Opinion ID: 494162
Heading Depth: 2
Heading Rank: 1

Heading: Candies Appeal--The Brown Repairs

Text: 9 Candies contends that the district court erred in allowing Atwood to recover for certain repairs to the VICKSBURG made by Brown Services, Inc. (Brown) after the VICKSBURG finally reached its offshore drilling site on March 5, 1984. The challenged items of damages include Atwood in-house labor costs, a repair survey by the American Bureau of Shipping (ABI), and invoices from Brown for repair work performed in late March and early April 1984 (collectively, the Brown repairs). According to Candies, the district court should have disallowed recovery of these items because there was insufficient evidence that they were necessitated by the Candies towing incident of February 25-March 2, 1984. 10 The Brown repairs involved work on both the port and starboard sides of the VICKSBURG. Candies asserts that the evidence showed the portside damage either pre-existed the events in question or occurred at some later date. Candies further contends that the Brown repairs to the starboard side of the VICKSBURG related to conditions of the rig's hull that pre-existed the Candies towing. Therefore, according to Candies, none of the Brown repair items were properly chargeable to it. 11 The evidence concerning which of the many dents and buckles in the VICKSBURG resulted from the Candies towing incident during the storm is not entirely consistent. The water is made murkier by the failure of the parties to support their arguments with specific references to the record. Nonetheless, our review of the record in its entirety convinces us that the district court's findings in this regard were not clearly erroneous. See Fed.R.Civ.P. 52(a); Ayers v. United States, 750 F.2d 449, 452 (5th Cir.1985). 12 Before the VICKSBURG left Galveston on February 25, 1984, the rig underwent a thorough inspection. Bill Howard, Atwood's senior project manager, testified that he supervised this inspection. He said Exxon, the Coast Guard, and the ABI, as well as Atwood personnel, participated in the inspection. When the VICKSBURG reached Mobile following the storm and the failed Candies towing effort, the VICKSBURG received another thorough inspection, at which Howard was again present. The inspection in Mobile was performed as soon as the rig arrived for repairs at Bender Shipbuilding & Repair Company (Bender), on March 3, 1984. Representatives from the Coast Guard, ABI, and both Atwood and Candies inspected the vessel, along with independent marine surveyors hired by the parties and their underwriters. Following extensive repair work by Bender, the VICKSBURG moved to its drilling location off the coast from Mobile. Once on location, further repair work was done to the VICKSBURG. This work comprises the disputed Brown repairs. 13 The reports from the various inspections and the testimony of witnesses who participated consistently indicate that the work done by Brown to the starboard side of the VICKSBURG repaired areas of the rig that had been damaged before it ever left Galveston. The evidence also makes plain, however, that Atwood deducted from its claimed damages the amount it was charged by Brown for this portion of the Brown repairs. Howard testified that he had the responsibility of determining which of the invoices paid by Atwood reflected costs attributable to the Candies towing incident. According to Howard, Brown's original invoice to Atwood totaled approximately $27,000. Since that invoice reflected labor costs for Brown's repairs to both the port and starboard sides of the VICKSBURG, as well as the cost of the steel used for the portside repairs, Howard said he deducted from the total the amount he estimated corresponded to the starboard repairs. 1 The difference, $22,661.63, equals the amount claimed by Atwood, and awarded by the district court, for repair work done by Brown. Consequently, we find no merit in Candies' argument that this item of damages erroneously includes costs of repairs to the starboard side of the VICKSBURG. 14 The evidence regarding Brown repairs to the portside of the VICKSBURG is more equivocal, but still provides adequate support for the district court's finding. A report and diagram prepared by employees of Marathon Le Tourneau Company (Le Tourneau), who inspected the VICKSBURG and surveyed her damage in Mobile at Atwood's request, indicated two different areas of damage to the portside of the rig. One area the report attributed to the Candies towing incident and the other, the report stated, look[ed] to be old. A Field Survey Report prepared by an independent marine surveyor, who also surveyed the VICKSBURG's damages in Mobile and who was hired by Atwood's underwriters, listed twelve separate items of structural damage to the portside of the rig. Some of these the Field Survey Report described as being rusty, suggesting that they pre-dated the trip from Galveston the previous week; others were not described as having rust. 15 Candies contends that all of the hull damage indicated by these reports to be fresh was fully repaired by Bender in Mobile, and that the Brown portside repairs were either of pre-existing damage, or subsequent damage, or both. In that they confirm the presence of old, rusty dents in the same general area as the storm-related damage, the Le Tourneau and Field Survey reports support Candies' position. Further support is provided by the testimony of Candies' representative at the Mobile inspection, John Kingston. Kingston testified that in his opinion all of the items on the Field Survey Report except those approved for repair by Bender reflected unrelated, old damage to the VICKSBURG. 16 On the whole, however, we think the bulk of the evidence runs counter to Candies' contention. Several witnesses testified that only some of the damage approved as a result of the Field Survey Report for repair by Bender was actually repaired in Mobile. According to these witnesses, the major item repaired by Bender was a fracture located at the deck level of the VICKSBURG. Although the NICK CANDIES also caused a number of other, smaller dents in the VICKSBURG, repair of these was postponed until the rig was on location. These dents were lower, at or beneath the water level, so that Bender could not repair them without drydocking the VICKSBURG. Since Atwood wanted to avoid breaching a very favorable drilling contract with Exxon, and since the ABI okayed deferral of the additional necessary repairs, Atwood elected not to have Bender do them. Atwood maintains that these comprise the portside repairs made by Brown. 17 This explanation makes sense. It is consistent with the Field Survey Report, which states that the NICK CANDIES hit the VICKSBURG a number of times in the same general area and which lists several fresh dented or buckled areas on the portside of the VICKSBURG. Testimony by Howard, who was in charge of managing the repair project for Atwood, is also consistent with this explanation. Howard confirmed that the Brown repairs to the portside of the VICKSBURG were to an area of the rig's hull that was at and below the water line when the vessel was afloat, and that the repairs were not of damaged areas indicated as old in the Field Survey Report and the Le Tourneau report. Considering all the evidence, therefore, we cannot say that the district court clearly erred in including the Brown repairs as items of damages owed to Atwood by Candies. Accordingly, we affirm this finding by the district court.