Fawzy v. Wauquiez Boats SNC
MEMORANDUM OPINION. Signed by Judge Richard D. Bennett on 10/14/2016. (jnls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
DR. AMR FAWZY,
WAUQUIEZ BOATS SNC,
Civil Action No.: RDB-16-3363
Plaintiff Dr. Amr Fawzy (“Plaintiff” or “Fawzy”) has brought this “admiralty and
maritime” action against Defendant Wauquiez Boats SNC (“Defendant” or “Wauquiez”),
pursuant to 28 U.S.C. § 1333 and Rule 9(h) of the Federal Rules of Civil Procedure, alleging
“a claim for the breach of a maritime contract, for products liability under the general
maritime law, and pursuant to admiralty tort jurisdiction.” Verified Compl., ¶ 1, ECF No. 1.1
At Plaintiff’s request, this Court issued an Order of Issuance of Process of Maritime
Attachment (ECF No. 4), authorizing the United States Marshals Service to seize a
Wauquiez Pilot Saloon 48 sailboat owned by Defendant and located in Annapolis, Maryland.
Via separate Order Appointing Substitute Custodian (ECF No. 5), this Court appointed the
Master and crew of that vessel as substitute custodians of the property. Currently pending
before this Court is Defendant’s Motion to Dismiss Verified Complaint, Dissolve Orders of
Attachment and Appointing Substitute Custodian, Release Vessel, and For Sanctions,
1 As discussed herein, despite filing this action as a maritime case, Plaintiff has failed to establish maritime
jurisdiction. Accordingly, this action shall be dismissed.
Attorneys Fees, Costs, and Damages (ECF No. 12). This Court conducted a hearing2 on the
pending Motion on October 12, 2016. For the reasons stated herein, Defendant’s Motion to
Dismiss Verified Complaint, Dissolve Orders of Attachment and Appointing Substitute
Custodian, Release Vessel, and For Sanctions, Attorneys Fees, Costs, and Damages (ECF
No. 12) is GRANTED IN PART and DENIED IN PART. Specifically, the Verified
Complaint shall be DISMISSED, the Orders of Attachment and Appointing Substitute
Custodian shall be DISSOLVED, and the vessel shall be RELEASED.
Defendant’s request for sanctions, attorneys fees, costs, and damages shall be DENIED.
In ruling on a motion to dismiss, this Court must accept the factual allegations in the
plaintiff’s complaint as true and construe those facts in the light most favorable to the
plaintiff. See, e.g., Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999); Harris v.
Publish Am., LLLP, No. RDB-14-3685, 2015 WL 4429510, at *1 (D. Md. July 17, 2015).
Plaintiff Dr. Amr Fawzy (“Plaintiff” or “Dr. Fawzy”) is a citizen of the State of
Massachusetts. Verified Compl., ¶ 2, ECF No. 1. Defendant Wauquiez (“Defendant” or
“Wauquiez”) “is a foreign business entity duly organized and existing under the laws of
France.” Id. at ¶ 3. “On or about June 15, 2011, [Dr. Fawzy] entered into a Sales Contract
[Pl.’s Ex. 1] with [Wauquiez] to build a PILOT SALOON 55 vessel [(“Fawzy Vessel”)].” Id.
at ¶ 4. On that same date, the parties entered into an “Addendum to Sales Contract” [Pl.’s
Ex. 2], which provided “certain amendments and modifications to the terms of contract that
2 “After receiving notice of Supplemental Rule B attachment, the defendant is entitled to contest the
attachment at a prompt hearing pursuant to Rule E(4)(f).” Vitol, S.A. v. Primerose Shipping Co., 708 F.3d 527,
541 (4th Cir. 2013) (citing Fed. R. Civ. P. Adm. Supp. R. E(4)(f)).
required certain continuing obligations of both parties,” including the use of the Fawzy
Vessel by Wauquiez at the Cannes Boat Show in Cannes, France and the Genoa Boat Show
at Genoa, Italy.3 Id. at ¶ 5.
The Fawzy Vessel was delivered to Dr. Fawzy in Port Camarque, France on
December 20, 2011, but was delivered “without a certification of construction of the builder
(or certificate of compliance),” allegedly in violation of Clause 1.6 of the Sales Contract.” Id.
at ¶ 6.
