Tidewater Marine, Inc. v. Sanco Intern., Inc.
Decision Date | 24 July 2000 |
Docket Number | No. CIV.A. 96-1258.,CIV.A. 96-1258. |
Citation | 113 F.Supp.2d 987 |
Parties | TIDEWATER MARINE, INC. and Twenty Grand Offshore, Inc. v. SANCO INTERNATIONAL, INC., et al. |
Court | U.S. District Court — Eastern District of Louisiana |
William B. Gibbens, III, Gelpi, Sullivan, Carroll & Gibbens, New Orleans, LA, for Plaintiffs.
Joseph E. LeBlanc, Jr., King, LeBlanc & Bland, New Orleans, LA, for Defendants Sanco Intern., Inc., Saber Steel Corp., Rig Ventures, Inc., Emilio Sanchez.
Anthony Reginelli, Jr., Baynham, Best & Reginelli, Metarie, LA, for Third-Party Defendant, Professional Divers of New Orleans, Inc. Georges M. Legrand, Mouledoux, Bland, Legrand & Brackett, New Orleans, LA, for Third-Party Defendant, Subsea Intern., Inc.
Tidewater Marine, Inc. (Tidewater Marine) and Twenty Grand Offshore, Inc. (Twenty Grand) (collectively referred to herein as Tidewater) brought this suit in admiralty for damages to the M/V MAC TIDE 63, an offshore tug. The MAC TIDE 63 was damaged when it struck a submerged, unlighted obstruction to navigation and sank in the Gulf of Mexico, in South Timbalier Block 96 off the coast of Louisiana. The obstruction was a portion of the D/B OCEAN STAR, a three-legged jack-up rig, which had broken while under tow eleven months prior to the allision.
Tidewater Marine was the operator of the MAC TIDE 63, which was owned by Twenty Grand. Sanco International, Inc. (Sanco) owned the OCEAN STAR. Tidewater brought its damage claim against: (1) Sanco, as the owner of the obstruction; (2) Saber Steel Corporation (Saber), which contracted on behalf of Sanco with various third parties with respect to marking the site in accordance with Coast Guard requirements; (3) Rig Ventures, Inc. (Rig Ventures) which held an ownership interest in the OCEAN STAR for one day prior to its transfer to Sanco; and (4) Emilio Sanchez, Sr. (Sanchez), the President and sole shareholder of these companies, in an attempt to pierce the corporate veil and hold him personally liable.1 These four defendants are referred to collectively as the Sanco Group.2
The corporations in the Sanco Group brought third-party claims against Professional Divers of New Orleans, Inc. (PDNO) and Sub Sea International, Inc. (Sub Sea), for acts and omissions resulting in the site being marked by an unlighted buoy. The Sanco Group also asserted a counter-claim for contributory negligence against Tidewater for alliding with the obstruction. Sub Sea asserted a cross-claim against PDNO, a counter-claim against Sanco, Saber, and Rig Ventures, and a third-party complaint against Sanchez alleging that each was responsible for the site not being properly marked.
Rig Ventures purchased the OCEAN STAR on or about February 14, 1995, and sold it the next day to Sanco. On March 21, 1995, one of the rig's jack-up legs broke while under tow. The remaining two legs and mat had to be cut free in order for the rig's tow to continue. Oceaneering International, Inc. (Oceaneering), a diving contractor, cut the rig's legs under the direction of Frank Ruiz, a salvor, who was present on the job as Saber's agent/representative and was in contact with Sanchez via cellular telephone. Ruiz decided where to cut the legs in an attempt to facilitate later salvage and also to accommodate vessel traffic in the area. When the legs were cut, the mat fell to the floor, with the two legs sticking up approximately 18 feet from the surface of the water.
The Sanco Group was aware of Sanco's obligation, as owner of the obstruction, to properly mark it as a hazard to navigation.
Saber through Sanchez and his son, Emilio Sanchez, Jr. (Sanchez, Jr.), who was employed by Saber Steel at the time,3 took responsibility for marking the submerged obstruction. Oceaneering installed a Coast Guard approved hazard buoy with a red flashing light to mark the obstruction on or about March 25, 1995.
In May or June, 1995, Saber hired Ruiz to attempt to salvage and/or remove the obstruction. When Ruiz returned to the site, he was unable to find the obstruction because the buoy had been lost or stolen. He located the obstruction by dragging anchors. For over a month, Ruiz made several attempts to raise the mat. Finally, in an attempt to lessen the weight, he allowed the front end to break off and sink to the floor. This left the mat in two pieces with one leg protruding only three feet from the water's surface. There were no more attempts to remove the obstruction or cut the legs from the mat prior to the allision nine months later, even though the evidence established that it would have taken only one day to cut and drop the legs.
