Tesvich v. 3-A's Towing Co.
| Citation | 547 So.2d 1106 |
| Decision Date | 13 July 1989 |
| Docket Number | Nos. CA-8849,CA-8850,s. CA-8849 |
| Parties | Kuzma D. TESVICH v. 3-A'S TOWING CO. Consolidated With Sinajka FARAC, M.J. Farac, Jr., and Beatrice Farac v. 3-A'S TOWING CO., et al. |
| Court | Court of Appeal of Louisiana (US) |
David J. Hebert, Marrero, and Anthony D. Ragusa, Jr., Port Sulphur, for Sinajka Farac, Jr., Beatrice Farac and Kuzma Tesvich.
Norman C. Sullivan, Jr., Randall C. Coleman, III, New Orleans, and J.Y. Gilmore, Jr., New Orleans, for John Hebert Barder, Individually and on Behalf of Certain Underwriters at Lloyd's and other British Companies.
Before SCHOTT, C.J., and BARRY, KLEES, CIACCIO and WILLIAMS, JJ.
Plaintiffs are oyster fishermen who hold leases from the state for oyster production on 378 acres of water bottoms in Bay Lanaux in Plaquemines Parish. On September 25, 1980, the tugboat, John XXIII, entered the bay with a barge in tow and became grounded after traversing the bay. Later, the tugboat's owner dispatched a second tugboat, the Nora Adams, to free the first tug. Plaintiffs claimed damages to their leases and loss of profits from the actions of the two tugboats. Defendants are certain underwriters at Lloyds who insured the vessels. The trial court found that both vessels destroyed the oyster beds and awarded judgments to the plaintiffs against the underwriters totaling $4,724,601.00. ($1,791,368 for Sinajka and Beatrice Farac, $684,622.50 for M.J. Farac, Jr., $1,502,910.50 for Beatrice Farac, and $745,700 for Kuzma Tesvich) The underwriters have appealed. The principal issues concern the quantum of damages and the extent of insurance coverage.
There is no question but that the John XXIII caused damage to plaintiffs' oyster beds. There is some question whether some additional damage was done by the Nora Adams. The primary question is the extent of the damage. Shortly after the incident, plaintiffs filed a complaint with the Louisiana Department of Wildlife & Fisheries who dispatched biologist Robert E. Ancelet to investigate the matter. He testified that 116 acres were directly damaged when the vessel or vessels traversed the oyster beds. He based this conclusion on gouges, depressions, trenches, and mounds he found in and around the leases. He also found evidence of some damage outside of the directly affected area from sediment which was plowed and spread over the bay by the vessel(s).
Plaintiffs, Tesvich and M.J. Farac, Jr., both testified that the entire 378 acres of oyster beds in the bay were ruined. Tesvich put it quite simply, "because the bottom is so soft, it can't support no oysters." Farac stated that he and his family have planted seed oysters on the leases since the damage was done and the oysters became buried under the sediment. He said they abandoned the area because it would not pay to work the leases for oysters unless the bottom was rebuilt.
In June, 1985 Dr. Edwin Cake, a marine biologist, investigated the oyster situation in the bay at the request of the plaintiffs. He concluded that the entire bay had been rendered unsuitable for commercial oyster production because of the damage caused by the offending vessel(s). He based his conclusion on samples he took showing fine sediment spread throughout the bay except around the perimeter and the absence of live oysters throughout the bay except on elevated reefs. He recommended that the entire bay bottom be covered with shells in order to provide a suitable surface for oysters to grow and reproduce. Thus, he supported the conclusion that the entire 378 acres which were under lease to the plaintiffs would have to be repaired.
The underwriters produced a biologist who testified that the damage was not nearly as extensive. Based on his investigation in October, 1980 he concluded that only 61 acres were directly damaged and he disputed Dr. Cake's theory that there was any damage to the leases beyond the paths of the vessel(s).
