Palla v. L M Sports, Inc. et al

Filing 284

FINDINGS of FACT and CONCLUSIONS of LAW signed by District Judge John A. Mendez on 05/16/19 ORDERING that, given the Court's findings of fact and conclusions of law, a jury trial to determine the amount of Palla's damages will commence 9/23/2019 at 09:00 AM in Courtroom 6 (JAM) before District Judge John A. Mendez. The Court will hold a Pretrial Conference on 8/16/2019 at 10:00 AM in Courtroom 6 (JAM) before District Judge John A. Mendez. (Benson, A.)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 Manisha Palla, 12 13 14 15 16 17 No. 2:16-cv-02865-JAM-EFB Plaintiff, v. L M SPORTS, INC. dba LAKESIDE MARINA and dba ACTION WATERSPORTS OF TAHOE; L T LEASING, INC.; PAUL GARCIA; and DOES 1-50, inclusive, FINDINGS OF FACT AND CONCLUSIONS OF LAW Defendants. 18 19 AND RELATED ACTIONS. 20 21 I. BACKGROUND AND PROCEDURAL HISTORY 22 Manisha Palla (“Plaintiff”) sued Defendants L M Sports, L T 23 Leasing, and Paul Garcia for negligence following an accident on 24 Lake Tahoe that resulted in the amputation of her right leg. 25 Sports and L T Leasing (collectively “Defendants”) filed a 26 limitation of liability action under 46 U.S.C. §§ 30505 et seq. 27 The Court related the two actions. 28 1 L M See Related Case Order, ECF 1 No. 12. 2 the suit through June 2018. 3 attorney that month, ECF No. 72, Garcia did not make any other 4 appearances until he showed up to testify during the limitation 5 action on March 4, 2019. 6 default against Garcia. 7 Garcia made an initial appearance and participated in Following the withdrawal of Garcia’s Neither party has attempted to enter a Palla invoked the Court’s diversity jurisdiction as well as 8 its admiralty jurisdiction. First Am. Compl. (“FAC”) ¶¶ 2-4. 9 Defendants’ limitation action also invoked the court’s admiralty 10 jurisdiction. 11 Defendants’ limitation action and allow Palla a jury trial on the 12 issue of damages if she made a showing of negligence during the 13 limitation action. 14 EFB, 2019 WL 427300 (E.D. Cal. Feb. 4, 2019). 15 The Court decided to first hold a bench trial on Palla v. L M Sports, No. 2:16-cv-02975-JAM- The Court held a ten-day bench trial beginning February 25, 16 2019. The parties offered in-person and deposition testimony 17 from the marina owner, marina employees, two first responders, 18 four experts1, and the thirteen (13) people who were on the boat 19 at the time of the accident, including Palla and Garcia. 20 parties did not stipulate to any facts before or during trial. The 21 22 23 24 25 26 27 28 The Court found that one of Defendants’ witnesses, Douglas Powell, “barely” qualified as a standard-of-care expert and admitted his testimony with “great concern.” Powell’s report was based on three (3) months’ experience of working as an expert. In those three months, Powell allegedly reviewed the policies of three (3) marinas. At trial, he could not name any of them. He testified that, based on his expertise, boating passengers need not “understand dangers that are likely to lead to catastrophic injury,” and contradicted otherwise uncontroverted evidence. The Court found Powell’s testimony to be wholly incredible, and therefore disregards it in its entirety. 2 1 1 II. 2 3 1. 2. 3. 4. 5. In 2016, the Hassets owned 54-57 boats across five (5) marinas. 12 13 At the time of the incident, the Hassets also owned and operated Meeks Bay Marina. 10 11 The Hassets’ other marinas are Timber Cove Marina, Round Hill Pines Marina, and Camp Richardson. 8 9 Lakeside Marina is one of four marinas Bob and Tamara Hasset own and operate on Lake Tahoe. 6 7 L M Sports is a California corporation that does business as Lakeside Marina. 4 5 FINDINGS OF FACT 6. In 2016, the Hassets had 12-15 boats, eight (8) personal watercrafts, and 18-25 employees at Lakeside Marina. 14 7. The Hassets also own L T Leasing, Inc., a California 15 corporation they have used to lease boats to their marinas since 16 1992. 17 18 19 20 21 22 23 8. Robert Hasset is the President of L M Sports and the Chief Financial Officer of L T Leasing, Inc. 9. Tamara Hasset is the President of L T Leasing and the Chief Financial Officer of L M Sports. 10. The Hassets decide which boats will be purchased and the activities for which they will be used. 11. As President of L M sports, Robert Hasset (hereinafter 24 “Hasset”) sets forth the policies and procedures of Lakeside 25 Marina. 26 27 28 12. He hires general managers at each marina to train employees and supervise operations. 13. During the summer of 2016, Dan Meeks was the general 3 1 2 3 4 manager at Lakeside Marina. 14. As part of his general manager duties, Meeks conducted monthly safety meetings for the Lakeside Marina staff. 15. Hasset did not provide Meeks with written descriptions 5 of his job responsibilities or instruct him to keep written 6 records on the marina’s employees. 7 8 9 16. Hasset did not require Meeks to document what was discussed at the safety meetings he conducted. 17. In July 2016, Manisha Palla, Evan Botwin, Nick 10 Carscadden, Frances Copeland, Paul Garcia, Benoit Gautier, Alvaro 11 Herranz, Elena Legramanti, Erlinda Lesi, Sean O’Dea, Efe Özyurt, 12 Regan Roberts, and Christa Wolf (“the Palla group”) were in 13 Dublin, CA as part of an international training rotation with 14 their employer, System Application Products (“SAP”). 15 18. Members of the Palla group came from different SAP 16 offices around the world, so they did not know each other prior 17 to the Dublin training. 18 19. Palla worked in the Chicago, Illinois office. 19 20. Garcia worked in the Paris, France office. 20 21. Botwin worked in the Philadelphia, Pennsylvania office. 21 22. Botwin used Lakeside Marina’s online reservation system 22 23 24 25 to reserve a boat and an innertube for Sunday, July 24, 2016. 23. Botwin selected the 1997 Four Winns because it had the highest maximum capacity. 24. The Palla group drove to Lakeside Marina in separate 26 cars—the car with Botwin, Carscadden, O’Dea, Özyurt, and Roberts 27 arrived at Lakeside Marina first. 28 25. Botwin, Carscadden, O’Dea, Özyurt, and Roberts went 4 1 2 3 4 into the rental hut to check-in for the reservation. 26. On July 24, 2016, Julie Hontos was the only employee working in the rental hut. 27. Hontos did not provide any information about the type 5 of boat Botwin reserved or what type of propulsion system it had; 6 nor was she trained to. 7 28. Hontos gave Botwin, Carscadden, O’Dea, Özyurt, and 8 Roberts a map of the lake, and told them to avoid the shallow 9 areas. 10 29. Hontos also gave them two forms—one was a rental 11 agreement that included a release of liability and the other was 12 a list of rules and regulations. 13 14 15 16 17 30. Botwin, Carscadden, O’Dea, Özyurt, and Roberts signed the rental agreement. 31. The rules and regulations sheet only had one space for a signature; Botwin signed it. 32. Neither form included specific tubing instructions or 18 contained specific warnings about the dangers of propeller 19 strikes. 20 33. Hontos did not tell Botwin that the eight (8) other 21 people listed on the reservation were required to sign the rules 22 or the rental agreement. 