Saratoga Fishing Co. v. Marco Seattle Inc.
| Citation | 69 F.3d 1432 |
| Decision Date | 26 October 1995 |
| Docket Number | 93-56368 and 93-56501,Nos. 93-56344,s. 93-56344 |
| Parties | , 64 USLW 2283, 95 Cal. Daily Op. Serv. 8322, 95 Daily Journal D.A.R. 14,405 SARATOGA FISHING CO., Plaintiff-Appellee, v. MARCO SEATTLE INC., Defendant-Appellant, and J.M. Martinac & Co.; Caterpillar Tractor Co.; Southwest Marine Hardware, Inc., Defendants. SARATOGA FISHING CO., Plaintiff-Appellant, v. MARCO SEATTLE INC.; Southwest Marine Hardware, Inc.; Caterpillar Tractor Co.; J.M. Martinac & Co., Defendants-Appellees. SARATOGA FISHING CO., Plaintiff-Appellee, v. J.M. MARTINAC & CO., Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Daniel B. MacLeod, Alford & MacLeod, San Diego, California, for defendant-appellant-cross-appellee Marco Seattle, Inc.
Duncan B. Koler, Walton, Ottesen, Meads & Koler, San Diego, California, for defendant-appellant-cross-appellee J.M. Martinac & Company.
Keith Zakarin, Pillsbury, Madison & Sutro, San Diego, California, for plaintiff-appellee-cross-appellant Saratoga Fishing Company.
Appeals from the United States District Court for the Southern District of California.
Before: BEEZER and JOHN T. NOONAN, Jr., Circuit Judges, and EZRA, District Judge. *
Opinion by Judge BEEZER; Partial Concurrence and Partial Dissent by Judge NOONAN.
The opinion filed August 4, 1995, appearing at 63 F.3d 792 (1995), is hereby withdrawn.
This products liability action in admiralty arose following an engine room fire that caused the flooding and sinking of the fishing vessel M/V SARATOGA. The district court concluded that J.M. Martinac & Company ("Martinac"), the shipbuilder, and Marco Seattle, Inc. ("Marco"), the designer of the vessel's hydraulic system, were strictly liable to Saratoga Fishing Company ("Saratoga Fishing"), the vessel owner, for damages to "other property" on the vessel because the fire and subsequent loss resulted from a defectively designed hydraulic system. The district court reduced the damages award by two-thirds, however, because of Saratoga Fishing's comparative fault in maintaining and operating that system. Both sides appeal the district court's determinations on liability and damages. 1
We have jurisdiction over these timely appeals pursuant to 28 U.S.C. Sec. 1291. Because we agree with all but one facet of the district court's resolution of this action, we affirm in part, reverse in part and remand.
We retrace the fateful path of the fishing vessel M/V SARATOGA ("SARATOGA"). The vessel was designed and built in 1971 by Martinac in its Tacoma, Washington shipyards for Joseph Madruga. During the construction process, Martinac, after consulting with Madruga, contracted with Marco to design a hydraulic system. The system was installed by Martinac and inspected by Marco.
The SARATOGA's hydraulic system included pumps, pump drives, control valves, hoses and pressure gauges all connected to a 190-horsepower Caterpillar D333 engine and turbocharger. The system operated machinery and equipment such as a power block, a boom and winches, which were necessary to use the seine (net) for tuna fishing operations. Hydraulic fluid was pumped through the system to operate the deck machinery. The fluid exited the pumps through five rubber hoses attached to the pump drive by metal couplings. The hoses rose vertically from the pump to the overhead, passing near the engine and turbocharger.
The completed vessel was launched in 1972. Its captain, Manuel Vargas, took the vessel from San Diego, where it had undergone various sea trials, to Panama where she was outfitted with a seine and other fishing equipment. The SARATOGA then commenced tuna fishing operations.
In 1974, the Manuel S. Vargas, Jr. Corporation, which was principally owned by Vargas and later changed its name to Saratoga Fishing, purchased the SARATOGA from Madruga. At the time of sale, the vessel was equipped with five speedboats, a purse skiff, a seine, and various electronic equipment. Vargas continued to serve as captain until 1979.
When Vargas returned to the SARATOGA as captain in 1984, the condition of the vessel had deteriorated. While overseeing a refurbishing of the vessel, Vargas ordered a series of modifications to various machinery and equipment: the size of the seine was increased; a larger boom was installed; a larger power block was installed; larger cartridges were installed in the pumps; and a 100-horsepower electric drive and pump were installed to increase power to the hydraulic system above that of the original equipment.
