Rocque v. Zetty, LLC

• Decision Date: 27 April 2020
• Docket Number: 2:18-cv-00256-JDL
• Citation: 456 F.Supp.3d 257
• Parties: Arthur J. ROCQUE, Jr. et al., Plaintiffs, v. ZETTY, LLC, a/k/a Edgecomb Boat Works et al., Defendants.
• Court: U.S. District Court — District of Maine

456 F.Supp.3d 257

Arthur J. ROCQUE, Jr. et al., Plaintiffs,

v.ZETTY, LLC, a/k/a Edgecomb Boat Works et al., Defendants.

2:18-cv-00256-JDL

United States District Court, D. Maine.

Signed April 27, 2020

William H. Welte, Welte & Welte, P.A., Camden, ME, for Plaintiffs.

Twain Braden, Benjamin Wahrer, Elizabeth K. Peck, Thompson Bowie & Hatch LLC, Portland, ME, for Defendants.

ORDER ON DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT

JON D. LEVY, CHIEF U.S. DISTRICT JUDGE

In June 2016, Arthur and Carol Rocque's boat, the M/V Against the Wind , sank at its mooring in Edgecomb, Maine. In their complaint, the Rocques assert several claims against Defendant Zetty, LLC, doing business as Edgecomb Boat Works, and its managing member, Defendant Mitch Garey (collectively, "Edgecomb"), contending that the repair work Edgecomb performed on the vessel was deficient and caused the vessel to sink. Edgecomb moves for a partial summary judgment regarding: (1) the appropriate measure of damages for the loss of the boat; (2) the availability of a cause of action for breach of the duty of good faith and fair dealing under maritime law; (3) the Rocques' fraudulent and negligent misrepresentation claims; and (4) the availability of punitive damages.

I. FACTUAL BACKGROUND

Edgecomb Boat Works is a full-service boatyard offering launching and hauling services and mechanical repairs to vessels ranging from five to 45 feet. Michael Mayne started Edgecomb Boat Works in 1986 and operated it until October 2015 when he sold it to Defendant Mitchell Garey. Before Mayne sold the business, Edgecomb Boat Works had made substantial restorations on the Rocques' vessel, a 37-foot Egg Harbor Deluxe Cruiser built in 1970, and provided annual maintenance on the vessel for eight or nine seasons.

In October 2015, Edgecomb Boat Works hauled the Rocques' vessel out of the water, winterized its engines, and stored the vessel inside its facility, pursuant to an oral agreement with Arthur Rocque. At some point, Rocque and Garey discussed the work that Rocque wanted performed on the vessel in preparation for the 2016 boating season. Thereafter, Edgecomb Boat Works' chief mechanic discovered that the vessel's two shaft logs required replacement. Shaft logs are permanently affixed to the hull of a motor-driven vessel and contain stuffing boxes, which seal water out from the propeller shaft. Within a week of learning of the issue with the shaft logs, Rocque came to Edgecomb Boat Works to inspect the shaft logs and agreed that they needed to be replaced.

Garey attempted to find replacement shaft logs, but because of the age of the vessel, he could not find any.¹ During the week of April 18, 2016, Rocque and Garey had multiple conversations regarding Garey's lack of success in finding used parts, and the conversation turned to the possibility of fabricating replacement shaft logs. Garey stated that while Edgecomb's chief mechanic had never done a fiberglass rebuild of shaft logs on a wooden boat, he had done it on many fiberglass boats. Rocque authorized Edgecomb to repair the shaft logs on the condition that Mayne (the former owner of Edgecomb Boat Works) be consulted and kept abreast of the repairs. Edgecomb's chief mechanic then fabricated two shaft logs out of fiberglass and installed them in the vessel.

On June 19, 2016, the Rocques took delivery of their vessel at Edgecomb Boat Work's boatyard. The Rocques attempted to bring the vessel back to its usual mooring in Stonington but were forced to return to the boatyard due to electrical problems. The next day, the Rocques brought the vessel to its mooring in Stonington. The vessel remained there until it sank, unattended, on June 24, 2016. The Rocques contend that Edgecomb's failure to properly repair the shaft logs caused progressive flooding which resulted in the sinking and total loss of the vessel.

II. LEGAL ANALYSIS

Summary judgment is granted when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is material if "its existence or nonexistence has the potential to change the outcome of the suit." Rando v. Leonard , 826 F.3d 553, 556 (1st Cir. 2016) (quoting Borges ex rel. S.M.B.W. v. Serrano-Isern , 605 F.3d 1, 5 (1st Cir. 2010) ). Issues are considered genuine "if the evidence of record permits a rational factfinder to resolve [the issue] in favor of either party ...." Id. (quoting Borges , 605 F.3d at 4 ). The facts in the record are construed in the light most favorable to the nonmoving party, and all reasonable inferences are resolved in the nonmoving party's favor. See Braga v. Genlyte Group, Inc. , 420 F.3d 35, 38 (1st Cir. 2005).

