Atlantic Specialty Insurance Company v. Mercier Marine Enterprise, LLC et al
Filing
22
OPINION and ORDER granting in part and denying in part 17 defendant's motion to dismiss. See Opinion and Order for details. (CMG)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
ATLANTIC SPECIALTY
INSURANCE COMPANY,
Plaintiff,
v.
Case No:
MERCIER MARINE
LLC
and
CORPORATION,
2:18-cv-93-FtM-29CM
ENTERPRISE,
BRUNSWICK
Defendants.
OPINION AND ORDER
This matter comes before the Court on defendant Brunswick
Corporation’s Motion to Dismiss (Doc. #17) filed on March 30, 2018.
Plaintiff filed a Response in Opposition (Doc. # 21) on April 23,
2018.
For
the
reasons
stated
below,
defendant
Brunswick
Corporation’s Motion is granted in part and denied in part, and
plaintiff is granted leave to file an amended complaint.
I.
According to the Complaint (Doc. #1):
On unspecified dates
defendant Brunswick Corporation, d/b/a Sea Ray Boats (Brunswick),
manufactured a 2013 45-foot Sea Ray vessel (the Vessel) which it
then sold to Joseph Campbell (Campbell).
(Doc. #1, ¶¶ 1, 2.)
Campbell obtained an insurance policy on the Vessel from Atlantic
Speciality Insurance Co. (Atlantic Specialty) for the relevant
time period.
(Id. ¶ 14.)
On June 28, 2016, Campbell ran the Vessel aground while
operating it in navigable waters off the coast of Naples, Florida.
(Id. ¶¶ 3, 10, 11.)
Campbell attempted to move the Vessel
immediately following running aground, but was unable to do so
because the Vessel’s Zeus Pods (the Product) failed to sheer,
causing the Vessel to sink.
Defendant
Mercier
(Id. ¶¶ 4, 5.)
Marine
Enterprise,
LLC,
d/b/a
Sea
Tow
Naples (Sea Tow), responded to the sunken Vessel to conduct a
salvage operation.
(Id. ¶ 5.)
Sea Tow used a gas-operated pump
in order to keep the Vessel from taking on water.
(Id. ¶ 7.)
The
pump leaked gas on or near the Vessel’s exhaust, which caused the
Vessel to catch fire.
(Id. ¶ 8.)
As the result of the damage
caused by the fire, Atlantic Speciality paid Campbell $936,622.00
as the agreed upon value for the Vessel.
(Id. ¶ 9.)
Atlantic Specialty filed a five-count Complaint in which it
seeks, as the subrogee of Campbell, recovery of its damages.
Atlantic Speciality asserts one claim against Sea Tow for gross
negligence (Count I).
against Brunswick:
warranty
(Count
Atlantic Specialty asserts four claims
Negligence (Count II), breach of express
III),
breach
of
implied
warranty
of
merchantability (Count IV), and breach of implied warranty of
fitness for a particular purpose (Count V).
Sea Tow filed an Answer (Doc. #15) and is not involved in the
current motion.
Brunswick moves to dismiss all counts against it,
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asserting that (1) Plaintiff’s negligence claim is barred by the
economic loss rule; and (2) Plaintiff failed to state causes of
action
for
breach
of
express
and
implied
Plaintiff has not adequately pled privity.
warranties
because
(Doc. #17.)
II.
Federal Rule of Civil Procedure 8(a) requires a complaint to
contain a “short and plain statement of the claim showing that the
pleader is entitled to relief.”
Fed. R. Civ. P. 8(a)(2).
In
evaluating a Rule 12(b)(6) motion seeking to dismiss a complaint
for failing to comply with Rule 8(a), the Court must accept as
true all factual allegations in the complaint and “construe them
in the light most favorable to the plaintiff.”
Baloco ex rel.
Tapia v. Drummond Co., 640 F.3d 1338, 1345 (11th Cir. 2011).
However,
mere
“[l]egal
conclusions
without
adequate
support are entitled to no assumption of truth.”
factual
Mamani v.
Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011) (citations omitted).
To avoid dismissal under Rule 12(b)(6), the complaint must
contain sufficient factual allegations to “raise a right to relief
above the speculative level.”
U.S. 544, 555 (2007).
Bell Atl. Corp. v. Twombly, 550
To do so requires “enough facts to state a
claim to relief that is plausible on its face.”
Id. at 570.
This
plausibility pleading obligation demands “more than labels and
conclusions, and a formulaic recitation of the elements of a cause
of action will not do.”