A new Chief Engineer joined the vessel in 1984. Wesley Ogilvie noticed on his first fishing trip that the hydraulic system was experiencing failures, such as leaking valves and breaking hoses. Nevertheless, Captain Vargas continued to seek increased power to the hydraulic system to quicken the speed at which the seine could be pursed. Assistant Engineer Lewis Jorge joined the crew in 1985, and observed worn out pump cartridges and an overloaded hydraulic system. In late 1985, Ogilvie was replaced as Chief Engineer by Mark Nielson, who noticed more problems with the hydraulic system. Hydraulic hoses needed replacement, winches were leaking hydraulic fluid, and the temperature of the hydraulic fluid was abnormally high.
Various repair work was completed on the SARATOGA when she docked in Panama late in 1985, including the replacement of seals in the hydraulic system and pump cartridges. Workers also repaired damage to the turbocharger on the main engine. On January 8, 1986, the SARATOGA departed Panama to fish for tuna near the Gallapagos Islands in the Pacific Ocean.
On the afternoon of January 16, Chief Engineer Nielson observed one hydraulic hose seeping hydraulic fluid at the coupling attaching the hose to the pump. Although Captain Vargas arranged to rendezvous with another vessel to obtain a necessary tool to manufacture a replacement hose, Vargas did not shut down the hydraulic system. Instead, Vargas utilized the system to catch more tuna late that afternoon.
A short time later, Lewis Jorge entered the engine room and observed that a hydraulic hose was "pulsating." As Jorge watched, the hose pulled out of its coupling and hydraulic fluid sprayed up from the coupling and fell back onto the hot surface of the turbocharger. The fluid ignited causing an immediate conflagration in the engine room. Jorge and Nielson attempted to extinguish the fire, but their efforts were unsuccessful.
The fire quickly spread throughout the SARATOGA, and Captain Vargas ordered the crew to abandon ship. The crew left in a skiff, and were soon rescued by another vessel. No crew member suffered serious injury. Unfortunately, the SARATOGA sank. 2
Property losses included, in addition to the loss of the vessel, all of the fishing equipment, fuel, a substantial tuna catch stored in the vessel, crew members' personal property losses, and $16,000 in cash that Captain Vargas had placed in the vessel's safe.
Saratoga Fishing brought the instant lawsuit in district court against Martinac and Marco within the court's admiralty jurisdiction seeking recovery for property losses. See 28 U.S.C. Sec. 1333. The court conducted a 14-day trial in which it heard testimony from a variety of expert witnesses and considered a substantial amount of evidence.
At trial, Saratoga Fishing argued that the hydraulic system was defectively designed. It sought recovery under theories of strict liability, negligence, and failure to warn.
Saratoga Fishing offered, among other witnesses, the expert testimony of David Saveker, a naval architect. Saveker testified that the Marco hydraulic drive system incorporated an unsafe design. The hydraulic hoses were, in Saveker's opinion, located too close to the hot surfaces of the engine and turbocharger. As hydraulic hoses and couplings are prone to fail for a variety of reasons, Saveker noted, the designer of the hydraulic system should have taken preventive measures such as relocating the hoses elsewhere, installing an electric instead of a diesel motor to reduce the risk of a fire developing from leaking hydraulic fluid, or isolating the hoses from the engine and turbocharger by the use of shielding. Such shielding would have "screen[ed] out a large percentage of the probability of an immediate torch" from the leaking hydraulic fluid. Saveker testified that the system was "a bad accident waiting to happen."
Marco and Martinac argued that the vessel's design was not defective, that Saratoga Fishing had failed to maintain the fire suppression system or the hydraulic hoses, and that Saratoga Fishing had substantially altered and misused the hydraulic system.
Larry Grief, a marine architect, testified as an expert witness for Marco and Martinac. He stated that the hydraulic system on board the SARATOGA met well-established marine practice and was similar to those on almost every vessel he had been aboard. The hydraulic hoses, Grief noted, were designed with a safety margin of 6 to 1 over standard operating pressures. In Grief's opinion, the hydraulic system was not operating properly because of the modifications made by Saratoga Fishing. The addition of a 100-horsepower electric drive caused the hydraulic fluid to pass through the system at a higher velocity, leading to a corresponding increase in the temperature of the hydraulic fluid, which in turn caused rapid deterioration. Furthermore, the larger equipment (seine, boom, and power block) installed by Saratoga Fishing required more hydraulic power, but the installation was not accompanied by any modifications in the hydraulic hoses.
The district court concluded that Marco and Martinac were strictly liable for the loss of the SARATOGA. The court found that the hydraulic system was defectively designed despite the fact that it met...
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