Rev–lyn Contracting Co. v. Patriot Marine Llc

• Decision Date: 09 December 2010
• Docket Number: Civil Action No. 08–10310–RGS.
• Citation: 760 F.Supp.2d 162
• Parties: REV–LYN CONTRACTING COMPANYv.PATRIOT MARINE, LLC, Robert J. Lockyer, and Hugh Farrell.
• Court: U.S. District Court — District of Massachusetts

760 F.Supp.2d 162

REV–LYN CONTRACTING COMPANY
v.
PATRIOT MARINE, LLC, Robert J. Lockyer, and Hugh Farrell.

Civil Action No. 08–10310–RGS.

United States District Court, D. Massachusetts.

Dec. 9, 2010.Opinion Denying Reconsideration Feb. 8, 2011.

West CodenotesPreemptedM.G.L.A. c. 93A, § 11

[760 F.Supp.2d 165]

Mark S. Adelman, Patridge Snow & Hahn, Providence, RI, for Patriot Marine, LLC (Defendant).John David Blaisdell, Robert E. Kiely, Regan & Kiely, LLP, Boston, MA, for Rev–Lyn Contracting Company (Counter Defendant).Samuel P. Blatchley, Norman A. Peloquin, II, Partridge, Snow & Hahn, LLP, Providence, RI, for Patriot Marine, LLC (Counter Claimant).

FINDINGS OF FACT, RULINGS OF LAW, AND ORDER FOLLOWING A TRIAL WITHOUT JURY STEARNS, District Judge.

This case was tried before the court without a jury on June 14, 2010. At the conclusion of the evidence, the parties sought and were granted leave to file proposed findings of fact and conclusions of law. By agreement, these were due on August 6, 2010. Because of the untimely death of defendants' attorney, Norman Peloquin, the filing date was extended to October 5, 2010.

Based on the credible testimony, the exhibits admitted in evidence, and the stipulations of the parties, I make the following findings and rulings.

FINDINGS OF FACT

1. Plaintiff Rev–Lyn Contracting Company (Rev–Lyn), is a Massachusetts corporation. Rev–Lyn owned the Ralph B, an undocumented coastal deck barge, and a 70–ton Manitowoc crawler crane, Model 2900, Serial No. 29616 (Crane). The Ralph B was used by Rev–Lyn to transport the Crane and provide it with a sea-based work platform.¹ Rev–Lyn also owned the Big Toot, a documented coastal towing vessel (tug) bearing Official No. 517294. The Big Toot served as the escort tug for the Ralph B.

2. Defendant Patriot Marine, LLC, is a Massachusetts limited liability company engaged in general marine work. Defendants Robert Lockyer and Hugh Farrell are the principals and managers of Patriot Marine.

[760 F.Supp.2d 166]

3. On February 1, 2006, Rev–Lyn entered into a Bare Vessel Charter Agreement (Charter Agreement) with Patriot Marine for the hire of the Ralph B and the Crane.

4. Pursuant to section 12 of the Charter Agreement, Patriot Marine agreed to “maintain the Vessel [Ralph B] in the same condition as at delivery, make all repairs necessary to keep the Vessel in the same condition at delivery and assumes all risk of damage or loss, ordinary wear and tear excepted and agrees to re-deliver the Vessel and articles of inventory attached thereto ... in substantially the same condition as when accepted by Charterer.”

5. Pursuant to section 15 of the Charter Agreement, Patriot Marine agreed that “should the Vessel [Ralph B] sustain breakdown of machinery or be disabled or damaged by fire, grounding, collision or other cause after delivery, and that the cause of such breakdown of machinery or damage or other cause is deemed to be a result of Charterer's negligence, [Charterer will] continue payments of charter hire as aforesaid until such time as the Vessel is restored to the condition as at the commencement of the Charter.”

6. In section 29 of the Charter Agreement, Rev–Lyn determined the fair market value of the Crane for insurance purposes to be $70,000. The Charter Agreement was a form leasing agreement prepared by Rev–Lyn for charters of the Ralph B and of its other vessels and equipment. Tr. at 61, 109.²

7. Although Patriot Marine had signed a Charter Agreement when hiring the Big Toot a year earlier on March 16, 2005, the terms of the 2005 Agreement expired on April 12, 2005. Patriot Marine did not take possession of the Big Toot again until April 12, 2006.

8. No other written agreement governed the hiring of the Big Toot on April 12, 2006.³

9. On April 12, 2006, Patriot Marine deployed the Ralph B, the Crane, and the Big Toot in an effort to salvage a sunken cabin cruiser near the location of Rev–Lyn's yard. During the salvage operation, the Crane's boom collapsed, causing serious damage to the boom, wire rope, and front rollers, and less serious damage to the Big Toot's pilothouse, port side window, port side running light, and deck illumination light. The accident caused no material damage to the Ralph B.

10. Patriot Marine stipulated at trial to contractual liability under the Charter Agreement for the damage to the Crane, as well as to liability in tort for the damage to the Big Toot.

11. The Crane was bought by Rev–Lyn in 2001 for $65,000. At the time of the purchase, the Crane required extensive repairs. During the five years prior to April 12, 2006, Rev–Lyn had purchased $69,000 in parts to refurbish the Crane.

