Gorman v. Rocky Pointe Marina Portland, LLC et al
Filing
67
OPINION AND ORDER: A&D's Motion for Partial Summary Judgment 40 is DENIED. Gorman's Cross Motion for Partial Summary Judgment 45 is DENIED. Signed on 6/27/12 by Magistrate Judge Dennis J. Hubel. (kb)
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UNITED STATES DISTRICT COURT
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DISTRICT OF OREGON
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PORTLAND DIVISION
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11 TOM GORMAN, an individual,
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13
Plaintiff,
vs.
14 ROCKY POINTE MARINA PORTLAND,
LLC, an Oregon limited liability
15 company, and A&D YACHT SERVICE,
LLC, an Oregon limited liability
16 company,
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Defendant.
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ROCKY POINTE MARINA PORTLAND,
19 LLC, an Oregon limited liability
company,
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Third-Party Plaintiff,
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v.
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ANDREW BROWN, an individual,
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Third-Party Defendant.
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25 Stephen C. Thompson
KIRKLIN THOMPSON & POPE LLP
26 522 SW Fifth Avenue, Suite 1100
Portland, OR 97204
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Attorney for Plaintiff
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1 - OPINION AND ORDER
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03:11-cv-00413-HU
OPINION AND
ORDER
1 Thomas E. McDermott
James P. McCurdy
2 LINDSAY HART NEIL & WEIGLER, LLP
1300 SW Fifth Avenue, Suite 3400
3 Portland, OR 97201-5640
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Attorneys for Defendant Rocky Pointe Marina
Portland, LLC
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Thomas G. Waller
6 BAUER MOYNIHAN & JOHNSON LLP
2101 Fourth Avenue, Suite 2400
7 Seattle, WA 98121-2320
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Attorney for Defendant A&D Yacht Service, LLC &
Third-Party Defendant Andrew Brown
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HUBEL, J.,
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This case involves a dispute between a shipowner, Tom Gorman
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(“Gorman”), and two shipyards, Rocky Pointe Marina Portland, LLC
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(“Rocky Pointe”) and A&D Yacht Service, LLC (“A&D”) (collectively,
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“Defendants”), over repairs to a vessel, the DELPHINUS.
Gorman’s
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complaint, filed on April 1, 2011, invokes this court’s admiralty
15
jurisdiction, 28 U.S.C. § 1333(1), and asserts claims against
16
Defendants for breach of the warranty of workmanlike service and
17
negligence.
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Now pending are A&D’s motion for partial summary judgment and
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Gorman’s cross-motion for partial summary judgment pursuant to
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Federal Rule of Civil Procedure (“Rule”) 56(c).
A&D and Gorman
21
seek a determination as to the scope of damages, but have reserved
22
the issue of liability for trial.1
For the reasons set forth
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below, A&D’s motion (Docket No. 40) for partial summary judgment is
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DENIED and Gorman’s cross-motion (Docket No. 45) for partial
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summary judgment is DENIED.
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1
The parties have given full consent to adjudication of the
28 case by a magistrate judge pursuant to 28 U.S.C. § 636(c).
2 - OPINION AND ORDER
I.
1
2
BACKGROUND
In June of 2006, Gorman purchased the DELPHINUS, a 1977 Hans
3 Christian 34 Cutter auxiliary cruising sailboat, for $67,000.
In
4 September of 2006, Gorman and Rocky Pointe entered into an oral
5 repair agreement whereby Rocky Pointe would make “significant”
6 repairs on the DELPHINUS, such as replacing the decks, salon,
7 wiring and breakers; removing moisture from the deck coring; and
8 installing a new bilge pump.2
Between September 2006 and April
9 2008, Rocky Pointe undertook $138,327.02 worth of repairs to the
10 DELPHINUS,
which
was
located
at
Rocky
Pointe
Marina
for
the
11 duration of the repairs.
12
Upon completion in April 2008, Rocky Pointe delivered the
13 DELPHINUS to Gorman, who transported it to Swantown Marina in
14 Olympia, Washington.
Gorman noticed cracking in the fiberglass
15 deck laminate and water entering through the scuppers during the
16 summer of 2008.
The cracks in the fiberglass laminate, which was
17 applied to the outer deck of the DELPHINUS as part of the repair
18 work performed by Rocky Pointe, allowed water to penetrate behind
19 the floorboards resulting in premature rotting of the wood.3
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24
25
2
According to A&D’s counsel, “[t]here is a dispute as to the
nature and scope of the relationship between [Rocky Pointe] and
A&D . . . as to which of the defendants contracted with plaintiff.
