American Steamship Company v. Hallett Dock Company et al

Filing 315

MEMORANDUM OF LAW & ORDER. IT IS HEREBY ORDERED: 1. The Motions to Supplement the Record 266 , 276 , 311 are GRANTED and Plaintiffs' Motion to Strike 286 is DENIED. 2. Plaintiffs' Motion for Partial Summary Judgment Against All Defendants on Damages Related to Repair Costs and Expenses 164 is DENIED; 3. Plaintiffs' Motion for Partial Summary Judgment against Defendant Hallett Dock Company 160 is GRANTED IN PART and DENIED IN PART as follows: a. The Pennsylvania Rule applies to Hallett Dock Company's actions; b. Summary judgment is DENIED in all other respects; 4. Defendant Hallett Dock Company's Motion for Partial Summary 168 is GRANTED IN PART and DENIED IN PA RT as follows: a. Count IV (breach of implied warranty of fitness for a particular purpose) is DISMISSED; b. All other counts REMAIN; 5. Defendant Fraser Shipyards, Inc.'s Motion for Summary Judgment 173 is GRANTED IN PART an d DENIED IN PART as follows; a. Count IV (breach of implied warranty of fitness for a particular purpose) and Count V (breach of express warranty) are DISMISSED; b. All other counts REMAIN; 6. Defendant Chris Jensen & Son, Inc.� 39;s a Motion for Partial Summary Judgment 156 is GRANTED IN PART and DENIED IN PART as follows; a. Count IV (breach of implied warranty of fitness for a particular purpose) and Count V (breach of express warranty) are DISMISSED; b. Al l other counts REMAIN; 7. Defendants RJS Construction LLC and Reuben Johnson & Son, Inc.'s Motion for Partial Summary Judgment 151 is GRANTED IN PART and DENIED IN PART as follows: a. Count IV (breach of implied warranty of fitness for a particular purpose) and Count V (breach of express warranty) are DISMISSED; b. All other counts and cross claims REMAIN. (Written Opinion). Signed by Chief Judge Michael J. Davis on 3/23/12. (GRR)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

AMERICAN STEAMSHIP CO.,
ARMSTRONG STEAMSHIP CO.,
Plaintiffs,
v.

Memorandum of Law & Order
Civil No. 09-2628 (MJD/LIB)

HALLETT DOCK CO.,
FRASER SHIPYARDS, INC.,
RJS CONSTRUCTION LLC,
CHRIS JENSEN & SON, INC.,
REUBEN JOHNSON & SON, INC.,
Defendants.

Gerardo Alcazar, Brent L. Reichert, David E. Bland, and Richard B. Allyn,
Robins, Kaplan, Miller & Ciresi L.L.P., Counsel for Plaintiffs.
David R. Hornig and Guerric S.H.L. Russell, Nicoletti Hornig & Sweeney, and
John D. Kelly and Scott A. Witty, Hanft Fride, P.A., Counsel for Defendant
Hallett Dock Co.
Nicholas Ostapenko and Paul W. Wojciak, Johnson Killen & Seiler, and Edward
C. Radzik and Lauran V. Marshall, Dennehey, Warner, Coleman & Goggin,
Counsel for Defendant Fraser Shipyards, Inc.
Daniel A. Haws, John Paul J. Gatto, and Krista J. Robertson, Murnane Brandt,
PA, Counsel for RJS Construction, LLC, Chris Jensen & Son, Co., Inc., and
Reuben Johnson & Son, Inc.
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I.

Summary of Decision
This case involves claims by the owners of the Walter J. McCarthy, Jr., a

one thousand foot freight ship which was damaged when it struck debris as it
attempted to berth at a Superior, Wisconsin dock on January 14, 2008. The
accident opened a large gash in the McCarthy’s hull and is alleged to have
caused more than four million dollars in damage. The McCarthy’s owners
brought suit against the various defendants named above, all of whom are
alleged to have played a role in the accident. This case proceeded through
discovery, with each party having an opportunity to depose the individuals
involved in the accident and to collect other relevant evidence. As might be
expected, the record reveals divergent accounts of the day of the accident and the
time leading up to it. Conflicting testimony abounds. Each party has attempted
to push to the blame away from itself and toward others.
The parties have now filed a series of motions, asking the Court to grant
summary judgment in their favor on questions of liability and various other legal
issues. The general rule of the federal maritime law that governs this case
provides that all parties responsible for the accident shall be liable for the
damages. Damages are apportioned among the responsible parties according to
their relative contribution to the accident.
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This Court cannot grant summary judgment where material factual
disputes persist; fact issues are for a jury at trial. Because of the numerous
factual disputes that remain in this case, the Court cannot determine at this stage
the total amount of damages caused by the accident, which parties are liable for
the damages, or to what extent the each of the responsible parties contributed to
the accident.
Although the Court concludes that the majority of the issues raised by the
parties must be resolved by a jury, the Court has granted summary judgment on
a few limited issues. The Pennsylvania Rule is maritime rule which comes into
play when a party involved in an accident has violated certain maritime statutes
and regulations. The Court concludes that the undisputed evidence shows that
Hallett Dock Co., the owner of the dock at which the McCarthy was damaged,
violated one or more maritime rules when it created and failed to mark debris in
the slip where the McCarthy was to be berthed. The burden at trial will therefore
fall on Hallett to prove that its negligence did not contribute to the accident.
The Court also concludes that certain warranty claims advanced by the
McCarthy’s owners are not supported by the law or the evidence developed in
discovery. Such claims need not proceed to a jury and will be dismissed.

3

II.

Introduction
This matter is before the Court on: (1) a motion for partial summary

judgment by Plaintiffs American Steamship Company and Armstrong Steamship
Company (collectively, “ASC”) against all Defendants on the issue of damages
[Docket No. 164]; (2) a motion for partial summary judgment by ASC against
Defendant Hallett Dock Company (“Hallett”) [Docket No. 160]; (3) a motion for
partial summary judgment by Hallett [Docket No. 168]; (4) a motion for
summary judgment by Defendant Fraser Shipyards, Inc. [Docket No. 173]; (5) a
motion for partial summary judgment by Defendant Chris Jensen & Son, Inc.
[Docket No. 156]; and (6) a motion for partial summary judgment by Defendants
RJS Construction LLC and Reuben Johnson & Son, Inc. [Docket No. 151]. ASC
and Hallet have also moved to supplement the record [Docket Nos. 266, 276,
311], and ASC has moved to strike Hallett’s motion [Docket No. 286]. The Court
heard oral argument on Friday, October 28, 2011.
III.

Background
This case arises out of an accident involving the Walter J. McCarthy, Jr.

(“McCarthy”), a one thousand foot freight ship owned and operated by ASC. On
January 14, 2008, the McCarthy struck underwater debris as it was entering a slip

4

at a Superior, Wisconsin dock owned by Hallett. The collision 1 caused a seven
by four foot gash in the hull, grounding the ship and allowing water to enter the
hull and engine room. The flooding caused extensive damage.
A. Hallett Dock Number 8
The McCarthy accident occurred at Hallett Dock Number 8 (“Dock No.
8”), a commercial dock and commodity storage site on the south shore of the
Duluth/Superior Harbor. Dock No. 8 runs north from the shore alongside a slip
which is 2,200-2,300 feet long and 151 feet wide. Dock No. 8 is used primarily to
load and unload bulk commodities.
In October 2006, a 180 foot section of the dock wall collapsed into the slip.
The collapsed area began approximately 330 to 250 feet north of the southern end
of the slip and ended approximately 510 to 540 feet north of the south end of the
slip. A concrete and rebar mooring house measuring 10 by 10 by 12 feet fell into
the slip near the north end of the collapsed section.
In the spring of 2007 Hallett hired Marine Tech, LLC to replace the
collapsed dock section and to clean up debris that fell into the slip. Marine Tech
The term “collision” has traditionally referred to an accident between two
moving vessels, while “allision” referred to a vessel’s contact with a stationary
object. Black’s Law Dictionary (9th ed. 2009). In modern cases, “collision” is
often used in the same context as “allusion,” id., and in this Order, the Court
uses the terms interchangeably.
5
1

reconstructed the dock, installing a new dock wall, pilings, and six new yellow
mooring bollards, which are used to tie up ships at the dock. This work was
completed in the summer of 2007. Marine Tech also dredged some portion of the
slip where the dock collapsed, but it did not remove all of the debris before the
winter. In October or November 2007, Marine Tech conducted soundings of the
slip to determine the depth of the slip at five foot intervals. The soundings
revealed an area several feet shallower than surrounding areas. (First Alcazar
Decl. [Docket No. 163], Ex. 12.) All areas north of the first new yellow bollard
appear to have been clear and unobstructed during the winter of 2007-2008.
While Hallett had marked the area containing the debris using buoys, it is
undisputed that the buoys were removed before the winter and there were no
physical warnings of debris in or around the slip as of January 2008.
B. Negotiations to Dock the McCarthy at Dock No. 8
ASC marine superintendent Ken Gliwa visited Dock No. 8 in September
2007 to assess whether it would be suitable for the McCarthy’s “winter layup”—
a time when the ship is docked to perform maintenance and to avoid extreme
winter conditions. That month, Gliwa sent a letter to Hallett reserving the dock,
and Hallett agreed to “provide mooring for [the McCarthy] during the winter
layup period.” (First Alcazar Decl., Ex. 7.) ASC contends that this agreement
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called for Hallett to assist with the mooring by providing guiding, spotting, and
tie-up services. Hallett denies that it agreed to provide such services, asserting
that it agreed only to allow ASC to moor the McCarthy at Dock No. 8. In
exchange for mooring the ship at Dock No. 8, ASC agreed to pay for a new
electrical service at the dock. (First Alcazar Decl., Ex. 9.)
ASC entered into a separate agreement with Defendant Fraser Shipyard
Shipyards, Inc. (“Fraser”), under which Fraser would repair the McCarthy over
the winter and also “provide line and anchor handling” upon the McCarthy’s
arrival for winter layup. (Radzik Decl. [Docket No. 177], Ex. 8.)
C. December 6 Phone Call
ASC alleges that Al Desmond, the McCarthy’s Chief Engineer, had a
telephone conversation with Hallett President Mike McCoshen on December 6,
2007, and during that conversation McCoshen told Desmond that the debris in
the slip had been cleaned up and that the slip was at least 21 feet deep up to
1,800 feet back from the opening of the slip. (Desmond Dep., First Alcazar Decl.,
Ex. 14 at 314:9-13.) Desmond typed notes to that effect. (First Alcazar Decl., Ex.
13.) McCoshen states that he does not recall such a conversation and denies that
he would have given the information alleged by Desmond because that

7

information would have been “incomplete or erroneous.” (McCoshen Aff.,
Hornig Aff. [Docket No. 226], Ex. A, ¶¶ 8-9, 15-16.)
D. The January 10 Meeting
A pre-arrival meeting was held at Dock No. 8 on January 10, 2008 (“the
January 10 meeting”). Present at that meeting were Gliwa, McCoshen, and Mike
Podgorak. Podgorak is a truck supervisor employed by Defendant Chris Jenson
& Son (CJS). Podgorak has testified that he attended the meeting in place of
Dave Whitehead, a Fraser employee, and also to represent Defendant Reuben
Johnson, which had been asked to provide snow removal services at the dock.
(Podgorak Dep., Fourth Alcazar Decl. [Docket No. 224], Ex. 11 at 92:5-9, 112:117.) Gliwa has asserted that he believed Podgorak to be a Fraser employee who
was also at the meeting to represent Reuben Johnson and Defendant RJS
Construction LLC. (Gliwa Aff., Fourth Alcazar Decl., Ex.8, ¶ 3.)
While the parties present at the meeting have differing recollections, all
agree that McCoshen stated that the McCarthy should be docked north of the
first yellow bollard. They disagree about the extent to which McCoshen
explained that there was debris in the slip past that point or warned that the
debris posed a danger.