12. As required by section 13 of the Charter Agreement, Patriot Marine insured the Crane for $70,000 through Fireman's Fund naming itself and Rev–Lyn as the co-insureds. In November of 2006,

[760 F.Supp.2d 167]

Rev–Lyn received a payment of $62,000 from Fireman's Fund to pay for damage to the Crane. On October 3, 2007, Patriot Marine tendered Rev–Lyn a check for an additional $8,000 as a “final payment” for the “sale” of the Crane to Patriot Marine.⁴ Rev–Lyn refused to deposit the check. Patriot Marine did not make any additional payments to Rev–Lyn for damage to the Crane or the Big Toot.

13. Rev–Lyn sold the Ralph B to Patriot Marine shortly after the April 12, 2006 accident in “as is” condition.

14. Rev–Lyn sold the Crane in its damaged condition to Norwalk Marine in June of 2008 for $25,000. Rev–Lyn undertook no repairs of the Crane prior to its sale. Although the evidence at trial did not establish a precise dollar amount, the parties agree that the cost of repairing the Crane would have exceeded its fair market value. Verified Compl. ¶ 13; Tr. at 46–47.

15. The Charter Agreement required Patriot Marine to pay Rev–Lyn a $13,000 monthly fee for the hire of the Ralph B and the Crane, plus 1% per month interest on any rental amount unpaid.

16. Patriot Marine has not paid Rev–Lyn for the hire of the Ralph B or the Crane. Patriot Marine made the monthly payment for the hire of the Big Toot.

17. At the time of the accident involving the Big Toot and the Crane, Rev–Lyn was under contract to perform maintenance work for Distrigas. The Distrigas job required the use of both a tug and a crane. After the accident, Rev–Lyn rented a substitute barge and crane to complete the job, incurring rental costs in July, August, and October of 2006, totalling $32,364.96. Rev–Lynn also paid a $700 captain's fee for the pickup and return of the replacement barge and crane.

18. In July, August, and October of 2006, Rev–Lyn rented a tug to perform work on the Distrigas project in place of the Big Toot. Rev–Lyn paid $1,250 for the rental of the substitute tug in July of 2006 and an additional $23,500 in rental fees in October and November of 2006. Rev–Lyn did not undertake any repairs to the Big Toot other than to fix the running light.

19. There is no evidence that at that time of the accident, Rev–Lyn was performing any contract requiring the use of a crane other than the Distrigas job.

20. The Charter Agreement provided that “should it become necessary for either party to enforce its rights under the terms of this Agreement, the losing party agrees to make the damaged party whole and to pay reasonable attorney's fees and costs to the prevailing party.” Rev–Lyn incurred $46,017.50 in attorney's fees in prosecuting this litigation. Blaisdell Aff.

21. Following the April 12, 2006 accident, the Big Toot was capable of navigating in fair weather, although it was unable to operate safely at night or in bad weather in its unrepaired condition. Tr. at 96.

22. Rev–Lyn sold the Big Toot to a third party in “as is” condition in October of 2008 for $26,500.

RULINGS OF LAW AND ULTIMATE CONCLUSIONS OF FACT

1. This court has jurisdiction over admiralty and maritime claims pursuant to 28 U.S.C. § 1333 and Rule 9(h) of the Federal Rules of Civil Procedure.

2. Venue lies in the District of Massachusetts. 28 U.S.C. § 1391(b).

3. The Ralph B was sold to Patriot Marine immediately after the April 12,

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2006 accident. Rev–Lyn is therefore not entitled to damages for loss of the use of the Ralph B.

4. Patriot Marine is liable to Rev–Lyn for the damage to the Crane incurred in the April 12, 2006 accident.

5. In general maritime law, “a constructive total loss occurs when the cost of repairing the ship [or other maritime property] is greater than its fair market value immediately before the casualty.” DiMillo v. Sheepscot Pilots, Inc., 870 F.2d 746, 751 (1st Cir.1989) (citations omitted). The Crane by this definition was a total loss.

6. Where a vessel is a total loss, the measure of damages is its fair market value at the time of the loss plus interest (less any salvage value). Standard Oil Co. of New Jersey v. S. Pac. Co., 268 U.S. 146, 155–156, 45 S.Ct. 465, 69 L.Ed. 890 (1925). See also A & S Transp. Co., Inc. v. Tug Fajardo, 688 F.2d 1, 2 (1st Cir.1982).

7. The vessel owner has the burden of establishing the fair market value of the vessel. Oliver J. Olson & Co. v. Am. S.S. Marine Leopard, 356 F.2d 728, 733 (9th Cir.1966).

8. Market value “is established by contemporaneous sales of like property in the way of ordinary business, as in the case of merchandise bought and sold in the market ....” Id., quoting Standard Oil, 268 U.S. at 155–156, 45 S.Ct. 465.

9. Evidence of value other than contemporary sales can be used only when it is shown that a vessel's market value cannot be reasonably established. Oliver J. Olson, 356 F.2d at 733 & n. 1.

10. Based on the evidence introduced at trial, I find that the $70,000 estimate of the fair market value of the Crane immediately prior to the accident offered by defendant's marine surveyor, Michael Collyer, more credible than the estimate of $125,000...