Pritchett v. Kimberling Cove, Inc.

• Decision Date: 07 December 1977
• Docket Number: M,Nos. 76-1912,76-1913 and 76-2014,No. 17071681,No. MO,17071681,MO,s. 76-1912
• Citation: 568 F.2d 570
• Parties: Joseph H. PRITCHETT and Vivian M. Pritchett, Plaintiffs-Appellees, and Margaret Ann Pritchett, Plaintiff-Appellee, v. KIMBERLING COVE, INC., Defendant-Appellant, and Dando Enterprises, Ltd. and Charles J. Dando, Defendants-Appellees, and In the Matter of the Complaint of Recreation Unlimited, Inc. (now Dando Enterprises, Ltd.), owner of a 1971 Classic 170 Motorboat,issouri Registry4164 GG, for Exoneration From or Limitation of Liability, Appellee, Joseph H. Pritchett, Vivian M. Pritchett, Margaret Ann Pritchett, Charles J. Oldham, Roma M. Oldham, and Mike Oldham, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 570

568 F.2d 570

Joseph H. PRITCHETT and Vivian M. Pritchett, Plaintiffs-Appellees and Margaret Ann Pritchett, Plaintiff-Appellee, v. KIMBERLING COVE, INC., Defendant-Appellant and Dando Enterprises, Ltd. and Charles J. Dando, Defendants-Appellees and In the Matter of the Complaint of Recreation Unlimited, Inc (now Dando Enterprises, Ltd.), owner of a 1971 Classic 170 Motorboat, No. 17071681, Missouri Registry No. MO 4164 GG, for Exoneration From or Limitation of Liability, Appellee, Joseph H. Pritchett, Vivian M. Pritchett, Margaret Ann Pritchett, Charles J. Oldham, Roma M. Oldham, and Mike Oldham, Appellants.

Nos. 76-1912, 76-1913 and 76-2014.

United States Court of Appeals, Eighth Circuit.

Submitted June 16, 1977.

Decided Dec. 7, 1977.

Rehearing En Banc Denied in No. 76-1912 Jan. 18, 1978.

As Modified on Denial of Rehearing and Rehearing En Banc in

No. 76-1913 Jan.

30, 1978.

Donald E. Bonacker, Springfield, Mo., for Pritchett; Bonacker & Reynolds, Springfield, Mo., on the brief.

James H. Horn, Kansas City, Mo., for Kimberling Cove, Inc.; Charles A. Schliebs, Kansas City, Mo., on the brief.

Glenn A. Burkart, Springfield, Mo., for appellee Charles J. Dando; Wallace Walter, Springfield, Mo., on the brief.

Glenn E. McCann, Kansas City, Mo., for Recreation Unlimited, Inc.; Stephen D. Manz and James E. Welsh, Kansas City, Mo., on the brief.

James K. Prewitt of Prewitt, Jones & Karchmer, Springfield, Mo., on brief of Mike Oldham, Charles J. Oldham and Roma Oldham.

Before MATTHES, Senior Circuit Judge, BRIGHT, Circuit Judge, and MILLER, Judge. ^*

MILLER, Judge.

This group of consolidated appeals is from the judgment of the district court (opinion unpublished). ¹ The cases arose out of a tragic collision between two motorboats on Lake Tablerock in Missouri shortly after dark on August 7, 1971.

THE CASES

Civil Action No. 2792 (Involving Appeal Nos. 76-1913 and

76-2014) ²

This was commenced by Mr. and Mrs. Joseph Pritchett, the parents of Margaret Ann Pritchett, the seriously injured minor operator of a boat owned by her parents, for medical expenses incurred for Margaret Ann Pritchett, loss of services, and damages to their boat. The sole defendant was the minor driver of the other boat, Scott Clifton.

By subsequent amendments, Recreation Unlimited, Inc. (Recreation), whose name was subsequently changed to Dando Enterprises, Ltd., Kimberling Cove, Inc. (Kimberling), and Charles J. Dando (Dando), president of both corporations, were added as defendants. ³ Kimberling was added on the theory that it negligently entrusted to Scott Clifton the motorboat he was driving, which was docked at a marina owned by Kimberling. Recreation was added on the theory that the marina, including the motorboat (which it owned and which was under a rental-sharing arrangement with Kimberling) was operated as a joint enterprise by the two corporations. Dando was added on the theory that he was carrying on an activity through Kimberling and Recreation, as his agents, which could be lawfully carried on only under a franchise granted by public authority and which involved an unreasonable risk of harm to others; thus, he was subject to liability for physical harm caused by the negligence of the said corporations.

Before trial, Scott Clifton was dismissed by plaintiffs as a defendant.

Civil Action No. 3122 (Appeal No. 76-1912)

This was filed by Recreation to limit its liability. Recreation acknowledged ownership of the motorboat driven by Clifton, but claimed that it was being driven without its knowledge or consent; also, that since the boat was being operated on navigable waters of the United States at the time of the accident, 46 U.S.C. §§ 183-189 applied. ⁴ It tendered $3,500.00 (the alleged value of the Recreation boat) with the court.