“Over the next two years, including while fulfilling the terms of the added
commitments for possession and use of the Fawzy Vessel, the Fawzy Vessel experienced
numerous problems pertaining to the main sail, the foresail, and other components of the
Fawzy Vessel, many of which only became apparent while the Fawzy Vessel was underway
with [Dr. Fawzy] onboard, which resulted in great danger to [his] life.”4 Id. at ¶ 7. Despite
Wauquiez’s “periodic attempts . . . to address the defects and make any required repairs or to
effect any replacement of the defective components, the problems persisted.” Id. at ¶ 8.
Therefore, Dr. Fawzy “retained counsel in France during the summer of 2013, who
authored a demand letter” to Wauquiez on August 30, 2013 [Pl.’s Ex. 2]. Id. at ¶ 9.
However, Wauquiez never responded to that letter of counsel.
Id. at ¶ 10.
thereafter, Dr. Fawzy filed suit in France against Wauquiez, “seeking return of the purchase
price of the Vessel and other, related expenses caused by the repetitive but unsuccessful
3 At this Court’s October 12, 2016 hearing, counsel for Dr. Fawzy clarified that Wauquiez showed the Fawzy
Vessel at the Cannes and Genoa boat shows in the fall of 2011, before Dr. Fawzy took delivery of the boat.
4 At the hearing on October 12, 2016, counsel for the Plaintiff represented that this was a “near death
experience” on the seas of the Atlantic Ocean because Dr. Fawzy and his crew were forced to float with the
tide during periods of time following the alleged problems with the vessel. These facts were not specifically
alleged in the Verified Complaint but, as discussed herein, they do not affect this Court’s ruling.
attempts to repair or replace the defective components.” Id. at ¶ 11. That suit remains
Dr. Fawzy estimates that he has experienced damages in the amount of $1,134,132.27
USD, the sum of the vessel’s purchase price ($1,127,323.95 USD) and the “cost of
unexpected marine storage in France due to defective condition of Vessel’s components”
($6,808.32 USD). Id. at ¶ 12. Additionally, Dr. Fawzy claims that “Since August 30, 2013,
prejudgment interest (at a rate of 6% per annum) has been incurred on the principal due in
the amount of $211,041.73” and that “the legal expenses and costs of prosecuting this claim
may exceed $100,000.” Id. at ¶¶ 14, 15. Therefore, Dr. Fawzy seeks a total award of
$1,445,174.00 USD. Id. at ¶ 16.
The United States Boat Show started on October 6, 2016 in Annapolis, Maryland.
Mot. to Dismiss, p. 1, ECF No. 12. Wauquiez was displaying a brand new vessel at the show
(“Wauquiez Vessel”). Id. That same day, Dr. Fawzy filed the Verified Complaint in this
action (ECF No. 1). He claims that this is “a case of admiralty and maritime jurisdiction
pursuant to 28 U.S.C. § 1333, and is an admiralty and maritime claim within the meaning of
Rule 9(h) of the Federal Rules of Civil Procedure in that it involves a claim for the breach of
a maritime contract, for products liability under the general maritime law, and pursuant to
admiralty tort jurisdiction.” Verified Compl., ¶ 1, ECF No. 1.
Also on October 6, 2016, upon motion of Dr. Fawzy, this Court issued an Order of
Issuance of Process of Maritime Attachment, pursuant to Rule B of the Supplemental Rules
for Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure (ECF
No. 4) and an additional Order appointing the Master and crew of the Wauquiez Vessel
located in Annapolis, Maryland as the Substitute Custodian (ECF No. 5). The Waquiez
Vessel was seized by the United States Marshals Service on October 7, 2016. Mot. to
Dismiss, p. 1, ECF No. 12. Pursuant to this Court’s Orders, “the general public, boat show
staff, and others (except Wauquiez and its agents and dealers) were not permitted on board,”
which Wauquiez now contends “effectively ruin[ed] the boat show for and caus[ed] great
embarrassment to Wauquiez.” Id. Following the close of the Boat Show, the Wauquiez
Vessel was moved to Bert Jabin’s Yacht Yard in Annapolis, Maryland, pursuant to this
Court’s Order (ECF No. 13).
