Bald Head Island Transportation, Inc. et al
Filing
122
ORDER granting 65 Motion for Summary Judgment; dismissing without prejudice 69 Motion to Dismiss for Failure to State a Claim; dismissing without prejudice 71 Motion for Partial Summary Judgment; granting 72 Motion for Summary Judgment; g ranting 82 Motion to Strike. This matter is REFERRED to U.S. Magistrate Judge Robert B. Jones, Jr. to conduct a status conference and enter a scheduling order governing Phase II of the litigation. Signed by Senior Judge James C. Fox on 8/18/2015. (Copy emailed to US Magistrate Judge Robert B. Jones, Jr.) (Edwards, S.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
IN ADMIRALTY
No. 7:14-CV-00077-F
In the Matter of:
Bald Head Island Transportation, Inc. ("Owner"),
Bald Head Island Limited LLC ("Manager")
and MIV ADVENTURE, Official No. 916323,
together with her Engines, Tackle and Apparel
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ORDER
This matter is before the court on the following motions: Claimant Tammy Strickland's
Motion for Summary Judgment [DE-65]; Plaintiffs' Motion to Dismiss Claimant Bonnie
Cockrell's Claim for Punitive Damages [DE-69]; Plaintiffs' Motion for Partial Summary
Judgment on Claimants' Punitive Damages Claims [DE-71]; Claimants Bonnie Cockrell, Mary
Beth Springmeier, and Steven Donecker's Motion for Summary Judgment [DE-72]; and
Claimants Tammy Strickland, Bonnie Cockrell, Steven Donecker and Mary Beth Springmeier's
Motion to Strike [DE-82]. The motions have been fully briefed and are ripe for disposition. For
the reasons stated below, Claimants Tammy Strickland, Bonnie_ Cockrell, Steven Donecker and
Mary Beth Springmeier's Motion to Strike is ALLOWED; Claimant Tammy Strickland's Motion
for Summary Judgment is ALLOWED; Plaintiffs' Motion to Dismiss Claimant Bonnie
Cockrell's Claim for Punitive Damages is DISMISSED without prejudice; Plaintiffs' Motion for
Partial Summary Judgment on Claimants' Punitive Damages Claims is DISMISSED without
prejudice; and Claimants Bonnie Cockrell, Mary Beth Springmeier, and Steven Donecker' s
Motion for Summary Judgment is ALLOWED.
I. FACTUAL AND PROCEDURAL BACKGROUND
The basic facts in this case are largely undisputed. Plaintiff Bald Head Island
Transportation, Inc. ("BHIT") is a North Carolina corporation that was the Owner of the
MIV ADVENTURE (the "Vessel"). Compl. [DE-l] ,-r 2. Plaintiff Bald Head Island Limited LLC
("BHIL") is a Texas limited liability company that was the Manager and owner pro hac vice of
the Vessel. ld. ,-r 4.
There is no means to access Bald Head Island, North Carolina by land. Charles A. Paul
Deposition [DE-68-7] at 59; Claude McKernan Deposition [DE-68-3] at 5. The Vessel is one of
passenger ferries that Plaintiffs used to transport passengers between Southport, North Carolina
and Bald Head Island, North Carolina. Charles A. Paul Deposition [DE-68-7] at 59.
On December 17, 2013, Captain Rodney Melton was in command during the 9:00a.m.
ferry run, and there were fifty-three passengers aboard the Vessel. Claude McKernan Deposition
[DE-68-3] at 30. The Vessel was headed from Deep Point Marina in Southport to the Village of
Bald Head Island. Compl. [DE-l] ,-r 5. At a speed of between 17-19 knots, the Vessel proceeded
down the channel. ESI Expert Report [DE-71-15] at 3. Captain Melton piloted the Vessel past
red buoy "18" on the starboard side. ld. After passing Buoy "18," Captain Melton initiated a
port tum around the western end of Battery Island. Jd. Captain Melton steadied on a course of
about 140 degrees about the time that the Vessel passed red Buoy "16" to starboard. ld. The
Vessel went 520 yards over about a minute before it experienced rapid deceleration because it
had run aground at position 33.9025 North and 78.01315 West. ld. at 3-4. The Vessel ran
aground on a sandbar in the Cape Fear River just southeast of marker 16 and Battery Island.
2
Compl.
[DE-l]~
5. As a result of the grounding, everyone was thrown forward. ESI Expert
Report [DE-71-15] at4.
Certain passengers and a crew member aboard the Vessel have alleged injuries and
damages. Compl. [DE-l]
~
8. The crew member is Bonnie Cockrell and the passengers are
Steven Donecker, Tom Griffm, Bernie Loerzel, Victor Magana, Richard Scearce, David
Simmons, Mary Beth Springmeier, Tammy Strickland and Robert Weisser. Id. Plaintiffs
received their first notice of claim arising from the December 17, 2013 grounding on January 6,
2014. Id.
~
7.
On April23, 2014, Plaintiffs filed this action for exoneration from or limitation of
liability pursuant to the Limitation of Liability Act, 46 U.S.C. § 30501, et seq., Fed. R. Civ. P.
9(h) and Rule F of the Supplemental Rules for Admiralty or Maritime Claims. Plaintiffs contend
that they are entitled to exoneration from or limitation of liability because the injuries sustained
by known and unknown claimants were sustained without privity or knowledge by either
Plaintiff. Id
~~
5, 9.
On May 1, 2014, the Clerk of Court entered a Notice [DE-ll] advising that Plaintiffs had
filed a Complaint for exoneration from or limitation of liability of all claims arising out of the
December 17, 2013 voyage. The Notice provided that all persons with a claim must file it on or
before June 15, 2014, or be defaulted. [DE-ll] at 2. The following individuals filed an Answer
and Claim: Steven A. Donecker, Mary Beth Springmeier, Richard W. Scearce, ill, Tammy
Strickland, and Bonnie Cockrell. Old Baldy Foundation, Inc. and Employers Assurance filed a
Notice and Claim of Subrogation Lien [DE-30] regarding claimant Mary Beth Springmeier. On
August 5, 2014, this court entered an Entry of Default Against Non-Appearing Parties [DE-48].
3
Plaintiffs and Richard W. Scearce, III entered into a settlement agreement [DE-59-1],
which was approved by this court. On December 4, 2014, Scearce was dismissed as a claimant
in this action, and all his claims were dismissed with prejudice. [DE-62] at 2.
II. STANDARDS OF REVIEW
A. Summary Judgment
The standard for granting summary judgment is well established. "The Court shall grant
summary judgment if the movant shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter oflaw." Fed: R. Civ. P. 56(a); see also
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The moving party bears the burden bears
the initial burden of informing the court of the basis for its motion and identifying the matter it
believes demonstrates the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323.
The substantive law governing the case will identify those facts that are material and "[o]nly
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). When the court determines whether summary judgment is appropriate, it must
resolve all ambiguities and draw all reasonable inferences in favor of the nonmoving party. See
Matsushita Elec. Indus. Co., Ltd, v. Zenith Radio Corp., 475 U.S. 574, 587-88 (citing United
States v. Diebold, Inc. 369 U.S. 654, 655 (1962)).
B. Rule 12(b)(6) Motion to Dismiss
The purpose of a motion to dismiss under Rule 12(b)(6) is to test the legal sufficiency of
the complaint, not to resolve conflicts of fact or to decide the merits of the action. Edwards v.
City of Goldsboro, 178 F.3d 231, 243-44 (4th Cir. 1999). In considering a motion to dismiss, the
4
court assumes the truth of all facts alleged in the complaint and the existence of any fact that can
be proved which is consistent with the complaint's allegations. E. Shore Mkts., Inc. v. J.D.