8

According to Gliwa, he advised both McCoshen and Podgorak that he
would be traveling the weekend before the docking of the McCarthy and that
there was a chance that he would not be present when the McCarthy arrived at
Dock No. 8. (Gliwa Dep., First Alcazar Decl., Ex. 11 at 207:9-21.) McCoshen
remembers that Gliwa told him about his travel plans but denies that Gliwa told
him that he might not be back by January 14. (McCoshen Aff. ¶ 14.)
E. January 11-13
Podgorak has testified that, after the January 10 meeting, he
communicated the intended docking location to Whitehead twice before January
14. (Podgorak Dep., First Alcazar Decl., Ex. 15 at 19:19-20, 145:12-147:17.)
On January 13, 2008, Bryon Petz, a McCarthy crew member called
McCoshen. Petz has testified that McCoshen confirmed the depth figures that he
had allegedly given to Desmond in the December 6 phone call, indicating that
there was at least 21 feet of water 1,800 feet into the slip. (Petz Dep., First Alcazar
Decl., Ex. 18 at 24:3-8.)
F. The January 14, 2008 Accident
The McCarthy arrived at the head of the slip at approximately 9:45 a.m. on
January 14, 2008. Due to a flight problem, Gliwa was not able to be present that
morning. Tug boats were used to break up the ice which covered the slip. At
9

around 10:00 a.m. Podgorak and Fraser employee Dave Whitehead drove to the
dock. According to Podgorak, he then told Whitehead for the third time that the
McCarthy should be stopped north of the first yellow bollard. (Podgorak Dep. at
155:12-17.) Whitehead denies ever having been told that crucial piece of
information. (Whitehead Statement, First Alcazar Decl., Ex. 26.) At this point,
the McCarthy was in the north end of the slip, moving slowly south. Whitehead
drove Podgorak to the Fraser Shipyard and dropped him off there. Podgorak
was not present on the dock from that point onward.
Whitehead returned to the dock. According to McCarthy crewmembers,
Whitehead and two other Fraser employees proceeded to guide or “spot” the
McCarthy from a truck on the dock. (Desmond Dep., Fourth Alcazar Decl., Ex.
17 at 96:2-25.) The Fraser employees spoke with the ship’s crew through an
engine room door in the stern of the ship and via radio. Whitehead has stated
that he suggested backing the McCarthy further into the slip, but denies that he
was acting as a spotter. Hallett Dock Superintendent Clyde Jago was also on the
dock, but he apparently observed the docking from a distance and did not
communicate with the crew of the McCarthy or the Fraser spotters.

10

The McCarthy initially came to a stop approximately 50 to 100 feet north of
the first yellow bollard. According to the McCarthy crewmembers, Whitehead
directed the McCarthy to proceed further south because a Fraser crane to be used
for lay-up maintenance and repairs would not be able to reach the McCarthy
from the location north of the yellow bollard. (Desmond Aff., Fourth Alcazar
Decl., Ex. 17, ¶¶ 10-13.) The McCarthy had some difficulty following
Whitehead’s instruction to move further south, apparently on account of ice in
the slip. When the McCarthy was finally able to proceed backward, it shortly
thereafter struck something which caused a seven by four foot hole in the ship’s
hull. No one on the dock told had instructed the McCarthy’s crew not to proceed
past the first yellow bollard or warned them about the debris.
G. Damage and Repairs to the McCarthy
The gash in the McCarthy’s hull caused significant damage. As a result of
the holing, water flooded part of the engine room, damaging the diesel motors
and other mechanical equipment. A large piece of concrete and rebar was later
found inside of the engine compartment. The McCarthy became grounded next
to the slip. Immediately after the holing and flooding, Gliwa arranged for the
delivery of heaters and generators to prevent the water in the engine room from

11

freezing. Fraser’s employees also took steps to mitigate damage and prevent the
McCarthy from becoming a total constructive loss.
Jared Aquilla, a marine surveyor from North American Marine, Inc.
(“NAM”), arrived shortly after the incident to assess the damage and oversee the
necessary repairs. Aquilla worked with Pierre Pelletreau (ASC’s Fleet Engineer),
Fraser, and other subcontractors to oversee repairs to the McCarthy. Repairs to
the McCarthy were completed on May 6, 2008. On February 19, 2009, Aquilla
submitted a Report of Survey which listed necessary repairs and assessed the
reasonableness of the charges. (Second Alcazar Decl. [Docket No. 167], Ex. 9.)
The report lists the following items as the sources of ASC’s repair costs and other
expenses: hull and cleanup; propulsion; generators; electrical; auxiliary
machinery; crew expenses; and miscellaneous expenses. Aquilla also submitted
an expert report on February 25, 2011 at ASC’s request. Aquilla’s report
identified three categories of expenses related to the holing and flooding of the
McCarthy: (1) total cost of repairs and expenses, $4,128,524.82; (2) cost to hire
NAM to serve as contractor and oversee the repairs, $146,178.90; and (3) costs for
anti-pollution efforts, $132,906.36. (Second Alcazar Decl., Ex. 10 at 44.)

12

H. Procedural History
ASC filed a six count complaint against the various defendants, alleging
negligence (Count I), breach of contract (Count II), breach of implied warranty of
workmanlike performance (Count III), breach of implied warranty of fitness for a
particular purpose (Count IV), breach of express warranty (Count V), and
negligent misrepresentation (Count VI). Discovery ensued, producing
voluminous records and conflicting deposition testimony. The parties have now
moved for summary judgment on a variety of different issues:
(1) ASC has moved for partial summary judgment on the amount of
damages that it sustained as a result of the holing and sinking of the McCarthy.
(2) ASC has also moved for a partial summary judgment ruling that Hallett was
at fault for the accident. (3) Hallett, in turn, has moved for a summary judgment
ruling that it was not at fault for the accident. Hallett further argues that
summary judgment is warranted as to Counts III and IV and also as to ASC’s
claim for damages related to anti-pollution efforts. (4) Fraser has moved for
summary judgment as to all counts. (5) Chris Jensen & Son has moved for
summary judgment as to Counts II, III, IV, and V. (6) Finally, Reuben Johnson
and RJS Construction LLC have moved for summary judgment on all counts.

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IV.

Discussion
A. Summary Judgment Standard
Summary judgment is appropriate if, viewing all facts in the light most

favorable to the non-moving party, there is no genuine dispute as to any material
fact, and the moving party is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The party seeking
summary judgment bears the burden of showing that there is no genuine dispute
as to any material fact. Id. at 323. Summary judgment is appropriate only when
“there is no dispute of fact and where there exists only one conclusion.”
Crawford v. Runyon, 37 F.3d 1338, 1341 (8th Cir. 1994) (citation omitted).
“Only disputes over facts that might affect the outcome of the suit under
the governing law will properly preclude the entry of summary judgment.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “Factual disputes that
are irrelevant or unnecessary will not be counted.” Id. “[I]n ruling on a motion
for summary judgment, the nonmoving party’s evidence ‘is to be believed, and
all justifiable inferences are to be drawn in [that party’s] favor.’” Hunt v.
Cromartie, 526 U.S. 541, 552 (1999).

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B. Motions to Supplement the Record
Three motions have been filed to supplement the factual record in this
case. In each instance the parties’ have sought to include newly produced
evidence. As the Court already indicated at oral argument, the Court will grant
the two motions made prior to the hearing. [Docket Nos. 266 & 276.] The Court
will also grant Hallett’s more recent motion to supplement the record. [Docket
No. 311.]
C. Motions for Summary Judgment on the Issue of Damages
ASC seeks summary judgment that it has established over $4 million in
“undisputed expenses” as a direct result of the holing and flooding of the
McCarthy. Defendants Hallett and Fraser have filed individual oppositions to
ASC’s motion, which the other Defendants have joined. Defendants argue that
the cost of repairs is a disputed fact issue which should be left to the jury. They
also argue that summary judgment is inappropriate because they intend to assert
contributory negligence and salvage claims. Defendants further contend that
ASC has improperly included the costs of surveying and anti-pollution efforts in
the total damages amount, and Hallett has moved the Court for summary
judgment on the question of the expenses arising out of the anti-pollution efforts.

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1. Damages in Admiralty
The parties agree that this case falls under the Court’s admiralty
jurisdiction. See U.S. Const. Art. III, § 2.
With admiralty jurisdiction comes the application of substantive
admiralty law. Absent a relevant statute, the general maritime law,
as developed by the judiciary, applies. Drawn from state and
federal sources, the general maritime law is an amalgam of
traditional common-law rules, modifications of those rules, and
newly created rules.
E. River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 864-865 (1986)
(citations and footnote omitted); see 1 Thomas J. Shoenbaum, Admiralty and
Maritime Law § 4-1 (5th ed. 2011). When necessary, relevant state law may be
used to fill gaps in general maritime law. Spiller v. Thomas M. Lowe, Jr., &
Associates, Inc., 466 F.2d 903, 910 n.9 (8th Cir. 1972) (“[I]t has long been held that
even though admiralty suits are governed by federal substantive and procedural
law, courts applying maritime law may adopt state law by express or implied
reference or by virtue of the interstitial nature of federal law.”).
In general maritime law, standard recovery for a vessel damaged in a
collision or allision is the cost of repairs. The Baltimore, 75 U.S. 377, 386 (1869);
see 2 Shoenbaum, supra, § 14-6. The owner is entitled to “sufficient damages to
put his vessel into a condition as seaworthy and serviceable as before the
16

collision.” Pinto v. M/S Fernwood, 507 F.2d 1327, 1331-32 (1st Cir. 1974). Such
damages are subject to a reasonableness determination. See, e.g., Zeller Marine
Corp. v. Nessa Corp., 166 F.2d 32, 34 (2d Cir. 1948). Other incidental costs paid
during the course of repairs “are also fully recoverable if reasonably incurred.” 2
Shoenbaum, supra, § 14-6 n.12-n.21; see Pilot River Transp., Inc. v. Chic. & N.W.
Transp. Co., 912 F.2d 967, 971 (8th Cir. 1990).
Once the total level of damages is determined, those damages are allocated
among the responsible parties. In United States v. Reliable Transfer Co., 421 U.S.
397, 411 (1975), the Supreme Court abandoned the admiralty rule of divided
damages—under which damages were equally divided between all responsible
parties—in favor of allocating damages on a more familiar comparative fault
basis. See In re Am. Milling Co., Ltd., 409 F.3d 1005, 1020 (8th Cir. 2005). Thus,
in this case, ASC will bear the burden of proving its total damages, and the
inquiry will then shift to a determination of the contributing parties’ comparative
fault.
2. ASC’s Motion for Summary Judgment as to Total Damages
The “undisputed expenses” set forth by ASC break down as follows:
Repair Costs:
Surveying Costs:

$4,020,524.82
$ 146,178.90
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Anti-Pollution Efforts:

$ 132,906.36

TOTAL

$4,299,610.08

ASC notes that Jared Aquilla of North American Marine surveyed the damaged
vessel and oversaw its repair. Aquilla concluded that all the repairs done were
necessary, reasonable, fair, and directly related to the January 2008 incident.
ASC further points out that none of the Defendants have provided expert
testimony which might contradict the amount of damages identified in Aquilla’s
report. ASC also highlights that some of Fraser’s own employees, Gene Walroos
and Mike Peterson, confirmed that the repairs done were necessary and
reasonable. (See Walroos Dep., Second Alcazar Decl., Ex. 6 at 219:23-221:15;
Peterson Dep., Second Alcazar Decl., Ex. 14 at 192:3-11.) ASC therefore contends
that there are no genuine issues of material fact as to $4,299,610.08 of their
claimed expenses. At the same time, ASC admits that there exists at least another
$108,000 in “potentially disputed repair costs” in addition to the “undisputed”
damages noted above.
Defendants contend that the amount of the repair costs is a disputed issue
which must be proven by ASC at trial and which should be left to the jury.
Defendants note that they have never admitted to the amount of expenses

18

claimed by ASC and state that they will dispute at trial both the scope and
reasonableness of such expenses. Hallet asserts, for example, that some of the
repairs listed in Aquilla’s report were already scheduled to occur during winter
lay-up.
“The determination of the amount of damages is peculiarly within the
province of the jury.” Taylor v. Otter Tail Corp., 484 F.3d 1016, 1020 (8th Cir.
2007) (citation omitted); see, e.g., Snyder v. City of Minneapolis, 441 N.W.2d 781,
789 (Minn. 1989) (“Ordinarily, the amount and extent of damages is a question of
fact.”). For this reason, the Court declines to establish the damages “floor” upon
which ASC seeks to stand. While there may be limited evidence to contradict
ASC’s evidence related to the majority of its damages claims, the Court cannot
ignore a jury’s important role in determining the proven damages. Such a
determination will certainly take into consideration the documentation provided
to the Court by ASC in support of its motion. The jury will also be entitled to
examine the credibility of the expert opinions which underpin ASC’s calculations
and its assertions of reasonableness. Of course, in the event that Defendants do
not contest the amount of expenses put forward by ASC at trial, then ASC may
be entitled to move for judgment as a matter of law on the amount of damages

19

before the case is put to the jury. See Hyundai Motor Finance Co. v. McKay
Motors I, LLC, 574 F.3d 637, 642 (8th Cir. 2009) (noting that judgment as a matter
of law on the issue of damages is appropriate at trial where damages amount is
truly “uncontested”). At this stage, however, and in light of ASC’s own
admission that at least some of its claimed expenses are genuinely disputed, the
Court cannot fix the minimum damages amount as ASC has requested. The
Court will therefore deny ASC’s Motion for Partial Summary Judgment Against
All Defendants on Damages Related to Repair Costs and Expenses.
As a result, the Court need not address Defendants’ separate arguments
about their contributory negligence and maritime salvage claims. Depending on
the facts presented at trial, those claims may allow Defendants to reduce or offset
liability for the damage caused to the McCarthy.
3. Cost of Anti-pollution Efforts
ASC claims that it incurred $132,906.36 in expenses for anti-pollution
efforts and that it is entitled to recover that amount from Defendants.
Defendants argue that ASC lacks standing to claim the expenses from the anti-

20

pollution efforts because it is not a real party in interest. Hallett has moved the
Court for summary judgment on this issue. 2
Rule 17(a) of the Federal Rules of Civil Procedure provides that “[a]n
action must be prosecuted in the name of the real party in interest.” To satisfy
Rule 17(a), a plaintiff must “actually possess, under the substantive law, the right
sought to be enforced.” Curtis Lumber Co., Inc. v. La. Pac. Corp., 618 F.3d 762,
771 (8th Cir. 2010) (quoting United HealthCare Corp. v. Am. Trade Ins. Co., Ltd.,
88 F.3d 563, 569 (8th Cir. 1996)).
The parties agree that, in the absence of an applicable federal maritime
rule, Minnesota law governs whether ASC possesses the right to seek
compensation for the anti-pollution costs. See Spiller, 466 F.2d at 910 n.9. Under
Minnesota law,
[i]f the loss of an insured is fully covered by insurance and the
insurer has compensated insured for the loss, the insurer is
subrogated to any rights insured may have had against a third party
because of the loss. In such case, the insurer is the real party in
interest and must bring suit in its own name under the real-party-ininterest statute.
Blair v. Espeland, 43 N.W.2d 274, 276 (Minn. 1950). If, however, the “insured
retains some interest in the cause of action, the suit may be brought in his name.”

2

Hallett’s other grounds for summary judgment are discussed below.
21

Id.; see also Westendorf v. Stasson, 330 N.W.2d 699, 703 (Minn. 1983) (explaining
that, under the full recovery rule, “subrogation will not be allowed where the
insured’s total recovery is less than the insured’s actual loss”).
Defendants argue that because a protection and indemnity (“P&I”) policy
issued by the UK P&I Club reimbursed ASC for all costs associated with antipollution efforts, ASC does not possess a right to compensation for those
expenses. In response, ASC argues that the anti-pollution costs were a necessary
part of the overall recovery effort which ensued after the McCarthy accident.
While ASC has been compensated for the anti-pollution expenses, those expenses
make up only a small amount of the total expenses incurred as a result of the
accident. ASC argues that it cannot be considered to have been “fully
compensated” by UK P&I Club and, therefore, it is entitled to seek the full
amount of the expenses relating to the repair of the McCarthy, including those
arising from anti-pollution efforts.
ASC also argues that the UK P&I Club is not a necessary party under Rule
19. See Braniff Airways, Inc. v. Falkingham, 20 F.R.D. 141, 144 (D. Minn. 1957)
(“[While a] partial insurer subrogee is a real party in interest, he is only a proper
party, not a necessary party, to a suit brought by the insured to recover the full

22

loss.”). ASC notes that UK P&I Club signed a formal ratification authorizing
ASC to bring the suit and stating that ASC is a real party in interest.
Additionally, ASC argues that Defendants waived their right to raise this
defense by failing to raise it with reasonable promptness. See United HealthCare
Corp., 88 F.3d at 569 (“[A]n objection on real party in interest grounds should be
raised with reasonable promptness in the trial court proceedings. If not raised in
a timely or seasonable fashion, the general rule is that the objection is deemed
waived.”) (internal quotations and citations omitted). Plaintiffs point out that
Fraser raised this defense over a year after it discovered the insurance policy and
six months after the deadline for amending pleadings and adding parties had
passed.
The Court agrees that the real party in interest defense is untimely. Fraser
could have raised its objection to the absence of UK P&I Club at a much earlier
date than it did. In any event, the Court also concludes—based on ASC’s
incomplete compensation for its total losses and the agreement between ASC and
the UK P&I Club—that ASC is a real party in interest with respect to the
expenses related to anti-pollution efforts. The Court will therefore deny Hallett’s
motion for summary judgment on this issue.

23

D. ASC’s Motion for Partial Summary Judgment against Hallett
ASC argues that undisputed evidence shows Hallett’s fault for the
McCarthy accident should be presumed because Hallett violated rules related to
maritime safety and navigation. 3 Hallett disagrees, arguing that the ASC should
be presumed at fault for the accident.
1. The Oregon Rule and the Pennsylvania Rule
The parties rely on two longstanding admiralty rules—the Oregon Rule
and the Pennsylvania Rule. The Oregon Rule “raises a presumption that a
vessel’s crew was negligent when a vessel strikes a stationary object.” Union
Pac. R.R. Co. v. Kirby Inland Marine, Inc. of Miss., 296 F.3d 671, 673 (8th Cir.
2002) (citing The Oregon, 158 U.S. 186, 197 (1895)). The Pennsylvania Rule is
another longstanding admiralty principle, which shifts the burden to a defendant
if it failed to comply with statutory safety rules.
Under the Pennsylvania rule, where any party violates a statutory or
regulatory rule designed to prevent collisions, that party has
committed per se negligence and that party has the burden of
proving that its statutory fault was not a contributing cause of the
accident.

ASC also argues that Hallett breached its duty as a wharfinger to warn about
obstructions in the slip. This issue is the subject of Hallett’s own motion for
summary judgment, which contends that Hallett satisfied its wharfinger duties.
Both sides of this dispute are discussed below.
24
3

Union Pac. R.R. Co., 296 F.3d at 674 (citations and alterations omitted).
Discussing the interplay between these two admiralty rules, the Eleventh Circuit
has summarized:
[T]he burden of proof initially rests with the moving vessel under
the Oregon Rule. If the moving vessel can establish the stationary
vessel violated a statutory rule intended to prevent allisions,
however, then the Pennsylvania Rule shifts the burden to the
stationary vessel.
Superior Const. Co., Inc. v. Brock, 445 F.3d 1334, 1340 (11th Cir. 2006).
It its motion for summary judgment, ASC argues that the Pennsylvania
Rule applies in this case because Hallett violated 33 U.S.C. § 403 (the “Rivers and
Harbors Act”) and 33 C.F.R. § 64, a regulation passed pursuant to 33 U.S.C. § 409
(the “Wreck Act”). In response, Hallett argues that it did not violate either the
Rivers and Harbor Act or the Wreck Act and the Pennsylvania Rule does not
apply. Hallett contends that the Oregon Rule should apply instead.
1. Application of the Oregon Rule.
The Oregon Rule “raises a presumption that a vessel’s crew was negligent
when a vessel strikes a stationary object such as a bridge.” Union Pac. R.R. Co.,
296 F.3d at 673. The Oregon Rule does not generally apply to allisions with
hidden, sunken, or submerged objects, but it may apply where “knowledge of an

25

otherwise nonvisible object warrants imposition of presumed negligence against
those operating the vessel who possessed this knowledge.” Delta Transload, Inc.
v. M/V Navios Commander, 818 F.2d 445, 450 (5th Cir. 1987). The party invoking
the presumption bears the “burden to prove either visibility or knowledge.” Id.
No party in this case contends that the object struck by the McCarthy was visible
or marked. To avail themselves of the Oregon Rule’s presumption, Defendants
will therefore need to prove that persons operating the McCarthy knew of
dangerous debris submerged in the slip.
Hallett argues that ASC was aware or should have been aware of the
debris in the south part of the slip and that the Oregon Rule should apply. ASC
notes that the Oregon Rule has only rarely been applied in cases where a ship has
struck a hidden object. ASC further contends that the McCarthy’s crew was
unaware of the obstruction in the slip and, because the obstruction was not
marked, the crew had no reason to know of its existence.
The question of what the crew of the McCarthy knew or should have
known is perhaps the most fiercely contested factual issue in this case. Hallett
contends that Gliwa had been informed that there was debris in the slip and that
he should have conveyed that information to the crew of the McCarthy. Hallett

26

further argues that Captain Smyth could have and should have conducted
soundings of the slip before attempting to dock the McCarthy and that Smyth
did not exercise good judgment when he accepted Whitehead’s ill-fated
instruction to back the McCarthy past the first yellow bollard. For its part, ASC
points to evidence that the McCarthy’s crew was not informed about the debris
when they spoke with Hallett personnel in the days before the accident.
The fundamental factual dispute between ASC and Hallett about ASC’s
knowledge of the obstruction in the slip precludes the Court’s grant of summary
judgment on application of the Oregon Rule.
2. Application of the Pennsylvania Rule.
Regardless of whether the Oregon Rule also applies, if the Pennsylvania
Rule applies, the burden would be shifted to Hallett to prove show that it did not
contribute to the allision. Superior Const. Co., 445 F.3d at 1340. Application of
burden shifting under the Pennsylvania Rule requires the existence of three
elements:
(1) proof by a preponderance of the evidence of violation of a statute
or regulation that imposes a mandatory duty; (2) the statute or
regulation must involve marine safety or navigation; and (3) the
injury suffered must be of a nature that the statute or regulation was
intended to prevent.