[However,] [t]he dispute is unrelated and immaterial to [A&D]’s
motion.” (A&D’s Mot. Partial Summ. J. at 2.) Based on the record
before me, it appears that both A&D Yacht and Rocky Pointe may have
provided laborers to repair the DELPHINUS. (See Waller Decl. Ex.
D at 11) (“We surmise from documents received that A&D Yacht was
able to provide one skilled laborer for the duration, with an added
helper assigned near the end of the [DELPHINUS] project.”)
26
3
A&D’s counsel cites, among other things, page 13 of Exhibit
27 B to the Declaration of Thomas Waller in support of his claims
that: (1) Gorman “made no effort to cover the boat or otherwise
28 protect it from the elements”; (2) when the DELPHINUS was not in
3 - OPINION AND ORDER
II.
1
2
LEGAL STANDARD
Summary judgment is appropriate “if pleadings, the discovery
3 and disclosure materials on file, and any affidavits show that
4 there is no genuine issue as to any material fact and that the
5 movant is entitled to judgment as a matter of law.”
FED. R. CIV.
6 P. 56(c).
Summary judgment is not proper if factual issues exist
7 for trial.
Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir.
8 1995).
9
The moving party has the burden of establishing the absence of
10 a genuine issue of material fact.
11 U.S. 317, 323 (1986).
Celotex Corp. v. Catrett, 477
If the moving party shows the absence of a
12 genuine issue of material fact, the nonmoving party must go beyond
13 the pleadings and identify facts which show a genuine issue for
14 trial.
Id. at 324.
A nonmoving party cannot defeat summary
15 judgment by relying on the allegations in the complaint, or with
16 unsupported conjecture or conclusory statements.
Hernandez v.
17
18 use, it “was kept in open moorage (without shelter, tarping, or
covering)
Marina”; and
19 otherelements,” at Swantown mooring the (3) “constant exposure to
the
such as
boat without a cover,
“exponentially increased the amount of water damage to the
20
DELPHINUS.” (A&D’s Mot. Partial Summ. J. at 3.) However, Exhibit B
21 is only 5 pages long and makes no mention of Gorman’s efforts to
keep the DELPHINUS protected from the elements. Perhaps A&D’s
22 counsel meant to refer to page 13 of Exhibit D which indicates the
DELPHINUS was not covered “[a]t the time of this survey,” i.e.,
23 October 11, 2011. (Waller Decl. Ex. D at 13.) But even so, Exhibit
D does not support the representations made by A&D’s counsel
24 regarding the extent to which Gorman does, or does not, cover his
boat while it is moored.
In fact, in his declaration, Gorman
25 states, “I have always moored the boat with fitted tarps in place
since I received it in April 2008.”
(Gorman Decl. ¶ 7.)
On
26 October 11, 2011, “Mr. Wienke and lawyers for defendants came to
inspect the boat as part of this litigation. The inspection was
27 scheduled to begin at 10:00 am. Mr. Wieneke and the lawyers were
late in arriving by 15 to 20 minutes. By the time of their arrival,
28 I had removed and stored all the tarping.” (Id. ¶ 8.)
4 - OPINION AND ORDER
1 Spacelabs Medical, Inc., 343 F.3d 1107, 1112 (9th Cir. 2003). Thus,
2 summary judgment should be entered against “a party who fails to
3 make a showing sufficient to establish the existence of an element
4 essential to that party’s case, and on which that party will bear
5 the burden of proof at trial.”
6
Celotex, 477 U.S. at 322.
The court must view the evidence in the light most favorable
7 to the nonmoving party. Bell v. Cameron Meadows Land Co., 669 F.2d
8 1278,
1284
(9th
Cir.
1982).
All
reasonable
doubt
as
to
the
9 existence of a genuine issue of fact should be resolved against the
10 moving party.
Hector v. Wiens, 533 F.2d 429, 432 (9th Cir. 1976).
11 Where different ultimate inferences may be drawn, summary judgment
12 is inappropriate.
Sankovick v. Life Ins. Co. of N. Am., 638 F.2d
13 136, 140 (9th Cir. 1981).
14
However, deference to the nonmoving party has limits.
The
15 nonmoving party must set forth “specific facts showing a genuine
16 issue for trial.”
FED. R. CIV. P. 56(e).
The “mere existence of
17 a scintilla of evidence in support of plaintiff’s positions [is]
18 insufficient.”