Assocs. Ltd. P'shp, 213 F.3d 175, 180 (4th Cir. 2000). However, the "'[±]actual allegations must
be enough to raise a right to relief above the speculative level'" and the plaintiff must allege
"'enough facts to state a claim to reliefthat is plausible on its face."' Wahi v. Charleston Area
Med. Ctr., Inc., 562 F.3d 599, 615 n.26 (4th Cir. 2009) (quoting Bell At!. Corp. v. Twombly, 550
U.S. 544, 555, 570 (2007)). "[A] plaintiffs obligation to provide the 'grounds' ofhis
'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citations omitted);
accord Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Moreover, a court "need not accept the legal
conclusions drawn from the facts" nor "accept as true unwarranted inferences, unreasonable
conclusions, or arguments." E. Shore Mkts., 213 F.3d at 180.
III. DISCUSSION
A. The Limitation of Liability Act
Under the Limitation of Liability Act, "the liability of the owner of a vessel for any claim,
debt, or liability ... shall not exceed the value of the vessel and pending freight," 46 U.S.C. §
30505(a), provided that such claims, debts, or liabilities "aris[e] from any embezzlement, loss, or
destruction of any property, goods, or merchandise shipped or put on board the vessel, any loss,
damage, or injury by collision, or any act, matter, or thing, loss, damage, or forfeiture, done,
occasioned, or incurred, without privity or knowledge of the owner," except as otherwise
excluded by law, id. § 30505(b).
5
In order to avail itself of the protection of the statute, "[t]he owner of a vessel may bring a
civil action in a district court of the United States for limitation ofliability ... within 6 months
after a claimant gives the owner written notice of a claim." 46 U.S.C. § 30511(a). For purposes
of the limitation of liabilities, "the term 'owner' includes a charterer that mans, supplies, and
navigates a vessel at the charterer's own expense or by the charterer's own procurement. 46
U.S.C. § 30501. After the owner posts the security required by 46 U.S.C. § 30511(b), the court
then "issue[s] a notice to all persons asserting claims with respect to which the [petition] seeks
limitation." Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions,
Fed. R. Civ. P., Supp. R. F(4).
In a limitation proceeding, the district court, sitting in admiralty without a jury, engages in
a two-step inquiry. In re Complaint ofDammers & Vanderheide & Scheepvaart Maats Christina
B. V, 836 F.2d 750, 755 (2d Cir. 1988). Under the first step, the court must determine which act
of negligence or conditions of unseaworthiness caused the accident. Verrett v. McDonough
Marine Service, 705 F.2d 1437, 1444 (5th Cir. 1983). "[T]he court must determine whether the
accident was caused by conduct that is actionable, for ·, [i]f there was no fault or negligence for
the shipowner to be "privy" to or have "knowledge" of within the meaning of the statute, there is
no liability to be limited,' and the owner would then be entitled to exoneration." In re Complaint
ofMessina, 574 F.3d 119, 126 (2d Cir. 2009) (quoting The 84-H, 296 F. 427, 432 (2d Cir.
1923)). Second, ifthe court finds that acts of negligence or unseaworthiness caused the casualty,
the court must determine whether the shipowner had knowledge or privity of the acts of
negligence or conditions of unseaworthiness. Id "When a corporation owns the vessel, the test
is whether culpable participation or neglect of duty can be attributed to an officer, managing
6
agent, supervisor, or other high-level employee of the corporation." Carr v. PMS Fishing Corp.,
191 F.3d 1, 4 (1st Cir. 1999). The claimants bear the initial burden of establishing liability,
following which the vessel owner bears the burden of establishing the lack of privity or
knowledge. Otal Investments Ltd v. MIV CLARY, 673 F.3d 108, 115 (2d Cir. 2012); Beiswenger
Enterprises Corp. v. Car/etta, 86 F.3d 1032, 1036 (lith Cir. 1996).
B. Claimants Tammy Strickland, Bonnie Cockrell, Steven Donecker and Mary Beth
Springmeier's Motion to Strike1
Claimants Tammy Strickland, Bonnie Cockrell, Steven Donecker and Mary Beth
Springmeier have moved to strike Plaintiffs' supplemental interrogatory responses pursuant to
Rule 16(f) of the Federal Rules of Civil Procedure and the Discovery Scheduling Order, as
entered on August 21, 2014 [DE-51], and modified on September 25,2014 [DE-54]. Mot. to
Strike [DE-82] at 1. Claimants Strickland, Cockrell, Donecker and Springmeier have also
moved to strike the supplemental interrogatory responses pursuant to Rule 26 of the Federal
Rules of Civil Procedure, on the basis that the responses are untimely. ld
1. Background
On August 21, 2014, U.S. Magistrate Judge Robert B. Jones, Jr. entered a Scheduling
Order [DE-51] governing Phase I of the litigation. 2 The claimants served their interrogatories on
Plaintiffs on September 9, 2014. Mem. ofLaw in Supp. ofMot. to Strike [DE-83] at 1-2. On
1
The Motion to Strike was filed by Claimant Tammy Strickland, but Claimants Bonnie
Cockrell, Steven Donecker and Mary Beth Springmeier join Claimant Strickland in her motion.
[DE-82] at 1.
2
The Scheduling Order notes that this action will be bifurcated into two phases. [DE-51]
at I. The primary focus of Phase I will be issues_related to exoneration and limitation of liability
under Rule F of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture
Actions. ld The focus of Phase II will be any remaining claimant's respective damages. ld
7
September 25, 2014, Judge Jones entered an Amendment To Scheduling Order [DE-54] in
response to the parties' joint motion to amend the scheduling order. The Amendment To
Scheduling Order amended the following deadlines: The date reports from retained experts were
due was changed to December 12, 2014, for the party with the burden of proof and January 12,
2015, for the opposing/responsive experts; the close of discovery was set for February 11, 2015;
the deadline for filing Rule 26(a)(3) disclosures was set for February 26, 2015; the deadline for
objections to Rule 26(a)(3) disclosures was set for March 13, 2015; and the deadline for filing all
potentially dispositive motions was set for March 30, 2015. [DE-54] at 1. The remainder of the
Scheduling Order remained unmodified. Id. The Scheduling Order provides in pertinent part
that "[s]upplementation under Rule 26(e) must be made promptly after receipt of the information
by the party or counsel, but in no event later than the close of discovery." [DE-51] at 2.
On November 10, 2014, Plaintiffs served their responses to the claimants' first set of
interrogatories, and Charles A. Paul, III verified Plaintiffs' responses. Mem. of Law in Supp. of
Mot. to Strike [DE-83] at 2, [DE-83-1] at 21. The relevant interrogatories are 4, 7 and 11. The
interrogatories and responses are as follows:
4) Describe fully and completely how you claim the Incident occurred, its cause, any
errors or omission contributing thereto and by whom committed, Identifying all
Persons with knowledge thereof and all Documents, ESI and the Electronic media
related thereto.
ANSWER: Limitation Plaintiffs state that the grounding occurred because Captain
Eugene Melton lost track of his position, began the port turn too soon, and held the
port turn too long causing the V esseI to encounter water shallower than the V esseI' s
draft....
7) Identify every fact that You claim supports the allegations contained in Paragraph
9(c) of your Complaint (i.e., that "None ofthe injuries and damages alleged by any
of the Claimants was caused by any fault or neglect of the Plaintiffs, jointly or
8
severally."), Identifying all Persons with knowledge thereof and all Documents, ESI
and the Electronic media related thereto.
ANSWER: See Limitation Plaintiffs' responses to Interrogatories 5 and 6 herein.
