SEAPORT INLET MARINA, LLC v. CONNELL et al
OPINION filed. Signed by Judge Freda L. Wolfson on 9/11/2017. (mps)
*NOT FOR PUBLICATION*
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
SEAPORT INLET MARINA, LLC,
Civil Action No. 17-1908 (FLW)(LHG)
PETER CONNELL, TOM SMITH, WILLIAM :
MAYFIELD, ROBERT MARSIGLIA, JOHN :
KOZAK, WILLIAM WALLUS, ERIC
FITZPATRICK, DAVID CABALLERO,
ANATOLY KOVYARENKO, PATRICK
DONNELLY, RON ELEUTERI, WILLIAM :
BAILEY, PAUL ROWAN, HARRY MIZAHI, :
ROBERT MERCIER, RUSSEL PASCALE,
and LARRY FISHMAN,
WOLFSON, United States District Judge:
Presently before the Court is Defendant Ron Eleuteri’s (“Eleuteri”) motion to dismiss
Plaintiff Seaport Inlet Marina, LLC’s (“Plaintiff” or “Seaport”) Complaint. The Complaint seeks
(1) enforcement of the terms of certain contracts entered into by Seaport and the Defendants1,
The term “Defendants” as used herein refers to Defendants Peter Connell (“Connell”), Tom
Smith (“Smith”), William Mayfield (“Mayfield”), Robert Marsiglia (“Marsiglia”), John Kozak
(“Kozak”), William Wallus (“Wallus”), Eric Fitzpatrick (“Fitzpatrick”), David Caballero
(“Cabellero”), Anatoly Kovyarenko (“Kovyarenko”), Patrick Donnelly (“Donnelly”), Ron
Eleuteri (“Eleuteri”), William Bailey (“Bailey”), Paul Rowan (“Rowan”), Harry Mizahi
(“Mizahi”), Robert Mercier (“Mercier”), Russel Pascale (“Pascale”), and Larry Fishman
(“Fishman”) collectively. Plaintiff’s Counsel has represented to the Court that the dispute
between Plaintiff and Defendant Donnelly has been resolved. See ECF No. 42 at 2 n.1.
However, no stipulation of voluntary dismissal of Defendant Donnelly has been filed with the
and (2) a declaration of non-liability to the Defendants for damages sustained by Defendants’
boats as a result of a fire at Plaintiff’s marina. For the reasons set forth below, Defendant
Eleuteri’s motion is denied (i) with prejudice as to his argument that the present dispute may not
be adjudicated as a declaratory judgment action and (ii) without prejudice as to his arguments
based on the interpretation or unconscionability of the contracts’ exculpatory clauses, which are
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
On a motion to dismiss, the Court reviews the Complaint by taking its allegations as true.
Plaintiff is a corporation that provides marina services to customers at its marina located in
Belmar, NJ, on and adjacent to New Jersey’s Shark River. See Compl. ¶¶ 6, 51-52, ECF No. 1.
Plaintiff’s marina services include storing boats, docking boats, boat maintenance and repairs,
removing and launching boats into and out of the Shark River, shrink-wrapping, and other
winterization services. Id. at ¶ 53. The Defendants stored their respective boats at Plaintiff’s
marina pursuant to the terms and conditions set forth in several agreements and/or work orders.2
Plaintiff alleges that the agreements and/or work orders entered into by and between Defendants
and Plaintiff each contained the following exculpatory clause:
All facilities are offered with the understanding that the
management assumes no liability and that the owner will carry hull
and liability insurance. In consideration of the making of this
contract, it is hereby stipulated and agreed that the Marina permits
Plaintiff alleges that these agreements and/or work orders include winter storage agreements,
winter service invoices, summer docking/mooring agreements, winter service work orders, and
general work orders. See Compl. ¶¶ 57-61. Plaintiff also alleges that these agreements and/or
work orders were “oral,” “oral and were reduced to writing,” or “written.” Id. at ¶¶ 62-64. On
August 15, 2017, complying with instructions from the Court made during the August 11
conference call, Plaintiff supplemented its motion to dismiss with copies of the contracts
currently in its possession for Defendants Connell, Smith, Marsiglia, Kozak, Wallus, Fitzpatrick,
Caballero, Kovyarenko, Eleuteri, Bailey, Rowan, Mizrahi, Mercier, Pascale, and Fishman. See
ECF No. 42.
the Owner to berth or moor his boat on Marina property and
equipment only on the condition that the Marina provides no
security and inspection service and assumes no responsibility
whatsoever for the safety of the boat, boats or equipment referred to
herein directly or indirectly in contract, tort or otherwise.