Richard Jaross, a business partner of the Sanco Group, warned the Sanchezes as early as April 18, 1995 (almost 10 months before the casualty and before Ruiz attempted salvage), that the legs should be cut off. He explained that time was of the essence. He further warned them on August 22, 1995, almost six months before the casualty, that they needed to get the mat out of the way.
Despite actual knowledge of the hazard to navigation, Sanco and Saber waited until after the allision (almost a year later) before cutting the legs. When the legs were finally cut, the clearance went from 3' to 48' below the surface, significantly reducing the hazard to navigation.
In June, 1995, Saber rented a buoy from World Marine Transport & Salvage, Inc. (World Marine) to mark the obstruction. The rental buoy was installed on June 23, 1995. This buoy was an SB-826 Sentinel, 8 feet wide, 21 feet tall, with an 8-mile maximum range radar reflector, light, and horn. It had a value of approximately $25,000. The buoy was rented to Saber at a cost of $4,455, plus an insurance premium of $1,100 every six weeks.
In mid-November, 1995, Sanchez sent divers to survey the mat for the purpose of cutting the legs. They reported to him that they were unable to locate the buoy or the obstruction. Sanchez subsequently learned in late-December, 1995 that the divers in fact had not gone out to the site and had falsely reported the buoy as lost. In the meantime, on December 14, 1995, Sanchez notified the United States Coast Guard that the obstruction was reportedly unmarked. He also asked his son to purchase a replacement buoy, rather than to rent another one, to save money.
On or about December 14, 1995, Sanco purchased a hazard buoy, light assembly, chains and anchor weights from Dor-Mar, Inc. Sanchez, Jr. did not refer to the dimensions of the rented buoy in purchasing a replacement, but he did have Dor-Mar confirm with the Coast Guard that the purchased buoy was Coast Guard approved for marking an underwater obstruction. In addition, his father reviewed and approved the specifications on the purchased buoy.
The purchased buoy was much smaller than the rented buoy, and it did not have a radar reflector or a horn. It had "HAZARD" printed in bold orange letters and displayed the diamond maritime symbol for hazard. The rental buoy cost approximately $25,000; whereas the purchased buoy cost approximately $1,238.00.
By facsimile dated December 21, 1995, Sanchez advised the Coast Guard that they still were aware of the hazard to navigation, that they "were on top of the situation," and had purchased a buoy which would be shipped to Port Fourchon for ultimate installation at the location of the obstruction.
Sanchez, Jr., acting on behalf of Saber, contacted PDNO in mid-December, 1995 to perform an underwater video survey of the mat and legs and to install the purchased buoy at the obstruction. Because Sanco had been advised that the divers who reported the buoy missing had not actually gone out to the site, Sanchez, Jr. also asked PDNO to verify whether the rental buoy was still on location.
Sanchez, Jr. arranged for the purchased buoy, light assembly, chain, and anchor weights to be sent to the Bollinger Shipyard facility in Fourchon, Louisiana. The buoy, weights, chain, and light assembly were shipped in three crates. Sanchez, Jr. told PDNO to pick up the buoy at Bollinger. On the morning of January 12, 1996, the buoy, the anchor, chain, and a light assembly were loaded aboard the M/V EMAR J. EYMARD at Bollinger Shipyard. PDNO had chartered the EYMARD to take its crew to the location of the obstruction.
The PDNO supervisor for the job, Richard Hastings, arrived at the Bollinger Shipyard facility in Fourchon, Louisiana on January 11, 1996, approximately four hours before the vessel departed. During this four-hour period, Hastings made no effort to inspect the buoy material, contrary to the expectations of Larry Tomlinson, President of PDNO.
Kris Hepting, Vice-President of Operations with PDNO, telephoned Sanchez, Jr. two or three times on the day of the job before the vessel left port to determine what equipment would be needed to set the buoy into the water. Sanchez, Jr. did not have the information at hand, but called back with the height and weight of the buoy, the length and size of the chain, and the weight of the anchor. He did not mention the light assembly. Sanchez also gave Hepting the coordinates for the obstruction.
The EYMARD crew found the rented buoy still on site. The PDNO divers conducted an underwater survey of the mat and legs, including taking video of the obstruction and pneumo-fathometer (or depth) readings on the obstruction, and determined the shallowest areas. PDNO then placed the purchased buoy in the center of the mat, but failed to install its light assembly. PDNO left the site without installing the light.
During the return trip, a PDNO employee brought the light to Richard Hastings in the wheelhouse. Hastings did not call his office at that time for instructions. After discussion with Captain Lewis about the rough weather and taking into account that the site, at that time, was properly marked by the lighted, rental buoy, Hastings decided not to return to the...
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