27

Union Pac. R.R. Co., 296 F.3d at 674. The parties agree that the Rivers and
Harbors Act and the Wreck Act both concern marine safety and navigation and
are also intended to prevent accidents like the one at issue in this case. The
parties dispute whether either Act applied in this case, imposing on Hallett a
mandatory duty which it then violated.
a. “Navigable Waters” Under the Rivers and Harbors Act
and the Wreck Act
The Rivers and Harbors Act and the Wreck Act both apply to the
“navigable waters” of the United States. Under 33 C.F.R. § 2.36(a), navigable
waters include “[i]nternal waters of the United States . . . that . . . [a]re or have
been used, or are or have been susceptible for use, by themselves or in
connection with other waters, as highways for substantial interstate or foreign
commerce.” The Eighth Circuit has similarly held that, for a body of water to be
“navigable” under the Rivers and Harbors Act, it “must be navigable in fact
[and] it must itself, or together with other waters, form a highway over which
commerce may be carried on with other states.” Minnehaha Creek Watershed
Dist. v. Hoffman, 597 F.2d 617, 623 (8th Cir. 1979). ASC argues that the water in
the slip alongside Dock No. 8 is “navigable.” Hallett disagrees.

28

ASC contends that the slip is navigable because it was in regular use by
commercial vessels in interstate commerce. It is undisputed that ships unloaded
commodities at the dock thirty-two times between October 2006 and January
2008. (See First Alcazar Decl., Ex. 25.) ASC also notes that McCoshen, the
President of Hallett, agreed that “Duluth harbor and the docks owned by
Hallett” are “navigable waters” meaning that they serve “large ships that are in
the business of shipping from state to state or international[ly].” (McCoshen
Dep., First Alcazar Decl., Ex. 3 at 264:2-12.) Hallett’s own expert, John Olthuis,
further agreed that “the slip[s] in [Dock Nos.] 5 and 8” were navigable. (Olthuis
Dep., First Alcazar Decl., Ex. 22 at 160:23-161:12.) No expert has offered a
contrary view.
Hallett argues that the various witnesses were not asked to opine
specifically whether the slip was “navigable” under the Rivers and Harbors Act
or the Wreck Act. Hallett notes that the term “navigable waters” is susceptible to
different meanings depending on context. As the Eighth Circuit has explained:
[The Supreme Court has] identified four separate purposes
underlying definitions of “navigability”: to delimit the boundaries
of the navigational servitude; to define the scope of Congress'
regulatory authority under the commerce clause; to determine the
extent of the authority of the Corps of Engineers under the Rivers
and Harbors Act of 1899; and to establish the limits of federal
29

admiralty jurisdiction. Each of these areas of the law might well
require a different definition of “navigability.”
Livingston v. United States, 627 F.2d 165, 169 (8th Cir. 1980); see Kaiser Aetna v.
United States, 444 U.S. 164, 176 (1979). In Hallett’s view, in light of the different
definitions of navigability, the various opinions by witnesses in this case that the
slip is generally “navigable” does not resolve the question of whether it is
specifically “navigable” for the purposes of the Rivers and Harbors Act or the
Wreck Act.
Hallett further argues that several factual details indicate that the slip
should not be considered “navigable waters.” First, the slip was originally a
marshland which was later dredged out. Second, the slip is not open to the
public but rather is private and open only to ships invited by Hallett. Hallett has
not, however, cited to cases supporting its assertion that these factors influence
the “navigable” character of a slip under the Rivers and Harbors Act or the
Wreck Act. As ASC notes, manmade waterways must be susceptible to a
“navigable” characterization. Otherwise, parts of major waterways such as the
St. Lawrence Seaway would not meet the definition. As for the contention that
the slip should not be considered navigable because it is private, the Fifth Circuit
has rejected that reasoning, concluding that “the characterization of [a waterway]
30

as ‘public’ or ‘private’ is irrelevant” when determining whether that waterway is
“navigable” under the Rivers and Harbors Act. Dow Chem. Co. v. Dixie
Carriers, Inc., 463 F.2d 120, 123 (5th Cir. 1972).
In light of the use and physical characteristics of the slip alongside Dock
No. 8, there is little doubt that it forms part of “a highway over which commerce
may be carried on with other states.” Minnehaha Creek Watershed Dist., 597
F.2d at 623. The Court therefore concludes that the slip meets the definition of
“navigable waters” under the statutes and regulations relevant here.
b. Violation of the Rivers and Harbors Act
In its entirety, § 403 of the Rivers and Harbors Act provides:
The creation of any obstruction not affirmatively authorized by
Congress, to the navigable capacity of any of the waters of the
United States is prohibited; and it shall not be lawful to build or
commence the building of any wharf, pier, dolphin, boom, weir,
breakwater, bulkhead, jetty, or other structures in any port,
roadstead, haven, harbor, canal, navigable river, or other water of
the United States, outside established harbor lines, or where no
harbor lines have been established, except on plans recommended
by the Chief of Engineers and authorized by the Secretary of the
Army; and it shall not be lawful to excavate or fill, or in any manner
to alter or modify the course, location, condition, or capacity of, any
port, roadstead, haven, harbor, canal, lake, harbor or refuge, or
inclosure within the limits of any breakwater, or of the channel of
any navigable water of the United States, unless the work has been
recommended by the Chief of Engineers and authorized by the
Secretary of the Army prior to beginning the same.
31

33 U.S.C. § 403.
The Court must first address Hallett’s argument that § 403 applies
exclusively to the intentional or purposeful creation of obstructions. As Hallett
has belatedly noted, 4 some Courts have opined that a “negligent creation of an
obstruction to navigation does not violate § 403.” United States v. W. Indies
Transp., Inc., 127 F.3d 299, 310 (3d Cir. 1997) (emphasis added); see United States
v. Bigan, 274 F.2d 729, 732 (3d Cir. 1960). Other courts have come to the opposite
conclusion. See, e.g., United States v. Cargill, Inc., 367 F.2d 971, 977-78 (5th Cir.
1966).
Many of the cases creating the Circuit split discussed above involve
negligently sunken vessels, not structures like the one at issue here. This
distinction is important because separate sections of the Rivers and Harbors Act
pertain to “vessels,” “craft,” and “boat[s].” See 33 U.S.C. §§ 409, 412. Some
courts have therefore concluded that § 403 should not be read to include sunken
vessels specifically covered elsewhere in the Act. See, e.g., United States v. Ohio
Barge Lines, Inc., 607 F.2d 624, 629-30 (3d Cir. 1979) (“Interpreting [§ 403] to

Hallett failed to raise this argument in its opposition to ASC’s motion for
summary judgment. Instead, it did so in its reply brief to ASC’s opposition to
Hallett’s motion for summary judgment.
32
4

impose liability for the unintentional sinking of a vessel would create the
anomaly of imposing criminal sanctions under a general provision of a statute on
an activity which is not prohibited by the section of the statute specifically
addressing the problem.”) (emphasis added). This case, in contrast, involves the
alleged negligent sinking of debris which, until it fell into the slip, was located on
land. Such objects are not vessels. See 1 U.S.C. § 3 (defining a “vessel” as a
“watercraft or other artificial contrivance used, or capable of being used, as a
means of transportation on water”).
Other opinions concluding that negligently created obstructions were not
covered by § 403 were addressed specifically to the second clause of § 403, which
prohibits the “the building of any wharf, pier, dolphin, boom, weir, breakwater,
bulkhead, jetty, or other structures” in navigable waters without permission. 33
U.S.C. § 403 (emphasis added). Obviously, the second clause in § 403 is more
specific than its first, which prohibits the creation of “any obstructions,” and a
court interpreting the more specific language is likely to conclude that a party
which negligently created an obstruction cannot be said to have “built” the
obstruction. See W. Indies Transp., Inc., 127 F.3d at 310; Bigan, 274 F.2d at 732.
The accusation in this case is that Hallett violated the first clause of § 403—the

33

general prohibition on the “creation of any obstructions.” The Court concludes
that this clause, in the very least, encompasses the negligent creation of a nonvessel obstruction.
Next the Court must consider whether the concrete and rebar debris in the
slip constitutes an “obstruction.” Though § 403 does not itself provide a
definition of “obstruction,” the Supreme Court has held that the term is
expansive—“broad enough to include diminution of the navigable capacity of a
water by a means not included in the second or third clauses [of § 403].” United
States v. Republic Steel Corp., 362 U.S. 482, 486-87 (1960) (emphasis added). The
term “obstruction” has elsewhere been defined as “anything that restricts,
endangers, or interferes with navigation.” 33 C.F.R. § 64.06.
ASC contends that there is no dispute that the debris which fell into the
slip when the part of Dock No. 8 collapsed constitutes an obstruction. Hallett
CEO, Jerry Fryberger, answered “Yes” when asked whether “the concrete
mooring house and the concrete and rebar obstruction presented a hazard to
navigation in the slip.” (Fryberger Dep., First Alcazar Decl., Ex. 1 at 119:25120:11.) The other experts in this case have each confirmed that the debris in the
slip was a “dangerous obstruction” (Libby Dep., First Alcazar Decl., Ex. 24 at