STANDARDS OF REVIEW
Motion to Dismiss Verified Complaint for Lack of Maritime Jurisdiction
Under 28 U.S.C. § 1333, United States District Courts have original and exclusive
jurisdiction over “[a]ny civil case of admiralty or maritime jurisdiction.” 28 U.S.C. § 1333(1);
see also U.S. Const. art. III, § 2, cl. 1 (“The judicial power shall extend to . . . all Cases of
admiralty and maritime Jurisdiction.”). A Motion to Dismiss a Complaint for lack of subject
matter jurisdiction, pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, may
proceed either as a facial challenge, asserting that the allegations in the complaint are
insufficient to establish subject matter jurisdiction, or a factual challenge, asserting “that the
jurisdictional allegations of the complaint [are] not true.” Kerns v. United States, 585 F.3d 187,
192 (4th Cir. 2009) (citation omitted). With respect to a facial challenge, a court will grant a
motion to dismiss for lack of subject matter jurisdiction “where a claim fails to allege facts
upon which the court may base jurisdiction.” Davis v. Thompson, 367 F. Supp. 2d 792, 799 (D.
Md. 2005). A plaintiff carries the burden of establishing subject matter jurisdiction. Lovern v.
Edwards, 190 F.3d 648, 654 (4th Cir. 1999).
Motion to Vacate Attachment
“After receiving notice of Supplemental Rule B attachment, the defendant is entitled
to contest the attachment at a prompt hearing pursuant to Rule E(4)(f).” Vitol, S.A. v.
Primerose Shipping Co., 708 F.3d 527, 541 (4th Cir. 2013) (citing Fed. R. Civ. P. Supp. Rule
E(4)(f)). “To avoid vacatur of attachment, it is the plaintiff’s burden to show that ‘1) it has
a valid prima facie admiralty claim against the defendant; 2) the defendant cannot be found
within the district; 3) the defendant’s property may be found within the district; and 4) there
is no statutory or maritime law bar to the attachment.’ ” Id. (quoting Aqua Stoli Shipping Ltd.
v. Gardner Smith Pty Ltd., 460 F.3d 434, 445 (2d Cir. 2006)). “[T]o plead a prima facie
admiralty case pursuant to Supplemental Rule E, ‘the complaint shall state the circumstances
from which the claim arises with such particularity that the defendant or claimant will be
able, without moving for a more definite statement, to commence an investigation of the
facts and to frame a responsive pleading.’ ” Id. (quoting Fed. R. Civ. P. Adm. Supp. R.
E(2)(a)). “The burden to show why continued attachment is proper is the plaintiff’s to
bear.” Id. (citing See Equatorial Marine Fuel Mgmt. Servs. Pte Ltd. v. MISC Berhad, 591 F.3d
1208, 1210 (9th Cir. 2010).
The Plaintiff Has Failed to Establish Maritime Jurisdiction
Maritime Jurisdiction Does Not Extend to Contracts to Build or Sell a Vessel
The Defendant objects that this matter is “not a maritime claim” but is simply “a
breach of warranty claim of a contract to build a pleasure vessel.” Mot. to Dismiss, p. 3,
ECF No. 12. It is well-established that a contract to build a vessel, or a contract for the sale
of a vessel, is not a maritime contract and, therefore, fails to establish maritime jurisdiction.
See, e.g., The Francis Donald Thames Towboat Co. v. The Francis Donald Cummins, 254 U.S. 242
(1920); North Pac. S. S. Co. v. Hall Bros. Marine Ry. and Shipbuilding Co., 249 U.S. 119 (1919);
Richard Bertram & Co. v The Yacht Wanda, 447 F. 2d 966, 967 (5th Cir. 1971); Twin City Barge
& Towing v. Aiple, 709 F. 2d 507 (8th Cir. 1983). The United States Court of Appeals for the
Fourth Circuit affirmed this principle in Flota Maritima Browning de Cuba v. Snobl, 363 F.2d 733
(4th Cir. 1966), observing that “the prevailing rule has been that a contract for the sale of a
ship is not a maritime contract.” Flota, 363 F.2d at 735.
The Plaintiff concedes that a contract for the sale of a vessel is not a maritime
contract, but argues that the contract in this case is an exception because the Addendum to
the Sales Contract “included provisions that required certain continuing obligations of both
parties as to the delivery of the [Fawzy] Vessel and the periodic possession and use of the
[Fawzy] Vessel by Wauquiez at the Cannes Boat Show in Cannes, France and the Genoa
Boat Show at Genoa, Italy.”
