Matter of Pacific Adventures, Inc.

• Decision Date: 26 March 1998
• Docket Number: No. CIV. 97-00216 ACK.,No. CIV. 97-00325 ACK.,CIV. 97-00216 ACK.,CIV. 97-00325 ACK.
• Citation: Matter of Pacific Adventures, Inc., 5 F.Supp.2d 874 (D. Haw. 1998)
• Parties: In the Matter of PACIFIC ADVENTURES, INC. In the Matter of TROPICAL HYDRO, INC. Stacy COURTNEY, Limitation Claimant/Third Party Plaintiff, v. PACIFIC ADVENTURES, INC. and Tropical Hydro, Inc., et al., Third Party Defendants. PACIFIC ADVENTURES, INC. and Tropical Hydro, Inc., et al., Fourth Party Plaintiffs, v. Jeff JENSEN, Fourth Party Defendant.
• Court: U.S. District Court — District of Hawaii

5 F.Supp.2d 874

In the Matter of PACIFIC ADVENTURES, INC.

In the Matter of TROPICAL HYDRO, INC.

Stacy COURTNEY, Limitation Claimant/Third Party Plaintiff, v. PACIFIC ADVENTURES, INC. and Tropical Hydro, Inc., et al., Third Party Defendants.

PACIFIC ADVENTURES, INC. and Tropical Hydro, Inc., et al., Fourth Party Plaintiffs, v. Jeff JENSEN, Fourth Party Defendant.

No. CIV. 97-00216 ACK.

No. CIV. 97-00325 ACK.

United States District Court, D. Hawaii.

March 26, 1998.

Julie H. China, Alcantara & Frame, Honolulu, HI, for Pacific Adventures, Inc., a/k/a Rainbow Chaser, O.N. 973629.

Michael Jay Green, David J. Gierlach, Robert E. Rapp, Honolulu, HI, for Stacy Courtney.

Michael Jay Green, David J. Gierlach, Honolulu, HI, for Jeff Jensen.

Roy Y. Yempuku, Yempuku & Kugisaki, Honolulu, HI, Steven D. Smelser, Law Offices of Matthew W. Monroe, Hermosa Beach, CA, David W. Proudfoot, SeaLaw Hawaii, Honolulu, HI, for Leslie Farnel.

Roy Y. Yempuku, Yempuku & Kugisaki, Honolulu, HI, Steven D. Smelser, Law Offices of Matthew W. Monroe, Hermosa Beach, CA, Paul H. Felser, Portman & Felser, Savannah, GA, for Tropical Hydro, Inc., as Owner of agent Kainalu, M/V, Kainalu, M/V, Dive Maui, Inc.

Roy Y. Yempuku, Yempuku & Kugisaki, Honolulu, HI, Matthew W. Monroe, Monroe & Shapiro LLP, Hermosa Beach, CA, Steven D. Smelser, Law Offices of Matthew W. Monroe, Hermosa Beach, CA, Paul H. Felser, Portman & Felser, Savannah, GA, for Dive Pacific Intern., Inc. d/b/a Offshore Adventures.

Deborah E. Barack, Carlsmith Ball Wichman Case & Ichiki, Honolulu, HI, for Brad K. Stafford, Individually, and as First Mate of Kai Nalu, Divemaster d/b/a Green Weaver Charters.

Brian M. Pearce, Carlsmith Ball Wichman Murray Case Mukai & Ichiki, Honolulu, HI, for Bradley K. Stafford.

ORDER DENYING STAFFORD'S MOTION FOR SUMMARY JUDGMENT

KAY, Chief Judge.

BACKGROUND

This action is based on an accident involving a scuba diver and a vessel at sea. On or about January 10, 1997, the "Kai Nalu," a vessel owned by Tropical Hydro, Inc. ("Tropical"), took Stacey Courtney and Jeff Jensen, her fiance and dive buddy, on a dive excursion to a dive spot near the Island of Lanai known as Shark Fin Rock. Leslie Farnel, the sole owner of Tropical, served as captain aboard the "Kai Nalu." Bradley Stafford served as diving guide and deckhand.

On the same day, the vessel "Rainbow Chaser," owned by Pacific Adventures, Inc. ("Pacific"), took a group of people snorkeling at Shark Fin Rock. The "Kai Nalu" anchored near the vessel "Rainbow Chaser." As Courtney, Jensen, and Stafford were completing a dive, the "Rainbow Chaser" proceeded to leave the area. Courtney's leg became entangled in its starboard propeller. She suffered serious injuries to her leg including: extensive lacerations; severed arteries, veins, tendons and nerves; and numerous broken bones.

Pacific and Tropical filed these limitations actions, which have been consolidated. Courtney filed claims against Pacific and Tropical as well as third-party complaints against both companies, their vessels, various employees or agents, and Stafford. Pacific, Tropical, and Farnel filed fourth party complaints against Jensen. Jensen filed cross claims against, inter alia, Stafford.

On December 29, 1997, Stafford filed a motion for summary judgment based on a release form signed by Courtney and Jensen, ("the Release"), which purported to exempt Stafford from liability for injury "caused by negligence, gross negligence, or otherwise." Stafford Concise Statement in Support of Motion, Exh. D.