Investigation into this matter is ongoing and this response will be
supplemented if necessary in accordance with the Federal Rules of Civil Procedure.
11) On the Incident Date, did You have a (formal or informal) safety management
system (e.g. ISM, etc) in effect that applied to the Vessel? If so, Identify all
Documents, ESI and the Electronic media in effect on the Incident Date which were
part ofYour Vessel's safety management system, including without limitation, those
which related to keeping or stationing a proper lookout, watch standing, vessel
electronic use, collision avoidance, grounding avoidance, manning requirements,
navigating in the proximity of other vessels, crew endurance management, crew relief
and voyage planning. This includes but is not limited to Your safety management
manual, vessel instructions for key shipboard operations pertaining keeping or
stationing a proper lookout, watch standing, vessel electronic use, collision
avoidance, grounding avoidance, depth monitoring, radar use and observation,
manning requirements, navigating in the proximity of other vessels, crew endurance
management, crew relief and voyage planning, and safety management system
internal audits which verify safety activities on the voyage planning, and safety
management system internal audits which verify safety activities on the Vessel, from
1 January 2009, through the present. Include in Your response an Identification of
all Persons with knowledge thereof and Documents, ESI and the Electronic Media ·
related thereto.
ANSWER: Yes Limitation Plaintiffs had a safety management system in effect that
applied to the vessel. ...
In addition to the information contained in the aforementioned responses and
documents, regarding general safety for Limitation Plaintiffs, BHIL hired Richard
Scearce as Safety Officer in 2005. Mr. Scearce provided a number of safety training
sessions for BHIL employees including CPR, First aid, AED, blood borne pathogen
training, accident reporting, ride with the Driver, MSDA training, lock out tag out,
ANSL Fire Suppression Training and certification, Fire extinguisher training,
training, and other sessions which applied to the Vessel. BHIT also provided safety
stand down meetings from time to time and held Employee safety recognition cookouts to reward safe behavior.
Claude McKernan, Shirley Mayfield, and Richard Scearce, along with all
captains, crewmembers, and other employees have knowledge regarding the safety
management system.
Investigation into this matter is ongoing and this response will be
supplemented if necessary in accordance with the Federal Rules of Civil Procedure.
9
Mem. of Law in Supp. of Mot. to Strike [DE-83-1] at 4, 6, 8-9.
Charles A. Paul, III, President of BHIT and CEO and Manager of BHIL, was deposed on
December 31, 2014. Charles Paul Deposition [DE-68-7] at 5. At that time, Paul acknowledged
that Plaintiffs' responses to the claimants' first set of interrogatories were true when made and
remained true to the best of his knowledge. Id at 24.
On December 15, 2014, Plaintiffs produced a corrected expert report from Engineering
Systems Inc. See ESI Expert Report [DE-68-11]. The report concluded as follows:
The cause of the grounding incident is directly related to the manner in which the
vessel was operated on the subject run. The primary factors are related to the
operator error in the form of inattention combined with possible limitations on
visibility due to the sun position and route of travel of the vessel being aligned.
Id at 12.
On January 19, 2015, Plaintiffs disclosed the report from their rebuttal expert, Captain
Donald W. Davis. See Captain Davis' rebuttal expert report [DE-83-3]. In his report, Captain
Davis opined "[t]hat the sole and proximate cause of the grounding of the MN "ADVENTURE"
(Official No. 916323), that occurred at the south end of Battery Island, Cape Fear River, on the
morning of December 17, 2013, was the result of temporary loss of situational awareness by the
master, Capt. Eugene Rodney Melton." Id at 9.
Plaintiffs amended their responses to the claimants' interrogatories on March 24, 2015.
See Pls' 1st Amended Answers to Claimants' Interr. [DE-83-4]. Plaintiffs amended their
response to Interrogatory #4 to read as follows:
Limitation Plaintiffs state that the grounding was solely caused by a spontaneous
navigational error made by Captain Eugene Melton when he began a port turn too
soon, and held the port turn too long causing the Vessel to encounter water shallower
than the Vessel's draft. Claimants are directed to Limitation Plaintiffs' Initial
10
Disclosures for information regarding people who may have knowledge regarding the
grounding after it occurred. Claimants are further directed to the USCG AIS Data
regarding the track and position of the vessel on the day of the grounding.
Id at 3. Interrogatory #7 was amended to read that "Limitation Plaintiffs state that the sole cause
of the grounding was Captain Melton's spontaneous and unique navigational error constituting
simple, ordinary negligence without any prior warning. Such negligence occurred in the scope of
Captain Melton's employment with Bald Head Island Limited." Id. at 5. Interrogatory #11 was
also amended to include the following: "Scearce had no responsibilities with respect to the
selection, monitoring, assignment or performance of any captains or crew members for the
ferries, nor did he provide any assistance with respect to the maintenance of the ferries, the
navigation of any vessel or the operational safety ofthose voyages." Id at 8.
On March 30, 2015, Plaintiffs filed their Motion for Partial Summary Judgment on
Claimants' Punitive Damages Claims [DE-71]. Plaintiffs filed their First Amended Answers to
Claimants' Interrogatories in support of their motion. See Pis' Mt. for Part. Summ. Judg. [DE71-27].
2. Discussion
Plaintiffs initially argue that the claimants' Motion to Strike should not be considered by
this court because it fails to comport with Rule 7.1(c) of the Local Civil Rules. Pis' Response to
Mt. to Strike [DE-86] at 2-3. Specifically, Plaintiffs contend that the claimants failed to certify
that there had been a good faith effort to resolve the discovery dispute before the filing of their
Motion to Strike. Id.
The United States District Court for the Eastern District ofNorth Carolina's Local Civil
Rule 7.1 provides as follows:
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(c) Motions Relating to Discovery and Inspection.
No motions to compel discovery or other motions relating to discovery or inspection
will be considered by the court unless the motion sets forth or has attached thereto,
by item, the specific question, interrogatory, etc., with respect to which the motion
is filed, and any objection made along with the grounds supporting or in opposition
to the objection. Counsel must also certify that there has been a good faith effort to
resolve discovery disputes prior to the filing of any discovery motions.
Local Civil Rule 7.1 (c).
In this case, the court concludes that the claimants did not need to comply with Local
Civil Rule 7.1(c) because the Motion to Strike Plaintiffs' supplemental interrogatory responses is
not a motion to compel discovery or other motion relating to discovery or inspection. See Mezu
v. Morgan State University, 269 F.R.D. 565, 579 n.11 (D.Md. 2010) (noting that "discovery"
refers to the methods of producing information that is within the scope of discovery set forth in
Federal Rule of Civil Procedure 26(b)(1), which includes interrogatories (Rule 33), document
production requests (Rule 34), depositions (Rules 30-32), motions for physical and mental
examinations (Rule 35), and requests for admission of facts and genuineness of documents (Rule
36)). Accordingly, the court will proceed to address the merits of the claimants' Motion to
Strike.
As noted, the claimants have moved to strike Plaintiffs' supplemental interrogatory
responses pursuant to Federal Rule of Civil Procedure 16(±) and the court's Discovery
Scheduling Order. Federal Rule of Civil Procedure 16 governs pretrial conferences, scheduling,
and general case management. Subsection (f) of that rule addresses sanctions and provides as
follows:
(1) In General. On motion or on its own, the court may issue any just orders,
including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its attorney:
12
(A) fails to appear at a scheduling or other pretrial conference;
(B) is substantially unprepared to participate-or does not participate in good
faith-in the conference; or·
(C) fails to obey a scheduling or other pretrial order.