34

156:3-5.), a “hazard to navigation” (Dudley Dep., First Alcazar Decl., Ex. 23 at
188:3.), and “dangerous to [a] ship” (Olthuis Dep. at 147:15-18). Hallett responds
that none of the experts stated that they defined “obstruction” in a manner
applicable to the statute. Hallett further argues that it was not in violation of §
403 because it had begun to clean up the debris with the permission of the Army
Corps of Engineers.
While it is true that none of the experts applied a particular definition of
“obstruction,” their statements that the debris was hazardous and dangerous
clearly satisfy the broad definition of that term. Moreover, Hallett has not
explained how its clean-up efforts, which were admittedly incomplete at the time
of the accident, lead to the conclusion that it was not in violation of § 403.
Because Hallet was responsible for the debris in the slip, the slip was
“navigable water,” and the debris constituted an “obstruction,” the Court
concludes that Hallett violated 33 U.S.C. § 403.
c. Violation of the Wreck Act
ASC further argues that Hallett violated regulations implementing the
Wreck Act. Under 33 C.F.R. § 64.11(a),
[t]he owner of a vessel, raft, or other craft wrecked and sunk in a
navigable channel shall mark it immediately with a buoy or
daymark during the day and with a light at night. The owner of a
35

sunken vessel, raft, or other obstruction that otherwise constitutes a
hazard to navigation shall mark it in accordance with this
subchapter.
This regulation requires owners of submerged obstructions to act with
“reasonable care under existing circumstances” in marking such obstructions.
Targa Midstream Servs. Ltd. P’ship v. K-Sea Transp. Partners, L.P., 527 F. Supp.
2d 598, 603 (S.D. Tex. 2007) (citing Nunley v. M/V Dauntless Colocotronis, 527
F.2d 455 (5th Cir. 1984)).
ASC argues that undisputed facts show that Hallett failed to mark the area
containing debris in the southern portion of the slip. In support, ASC notes that
Hallett CEO Fryberger has admitted that Hallett did not put up a sign to warn
ships of the debris in the slip. (Fryberger Dep. 139:7-18.) It further points to
statements by Hallett President McCoshen that “that there was nothing
preventing [Hallett] from placing a sign on the dock” and that “warning signs
are good practice” but that Hallett had not considered placing a sign on the dock.
(McCoshen Dep. 172:11-15; 252:15-16.)
Hallett responds that it exercised reasonable care in warning ASC about
the debris in the slip. First Hallett notes that while it had initially marked the
area around the debris with buoys, doing so in winter would have been

36

ineffective because the harbor generally freezes over with two to three feet of ice.
(McCoshen Aff. ¶¶ 3-5.) While Hallett does not dispute the fact that it did not
place signs, daymarks, or lights warning of the debris on the dock, it argues that
it exercised reasonable care by notifying ASC employees that the McCarthy
should not pass beyond the first yellow bollard.
While Hallett’s alleged statements to ASC may help it rebut a presumption
of its contribution to the McCarthy accident, the question here is whether Hallett
complied with the Wreck Act. The Wreck Act specifically requires the owner of
a submerged obstruction to “mark” the area of an obstruction, and there is no
dispute that the area was not marked in any way on the day the of the McCarthy
accident. A reasonable juror could not conclude that Hallett’s complete failure to
mark the debris was reasonably in compliance with a regulation requiring it to
do just that.
For these reasons, the undisputed evidence indicates that Hallett violated
both the Rivers and Harbors Act and Wreck Act by creating an underwater
obstruction and failing to mark that obstruction in any way on the day of the
holing and sinking of the McCarthy. Under the Pennsylvania Rule, these

37

violations create a rebuttable presumption that Hallett’s negligence contributed
to the holing and sinking of the McCarthy.
Although ASC is entitled to this presumption, Hallett will be afforded an
opportunity to rebut that presumption by showing that another party was solely
responsible for the accident, see Alter Barge Line, Inc. v. TPC Transp. Co., 801
F.2d 1026, 1029 (8th Cir. 1986), or showing that the violation of statute “could not
have contributed to the collision,” Hellenic Lines, Ltd. v. Prudential Lines, Inc.,
730 F.2d 159, 162 (4th Cir. 1984); see 2 Shoenbaum, supra, § 14-3.
Hallett argues that ASC and the McCarthy’s crew were aware or should
have been aware of “a specific do not pass point and/or the debris in the slip.” In
particular, Hallett points to Gliwa’s statement that Hallett representatives had
told him that the McCarthy should not proceed past the first yellow bollard
because there was debris in the southern end of the slip. This evidence might
indicate that the accident was caused by ASC’s negligence, not by Hallett’s
statutory violations. Hallett also argues that markers around the debris may not
have stopped the accident. Adjudication of such claims would require the
resolution of basic factual disputes, which is not appropriate at summary
judgment.

38

The Court concludes that the initial presumption against Hallett under the
Pennsylvania Rule is supported by undisputed evidence of violations of the
Rivers and Harbors Act and the Wreck Act, but that genuine issues of material
fact remain as to whether that presumption can be rebutted. The Court will
therefore grant ASC’s motion for summary judgment in part, ruling that the
Pennsylvania Rule’s presumption applies to Hallett’s conduct.
D. Hallett’s Motion for Partial Summary Judgment
Hallett and ASC both seek summary judgment on whether Hallett
breached its duties as a wharfinger. Hallett also seeks summary judgment on the
viability of ASC’s implied warranty claims (Counts III and IV). Hallett’s request
for summary judgment on ASC’s claim for damages related to anti-pollution
efforts has already been discussed above.
1. Duties of a Wharfinger
Both ASC and Hallett have moved for summary judgment asking this
court to rule whether Hallett satisfied its duties as a wharfinger. The Supreme
Court explained those duties in Smith v. Burnett, 173 U.S. 430, 433 (1899):
Although a wharfinger does not guaranty the safety of vessels coming to
his wharves, he is bound to exercise reasonable diligence in ascertaining
the condition of the berths thereat, and, if there is any dangerous
obstruction, to remove it, or to give due notice of its existence to vessels
39

about to use the berths. At the same time, the master is bound to use
ordinary care, and cannot carelessly run into danger.
A wharfinger is not generally responsible for dangers “reasonably known to the
shipowner.” See Trade Banner Line, Inc. v. Caribbean S.S. Co., S.A., 521 F.2d 229,
230 (5th Cir. 1975).
The parties dispute whether the area of the slip containing the debris was
part of the berthing area offered by Hallett to ASC. The parties also disagree
about a wharfinger’s duty to warn about obstructions outside of the berthing
area. They further contest whether undisputed evidence indicates that Hallett
satisfied its duties, even assuming that the debris was within the berthing area.
a. The Berthing Area
Hallett argues that it had no duty to warn ASC about the debris in the
southern end of the slip because that part of the slip was not part of the
designated berthing area. In Hallett’s view, the berthing area included only the
portion of the slip north of the first yellow bollard. ASC asserts that the
designated berthing area extended to the area containing the debris.
There is evidence supporting both parties’ assertions: Hallett’s witnesses
state that they made clear to ASC employees that the McCarthy was not to
proceed past the first yellow bollard. On the other hand, it is undisputed that
40

there were no warning signs or buoys marking the end of the safe berthing area
and that the dock continued on for hundreds of feet to the shore. ASC has also
submitted evidence indicating that Hallett employees told the McCarthy’s crew
members that the slip had “good water” in areas further south than the spot
where the McCarthy was grounded and that the McCarthy should be docked as
far south in the slip as possible.
To rule that the berthing area at Dock No. 8 extended only to the first
yellow bollard would be to resolve one of the main factual disputes in this case:
Had Hallett made clear to ASC that the McCarthy was not to proceed past the
first yellow bollard because of the existence of dangerous debris past that point?
Because the Court cannot resolve this fact-bound issue at summary judgment, it
cannot rule in favor of either party on the question of whether Hallett satisfied its
duty as a wharfinger.
b. Duties outside of the Berthing Area
The parties also dispute the related question of whether a wharfinger has a
duty to warn about dangers near to, but not within, a berthing area. The Fifth
Circuit has held that “there is no duty on the part of a wharfinger to provide a
berth with safe surroundings (other than an entrance and exit) or to warn that
hazards exist in its vicinity.” Trade Banner Line, Inc., 521 F.2d at 230. As ASC
41

points out, however, Trade Banner Line concerned facts quite different from
those at issue here. See Trade & Transp., Inc. v. Caribbean S. S. Co., S.A., 384 F.
Supp. 782, 786 (S.D. Tex. 1974). Other courts facing more analogous situations
have concluded that wharfingers have duties which extend beyond the narrow
confines of the berthing area. In Sonat Marine Inc. v. Belcher Oil Co., 629 F.
Supp. 1319, 1326 (D.N.J. 1985), for example, the Court held that a wharfinger had
a duty to know of and warn about an obstruction adjacent to a berthing area,
where it was “highly likely” that a ship might strike the obstruction when
accessing the berth.
As discussed above, the facts proven at trial may indicate that the debris
struck by the McCarthy was within the designated berthing area, rendering the
question of Hallett’s duties outside that area moot. Since the Court must deny
summary judgment as to the question of Hallett’s wharfinger’s duties for the
reasons already discussed, the Court need not resolve this legal issue at this
stage.
c. Hallett’s Satisfaction of its Duties
Hallett has argued in the alternative that, even if the debris had been in the
berthing area, Hallett was under no duty to warn the McCarthy about the debris
directly because Hallett had already warned Gliwa in the January 10 meeting.
42

Once again, what Hallett told Gliwa is a contested factual issue, and there were
subsequent conversations between Hallett and members of the McCarthy crew in
which Hallett allegedly stated that the slip was free of obstructions. For all of the
above reasons, there remain genuine issues of material fact as to Hallett’s
performance of its duties as a wharfinger, and a grant of summary judgment on
this issue would be premature.
2. Counts III & IV—Implied Warranty Claims
a. Implied Warranty of Workmanlike Performance
Hallett argues that the ASC’s claim for breach an implied warranty of
workmanlike performance (“WWLP”) must be dismissed because such claims
are not recognized in maritime law. Hallett argues that such claims are
recognized.
The WWLP was introduced into federal maritime law from common
contract law in Ryan Stevedoring Co. v. Pan-Atl. S.S. Corp., 350 U.S. 124 (1956).
See 1 Shoenbaum, supra, § 5-9. In Ryan, a vessel owner was liable for personal
injuries suffered by a stevedore working on the vessel. The Supreme Court
concluded that the vessel owner could recover from the stevedore’s employer on
a theory of indemnity where the company was responsible for the unseaworthy
conditions which led to the stevedore’s injuries. Id. After Ryan, courts began to
43

apply the WWLP to a variety of maritime contexts, even after the direct holding
of Ryan was legislatively abrogated by 1972 amendments to the Longshoreman
and Harbor Worker’s Compensation Act. See Ducrepont v. Baton Rouge Marine
Enters., Inc., 666 F. Supp. 882, 884 -885 (E.D. La. 1987). As a result, the WWLP
“lives on as one of the ambiguous and controversial concepts in all of admiralty
law.” 1 Shoenbaum, supra, § 5-9.
The WWLP has come to take on different meanings. See id. It is often
used as a basis for establishing a party’s liability for a maritime damages. See,
e.g., N. Ins. Co. of N.Y. v. Point Judith Marina, LLC, 579 F.3d 61, 67 (1st Cir.
2009). In this context, a contractor providing a maritime service has a duty to
perform its work in a “diligent and workmanlike manner.” Id. This requirement
is “analogous to a duty of care in tort” and, “[u]nlike the implied warranties of
the U.C.C.,” it “necessarily parallel[s] a negligence standard rather than
imposing strict liability.” Emp’rs Ins. of Wausau v. Suwannee River Spa Lines,
Inc., 866 F.2d 752, 763 (5th Cir. 1989); see 1 Shoebaum, supra, § 5-8.
In other contexts, WWLP might also serve as a basis for indemnification—
fully shifting one party’s liability to another. Courts have made clear, however,
that “the factors to be considered in determining whether a contract includes a