Mike Oldham, a minor who was a passenger in the Pritchett boat, and his parents filed an answer and claim for damages resulting from personal injuries, alleging negligent entrustment by Recreation to Clifton. His parents also filed a claim for their derivative damages.

Margaret Ann Pritchett filed an answer-counterclaim, alleging a number of grounds of active negligence on Recreation's part. Her parents filed a similar

answer-counterclaim. Civil Action No. 74 CV 341-S (Involving

Appeal Nos. 76-1913 and 76-2014) ⁵

This was filed by Margaret Ann Pritchett against Scott Clifton, Kimberling, Recreation, and Dando. The alleged bases of liability were the same as those in Civil Action No. 2792, supra, brought by Mr. and Mrs. Pritchett.

DISTRICT COURT PROCEEDINGS

The foregoing actions were consolidated, and a bifurcated trial, without a jury, was held on the issue of liability and damages. The court found that Kimberling negligently entrusted the boat to Scott Clifton, and judgments were entered against the last directors of Kimberling, in their capacity as trustees winding up the corporation's business. Damages were assessed at $400,000.00 in favor of Margaret Ann Pritchett. Mr. and Mrs. Pritchett were awarded medical expenses ($25,783.34) and the value of their boat ($2,900.00) along with prejudgment interest. Damages for Mike Oldham's physical injuries were assessed at $10,000.00, and an award was made for $3,675.00, plus prejudgment interest, for medical expenses.

Regarding Recreation, the court concluded that there was no joint enterprise between it and Kimberling and, therefore, held that there was no joint liability with Kimberling. Under 46 U.S.C. § 183(a), Recreation's liability was limited to the value of its boat, and the award was divided among the Pritchetts and the Oldhams.

The court also concluded that operating the marina did not involve an unreasonable risk of harm to others under a franchise granted by public authority; therefore, no liability was imposed on Dando.

FACTS

Kimberling Cove Marina, owned and operated by Kimberling, is on the shoreline of a large cove on Lake Tablerock in Stone County, Missouri. Both boats involved in the accident were docked there. Scott Clifton was operating a yellow Classic 17 foot motorboat, and Margaret Ann Pritchett was operating a 16 foot motorboat. Both boats were powered by large inboard-outboard engines, 140 and 155 horsepower respectively, and were capable of speeds of about 45 miles per hour. Scott Clifton, who had turned fifteen just two days before the accident, was accompanied by a friend and two girls. There were also two couples in the Pritchett boat.

The boat driven by Clifton had been out on the lake and was returning to the marina. The Pritchett boat had left the marina for the main body of the lake. The boats approached each other on a collision course. Upon impact, the bow of the Clifton boat cut through the Pritchett boat. The trial court found:

The evidence as to navigation lights was disputed. Similarly, the evidence as to the speed of the two boats was contested.

The evidence established that the pilot of a boat approaching a lighted marina at night has much more difficulty seeing the navigation lights of a boat between him and the marina, than observing similar lights against an unlighted background, and reduced speed is necessary.

The court further found that there was no negligence or fault in the operation of the Pritchett boat.

Margaret Ann Pritchett received serious and disabling injuries, including a cerebral mass lesion on the left, a shift of the brain midline to the right, and a fracture of the skull. She also received several severe lacerations to muscles and nerve trunks. She was unconscious and in critical condition for many days and was not able to support her own life systems for over two months. Her left eye had to be removed; the right side of her face remains completely paralyzed. She has learned to walk without a cane, albeit with a wide base gait. She has permanent brain damage, which affects her gait, her vision in the right eye, her ability to speak, and causes headaches, insomnia, and memory difficulties, which make it difficult for her to learn. Mike Oldham received an injury to his nose, mouth, forehead, and left eyelid requiring four operations.

The marina activities included storage of private boats, boat repair facilities, a fuel dock, and rental of pleasure boats. Several dockhands were employed at the marina during the summer of 1971, including Scott Clifton, who was the youngest. His duties included opening and closing the marina, fueling and renting boats, selling merchandise, providing customers with services, instructing them in the operation of rental boats, and protecting the boats in event of a storm or catastrophe. He was regularly responsible for locking up the dockhouse at night. This was located on the fuel dock and contained keys to all boats docked at the marina, including the rental boats. To perform his duties, Scott Clifton was given a set of keys to the marina facilities, including the dockhouse, and thus had access to all of the boats.

As a fringe benefit, dockhands were allowed to use the rental boats without paying rental charges; but the policy of Kimberling was to require permission, usually from the marina manager, before such use. On the night of the accident, Scott Clifton, without permission, took the Classic motorboat from its slip next to the fuel dock by using his key to the dockhouse to obtain the key to the Classic that was kept there.

During the period in which the accident occurred, Recreation was not only selling boats but furnishing boats to the marina for rental by Kimberling. The rental proceeds were divided forty percent to Recreation and sixty percent to Kimberling. There were four boats in the 1971 rental arrangement, including the Classic involved in the accident. Although these were being rented by Kimberling to the public, they, nevertheless, remained on the inventory of Recreation and were available for demonstration and sale by Recreation.

OPINION

There are three major issues: (1) whether the district court correctly found that...