Id. at 555 (citation omitted); see also
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Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“Threadbare recitals
of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.”); Chaparro v. Carnival Corp., 693
F.3d 1333, 1337 (11th Cir. 2012) (“Factual allegations that are
merely consistent with a defendant’s liability fall short of being
facially plausible.” (citation omitted)).
Thus, the Court engages
in a two-step approach: “When there are well-pleaded factual
allegations,
a
court
should
assume
their
veracity
and
then
determine whether they plausibly give rise to an entitlement to
relief.”
Iqbal, 556 U.S. at 679.
III.
A.
Subject Matter Jurisdiction
The only basis for federal subject matter jurisdiction set
forth in the Complaint is admiralty jurisdiction.
The caption of
the Complaint states that it is “IN ADMIRALTY,” and the body of
the Complaint
states
that
it
includes
a
maritime
tort
“that
occurred on navigable water during a traditional maritime activity
or activities that could or did impact maritime commerce.”
#1, ¶ 10.)
“With admiralty jurisdiction comes the application of
substantive admiralty law.”
E. River S.S. Corp. v. Transamerica
Delaval, Inc., 476 U.S. 858, 864 (1986).
“an
(Doc.
independent
duty
to
ensure
before applying admiralty law.”
The Court, however, has
admiralty
jurisdiction
exists
Doe v. Celebrity Cruises, Inc.,
394 F.3d 891, 900 (11th Cir. 2004).
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(1)
In
Admiralty Jurisdiction Over the Count II Tort Claim
Count
liability
II,
claim
Plaintiff
against
asserts
Brunswick
construction of the Vessel.
for
a
negligence/products
Brunswick’s
negligent
Specifically, Count II asserts that
Brunswick owed Campbell (and his insurer) a duty to construct,
design, formulate, install, prepare and assemble a safe Vessel;
that Brunswick breached this duty by constructing, designing,
formulating, installing, preparing and assembling the Vessel with
defective Zeus Pods, which caused the Vessel to sink, require
salvage, and ultimately catch fire; and that Atlantic Speciality
sustained damages in the form of payments made to Campbell under
its insurance policy and payments associated with investigating
the salvage, fire, sinking and filing of the lawsuit.
(Doc. #1,
¶¶ 30-32.)
“[A] party seeking to invoke federal admiralty jurisdiction
. . . over a tort claim must satisfy conditions both of location
and of connection with maritime activity.”
Jerome B. Grubart,
Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 534 (1995).
The location test is satisfied if “the tort occurred on navigable
water . . . .”
navigable
Id.
waters,
manifested itself.
In determining whether a tort occurred on
the
Court
looks
to
where
the
tort’s
harm
E. River S.S. Corp., 476 U.S. at 863-64
(although defective turbines manufactured on land, location test
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satisfied because injury “occurred while the ships were sailing on
the high seas.”)
The connection test has two prongs, both of which must be
satisfied: (1) the incident at issue must have a potential to
disrupt maritime commerce; and (2) the activity giving rise to the
incident must have a substantial relationship to a traditional
maritime activity.
Jerome B. Grubart, 513 U.S. at 534.
The Court
“must assess the general features of the type of incident involved”
to determine if it has a potentially disruptive impact on maritime
commerce.
Sisson v. Ruby, 497 U.S. 358, 363 (1990).
“The correct
inquiry is not whether there was an effect on maritime activity,
but rather whether there potentially could have been.”
Alderman
v. Pac. N. Victor, Inc., 95 F.3d 1061, 1064 (11th Cir. 1996).
Under the second prong of the connection test, the Court must
analyze “the general conduct from which the incident arose” to
determine
if
the
activity
has
traditional maritime activity.
a
substantial
connection
to
a
Sisson, 497 U.S. at 364.
The Complaint alleges that the Vessel’s defective Zeus Pods
malfunctioned and injured the Vessel while in navigable waters off
the coast of Naples, Florida.
The Court finds the location test
is sufficiently pled. The Court also finds that the allegations
regarding the operation of the Vessel in navigable waters and the
sinking and burning of the Vessel sufficiently allege a potential
to
disrupt
maritime
commerce
and
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that
the
activity
had
a
substantial
Foremost
relationship
Ins.
Co.
v.
to
a
traditional
Richardson,
457
maritime
U.S.
668,
activity.
675
(1982).
Accordingly, the tort claim as pled in Count II of the Complaint
comes within the Court’s admiralty jurisdiction.