23 24 25 34. Neither of the two forms Hontos gave Botwin said that everyone on the reservation had to sign them. 35. Prior to July 24, 2016, Lakeside Marina did not provide 26 its rental hut staff a written protocol for how to get renters to 27 sign the rental contract. 28 36. When Botwin, Carscadden, O’Dea, Özyurt, and Roberts 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 were inside, the other eight (8) members of the group arrived. 37. The new arrivals congregated around the picnic tables outside the rental hut until the other five (5) came outside. 38. Nobody at Lakeside Marina instructed the group that they were all supposed to go inside the rental hut. 39. Lakeside Marina did not have any signs that instructed all members of a reservation to go inside to sign forms. 40. Soon after Botwin, Carscadden, O’Dea, Özyurt, and Roberts came back outside, Mathan Foss met the Palla group near the picnic tables and led them toward the dock. 41. Foss was the dockhand in charge of boarding the Palla group onto the boat. 42. Dan Meeks hired and trained Foss to work as a dockhand for the Summer 2014 boating season. 43. All of Lakeside Marina’s dockhand training was done orally, without aid of any written documents. 44. Foss’s training included shadowing other dockhands; 18 being shadowed by Lakeside supervisors as he carried out dockhand 19 responsibilities; and learning how to launch boats and check for 20 invasive species. 21 45. At the end of his training, Foss had to take a 22 computerized test on how to properly check for invasive species 23 before launching boats. 24 46. Foss did not, however, take any written tests on how to 25 properly give safety instructions to renters; nor was he ever 26 given any written instructions on how to properly give safety 27 instructions. 28 47. As the dockhand assigned to the Palla group on July 24, 6 1 2016, Foss gave instructions on how to operate the rental boat to 2 the boat operators, Garcia and Botwin. 3 known as the “spiel.” 4 5 6 48. The instructions were Foss also drove the rental boat out of the marina for the Palla group. 49. Per Hasset’s instructions, Meeks trained Foss that 7 dockhands only needed to provide boating information to the 8 operator(s) of the rental boat. 9 10 11 50. Meeks trained Foss to identify the operator(s) and ask whether the operator(s) had any boating experience. 51. Meeks trained Foss to show the operator(s) the boat, 12 pointing out the propellers, fire extinguisher, ski flag, oar, 13 life jackets, throw cushion/flotation device, kill cord, 14 throttle, blower, steering wheel, and the marina’s phone number 15 (located on the back of the rental contract). 16 52. Meeks trained Foss to tell the operator(s) how to pick 17 up tubers: circle the boat around so that the tuber is on the 18 driver’s side, shut the boat off, and let the tuber swim to the 19 boat, using the ladder to board. 20 53. Meeks trained Foss to instruct the operator(s) how to 21 click the lever at the bottom of the throttle to move it forward, 22 backward, and into neutral. 23 54. Meeks trained Foss to explain to the operator(s) that 24 they would be financially responsible for any damage caused to 25 the propeller. 26 27 28 55. Meeks did not train Foss to discuss the dangers of propeller strikes with the operator(s). 56. Meeks did not train Foss to show the operator(s) the 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 proximity of the propellers to the boarding ladder. 57. Meeks did not train Foss to ensure the operator(s) relayed the safety instructions to the boat passengers. 58. Meeks did not train Foss to ask tubing passengers whether they had any experience tubing. 59. Meeks did not train Foss to give any safety instructions to customers who would be tubing. 60. Meeks trained Foss to drive the rented boat out of the marina for rental groups so the operator(s) did not damage any of the boats in the marina. 61. Foss completed his first period of employment with Lakeside Marina at the end of the Summer 2014 boating season. 62. Meeks re-hired Foss to work as a dockhand for Lakeside Marina two summers later. 63. Foss did not receive new training when he came back to work for Lakeside in 2016. 64. On July 24, 2016, Foss identified the operators of the Palla group’s rental boat: Botwin and Garcia. 65. Botwin and Garcia joined Foss on the dock, while the 20 other members of the group lined up single-file along a narrow 21 dock ramp. 22 23 24 25 26 66. Botwin told Foss he did not have any experience driving boats. 67. Garcia told Foss he’d driven boats before and that his family owned a boat in France. 68. Foss maintained Botwin and Garcia’s attention, but he 27 did not know whether any of the passengers on the ramp were 28 listening. 8 1 69. Foss never spoke to the Palla group as a whole. 2 70. None of Foss’s supervisors were watching him as he gave 3 4 his spiel to the Palla group. 71. Foss showed Garcia and Botwin the propellers, fire 5 extinguisher, ski flag, oar, life jackets, throw 6 cushion/flotation device, kill cord, throttle, blower, steering 7 wheel, and the marina’s phone number. 8 9 72. Foss told Garcia and Botwin that centering the throttle put the boat in neutral, turning the key turned the boat off, and 10 that the operators must turn the boat off when people are 11 boarding. 12 73. Foss showed Botwin and Garcia the boat’s propellers, 13 but only for the purpose of informing them that they would be 14 responsible for any additional damage. 15 74. Foss did not specifically address any of the passengers 16 during the spiel. 17 propellers to the passengers. 18 point out the proximity of the ladder to the propellers, or 19 provide any of the passengers with tubing-specific safety 20 instructions (i.e., how to safely get in and out of the boat). 21 22 75. He did not point out the location of the He did not pull out the ladder, After Foss gave his spiel, the Palla group boarded their rental boat—a 1997 Four Winns (“the Four Winns”). 23 76. The Hassets purchased the Four Winns in 2006. 24 77. The Four Winns was an inboard/outboard boat (“I/O 25 boat”) with counter-rotating propellers, and the only boat at 26 Lakeside large enough to fit a party of 13 people. 27 28 78. The Four Winns had a fold-in ladder on the back under a small door. 9 1 2 3 4 5 79. Once unfolded, the ladder sat 17 inches away from the propellers. 80. The propellers moved closer to and further from the ladder depending on how the steering wheel was turned. 81. Hasset and Meeks knew how close the ladder was to the 6 boat’s counter-rotating propellers, and that L M Sports rented 7 this boat out for towing sports. 8 9 10 11 82. The Palla group did not bring any alcohol or drugs onto the boat. 83. After Foss drove the Palla group out onto the lake, he got onto a skiff, and went back to the marina. 12 84. The water on the lake was cold and choppy. 13 85. Botwin and Garcia both drove the boat for a while 14 15 16 17 18 without pulling any tubers. 86. None of the passengers felt uncomfortable with the way Botwin and Garcia were driving the boat. 87. Garcia was the only person who drove the rental boat once the group started tubing. 19 88. 20 before Palla. 21 89. 22 23 At least three members of the Palla group went tubing Neither Copeland nor Gautier saw the propeller when re- boarding the boat after they went tubing; O’Dea did. 90. Neither Copeland, Gautier, nor O’Dea communicated that 24 they had any problems getting back onto the boat after they went 25 tubing. 