Furthermore, the Marina will not be liable for any loss or damage
for any cause whatsoever, including but not limited to fire, theft,
malicious mischief or action of the elements which may arise to said
boat, boats or its or their equipment, or to any property of the owner
or his guests, including but not limited to cars parked in the Marina
or for any consequences thereof. Under the foregoing, it is
understood the marina reserves the right to assume control and
charge any boat, boats or their equipment for the protection of life
and property in abnormal conditions or during catastrophes.
Id. at ¶ 65.
On February 14, 2017, a fire occurred while one of Plaintiff’s employees was performing
shrink-wrapping work on Defendant Connell’s boat. Id. at ¶ 84. Defendant Connell’s boat
caught fire and the fire spread to the other Defendants’ boats causing varying degrees of damage,
up to and including total loss of value. Id. at ¶¶ 85-86. Plaintiff alleges that it has no liability to
the Defendants for any damages arising out of the February 14, 2017 fire because of the
exculpatory clause contained in the agreements and/or work orders. Id. at ¶ 100-101.
Based upon these allegations, Plaintiff filed the Complaint on March 22, 2017, seeking
enforcement of the exculpatory clause contained in the agreements and/or work orders and a
declaration of non-liability. Specifically, Count I requests a declaratory judgment that Seaport is
not liable to any of the Defendants for damages to their respective boats arising out of the
February 14, 2017 fire. Id. at ¶¶ 88-101. Count II seeks an order directing enforcement of the
exculpatory clause contained in the agreements and/or work orders. Id. at ¶¶ 102-16. The Court
has admiralty jurisdiction, as Plaintiff’s claims arise from a maritime contract. See Dominici v.
Between the Bridges Marina, 375 F. Supp. 2d 62, 64-65 (D. Conn. 2005) (“Whether exculpatory
clause in [marina’s] Winter Storage Contract fully absolves [marina] from all liability for its own
negligence, and if so, whether it is enforceable, implicates this Court’s admiralty jurisdiction . . .
.”); In re Pennypacker, No. 16-1317, 2016 WL 4705535, at *3 (D. Md. Sept. 8, 2016) (contract
to shrink-wrap yacht is a maritime contract subject to admiralty jurisdiction).
Defendants Connell, Smith, Mayfield, Marsiglia, Kosak, Wallace, Fitzpatrick, Caballero,
Rowan, Mercier, Pascale, and Fishman have answered the Complaint and have filed
counterclaims. See ECF Nos. 11, 17, 30.3 In addition, Axis Insurance Company (“Axis”), as
subrogee of Defendant Fishman, filed a Complaint in Intervention. See ECF No. 32.
On June 18, 2017, Defendant Eleuteri filed the instant motion to dismiss (ECF No. 19),
which Plaintiff opposes (ECF No. 36).4 Defendant Eleuteri’s motion sets forth two grounds for
dismissal: (1) lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) and (2) failure
to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). On August
11, 2017, the Court held a telephonic conference with the parties, at which the Court noted that the
law was well-settled that fixed-duration dry or winter storage contracts fell within the Court’s
admiralty jurisdiction5, and directed Plaintiff to provide evidence of the existence of the winter
Defendant Connell filed counterclaims asserting negligence, breach of bailment, and breach of
contract. See ECF No. 11. Defendants Smith, Mayfield, Marsiglia, Kosak, Wallace, Fitzpatrick,
Caballero, Rowan, Mercier, and Pascale answered jointly and also jointly filed counterclaims
asserting negligence, breach of bailment, and breach of contract. See ECF No. 17. Defendant
Fishman filed counterclaims asserting negligence and breach of bailment obligations. See ECF
In addition, Defendants Smith, Mayfield, Marsiglia, Kosak, Wallace, Fitzpatrick, Caballero,
Rowan, Mercier, Pascale, and Connell and Intervening Plaintiff Axis jointly filed a partial
opposition to Defendant Eleuteri’s motion. See ECF No. 37.
