UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

JOHN FERNANDEZ, III, 

Plaintiff-Appellee,

v.

JAMES B. HAYNIE, d/b/a Financial

Solutions, a/k/a Jim Haynie,

individually; U. S. ENTERPRISES,

L.C., d/b/a U. S. Vessels, d/b/a

Financial Solutions, a/k/a U. S.

Enterprises, LLC,

Defendants-Appellants,

and  No. 01-1831 JAMES K. HAYNIE, d/b/a Financial

Solutions, a/k/a Kevin Haynie,

individually; TOMMY K. HILL, d/b/a

The Covenant Group, d/b/a U.S.

Vessel Services, Incorporated, d/b/a

U. S. Vessels, individually; J. M.

CARON, d/b/a The Covenant Group,

d/b/a U. S. Vessel Services,

Incorporated, d/b/a U. S. Vessels,

individually; U. S. VESSEL SERVICES,

INCORPORATED, d/b/a The Covenant

Group, in its own behalf,

Defendants. 

Appeal from the United States District Court

for the Eastern District of Virginia, at Newport News.

Henry C. Morgan, Jr., District Judge.

(CA-00-9)

Argued: February 27, 2002

Decided: March 25, 2002
Before NIEMEYER and LUTTIG, Circuit Judges, and

Henry M. HERLONG, Jr., United States District Judge

for the District of South Carolina, sitting by designation.

Affirmed by unpublished per curiam opinion. 

COUNSEL

ARGUED: William Frederick Jones, WILLIAMS, MULLEN,

CLARK & DOBBINS, Richmond, Virginia, for Appellants. Philip

Norton Davey, DAVEY & BROGAN, P.C., Norfolk, Virginia, for

Appellee. ON BRIEF: William D. Bayliss, WILLIAMS, MULLEN,

CLARK & DOBBINS, Richmond, Virginia, for Appellants.

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). 

OPINION

PER CURIAM: 

James B. Haynie ("Haynie") appeals from two orders of the district

court. First, Haynie appeals the district court’s denial of his motion

to dismiss for lack of subject matter jurisdiction. Second, Haynie

appeals the district court’s order entering judgment and awarding

attorneys’ fees to John Fernandez, III ("Fernandez") following a

bench trial on the merits. 

I.

During the time relevant to this lawsuit, Fernandez owned three

commercial fishing boats. One of Fernandez’s boats was the F/V Cap2 FERNANDEZ v. HAYNIE
tain Layman ("Layman"). On February 1, 1998, a crewman aboard the

Layman named Chauncey Pitts ("Pitts") broke his arm. Upon asserting a claim under his marine insurance for Pitts’ injury, Fernandez

learned that Haynie, his insurance broker, had misled him concerning

the nature and quality of his insurance coverage. 

In early 1997, about one year before Pitts’ injury, Fernandez contracted with Haynie, an insurance broker with U.S. Enterprises, L.C.

("U.S. Enterprises"), to procure marine insurance on his fishing boats.

Haynie originally placed Fernandez’s policy with an "A" rated American insurance company. Later that year, the "A" rated insurance company informed Haynie that it would not renew his book of business.

After informing Fernandez of the non-renewal, Fernandez stressed to

Haynie that his insurance must be placed with another "A" rated

domestic company. For the time being, Haynie placed Fernandez’s

insurance with an unrated, offshore carrier with the understanding that

Haynie would soon find a suitable carrier. 

However, unknown to Fernandez, Haynie eventually transferred

Fernandez’s insurance to LIC Liberty Insurance Company

("Liberty"), an unrated company organized under the Exempt Companies Act of Aruba, The Netherlands Antilles. Also unknown to Fernandez was the fact that Haynie and two other individuals were

actively involved in a venture to build their own marine insurance

business. The loss of Fernandez’s business would have dealt a significant blow to Haynie’s efforts. 

When Fernandez attempted to file a claim concerning Pitts’ injuries, he discovered the switch to Liberty. Pitts eventually filed a lawsuit against Fernandez to recover for his injuries on board the

Layman. Liberty failed to provide Fernandez with a defense, and the

first attorney who handled Fernandez’s case was unable to make contact with Liberty. 

II.

Haynie first challenges the district court’s denial of his motion to

dismiss for lack of subject matter jurisdiction. Haynie argues that the

district court improperly asserted admiralty jurisdiction over the case

because the contract to procure marine insurance is not maritime.

FERNANDEZ v. HAYNIE 3
After a de novo review of the nature and subject matter of the contract

at issue, the court finds that the contract is maritime in nature and the

district court properly asserted admiralty jurisdiction over the case.

See Exxon Corp. v. Central Gulf Lines, Inc., 500 U.S. 603, 612

(1991). 

III.

Haynie also challenges the district court’s finding of fraud and

award of attorneys’ fees to Fernandez. After conclusion of the trial,

the district court allowed Fernandez to amend his pleadings to conform to the evidence to state a viable cause of action for fraud. See

Fed. R. Civ. P. 15(b). The district court found that Haynie’s concealment of the switch of Fernandez’s insurance to Liberty while pursuing

his goal of creating his own marine insurance business constituted

fraud. Based on its finding of fraud, the district court awarded Fernandez attorneys’ fees. 

We find that the district court did not abuse its discretion in allowing Fernandez to amend his pleading to conform to the evidence. See

Quillen v. International Playtex, Inc., 789 F.2d 1041, 1043 (4th Cir.

1986) (stating that district court’s decision to allow plaintiff to amend

pleadings to conform to the evidence under Rule 15(b) is reviewed for

abuse of discretion). The district court found that Haynie committed

fraud under Virginia law. "[I]n an admiralty case, a court applies federal common law and can look to state law in situations where there

is no admiralty law on point." Ost-West-Handel Bruno Bischoff

GMBH v. Project Asia Line, Inc., 160 F.3d 170, 174 (4th Cir. 1998);

see also Su v. M/V Southern Aster, 978 F.2d 462, 472-73 (9th Cir.

1992) (applying state law definition of fraud in admiralty). After a

review of the district court’s determination of this issue, we find it to

be without reversible error. As to the district court’s award of attorneys’ fees, while such motions are granted infrequently, the "district

court has wide discretion in deciding motions for attorneys fees in

admiralty cases." Ost-West-Handel, 160 F.3d at 177. We cannot say

that under the circumstances of this case the district court abused its

discretion in its award of attorneys’ fees to Fernandez. We therefore

affirm the judgment of the district court.

AFFIRMED

4 FERNANDEZ v. HAYNIE