Mahony v. Lowcountry Boatworks, LLC

• Decision Date: 21 November 2006
• Docket Number: C.A. No.: 9:06-02150-PMD.
• Citation: 465 F.Supp.2d 547
• Court: U.S. District Court — District of South Carolina
• Parties: Sheila MAHONY, Charles Riggs, and Ace American Insurance Co., Plaintiffs, v. LOWCOUNTRY BOATWORKS, LLC d/b/a Hilton Head Boathouse, Defendant.

465 F.Supp.2d 547

Sheila MAHONY, Charles Riggs, and Ace American Insurance Co., Plaintiffs, v. LOWCOUNTRY BOATWORKS, LLC d/b/a Hilton Head Boathouse, Defendant.

C.A. No.: 9:06-02150-PMD.

United States District Court, D. South Carolina, Beaufort Division.

November 21, 2006.

John Rhett Crosswell Bowen, Laughlin and Bowen, Hilton Head Island, SC, for Plaintiffs.

Russell Grainger Hines, Stephen L. Brown, Young Clement Rivers and Tisdale, Charleston, SC, for Defendant.

ORDER

DUFFY, District Judge.

This matter is before the court upon Defendant Lowcountry Boatworks, LLC d/b/a Hilton Head Boathouse's ("Defendant" or "Marina") motion to dismiss. For the reasons set forth herein, the court denies Defendant's motion.

BACKGROUND

Defendant is a maritime service contractor and marine service provider in Beaufort County, South Carolina. Defendant's operations include a marine repair facility for the repair of vessels and machinery; a launching and commissioning operation whereby Defendant removes vessels from their transport and places them into the water; a covered storage facility for both vessels and equipment; berthing facilities for certain commercial vessels; a parts department; and a sales and brokerage division for the sale of certain new and used vessels.

Plaintiffs Shelia Mahony and Charles Riggs (herein collectively referred to as "Mahony") own the M/V Essency (the "Vessel"). On or about October 23, 2004, the Vessel was delivered to Defendant by truck. Pursuant to an agreement between Mahony and Defendant, Defendant was to remove the Vessel from the truck and launch it into the waters contiguous to the Intracoastal Waterway. Defendant launched the Vessel without servicing or inspecting it, and the Vessel became partially submerged and thereby suffered damage. Plaintiffs allege the damage was caused by Defendant's "gross negligence ... in failing to inspect the Vessel prior to launching, in failing to install the drain plug prior to placing the Vessel into the water, and by failing to properly supervise its agents and employees in the proper procedures employed in launching the Vessel following removal from its transport." (Complaint ¶ 9.) Plaintiffs filed suit on July 28, 2006, asserting causes of action for negligence and breach of warranty of workmanlike performance. On September 29, 2006, Defendant filed a motion to dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, asserting this court does not have subject matter jurisdiction.

STANDARD OF REVIEW

When evaluating a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) on the grounds that the complaint fails to state facts upon which jurisdiction can be founded, "all the facts alleged in the complaint are assumed to be true and the plaintiff, in effect, is afforded the same procedural protection as he would receive under a Rule 12(b)(6) consideration." Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982). The plaintiff has the burden of proving jurisdiction, and the court may go beyond the face of the complaint and consider evidence without converting the motion into one for summary judgment. Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir.1991).

ANALYSIS

Pursuant to the United States Constitution, a federal court has the authority to hear cases in admiralty: "The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority ... to all Cases of admiralty and maritime Jurisdiction...." U.S. CONST. art III, § 2, cl. 1. Congress embodied this power in 28 U.S.C. § 1331(1): "The district courts shall have original jurisdiction, exclusive of the courts of the States, of: (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled."

Plaintiffs filed suit for negligence and breach of warranty of workmanlike performance, asserting this court has jurisdiction over both claims pursuant to 28 U.S.C. § 1333. Defendant asserts, however, that this court does not have jurisdiction over Plaintiffs' tort claim "because none of the negligent acts/omissions allegedly committed by [Defendant] with regard to preparing the vessel for launch occurred on navigable water and [because] the wrong alleged by Plaintiffs bears no significant relationship to traditional maritime activity." (Defendant's Motion at 2.) Defendant also asserts this court does not have jurisdiction over Plaintiffs' contract claim "because the subject matter of the contract is not maritime." (Defendant's Motion at 3.)

A. Plaintiffs' Contract Claim

In Insurance Co. v. Dunham, 78 U.S. 1, 11 Wall. 1, 20 L.Ed. 90 (1870), the Supreme Court explained that "the true criterion [for admiralty jurisdiction in contract claims] is the nature and subjectmatter of the contract, as whether it was a maritime contract, having reference to maritime service or maritime transactions." Dunham, 78 U.S. at 16, 11 Wall. 1. The Court further states, "Perhaps the best criterion of the maritime character of a contract is the system of law from which it arises and by which it is governed." Id. at 18,11 Wall. 1.