“To ascertain whether a contract is a maritime one, [courts] cannot look to whether a ship or
other vessel was involved in the dispute[,] . . . [n]or can [courts] simply look to the place of the
contract's formation or performance. Instead, the answer ‘depends upon ... the nature and
character of the contract,’ and the true criterion is whether it has ‘reference to maritime service
or maritime transactions.’” Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 23–24 (2004) (quoting
North Pacific S.S. Co. v. Hall Brothers Marine Railway & Shipbuilding Co., 249 U.S. 119, 125
(1919)). See also Kossick v. United Fruit Co., 365 U.S. 731, 735–36, 81 S. Ct. 886, 890, 6 L. Ed.
2d 56 (1961) (“The boundaries of admiralty jurisdiction over contracts—as opposed to torts or
storage contracts referenced in the Complaint. Plaintiff filed a supplemental certification, attaching
storage, maintenance and repair agreements between Plaintiff and Defendants Connell, Smith,
Marsiglia, Kozak, Wallus, Fitzpatrick, Caballero, Kovyarenko, Eleuteri, Bailey, Rowan, Mizrahi,
Mercier, Pascale, and Fishman. After reviewing the supplemental certification, Defendant Eleuteri,
crimes—being conceptual rather than spatial, have always been difficult to draw. Precedent and
usage are helpful insofar as they exclude or include certain common types of contract: a contract
to repair, . . . or to insure a ship, . . . is maritime, but a contract to build a ship is not. Without
doubt a contract for hire either of a ship or of the sailors and officers to man her is within the
admiralty jurisdiction. . . . The principle by reference to which the cases are supposed to fall on
one side of the line or the other is an exceedingly broad one. The only question is whether the
transaction relates to ships and vessels, masters and mariners, as the agents of commerce.”)
(citations and quotations omitted). Accordingly, in determining whether contracts relating to the
storage or repair of vessels are “maritime” in nature, courts look to whether the ship in question
has “been withdrawn from marine commerce and navigation.” The Hercules Co v. Brigadier
Gen. Absolom Baird, 214 F.2d 66, 69 (3d Cir. 1954). When a vessel has been withdrawn from
marine commerce and navigation it becomes “a dead ship, i.e., not a maritime object,” and where
“the subject matter of the contract [is] a nonmaritime object, there [is] no admiralty jurisdiction.”
Id. at 68. See also Mullane v. Chambers, 333 F.3d 322, 328 (1st Cir. 2003) (discussing the dead
ship doctrine, under which a ship loses its status as a vessel when its function is so changed that
it has no further navigation function, explaining that simply taking a vessel temporarily out of
service does not render it a dead ship, and finding no authority for the proposition that the
duration and location of a ship’s temporary storage takes it out of admiralty jurisdiction).
Applying these principles, courts have consistently found winter storage contracts, and
disputes concerning the extent of the exculpatory clauses contained therein, to fall within the
federal courts’ admiralty jurisdiction. Fireman's Fund Am. Ins. Co. v. Boston Harbor Marina,
Inc., 406 F.2d 917, 918-19 (1st Cir. 1969) (contract claim against marina where storage contract
provided that marina “will not be liable for loss of or damage to said property under any
circumstances including, but not limited to fire, theft, vandalism, water damage and any
negligent acts or omissions and notwithstanding any asserted or actual breach of this contract”
was within the court’s admiralty jurisdiction). See also Am. E. Dev. Corp. v. Everglades Marina,
Inc., 608 F.2d 123, 125 (5th Cir. 1979) (“contracts for . . . dry storage [of boats] . . . within
admiralty jurisdiction.”); Robert E. Blake Inc. v. Excel Envtl., 104 F.3d 1158, 1160 (9th Cir.