On February 25, 1998, Courtney and Jensen filed memoranda in opposition to Stafford's motion. On the same day, Pacific filed a memorandum in opposition to Stafford's motion. On February 26, 1998, Tropical filed a statement of no opposition to Stafford's motion, and, on March 5, 1998, Tropical filed a response to Courtney's and Pacific's memoranda. On the same day, Stafford filed a reply memorandum. The Court heard oral arguments on March 16, 1998.

SUMMARY JUDGMENT STANDARD

Summary judgment shall be granted where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). One of the principal purposes of the summary judgment procedure is to identify and dispose of factually unsupported claims and defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

The United States Supreme Court has declared that summary judgment must be granted against a party who fails to demonstrate facts to establish an element essential to his case where that party will bear the burden of proof of that essential element at trial. Celotex, 477 U.S. at 322. "If the party moving for summary judgment meets its initial burden of identifying for the court the portions of the materials on file that it believes demonstrate the absence of any genuine issue of material fact [citations omitted], the nonmoving party may not rely on the mere allegations in the pleadings in order to preclude summary judgment." T.W. Elec. Serv. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987).

Rather, Rule 56(e) requires that the nonmoving party set forth, by affidavit or as otherwise provided in Rule 56, specific facts showing that there is a genuine issue for trial. T.W. Elec. Serv., 809 F.2d at 630. At least some "significant probative evidence tending to support the complaint" must be produced. Id. Legal memoranda and oral argument are not evidence and do not create issues of fact capable of defeating an otherwise valid motion for summary judgment. British Airways Bd. v. Boeing Co., 585 F.2d 946, 952 (9th Cir.1978).

The standard for a grant of summary judgment reflects the standard governing the grant of a directed verdict. See Eisenberg v. Ins. Co. of North America, 815 F.2d 1285, 1289 (9th Cir.1987) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). Thus, the question is whether "reasonable minds could differ as to the import of the evidence." Anderson, 477 U.S. at 250-51.

The Ninth Circuit has established that "[n]o longer can it be argued that any disagreement about a material issue of fact precludes the use of summary judgment." California Architectural Bldg. Products, Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir.1987). Moreover, the United States Supreme Court has stated that "[w]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

Indeed, "if the factual context makes the nonmoving party's claim implausible, that party must come forward with more persuasive evidence than would otherwise be necessary to show that there is a genuine issue for trial." Franciscan Ceramics, 818 F.2d at 1468 (emphasis in original) (citing Matsushita, 475 U.S. at 587). Of course, all evidence and inferences to be drawn therefrom must be construed in the light most favorable to the nonmoving party. T.W. Elec. Serv., 809 F.2d at 630-31.

DISCUSSION

A. Jurisdiction and Choice of Law

As a preliminary matter, the Court must determine jurisdiction and choice of law. Courtney alleges in her complaint both admiralty and diversity jurisdiction, while Jensen alleges only diversity jurisdiction.

On February 11, 1998, Magistrate Judge Kurren issued a Findings and Recommendation ("F & R") stating that, with respect to Courtney's claims, there was diversity of citizenship.¹ F & R at 16. Judge Kurren correctly observed that, when aligned by interest, Courtney, a California citizen, stood alone as claimant, and all other parties (excluding Jensen), who are not citizens of California, were properly aligned as third-party defendants. Judge Kurren further noted that Jensen, if included as a third-party defendant under Federal Rule of Civil Procedure 14(c), would defeat diversity because he is an indispensable party and would be aligned against Courtney, and he is a citizen of California. Judge Kurren concluded, however, that the complaints against Jensen failed to state a claim. Unless and until Tropical, Pacific, and Farnel amend their complaints against Jensen, there is diversity of citizenship. However, the Court further notes that Courtney alleged an amount in controversy in excess of $50,000. In 1996, Congress raised the minimum amount necessary to establish diversity jurisdiction to $75,000. 28 U.S.C. § 1332. This change became effective before Courtney filed her complaint. Thus, Courtney's claims cannot rest on diversity jurisdiction.

Courtney also alleged admiralty jurisdiction. To determine whether there is admiralty jurisdiction under 28 U.S.C. § 1333, a court considers a two prong test:

Under the first prong, a court must determine whether the tort occurred on navigable water or whether injury suffered on land was caused by a vessel on navigable water. Under the second prong, two issues are raised: (1) whether the incident has a "potentially disruptive impact on maritime commerce" (viewing the "general features of the type of incident involved") and (2) whether the "general character" of the "activity giving rise to the incident" bears a "substantial relationship to traditional maritime activity."

McClenahan v. Paradise Cruises, Ltd., 888 F.Supp. 120, 121 (D.Haw.1995) (quoting Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 532-34, 115 S.Ct. 1043, 1048, 130 L.Ed.2d 1024 (1995)).

In his F & R, Judge Kurren observed that the parties do not dispute that the incident occurred in navigable water, and therefore the first prong is satisfied. F & R at 5. In addition, the parties do not dispute that there existed a potential for a disruptive impact on maritime commerce. Id. Lastly, Judge Kurren correctly concluded that, with respect to the limitation claims of Tropical...