McAllister Towning of Virginia, Inc. v. United States

• Decision Date: 03 April 2012
• Docket Number: CIVIL ACTION NO. 2:10cv595
• Court: U.S. District Court — Eastern District of Virginia
• Parties: IN THE MATTER OF THE COMPLAINT OF MCALLISTER TOWNING OF VIRGINIA, INC. AS OWNER OF THE TUG KATIE G. MCALLISTER Limitation Plaintiff, v. UNITED STATES OF AMERICA, Claimant.

IN THE MATTER OF THE COMPLAINT OF MCALLISTER TOWNINGOF VIRGINIA, INC. AS OWNER OF THE TUG KATIE G. MCALLISTER Limitation Plaintiff,

v.UNITED STATES OF AMERICA, Claimant.

CIVIL ACTION NO. 2:10cv595

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Norfolk Division - In Admiralty

April 3, 2012

MEMORANDUM OPINION AND ORDER

This admiralty matter is before the Court for decision following a three-day bench trial commencing on October 18, 2011. On December 2, 2010, McAllister Towing of Virginia, Inc. ("McAllister") brought this action as the owner and operator of the Tug KATIE G. MCALLISTER ("KATIE G."), in an action for exoneration from or limitation of liability pursuant to the Limitation of Liability Act, 46 U.S.C. §§ 30501-35012 ("Limitation Act"). Limitation Plaintiff, McAllister, moves this Court to enter an order determining that: 1) McAllister is not liable to any extent for the damage to the United States Navy's Degaussing Range, which occurred on July 13, 2010, or alternatively 2) if McAllister is found liable for the damage, then such damage is limited to the value of the KATIE G. as found at the time of the casualty and that McAllister be discharged from any further liability. The parties have filed post-trial briefs and this matter is now ripe for judicial determination. For the reasons set forth herein, McAllister's claim for exoneration from liability is DENIED and McAllister's claim for limitation of liability is GRANTED. The Court GRANTS the United States damages in theamount of $2,520,000.00 and prejudgment interest on this amount from July 13, 2010 through the date of entry of this judgment.

I. FACTUAL FINDINGS

A. Stipulated Facts

The parties have stipulated to the following facts which the Court accepts and finds:

1. McAllister is a corporation existing under the laws of Virginia, with its principal place of business in Norfolk, Virginia, and was at all material times the owner pro hac vice and bare boat charterer of the Tug KATIE G. referred to in this Complaint.

2. The KATIE G. is a steel towing vessel, 113 feet in length, built in 1966, Official No. 505022.

3. There are no demands or unsatisfied liens against the KATIE G. which arose from the voyage at issue.

4. The KATIE G. has not been attached or arrested.

5. With the exception of the United States of America, there are no other claimants in this action.

6. The fair market value of the KATIE G. on July 13, 2010 was $2,520,000.00.

7. On July 13, 2010, the KATIE G. was towing the barge COLUMBIA ELIZABETH.

8. The maximum draft of the KATIE G. on July 13, 2010 was 16 feet.

9. On July 13, 2010, the barge COLUMBIA ELIZABETH had a draft of 12 feet fore and 15 feet aft.

10. The Degaussing Range had just undergone replacement of numerous sensors and sensor cables by Precon Marine, Inc. ("Precon"), a subcontractor of PCCI, Inc., who wasworking under a government contract to repair damage to the range done by a Hapag-Lloyd freighter dragging its anchor through the range in 2007.

11. The parties and their experts agree that, as the KATIE G. and her tow moved away from the Degaussing Range after the tug's tow wire was lengthened, the tug's wire dragged an object through the array and caused the damage to the Range on July 13, 2010.

B. Additional Factual Findings

McAllister's Operations

1. McAllister owns a fleet of thirteen tugboats and employs approximately thirty captains. It operates out of its home port on the waterfront of the Elizabeth River, located at 1914 Pearl Street, Norfolk, Virginia.¹ McAllister's tugboats must navigate through the Norfolk Entrance Reach Channel, where the United States Navy's Degaussing Range is located, in order to reach the Chesapeake Bay and Atlantic Ocean.²

2. McAllister's tugboats have been traveling through the Entrance Reach Channel since at least 1989, when the Degaussing Range was constructed, and its captains are familiar with the Norfolk harbor, including navigational charts and ongoing construction.³

3. McAllister issues two written manuals that provide guidance to its captains - the "Both Book"⁴ and the "Boat Book."⁵ The Both Book is a quality safety management manual that provides guidance on "operations, marine, and some other processes," which apply to both its fleet and shore side operational activity.⁶ McAllister maintains a copy of the Both Book onboard all its vessels and in its senior management's office.⁷ The Boat Bookoutlines specific guidelines for fleet operations - everything from deck to engineering -and covers job descriptions, and emergency and safety procedures.⁸