1997) (contracts for services to a vessel laid up and withdrawn from navigation, i.e. a “dead
ship”, are not governed by admiralty law, but services to ships only temporarily dry docked are;
“It is the health of the ship at the time the contract is formed that is determinative.”); Omaha
Indemnity Co. v. Whaleneck Harbor Marina, 610 F. Supp. 154, 156–57 (E.D.N.Y.1986)
(upholding admiralty jurisdiction over dispute involving vessel stored for the duration of winter
because “[a] winter storage contract . . . certainly relates to a ship in its use as a ship”); Schuster
v. Baltimore Boat Sales, Inc., 471 F. Supp. 321, 322 (D. Md. 1979) (dispute over winter storage
contract of vessel subject to court’s admiralty jurisdiction).
by letter dated August 16, 2017, withdrew the portion of his motion seeking dismissal of the
Complaint pursuant to Rule 12(b)(1). See ECF No. 44. Accordingly, this Opinion addresses only
Defendant Eleuteri’s Rule 12(b)(6) arguments. Defendant Eleuteri’s motion contends that
Seaport’s Complaint fails to state a claim because (1) it seeks a declaration of non-liability for past
conduct, and (2) the exculpatory clause is unconscionable and unenforceable as a matter of law.
STANDARD OF REVIEW
A motion under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a
complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). The defendant bears the burden
of showing that no claim has been presented. Hedges v. United States, 404 F.3d 744, 750 (3d
Cir. 2005). When considering a Rule 12(b)(6) motion, a district court should conduct a threepart analysis. See Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). “First, the court must
‘take note of the elements a plaintiff must plead to state a claim.’” Id. (quoting Ashcroft v. Iqbal,
56 U.S. 662, 675 (2009)). Second, the court must accept as true all of a plaintiff’s well-pleaded
factual allegations and construe the complaint in the light most favorable to the plaintiff. Fowler
v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). The court may disregard any
conclusory legal allegations. Id. Finally, the court must determine whether the “facts are
sufficient to show that plaintiff has a ‘plausible claim for relief.’” Id. at 211 (quoting Iqbal, 556
U.S. at 679). Such a claim requires more than mere allegation of an entitlement to relief or
demonstration of the “mere possibility of misconduct;” instead, the facts must allow a court to
reasonably infer “that the defendant is liable for the misconduct alleged.” Id. at 210-11 (quoting
Iqbal, 556 U.S. at 678-79).
A Declaratory Judgment Action is Permissible Here
Defendant Eleuteri first argues that the Complaint fails to state a claim upon which relief
can be granted because it improperly seeks a declaration of non-liability for past conduct.
Defendant Eleuteri contends that, therefore, the substance of this dispute may not be adjudicated
as a declaratory judgement action. See ECF No. 19-7 at 16-17. Plaintiff counters that a
declaratory judgment action regarding the enforceability of an exculpatory clause in a maritime
contract is proper under both the declaratory judgment act and general maritime law. See ECF
No. 36 at 17-20. The Court agrees with Plaintiff.
The Declaratory Judgment Act, 28 U.S.C. § 2201, provides that a court “[i]n a case of
actual controversy within its jurisdiction . . . may declare the rights and other legal relations of
any interested party seeking such declaration, whether or not further relief is or could be sought.”
28 U.S.C. § 2201(a). District courts have “unique and substantial discretion in deciding whether
to declare the rights of litigants.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 136 (2007)
(internal citations omitted). In exercising that discretion, a district court must act “in accordance
with the purposes of the Declaratory Judgement Act and the principles of sound judicial
administration.” Elecs. For Imaging, Inc. v. Coyle, 394 F.3d 1341, 1345 (Fed. Cir. 2005)
Ordinarily, “[d]eclaratory judgment is inappropriate solely to adjudicate past conduct[,] .
. . [n]or is declaratory judgment meant simply to proclaim that one party is liable to another.”
Corliss v. O'Brien, 200 F. App'x 80, 84 (3d Cir. 2006). See Gruntal & Co. v. Steinberg, 837 F.
Supp. 85, 89 (D.N.J. 1993) (“A declaratory judgment is inappropriate solely to adjudicate past
conduct.”). “There must be a substantial controversy between parties having adverse legal
interests of sufficient immediacy and reality to warrant issuance of a declaratory judgment. The
fundamental test is whether the plaintiff seeks merely advice or whether a real question of
conflicting legal interests is presented for judicial determination.” Zimmerman v. HBO Affiliate
Grp., 834 F.2d 1163, 1170 (3d Cir. 1987). “[T]he threat of legal action may present a real
controversy.” Id. at 1170. Threatened legal action is not an appropriate basis for a declaratory
judgment action where “the dispute lacks the immediacy and reality necessary to require a
judicial declaration of rights as between the parties,” that is, where “it is purely a matter of
conjecture whether the defendants have threatened to file suit on the theory on which the plaintiff
has requested a declaration.” Ibid.
