LeClercq Marine Const. Inc. v. Leco, Inc.
| Decision Date | 29 November 1993 |
| Docket Number | 92-35541,92-35540,92-35514,92-36615,Nos. 92-35500,92-36578,s. 92-35500 |
| Citation | 12 F.3d 1107 |
| Parties | NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel. LECLERCQ MARINE CONSTRUCTION INCORPORATED; Samuel Leclercq; Royal Insurance Co.; Highlands Insurance; Albany Insurance Co., Plaintiffs-Appellees, v. LECO, INC., in its own name and doing business as Leco Marine and Pioneer Lumber and Treating, Defendant-Appellant, and William E. Legg, Defendant. LECLERCQ MARINE CONSTRUCTION INCORPORATED; Samuel Leclercq; Royal Insurance Co.; Highlands Insurance; Albany Insurance Co., Plaintiffs-Appellants, v. LECO, INC., in its own name and doing business as Leco Marine and Pioneer Lumber and Treating, Defendant-Appellee. MONTICELLO INSURANCE COMPANY; Unigard Insurance Company, Plaintiffs, v. LECO, INC., in its own name and doing business as Leco Marine and Pioneer Lumber and Treating, et al., Defendants. William SLEEPER; Fred Dust; June Dust; Peter Orton, Plaintiffs-Intervenors-Appellees, v. LECO, INC., Defendant-Intervenor-Appellant. MONTICELLO INSURANCE COMPANY; Unigard Insurance Company, Plaintiffs, and Commercial Union Insurance Company, Plaintiff-Intervenor-Appellee, v. LECO, INC., in its own name and doing business as Leco Marine and Pioneer Lumber and Treating, et al., Defendants, and Leco, Inc., Defendant-Intervenor-Appellant. Leclercq Marine Construction Incorporated; Samuel Leclercq; Royal Insurance Co.; Highlands Insurance; Albany Insurance Co., Plaintiffs. ALLSTATE INSURANCE COMPANY, Plaintiff-Intervenor-Appellant, v. LECO, INC., in its own name and doing business as Leco Marine and Pioneer Lumber and Treating, Defendant-Appellee. LECLERCQ MARINE CONSTRUCTION INCORPORATED; Samuel Leclercq; Royal Insurance Co.; Highlands Insurance; Albany Insurance Co., Plaintiffs-Appellees, v. LECO, INC., in its own name and doing business as Leco Marine and Pioneer Lumber and Trea |
| Court | U.S. Court of Appeals — Ninth Circuit |
Before: GOODWIN, HUG and FERGUSON, Circuit Judges.
Leco, Inc., a marina owner, appeals from a district court order holding it liable for the spread of a marina fire. We AFFIRM on all issues except Allstate's cross-appeal.
On December 20, 1990, a fire started on or near a boat owned by Joseph and Eda Johnson ("the Johnsons") which was moored at Leco, Inc. ("Leco")'s marina. Mr. Johnson, who lived on his boat, rescued his children, but the fire quickly spread to adjacent docks and boats moored in the area, as well as to property owned by plaintiff LeClercq Marine Construction, Inc. ("LeClercq"). The fire ultimately damaged or destroyed six buildings, one houseboat, several piers and thirty-five boats.
LeClercq filed an action against Leco and Leco's president, William E. Legg ("Legg"), in the United States District Court for the Western District of Washington, alleging maritime jurisdiction. Other plaintiffs, including owners of boats destroyed in Leco's marina and their insurers, intervened.
Plaintiffs settled with Legg early in the trial, signing a settlement agreement which specifically released Legg and his business, Pioneer Lumber, without releasing Leco. Leco's counsel was involved in the negotiations and did not object to the settlement. After the court approved the agreement, Leco moved for summary judgment on all claims, arguing that under Washington State law, a plaintiff who releases a solvent agent necessarily releases a principal as well. The district court denied Leco's motion with regard to compensatory damages, but dismissed plaintiffs' claims for punitive damages.
The trial of plaintiffs' remaining claims was bifurcated on the issues of liability and damages. After a seven day bench trial on liability, the court found that the fire started inside the Johnsons' boat, but that Leco was responsible for its spread. Because of freezing temperatures, Leco had turned off all water to the marina and failed to provide any other fire fighting equipment. The court found that the fire could have been contained had proper fire fighting equipment been available and that Leco had a duty to provide some type of fire fighting equipment, given the number of live-aboard tenants residing at the marina. It held that Leco was liable for damages to property outside the immediate vicinity of the Johnson's boat, since this property would have been saved by proper fire fighting equipment.
After trial, the parties stipulated to damages, reserving the right to appeal liability. Final judgments were entered on May 18, 1992, May 21, 1992 and July 13, 1992.