Pl. Response, p. 7, ECF No. 14.
This aspect of the
Addendum, Plaintiff contends, “amounts to a charter agreement between the parties,” which
establishes maritime jurisdiction with respect to the contract. Id.
“The charter of a vessel . . . is maritime.” Flota, 363 F.2d at 735. However, as
clarified at this Court’s hearing on the pending motion, the parties did not enter into a
charter agreement. The Addendum does not include the word “charter,” and is titled simply
Addendum to “Sales Contract.” Addendum, Pl. Ex. 1, p. 22, ECF No. 1-1. Rather, the
Defendant showed the Fawzy Vessel at the Cannes and Genoa boat shows in the Fall of
2011, prior to Plaintiff’s taking delivery of the vessel.5
The Plaintiff Has Failed to Allege Any Injury Sufficient to Raise a Tort Claim
Alternatively, Dr. Fawzy contends that his claims, raised both in this case and in the
pending litigation in France, “are largely based on products liability due to defective
components, strict liability sounding in tort, and tort jurisdiction related thereto, such as the
negligent design and construction of the Wauquiez Pilot Saloon 55 and the failure to warn6.”
Pl. Response, p. 8, ECF No. 14. He argues that “[a]ll of these types of claims provide a valid
basis for admiralty jurisdiction.” Id. (citing Dudley v. Bayou Fabricators, 330 F. Supp. 788, 791
(S.D. Ala. 1971); McKee v. Brunswick Corp., 354 F.2d 577 (7th Cir. 1965)).
While it is true that certain tort claims provide a basis for admiralty jurisdiction, it has
been well-established that they require some form of alleged personal injury or property
damage. In the Dudley case relied upon by Plaintiff, the United States District Court for the
Southern District of Alabama specifically clarified that “[w]hether the action be called
products liability, breach of implied warranty sounding in tort or tort on navigable waters, if
5 Counsel for the Plaintiff stated at the hearing on October 12, 2016 that this was not his strongest argument.
6 Plaintiff claims in his Response to the pending Motion that “[i]t is possible that if discovery and depositions
were permitted in this matter regarding Wauquiez’s possession and use of the Vessel” at the Cannes and
Genoa shows, “it would likely reveal that Wauquiez obtained certain knowledge and developed concerns as to
the boat, its design, and the defective components installed thereon prior to it being delivered to Plaintiff.”
Pl. Response, p. 7, ECF No. 14.
the action is based on a negligent act or omission by the manufacturer or builder that is the
proximate cause of subsequent personal or property injury, liability attaches and is actionable under
admiralty.” Dudley, 330 F. Supp. at 791 (emphasis added).
The United States Supreme Court clearly reiterated this long-standing principle of
admiralty law in E. River S.S. Corp v. Transamerica Delaval, 476 U.S. 858 (1986). In that case,
the Court affirmed dismissal of an action where the only claimed injuries were to turbine
engines, the allegedly defective products, and no personal injury or property damage was
alleged. E. River S.S. Corp., 476 U.S. at 876. The Court concluded that “[d]amage to a
product itself is most naturally understood as a warranty claim” and that “whether stated in
negligence or strict liability, no products-liability claim lies in admiralty when the only injury
claimed is economic loss.” Id. at 872, 876.
Dr. Fawzy’s complaint in this case falls within the ambit of the East River opinion.
He contends that he has alleged injury, including a “near death experience in the middle of
the Atlantic due to the defective product and components [and] personal injury to a Captain
in 2012 while onboard the Vessel due to the recurring problems with the boom and main
Pl. Response, p. 9, ECF No. 14.
However, the Supreme Court in East River
specifically considered “permit[ting] recovery for a ‘near miss,’ where the risk existed but no
calamity occurred,” and rejected that approach. E. River S.S. Corp., 476 U.S. at 862. In
attempting to avoid the clear mandate of the East River opinion, the Plaintiff can only allege
that the Captain was “injured” by being hit with the boom. This common occurrence on
sailboats does not approach the type of tort injury anticipated in the Supreme Court’s
opinion in the East River case. For these reasons, Plaintiff has failed to establish maritime
jurisdiction. Accordingly, the Verified Complaint shall be dismissed. Furthermore, because
Plaintiff has failed to state a maritime claim, the Rule B attachment in this case shall be
vacated, and the Wauquiez Vessel shall be released. See supra Aqua Stoli Shipping Ltd., 460
F.3d at 445 (“To avoid vacatur of attachment, it is the plaintiff’s burden to show that . . . it
has a valid prima facie admiralty claim against the defendant.”).