26 91. Palla was last person to go tubing. 27 92. After Palla fell off the tube, Garcia circled the boat 28 around to pick her up. 10 1 2 93. Palla swam toward the back of the boat where the group encouraged her to take another turn. 3 94. Palla got back on the tube and took another turn. 4 95. Palla fell off the tube again. 5 96. After Garcia circled around to pick up Palla, he 6 7 attempted to put the boat in neutral. 97. Before Garcia “clicked” the throttle into the neutral 8 position, the preponderance of the evidence suggests that he 9 inadvertently pulled it through neutral and into reverse. 10 11 12 13 14 15 16 17 18 19 20 21 22 98. Palla swam toward the back of the boat where a member of the group lowered the ladder 99. As Palla reached toward the boarding ladder, she was pulled down by the chop of the water. 100. Palla’s legs were then swept into the still-spinning propeller blades. 101. Palla freed her left leg, but her right leg became wedged in between the two propeller blades. 102. Upon hearing Palla’s screams, Garcia and Herranz went to the back of the boat. 103. Garcia leaned over the back to hold Palla out of the water, while Herranz held onto Garcia’s legs. 104. Other members of the group jumped into the water to 23 help Palla, while Copeland and Botwin called 9-1-1 and Lakeside 24 Marina. 25 26 105. Lt. Leslie Lovell, a sheriff and member of El Dorado County’s summer boat patrol, was one of the first responders. 27 106. Deputy Aaron Crawford, who worked for the Douglas 28 County Sheriff’s Department, also arrived shortly after the 11 1 accident. 2 3 107. Lt. Lovell and Deputy Crawford eventually freed Palla’s leg from the propeller blades. 4 5 108. Marine One transferred Palla to Timber Cove, where she was airlifted to a nearby hospital. 6 7 109. Due to the injuries Palla sustained, doctors had to amputate her right leg above the knee. 8 9 110. After Palla was air-lifted from Timber Cove, Lt. Lovells conducted an inspection of the rental boat. 10 11 111. Lt. Lovells did not find any problems with the boat’s operation. 12 112. Lt. Lovells concluded that, based on the damage he 13 found on trailing edge of the propeller blades, the boat was in 14 idle reverse at the time of the accident. The Court agrees with 15 this conclusion. 16 III. 17 A. 18 19 20 21 22 23 24 25 26 27 28 OPINION Legal Standard The Limitation of Liability Act (“LOLA”) provides shipowners with an opportunity to cap the amount of damages owed to a claimant or group of claimants. seq. See 46 U.S.C. § 30505 et After the shipowner files a limitation of liability petition, the limitation action proceeds in two phases. First, the injured party must show “what acts of negligence or conditions of unseaworthiness caused the accident.” Hechinger, 802 F.2d 202, 207 (9th Cir. 1989). In re If the claimant fails to make a showing of negligence or unseaworthiness, the vessel owner is wholly exonerated—“if no liability exists there 12 1 is nothing to limit.” 2 Co., Inc. v. Grabowski, 1973 A.M.C. 1283, 1290 (9th Cir. 1973)). 3 Id. (quoting Northern Fishing Trading But if the claimant makes a valid showing of negligence or 4 unseaworthiness, the action proceeds to the second phase. 5 this stage, the burden shifts, requiring the shipowner to prove 6 that “the act or condition [causing the accident] was outside 7 its privity or knowledge.” 8 1137 (9th Cir. 2003). 9 liability is limited to the value of the vessel and its cargo. 10 11 12 13 At In re BOWFIN M/V, 339 F.3d 1137, If a vessel owner makes this showing, his Newton v. Shipman, 718 F.2d 959, 961 (9th Cir. 1983). B. Analysis 1. Choice of Law Defendants’ limitation action arises out of the Court’s 14 admiralty jurisdiction and is governed by federal admiralty law. 15 Churchill v. F/V Fjord, 5 F.3d 374, 376 (9th Cir. 1993). 16 court may use state law to supplement federal admiralty law, but 17 only when the state’s law “will not work material prejudice to 18 the characteristic features of the general maritime law, nor 19 interfere with the proper harmony and uniformity of that law.” 20 Id. at 207 (quoting Western Fuel Co. v. Garcia, 257 U.S. 233, 21 242 (1921)). 22 2. 23 A Negligence Palla proved by a preponderance of the evidence that L M 24 Sports was negligent. A negligence claim under admiralty law 25 has the same elements as a common law negligence claim: duty, 26 breach, causation, and damages. 27 Inc., 236 F.3d 1061, 1070 (9th Cir. 2001). 28 Defendant L M Sports negligently maintained a policy of allowing Morris v. Princess Cruises, 13 The Court finds that 1 its customers to go tubing without warning prospective tubers 2 about propeller strikes. 3 however, prove that Defendant L T Leasing was negligent. 4 a. 5 6 The Court finds that Palla did not, The Oregon Rule, The Pennsylvania Rule, and Res Ipsa Loquitur As a preliminary matter, Defendants argued that The Oregon 7 Rule, The Pennsylvania Rule, and the doctrine of res ipsa 8 loquitur each preclude a finding of negligence against 9 Defendants. The Court rejects this argument. As discussed 10 below, each of these doctrines are ill-fitted for the facts of 11 this case. 12 merely create a presumption that the vessel operator was a cause 13 of the accident; not the sole cause. 14 Services Inc. v. Maritrans Inc., 2006 A.M.C. 1246, 1254 (9th 15 Cir. 2006) (“Our analysis of the applicability of the COLREGS 16 does not, of course, determine the ultimate allocation of 17 liability in this case.”); Caravel/Woodwind Charters, Inc. v. 18 Tahoe Keys Marina, LLC, 438 F.Supp. 1174, 1182 (E.D. Cal. 2006) 19 (“[E]ven if [the vessel operator’s] negligence is established, 20 the question of comparative negligence remains.”). 21 cannot use The Oregon rule, The Pennsylvania rule, or res ipsa 22 loquitur to absolve themselves of liability. 23 Furthermore, these doctrines—even when applicable— See Crowley Marine Defendants By its own terms, The Oregon rule does not apply. The 24 Oregon Rule creates a presumption that the operator of a vessel 25 is at fault when the vessel collides with a stationary object. 26 The Oregon, 158 U.S. 186, 192-93 (1895). 27 from “the common-sense observation that moving vessels do not 28 usually [a]llide with stationary objects unless the vessel is 14 This presumption flows 1 mishandled in some way.” 2 563, 572 (7th Cir. 2004) (quoting Wardell v. Nat’l Transp. 3 Safety Bd., 884 F.2d 510, 512 (9th Cir. 1989)). 4 not cite to any cases that have classified human beings as 5 “stationary objects.” 6 inconsistent with the rationale underlying the presumption. 7 City of Chi. v. M/V Morgan, 375 F.3d Defendants do Such a classification defies logic and is Likewise, The Pennsylvania Rule does not apply to the facts 8 of this case. 9 time of a collision is in actual violation of a statutory rule 10 intended to prevent collisions” the operator of the infringing 11 vessel is presumed to be a contributing, if not the sole, cause. 12 The Pennsylvania, 86 U.S. 125, 136 (1873), overruled on other 13 grounds by United States v. Reliable Transfer Co., 431 U.S. 397, 14 411 (1975). 