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

Heading: Atwood Appeal--Excessive Downtime

Text: 18 In the schedule of damages that Atwood submitted to the district court, Atwood claimed entitlement to $104,192.04 in damages for loss of use. According to Atwood, the district court erred in disallowing a portion of this figure. This $104,192.04 item represents the part of Atwood's invoice to Exxon for moving the VICKSBURG that Exxon refused to pay. John Irwin, Atwood's vice president, explained that Atwood had billed Exxon at the stipulated moving rate for the actual time it took the rig to travel from Galveston to Mobile. Irwin said Exxon refused to pay this total, and instead agreed to pay what Exxon considered to be a reasonable moving time of six days, or 182 hours. Exxon therefore paid Atwood for 182 hours of the 262 hours charged, leaving eighty hours during which the VICKSBURG was either in transit or at Bender's, but for which Atwood was not reimbursed. 19 Atwood's claimed loss of use damages of $104,192.04 correspond to these eighty hours for which Exxon refused to pay. The district court found that the eighty hours reflected the amount of time the VICKSBURG was delayed in reaching its destination due to its detour to Bender's in Mobile for repairs, and that but for the fault of Candies, the detour would not have been necessary. The court also found, however, that even if the Candies towing incident had not occurred, before drilling could have commenced, the VICKSBURG's spud cans would have had to be inspected. As it was, Atwood was able to hire divers to inspect the rig's spud cans during the time the Candies-related repairs were performed at Bender's. The spud can inspection took twenty-six hours. Based on its conclusion that the twenty-six-hour spud can inspection would have delayed drilling by that amount of time whether or not the Candies incident had taken place, the district court reduced Atwood's recoverable damages for the VICKSBURG's downtime by 26/80ths, from $104,192.04 to $70,329.63. 20 Atwood challenges the district court's reduction as inconsistent with Fifth Circuit case law. In support of its position, Atwood cites Delta Marine Drilling Co. v. M/V BAROID RANGER, 454 F.2d 128 (5th Cir.1972). In Delta Marine, we affirmed the district court's refusal to reduce the loss of use award in a collision case for the time spent on other repairs which were performed simultaneously with the collision-related repairs and did not extend the time lost on account of the performance of the collision-related repairs. Id. at 131. However, there was no indication in Delta Marine that the noncollision repairs were required in order for the vessel to do the tasks for which it was hired. Instead, the implication was that these repairs were merely incidental. This distinguishes Delta Marine from the case at hand. 21 That our decision in Delta Marine, properly construed, does not extend to cover the present circumstances is made clear by the authority we relied upon there. See Clyde S.S. Co. v. City of New York, 20 F.2d 381 (2d Cir.1927), cited in Delta Marine, 454 F.2d at 131 n. 10. In Clyde, where Judge Learned Hand authored the opinion, the Second Circuit affirmed the district court's disallowance of a shipowner's damage claim for the ten days his vessel was undergoing simultaneously performed collision-related and other repairs. The Clyde Court reasoned that since the repairs unrelated to the tort-feasor's actions had to be done that season, the owner would have lost the use of the vessel for that period of time regardless of the collision; therefore, he was not entitled to recover damages for the detention. In Judge Hand's words:[I]f the ship would in any event go out of commission, collision or no collision, and if therefore, during the period when the collision repairs are actually made, she would have earned no profits for her owner, he cannot be said to have been damaged. The collision has not deprived him of earnings which he would have made at that season. 20 F.2d at 381. 22 The situation in Clyde is analogous to that here. The district court found, and the parties concede, that the spud can inspection on the VICKSBURG was necessary before the rig could begin drilling operations regardless of the Candies towing incident. Like the work done in Clyde, which was necessary for the ship's certificate but unrelated to the collision, the spud can inspection was not an incidental repair that could have been done at any time (including times when such work would not impair the earning capacity the vessel would otherwise have). Rather, the spud can inspection was a necessary prerequisite for the VICKSBURG to be able to do the very work Exxon hired it to do. 23 This result also squares with the principle underlying damage awards for loss of use. The injured party may recover damages for lost income resulting from a collision, but only to the extent that those damages can be proven with reasonable certainty. Bolivar County Gravel Co. v. Thomas Marine Co., 585 F.2d 1306, 1308 n. 2 (5th Cir.1978). Here, the district court found that the VICKSBURG would have been out of service for the period of time required to complete the spud inspection. Thus, Atwood has suffered no loss from the detention of its vessel for that period. See Inland Oil and Transport Co. v. Ark-White Towing Co., 696 F.2d 321, 326-27 (5th Cir.1983) (no damages recoverable for loss of use of barge unless the vessel would have been used during time spent in repair). The fact that Atwood was able to perform the spud inspection while the VICKSBURG was laid up for repairs does not alter this conclusion. Only actual damages are recoverable and Atwood suffered no damages for the period when but for the accident and subsequent repair the VICKSBURG would have been out of service. See Demetrius Maritime Co. v. S/T Connecticut, 463 F.Supp. 1108, 1111 (S.D.N.Y.1979) (If collision repairs are to be made while a ship would in any event be out of commission, earnings that would be lost during the time of repair ... cannot be regarded as consequences of the collision.). 24 On appeal Atwood seeks to avoid this conclusion by asserting for the first time that but for the Candies incident, it would not have sustained any loss of use time for the spud can inspection. Atwood bases this contention on its claim that under its contract with Exxon, it would have been paid for the time during which the cans were inspected. Candies counters, persuasively, that the evidence in the record fails to establish this fact. 2 As Candies notes, Atwood's agreement with Exxon was not introduced into evidence. Irwin, Atwood's representative, did testify that Atwood billed Exxon for the entire actual moving time from Galveston to the drilling site, but that does not show Atwood was contractually entitled to receive payment for the downtime necessary for the spud can inspection. Irwin also said Exxon calculated a reasonable moving time of 182 hours; however, he could not explain how Exxon arrived at that figure. There was no evidence as to whether or not this 182 hours included any time for spud can inspection. Neither the testimony nor the documents introduced into evidence adequately established that Atwood's contract with Exxon required Exxon to pay for the twenty-six-hour period during which the VICKSBURG's spud cans were inspected. We therefore conclude, largely on the basis of Delta Marine and Clyde, that the district court properly reduced Atwood's damage claim for loss of use to exclude the twenty-six hours during which the spud can inspection took place.