19 (1986).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252
Therefore, where “the record taken as a whole could not
20 lead a rational trier of fact to find for the nonmoving party,
21 there is no genuine issue for trial.” Matsushita Elec. Indus. Co.,
22 Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal
23 quotation marks omitted).
III.
24
25
DISCUSSION
I turn now to the only issue raised by Gorman and A&D’s
26 motions: Is Gorman’s recovery limited to the fair market value of
27 the DELPHINUS at the time of the alleged loss less any residual
28 salvage value?
5 - OPINION AND ORDER
1
A&D argues that where, as here, a vessel is considered a
2 constructive total loss -- when the costs of repairing the ship
3 exceeds its fair market value -- damages are measured by the value
4 of the vessel at the time loss minus its salvage value.
Based on
5 a June 2006 condition and valuation survey conducted at Gorman’s
6 request, A&D asserts that the fair market value of the DELPHINUS at
7 the time of the loss was $68,000, while the current costs estimate
8 to make full repairs to the DELPHINUS “as they relate to damage
9 caused by poor workmanship and related effects” would be $68,600.4
10 (Waller Decl. Ex. D at 13.)
Because the value of the DELPHINUS is
11 less than the cost of repairs, A&D contends the vessel is a
12 constructive total loss and Gorman’s damages should be capped at
13 the value of the DELPHINUS at the time of the loss ($68,000) less
14 any residual salvage value.
15
In support of its position, A&D relies almost exclusively on
16 McCutcheon v. Charleston Boatworks, Inc., No. 2:07-cv-4079, 2010 WL
17 2431017 (D.S.C. June 14, 2010).
There, a vessel was delivered to
18 defendant’s boatyard for the swim platform to be repaired and cleat
19 replaced.
Id. at *1.
Following completion of the repairs, the
20 vessel began taking on water because defendant failed to properly
21 adjust the stuffing boxes and failed to charge the bilge pump
22 batteries before delivering the vessel back to plaintiff’s slip.
23 Id. In her complaint, plaintiff asserted causes of action for
24 breach of bailment duty and negligence.
Id. at *4.
After the
25
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4
This estimate was provided by Kuhrt Wieneke (“Wieneke”), a
27 marine surveyor who was retained by A&D to board and inspect the
DELPHINUS in order to provide an opinion as to the scope of
28 damages.
6 - OPINION AND ORDER
1 matter was tried without a jury, the McCutcheon court concluded
2 plaintiff was entitled to recover the vessel’s pre-loss value
3 ($60,000) minus its post-loss value ($20,000) plus $4,935 for the
4 pumping and towing of the vessel after submersion, for a total of
5 $44,935
in
damages.
Id.
at
*5.
Defendant
also
asserted
6 counterclaims against plaintiff for its storage of the vessel at
7 its boatyard following submersion ($4,540) and for the costs of
8 post-submersion repairs ($11,300); however, the McCutcheon court
9 determined the counterclaims lacked merit because defendant refused
10 to release the vessel based on plaintiff’s refusal to pay for
11 defendant’s unauthorized post-submersion repairs (i.e., the repairs
12 necessitated by defendant’s failure to properly adjust the vessel’s
13 stuffing boxes and charge the bilge pump batteries). Id.
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McCutcheon
provides
little,
if
any,
guidance
here.
In
15 ascertaining the fair market value of the vessel in McCutcheon, the
16 court had the benefit of being provided “listings of similar
17 vessels on the U.S. East Coast market[.]”
18 2431017, at *3.
McCutcheon, 2010 WL
This record does not have comparable listings.
It
19 might be wise to investigate whether any vessels comparable to the
20 DELPHINUS exist in the marketplace.
(See Mot. Partial Summ. J.
21 Hr’g Tr. 36) (indicating that counsel was not sure whether “such a
22 boat
exists.”)
Additionally,
although
it
appears
that
the
23 plaintiff in McCutcheon paid for the pre-submersion repairs to the
24 vessel, and was spared with respect to post-submersion repairs
25 performed by defendant without her authorization, the McCutcheon
26 decision does not address which party would have been required to
27 bear the post-submersion costs if defendant had in fact received
28 authorization
from
7 - OPINION AND ORDER
plaintiff.
Moreover,
the
plaintiff
in
1 McCutcheon was able to sell her boat for $20,000 (i.e., it had a
2 post-loss value). By contrast, Gorman’s counsel claims it may cost
3 his
client
$30,000
just
to
dispose
of
the
DELPHINUS
“in
an
4 environmentally safe manner . . . [because] you can’t simply take
5 hulls and leave them on a sand bar anymore.” (Hr’g Tr. 36.)