A contract is maritime if it relates "to a ship in its use as such, or to commerce or navigation on navigable waters, or to transportation by sea or to maritime employment." J.A.R., Inc. v. M/V Lady Lucille, 963 F.2d 96, 98 (5th Cir.1992) (internal quotation marks omitted); see also Commercial Union Ins. Co. v. Detyens Shipyard, Inc., 147 F.Supp.2d 413, 419 (D.S.C.2001). It is widely accepted that contracts to repair vessels are subject to the court's admiralty jurisdiction. See New Bedford Dry Dock Co. v. Purdy, 258 U.S. 96, 99, 42 S.Ct. 243, 66 L.Ed. 482 (1922) ("It is not always easy to determine what constitutes repairs as opposed to original construction. A contract for the former is maritime; if for the latter, it is not."); see also David Wright Charter Serv. of N.C, Inc. v. Wright, 925 F.2d 783, 784 (4th Cir.1991) ("A contract between a vessel owner and a repair facility for work on a vessel that has not been withdrawn from navigation is within admiralty jurisdiction."). "Moreover, courts have gone on to hold that maritime contracts to be performed on land can be within the admiralty jurisdiction of the court." AXA Re Prop. & Cas. Inc. Co. v. Tailwalker Marine, Inc., No. C.A. 2:04-1684-23, 2004 WL 3680276, at *2 (D.S.C. Dec. 17, 2004) (citing American E. Dev. Corp. v. Everglades Marina, Inc., 608 F.2d 123 (5th Cir.1979)). In Tailwalker Marine, this court said, "`[C]ontracts to repair and store vessels fall within the Court's admiralty jurisdiction, whether the vessels are kept on land or in the water. The key to jurisdiction is not the location of the vessel, but whether the contract sought to be enforced impacts maritime commerce.'" Tailwalker Marine, 2004 WL 3680276, at *3 (quoting Commercial Union Ins. Co. v. Used Boat Haven, No. 94 CIV. 0448(JFK), 1996 WL 191960 (S.D.N.Y. Apr. 22,1996)).

Defendant contends this court does not have jurisdiction over the contract claim because the subject matter of the contract is not maritime. Defendant states that Plaintiffs' memorandum "alleges the contract at issue was to `commission and launch the vessel.' Accordingly, the contract involved the provision of services that were completed at the time the vessel was in the water." (Defendant's Reply at 5.) Because the contract between Mahony and Defendant was for the Defendant to launch the Vessel, if Defendant contends that all services under the contract were completed before the Vessel was in the water, this contention is without merit. It is difficult to imagine that Defendant could complete a contract to launch a vessel before actually placing it in the water. Furthermore, a contract to store a vessel is a maritime contract. See American E. Dev. Corp., 608 F.2d at 124-25; see also Tailwalker Marine, 2004 WL 3680276, at *2. If a contract to store a vessel is a maritime contract, a contract to launch a vessel is likewise a maritime contract. Defendant is correct in asserting that "not all contracts concerning vessels are necessarily maritime contracts, such that they trigger admiralty jurisdiction." (Defendant's Reply at 4 (citing Doolittle v. Knobeloch, 39 F. 40, 41 (D.S.C.1889)).) However, this court finds that a contract to launch a vessel is a maritime contract because it "relates to a vessel in its use as such." BLACK'S LAW DICTIONARY 346 (8th ed.2004).

B. Plaintiffs' Tort Claim

"The traditional test for admiralty tort jurisdiction asked only whether the tort occurred on navigable waters. If it did, admiralty jurisdiction followed; if it did not, admiralty jurisdiction did not exist." Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 531-32, 115 S.Ct. 1043, 130 L.Ed.2d 1024 (1995). This traditional test has been modified, however, by several opinions from the United States Supreme Court. In Executive Jet Aviation, Inc. v. Cleveland, 409 U.S. 249, 93 S.Ct. 493, 34 L.Ed.2d 454 (1972), the Court held that unless the "wrong bear[s] a significant relationship to traditional maritime activity, ... claims arising from airplane accidents are not cognizable in admiralty." Id. at 268, 93 S.Ct. 493. Ten years later, in Foremost Insurance Co. v. Richardson, 457 U.S. 668, 102 S.Ct. 2654, 73 L.Ed.2d 300 (1982), the Court found admiralty jurisdiction to exist in tort claims resulting from the collision of two pleasure boats in navigable waters. Id. at 677, 102 S.Ct. 2654. The Foremost Court noted, however, "that the Executive Jet requirement that the wrong have a significant connection with traditional maritime activity is not limited to the aviation context." Id. at 674. The Court found such a connection in that case: "The potential disruptive impact of a collision between boats on navigable waters, when coupled with...