15 vessel operator “shows by clear and convincing evidence that the 16 violation could not reasonably be held to have been a proximate 17 cause of the injury.” 18 2113, 2118 (9th Cir. 2009) (citing Trinidad Corp. v. S.S. Keiyoh 19 Maru, 845 F.2d 818, 845 (9th Cir. 1988)). 20 applies to violations of the Inland Rules of Navigation. 21 Caravel/Woodwind Charters, 438 F. Supp. 2d at 1182. 22 Under The Pennsylvania Rule, when “a ship at the The presumption may only be rebutted where the MacDonald v. Kahikolu, Ltd., 2009 A.M.C. The Pennsylvania Rule See The Ninth Circuit has not defined the precise scope of The 23 Pennsylvania Rule. MacDonald, 2009 A.M.C. at 2118. 24 not clear that The Pennsylvania Rule applies to cases that do 25 not involve a collision or other “navigational accident.”) 26 has extended The Pennsylvania Rule to cover “navigational 27 accidents” as well as collisions. 28 the ranks of other federal circuit courts that have pushed the 15 Id. (“[I]t is It But it has not joined 1 doctrine beyond these two categories. See id. at 2120-21 2 (collecting cases). 3 accident was not the result of a collision or “navigational 4 accident” in the ordinary sense of either term. 5 declines to expand the scope of The Pennsylvania Rule where the 6 Ninth Circuit has not yet done so. 7 Contrary to Defendants’ argument, this This Court Finally, the Court finds that the doctrine of res ipsa 8 loquitur does not apply. Res ipsa loquitur “is a form of 9 circumstantial evidence that permits an inference of negligence 10 to be drawn from a set of proven facts.” Ashland v. Ling-Temco- 11 Vought, Inc., 711 F.2d 1431, 1437 (9th Cir. 1983). 12 doctrine is available in admiralty. 13 United States, 645 F.2d 728 (9th Cir. 1981). This Id. (citing Wilson v. 14 To invoke res ipsa loquitur, a party must show: (1) an 15 injury-producing event of a kind that ordinarily does not occur 16 in the absence of someone’s negligence; (2) the event was caused 17 by an agency or instrumentality within the exclusive control of 18 the defendant; and (3) the event was not due to any voluntary 19 action or contribution on the part of the plaintiff. 20 the elements suggest, res ipsa loquitur is traditionally used by 21 plaintiffs to create an inference of negligence where direct 22 evidence is lacking. 23 cases where a party used res ipsa loquitur to defend itself 24 against a claim of negligence or shift liability to a co- 25 defendant. 26 Accordingly, the Court finds that res ipsa loquitur does not 27 apply. 28 /// Id. As Defendants here have not cited to any Nor is the Court aware of such authority. 16 1 2 b. Duty of Care and Breach Defendant L M Sports breached the duty of care it owed to 3 Palla by failing to provide safety instructions to her (and 4 other prospective tubers) before allowing them to take the 5 rental boat out onto Lake Tahoe. 6 federal admiralty law imposes upon a shipowner “the duty of 7 exercising reasonable care under the circumstances.” 8 v. Compagnie Generale Transatlantique, 358 U.S. 625, 630 (1959). 9 This duty is owed to seamen and all others aboard a boat “for It is well-established that Kermarec 10 purposes not inimical to [the vessel owner’s] legitimate 11 interests.” 12 113 F.3d 1050, 1060 (9th Cir. 1997). Id.; Ghotra by Ghotra v. Bandila Shippping, Inc., 13 The contours of this standard of care, “although not 14 precisely defin[ed],” are “fashioned by the federal courts, by 15 Congressional enactments, and[] by international conventions and 16 treaties.” 17 Cal. 1997). 18 Rules of Navigation; local custom and practice; and a general 19 understanding of prudent maritime conduct. 20 care” in admiralty is neither more nor less stringent than the 21 reasonableness standard for a common law negligence claim. 22 Weyerhaeuser Co. v. Atropos Island, 777 F.2d 1344, 1348 (9th 23 Cir. 1985). Prince v. Thomas, 25 F. Supp. 2d 1045, 1047 (N.D. It is also informed by the Coast Guard’s Inland Id. “Reasonable 24 The Court first finds that neither L M Sports nor L T 25 Leasing breached a duty of care by simply making the Four Winns 26 available to Lakeside Marina customers for tubing. 27 that Defendants were negligent for failing to provide the Palla 28 group a vessel fit for its intended purpose. 17 Palla argued Palla did not, 1 however, prove by a preponderance of the evidence that the Four 2 Winns manufacturer did not intend for the boat to be used for 3 towing sports. 4 Winns was subject to recall. Nor did Palla present any evidence that the Four 5 Plaintiff’s expert, William Kitzes, provided testimony that 6 the warning labels on the rental boat were inconsistent with the 7 2016 American National Standard Institute (“ANSI”), American 8 Boating & Yacht Council (“ABYC”), and National Association of 9 State Law Administrators (“NASBLA”) standards for warning 10 labels. 11 recalled or that Four Winns had advised its customers that the 12 labels were inadequate. 13 marinas in Lake Tahoe to determine whether ANSI, ABYC, or NASBLA 14 compliance is standard practice. 15 But he did not testify that the warnings had been Nor did he conduct a study of other The Court recognizes that the design of the 1997 Four Winns 16 made use of the boat’s ladder dangerous. 17 and marinas are not responsible for a boat’s design. 18 showing that the Four Winns was not intended for towing sports, 19 or that either the boat or its warning labels were subject to 20 recall at the time of the accident, the Court does not find 21 Defendants breached a duty of care by making the Four Winns 22 available to its customers for towing sports. 23 But leasing companies Absent a The Court does, however, find Defendant L M Sports had a 24 duty to warn the entire Palla group of the dangers of propeller 25 strikes both in general and when being towed behind the 1997 26 Four Winns. 27 circumstances to its renters at Lakeside Marina, including 28 Palla. L M Sports owed a reasonable duty of care under the By its own terms, this standard of care requires the 18 1 Court to consider all attendant circumstances when determining 2 what is reasonable. 3 Sports’s awareness that they largely serviced inexperienced 4 boaters; (2) a large alpine lake; (3) a boat with its boarding 5 ladder only 17 inches from its propellers; and (4) L M Sport’s 6 decision not to retrofit its boats with propeller safety 7 devices. 8 L M Sports had a duty to provide safety instructions to all of 9 its tubing customers. The circumstances here involved: (1) L M Given these circumstances, the Court finds Defendant L M Sports breached this duty when it 10 failed to give safety instructions to the whole Palla group. 11 In 2016, California state law allowed people to operate 12 recreational boats without a boating license or any type of 13 boating experience. 14 did not require its customers to have a boating license or any 15 boating experience to rent one of its boats. 16 Hasset confirmed this, testifying in court that the decision of 17 whether to rent someone a boat lied almost entirely within 18 Meeks’s discretion. 19 testified that he only turned away potential customers if they 20 were too intoxicated to operate a boat or be out on the lake. 21 Meeks explained that a customer without boating experience might 22 be required to take lessons with a marina employee prior to 23 operating the boat by herself. 