Fed. R. Civ. P. 16(f). Rule 16(f) refers to sanctions authorized by Rule 37(b)(2)(A) when a party
fails to comply with a discovery order. Those sanctions include:
(ii) prohibiting the disobedient party from supporting or opposing designated claims
or defenses, or from introducing designated matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobedient party; or
(vii) treating as contempt of court the failure to obey any order except an order to
submit to a physical or mental examination.
Fed. R. Civ. P. 37(b)(2)(A).
A Rule 16(f) analysis is focused on whether there is good cause for the failure to timely
disclose. SMD Software, Inc. v. EMove, Inc. No. 5:08-CV-403-FL, 2013 WL 5592808, at *4
(E.D.N.C. Oct. 10, 2013); Akeva L.L.C. v. Mizuno Corp., 212 F.R.D. 306, 309 (M.D.N.C. 2002) .
. When the court determines that the violation was without good cause, it has broad discretion to
employ sanctions. SMD Software, Inc., 2013 WL 5592808, at *4; Akeva L.L.C., 212 F.R.D. at
311. When determining what sanctions are appropriate, the court may consider the following
factors:
(1) the explanation for the failure to obey the order; (2) the importance of the
testimony; (3) the prejudice to the opposing party by allowing the disclosures; (4)
the availability of alternative or lesser sanctions; (5) the interest in expeditious
13
resolution oflitigation; (6) a court's need to manage its docket; and (7) public
policy favoring disposition of cases on the merits.
SMD Software, Inc., 2013 WL 5592808, at *4. 3
Under the first factor, the court must look at the explanation for failure to obey the order.
In this case, there has been no explanation provided by Plaintiffs for altering their interrogatory
responses. Plaintiffs did not move to amend the court's Scheduling Order or Amendment To
Scheduling Order. Moreover, Plaintiffs did not inquire whether the claimants would consent to
supplementation.
As to the second factor, the court must look to the importance of the matter. Here, the
amended interrogatory responses go to the very heart of the case by addressing privity and
knowledge of a condition which likely caused the grounding. Plaintiffs' amended interrogatory
responses seek to represent that a quick steering error or error in judgment caused the accident.
Plaintiffs also seek to restrict the duties and knowledge of Richard Scearce, their Safety Officer.
Under the third factor, the court must look at prejudice to the claimants if Plaintiffs are
allowed to amend their interrogatory responses. The claimants argue that allowing the
supplemental disclosure after the expiration of the discovery deadline would severely prejudice
all claimants because they followed a logical progression with their discovery by serving written
3
As the claimants note, there is legal authority within the Fourth Circuit that the five
factors for determining whether evidence should be excluded under Rule 37(c)(1), as set forth in
Southern States Rack& Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592,597 (4th Cir. 2003),
should also be used in a Rule 16(f) analysis. See East West LLC v. Rahman, No. 1:11-CV-1380,
2012 WL 4105129, at *6 (E.D.Va. Sept. 17, 2012). The Rule 37 factors include "(1) the surprise
to the party against whom the evidence would be offered; (2) the ability of that party to cure the
surprise; (3) the extent to which allowing the evidence would disrupt the trial; (4) the importance
of the evidence; and (5) the nondisclosing party's explanation for its failure to disclose the
evidence." Southern States Rack & Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592, 597
(4th Cir. 2003).
14
discovery and then taking depositions based upon the responses to the written discovery requests.
Mem. of Law in Supp. of Mot. to Strike [DE-83] at 8. Also, the claimants point out that they did
not depose Plaintiffs' experts because Plaintiffs' experts supported the claimants' theory and
Tammy Strickland's Motion for Summary Judgment. Id.
The fourth factor requires the court to look at the availability of alternative or lesser
sanctions. Here, the claimants note that more onerous sanctions include dismissal of the case or
summary judgment against Plaintiffs. Id. The claimants argue that nothing less than striking
Plaintiffs' attempt to change the case at the eleventh hour will suffice in this case because
anything less would essentially require restarting discovery by re-taking most of the twenty-two
depositions taken by the claimants and re-analyzing the case from the new perspective offered by
the amended interrogatory responses. 4 !d. at 8-9. The claimants further argue that they would
have to discuss the changes with potential experts and pay some to analyze the case for
"navigational error." Id. at 9. The claimants conclude that it would be too time-consuming and
expensive to restart discovery. Id.
With the fifth factor, the court must address the interest in the expeditious resolution of
the litigation. The claimants contend that striking the amended interrogatory responses is the
most expeditious way .to move this case along while preventing unfair prejudice to either side.
Mem. of Law in Supp. of Mot. to Strike [DE-83] at 9.
4
According to the claimants, nearly all of the twenty-two depositions addressed Captain
Melton's inattentiveness and related topics, as well as Scearce's roles and responsibilities. Mem.
of Law in Supp. of Mot. to Strike [DE-83] at 8.
15
Under the sixth factor, the court should address the need to manage its docket. The
claimants argue that striking the amended interrogatory responses is consistent with this court's
need to manage its docket. !d.
In the seventh and final factor, the court must consider that public policy favors the
disposition of cases on the merits. The claimants argue that allowing Plaintiffs to amend their
interrogatory responses does not support disposition of the case on the merits and will merely
serve to slow down the resolution of the action by possibly creating a "sham" issue of fact. !d.
In light of the foregoing factors, the court agrees with the claimants that allowing
Plaintiffs to use their amended interrogatory responses would be extremely prejudicial and would
require the claimants to restart the discovery process. As the claimants point out, this would be
very time-consuming and expensive. The court believes that preventing Plaintiffs from
benefitting from the use of their attempt to change the case at the eleventh hour is the only
appropriate sanction. Accordingly, Claimants Tammy Strickland, Bonnie Cockrell, Steven
Donecker and Mary Beth Springmeier's Motion to Strike [DE-82] is ALLOWED. The court will
not consider Plaintiffs' amended interrogatory responses when ruling on Tammy Strickland's
Motion for Summary Judgment or Plaintiffs' Motion for Partial Summary Judgment. The court,
however, declines to "strike" Plaintiffs' amended interrogatory responses because Federal Rule
of Civil Procedure 12(f) only allows a court to strike pleadings. See Fed. R. Civ. P. 12(±) ("The
court may strike from a pleading an insufficient defense or any redundant, immaterial,
impertinent, or scandalous matter."); see also Int'l Longshoremen's Assn., Steamship Clerks
Local1624, AFL-C/0 v. Virginia Int 'l Terminals, Inc., 904 F. Supp. 500, 504 (E.D. Va. 1995)
16
(concluding that summary judgment briefs and affidavits are not pleadings and therefore a Rule
12(±) motion could not be used to "strike" such documents).
C. Claimant Tammy Strickland's Motion for Summary Judgment and Claimants Bonnie
Cockrell, Mary Beth Springmeier, and Steven Donecker's Motion for Summary Judgment
Claimant Tammy Strickland moves for this court to grant her motion for summary
judgment and dismiss Plaintiffs' complaint for exoneration from and limitation of liability with
prejudice, arguing that the parties agree that the December 17, 2013 grounding of the vessel was
the result of negligence, Plaintiffs had knowledge that Captain Melton was chronically
inattentive prior to the grounding and Richard Scearce's verified testimony establishes sufficient
corporate knowledge to grand summary judgment. Strickland's Mem. of Law in Supp. ofMt. for
Summ. Jud. [DE-66] at 7-9.
Claimants Bonnie Cockrell, Mary Beth Springmeier, and Steven Donecker have moved
for this court to grant their motion for summary judgment and dismiss the Limitation Action,
arguing that Plaintiffs cannot disprove that their negligent acts, policies and unseaworthy vessel
may have contributed to the December 17, 2013 grounding. Mem. in Supp. ofMt. for Summ.