A. The Measure of Damages

Edgecomb moves for summary judgment on the measure of damages, contending that the so-called "total loss rule" limits the damages the Rocques may seek. The total loss rule provides that "where a vessel is adjudged a complete loss, the damages will be derived by calculating the vessel's value and deducting therefrom [any] salvage proceeds." DiMillo v. Sheepscot Pilots, Inc. , 870 F.2d 746, 752 (1st Cir. 1989) (citing The Anna Maria , 15 U.S. (2 Wheat.) 327, 335, 4 L.Ed. 252 (1817) ); see also The Umbria , 166 U.S. 404, 421, 17 S.Ct. 610, 41 L.Ed. 1053 (1897). Accordingly, under the total loss rule, a plaintiff may not also recover damages for lost profits or loss of use of the vessel. See A & S Transp. Co. v. Tug Fajardo , 688 F.2d 1, 2 (1st Cir. 1982) ; Rev-Lyn Contracting Co. v. Patriot Marine, LLC , 760 F. Supp. 2d 162, 169 (D. Mass. 2010). Here, it is undisputed that the vessel sank and became a total loss. Edgecomb therefore argues that the damages the Rocques may seek are limited to the vessel's pre-casualty value less salvage. The Rocques respond that the total loss rule is specific to maritime torts and does not apply to claims sounding in contract. Because they assert claims arising out of their verbal ship repair contract with Edgecomb in addition to their tort claims,² the Rocques argue that they are entitled to seek contract damages, which are not limited by the total loss rule.

At least two courts have found that, as the Rocques argue, the total loss rule does not limit damages for breach of a ship repair contract. In Crowley Marine Services, Inc. v. Vigor Marine LLC , 17 F. Supp. 3d 1091 (W.D. Wash. 2014), the court thoroughly examined the issue and concluded that in "a non-towing case where there was a contract, and the contract did not expressly exclude consequential damages or limit damages to the [total loss] rule[,] ... contract law applies to maritime contracts, to the exclusion of tort rules." Id. at 1096–97. Thus, the court declined to limit the liability of a ship repairer to the damages that would be available in a tort case under the total loss rule. Id. at 1097.

Likewise, in Todd Shipyards Corp. v. Turbine Service, Inc. , 674 F.2d 401 (5th Cir. 1982), the defendants argued on appeal that the trial court should have limited their damages under contract law to those available under tort law by arguing that the vessel was a constructive total loss.³ Id. at 415. But the Fifth Circuit flatly rejected that line of argument, explaining that "discussion of the defendants' constructive total loss argument[ ] would serve no useful purpose[ ] because ... the district court properly applied a contractual rather than a tort measure of damages." Id. The Todd court thus concluded that the total loss rule does not limit damages in contract cases such as this one. See id. at 412. It also emphasized that tort damages are typically applied in "classic cases" where "parties unknown to each other come into contact and one comes away damaged, such as collision cases and other maritime torts." Id.

The three cases Edgecomb cites in support of applying the total loss rule are readily distinguishable. In the first, Sailor Inc. F/V v. City of Rockland , 324 F. Supp. 2d 197 (D. Me. 2004), aff'd on other grounds , 428 F.3d 348 (1st Cir. 2005), the plaintiff brought claims for breach of contract and negligence and sought damages for lost profits and consequential damages. Id. at 199. The Sailor court granted the defendant's motion for partial summary judgment, finding that the vessel was a constructive total loss and limiting damages to the vessel's fair market value. Id. at 203. Although the case included a breach of contract claim, the plaintiff waived any argument that the total loss rule was inapplicable. See Pl.'s Mem. in Opp'n to Def.'s Mot. for Summ. J. at 1, Sailor Inc. F/V v. City of Rockland , 324 F. Supp. 2d 197 (D. Me. 2004) (No. 2:03-cv-261), ECF No. 11 ( "The parties disagree on the issue of whether or not this vessel was a constructive total loss, thereby precluding the owner of the vessel from seeking lost profits."). By contrast, the Rocques have pressed, not waived, the same argument.

In the second case Edgecomb cites, Galapagos Corporacion Turistica "Galatours," S.A. v. Panama Canal Commission , 190 F. Supp. 2d 900 (E.D. La. 2002), the plaintiff had no contract with the defendant and brought no contract claims against it. See id. at 906. As such, the court did not address the question presented here, namely, whether the total loss rule should apply where the parties have a ship repair contract.

In the third case Edgecomb cites, A & S Transportation Co. v. Tug Fajardo , 688 F.2d 1 (1st Cir. 1982), the First Circuit affirmed the district court's application of the total loss rule despite the presence of a contract. The contract there, however, was a towing contract, which courts have specifically treated in the same way as collision cases for purposes of the total loss rule. See id. at 2–3 ; Crowley , 17 F. Supp. 3d at 1096. Here, the contract is not one for towing, but rather ship repair.

Thus, Edgecomb does not provide a compelling reason to depart from Crowley and Todd. Mindful of the First Circuit's recent instruction "against...