24 did not disqualify anyone from renting a boat, operating a boat, 25 or being towed behind a boat under either California law or 26 Lakeside Marina policy. Consistent with state law, Lakeside Marina Both Meeks and Although later qualified by Hasset, Meeks But a lack of boating experience 27 The dangers of renting out boats without regard to operator 28 or passenger experience increase when viewed in conjunction with 19 1 the size and elevation of Lake Tahoe. Lake Tahoe is an alpine 2 lake. 3 elevation of Lake Tahoe make it a “unique body of water,” giving 4 rise to circumstances not generally seen on other lakes. 5 weather changes quickly, the water can be unsettlingly cold, and 6 the current can cause the water to have several feet of chop— 7 enough to move a propeller’s blades even when the boat is no 8 longer under power. 9 unexpected challenges for renters who, based on other Both Hasset and Lt. Lovells testified that the size and The The peculiarities of Lake Tahoe raise 10 experiences, might expect to be familiar with water sports. 11 Those peculiarities pose even greater dangers for renters 12 without any experience at all. 13 But of perhaps paramount importance are the layout of the 14 1997 Four Winns and L M Sports’s decision not to modify it 15 before renting it out for tow sports. 16 liability case. 17 precautionary measures are both relevant considerations that 18 inform the scope of L M Sports’s duty. 19 rented to the Palla group had two counter-rotating propellers 20 that were capable of spinning up to a thousand times per second. 21 The propellers sat below the water line, 17 inches away from the 22 boarding ladder. 23 upper body strength, a tuber would be unable to re-board this 24 particular boat without using the boarding ladder. 25 This is not a products All the same, a boat’s features and a marina’s The boat L M Sports Hasset testified that, absent significant Defendants’ Trial Exhibit C showed that the propellers were 26 not visible to people standing on the dock. 27 credibly testified at his deposition that he could see the 28 propellers as he re-boarded the Four Winns after tubing, 20 Although O’Dea 1 Copeland and Gautier both credibly testified that they did not 2 see the propellers when re-boarding. 3 were only sometimes visible to tubers returning to the boat in 4 choppy water. 5 the risk invariably posed by having the boat’s boarding ladder 6 so close to the propellers. 7 At best, the propellers Even so, L M Sports did nothing to guard against Plaintiff’s expert, Dr. Alison Osinski testified that L M 8 Sports could have retrofitted the Four Winns with safety 9 equipment such as a ladder interlock device or a propeller 10 guard. 11 with Dr. Osinski about whether the industry required these 12 devices, she acknowledged that a ladder interlock device would 13 have prevented this accident so long as the ladder was down and 14 no one intentionally overrode the system. 15 to install this device on the rental boat, as they were entitled 16 to do. 17 out the 1997 Four Winns out for towing sports. 18 Although defense expert, Dr. Wendy Sanders, disagreed Defendants chose not And safety hazards notwithstanding, L M Sports rented But under these circumstances, reasonable care required L M 19 Sports to inform all potential tubers of the risks they were 20 likely to encounter. 21 at any time during the “spiel.” 22 rejects Palla’s arguments that maritime law imposed a specific 23 duty on Defendants to retrofit the rental boat with propeller- 24 safety devices or modify the boat’s warning labels absent a 25 specific recall or regulatory requirement. 26 Defendants could have taken greater strides to ensure their 27 customers’ safety with aftermarket devices does not make it 28 required by law. It is undisputed that Foss did not do this As discussed above, the Court The fact that Holzhauer v. Golden Gate Bridge Highway & 21 1 Transportation District (“Holzhauer I”), 899 F.3d 844, 850 (9th 2 Cir. 2018) (“Even if having radar reflectors is a good practice, 3 good practice does not create liability absent facts to support 4 that the practice is an operational standard in the relevant 5 community of small boat owners.”). 6 understandings of prudent maritime conduct to rent out a boat 7 that is uniquely dangerous for a particular purpose without 8 warning the renters of those dangers—particularly given the 9 severity of the risks involved and the feasibility of the But it contravenes general 10 remedial measure here. 11 believed passengers on a boat should be educated about propeller 12 safety. 13 Indeed, Hasset himself testified that he L M Sports was in the best position to know of the unique 14 dangers posed by the rental boat when used for towing sports. 15 L M Sports leased the boat. 16 boat and what it could be used for. 17 customers, had occasion to see the rental boat when it was out 18 of the water, with the ladder unfolded. 19 policy of not specifically warning prospective tubers about the 20 dangers of propeller strikes. 21 to sign any type of written form that included tuber-safety 22 information. 23 warning prospective tubers of propeller strikes. 24 did not train Foss to inform tubers of the risks that propellers 25 pose generally or of the heightened risk propellers pose on the 26 1997 Four Winns. 27 28 L M Sports decided where to put the L M Sports, unlike their And yet, it adopted a L M Sports did not require tubers It did not place any signs around Lakeside Marina And L M Sports On the next-to-last day of trial, Hasset testified for the first time that Foss was trained to tell a boat’s operators that 22 1 they were tasked with relaying safety instructions from Foss to 2 the other passengers. 3 this testimony given that Hasset had testified for nearly two 4 days at the beginning of the trial without ever mentioning this 5 policy. 6 testimony, i.e. that dockhands were trained to tell operators to 7 relay information to other members of the boat. 8 Botwin nor Garcia testified to hearing such an instruction. 9 Simply put, the Court did not find Hasset’s amended account of The Court gave little if any weight to Neither Meeks nor Foss corroborated Hassett’s And neither 10 Foss’s training to be credible. 11 care by failing to warn its customers of the dangers they were 12 likely to encounter while tubing. 13 L M Sports breached its duty of L M Sports argues that it should be absolved of any duty it 14 owed Palla for two reasons: (1) Palla assumed the risk of being 15 injured while tubing, and (2) the dangers posed by the rental 16 boat’s propellers were “open and obvious.” 17 both arguments. 18 The Court rejects During trial, the Court requested briefing on the issue of 19 the applicability of assumption of risk in this case. 20 Plf.’s Trial Brief, ECF No. 256; Defs.’ Trial Brief, ECF No. 21 257. 22 8, 2019 finding that assumption of risk did not apply as a bar 23 to Palla’s recovery here. See Socony-Vacuum Oil Co. v. Smith, 24 305 U.S. 424, 431 (1939). That ruling stands. 25 Oil Co., the Supreme Court plainly stated: 26 27 28 See The Court issued an order from the bench on Friday, March In Socony-Vacuum Any rule of assumption of risk in admiralty, whatever its scope, must be applied in conjunction with the established admiralty doctrine of comparative negligence and in harmony with it. Under that doctrine contributory 23 1 negligence, however gross, is not a bar to recovery but only mitigates damages. 