Jud. [DE-73] at 20. Specifically, the claimants argue that with Plaintiffs' permission and urging,
the Vessel was purposefully operated outside of a marked navigation channel and grounded on a
charted obstruction. Id. at 20-22. Further, the claimants argue that Plaintiffs were negligent in
employing a chronically inattentive captain who had a documented history of failing to maintain
situational awareness, not keeping his eyes on the road and not keeping a proper lookout. Id. at
23-24. The claimants also contend that Plaintiffs were negligent for not providing a dedicated
lookout for the Vessel when they knew she would be operated outside of the marked channel in
17
close proximity to known shoals, at high speed, and with the grounding alarm off. Id at 24-25.
The claimants further contend that ~laintiffs were negligent and the Vessel was unseaworthy by
employing a ferry master with no training in grounding avoidance who was not qualified to
operate the Vessel's radar and for allowing the Vessel to operate with its grounding avoidance
equipment either turned off, malfunctioning or out of date. Id at 25-29. Finally, the claimants
argue that Plaintiffs' Safety Officer, Richard Scearce, has sworn to Plaintiffs' negligence and to
its privity and knowledge of the Vessel's negligence. Id at 29-30.
1. The December 17,2013 grounding was the result of Plaintiffs' negligence.
The elements of a negligence claim in a limitation of liability proceeding under maritime
law are the same as the elements of negligence under common law. In re RE, No. 07-CV-223,
2008 WL 4069747, at *3 (E.D.N.Y. Aug. 27, 2008). These elements are duty, breach of duty,
causation, and damages. In re Bridge Canst. Services ofFlorida, Inc., 39 F. Supp. 3d 373,382
(S.D.N.Y. Aug. 11, 2014) (citing Cornfieldv. Cornfield, 156 Fed. Appx. 343,344 (2d Cir.
2005)).
In this case, the parties do not dispute that the December 17, 2013 grounding of the
Vessel was the result of negligence. Plaintiffs concede that exoneration is not appropriate
because the grounding was caused by Captain Melton's "spontaneous negligent navigational
error." Mem. in Oppos. to Strickland's Mt. for Summ. Jud. [DE-68] at 2, 8-9. Plaintiffs further
concede that at the time of the grounding, Captain Melton was the captain of the Vessel and was
an employee of Plaintiffs who was acting within the scope ofhis employment and on the
business of Plaintiffs. Id at 9. Plaintiffs admit that the grounding on a known stationary object,
a sandbar in the vicinity of Battery Island, constitutes negligence which is imputable to Plaintiffs.
18
Id; see McAlister Towing ofVa., Inc. v. U.S., No. 2:10CV595, 2012 WL 1438770, at *9
(E.D.Va. April25, 2012) (When a moving vessel strikes a stationary object, "knowledge of an
otherwise nonvisible object warrants imposition of presumed negligence against those operating
the vessel who possessed this knowledge.") (internal citation omitted); Complaint ofNautilus
Motor Tanker Co., Ltd 862 F. Supp. 1260, 1274 (D.N.J. 1994) (There is a presumption of
negligence when a vessel strikes a charted obstruction.); McAllister Bros., Inc. v. United States,
709 F. Supp. 1237, 1251 (S.D.N.Y. 1989) ("Striking a charted obstruction such as a reef raises a
presumption of negligence.").
2. There are no genuine issues of material fact on the issue of Plaintiffs' privity or
knowledge and Plaintiffs have failed to carry their burden of demonstrating the lack
of privity or knowledge.
Because negligence is undisputed at the first step of the limitation of liability proceeding,
the court must determine whether the vessel owner who is not entitled to exoneration due to acts
of fault might be still be entitled to a limitation ofliability. In re Moran Towing Corp., 984 F.
Supp. 2d 150, 180 (S.D.N.Y. Nov. 18, 2013). The owner is entitled to limit its liability to the
value of the vessel and her cargo if the negligence or unseaworthiness causing the injuries was
outside the "privity or knowledge" ofthe owner. 46 U.S.C. § 30505(a), (b); In re Lyon Shipyard,
Inc., No. 2:14CV422, 2015 WL 1033807, at *4 n.7 (E.D.Va. March 9, 2015).
The shipowner bears the burden of establishing lack of privity or knowledge. Otal
Investments Ltd, 673 F.3d at 115. In order for the shipowner to meet its burden, it "must show
how the loss occurred, together with its lack of privity to or knowledge of the asserted cause. If it
cannot show how the loss occurred, a defendant must exhaust all the possibilities, and show that
as to each it was without the requisite privity or knowledge." Terracciano v. McAlinden Canst.
19
Co., 485 F.2d 304, 307-08 (2d Cir. 1973). A shipowner has privity if he personally participated
in the negligent conduct or was responsible for bringing about the unseaworthy condition. Trico
Marine Assets Inc. v. Diamond B Marine Services Inc., 332 F.3d 779, 789 (5th Cir. 2003) (citing
Pennzoil Producing Co. v. Offshore Exp., Inc., 943 F.2d 1465, 1473 (5th Cir. 1991)). When a
shipowner is a corporation, knowledge is judged by what the corporation's managing officers
actually knew and by what they should have known with respect to conditions or actions likely to
cause the loss. !d. at 789-90.
a. Plaintiffs employed a chronically inattentive captain who had a
documented history of failing to maintain situational awareness, not keeping
his eyes on the road and not keeping a proper lookout.
"The master of a vessel is 'under a continuing duty to know where his vessel is at all
times, and he, or those under him, are (or should be) in possession of all other pertinent facts
relating to the voyage." Complaint ofNautilus Motor Tanker Co., Ltd., 862 F. Supp. at 1274
(quoting Mid-America Transp. Co., Inc. v. Nat'! Marine Serv., Inc., 497 F.2d 776,780 (8th Cir.
1974)). The owner of a vessel has a duty to use "'due and proper care"' to provide a competent
crew. In re Complaint ofMessina, 574 F.3d 119, 127 (2d Cir. 2009) (quoting Tug Ocean Prince,
584 F.2d 1151, 1155 (2d Cir. 1978)). In order to satisfy the due and proper care standard, the
owner must have an objectively reasonable basis for his belief in the competence of the person to
whom he is entrusting the vessel. !d.
Captain Melton lost situational awareness and did not know where he was at the time of
the December 17, 2013 grounding. Captain Melton's Interview (Exhibit 74) [DE-75-13] at 80;
Charles Paul Deposition [DE-68-7] at 12; Claude McKernan Deposition, Vol. 2 [DE-71-16] at
14; Plaintiffs' Answers to Interrogatories (Exhibit 76) [DE-75-14] at 1-2. Plaintiffs' knowledge
20
of this problem is well documented in Captain Melton's personnel records leading up to the date
of the grounding.
In Captain Melton's 2006 Performance Appraisal, prepared by Transportation Manager
Claude McKernan, it states that Captain Melton ''takes his 'eyes off the road' too often."
Strickland's Mem. ofLaw in Supp. ofSumm. Jud. [DE-66-3] at 3. McKernan testified that he
had never put in another captain's review that he takes his eyes off the road too often and that
with Captain Melton it was a "real concern." Claude McKernan Deposition [DE-68-3] at 52-53.
It was noted in Captain Melton's 2008 Performance Appraisal that a performance
objective was for him to "[a]void the tendency to leave the helm or 'take [his] eyes off the road'
for more than a few seconds." Strickland's Mem. ofLaw in Supp. ofSumm. Jud. [DE-66-5] at
7. McKernan explained that keeping your "eyes on the road" is a euphemism that means to pay
attention and stay involved on the waterway out ahead of you. Claude McKernan Deposition
[DE-68-3] at 34. When asked about the objective to avoid the tendency to leave the helm and
not take his eyes off the waterway for more than a few seconds, McKernan testified, "[Captain
Melton] is who he is. He's got an imperfection." Id. at 54. McKernan further testified that he
had never had to tell another captain not to leave the helm. Id.