Here, Plaintiff’s claim for declaratory judgment asks the Court to interpret and enforce the
exculpatory provision in its maritime contracts with the Defendants. This presents an immediate
and real dispute among the parties warranting the issuance of a declaratory judgment because it
asks for adjudication not of past conduct, but of present liability in threatened, imminent litigation.
Plaintiff has alleged that “[a] majority of the [Defendants] have already submitted claims to
[Plaintiff’s insurer] and several have retained attorneys and/or threatened to commence lawsuits
seeking damages as a result of the subject fire.” ECF No. 1 at 2. Plaintiff has also alleged that the
majority of the Defendants’ insurers have notified Plaintiff of “their intent to seek subrogation for
monies [t]hat will be paid out under policies of insurance issued to the [Defendants] as a result of
the subject fire.” Id. Additionally, as discussed above, many of the Defendants have filed
counterclaims. The parties’ interests, therefore, are clearly adverse and pertain to present liability,
not past conduct. The Court further finds that Plaintiff’s declaratory judgment action has the
potential to resolve the rights of the parties and would be useful to the parties in this case. In other
words, a declaratory judgment regarding the applicability and enforceability of an exculpatory
clause in this case may determine whether Plaintiff is excused from liability for the damage to the
Defendants’ boats. Accordingly, the Court will exercise its “unique and substantial discretion”
and allow Plaintiff’s claim for a declaratory judgment to proceed.
The Court’s holding is consistent with those of other courts in this district in matters
pertaining to the contractual rights of the parties to boat storage and insurance contracts. See
Harbour Cove Marine Servs. V. Rabinowitz, No. 02-1695, 2005 WL 1038957, at *1 (D.N.J. May
3, 2005) (declaratory judgment action initiated by marina seeking a declaration that it was not
liable for damages to defendants’ boats following a fire caused by the marina’s employee); N. Am.
Specialty Ins. Co. v. Diantonio, No. 14-4019, 2015 WL 790514, at *2 (D.N.J. Feb. 25, 2015)
(action by insurer seeking a declaratory judgment that it was not obligated to defend and/or
indemnify insured under an insurance policy it issued); Centennial Ins. Co. v. Lithotech Sales,
LLC, 187 F. Supp. 2d 214 (D.N.J. 2001) (same). Accordingly, Defendant Eleuteri’s motion to
dismiss on the basis of Plaintiff’s inability to bring the present case as a declaratory judgment
action is denied with prejudice.
Plaintiff’s Arguments Pertaining to Enforceability of the Exculpatory Clause
Defendant Eleuteri next argues that the Complaint fails to state a claim upon which relief
can be granted because the exculpatory provisions included in the alleged agreements and/or
work orders are unenforceable against Defendant Eleuteri as a matter of law. See ECF No. 19-7
at 17-21. Defendant Eleuteri sets forth two distinct arguments regarding unenforceability: (1)
that the exculpatory clause only applies to “berthing” and “mooring” a vessel, not long-term
winter storage, and (2) that the exculpatory clause is unconscionable and unenforceable as a
matter of law6 due to the bailor/bailee relationship between Defendant Eleuteri and Plaintiff. See
Generally, “[w]ith admiralty jurisdiction . . . comes the application of substantive admiralty
law.” Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199, 206 (1996) (internal quotation
id. Plaintiff argues that the issue of enforceability cannot be resolved at the pleading stage
because that issue depends on the factual circumstances surrounding the transaction. See ECF
No. 36 at 22-23. The Defendants opposing Eleuteri’s motion, see n. 5, supra, agree with
Plaintiff that any determination of enforceability is premature. See ECF No. 37 at 8-11.