Leco first contends that the district court erred in taking jurisdiction under the federal maritime jurisdiction statute, 28 U.S.C. Sec. 1333(1). We review de novo, Reebock Int'l, Ltd. v. Marnatech Enterprises, Inc., 970 F.2d 552, 554 (9th Cir.1992), and affirm. The district court properly took jurisdiction under Sisson v. Ruby, 497 U.S. 358 (1990). Accord, Unigard Security Ins. v. Lakewood Eng'g & Mf'g, 982 F.2d 363 (9th Cir.1992).
Leco next contends that the district court erred in denying its motion for summary judgment based on the release of Legg. We review de novo, Jones v. Union Pac. R.R., 968 F.2d 937, 940 (9th Cir.1992), viewing the evidence in the light most favorable to the non-moving party, Fed. Deposit Ins. Corp. v. O'Melveny & Meyers, 969 F.2d 969, 744, 747 (9th Cir.1992), and affirm.
Under both Washington state law and federal maritime law, an agreement to release one tortfeasor does not release another joint tortfeasor, absent a specific agreement to the contrary. Avery v. United States, 829 F.2d 817, 819-20 (9th Cir.1987); Vanderpool v. Grange Ins. Ass'n, 756 P.2d 111, 113-14 (Wash.1988) (en banc); see also Restatement 2d of Torts Sec. 885(1) (1979); Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (1971). In the present case, the parties clearly intended to release Legg and Pioneer without releasing Leco. Both the settlement agreement and the court order adopting it specifically state that the plaintiffs did not intend to release Leco.
However, Leco correctly notes that Washington state courts have held that, under some circumstances, a tort plaintiff who releases an agent also releases a vicariously liable principle. Glover for Cobb v. Tacoma General Hosp., 658 P.2d 1230 (Wash.1983) (en banc). Since federal maritime courts have not addressed this issue, Leco argues that these cases are controlling.
This argument fails for several reasons. First, under Washington law, the settlement with Legg would, at most, extinguish Leco's liability for claims based on Legg 's negligence. It would not eliminate liability for claims based on Leco's own negligence or the negligence of other Leco employees. Schoening v. Grays Harbor Hosp., 698 P.2d 593 (Wash.Ct.App.1985). Leco has several other employees and could be vicariously liable for their actions as well as for Legg's.
Second, the Washington State rule is part of a specific statutory scheme which abolishes the common law right of indemnity between passive and active tortfeasors. Vanderpool, 756 P.2d at 113 (citing RCW 4.22.040(3)); Glover, 658 P.2d at 1237 (citing the Restatement 2d of Judgments Sec. 51, Comment f (1982). Washington courts have specifically limited the Glover rule to situations where treating the agent and principal separately would prejudice the principal. Thus, a Washington plaintiff who settles with an agent may still sue a principal if a court determines that the settlement was reasonable and the plaintiff was unable to recover completely from the agent. Pickett v. Stephens-Nelsen, Inc., 717 P.2d 277, 280 (Wash.Ct.App.1986). Similarly, settling with a principal does not prevent a plaintiff from suing an agent since the policy considerations underlying the Glover rule do not apply. Vanderpool, 756 P.2d at 113.
Under federal maritime law, the right of indemnity still exists. Newby v. F/V KIRSTEN GAIL, 937 F.2d 1439, 1443-44 (9th Cir.1991). Thus, the policy considerations underlying the Washington rule are inapplicable. Plaintiffs could not extinguish Leco's right to collect from its agents merely by settling with them. Thus, under the logic of Washington's decisions, the settlement with Legg does not release Leco.
Leco also argues that the district court erred in finding a duty to provide alternative fire fighting equipment during freezing weather. We disagree.
Leco correctly notes that liability cannot exist without a duty and that, although negligence and causation determinations are reviewed for clear error, the existence of a duty is a question of law, reviewed de novo. Vollendorff v. United States, 951 F.2d 215, 217 (9th Cir.1991); Hasbro Indus. v. M/S CONSTANTINE, 705 F.2d 339 (1983), cert. denied 464 U.S. 1013 (1983). Since federal maritime law is sketchy as to the liability for fire spread, we look to Washington case law and general common law principals. Daigle v. Point Landing, Inc., 616 F.2d 825 (5th Cir.1980).
Contrary to Leco's assertions, this case law indicates that, at least under certain circumstances, landowners have a duty to control the spread of a fire on their land, even if they were not negligent in starting the fire. Early common law Washington cases recognize that landowners have a duty to control fires once they became aware of them. Jordon v. Spokane, 186 P. 875, 876 (Wash.1920); Sandberg v. Cavanaugh, 164 P. 200 (Wash.1917). More recent decisions based on statutory liability also recognize a common law duty to take reasonable precautions against fire. Oberg v. Dep't of...
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