Captain Melton's 2009 Performance Appraisal demonstrated that Captain Melton had
"[q]uestionable judgment occasionally when allowing [himself] to be distracted from the task at
hand." Strickland's Mem. ofLaw in Supp. ofSumm. Jud. [DE-66-6] at 3. On January 7, 2010,
Claude McKernan had a counseling session with Captain Melton. At that time, McKernan
directed Captain Melton to "maintain situational awareness." Strickland's Mem. of Law in Supp.
of Summ. Jud. [DE-66-7] at 1.
21
In his 2010 Performance Appraisal, Captain Melton was given the following performance
objectives: "Pay closer attention to the helm when conning a vessel. Do not walk away from the
helm leaving it unattended. Put a relief on the helm if you need to tend to other responsibilities."
Strickland's Mem. of Law in Supp. of Summ. Jud. [DE-66-8] at 6.
On September 15, 2011, Captain Melton received an Employee Disciplinary Report,
which noted that he failed to "maintain situational awareness." Strickland's Mem. of Law in
Supp. of Summ. Jud. [DE-66-9] at 1. Captain Melton received the following instructions:
Do not allow unauthorized persons into the wheelhouse. Pay attention to the things
that you are being paid to pay attention to. Ensure the safety of your crew and
passengers. Maintain awareness of the ferry operation, both on board and on the
dock while you are moored. There should always be a valid reason for what you are
doing while you are on watch as Ferry Master.
!d. at 3. Captain Melton was advised that this was a "final warning" and that further violations
would lead to "[f]urther disciplinary action up to and possibly including termination." !d. In
Captain Melton's 2012 Performance Appraisal, he was given the performance objective of
keeping his "eyes on the road." Strickland's Mem. ofLaw in Supp. ofSumm. Jud. [DE-66-10]
at4.
McKernan testified that Captain Melton had the traits of letting his eyes wander and a
lack of focus. Claude McKernan Deposition [DE-68-3] at 70. McKernan also testified that he
had known that Captain Melton would be "momentarily distracted," but McKernan suggested he
did not believe it had .risen to the level that there was a safety concern. !d. at 61.
Plaintiffs' employee Captain Elizabeth Blee discussed her knowledge of Captain
Melton's chronic inattentiveness. Captain Blee testified that Captain Melton lost focus fairly
often during his shifts. Elizabeth Sumner Blee Deposition [DE-78-7] at 6. According to Captain
22
Blee, Captain Melton was a smoker and frequently took smoke breaks from the wheelhouse. Id
Also, Captain Melton was a reader and often read. ld Captain Blee testified that Captain
Melton was an avid photographer and took "a lot" of pictures of birds and wildlife on his trips.
Id Captain Blee also testified that Captain Melton loved the dogs on the boat and would feed
them dog biscuits. ld Captain Blee testified that Captain Melton would step away from the
wheel to put something into the microwave. ld at 8. Captain Blee explained that Captain
Melton engaged in all these activities while the vessel was underway and he was the only master
on board the vessel. Elizabeth Sumner Blee Deposition [DE-78-7] at 7.
Deckhand Ira Adelman noted that Captain Melton had a tendency to be complacent in his
operations at times. Ira Adelman Deposition [DE-78-6] at 3. Deckhand Adelman also noted that
there were times when Captain Melton was more interested in taking pictures with his camera or
going down for a smoke than paying attention to safely crossing the river. ld at 4. Deckhand
Adelman explained that Captain Melton could be preoccupied at times with things other than
safe navigation. ld at 6. Deckhand Adelman testified that he had many times seen Captain
Melton walk over to the microwave in the wheelhouse with nobody at the helm. Id
According to Deckhand Adelman, Captain Melton also ate food that required the use of utensils
while he was conning the vessel. Id at 8.
b. At Plaintiffs' permission and urging, the Vessel was purposefully operated
outside of a marked navigation channel and grounded on a charted hazard.
At the time of the December 17, 2013 grounding of the Vessel, Plaintiffs' written policy
materials regarding the Deep Point Ferry Route directed the ferry captains to "[r]emain between
the buoys as you head down the river." Exhibits in Support ofMt. for Summ. Jud. [DE-74-1] at
23
12; Claude McKernan Deposition [DE-68-3] at 14. The written policy materials also directed the
captains to "[r]emain within the confines ofthe marked channel." Exhibits in Support ofMt. for
Summ. Jud. [DE-74-1] at 12. Claude McKernan testified, however, that he issued "prior
guidance" authorizing operation outside the channel if there was a "clear and compelling reason
to do otherwise." Claude McKernan Deposition [DE-68-3] at 26. The "compelling reasons"
included "fuel savings" and "making up time." !d. at 38.
Plaintiffs' policy allowing operation outside the marked channel was reduced to writing
shortly after the December 17, 2013 grounding. !d. at 38-39; Exhibits in Support ofMt. for
Summ. Jud. [DE-74-2] at 11-12. According to McKernan, the update to their Marine Operations
manual more accurately depicted the actual policy in place on the day of the grounding, and the
update was promulgated to "clear up any sort of confusion or misunderstanding." Claude
McKernan Deposition [DE-68-3] at 38-39. Captain Melton confirmed that the update reflected
the policy in place at the time of the grounding. Captain Melton Deposition [DE-68-4] at 17. On
the day of the grounding, McKernan provided Captain Melton with the "Reduce Wake" memo,
which stated that "[o]perating outside of the channel can be done safely but you must closely
monitor depth and your proximity to shoal water." Captain Melton Deposition [DE-68-4] at 15;
Exhibits in Support ofMt. for Summ. Jud. [DE-74-3] at 1.
Charles Paul testified that Captains Melton, Frazier, McKernan and Williams departed
from the federally-marked navigation channel more often than others. Charles Paul Deposition
[DE-68-7] at 52. Captain Melton testified that it was his standard practice to operate outside
Buoys Red 16 and Red 18. Captain Melton Deposition [DE-68-4] at 18. Plaintiffs' management
knew about Captain Melton's standard practice because they rode the boat to and from work. !d.
24
According to Captain Melton, anyone riding the boat would have noticed, and no one ever voiced
disapproval of the practice. Id at 18-19. McKernan admitted he knew that Captain Melton
frequently operated outside the buoys. Claude McKernan Deposition [DE-68-3] at 40.
At times, McKernan even asked Captain Melton, "Well, why aren't you cutting that buoy?"
Captain Melton Deposition [DE-68-4] at 49. Captain Melton explained that by cutting Buoys 16
and 18, he could save between one and five minutes, which at times could "make or break" him
keeping the schedule. Id at 21. Many of Plaintiffs' captains not involved in the grounding
expressed their professional opinions that operating the ferries outside of the buoys to make up
time and save fuel was not a good practice and increased the risk of grounding. Joe Miller
Deposition [DE-71-24] at 17-18; James Williams Deposition [DE-78-8] at 3-4; Steve Wilson
Deposition [DE-78-1 0] at 2-4.
c. Plaintiffs failed to provide a dedicated lookout for the Vessel when they
knew she would be operated outside the marked channel, in close proximity
to known shoals, and at a high rate of speed with the grounding alarm off.
The importance of a lookout was addressed by the Supreme Court in The Adriane, 80
U.S. 475 (1871):
The duty of the lookout is of the highest importance. Upon nothing else does the
safety of those concerned so much depend. A moment's negligence on his part may
involve the loss of his vessel with all the property and the lives of all on board....
