Travelers Indemnity Co. v. Gulf Weighing Corp.
| Decision Date | 07 December 1972 |
| Docket Number | 72-487 and 72-488.,Civ. A. No. 70-2275,71-1804 |
| Citation | 352 F. Supp. 335 |
| Parties | TRAVELERS INDEMNITY COMPANY v. GULF WEIGHING CORPORATION and Samuel Evanac. STATE FARM FIRE AND CASUALTY COMPANY v. Captain A. L. BEYER. Donald R. JOHNSON v. John W. MECOM et al. William H. SCHOFIELD et al. v. GULF WEIGHING CORPORATION et al. |
| Court | U.S. District Court — Eastern District of Louisiana |
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Donald L. King and W. S. McKenzie, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, La., for Travelers Indemnity Co.
Bernard K. Oppenheim, New Orleans, La., for Gulf Weighing Corp. and Samuel Evanac.
Michael E. Wanek, Porteous, Toledano, Hainkel & Johnson, New Orleans, La., for State Farm Fire and Cas. Co.
Paul A. Nalty, Chaffe, McCall, Phillips, Burke, Toler & Sarpy, New Orleans, La., for Donald R. Johnson.
W. S. McKenzie, Taylor, Porter, Brooks & Phillips, Baton Rouge, La., for John W. Mecom.
James A. Wood, Baton Rouge, La., for William H. Schofield and others.
W. K. Christovich, Christovich & Kearney, New Orleans, La., for Louis Battistella and Continental Ins. Co.
Before the Court are four consolidated cases, all emanating from the sudden and unexplained sinking of the 36-foot yacht JWM II while on an ill-fated fishing trip in the Gulf of Mexico on July 5, 1970. The cases were tried before the Court without a jury.
Those on board were the organizer of the excursion, plaintiff Donald R. Johnson; plaintiff William H. Schofield, the president of the company by which Johnson was employed; Mr. Schofield's wife and daughter, also plaintiffs; Mr. Johnson's fiancee, Miss Elaine Harelson; the captain of the vessel, A. L. Beyer; and a deck-hand; the latter three not being parties to the consolidated suits. The vessel was owned by defendant, Gulf Weighing Corporation, whose president was defendant, Samuel Evanac, and was berthed at a marina in Empire, Louisiana, owned by defendant, Louis Battistella d/b/a Battistella's Empire Marina. The marina was insured by defendant Continental Insurance Company. The vessel was insured by plaintiff and defendant The Travelers Indemnity Company, which provided hull and P. & I. coverage.
In the various suits, in the order of their filing:
a) The Travelers sought a declaratory judgment against Gulf Weighing and Evanac, declaring void the hull insurance on the JWM II because of an alleged violation by the insured of the "private pleasure warranty" in the insurance contract, and Gulf Weighing in turn counter-claimed against The Travelers, asserting its right to the insurance proceeds for the loss of the JWM II, together with penalties and attorney's fees.
b) State Farm Fire & Casualty Company, as subrogee, sued Captain Beyer, Samuel Evanac, and The Travelers for reimbursement of insurance proceeds paid to Mrs. Schofield under a floater policy for loss of a valuable ring.
c) Plaintiff Johnson sued Gulf Weighing, Evanac, and The Travelers for mental anguish, personal injuries and property losses arising out of the sinking of the JWM II.
d) The Schofield plaintiffs, like Johnson, sued Gulf Weighing, Evanac, and The Travelers, and also sued Louis Battistella d/b/a Battistella's Empire Marina and Continental.
After considering the testimony of the various witnesses and the evidence introduced at the trial, for reasons discussed more fully herein, the Court reached the following conclusions:
1. The insurance policy issued Gulf Weighing by The Travelers was not invalidated by a breach of warranty and The Travelers is liable to Gulf Weighing for the loss of the vessel JWM II;
2. The Travelers is liable in damages for mental anguish and suffering (but not for physical damages or property loss) to Johnson and the Schofields because of the negligence of Captain Beyer, who was operating the JWM II with the permission of its owner;
3. The claim of State Farm must be dismissed, because the negligence of Captain Beyer was not the cause of the loss of Mrs. Schofield's ring.