6
In the alternative, A&D argues that, even if Gorman has
7 alleged a contract claim, “which he did not,” he would only be
8 entitled to recover his expectation interest.
See Marine Overseas
9 Servs., Inc. v. Crossocean Shipping Co., 791 F.2d 1227, 1234 (5th
10 Cir. 1986) (noting “the basic proposition that the measure of
11 contract damages is based on the injured party’s expectation
12 interest.”
13 (1981))).5
(citing
Restatement
(Second)
of
Contracts
§
347
A&D’s counsel claims Gorman’s “expectation interest is
14 a 30 year old boat purchased for $67,000 (its FMV) in the condition
15 it would have been had the contract not (allegedly) been breached.”
16 (A&D’s Mot. Partial Summ. J. at 8.)
17
Gorman counters by arguing that the caselaw upon which A&D
18 relies –- “collision or mishap” cases where the tort measure of
19 damages is applied when two parties unknown to each other come into
20 contact and one comes away damaged -– is inapposite.6
Gorman
21
5
In fact, in his reply memorandum, A&D’s counsel go so far as
to say that Gorman never pled a breach of contract claim and that
23 the words “breach” and “contract” appear nowhere in the complaint,
despite (1) Gorman’s complaint bearing the caption “COMPLAINT24 CLAIM IN ADMIRALTY FOR BREACH OF THE WARRANTY OF WORKMANLIKE
PERFORMANCE. . .”; and (2) A&D’s counsel’s prior concession that
25 Gorman “appears to allege breach of warranty of workmanlike
service.” (A&D’s Mot. Partial Summ. J. at 6.)
26
6
Although Gorman seems to concede that McCutcheon is not a
27 collision or mishap case, he nevertheless argues that A&D’s counsel
reliance on McCutcheon is misplaced because the “court actually
28 applied a consequential (i.e contractual) measure of damages.”
22
8 - OPINION AND ORDER
1 contends this case involves his claims for breach of Defendants’
2 duties while under contract to effect workmanlike repairs to his
3 boat.
As Gorman points out, a shipowner has a maritime cause of
4 action in tort for the negligent performance of a maritime contract
5 or in contract for breach of warranty of workmanlike service. Alcoa
6 S.S. Co. v. Charles Ferran & Co., 383 F.2d 46, 50 (5th Cir. 1967);
7 see also Midwest Marine, Inc. v. Sturgeon Bay Shipbuilding and Dry
8 Dock Co., 247 F. Supp. 283, 284 (E.D. Wisc. 1965) (indicating that
9 an oral contract for repair of a vessel gives rise to an implied
10 warranty of workmanlike service).
11
With respect to damages based on A&D’s alleged breach of its
12 warranty of workmanlike service, Gorman draws the court’s attention
13 to Todd Shipyards Corp. v. Turbine Serv., Inc., 674 F.2d 401 (5th
14 Cir. 1982). In Todd, the Court of Appeals for the Fifth Circuit
15 recognized that
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18
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20
21
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24
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a shipowner has a maritime cause of action whether he
sues in contract for its breach by a person with whom
there was a contract for repairs of the vessel, or in
tort for the negligent performance of the maritime
contract. . . . [The] tort measure of damages is applied
in classic cases when two parties unknown to each other
come into contact and one comes away damaged, such as
collision cases and other maritime torts. [In this case,
however, defendant] breached its contract to repair the
[vessel’s low pressure] turbine and this fact permits the
adoption of a different measure of damages. It is too
well settled to require citation of authorities that
damages awarded for breach of contract should return the
party to the position he would have occupied had the
contract not been violated. [Plaintiff is] entitled to
have the [low pressure] turbine in the condition
contracted for, and to recover as well for loss of use of
the vessel, out-of-pocket expenses, and (since defendants
breached warranties of workmanlike performance) costs and
attorneys’ fees.
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Todd, 674 F.2d at 412.
27
28 (Pl.’s Reply at 3.)
9 - OPINION AND ORDER
1
The Todd court, according to Gorman, also rejected the very
2 argument that A&D now makes regarding whether Gorman’s damages
3 should be limited since the DELPHINUS is allegedly a constructive
4 total loss, stating:
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8
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The defendants next insist that since the cost of
repairing the damages caused by the defendants exceeded
the market value of the vessel in her condition prior to
the casualty, the vessel was a constructive total loss
and recoverable damages are limited to the value of the
vessel in her damaged condition. . . . Further discussion
of the defendants’ constructive total loss argument,
would serve no useful purpose however, because it ignores
the fact that the district court properly applied a
contractual rather than a tort measure of damages.