In the performance of this duty the law requires indefatigable care and sleepless
vigilance. The rigor of the requirement rises according to the power and speed of the
vessel in question.... If this were not so, there would be no safety for other vessels.
But it is equally important to vessels of that powerful class for their protection from
one another. It is the duty of all courts, charged with the administration of this branch
of our jurisprudence, to give it the fullest effect whenever the circumstances are such
so to call for its application; Every doubt as to the performance of the duty, and the
effect of non-performance, should be ·resolved against the vessel sought to be
inculpated until she vindicates herself by testimony conclusive to the contrary.
25
80 U.S. at 478-79.
There were not enough deckhands on board the Vessel at the time of the grounding so
that one deck hand could serve as a dedicated lookout to assist in navigation. Captain Melton
Deposition [DE-68-4] at 11. Melton testified that it was "possible" that if a deckhand had been
in the wheelhouse at the time of the grounding, or shortly before the grounding serving as a
dedicated lookout, it could have assisted him in preventing the grounding. Id. Mark Mandrak, a
ferry mate aboard the Vessel on the day of the grounding, testified that he was downstairs at the
base of the stairs at the time of the grounding and noticed that the Vessel was too far over. Mark
Mandrak Deposition [DE-71-26] at 10. Mandrak further testified that ifhe had been in the
wheelhouse serving as a lookout, he could have alerted Captain Melton that they were too far
over. Id.
The claimants concede that Plaintiffs' number of crew met the regulatory minimum.
Mem. in Supp. of Mt. For Sumrn. Jud. [DE-73] at 24. Despite the fact that the crew might have
met the regulatory minimum, it was negligence to have no one assigned to serve as a lookout in
light of Plaintiffs' direction to operate on the far eastern side of the river, at a high rate of speed,
outside of the marked channel, with the grounding alarm off, and in waters that had not been
surveyed in at least nine years. Plaintiffs cannot disprove that their failure to have a dedicated
lookout available to Captain Melton under these circumstances may have contributed to the
grounding.
d. Plaintiffs failed to ensure that Captain Melton was competent in radar
usage.
26
Plaintiffs had a written policy requiring their masters to have a valid Radar Observer
Endorsement. Claude McKernan Deposition [DE-68-3] at 49; Exhibit 50 [DE-71-22] at 3.
According to McKernan, the radar was one of the tools used to keep your position on the river.
Claude McKernan Deposition [DE-68-3] at 49. McKernan admitted that the use of radar could
have aided in preventing the December 17, 2013 grounding. Id McKernan knew that Captain
Melton lacked a Radar Observer Endorsement at the time of the December 17, 2013 grounding.
!d. at 49, 57. McKernan explained that he personally observed Captain Melton, and he was
satisfied that Captain Melton knew how to use the radar adequately. Id at 49. McKernan relied
on his own belief that Captain Melton knew how to use the radar. Id McKernan's subjective
belief that Captain Melton was competent on the radar is not objective evidence that renders
McKernan's belief objectively reasonable. See In re Complaint ofMessina, 574 F.3d at 127 ("A
vessel owner is not entitled to limited liability as a matter of law merely because he subjectively
believed the person he has allowed to operate his craft was competent.")
e. Plaintiffs were negligent and the Vessel unseaworthy because the Vessel
was allowed to operate with its primary grounding avoidance equipment
turned off, malfunctioning or out of date.
McKernan testified that a vessel's radar, plotter, and depth sounder are tools used to
determine exact location. Claude McKernan Deposition [DE-68-3] at 33. Captain Melton
testified that the Vessel's chart plotter data card, which contained the chart data of the depth of
the water was out of date. Captain Melton Deposition [DE-68-4] at 19. Plaintiffs admit that the
Vessel's fathometer or depth finder/sounder's alarm was turned off on the day of the grounding
and was generally not used. Exhibit 76 [DE-75-14] at 10-11. Captain Melton testified that the
alarm was not used because it gave false positive alarms, and it was a bad distraction because it
27
could be set at ten feet and would go off in fifty to sixty feet of water. Captain Melton
Deposition [DE-68-4] at 20, 40.
3. Scearce's sworn claim establishes Plaintiffs' corporate knowledge.
Plaintiffs argue that Richard Scearce is not management from whom knowledge may be
imputed for purposes of the Limitation of Liability Act. Mem. ofLegal Authorities in Oppos. To
Claimant Strickland's Mt. for Summ. Judg. [DE-68] at 18-20. Specifically, Plaintiffs contend
that during Scearce's employment with BHIL, he never assumed the responsibility of providing
any safety measures, assistance, of supervision with respect to any issues which may be related to
the negligence giving rise to this suit. !d. at 19. Plaintiffs assert that the only application of
Scearce's job to the ferry operation was limited to the application of general safety discussions as
they pertained to "'the passengers or crew of the Vessel, such as slip and fall, such as cardiac
arrest, such as heat stroke, and other safety issues that are not peculiar or unique to the marine
environment."' !d. at 19-20 (quoting Richard Scearce Affidavit [DE-87-25]
~
8).
When the shipowner is a corporation, "liability may not be limited under the statute
where the negligence is that of an executive officer, manager or superintendent whose scope of
authority includes supervision over the phase of the business out of which the loss or injury
occurred." Coryell v. Phipps, 317 U.S. 406, 410 (1943). It is the extent of an employee's
responsibilities, not his job title, that determines whether limitation of liability is appropriate. In
re Vulcan Materials Co., 369 F. Supp.2d 737, 741 (E.D.Va. 2005) (citing Continental Oil v.
Bonanza Corp., 706 F.2d 1365, 1377 n.16 (5th Cir. 1983)). When assessing whether an
employee is a "managing agent," the court may look at the following non-exhaustive list of
factors:
28
(1) the scope of the agent's authority over day-to-day activity in the relevant field of
operations; (2) the relative significance of this field of operations to the business of
the corporation; (3) the agent's ability to hire and fire other employees; (4) his power
to negotiate and enter into contracts on behalf of the company; ( 5) his authority to set
prices; (6) the agent's authority over the payment of expenses; (7) whether the
agent's salary is fixed or contingent; and (8) the duration of his authority (i.e. fulltime or restricted to a specific shift).
Id (citing In re Helenic Inc., 252 F.3d 391, 397 (5th Cir. 2001)). "[T]he dispositive question is
whether the corporate employee is a 'managing agent' with respect to the field of operations in
which the negligence occurred." Cupit v. McClanahan Cont., Inc. 1 F.3d 346, 348 (5th Cir.
1993).
Scearce holds the position of Safety Director and is a senior management level employee
and the top level person with respect to safety issues for BHIL. 5 Gail English Deposition [DE78-3] at 2-3. Plaintiffs rely on Scearce's March 17, 2015 Affidavit to support their assertion that
Scearce lacks management responsibilities with respect to the ferries. Scearce's Affidavit in
pertinent part provides as follows:
10. During my entire employment by Bald Head Island Limited, I have
never been asked to, or assumed the responsibility of providing any safety
measures or assistance with respect to the:
a. employment, monitoring the performance, and terminating
members of the crew of the ferries, particularly the Captain of any ferry;
b. the selection of the vessels to act and be the ferries serving Bald
Head Island;
c. the navigation and handling of the ferries;
d. whether the ferries are or are not, and were or were not,
adequately manned and fully serviceable for their intended uses; and
e. determining the speed at which, or the route by which, each ferry
navigated the reach between Deep Point and Bald Head Island.
5
ln addition to being the corporate officer in charge of safety, Scearce was also a
passenger on the Vessel at the time ofthe December 17, 2013 grounding.