As an initial matter, Defendant Eleuteri’s motion to dismiss Plaintiffs’ Complaint “as a
matter of law” is clearly premature because the parties have not yet had the opportunity to argue
which law applies. The parties have not argued choice of law under the challenged contracts, and
indeed, the text of any of the challenged contracts was not in the record until the filing of the
supplemental certification at the Court’s direction, and the complete text of all of the fullyexecuted, contracts may not yet be before the Court. At least some of the contracts with which
the Court has heretofore been presented, including that to which Defendant Eleuteri is alleged to
be a party, do not on their faces appear to contain choice of law provisions. See, e.g., ECF No.
42-9 (Plaintiff’s winter storage contract with Defendant Eleuteri, attached as an exhibit to the
August 15, 2017 O’Donnell Supplemental Certification). Where maritime contracts do not
contain choice of law provisions, courts in the Third Circuit “follow the choice of law analysis
set forth by the Supreme Court in Wilburn Boat; that is, we would apply well established
principles of federal admiralty law to resolve this dispute, but if none existed, we would apply
state law as the federal rule of decision.” AGF Marine Aviation & Transp. v. Cassin, 544 F.3d
255, 260 (3d Cir. 2008) n. 4 (citing 348 U.S. at 313, 75 S.Ct. 368). See Centennial Ins. Co. v.
marks and citation omitted). “The application of substantive admiralty law does not, however,
result in the ‘automatic displacement of state law.’” Centennial Ins. Co. v. Lithotech Sales, LLC,
29 F. App’x 835, 836 (3d Cir. 2002) (citation omitted). A federal court may rely on state law in
an admiralty case “so long as it does not conflict with maritime law.” Id. Therefore, the
question of whether an exculpatory clause is unenforceable as a matter of law may rely on both
substantive admiralty law and New Jersey state law, a choice of law question not yet addressed
by the parties, as discussed below.
Lithotech Sales, LLC, 29 F. App'x 835, 836 (3d Cir. 2002) (“With admiralty jurisdiction comes
the application of substantive admiralty law. The application of substantive admiralty law does
not, however, result in the automatic displacement of state law. State law may provide the rule of
decision in an admiralty case so long as it does not conflict with maritime law.” (quotations
“When a contract is a maritime one, and the dispute is not inherently local, federal law
controls the contract interpretation.” Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 22–23 (2004). In
determining whether a dispute is inherently local, the court looks to whether a “maritime
contract’s interpretation may so implicate local interests as to beckon interpretation by state
law.” For example, both the United States Supreme Court and the Third Circuit Court of Appeals
have concluded that, under this framework, the interpretation of various policy provisions in
maritime insurance contracts, implicating issues comparable to those of the winter storage
contract exculpatory clauses in this case, are governed by state law. The Supreme Court
“applyi[ed] state law to maritime contract[s] for marine insurance because of state regulatory
power over [the] insurance industry.” Id. (describing the holding in Wilburn Boat Co. v.
Fireman's Fund Ins. Co., 348 U.S. 310, 313, 75 S.Ct. 368, 99 L.Ed. 337 (1955)).7 The Third
In Wilburn, the Supreme Court held:
[W]e think it plain that [the interpretation of a provision in a maritime insurance contract]
has not been judicially established as part of the body of federal admiralty law in this
country. Therefore, the scope and validity of the policy provisions here involved and the
consequences of breaching them can only be determined by state law unless we are now
prepared to fashion controlling federal rules. . . . The whole judicial and legislative
history of insurance regulation in the United States warns us against the judicial creation
of admiralty rules to govern marine policy terms and warranties. The control of all types
of insurance companies and contracts has been primarily a state function since the States
came into being.
Wilburn Boat Co. v. Fireman's Fund Ins. Co., 348 U.S. 310, 316 (1955).
Circuit, similarly, held that “[b]ecause there is no applicable federal rule governing the
construction of the [maritime insurance] Policy at issue in the present case, state law applies.”
Royal Ins. Co. of Am. v. KSI Trading Corp., 563 F.3d 68, 73 (3d Cir. 2009). See also Calhoun v.
Yamaha Motor Corp., U.S.A., 40 F.3d 622, 627 (3d Cir. 1994), aff'd, 516 U.S. 199, 116 S. Ct.