4. While the Both Book indicates that the captain is the master and in sole command of the vessel, neither manual provides specific guidance on the proper procedures for lengthening tow wire.⁹ Instead, McAllister defers to its captains to determine when and where to lengthen tow wire by accounting for several variables, including weather, tide conditions, and traffic, among others.¹⁰

5. McAllister provides the Local Notices to Mariners ("LNMs") to its captains automatically via e-mail.¹¹ LNMs are weekly publications by the Coast Guard that advise mariners of gates of navigation, hazardous navigation, and other items of marine information.¹² They relay information such as any impediments to the navigation channel, whether there is ongoing construction work, and similar information.¹³ LNMs are available for download online.¹⁴

6. McAllister holds annual "captains' meetings"¹⁵ and conducts mandatory safety training onboard its vessels on a variety of topics.¹⁶ McAllister holds more frequent meetings with mariners, including, for example, when a new crew is scheduled to man a vessel, although these meetings are informal and not mandatory.¹⁷ McAllister's Vice-President and General Manager, Captain James E. Westall, has observed the operations of some ofMcAllister's vessels from a managerial perspective, although he has not done so aboard the KATIE G.¹⁸

The KATIE G. MCALLISTER Crew

7. Captain Richard Hinson, who was the master of the KATIE G. on July 13, 2010, has over thirty years of experience in the maritime industry, and specifically in the towing industry: he has served as a deck hand, mate, and captain aboard various towing vessels.¹⁹ During his more than six years with McAllister, he has served as master of several tugboats, including the KATIE G.²⁰ Captain Hinson has made the trip from Norfolk, Virginia to Baltimore, Maryland with the KATIE G. for at least six years, twice per week for three years and then once per week the latter three years.²¹ In all, Captain Hinson has made the Norfolk-Baltimore trip over one hundred times at least.²²

8. In addition to Captain Hinson, the other crew aboard the KATIE G. on July 13, 2010 included: Charles Sturgis, an engineer; Kevin Bird, a mate; Marcus Jerz, a deck hand; and Donald George, a deck hand.

9. Charles Sturgis has served as an engineer on the Katie G. for at least two years, and he has worked on other McAllister vessels before that.²³

10. Kevin Bird has served as mate with McAllister for five and a half years and has worked on the KATIE G. for two and a half of those years.²⁴ Prior to serving as a mate, Mr. Birdserved in the Navy for twenty years and worked on supply ships, landing ship docks (LSDs), and carriers.²⁵

11. Donald George has been employed as a deck hand with McAllister for the entirety of his service with the company and, while his exact length of time with McAllister is not evident from the record, he has made the Norfolk-Baltimore trip on the KATIE G. between 150 and 200 times.²⁶

12. The record contains no information regarding Marcus Jerz's experience in the maritime industry prior to his service on the KATIE G. on July 13, 2010, although McAllister's expert, Donald Kinsey, testified that the entire crew aboard the KATIE G. on July 13, 2010 was qualified and experienced.²⁷

13. The Katie G. is outfitted with a towing, "Markey" winch spooled with approximately 2,000 feet of steel towing wire that is 2 1/4-inch in diameter.²⁸ It also is equipped with an Electronic Chart Display and Information System ("ECDIS") navigational computer with a video chart display.²⁹

United States Navy's Degaussing Range

14. Since 1941, the United States Navy has maintained a Degaussing Range in the Elizabeth River off of Sewell's Point. The purpose of the Degaussing Range is to measure the magnetism of the Navy's ships as part of its mine counter-measures.³⁰ The Degaussing Range has been in its current location at the Norfolk Harbor Entrance Reach Channel, near Sewell's Point, since 1989.³¹

15. The Degaussing Range consists of a series of sensors located on the floor of the harbor floor. The sensors are arranged perpendicular to the Channel and are linked by cables, which also run perpendicular to the Channel.³²

16. As a structure in the navigable waters of the United States, the Degaussing Range is required to be authorized and permitted through the United States Army Corps of Engineers ("ACOE") pursuant to Section 10 of the River and Harbor Act of 1899, as codified at 33 U.S.C. § 403, et seq.³³ The Degaussing Range also must be authorized by the Virginia Marine Resources Commission ("VMRC").

17. In 1987, the Navy received authorization in the form of a permit from the ACOE to construct the Degaussing Range at its current location.³⁴ The Navy likewise received such authorization from the VMRC in 1987.³⁵ Both permits incorporated technical drawings demonstrating how the Range was to be constructed.

Prior Damage to the Degaussing Range

18. Prior to the damage to the Degaussing Range on July 13, 2010, the Range sustained similar damage in two separate incidents in 2006 and 2007.

19. On August 8, 2006, an unknown vessel dragged an unknown object through the Range, thereby snagging cables and causing extensive damage to the Range.³⁶ The Navy completed repairs resulting from the August 2006 incident later that year.³⁷

20. On April 20, 2007, a container vessel, the M/V LERVERKUSEN

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