2 3 305 U.S. 424, 431 (1939). 4 While true that neither the Supreme Court nor the Ninth 5 Circuit have squarely addressed the application of assumption of 6 risk in the recreational sports context, their wholesale 7 rejection of the defense as a complete bar to suit in other 8 areas has been uniform and emphatic. 9 Southern S.S. Co., 321 U.S. 96, 103 (1944); Jacob v. City of See, e.g., Mahnich v. 10 N.Y., 315 U.S. 752, 755 (1942); Socony-Vacuum Oil Co., 305 U.S. 11 at 431; Simeonoff v. Hiner, 249 F.3d 883, 888 (9th Cir. 2001); 12 DuBose v. Matson Nav. Co., 403 F.2d 875, 877 (9th Cir. 1968). 13 The Northern District of California has also ruled persuasively 14 on the issue. 15 (N.D. Cal. 1994).2 16 accordance with its previous ruling, the Court again rejects 17 Defendants’ claims of an assumption-of-risk defense. 18 Manning v. Gordon, 853 F.Supp. 1187, 1188-89 In line with these decisions, and in The Court likewise rejects L M Sports’s position that they 19 owed no duty to warn passengers of propeller strikes because the 20 danger was open and obvious. 21 Sports relies exclusively on non-binding authority, primarily 22 from other circuits. 23 open-and-obvious defense in admiralty cases when claims are 24 brought by ship repairmen, longshoremen, stevedores and vessel 25 owners. In support of this position, L M The Ninth Circuit has only recognized the See Howlett v. Birkdale Shipping Co., S.A., 512 U.S. 26 27 28 The Central District of California adopted the Northern District’s reasoning in Mavromati v. Spot, LLC, No. 14-cv-03333SJO, 2016 WL 4820634 at *9 n.11 (C.D. Cal. Jan. 29, 2016). 24 2 1 92, 98-99 (1994) (finding shipowner did not owe stevedores a 2 duty to warn of open and obvious danger); Ludwig v. Pan Ocean 3 Shipping Co., Ltd., 941 F.2d 849, 851 (9th Cir. 1991) (finding 4 shipowner did not owe longshoreman duty to warn of open and 5 obvious danger); Peters v. Titan Nav. Co., 1989 A.M.C. 1598, 6 1601-02 (9th Cir. 1988) (finding shipowner did not owe ship 7 repairmen duty to warn of condition he was hired to fix); 8 Grace Line, Inc. v. Todd Shipyards Corp., 500 F.2d 361, 365 (9th 9 Cir. 1974) (finding wharfinger did not owe shipowner duty to 10 warn of open and obvious danger). 11 The availability of this defense in cases brought by seamen 12 and vessel owners stems, in part, from the symmetry of expertise 13 between those who owe the duty and those to whom the duty is 14 owed. 15 was injured when he stepped down off a ladder, into a coiled 16 lashing cable left at the bottom. 17 owner of the ship he was working on, arguing that the owner 18 breached his statutory duty to warn him of unsafe conditions on 19 the boat. 20 have been open and obvious to any “competent longshoreman” 21 ascending the ladder; the longshoreman’s “momentary 22 forgetfulness” when descending the ladder “[did] not erase the 23 notice given by [the cables’] presence.” 24 so, the Court explicitly distinguished between a longshoreman 25 and “an average reasonable person.” 26 27 28 For example, in Ludwig, 941 F.2d at 850, a longshoreman Id. at 850-51. The longshoreman sued the The Court found that the cables would Id. at 851. In doing Id. at 852. A longshoreman is an expert who is required to be mindful of hazards—not forgetful of them. . . . [A] shipowner may rely on the expertise of longshoremen and leave unremedied conditions that would otherwise be considered 25 1 2 3 4 5 6 unreasonably dangerous to less skilled persons. It is for this reason that the question of whether an average reasonable person would be excused from forgetting about a hazard aboard ship is irrelevant when the issue is whether a longshoreman should be excused from forgetting such a hazard. Id. (internal quotations and citations omitted). The symmetry of expertise that exists between a 7 longshoreman and a shipowner does not exist between a 8 recreational rental boat owner and the occasional renter, making 9 “obviousness” relative. 10 11 The Court declines to extend the open- and-obvious defense to this context. Even if admiralty law did recognize an open-and-obvious 12 defense to negligence claims by recreational boat renters, it 13 would not apply here. The Court disagrees with L M Sports’s 14 argument that a vague awareness of a boat’s propulsion system 15 made the danger posed by the Four Winns obvious. 16 testified that boats can be powered by propellers or jet 17 propulsion. 18 propellers, there are differences in how far the propellers 19 extend from the back of the boat. 20 Hasset He also acknowledged that, even among boats with The parties provided several images depicting which parts 21 of the boat were visible above water. The boat’s propellers 22 were not visible in any of those pictures. 23 evidence of the boat’s propulsion system were the bubbles it 24 created when under power. 25 passengers on notice that their boat was specifically powered by 26 propellers. 27 specific information about where those counter-rotating 28 propellers were in relation to where they would be re-boarding The only visible Those bubbles did not place the More importantly, they did not provide tubers 26 1 the boat. 2 Palla of propeller strikes because the dangers here were not 3 open and obvious. 4 The Court finds that L M Sports had a duty to warn Based on all the evidence admitted at trial, the Court 5 concludes that L M Sports owed Palla a duty of reasonable care 6 under the circumstances. 7 July 24, 2016, L M Sports had a duty to warn the Palla group of 8 dangers they were likely to encounter while tubing. 9 breached this duty when it failed to warn Palla of the dangers 10 of propeller strikes both generally and on her particular boat. 11 The Court also concludes L T Leasing did not breach a duty of 12 care owed to Palla. 13 14 c. Given the circumstances present on L M Sports Causation L M Sports’s failure to warn Palla of the dangers she was 15 likely to face while tubing was a proximate cause of her 16 injuries. 17 must make a showing of proximate causation to sustain a 18 negligence claim arising in admiralty. Exxon Co., U.S.A. v. 19 Sofec, Inc., 517 U.S. 830, 832 (1996). Proximate cause serves 20 as “a means of cutting off liability for consequences that, 21 although causally related to the defendant’s negligent conduct, 22 are not so closely connected with this conduct to justify the 23 imposition of liability.” 24 As with a claim of common law negligence, plaintiffs Weyerhaeuser, 777 F.2d at 1351. Admiralty law also recognizes “superseding causes.” Exxon, 25 517 U.S. at 837. A superseding cause severs the causal link 26 between a careless actor and a subsequent injury when “the 27 defendant’s negligence in fact substantially contributed to the 28 plaintiff’s injury, but the injury was actually brought about by 27 1 a later cause of independent origin that was not foreseeable.” 2 Id. (quoting 1 T. Schoenbaum, Admiralty and Maritime Law § 5-3, 3 pp. 165-166 (2d ed. 1994)). 4 The Court finds that L M Sports’s failure to warn Palla of 5 the location of the propellers, the dangers associated with 6 them, and the measures she could have employed to protect 7 herself from injury due to a propeller strike was a proximate 8 cause of her injuries. 