In extensive reasons for judgment the trial court found that the entire area leased to plaintiffs was rendered unsuitable for oyster production and that plaintiffs were entitled to restoration or reconstruction of the entire 378 acres. Restoration would consist of spreading shells on the leased water bottoms to the extent of fifty cubic yards of shells per acre at a cost of $16.59 per yard. The court awarded reconstruction amounts to each plaintiff (for purposes of discussion plaintiffs Sinajka and Beatrice Farac in their joint claim will be sometimes referred to as a single plaintiff) based on the formula of the number of acres leased times fifty times $16.59 with this result:
S & B Farac 144 acres x 829.50 = $119,448.00
M.J. Farac 55 acres x 829.50 = 45,622.50
Beatrice Farac 119 acres x 829.50 = 98,710.50
Kuzma Tesvich 60 acres x 829.50 = 49,770.00
The trial court also found that the plaintiffs were entitled to profits they would lose for ten years from the time the damage was inflicted to their leases. The court based this conclusion on finding that once the oyster beds were reconstructed commercial production could not resume until three years later and on a holding that plaintiffs were already entitled to seven years of lost profits by the time of the trial in 1987 because the defendants had failed to "mitigate" their damages by paying for the reconstruction as soon as the damage occurred. The court found that these oyster beds would yield one hundred sacks of oysters per acre per year and awarded lost profits for each year based on the formula: Number of acres X 100 sacks X price per sack.
In this court the underwriters strenuously dispute the conclusions that all 378 acres were destroyed for oyster production and required reconstruction, that plaintiffs are entitled to any lost profits beyond two years, and that plaintiffs are entitled to recover the price of the oysters (for lost profits computation) without regard to the expenses incurred in bringing the oysters to market.
We have reviewed the judgment of the trial court in the light of those fundamental principles which provide that factual findings and conclusions of the trial court will not be disturbed in the absence of manifest error and an award for damage by the trial court will not be disturbed unless it constitutes an abuse of the great discretion vested in the trial court for this purpose. We have also applied the principle that a conclusion on the appellate level that an award is excessive will supply a basis of reducing the award only to the highest level or limit of the trial court's discretion. Thus, in analyzing the present judgment we have resolved to leave intact as many of the trial court's conclusions as the record supports, but we have nevertheless concluded that substantial modifications and reductions in the judgment are warranted.
The court's conclusion that the entire leased area was damaged and requires reconstruction is essentially a factual one based upon the combined testimony of the plaintiffs and of Ancelet and Cake. As to the plaintiffs it was the function of the trial court to assess their credibility. That there was some damage from outside of the area directly invaded by the vessel(s) is supported by Ancelet's testimony. In attacking Cake's conclusion that the entire bottom of the bay had to be repaired to make the entire bay suitable for commercial production defendants argue that he didn't take enough samples and that the presence of some live oysters in the samples he took disproved his theory. But Cake testified that the live, marketable oysters were found for the most part only around the perimeter of the bay and on high points of reef.
He explained that the more practical solution was to reshell the entire bottom rather than to stake out the tops of the old reef and to determine where to spread new shells. He stated, "In my estimation, the sediments that were moved about in that bay were sufficient to interfere with oyster culture throughout the bay except for the very margins of the bay." He insisted that the entire leased area should be reshelled. Dr. Cake based his conclusions on a legitimate investigation and he explained it logically and clearly. His testimony confirmed what the plaintiff said and was consistent with Ancelet's. Even though the defendants' expert disputed Cake's conclusions and offered good reasons for his position the trial court resolved this conflict in Cake's favor. On the appellate level we accept this resolution.
There is no real dispute as to the cost of such a restoration. The evidence established that the work would consist of spreading fifty cubic yards of shells per acre and the cost would be $16.59 per yard. Consequently, the plaintiffs are entitled to recover $829.50 per acre for reconstruction as the trial court awarded.
We have concluded that the awards for loss of profits are excessive. They are based upon an error of law which led the trial court to award ten years of lost profits. Furthermore, they are factually erroneous because they do not comport with the testimony of plaintiffs themselves that they never did and never would fish the full potential of oyster production from these leases in a given year or in successive years. Finally, the awards are inconsistent with this court's expressions in Skansi v. Signal Petroleum, 375 So.2d 965 (La.App. 4th Cir.1979).
In awarding plaintiffs ten years of lost profits, the trial judge reasoned that plaintiffs already lost seven years of production by the time of the judgment and would lose an additional three years from the time the repair work was done. He spoke of the defendants' duty to "mitigate" their damages by making the repairs pending this litigation. The law does not support such a result. Defendants disputed plaintiffs' claim and they were entitled to do so. Until the court would hold that they were liable for this restoration cost and the judgment became final the defendants were under...
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