At all relevant times, defendant Gulf Weighing was the owner of the vessel JWM II, which was berthed at the Battistella Marina in Empire, Louisiana. The boat had been purchased from U.S. Oil of Louisiana, Inc., a company controlled by the Mecom family interests in Houston, Texas. Mr. Battistella and his wife, as a service to the charter boat owners at the marina, kept in the marina restaurant or office a list of the charter boats in the marina, together with information furnished by the charter boat captains as to the dates on which the individual charter boats were booked and would not be available for hire. Frequently persons wishing to engage a charter boat would call the Battistella restaurant or office and, if charter boats were available, the Battistellas would advise the inquirers how they could get in touch with the captains of available charter boats. The Battistellas on inquiry might inform the callers of the general range of rate of hire for charter boats, which rate would ultimately depend upon such factors as where in the Gulf fishing would take place, but the Battistellas never acted as agents or managers of charter boat owners, never entered into any charter agreements, and never received any payment for their services from the charter boat owners or captains. There were approximately 100 vessels at the marina, of which eight, not including the JWM II, were listed with the Battistellas as charter boats.
Captain Beyer was a qualified boat captain and mechanic who worked at the Battistella Marina. He worked mainly as a mechanic and maintenance man, and, in this capacity, "serviced" approximately three-fourths of the boats at the marina, among them the JWM II.
Gulf Weighing purchased the vessel and kept it at the marina solely for the purpose of having it available for entertainment of customers and business associates. Gulf Weighing never used or considered using the JWM II as a charter boat, and never received any money from this or any other boat for charter or hire. In the words of Mr. Evanac, Gulf Weighing's president, the company "never charged anyone a single dime for the use of the boat".
As stated, the JWM II was among the many vessels at the marina "serviced" by Captain Beyer. In his words, he "took care" of the boat. He was not an employee of Gulf Weighing, received no salary from Gulf Weighing, but was paid by the job for any work done by him on the JWM II. Clearly, he had no authority to charter the vessel on behalf of Gulf Weighing.
As a part of his "servicing" of the JWM II, Captain Beyer would periodically start up and run the twin diesel engines of the boat and on occasion take it out into the Gulf. It was understood between Mr. Evanac and Captain Beyer that on such occasions Captain Beyer was authorized to fish in the Gulf and to bring along others to fish with him. In such event, Captain Beyer was to pay for the fuel, the bait, and other incidental expenses, but he was not to be paid by Gulf Weighing for his time during such excursions. As Mr. Evanac put it, Captain Beyer's running the boat during his fishing trips was "a favor for a favor". On at least one occasion prior to July 5, 1970, Captain Beyer did take such a fishing trip with his wife or other friends or relatives. On that occasion, as on July 5, 1970, Captain Beyer paid for the fuel for the boat.
Plaintiff Johnson, a resident of Baton Rouge, decided that he would like to arrange a fishing trip for the week of July 4, 1970. At some date or dates prior to July 4, he made many long distance telephone calls to various places in an attempt to find an available charter boat. According to Johnson, he called the office of John Mecom, Jr. in Houston, talked to Mr. Mecom (or someone in his office) and was advised that Mecom had an available vessel at the Battistella Marina at Empire. (It was never proven whether Mecom did, in fact, own a boat at the marina at the time, but it is apparent that, throughout the events of July 5, Mr. Johnson thought that the JWM II was a Mecom-owned vessel). On or slightly before July 4, 1970, Mr. Johnson telephoned Mrs. Battistella from Baton Rouge. According to Johnson, Mrs. Battistella told him that "the Mecom boat" was at the marina, and available. According to Mrs. Battistella, when Johnson called, she advised him that no charter boats were available, but she thought of Captain Beyer, and, thinking that Beyer might take Johnson's party out, gave Johnson Beyer's telephone number. According to Johnson, when he inquired, Mrs. Battistella stated that the charter hire would be in the neighborhood of $150.00 or $175.00. According to Mrs. Battistella, she had knowledge of the arrangement between Beyer and Gulf Weighing and that Beyer never accepted payment for fishing trips.
In any event, Johnson organized a fishing party, consisting of himself, his fiancee, Mr. and Mrs. Schofield and their daughter. Early on the morning of July 5 they drove to Empire from Baton Rouge. Mrs. Battistella did not remember the Johnson party arriving on the 5th at the marina. Mr. Johnson testified that upon arrival at the marina he went to the marina office and saw Mrs. Battistella, who directed him to the JWM II. He thereafter went to the boat, met Captain Beyer. The party went aboard, their gear was loaded, and the trip commenced.
At approximately 9:30 the JWM II arrived at its destination, a drilling rig in the Gulf of Mexico, was tied to the rig, and preparations for fishing commenced. Just as Miss Schofield, the first (and only) passenger to wet a line, started fishing, it was noticed that the vessel was low in the stern. The captain raised the rear hatch and saw that the vessel was rapidly taking on water. The boat sank quickly, but the passengers and crew all managed to get free of the vessel and were duly rescued.
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