44

warranty of workmanlike performance are entirely separate from the factors that
go into the determination of whether that warranty encompasses an obligation to
indemnify.” Fairmont Shipping Corp. v. Chevron Int’l Oil Co., Inc., 511 F.2d
1252, 1259 (2d Cir. 1975). There has been much reluctance to expand this
indemnification theory beyond the personal injury context at issue in Ryan. See,
e.g., Phillips Petroleum Co. v. Stokes Oil Co., 863 F.2d 1250, 1255 (6th Cir. 1988);
Gator Marine Serv. Towing, Inc. v. J. Ray McDermott & Co., 651 F.2d 1096, 1099
(5th Cir. 1981).
In light of the above discussion, to the extent that ASC’s WWLP claim is an
assertion that the contract between ASC and Hallett may have given rise to
duties on Hallett to perform its obligations in a diligent manner, that claim
survives. There is no basis for a Ryan indemnification claim here, however,
because this case involves property damage rather than personal injury.
Damages proven in this case will be divided among the liable parties in
proportion to each party’s fault. See e.g., Agrico Chem. Co. v. M/V Ben W.
Martin, 664 F.2d 85, 93-94 (5th Cir. 1981). As other Courts have concluded in
similar cases, ASC’s claims “are best accommodated by a straightforward
application of the usual maritime comparative fault system.” Phillips, 863 F.2d

45

at 1253 (quoting Gator Marine Serv. Towing, Inc., 651 F.2d at 1100). The Court
will deny Hallett’s motion to dismiss Count III, but ASC should abandon any
hope of pursuing a theory of Ryan indemnity or strict liability.
b. Implied Warranty of Fitness for a Particular Purpose
ASC grounds this implied warranty claim in Uniform Commercial Code
(“UCC”) § 2-315. See Minn. Stat. § 336.2-315. The Court concludes that § 2-315
cannot apply here. As ASC notes, § 2-315 applies to “goods.” See Minn. Stat. §§
336.2-102, 2-315. “Goods” are “all things (including specially manufactured
goods) which are movable at the time of identification to the contract for sale
other than the money in which the price is to be paid, investment securities
(article 8) and things in action.” Minn. Stat. § 336.2-105. ASC asserts that Dock
No. 8 is a “good.” ASC has not, however, cited to a single case holding that such
a structure can be so characterized. Dock No. 8 consists of a 2,200-2,300 foot long
slip and a permanent concrete and metal pier that runs alongside it. The Court
fails to see how the slip or pier is “movable” in any sense. ASC’s claim against
Hallett based on an implied warranty of fitness for a particular purpose must be
dismissed.

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E. Fraser’s Motion for Summary Judgment
Fraser has moved for summary judgment on all counts of ASC’s
complaint. In response, ASC concedes that Count IV (breach of implied
warranty of fitness for a particular purpose) should be dismissed. ASC argues
that it should be entitled to summary judgment against Fraser on Count I
(negligence) and that there exist genuine issues of material fact as to the
remaining counts.
1. Count 1—Negligence
A claim for negligence in maritime law, as in other contexts, requires a
showing that the defendant breached a duty of care owed to the plaintiff, that the
plaintiff suffered damages, and that the defendant’s breach was the proximate
cause of those damages. See, e.g., Consol. Aluminum Corp. v. C.F. Bean Corp.,
833 F.2d 65 (5th Cir. 1987).
a. Duty
Fraser argues that because it was not wharfinger, it did not owe ASC a
general duty to act with ordinary care and diligence to provide a safe berth for
the McCarthy. ASC does not contend that Fraser was a wharfinger. ASC instead
argues that Fraser owed it a duty of care because it had agreed to help guide and
spot the McCarthy and because one of Fraser’s employees, Whitehead, guided
47

the McCarthy backward past the first yellow bollard, despite having been told
that the McCarthy should not proceed past that point. In short, ASC argues that
Fraser “had a duty to conform to a particular standard of conduct which . . .
meant adhering to the docking instructions and making sure that the McCarthy
was not exposed to potential danger.”
Fraser denies that it had any such duty. It contends that it never agreed to
assume Hallett’s responsibilities as wharfinger and that it was merely a business
invitee on the dock with the narrow duties of tying the McCarthy to the dock and
performing other services once the ship’s crew brought it to a location of their
choosing. Fraser points to the Service Purchase Orders (“SPOs”) that ASC sent to
Fraser, which specified that Fraser was to handle line and anchor handling,
provide gangway access, and assist in connecting the ship to onshore electricity.
These duties, it contends, did not extend to spotting or guiding the McCarthy or
otherwise ensuring that the McCarthy was safely berthed at Dock No. 8.
In response, ASC argues that it had been Fraser’s practice to “spot, guide,
and tie-up” ASC’s ships when they berthed at Hallett docks. It notes
Whitehead’s testimony that it was his practice to consult with a Hallett
representative about where the vessel should be located at the dock before the

48

day of docking. (Whitehead Dep. at 210:4-211:16.) ASC further notes that, with
respect to the docking of the McCarthy, Whitehead had been told by fellow
Fraser employee Mike Peterson to “get with [CJS employee] Mike Podgorak
about the instructions for docking the vessel.” (Whitehead Dep. 309:10-12.) The
testimony of Hallet President McCoshen further corroborates ASC’s position;
when asked whether he understood that “Fraser was going to guide and spot the
McCarthy,” McCoshen answered, “Absolutely.” (McCoshen Dep. at 90:2-6)
Moreover, viewing the evidence in ASC’s favor, Whitehead’s alleged
actions on the day of the docking are not consistent with Hallett’s contention that
it had not endeavored to help spot and guide the McCarthy. Whitehead has
stated that he told Podgorak that he was going to “back [the McCarthy] as far as
[he] could get it between the forward cleat and the ladder” which he had
previously placed on the dock. (Whitehead Statement, First Alcazar Decl., Ex.
26.) Whitehead has also stated that he told the crew of the McCarthy that the
“further [they could back up the McCarthy] the better so that we could access the
McCarthy for repairs requiring a crane” and that if he “had been informed there
was something back there [he] would never have backed the McCarthy up.”
(Id.) While Whitehead has denied that he was acting as a “spotter,” the

49

McCarthy’s crew has stated that they were following Whitehead’s instructions
when they backed the McCarthy past the first yellow bollard. (Smyth Statement,
Second Alcazar Decl., Ex. 5.) Further, Reuben Johnson employee David
Shepersky has stated that when he arrived at Dock No. 8 after the holing of the
McCarthy, Whitehead told him that he was “the one that decided to bring the
boat back further” south into the slip. (Shepersky Statement, Second Alcazar
Decl., Ex. 7.)
Fraser asserts that Whitehead wanted to know where the McCarthy would
be docked only so that Fraser could be prepared to do the tasks set out in the
SPOs and that Fraser never undertook guiding or spotting responsibilities. The
various conflicting statements create a genuine factual dispute as to whether
Fraser had assumed a role beyond merely performing services on the McCarthy
after it had come to stop. If Fraser had assumed a role guiding the McCarthy,
then it would have owed ASC a duty to do so with a reasonable standard of care,
whether or not it was the wharfinger. 5

Fraser has also argued that it did not owe ASC a duty to warn because ASC was
already aware of the debris in the slip. This argument mischaracterizes the duty
asserted by ASC, and it is also undermined by many factual disputes over just
what ASC knew about the debris in the slip prior to the accident.
50
5

b. Foreseeability
Fraser argues that it cannot be held liable because the holing of the
McCarthy was unforeseeable. It argues that it and ASC had the same level of
knowledge about the debris in the slip because Whitehead and Gliwa were at the
same meeting. ASC argues that even if Fraser had no knowledge about the
debris in the slip, the accident was still foreseeable because it is always
foreseeable that a vessel may be damaged if it is “brought beyond the designated
docking location.” In this instance, ASC notes that Fraser was particularly aware
of the potential for damage because it was aware that Dock No. 8 could “silt-in”
or fill with silt, reducing the amount of water available for docking. Given the
factual disputes that persist in this case, the Court cannot make a ruling on the
foreseeability of the McCarthy accident at this time.
c. Causation
In maritime law, as in general tort law, “a party’s negligence is actionable
only if it is the legal cause of the plaintiff's injuries, which is something more
than but for causation—the negligence must be a substantial factor in causing the
injuries.” In re Great Lakes Dredge & Dock Co. LLC, 624 F.3d 201, 213-214 (5th
Cir. 2010) (citations, alterations, and quotations omitted); see 1 Shoenbaum,
supra, § 5-3. Fraser argues that Hallett’s failure to warn of an obstruction was
51

the “substantial factor” in causing the McCarthy accident and that any additional
breach on Fraser’s part could not also have been a substantial factor.
Clearly, however, more than one factor may be a substantial factor in
causing a plaintiff’s injury. See, e.g., Osborne v. Twin Town Bowl, Inc., 749
N.W.2d 367, 376 (Minn. 2008). Viewing the facts in the light most favorable to
ASC, Fraser’s direction of the McCarthy past the first yellow bollard and
Hallett’s failure to warn the McCarthy about the debris in the southern part of
the slip may have both constituted substantial causal factors leading to the
accident. Of course, viewing the evidence in the light most favorable to Fraser
and Hallett, ASC’s own negligence may have been the sole substantial factor in
the accident. Such determinations are for the jury to make at trial.
For the foregoing reasons, the Court will deny Fraser and ASC’s motions
for summary judgment on the negligence claim.
2. Count II—Breach of Contract
Fraser next contends that summary judgment should be granted in its
favor on ASC’s breach of contract claim. Fraser argues that the SPOs between it
and ASC obligated it only to provide “line and anchor handling,” which it
contends does not include “guiding” or “spotting” services. Fraser argues that

52

the term “line and anchor handling” is unambiguous and, therefore, extrinsic
evidence should not be consulted to determine its meaning. See, e.g., Town Bank
v. City Real Estate Dev., LLC, 793 N.W.2d 476, 484 (Wis. 2010) (“Only when the
contract is ambiguous, meaning it is susceptible to more than one reasonable
interpretation, may the court look beyond the face of the contract and consider
extrinsic evidence to resolve the parties’ intent.”).
ASC argues that the term “line and anchor handling” is ambiguous and,
therefore, evidence of “custom and usage” should be examined to determine the
meaning of the contract. See Stolt-Nielson S.A. v. AnimalFeeds Int’l Corp., 130 S.
Ct. 1758, 1769 n.6 (2010) (“Under . . . general maritime law, evidence of ‘custom
and usage’ is relevant to determining the parties’ intent when an express
agreement is ambiguous.”). ASC contends that both parties understood the term
to include spotting services. In support, ASC notes that Fraser has performed
spotting services for ASC vessels in the past when only “line and anchor
handling” was requested. (Gliwa Aff. ¶ 4; McCoshen Dep. 97:23-98:2.)
The question of whether a contract is ambiguous is a question of law for
the Court, but construction of an ambiguous contract becomes a fact question for
the jury. See, e.g., Thomsen v. Famous Dave’s of Am., Inc., 606 F.3d 905, 908 (8th