(2)
Admiralty Jurisdiction Over the Warranty Claims
The
Complaint
also
asserts
claims
against
Brunswick
for
breach of express warranty (Count III), breach of implied warranty
of merchantability (Count IV), and breach of implied warranty of
fitness for a particular purpose (Count V).
The Court finds these
claims do not come within the Court’s admiralty jurisdiction.
It is well settled that a contract for the “sale of a vessel
is not maritime in nature” and “does not invoke the maritime
jurisdiction of the federal courts.”
Hatteras of Lauderdale, Inc.
v. Gemini Lady, 853 F.2d 848, 851-52 (11th Cir. 1988).
Similarly,
warranty claims arising out of a contract for the sale of a vessel
are not subject to federal admiralty jurisdiction.
E. River, 476
U.S. at 872, n. 7 (noting that the plaintiff’s breach of warranty
claims “would not be within the admiralty jurisdiction” of the
federal courts).
In this case, Plaintiff’s warranty claims appear to arise out
of a contract for the sale of the Vessel to Campbell, and therefore
do
not
fall
under
federal
admiralty
jurisdiction.
However,
because the Court has original subject matter jurisdiction over
the tort claim in Count II, the Court has jurisdiction over the
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warranty claims under 28 U.S.C. § 1367(a), at least if Count II is
viable.
B.
The Negligence Claim (Count II)
As discussed above, Count II asserts that Brunswick owed
Campbell a duty to construct, design, formulate, install, prepare
and assemble a safe Vessel, breached that duty, and caused Atlantic
Speciality damages in the form of payments made to Campbell under
its insurance policy and payments associated with investigating
the salvage, fire, sinking and filing of the lawsuit.
¶¶ 30-32.)
(Doc. #1,
Brunswick contends that Plaintiff’s negligence claim
should be dismissed because it is barred by the economic loss rule.
The Court agrees.
(1)
Federal Maritime Law Applies
As a preliminary matter, the Court first addresses whether
state or federal law applies to this claim.
“Where a case arises
in admiralty,” federal maritime law applies.
Sea Byte, Inc. v.
Hudson Marine Mgmt. Servs., Inc., 565 F.3d 1293, 1298 (11th Cir.
2009)(internal
citation
omitted).
However,
“when
neither
statutory nor judicially created maritime principles provide an
answer to a specific legal question, courts may apply state law
provided that the application of state law does not frustrate
national interests in having uniformity in admiralty law.”
(internal citation and quotation omitted).
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Id.
(2)
Negligence Claim Barred by Economic Loss Rule
“It is settled that the general maritime law imposes duties
to avoid . . . negligence.”
Norfolk Shipbuilding & Drydock Corp.
v.
813
Garris,
532
U.S.
811,
(2001).
Federal
maritime
recognizes negligence products liability principles.
476 U.S. at 865.
law
E. River,
In East River, the Supreme Court held that
“whether stated in negligence or strict liability, no productsliability claim lies in admiralty when the only injury claimed is
economic
loss.”
Id.
at
876.
The
Court
reasoned
that
a
manufacturer has no duty to “prevent a product from injuring
itself.”
In
Id. at 871.
resulting
this
case,
from
Plaintiff
payments
made
seeks
to
purely
Campbell
economic
under
the
damages
Vessel’s
insurance policy and the costs of investigating the claim and
filing this lawsuit.
recovery
in
tort
Because federal maritime law does not permit
for
such
negligence claim is barred. 1
granted.
purely
economic
loss,
Plaintiff’s
The motion to dismiss Count II is
Because plaintiff may be able to allege the existence
of compensable “other property,” Saratoga Fishing Co. v. J.M.
1
The parties incorrectly rely on Florida law as controlling
whether the economic loss rule bars Plaintiff’s negligence claim.
However, even if Florida law applied, the result would nonetheless
be the same.
Tiara Condo. Ass'n, Inc. v. Marsh & McLennan
Companies, Inc., 110 So. 3d 399, 407 (Fla. 2013) (limiting
Florida’s economic loss rule to products liability cases).
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Martinac & Co., 520 U.S. 875 (1997), dismissal is without prejudice
to filing an amended complaint.
C.
Breach of Express Warranty Claim (Count III) 2
Count III asserts a breach of express warranty claim against
Brunswick.
Specifically, it asserts that Brunswick “issued an
express warranty to Campbell” that the Vessel was free of defects,
but breached its express warranty by negligently constructing the
Vessel
with
a
defective
Product.
(Doc.
#1,
¶¶
33,
35.)
Brunswick argues Count III should be dismissed because Plaintiff
failed to allege privity between Brunswick and Campbell.
