Snavely v. Lang

• Decision Date: 29 January 1979
• Docket Number: No. 77-3057,77-3057
• Citation: 592 F.2d 296
• Parties: Thomas G. SNAVELY, Plaintiff-Appellee, v. Archie K. LANG et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 296

592 F.2d 296

Thomas G. SNAVELY, Plaintiff-Appellee, v. Archie K. LANG et al., Defendants-Appellants.

No. 77-3057.

United States Court of Appeals, Sixth Circuit.

Argued Dec. 11, 1978.

Decided Jan. 29, 1979.

David G. Davies, Arter & Hadden, Cleveland, Ohio, Charles W. Waterfield, Flynn, Py & Kruse Co., L.P.A., Sandusky, Ohio, for defendants-appellants.

Gene B. George, Ray, Robinson, Kennen & Hanninen, Cleveland, Ohio, for plaintiff-appellee.

Before WEICK, Circuit Judge, PHILLIPS, Senior Circuit Judge, and TAYLOR, ^* District Judge.

ROBERT L. TAYLOR, District Judge.

This is an appeal by Archie K. Lang, Archie K. Lang d/b/a Venetian Marina, ("Lang"), and Inland Seas Boat Company, ("Inland Seas"), a corporation of which Lang was President, from part of a judgment rendered by the District Court in the Northern District of Ohio in favor of appellee, Thomas G. Snavely, the purchaser of a yacht, the Molly Jane, built by Inland Seas and repaired at Lang's marina. The District Judge, sitting in admiralty, ¹ awarded damages against both appellants for repairs arising from breach of warranty and fire damage. The District Judge also awarded damages against both appellants for loss of use of the yacht for the above periods of repair. Appellant Lang appeals from that part of the judgment holding him individually liable for breach of warranty. Both appellants appeal from the award for loss of use.

The vessel involved was originally constructed by Inland Seas under a contract with Snavely. Although the contract called for the vessel to be completed and delivered in 1969, it was not actually completed and delivered until April 17, 1970. The purchase price, including the value of exchange of another vessel, was between $81,000.00 and $82,000.00. Snavely took delivery at the Inland Seas factory in Sandusky, Ohio, which was on the same property as Lang's marina. Snavely temporarily operated the vessel in and around a berth at Venetian Marina in order to become familiar with it. The vessel was subsequently moved to Cleveland where Snavely also had a berth. On May 9 and 10, 1970, Snavely, his wife and son were shocked by a strong electrical current in the water around the Molly Jane caused by improper design and/or installation of the vessel's electrical system. Prior to this incident, Snavely had discovered other defects in the vessel's electrical system and plumbing. In response to Snavely's demand that the problems be corrected, Lang and an employee of Inland Seas came to Cleveland and took the vessel back to Sandusky where it was placed in a berth at Venetian Marina while repairs were made. On May 20, several of the Inland Seas employees were aboard the yacht testing the electrical system. Shortly after they left, a fire broke out in the engine compartment. The fire caused extensive damage.

Repair estimates were solicited by Snavely from Lang as well as from other marinas. Snavely considered Lang's estimate to be excessive. When Snavely refused to have the repairs performed by Lang he was forced to pay $3,044.00 before the vessel was released. The Molly Jane was ultimately removed to Lakeside Marina, the low bidder, where repairs were carried out through October 20, 1970. After the repairs at Lakeside Marina were completed, Snavely took the Molly Jane on a trip to Florida. During the trip a defective propeller strut broke and the yacht was laid up for repairs from November 10 to November 22, 1970 at Wrightsville Beach, North Carolina. After the Molly Jane arrived in Florida it was laid up from January 27 to February 12, 1971 in order to paint the deck, which had not been done as a part of the original fire repair, and to paint the hull, which had been partially painted by the appellants after the fire.

The first issue in the appeal is Lang's liability for repair and loss of use arising from breach of warranty. All parties agree that there is no individual act by Lang in the record which would justify disregarding the corporate entity, Inland Seas, and holding Lang individually for liabilities of the corporation, of which he was an officer. Accordingly, the judgment for damages in warranty against Lang is reversed. ²

The remaining issue in the case, which was the issue vigorously contested in oral argument and in the briefs, concerns the award of $32,914.56 by the District Judge for loss of use of the Molly Jane for the periods of repair. The award does not appear to have been for loss of charter hire, but rather was for the value of deprivation of the vessel for the periods of time in question. Cf. Johnson's Branford Boat Yard, Inc. v. Yacht Altair, 260 F.Supp. 841, 846 (D.Conn.1966). Appellants contend that such an award is not a proper item of damage in a case involving a pleasure boat. The record shows clearly, and there is no dispute, that the Molly Jane was purchased and was used purely for recreation.

The seminal case in the area of damages for loss of use of a pleasure boat is The Conqueror, 166 U.S. 110, 17 S.Ct. 510, 41 L.Ed. 937 (1897). In that case, the Supreme Court reversed an award of demurrage ³ for wrongful detention of a pleasure boat. The Court stated that:

(i)t is not the mere fact that a vessel is detained that entitles the owner to demurrage. There must be a pecuniary loss, or at least, a reasonable certainty of pecuniary loss, and not a mere inconvenience arising from an inability to use the vessel for the purposes of pleasure . . . . In all the cases in which we have allowed demurrage the vessel has been engaged, or was capable of being engaged, in a profitable commerce . . . . The Conqueror, however, did not belong to the class of vessels which are engaged in commercial pursuits, or are ordinarily let to hire. . . . She was purchased by her owner for his personal pleasure, and there is not an atom of testimony tending to show that he bought her for hire, or would have leased her if he had been able to do so . . . . The Conqueror, 166 U.S. at 133-134, 17 S.Ct. at 519.

The Conqueror has been interpreted as creating an iron-clad rule that under federal maritime law demurrage is not an allowable item of damage for loss of use of a private pleasure craft. See Thomson v. United States, 266 F.2d 852, 856 (4th Cir. 1959); Oppen v. Aetna Insurance Company, 485 F.2d 252, 257 (9th Cir. 1973). But see Finkel v. Challenger Marine Corp., 316 F.Supp. 549 (S.D.Fla.1970); The Vanadis, 250 F. 1010 (E.D.N.Y.1918). Under such a rule the award for loss of use in this case would plainly fall.

Snavely argues that the reach of The Conqueror has been limited by Brooklyn Eastern District Terminal v. United States, 287 U.S. 170, 53 S.Ct. 103, 77 L.Ed. 240 (1932). In Brooklyn Eastern District Terminal, the Court, speaking through Justice Cardozo, affirmed the reversal of an award of damages for loss of use of a steam tug. The Court held that the award by the District Court was erroneous and extravagant. Id. at 174, 53 S.Ct. 103. After stating that the theoretical availability of demurrage did not need to be decided for purposes of the decision, Justice Cardozo described portions of the decision in The Conqueror, which concerned the general rule regarding demurrage, as "not essential to the judgment (therein)." Id. at 175, 53 S.Ct. at 104. Justice Cardozo added that there existed a strong current of authority to the effect that, in the case of a yacht employed for pleasure, "the value of the use may be considered by the triers of the facts in fixing the recovery if there has been a substantial impairment of that enjoyment for which such vessels are maintained." Id. (citations omitted). The characterization of The Conqueror in Brooklyn Eastern District Terminal as well as the discussion therein of the availability of demurrage has itself been described as dictum. See Oppen v. Aetna Insurance Co., 485 F.2d at 257 n.12.

While appreciative of the reasoning in Brooklyn Eastern District Terminal, and with great deference to Justice Cardozo, the Court is constrained to...