9 that she was a cautious individual. Palla’s uncontested testimony revealed Because she had never gone 10 tubing before, she waited for others to go first to see how it 11 was done. 12 around her when attempting to re-board the Four Winns after 13 tubing. 14 of the water would make it difficult to grab the ladder from the 15 side, she swam past the ladder, turned around, and approached it 16 head on. 17 evidence that had L M Sports instructed Palla to also be mindful 18 of the proximity of the boat’s propellers to the boarding 19 ladder, she would have been. 20 Palla tried to be cognizant of what was going on She testified that, being mindful of how the choppiness The Court is persuaded by a preponderance of the While the Court finds that Garcia was the primary cause of 21 Palla’s injuries, his actions do completely not cut off L M 22 Sports’s liability because those actions were foreseeable. 23 Palla’s legs were struck by the propellers because the rental 24 boat was in idle reverse shortly before she attempted to board. 25 The preponderance of the evidence suggests that Garcia 26 inadvertently pulled the throttle past neutral, briefly putting 27 the boat into reverse before locking the control into neutral. 28 At trial and through deposition testimony, witnesses gave 28 1 seemingly conflicting testimony about the boat’s movement when 2 Garcia was picking up Palla. 3 Four Winns in neutral when picking up all tubers, including 4 Palla, and that he never put the boat in reverse. 5 this testimony, several members of the Palla group testified 6 that they remembered the boat being still after Garcia circled 7 around to pick up Palla. 8 boat was not moving backward as she approached the boat to re- 9 board. Garcia testified that he put the In line with Palla similarly recounted that the Yet, the damage to Palla’s legs clearly suggests that 10 the propeller blades were moving at some speed. 11 explained by Lt. Lovell, the damage to the trailing edge of the 12 propellers indicates that the blades were spinning in reverse 13 when they struck Palla. 14 accidently pulled the throttle into reverse before settling it 15 into neutral best reconciles otherwise conflicting accounts of 16 credible witnesses. 17 And, as The Court’s finding that Garcia Testimony from the parties’ experts also supports the 18 Court’s finding. 19 rental boat “clicked” into each gear if the operator released 20 the red lever at the bottom of the throttle. 21 operator kept the red lever compressed, he could pull it from 22 forward into reverse without the throttle clicking into neutral. 23 Dr. Osinski testified that it is common for novice boaters to 24 make this mistake because the difference between neutral and 25 idle reverse can be imperceptible. 26 Dr. Sanders testified that the throttle on the If, however, the Garcia bears the vast majority of the responsibility for 27 Palla’s injuries because he did not follow Foss’s instructions 28 to turn off the boat’s engine when picking up tubers. 29 In doing 1 so, he breached the duty of ordinary care that he owed to Palla. 2 Even so, Garcia’s mishandling of the Four Winns does not amount 3 to a superseding cause such that it cuts off Defendants’ 4 liability because his failure to follow instructions was 5 foreseeable. 6 the most dangerous part of the boat, and Hasset testified that 7 he knew inexperienced and inattentive operators would be driving 8 his rental boats. 9 2016, he knew an operator might put a boat in neutral, thinking Meeks testified that a rental boat’s operator was More specifically, Meeks testified that, in 10 it was off. Dr. Osinski gave further weight to Meeks’s 11 testimony when she testified that both putting a boat in neutral 12 instead of turning it off and inadvertently pulling the throttle 13 past the neutral position were common mistakes that she would 14 expect rental boat operators to make. 15 Despite the clear risk posed by inattentive and 16 inexperienced operators, L M Sports did not train Foss to 17 decrease this risk by giving operators demonstrative training on 18 how the throttle worked. 19 operators of the dangers of shifting the throttle past neutral. 20 L M Sports did not provide operators with a checklist of these 21 critical safety instructions to use while out on the lake. 22 although Foss instructed Garcia to turn the boat completely off 23 when picking up tubers, the Court did not find Foss’s testimony 24 that he repeatedly emphasized this instruction, carefully 25 highlighting the difference between “off” and “neutral,” to be 26 credible. 27 be inattentive and careless—when combined with the barebones 28 instructions L M Sports provided—made Garcia’s failure to follow Nor did L M Sports train Foss to warn And The known predisposition of rental boat operators to 30 1 all of Lakeside’s instructions foreseeable. 2 that L M Sports was a proximate cause of Palla’s injuries. 3 4 d. The Court finds Damages Palla sustained severe injuries on both of her legs as a 5 result of the propeller strike. 6 her right leg required the doctors at Renown Medical Center in 7 Reno, Nevada to amputate it right above the knee. 8 Palla sustained damages is undisputed. 9 which Palla is entitled will be determined in a subsequent jury 10 The fact that The amount of damages to trial. 11 12 The severity of the injuries on e. Comparative Fault When an accident has multiple causes, a court must allocate 13 liability among all individuals and entities responsible. 14 Reliable Transfer Co., 421 U.S. at 411. 15 comparative fault requires the court to make “an individualized 16 evaluation of [the] collision . . . [and] to compare the fault 17 of each party, where fault is defined as blameworthy conduct 18 which contributes to the proximate cause of the loss or injury.” 19 Crowley, 530 F.3d at 1174 (quoting Pan-Alaska Fisheries, Inc. v. 20 Marine Constr. & Design Co., 565 F.2d 1129, 1139 (9th Cir. 21 1977)) 22 The doctrine of Based on the evidence admitted at trial and the findings 23 and conclusions set forth above, the Court finds L M Sports to 24 be 20% at fault and Garcia to be 80% at fault for Palla’s 25 injuries. 26 Palla when it failed to warn her of the risks of propeller 27 strikes when re-boarding a boat after tubing. 28 presented a video during trial to illustrate how the Four L M Sports created an unreasonable additional risk to 31 L M Sports 1 Winns’s propellers spun depending on what gear the boat was in. 2 The video showed that, even when the boat’s engine was off, its 3 propellers continued to spin so long as the boat was moving 4 through the water. 5 a Lakeside Marina dockhand’s instruction to turn the engine off 6 when picking up tubers, a tuber is still at risk of getting 7 struck by a propeller—particularly on the Four Winns. 8 Sports could have alleviated this risk at little to no cost to 9 the company. Therefore, even when a boat operator follows It chose not to. L M While this decision contributed 10 to Palla’s injuries, the Court finds it was not the primary 11 reason for this tragic accident. 12 fault is consistent with L M Sports’s level of blameworthiness. 