Woods Hole Oceanographic Inst. v. ATS Specialized, Inc.
| Decision Date | 29 March 2022 |
| Docket Number | Civil Action No. 17-12301-NMG |
| Parties | WOODS HOLE OCEANOGRAPHIC INSTITUTION, Plaintiff, v. ATS SPECIALIZED, INC., et al., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Francis X. Downey, Robert J. Murphy, Holbrook & Murphy, Samuel P. Blatchley, Eckland & Blando LLP, Boston, MA, for Plaintiff.
Robert D. Moseley, Jr., Pro Hac Vice, Moseley Marcinak Law Group LLC, Greenville, SC, Andrew J. Fay, Craig S. Harwood, Susan E. Bochnak, Fay Law Group, LLC, Boston, MA, for Defendant ATS Specialized, Inc.
John D. Kimball, Pro Hac Vice, Noe S. Hamra, Pro Hac Vice, Blank Rome LLP, New York, NY, Gordon P. Katz, Holland & Knight, LLP, Boston, MA, for Defendant Ridgeway International USA, Inc.
Bradley H. Pace, Pro Hac Vice, Forrest Booth, Pro Hac Vice, Pamela L. Schultz, Pro Hac Vice, Kennedys Cmk LLP, San Francisco, CA, Chad M. Vacarella, Nystrom Beckman & Paris LLP, Boston, MA, William J. Brennan, Kennedys Cmk LLP, New York, NY, for Defendant Australian National Maritime Museum.
Michelle I. Schaffer, Jacob J. Lantry, Campbell Conroy & O'Neil, P.C., Boston, MA, for Defendant TravelCenters of America.
This case arises from the substantial damage done to an experimental, deep sea submarine ("the sub") during its ill-fated shipment from Woods Hole, Massachusetts to Australia. It didn't get very far.
In or about May, 2017, plaintiff Woods Hole Oceanographic Institution ("WHOI" or "plaintiff"), the owner of the sub, executed a settlement agreement with Eagle Underwriting Group, Inc. ("Eagle") and its underwriters ("the Underwriters") whereby those parties agreed to pay WHOI $3.9 million and Woods Hole agreed to assign to them any claims arising out of the damage to the extent of that payment. Thereafter, Woods Hole brought several claims sounding in contract and tort against the multiple defendants allegedly involved in the transportation of the sub.
Pending before the Court are an array of motions for summary judgment and other pleadings filed by the parties.
The facts of this case have been broadly recited in prior Memoranda and Orders of this Court and Reports and Recommendations of Magistrate Judge Jennifer C. Boal, see, e.g., Docket Nos. 91, 238, 239, 420, 444 and 674, but relevant here is the following:
In or before 2015, WHOI and the Australian National Maritime Museum ("the Museum") executed an agreement ("the Loan Agreement") whereby WHOI was to loan its submarine, the Deepsea Challenger (again, "the sub"), to the Museum for two years. The agreement provided that the Museum was responsible for, inter alia, arranging a multimodal transportation of the vessel between Massachusetts and Australia and insuring it during that transport for $5 million, the amount disclosed in the Loan Agreement as the value of the sub. The parties also agreed to indemnify each other against all "actions, claims, suits, demands, liabilities, losses, damages and costs" relating to the Loan Agreement.
To perform its obligations under the Loan Agreement, the Museum retained Ridgeway International Australia Limited ("Ridgeway Australia") to organize the transportation and obtain insurance coverage for the trip. Ridgeway Australia, in turn, engaged Ridgeway International USA, Inc. ("Ridgeway USA") to coordinate and oversee both and the Museum subsequently provided Ridgeway USA a power of attorney ("the POA") to perform those duties on the Museum's behalf. The Museum also received a donation from Wallenius Wilhelmsen Logistics ("Wallenius"), an ocean carrier, to cover the ocean portion of the shipment.
With respect to the inland portion of the shipment, Ridgeway USA contracted with ATS Specialized ("ATS") to carry the sub via tractor-trailer ("the Trailer") from Woods Hole, Massachusetts to the Port of Baltimore, Maryland, where it was to be loaded onto the Wallenius vessel and shipped to Australia. Ridgeway USA also arranged for Guy Tombs Ltd. ("GTL") to secure $5 million of cargo insurance to cover shipment of the sub from start to finish. GTL obtained a $6.5 million Single Shipment Policy ("the Policy") from the Underwriters which represents a $1.5 million increase over the coverage requested and over the value of the sub as disclosed in the Loan Agreement. The Policy named GTL as an insured, WHOI as the loss payee and the Museum as the consignee of the sub.