53

Cir. 2010). A contract is ambiguous when “it is reasonably susceptible of more
than one interpretation.” Id. Here the Court concludes that the term “line and
anchor handling” without further definition or explanation is sufficiently
ambiguous to allow resort to extrinsic evidence to understand the bounds of the
parties’ agreement.
ASC argues in the alternative that, if the Court were to conclude that the
term “line and anchor handling” were not ambiguous and did not include
spotting services, Fraser’s conduct nonetheless changed the terms of the contract,
obligating Fraser to spot and guide the McCarthy. See Mitchell v. Rende, 30
N.W.2d 27 (Minn. 1947) (“The law is well settled that assent to an offer to
modify, to rescind, or to alter a written contract may be evinced by the conduct
and acts of the offeree as well as by express verbal agreement.”); see also
Cousineau v. Norstan, Inc., 322 F.3d 493, 496-497, 322 F.3d 493 (8th Cir. 2003)
(“[W]hether particular facts amount to modification of a contract is a question of
law, while whether such facts are proved is a question of fact.”)
ASC contends that Fraser’s decision to send Podgorak to the January 10
meeting on its behalf, as well as Whitehead’s actions upon the McCarthy’s arrival
at Dock No. 8 sufficiently demonstrate Fraser’s intention to take on spotting

54

responsibilities in addition to merely tying the McCarthy to the dock.
Whitehead’s alleged actions—meeting with Podgorak to learn where to “park”
the boat and instructing the McCarthy to proceed further south into the slip—do
indicate that he, a Fraser employee, accepted spotting responsibilities. Thus, the
facts viewed in the light most favorable to ASC give rise to an inference of
modification.
For the foregoing reasons, the Court will deny summary judgment as to
ASC’s breach of contract claims.
3. Count III—Implied Warranty of Workmanlike Performance
As discussed above, in maritime law, as in other areas of the law, a party
that “contracts to provide services impliedly agrees to perform in a diligent and
workmanlike manner.” N. Ins. Co. of N.Y., 579 F.3d at 67. Thus, ASC’s claim for
breach of the implied warranty of workmanlike performance (WWLP) is
predicated on the existence of a contract between it and Fraser for spotting
services. See id. at 68 (“Though the implied warranty of workmanlike
performance is a legal standard, the question of what is required in a
workmanlike performance is necessarily a factual question that naturally varies .
. . based on the scope and nature of the service being undertaken.”). Because

55

ASC’s breach of contract claim survives summary judgment, this claim must also
survive.
In its reply brief, Fraser argues that even if a breach of an implied warranty
occurred, it cannot be held liable under a principle of law explained by the
Seventh Circuit:
It is the law that a plaintiff may not recover for breach of express or
implied warranty where the facts proven show that there are several
possible causes of an injury, for one or more of which the defendant was
not responsible and it is just as reasonable and probable that the injury was
the result of one cause or the other.
Royal Bus. Machines, Inc. v. Lorraine Corp., 633 F.2d 34, 46 (7th Cir. 1980)
(citations and alterations omitted). While it is not altogether clear that this rule of
law applies to this case, if it did, it would be premature for the Court to rule that
any “facts proven” have shown that there were multiple causes of the injury or
that it was “just as reasonable and probable” that the holing of the McCarthy was
the result of other parties’ negligence. See id. In any event, as the Court has
already explained, a potential WWLP in this case is not a source of
indemnification or strict liability. Rather, any WWLP establishes only duties
owed by one party to another. Thus, even if Fraser is found to have breached an
implied warranty of workmanlike performance, damages will still be

56

apportioned between the responsible parties based upon their relative fault for
the accident.
4. Count V—Breach of Express Warranties
Fraser argues that it made no express warranties to ASC which might have
been breached in the McCarthy accident. In support of its claim, ASC points to
the Service Purchase Orders (“SPOs”) that ASC sent to Fraser, which stated:
“Unless instructions given in this order (both written or printed) are followed
strictly, we will hold you responsible for any errors or delays which may occur.”
(First Alcazar Decl., Ex. 7.) ASC argues that, by agreeing to this clause, Fraser
expressly warranted against all “errors” in the performance of its duties. It
argues that Fraser breached this warranty by failing to follow docking
instructions and guiding the McCarthy into debris in the slip. Fraser argues that
the plain language of the SPOs does not reveal an express warranty by Fraser
that the McCarthy would be safely docked.
An express warranty is “an assurance by one party to a contract of the
existence of a fact upon which the other party may rely.” Dittman v. Nagel, 168
N.W.2d 190, 193 (Wis. 1969). The Court cannot conclude that the language in
ASC’s SPOs amounted to an express warranty by Fraser. The language of the

57

SPOs—“we will hold you responsible for any error or delays”—is simply not a
promise from Fraser to ASC. If anything, this language relates to the actions that
ASC will take should Fraser commit an “error.” Because this language is the sole
basis for ASC’s express warranty claim, the Court will grant summary judgment
in favor of Fraser on that claim.
5. Count VI—Negligent Misrepresentation
An individual or entity commits the tort of negligent misrepresentation
when,
in the course of his business, profession or employment, or in any
other transaction in which he has a pecuniary interest, supplies false
information for the guidance of others in their business transactions,
is subject to liability for pecuniary loss caused to them by their
justifiable reliance upon the information, if he fails to exercise
reasonable care or competence in obtaining or communicating the
information.
First Presbyterian Church of Mankato v. John G. Kinnard & Co., 881 F. Supp. 441,
446 (citations omitted) (D. Minn. 1995).
In its complaint, ASC claims that Fraser made representations that Dock
No. 8 was safe for berthing. There does not appear to be support for those
allegations, as there is no evidence that Fraser employees told ASC anything

58

about the conditions at Dock No. 8 in the lead up to the McCarthy accident.
Those allegations, therefore, cannot support a negligent representation claim.
ASC has also claimed, however, that Fraser also provided false
information when Podgorak, acting as Fraser’s representative, stated that he
would be present for the arrival of the McCarthy and when Fraser indicated that
it would spot and guide the McCarthy. With respect to those allegations, as
discussed above, there do appear to be genuine questions of material fact as to
whether Fraser made such representations, whether ASC’s reliance on those
representations was justifiable, and whether ASC suffered a loss as a result of
that reliance. The Court will therefore decline to grant Fraser’s motion for
summary judgment as to this claim.
6. Presumption of Fault
Fraser finally argues that ASC should be presumed at fault for the
McCarthy accident under the Oregon Rule. The Court has already concluded
that it cannot rule on the application of the Oregon Rule at this stage.
G. Chris Jensen & Son’s Motion for Partial Judgment
Defendant Chris Jenson & Son Co., Inc. (“CJS”) has moved for summary
judgment as to four of the six counts directed at it. ASC has conceded that two of
those counts—Count IV (breach of implied warranty of fitness for a particular
59

purpose) and Count V (breach of an implied warranty)—should be dismissed.
The remaining two counts—Count II (breach of contract) and Count III (breach of
implied warranty of workmanlike performance)—remain in dispute.
1. Count II—Breach of Contract
CJS argues that ASC’s breach of contract claim cannot succeed because the
undisputed facts show that no contract was formed between CJS and ASC. The
parties agree that maritime law applies to any contract regarding the docking of
the McCarthy, and where a federal court considers a breach of contract claim in
the maritime context, it recognizes the prevailing state law. See, e.g.,
Constructive Hands, Inc. v. Baker, 446 F. Supp. 2d 88, 93 (N.D.N.Y. 2006). While
the parties dispute whether Minnesota or Wisconsin law applies, this dispute is
immaterial because the elements of a contract claim are the same in both states.
To form a contract, there must be a specific and definite offer, acceptance,
and consideration. See Taxi Connection v. Dakota, Minn. & E. R.R. Corp., 513
F.3d 823, 826 (8th Cir. 2008); Larimer v. Dayton Hudson Corp., 137 F.3d 497, 502
(7th Cir. 1998). There must be a “meeting of the minds with respect to [the
alleged contract’s] essential terms.” Larimer, 137 F.3d at 502; Minneapolis
Cablesystems v. City of Minneapolis, 299 N.W.2d 121, 122 (Minn. 1980).

60

Both parties agree that there was no written contract between ASC and
CJS, but they dispute whether an oral contract was formed. ASC claims that an
oral contract was created when Mike Podgorak allegedly agreed at the January
10 meeting to be present at the docking of the McCarthy. ASC Marine
Superintendent Ken Gliwa has stated that Podgorak promised to be present for
the McCarthy’s docking (Gliwa Dep. at 269:8-21), but Podgorak has denied
making any such promise (Podgorak Dep. at 189:8-10).
CJS argues that, regardless of the factual discrepancy between the accounts
of the January 10 meeting given by Gliwa and Podgorak, no contract could have
been formed because no consideration was given for Podgorak’s alleged
promises, nor was there a meeting of the minds on the essential terms of the
alleged contract.
a. Consideration.
CJS argues that there is no evidence that ASC compensated or promised to
compensate CJS for the services that Podgorak allegedly promised to perform.
ASC acknowledges that it made no direct payments to CJS but argues it did
provide compensation for Podgorak’s work through its payments to Fraser.
The relationship between CJS, RJS, Reuben Johnson & Son, Inc. (“Reuben
Johnson”), and Fraser is complicated. During the time of the incident at issue in
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this case, Todd Johnson was the majority stakeholder of Reuben Johnson, of
which both RJS and Fraser were first tier subsidiaries. Todd Johnson was also
the sole owner of CJS. Mike Podgorak was an employee of Chris Jensen and he
directly supervised RJS employees, and RJS coordinated and billed for work
performed by Podgorak.
Records show that Podgorak indicated on his time sheets that he spent
time working on the McCarthy docking between January 10 and 14. RJS billed
Fraser for time spent by Podgorak on that work. Fraser, in turn, was ultimately
paid by ASC to provide “line and anchor handling at arrival and departure of
lay-up.” ASC argues that these payments are sufficient to show consideration
provided in exchange for Podgorak’s alleged promise to be present at the
McCarthy’s docking. CJS argues that this evidence shows only that Podgorak’s
work was charged to and paid by Fraser, not by ASC.
Viewing the evidence in the light most favorable to ASC, it appears that
CJS was compensated for Podgorak’s work through the payments made to Fraser
and that ASC did provide consideration for the promises that Podgorak
allegedly made.