13 The Court concludes that Garcia is 80% at fault because it The Court’s allocation of 20% 14 is uncontroverted that his negligent operation of the boat 15 directly caused Palla’s injuries. 16 either misunderstood Foss’s instructions, forgot them, or chose 17 not to follow them. 18 ordinary care that he owed to Palla when he failed to turn the 19 boat off as she was re-boarding the boat. 20 operate the boat correctly was the primary cause of Palla’s 21 injuries. 22 propeller even if the boat’s engine was off, her injuries would 23 have likely been much less severe given the decreased speed of 24 the propeller blades. 25 given Garcia’s role in the accident. Garcia made a mistake. He Either way, he breached the duty of His failure to Although Palla could have been struck by the 80% is an appropriate allocation of fault 26 L T Leasing is 0% at fault for Palla’s injuries. 27 Palla is also 0% at fault. 28 Palla was 22 years old at the time of the accident and had never been towed behind a boat. 32 1 She had been a passenger on a boat only a handful of times in 2 her life. 3 of propeller strikes prevented her from exercising the level of 4 care necessary when re-boarding the Four Winns after tubing. 5 Furthermore, Garcia’s representation that he had stopped the 6 boat deprived Palla of any reason to believe that she should not 7 have attempted to re-board. 8 9 L M Sports’s failure to warn Palla of the known risk 3. Privity or Knowledge Because Palla proved by a preponderance of evidence that L M 10 Sports was negligent, L M Sports bore the burden of proving that 11 it lacked privity or knowledge of “the act or condition [causing 12 the accident].” 13 concludes that L M Sports did not make this showing. 14 In re BOWFIN M/V, 339 F.3d at 1137. The Court L M Sports argues that it lacked knowledge because it could 15 not have known that Garcia was going to accidentally put the boat 16 in reverse while Palla was re-boarding the boat. 17 disagrees with L M Sports’s characterization of this analysis. 18 The focus of the inquiry is not whether L M Sports could have 19 predicted the exact consequences, but rather, whether L M Sports 20 knew of the risk its negligence posed. 21 Gate Bridge Highway & Transportation District (“Holzhauer II”), 22 745 Fed. Appx. 265, 269 (9th Cir. 2018). 23 issue requires the Court to determine whether L M Sports knew 24 that it was allowing its customers to go tubing without providing 25 any warnings to the individuals who would be in the water and 26 most at risk of a propeller strike. 27 28 The Court See Holzhauer v. Golden More specifically, this The Court finds that it did. A company’s failure to formulate and implement a necessary safety policy may support a finding of knowledge. 33 In Holzhauer 1 II, 745 Fed. Appx. At 267-69, a speedboat passenger was killed 2 when the speedboat and a passenger ferry collided. 3 of the ferry had been using his cell phone right before the 4 accident occurred. 5 the captain’s use of a cell phone while operating a ferry was a 6 negligent condition, and that Defendant Golden Gate Bridge 7 Highway and Transportation District (“GGB”) had constructive 8 knowledge of that condition. 9 that [GGB] was ‘on notice’ of similar prior incidents,” it could Id. at 269. The captain The district court found that Even though “there was no evidence 10 have “discover[ed] with reasonable investigation that ferry 11 operators used their cellphone[s] while operating the ferry.” 12 Id. 13 personal cell phone use. 14 district court, finding the defendants failed to show they lacked 15 knowledge of a negligent condition. Despite this knowledge, GGB did not have a policy against Id. The Ninth Circuit affirmed the Id. 16 The negligent act at issue here is L M Sports’s policy of 17 training Lakeside Marina dockhands to only provide boating and 18 safety instructions to rental boat operators. 19 accident, Hasset and Meeks were collectively in charge of 20 formulating Lakeside Marina’s employee training policies. 21 testimony at trial revealed that they knew they were renting 22 boats out for tubing, without providing tubers any information on 23 the dangers of tubing generally or on the dangers of tubing 24 behind the 1997 Four Winns specifically. 25 knowledge is imputed to L M Sports. 26 Standard Oil of California, 495 F.2d 911, 917 (9th Cir. 1974) 27 (“In short, the [privity or knowledge] inquiry must focus on 28 whether the negligence is that of ‘managing officers’ or, more 34 At the time of the Their Hasset and Meeks’s See United States v. 1 properly, ‘supervisory employees.’”). 2 L M Sports’s otherwise clean safety record does not preclude 3 a finding of knowledge here. See Holzhauer II, 745 Fed. Appx. at 4 269. 5 at risk of propeller strikes and that propeller strikes could be 6 deadly. 7 a policy of only providing safety instructions to rental boat 8 operators. 9 exist so that a marina owner may gamble on the safety of his Hasset testified that he knew people in the water were most Notwithstanding this knowledge, he knowingly maintained The knowledge prong of the limitation action does not 10 customers, then feign ignorance when that bet goes sour. 11 Court finds that L M Sports knew that it was negligently failing 12 to warn rental boat passengers of the risks they were likely to 13 face while tubing. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IV. The The limitation of liability does not apply. CONCLUSIONS OF LAW AS TO LIABILITY For the reasons set forth above, the Court concludes as follows: 1. L T Leasing owed a duty of reasonable care under the circumstances to Palla. 2. L T Leasing did not breach its duty of care to Palla, i.e. it did not fail to provide a boat that was fit for its intended purpose. 3. L M Sports owed a duty of reasonable care under the circumstances to Palla. 4. L M Sports breached its duty of care by not warning Palla of the location of the propellers, the dangers of propeller strikes generally, or the dangers of propeller strikes when towed behind the 1997 Four Winns, and how to avoid injury. 35 1 2 5. This breach by L M Sports was a proximate cause of Palla’s injuries. 3 6. Garcia owed a duty of ordinary care to Palla. 4 7. Garcia breached his duty of care to Palla by failing to 5 stop the boat’s propellers and by putting the boat in reverse as 6 Palla approached the swim ladder after going tubing. 7 8 9 8. Garcia’s negligence was a proximate cause of Palla’s injuries. 9. L M Sports was 20% at fault for Palla’s injuries. 10 10. Garcia was 80% at fault for Palla’s injuries. 11 11. L T Leasing was 0% at fault for Palla’s injuries. 12 12. Palla was 0% at fault for her injuries. 13 13. The negligence of L M Sports was within its knowledge 14 or privity. L M Sports knew that it did not properly train its 15 employees to warn passengers of the dangers of propeller strikes 16 despite the fact that propellers posed a deadly threat to its 17 tubing customers. 18 19 20 21 22 23 24 25 V. ORDER Given the Court’s findings of fact and conclusions of law, a jury trial to determine the amount of Palla’s damages will commence on September 23, 2019 at 9 a.m. The Court will hold a Pretrial Conference on August 16, 2019 at 10 a.m. IT IS SO ORDERED. Dated: May 16, 2019 26 27 28 36

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