On July 7, 2015, approximately two weeks prior to the shipment, an ATS driver took the subject Trailer to TravelCenters of America ("TCA") in Whitestown, Indiana, complaining of an air leak. There, a TCA service technician performed an annual Department of Transportation ("DOT") inspection, repaired the slack adjusters on the Trailer's rear axle and attempted to address the driver's complaint of an air leak. The service technician examined the Trailer's brakes and other components and, although he failed to identify the air leak, he ultimately verified that each component of the Trailer met the requirements necessary to pass the DOT inspection. Accordingly, the Trailer was deemed safe and appropriate for transporting cargo.
On or about July 22, 2015, ATS took possession of the sub, loaded it onto the Trailer and began the trip to Baltimore. Approximately one hour into the trip, the Trailer experienced a single tire blow-out in its front axle. Terminated defendant Service Tire Truck Center ("STTC") was called to service the flat tire and sent one of its tire technicians to do the job. When the tire technician arrived at the Trailer, he removed the front left tires, cleaned and inspected the exterior of the front-axle brake drum for clogs and cracks per usual and affixed the replacement tire. A few hours later, the Trailer was parked overnight at another TCA facility in Rhode Island. Just after its departure the next day, however, the left rear wheel well of the Trailer caught fire. The fire spread to the sub and caused substantial damage to it.
The parties have disclosed multiple experts to opine on the origin and cause of the fire. All parties acknowledge that the fire was caused by some component of the subject Trailer's brake system and many attribute it to a small air leak at or near the left brake chamber of the Trailer's rear axle. The experts dispute, however, which specific mechanism ultimately caused the conflagration.
Following the fire, WHOI made a claim under the Policy and sent notice of such to Ridgeway USA and ATS. On or about May 3, 2017, WHOI entered into a Settlement Agreement with Eagle and the Underwriters as described above.1 None of the defendants was included in the settlement discussions nor in the ultimate agreement.
Pursuant to the Settlement Agreement, WHOI assigned all subrogated rights to Eagle and the Underwriters to the extent of the payments made by them. The agreement also acknowledged that WHOI may have losses not covered by the Policy and damages in excess of $3.9 million. It, thus, permitted WHOI to pursue claims for its uninsured losses "as it sees fit".
Two weeks later, Anderson Trucking Service, Inc. ("Anderson"), a company affiliated with ATS, filed a complaint for declaratory judgment in the United States District Court for the District of Connecticut. See Anderson Trucking Servs., Inc. v. Eagle Underwriting Group, Inc., et al., No. 3:17-cv-000817 (D. Conn.). Anderson named WHOI, the Museum, Ridgeway USA and Eagle as defendants, seeking a declaration that 1) it is not liable for any damage incurred by the sub or, in the alternative, 2) any liability shall be limited. That case was dismissed without prejudice as to most defendants in August, 2018, for lack of personal jurisdiction and voluntarily dismissed as to the remaining defendants in December, 2020.
In the meantime, in November, 2017, Woods Hole brought this action on its own behalf and as agent, trustee, assignee and/or subrogee of all other interested parties who were damaged as a result of the loss. Woods Hole sued ATS, the Museum, Ridgeway USA, TCA and other defendants for, inter alia, breach of contract, breach of bailment obligations, negligence and liability under the Carmack Amendment, 49 U.S.C. § 14706. Over the course of more than four years, multiple answers, counter-claims, cross-claims, third-party claims and motions have also been filed in this case. Several defendants have been dismissed and, in general, all remaining parties deny liability for the damage and posit numerous affirmative defenses.
In August, 2021, this Court issued a memorandum and order ("M&O") addressing a proliferation of motions filed by the parties. See Woods Hole Oceanographic Inst. v. ATS Specialized, Inc., No. 17-12301, 557 F.Supp.3d 261, 2021 U.S. Dist. LEXIS 158516 (D. Mass. Aug. 20, 2021). The Court held, inter alia, that 1) WHOI was estopped from arguing that the sub was worth more than $5 million, 2) ATS was liable under the Carmack Amendment but disputed material facts prevented a determination of the amount of damages, 3) disputed material facts likewise precluded a determination with respect to whether TCA was negligent, 4) the Museum was not entitled to indemnity from TCA and 5) questions of fact prevented a determination of whether Ridgeway USA and/or the Museum were insureds under the Policy. See id.
The Court held the remaining motions, also numerous, under advisement and turns to them now.
The role of summary judgment is "to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir. 1990) ). The burden is on the moving party to show, through the pleadings, discovery and affidavits, "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).
A fact is material if it "might...
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