619, 133 L. Ed. 2d 578 (1996) (general discussion of same). Because the parties have not briefed
the issue, it is unclear whether any party will contend that a provision of admiralty law directly
conflicts with otherwise applicable New Jersey state law and therefore governs the winter
storage contracts here. The Court, however, has not located any instance in which the
interpretation of the coverage provisions of a winter storage agreement or maritime insurance
policy has been found to be governed by admiralty law, compared with the several instances
identified above in which state law was found to apply.
Even assuming that the choice of law question in this case had been resolved in favor of
the application of New Jersey state law, it would be clear that Defendant Eleuteri’s motion would
be premature before the development of the factual record. “Under New Jersey law, an insurance
policy is simply a contract and its provisions should, of course, be construed as in any other
contract. In the absence of any ambiguity, the terms of an insurance policy should ‘be given their
plain, ordinary meaning.’” Royal Ins. Co. of Am. v. KSI Trading Corp., 563 F.3d 68, 73 (3d Cir.
2009) (quotation omitted) (quoting Zacarias v. Allstate Ins. Co., 168 N.J. 590, 775 A.2d 1262,
1264 (2001)). See also Centennial Ins. Co. v. Lithotech Sales, LLC, 29 F. App'x 835, 837 (3d
Cir. 2002) (“In New Jersey, the terms of an insurance policy, absent ambiguity, should be given
their plain ordinary meaning.” (quotation omitted)). “Under New Jersey law[, however,] . . .
courts must always ‘consider all of the relevant evidence that will assist in determining the intent
and meaning of the contract’ when making ambiguity determinations.” 8 Mylan Inc. v.
SmithKline Beecham Corp., 723 F.3d 413, 419 (3d Cir. 2013) (quoting Conway v. 287 Corp. Ctr.
Assocs., 187 N.J. 259, 901 A.2d 341, 346 (2006)). “‘Evidence of the circumstances is always
admissible in aid of the interpretation of an integrated agreement. This is so even when the
contract on its face is free from ambiguity.’” Mylan, 723 F.3d at 419 (quoting Sumitomo Mach.
Corp., 81 F.3d at 332 (quoting Atl. N. Airlines, Inc. v. Schwimmer, 12 N.J. 293, 96 A.2d 652, 656
(1953))). “In aid of interpretation, courts should consider, for example, ‘the particular contractual
provision, an overview of all the terms, the circumstances leading up to the formation of the
contract, custom, usage, and the interpretation placed on the disputed provision by the parties'
conduct.’” Mylan, 723 F.3d at 419 (quoting Kearny PBA Local No. 21 v. Town of Kearny, 81
N.J. 208, 405 A.2d 393, 400 (1979)). Accordingly, “courts must consider all relevant evidence to
determine if any ambiguity exists” and, “if the contested provisions fall in that gray area,”
dismissal or “summary judgment is improper.” Mylan, 723 F.3d at 419. “Federal law is
consistent with this approach.” Id. at 419 n. 8. The Court’s ambiguity determination preceding its
construction of the clause is thus informed by facts not yet before it. Because Defendant
Eleuteri’s first argument—that the exculpatory clause applies only to berthing and mooring and
not long-term storage of vessels on land—requires construction of the clause, it is premature. See
E.H. Yachts, LLC v. B&D Boatworks, Inc., No. 06-164, 2006 WL 3068560, *4 n.3 (D.N.J. Oct.
27, 2006) (finding that interpretation of contract provisions was inappropriate in a motion to
Traditional rules of contract interpretation under federal law would largely be consistent with
the New Jersey state law approach. Emerson Radio Corp. v. Orion Sales, Inc., 253 F.3d 159, 164
(3d Cir. 2001) (“before we decide whether a contract is ambiguous, we must consider the
contract language, the meanings suggested by counsel, and the extrinsic evidence offered in
support of each interpretation.” (citations omitted).
Turning to Defendant Eleuteri’s second argument—that the exculpatory provision is
unconscionable and unenforceable as a matter of law— “[b]oth admiralty law and New Jersey
law recognize that exculpatory contracts, in certain circumstances, are valid and enforceable.”
Olmo v. Atl. City Parasail, LLC, No. 13-4923, 2016 WL 1704365, *8 (D.N.J. Apr. 28, 2016).