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b. Meeting of the Minds
Whether parties to an alleged contract mutually agreed on the contract or
had a “meeting of the minds” is generally a fact issue reserved for the jury. See,
e.g., Olson v. E.F. Hutton & Co., Inc., 957 F.2d 622, 626 (8th Cir. 1992). CJS argues
that any alleged agreement between ASC and CJS was too indefinite to be
considered a valid contract. CJS further argues that the fact that Podgorak denies
agreeing to be present for the McCarthy’s docking shows that there was no
“meeting of the minds” between him and Gliwa. CJS points to Podgorak’s
statements that his main function was to examine the dock in order to determine
if it would be possible to plow snow and allow access to the McCarthy. CJS
argues that ASC’s assertion that Podgorak had agreed to help guide and spot the
McCarthy is not credible because CJS employees had not done such work in the
past.
In its consideration of CJS’s motion for summary judgment, the Court
must view the evidence in the light most favorable to ASC. Gliwa has testified
that he told Podgorak that he might not be able to be present at the docking, that
Podgorak promised to be present at the docking, that they “shook hands on it,”
and that Gliwa expected Podgorak to be present. (Gliwa Dep. at 269:8-21.) In

63

spite of ASC’s evidence to the contrary, this testimony creates a genuine issue of
fact on the issue of mutual assent.
Because there remain genuine issues of material fact with respect the
formation of a contract between ASC and CJS, the Court will CJS’s motion for
summary judgment as to Count II.
2. Count III—Implied Warranty of Workmanlike Performance
As discussed above, a contractor who “contracts to provide services
impliedly agrees to perform in a diligent and workmanlike manner.” N. Ins. Co.
of N.Y., 579 F.3d at 67. A claim for breach of an implied warranty of
workmanlike performance therefore requires the existence of a contract. CJS
reiterates its argument that no contract existed between it and ASC. As
discussed above, however, the existence of a contract remains a live issue, so
summary judgment on Count III would not be appropriate at this time.
H. Reuben Johnson & Son and RJS Construction’s Motion for Partial
Summary Judgment
Defendants Reuben Johnson & Son, Inc. (“Reuben Johnson”) and RJS
Construction, LLC (“RJS”) have moved for summary judgment on the counts of
ASC’s complaint directed at them. They have also moved for summary

64

judgment on the cross claims brought by Hallett and Fraser for contribution and
indemnity.
Of the six counts ASC brought against Reuben Johnson and RJS, ASC now
concedes that Count IV (breach of implied warranty of fitness for a particular
purpose) and Count V (breach of express warranty) should be dismissed. ASC
argues, however, that summary judgment is not warranted as to the Count I
(negligence), Count II (breach of contract), Count III (breach of implied warranty
of workmanlike performance), and Count VI (negligent representation).
1. ASC’s Claims against Reuben Johnson and RJS
The key question with respect to ASC’s claims against Reuben Johnson
and RJS is whether CJS employee Podgorak’s actions can be imputed to those
companies. Reuben Johnson and RJS argue that they simply have no connection
to Podgorak or the McCarthy accident. No employee of either company was
involved with the docking of the McCarthy, nor was any formal contract or
agreement entered into with Reuben Johnson or RJS. ASC contends that Reuben
Johnson and RJS are liable through Podgorak’s actions because he acted as their
representative.

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As evidenced by his W-2 forms, Podgorak is employed by CJS as a truck
supervisor. (Gatto Suppl. Decl. [Docket No. 261], Ex. 2.) At the same time, as
discussed above, the relationships between CJS, Reuben Johnson, and RJS are
complicated. RJS is a wholly owned subsidiary of Reuben Johnson. CJS is a
separate corporation but its majority shareholder owner, Todd Johnson, is also
the majority shareholder of Rueben Johnson. RJS tracks and bills for Podgorak’s
time.
The Court has already determined that ASC’s claims arising out of an
alleged oral contract with Podgorak and CJS should survive the summary
judgment. ASC argues that the alleged oral contract that Podgorak entered into
with ASC also implicated RJS and Reuben Johnson. ASC points to several pieces
of evidence which indicate that Podgorak’s actions should be imputed to Reuben
Johnson and RJS in addition to CJS. First, Ken Gliwa has stated that Podgorak
told him that he attended the January 10 meeting to represent Fraser and
“Reuben Johnson/RJS.” (Gliwa Aff. ¶ 3.) Second, Podgorak arrived at the
January 10 meeting driving a Reuben Johnson pickup truck with a Reuben
Johnson logo on the door. (Podgorak Dep. at 98:20-99:17.) Third, Podgorak has
stated that he attended the January 10 meeting to represent both Fraser and

66

Reuben Johnson. (Id. 9:1-4, 123:3-6.) Fourth, Hallett President Mike McCoshen
was also under the belief that Podgorak had attended the January 10 meeting as
a representative or employee of RJS or Reuben Johnson. (McCoshen Dep. at 93:14.)
Reuben Johnson and RJS take issue with some of these assertions. They
note that Gliwa stated in his deposition that Podgorak told him that he
represented Fraser, but Gliwa did not mention Podgorak’s representation of
Reuben Johnson or RJS. Only later, in an affidavit, did Gliwa say that Podgorak
stated that he was representing all three companies (Fraser, Reuben Johnson, and
RJS). Reuben Johnson and RJS urge that this Court should not consider the
statement in Gliwa’s affidavit. See Dotson v. Delta Consol. Industries, Inc., 251
F.3d 780, 781 (8th Cir. 2001) (“[A] party may not create a question of material
fact, and thus forestall summary judgment, by submitting an affidavit
contradicting his own sworn statements in a deposition.”).
Here it is not so clear that Gliwa’s two statements are contradictory. At
his deposition, in a response to a question about whether he had said something
to Podgorak which he apparently understood, Gliwa stated: “If I remember right,
which I don’t offhand, it was something to do with, you know, are you’re the

67

representative from Fraser Shipyard, representing Gene Walroos and Fraser
Shipyard.” (Gliwa Dep. at 201:8-14). This statement is not necessarily
contradicted by Gliwa’s later assertion that Podgorak had told him that he
represented Reuben Johnson and RJS in addition to Fraser.
Further, while RJS and Reuben Johnson acknowledge Podgorak’s own
statement that he attended the January 10 meeting as a representative of Reuben
Johnson (in addition to Fraser), they dispute the scope of that representation.
They note that Podgorak stated that he was at the meeting to discuss Reuben
Johnson’s participation in snow removal from the dock, not with the docking of
the McCarthy.
Taking the evidence in the light most favorable to ASC, a reasonable juror
could conclude that Podgorak was representing Reuben Johnson and RJS at the
January 10 meeting. As discussed above, the business relationships between
Reuben Johnson, RJS, and CJS are interwoven and complex. Given the complex
factual disputes as to the nature of scope of Podgorak’s representation of Reuben
Johnson and RJS, the Court will not grant summary judgment as to the claims
arising out of the alleged oral contract formed between Podgorak and ASC.

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2. Negligence and Negligent Representation Claims
The parties dispute whether Reuben Johnson or RJS could have owed any
duty to ASC which would give rise to a negligence claim. Reuben Johnson and
RJS note they are construction companies, not wharfingers. They therefore argue
that they owed no duty to warn or otherwise advise ASC about any problems
with Hallett’s Dock No. 8.
In response, ASC does not argue that Reuben Johnson or RJS owed it
duties as wharfingers. Instead, ASC contends that Reuben Johnson and RJS
owed ASC a duty of care based on Podgorak’s statements. ASC argues that
when Podgorak attended the January 10 meeting, he agreed to communicate
docking instructions to Whitehead (a Fraser employee) and also to be present
when the McCarthy was to be docked. ASC argues that, as a result of
Podgorak’s statements, he and the companies that he represented had a duty to
conform to a particular standard of conduct. To the extent that Podgorak failed
to inform Whitehead of the docking instructions, forgot to relay the fact that
there was debris in the slip, or left the dock before docking was complete, ASC
argues that Podgorak (along with Reuben Johnson and RJS) breached that
standard of care. Moreover, ASC argues that Reuben Johnson and RJS were

69

negligent in allowing Podgorak, an inexperienced truck driver, to represent them
at the January 10 meeting.
Viewing the evidence in the light most favorable to ASC, the Court
concludes that Rueben Johnson and RJS, while not subject to the same duties as a
wharfinger, may nonetheless be liable for negligence to the extent that Podgorak
acted as their representative. The motion for summary judgment as to
negligence and negligent misrepresentation will therefore be denied.
3. Cross Claims
Hallett and Fraser have brought cross claims against Reuben Johnson and
RJS for contribution and indemnification. Indemnification and contribution are
both equitable remedies. Contribution requires that parties “under a common
burden share that burden equitably.” A.P.I., Inc. v. Home Ins. Co., 706 F. Supp.
2d 926, 946 (D. Minn. 2010).
In contrast to contribution, which allows one to recover a
proportionate share from the other liable party, indemnity is the
right of one party held liable to another to shift the entire burden of
liability to a third party also liable for the same harm.
United States v. J & D Enterprises of Duluth, 955 F. Supp. 1153, 1157 (D. Minn.
1997) (alterations and citations omitted). Reuben Johnson and RJS argue that
these cross claims should be dismissed because they share no liability to ASC
70

with the other Defendants. Because the Court concludes that some of ASC’s
claims against Reuben Johnson and RJS survive summary judgment, the Court
declines to dismiss the cross claims at this time. The Court again reiterates,
however, that damages proven in this case will be apportioned between the
contributing parties based on the jury’s assessment of their relative fault for the
accident.

Accordingly, based upon the files, records, and proceedings herein, IT IS
HEREBY ORDERED:
1. The Motions to Supplement the Record [Docket Nos. 266, 276, 311] are
GRANTED and Plaintiffs’ Motion to Strike [Docket No. 286] is
DENIED.
2. Plaintiffs’ Motion for Partial Summary Judgment Against All
Defendants on Damages Related to Repair Costs and Expenses [Docket
No. 164] is DENIED;
3. Plaintiffs’ Motion for Partial Summary Judgment against Defendant
Hallett Dock Company [Docket No. 160] is GRANTED IN PART and
DENIED IN PART as follows:
a. The Pennsylvania Rule applies to Hallett Dock Company’s
actions;
b. Summary judgment is DENIED in all other respects;
4. Defendant Hallett Dock Company’s Motion for Partial Summary
[Docket No. 168] is GRANTED IN PART and DENIED IN PART as
follows:
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a. Count IV (breach of implied warranty of fitness for a particular
purpose) is DISMISSED;
b. All other counts REMAIN;
5. Defendant Fraser Shipyards, Inc.’s Motion for Summary Judgment
[Docket No. 173] is GRANTED IN PART and DENIED IN PART as
follows;
a. Count IV (breach of implied warranty of fitness for a particular
purpose) and Count V (breach of express warranty) are
DISMISSED;
b. All other counts REMAIN;
6. Defendant Chris Jensen & Son, Inc.’s a Motion for Partial Summary
Judgment [Docket No. 156] is GRANTED IN PART and DENIED IN
PART as follows;
a. Count IV (breach of implied warranty of fitness for a particular
purpose) and Count V (breach of express warranty) are
DISMISSED;
b. All other counts REMAIN;
7. Defendants RJS Construction LLC and Reuben Johnson & Son, Inc.’s
Motion for Partial Summary Judgment [Docket No. 151] is GRANTED
IN PART and DENIED IN PART as follows:
a. Count IV (breach of implied warranty of fitness for a particular
purpose) and Count V (breach of express warranty) are
DISMISSED;
b. All other counts and cross claims REMAIN;

Dated: March 23, 2012

s/ Michael J. Davis
Michael J. Davis
Chief Judge
United States District Court

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