29
In short, I had nothing to do with the conduct of the operation of the
Transportation Division, except the general safety instructions applicable to all
divisions and all employees of Bald Head Island Limited[.]
[DE-87-25] at 3.
The court concludes that Plaintiffs' claim that Scearce lacked supervisory authority based
on Scearce's March 17, 2015 Affidavit differs from their earlier responses and is little more than
a shain issue of fact. See Rohrbough v. Wyeth Labs, Inc., 916 F.2d 970, 975 (4th Cir. 1990)
(holding that if an affidavit conflicts with earlier sworn testimony, it must "be disregarded as a
sham issue of fact").
In Plaintiffs' Answers to Claimants' Interrogatories, dated November 10, 2014, Plaintiffs
were asked whether there was a safety management system in effect that applied to the V esseI.
[DE-75-14] at 7-8. Plaintiffs responded that they had a safety management system in effect that
applied to the Vessel and noted that they had hired Richard Scearce as Safety Officer in 2005.
Id at 8. Plaintiffs further responded as follows:
Mr .. Scearce provided a number of safety training sessions for BHIL employees
including CPR, First aid, AED, blood borne pathogen training, accident reporting,
ride with the Driver, MSDA training, lock out tag out, ANSL Fire Suppression
Training and certification, Fire extinguisher training, training, and other sessions
which applied to the Vessel. ...
Id
Shirley Mayfield, CFO and Manager ofBHIL, testified that Scearce's duties as Safety
Officer included investigating the causes of accidents covering all BHIL assets. Shirley Mayfield
Deposition [DE-68-24] at 14. Following his investigation, Scearce then made recommendations
to the company as to any changes in policy and procedure. Id Scearce also worked with the
insurance companies who came in to do audits, which included looking at Plaintiffs' vessels. Id
30
Charles A. Paul, President of BRIT, testified that Scearce is Safety Officer for the entire
company. Charles Paul Deposition [DE-71-8] at 34. According to Paul, Scearce's position
covered aspects of both marine and non-marine. Id
In light ofPlaintiffs' Answers to Claimants' Interrogatories and Mayfield's and Paul's
deposition testimony, the court fmds that Scearce had supervisory authority within Plaintiffs'
organizations over marine safety management. Accordingly, Scearce's statements will be
imputed to Plaintiffs for the purpose of privity or knowledge.
Plaintiffs further argue that even if Scearce qualified as management for purposes of the
Limitation of Liability Act, the material portions of Scearce's Verified Claim relied upon by
claimant Strickland must be disregarded because they are conclusions of law. Mem. ofLegal
Authorities in Oppos. To Claimant Strickland's Mt. for Summ. Judg. [DE-68] at 20.
At the outset, the court notes that Plaintiffs concede that claimant Strickland does not
identify which particular allegations contained in Claimant Scearce's Verified Claim are relied
upon. ld The court concludes that Claimant Scearce's Verified Claim consists ofboth
statements of fact and conclusions oflaw. The court notes that Scearce's knowledge base for the
statements of fact come from being Safety Director and a senior management level employee and
the top level person with respect to safety issues for BHIL and also from the fact that Scearce was
a passenger onboard the Vessel on December 17,2013, when it grounded.
Plaintiffs have failed to carry their burden of demonstrating the lack of privity or
knowledge; thus, they are not entitled to limitation ofliability. Consequently, Plaintiffs' petition
for exoneration or limitation is DISMISSED with prejudice. Further, Claimant Tammy
Strickland's Motion for Summary Judgment and Bonnie Cockrell, Mary Beth Springmeier, and
31
Steven Donecker's Motion for Summary Judgment are ALLOWED. This matter is REFERRED
to U.S. Magistrate Judge Robert B. Jones, Jr. to conduct a status conference and enter a
scheduling order governing Phase II of the litigation. 6
D. Plaintiffs' Motion for Partial Summary Judgment on Claimants' Punitive Damages
Claims and Plaintiffs' Motion to Dismiss Claimant Bonnie Cockrell's Claim for Punitive
Damages
Plaintiffs move for partial summary judgment on claims by the claimants Steven A.
Donecker, Mary Beth Springmeier, Tammy Strickland, and Bonnie Cockrelf for punitive
dainages, arguing that these claimants have failed to marshal sufficient evidence or a forecast of
evidence to support their allegations that Plaintiffs' conduct was sufficiently egregious to award
punitive damages. Mem. in Supp. ofPls' Mt. for Part. Summ. Judg. [DE-71-1] at 9-17.
Specifically, Plaintiffs argue as follows: The allowance of the ferry captains to use their sound
judgment in navigating the ferries, including outside the federally-marked shipping channel, is
insufficient to serve as a basis for punitive liability; The ferry operation pursuant to a stateapproved ferry schedule is insufficient to serve as the basis for punitive liability; The previous
ferry groundings are unrelated to the December 17, 2013 grounding and are insufficient to serve
as the basis for punitive liability; and Senior management never encouraged or instructed their
captains to disable depth detection equipment. !d. Plaintiffs further argue that punitive damages
6
As noted, the August 21, 2014 Scheduling Order notes that this action will be bifurcated
into two phases. [DE-51] at 1. The primary focus ofPhase I will be issues related to exoneration
and limitation of liability, and the focus of Phase II will be any remaining claimant's respective
damages. !d.
7
Plaintiffs note that their Motion for Partial Summary Judgment as to Claimant Cockrell's
claim for punitive damages is cumulative to and does not supplant their Motion to Dismiss
Claimant Cockrell's claim for punitive damages on the basis that she is barred as a matter oflaw
from seeking non-pecuniary damages against Plaintiffs. [DE-71-1] at 8 n.l.
32
are manifestly improper in this case because there is no genuine issue of material fact that they
operate a safe public transportation entity that cares deeply about the safety of the passengers and
crew. Id at 17-19.
Plaintiffs have moved to dismiss Claimant Bonnie Cockrell's claim for punitive damages,
arguing that punitive damages are not recoverable under negligence claims brought pursuant to
the Jones Act, 46 U.S.C. § 30101, et seq.; punitive damages are not recoverable under claims of
unseaworthiness brought by Jones Act seamen; and Claimant Cockrell does not make a claim for
punitive damages for Plaintiffs' willful failure to pay maintenance and cure. Mem. in Supp. of
Pis' Mt. to Dismiss [DE-70] at 3-8.
In the court's equitable discretion the court has chosen not to address the issue of punitive
damages. Accordingly, Plaintiffs' Motion for Partial Summary Judgment on Claimants' Punitive
Damages Claims and Plaintiffs' Motion to Dismiss Claimant Bonnie Cockrell's Claim for
Punitive Damages are DISMISSED without prejudice to Plaintiffs to renew these claims in the
forum of their choice.
IV. CONCLUSION
For the foregoing reasons, t,he court orders as follows:
(1) Claimants Tammy Strickland, Bonnie Cockrell, Steven Donecker and Mary Beth
Springmeier's Motion to Strike [DE-82] is ALLOWED;
(2) Claimant Tammy Strickland's Motion for Summary Judgment [DE-65] is
ALLOWED;
(3) Plaintiffs' Motion to Dismiss Claimant Bonnie Cockrell's Claim for Punitive
Damages [DE-69] is DISMISSED without prejudice;
33
(4) Plaintiffs' Motion for Partial Summary Judgment on Claimants' Punitive Damages
Claims [DE-71] is DISMISSED without prejudice; and
(5) Claimants Bonnie Cockrell, Mary Beth Springmeier, and Steven Donecker's Motion
for Summary Judgment [DE-72] is ALLOWED.
SO ORDERED.
I
This, the _Ji_ day of August, 2015.
J
S C. FOX
Senior United States District Judge
34
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