See also Metal Processing, Inc. v. Humm, 56 F. Supp. 2d 455, 463 (D.N.J. 1999) (interpreting
the Supreme Court’s decision in Bisso v. Inland Waterways Corp., 349 U.S. 85 (1955), to hold
that exculpatory provisions in admiralty contracts are not automatically unenforceable except in
certain towage contracts); Stelluti v. Casapenn Enterprises, LLC, 203 N.J. 286, 303, 1 A.3d 678,
689 (2010) (New Jersey courts “enforce contracts that contain exculpatory clauses unless such
provision proves adverse to the public interest.”). See also Harbour Cove Marine Servs., Inc. v.
Rabinowitz, No. CIV. 02-1695 (RBK), 2005 WL 1630871, at *4 (D.N.J. July 8, 2005)
(“[E]xculpatory provisions in admiralty contracts are not automatically unenforceable as
violative of public policy.”).
The analysis of whether an exculpatory provision is enforceable is fact specific and,
accordingly, is inappropriate to decide on a motion to dismiss. Sw. Sugar & Molasses Co. v.
River Terminals Corp., 360 U.S. 411, 421 (1959) (affirming the Court of Appeals ruling that “the
exculpatory clause here at issue [in a maritime contract] should not be struck down as a matter of
law” and emphasizing that “[c]ases are not decided, nor the law appropriately understood, apart
from an informed and particularized insight into the factual circumstances of the controversy
under litigation. This principle has particular force when the courts are asked to strike down on
grounds of public policy a contractual arrangement on its face consensual.” (internal quotation
omitted)). See, e.g., Dominici, 375 F. Supp. 2d at 69-70 (“[A]ny categorical rule prohibiting or
permitting the exculpatory clause in [the] Winter Storage Contract is inappropriate. The public
policy concerns with exculpatory clauses are instead best channeled into a fact-specific
examination . . . . Given the highly particularized inquiry that therefore must precede any
determination of the enforceability of an exculpatory clause, it is inappropriate to decide the
issue on a Rule 12(b)(6) motion.”); Pub. Serv. Enter. Grp., Inc. v. Philadelphia Elec. Co., 722 F.
Supp. 184, 211 (D.N.J. 1989) (“The validity of [an exculpatory] clause also depends on factual
circumstances inappropriate for resolution on a motion to dismiss.”). Again, the Court finds that
it would be inappropriate to attempt to resolve the issue of unconscionability without the benefit
of a more complete evidentiary record.
Finally, the Court notes that Defendant Eleuteri’s letter of August 16, 2017, requests that
the Court issue a decision with regard to the portion of Defendant Eleuteri’s motion seeking
dismissal on the ground that “the purported contract and its alleged exculpatory provision is not
dated nor signed by Defendant [Eleuteri].” ECF No. 44 at 1. This argument, as well as the cases
cited in the August 16, 2017 letter, does not appear anywhere in Defendant Eleuteri’s opening
brief or reply brief. In addition, Defendant Eleuteri did not seek leave to file a supplemental
brief to raise this additional argument. Accordingly, the Court will not consider this new
argument at this juncture. Even if this argument were properly before the Court, it could not be
appropriately decided at the motion to dismiss stage. A cursory review of the contracts
submitted by Plaintiff with respect to Defendant Eleuteri reveals that at least one document
bearing the exculpatory clause at issue was signed and dated by Defendant Eleuteri. See ECF
No. 42-9 at 17. Whether this signed contract and/or the unsigned contracts produced by Plaintiff
may be enforced against Defendant Eleuteri is a question that would benefit from a more
complete evidentiary record.
Accordingly, Defendant Eleurteri’s motion to dismiss on the basis of the interpretation or
unconscionability of the challenged contracts is denied without prejudice as premature.
For the foregoing reasons, Defendant Eleuteri’s motion to dismiss (ECF No. 19) is
DENIED (i) with prejudice as to his argument that the present dispute may not be adjudicated as
a declaratory judgment action and (ii) without prejudice as to his arguments based on the
interpretation or unconscionability of the contracts’ exculpatory clauses, which are premature.
Dated: September 11, 2017
/s/ Freda L. Wolfson
Freda L. Wolfson
United States District Judge
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