While
the allegations are humble, the Court finds they are sufficient.
The Court agrees with defendant that Florida law requires
privity to establish this claim, and therefore privity must be
plausibly pled in the complaint.
“Florida law reveals no clear
rule about whether privity is required in every Florida express
warranty claim.”
Godelia v. Doe 1, 881 F.3d 1309, 1321 (11th Cir.
2018).
As a general principle, however, Florida law requires
privity
in
an
action
for
breach
of
express
warranty.
See
Intergraph Corp. v. Stearman, 555 So. 2d 1282, 1283 (Fla. 2d DCA
1990) (“Privity is required in order to recover damages from the
seller of a product for breach of express or implied warranties.”);
2
Because Count III does not fall within the Court’s admiralty
jurisdiction, as discussed supra, the Court applies Florida law to
it.
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see also Weiss v. Johansen, 898 So. 2d 1009, 1012 (Fla. 4th DCA
2005)(noting that “in order to recover for the breach of a warranty
either express or implied, the plaintiff must be in privity of
contract with the defendant”).
Additionally,
privity
Florida
requirement
in
courts
have
express
recognized
warranty
claims
a
relaxed
where
manufacturer makes direct representations to a purchaser.
a
See
Cedars of Lebanon Hosp. Corp. v. European X-Ray Distributors of
Am., Inc., 444 So. 2d 1068, 1071 (Fla. 3d DCA 1984).
In Cedars,
a hospital purchased a manufacturer’s medical equipment through a
third-party dealer.
between
hospital
the
Id. at 1072.
hospital
did
not
manufacturer,
the
and
purchase
The court found privity existed
manufacturer
the
manufacturer
because,
equipment
made
although
directly
direct
from
the
the
representations
regarding the equipment’s quality to the hospital prior to purchase
from the dealer.
Id.
The court noted that without the direct
contacts from the manufacturer to the hospital, there would have
been no privity “and thus no liability for breach of warranties .
. . .”
Id. at 1072 n. 4.
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In this case, the Court finds Plaintiff has adequately alleged
privity between Campbell and Brunswick. 3
Plaintiff alleges that
Campbell purchased the Vessel from Brunswick (Doc. #1, ¶2) and
that Brunswick “issued an express warranty to Campbell.”
33.)
Accordingly,
the
Court
alleged the required privity.
finds
Plaintiff
has
(Id. ¶
adequately
The motion to dismiss Count III is
therefore denied.
D.
The Breach of Implied Warranty Claims (Counts IV and V) 4
Count IV asserts a claim for breach of implied warranty of
merchantability, and Count V asserts a claim for breach of implied
warranty of fitness for a particular purpose.
Brunswick argues
these claims should be dismissed because Plaintiff has failed to
allege privity.
The Court disagrees.
The Court agrees with Brunswick that under Florida law,
privity is required in a claim for breach of an implied warranty.
Kramer v. Piper Aircraft Corp., 520 So. 2d 37, 39 (Fla. 1988); see
also Mesa v. BMW of N. Am., LLC, 904 So. 2d 450, 458 (Fla. 3d DCA
2005) (“Under Florida law, a plaintiff cannot recover economic
3
Plaintiff appears to argue that privity is necessarily
established here because it has brought this action as subrogee of
Campbell. The required privity is between Brunswick and Campbell.
As subrogee, Plaintiff is subject to any defenses available against
Campbell. Allstate Ins. Co. v. Metro. Dade Cty., 436 So. 2d 976,
978 (Fla. 3d DCA 1983).
4
Because Counts IV and V do not fall within the Court’s original
subject matter jurisdiction as discussed supra, the Court applies
Florida law.
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losses for breach of implied warranty in the absence of privity.”).
As discussed above, Plaintiff has sufficiently alleged privity
between Campbell and Brunswick to satisfy its pleading burden.
Accordingly, it is hereby
ORDERED AND ADJUDGED:
Defendant Brunswick’s Motion to Dismiss (Doc. #17) is GRANTED
IN PART AND DENIED IN PART as follows:
1.
The motion is granted as to Count II, which is dismissed
without prejudice.
2.
The motion is denied as to Counts III, IV, and V. 5
3.
Plaintiff may file an amended complaint within thirty
(30) days of the date of this Opinion and Order.
DONE and ORDERED at Fort Myers, Florida, this 23rd day of
May, 2018.
Copies:
Counsel of Record
5
Without a viable Count II, the Court would anticipate dismissing
Counts III-V. That matter, however, is premature in light of a
potential for amendment.
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