The Defendant is Not Entitled to Sanctions, Attorneys Fees, Costs, or Damages
Given that the “Annapolis Boat Show is the single most important event for the
business of selling sailboats in the United States” and this proceeding prevented Wauquiez
from showing the Wauquiez Vessel to the public or members of the press for most of the
show, the Defendant contends that this was a malicious action. Mot. to Dismiss, p. 11-12,
ECF No. 12. The Defendant contends that there was no logical reason for prohibiting
access to the vessel as it was “blocked in by the floating docks and other boats at the Show”
and, therefore, could not go anywhere. Id. at 12.
According to Patrick Bloch, Director of Sales & Marketing for Wauquiez Boats,
“Plaintiff has been heard to say on more than one occasion that his goal was to prevent
Wauquiez from ever importing another boat to the United States.” Id. (citing Bloch Aff.,
Def. Ex. 1, ECF No. 12-1). Defendant contends that “Wauquiez has suffered significant
damage,” “[t]hey were unable to show their boat to members of the public” despite the fact
that “[m]embers of the press, including Cruising World magazine, wanted to review the
Wauquiez Vessel as a potential Boat of the Year candidate,” and “[t]he brand suffered
significant embarrassment in the industry, as word quickly spread through the boat show of
the seizure of the Wauquiez Vessel.” Id. Accordingly, the Defendant requests that a hearing
be scheduled to assess the damages incurred by Wauquiez.
“A vessel is wrongfully arrested if the claimant acted in bad faith, malice, or gross
negligence.” Fid. Bank PLC v. N. Fox Shipping N.V., No. WDQ-05-0871, 2010 WL 4117003,
at *3 (D. Md. Oct. 19, 2010) (citing Frontera Fruit Co. v. Dowling, 91 F.2d 293, 297 (5th
Cir.1937); Ocean Ship Supply, Ltd. v. M/V Leah, 729 F.2d 971, 974 (4th Cir.1984)). Although
Plaintiff has failed to establish maritime jurisdiction, there is no indication that the Plaintiff
“acted in bad faith, malice, or gross negligence” by seeking Rule B attachment. This Court
rejected a similar claim in Fid. Bank PLC. Like the Plaintiff in this case, the plaintiff in Fid.
Bank PLC “properly filed a verified complaint.” Additionally, while there was a question in
Fid. Bank PLC as to whether an action against the Defendant supporting arrest of the vessel
had been filed, it is undisputed in this case that Plaintiff has brought an action against the
Defendant in France, which was pending at the time of the attachment and remains pending,
and Plaintiff submitted his motion for attachment of the Wauquiez Vessel based on a “good
faith determination” that he had raised a maritime claim. Fid. Bank PLC, 2010 WL 4117003
at 4. Plaintiff has indicated that he requested attachment of the vessel at the start of the boat
show only because it is his “understanding that this is the first time that Wauquiez has
attempted to bring a boat into the United States.” Pl. Response, p. 11, ECF No. 14. There
are clearly legal issues in this case, including this Court’s interpretation of the Supreme
Court’s opinion in E. River S.S. Corp v. Transamerica Delaval, 476 U.S. 858 (1986) and its
progeny. It simply cannot be said that Plaintiff’s counsel proceeded in “bad faith, malice, or
gross negligence” in the pursuit of this litigation. Accordingly, Defendant’s request for
sanctions, attorneys fees, costs, and damages shall be denied.
For the reasons stated above, Defendant’s Motion to Dismiss Verified Complaint,
Dissolve Orders of Attachment and Appointing Substitute Custodian, Release Vessel, and
For Sanctions, Attorneys Fees, Costs, and Damages (ECF No. 12) is GRANTED IN PART
and DENIED IN PART. Specifically, the Verified Complaint shall be DISMISSED, the
Orders of Attachment and Appointing Substitute Custodian shall be DISSOLVED, and the
vessel shall be RELEASED. However, Defendant’s request for sanctions, attorneys fees,
costs, and damages shall be DENIED.
October 14, 2016
Richard D. Bennett
United States District Judge
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