessel that was not in marine peril.¹² Given the surrounding circumstances and the context in which the agreement was formed, the agreement was strictly limited to towing, not ungrounding. The scope of the agreement did not extend to hard or soft groundings or for services that required more than one assist boat.

The events leading to the foregoing telephone call and the formation of the towing contract are as follows. The Prescotts, together with Bain on board, arrived at Cuttyhunk in the early afternoon of September 1, 2003, having motored the Lady Mazie from a marina in New Bedford. Once they reached Cuttyhunk's outer harbor, Prescott piloted the Lady Mazie while Bain, serving in the capacity of "mate/captain" (Tr. 1, p. 112), went forward to prepare the anchor. Prescott and Bain jointly decided where to drop anchor. The ship anchored in Cuttyhunk's outer harbor...