10
Id. at 415.
Based on these excerpts from Todd, Gorman claims he
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“can recover the cost of new repairs designed to bring the boat to
12
where she should have been, regardless of their amount relative to
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the boat’s previous fair market value,” or, alternatively, if the
14
DELPHINUS “is so far gone that repairs are pointless,” then Gorman
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says he is entitled to “his cost in the now lost boat, plus
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disgorgement of all sums he paid [D]efendants for the failed
17
repairs.”
(Pl.’s Opp’n at 9.)
18
To begin, I note that Gorman’s counsel concedes that his
19
cross–motion for summary judgment should be denied.
(See Hr’g Tr.
20
44) (“I don’t think you can grant my motion, and frankly, I don’t
21
think you should.”)
In any event, it is not seriously disputed
22
whether Gorman, assuming he proves liability, would be entitled to
23
be placed in the position he would have occupied had the alleged
24
breach not occurred.
A&D’s counsel concedes as much.
(See A&D’s
25
Reply at 3) (“In the event he proves liability, plaintiff would be
26
entitled only to be placed in the position he would [have] occupied
27
had the alleged breach . . . not occurred.”)
28
10 - OPINION AND ORDER
1
Questions of fact remain as to the measure of damages.
For
2 example, A&D’s counsel has put forth evidence suggesting that the
3 current estimate to make full repairs to the DELPHINUS “as they
4 relate to damage caused by poor workmanship and related effects”
5 would be $68,600.
By contrast, Pettit Marine LLC’s owner, Walter
6 Pettit (“Pettit”), emailed Gorman and his counsel on March 5, 2012,
7 indicating that he reviewed A&D’s surveyor’s December 2011 repair
8 estimate and made the following determinations: (1) “[i]t is
9 impractical to determine the amount of water damage caused by
10 improper . . . repairs without knowledge of [the] vessel interior
11 condition prior to current water damage”; (2) A&D’s estimate is
12 “not conclusive based on estimating water damage . . . [which] can
13 only be estimated by a proper open and inspection”; and (3) repairs
14 could costs anywhere between $138,894 and $166,730.
15 Ex. I.)
16 uncommon
(Waller Decl.
As the marine surveyor retained by A&D admits, it is “not
for
shipyard
repairs
to
climb
far
above
initial
17 estimates . . . due to the nature of ship repair in that a large
18 portion of necessary repairs cannot be accurately estimated from
19 surface inspection.”
20
(Waller Decl. Ex. D at 11.)
Cascadia Lumber Co. v. Double T. Indus., Inc., 162 F. Supp.
21 478 (D. Or. 1958), should provide some helpful insight for the
22 parties’ trial preparation on the measure of damages. In Cascadia,
23 a barge owner sued a repairman for the loss of his barge, which
24 sunk during the course of repairs.
Id. at 479.
One of the
25 “primary questions” presented to this court was: “[W]hat are [the]
26 libelant’s damages?” Id. at 480. After noting that the measure of
27 damages advocated by the parties were equally absurd, Judge East
28 determined that the measure of damage in a case involving a unique
11 - OPINION AND ORDER
1 vessel should be “based upon a logical formula which takes into
2 consideration the fair reasonable cost” of a comparable vessel with
3 comparable characteristics.
Id.
He also found the repairmen
4 liable for the barge owner’s claim for salvage service.
Id. at
5 481.
6
In summary, I intend on employing an approach similar to Judge
7 East in Cascadia, but there are questions of fact regarding what
8 sum of money would, to the extent possible, put Gorman in as good
9 a position as he would have been in had the contract not been
10 breached.
It may well be appropriate to consider the value of a
11 vessel properly repaired by Defendants would have had (if there is
12 any liability for faulty workmanship), or perhaps if there is no
13 “comparable vessel” to consider in that way, the parties may have
14 to focus on the vessel’s value before repairs, the money paid for
15 the repairs, and perhaps the fair salvage costs if the vessel is
16 now worthless.
The measure of damages will await the evidence at
17 trial.
IV.
18
19
CONCLUSION
For the reasons set forth below, A&D’s motion (Docket No. 40)
20 for partial summary judgment is DENIED and Gorman’s cross-motion
21 (Docket No. 45) for partial summary judgment is DENIED.
22
IT IS SO ORDERED.
23
Dated this 27th day of June, 2012.
24
/s/ Dennis J. Hubel
25
________________________________
26
Dennis James Hubel
Unites States Magistrate Judge
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12 - OPINION AND ORDER
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