Court Opinion

ID: 2966006
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:47:36.601656+00
Date Added: 2024-06-11T11:43:08.454053
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<pre>                 United States Court of Appeals <br>                     For the First Circuit <br> <br> <br> <br> <br> <br>No. 99-1088 <br> <br> <br>                         PATRICK J. CARR, <br> <br>                      Plaintiff, Appellant, <br> <br>                                v. <br> <br>         PMS FISHING CORPORATION AND F/V JANE AND URSULA, <br> <br>            HER GEAR, TACKLE, AND APPURTENANCES, ETC., <br> <br>                      Defendants, Appellees. <br> <br> <br> <br>           APPEAL FROM THE UNITED STATES DISTRICT COURT <br> <br>                FOR THE DISTRICT OF MASSACHUSETTS <br> <br>         [Hon. Robert B. Collings, U.S. Magistrate Judge] <br> <br> <br> <br>                              Before <br> <br>                      Selya, Circuit Judge, <br>                                 <br>                   Cyr, Senior Circuit Judge, <br>                                 <br>                   and Lipez, Circuit Judge. <br>                                 <br>                                 <br>                                 <br>     Joseph G. Abromovitz, with whom  George F. Leahy, Marsha A. <br>Morello, and Abromovitz & Leahy, P.C. were on brief, for appellant. <br>     Brian B. Kydd, with whom Paul Antinori and Kneeland & Kydd <br>were on brief, for appellees. <br> <br> <br> <br> <br>August 30, 1999 <br> <br> <br> <br>                                 <br>

  SELYA, Circuit Judge.  Like Venus, this appeal arises <br>full-grown from the sea.  In the underlying case, a shipowner, PMS <br>Fishing Corporation (PMS), responded to the sinking of its vessel <br>and an injured seaman's ensuing suit by invoking the Limitation of <br>Liability Act, 46 U.S.C. app.  181-196 (Supp. 1999).  The <br>district court granted PMS the protection it sought.  The seaman <br>appeals, averring that the trial judge misconstrued the burden of <br>proof applicable to limitation of liability (LOL) proceedings and <br>erred in finding that the shipowner lacked  privity and knowledge <br>of the vessel's unseaworthiness.  Discerning no error, we affirm. <br>                                I <br>  We start with the facts.  Plaintiff-appellant Patrick J. <br>Carr, along with two investors (Mark Bergeron and Norville <br>Stanley), established PMS in October 1991.  PMS then purchased the <br>F/V JANE & URSULA, a veteran wooden-hulled scalloper.  Bergeron and <br>Stanley each owned 25% of PMS's issued and outstanding stock, and <br>Carr   an experienced commercial fisherman who was to oversee <br>operations and captain the vessel   held the balance. <br>  Although a shoreside survey conducted in March 1991 had <br>declared the F/V JANE & URSULA to be in generally good condition, <br>she leaked in the bow on her first voyage under PMS's auspices.  <br>PMS had the vessel hauled out and extensively refurbished by a <br>reputable shipyard and master carpenters, under Carr's personal <br>supervision.  On her next trip, Carr thought that she handled well, <br>but he and the crew noticed some seepage around the rudder flange <br>and along the rub rail, as well as minor leaking near the cutting <br>box.  PMS again had the vessel hauled out, inspected, and repaired.  <br>As on the earlier occasion, the rehabilitative work was performed <br>by a reputable shipyard and master carpenters. <br>  After Carr pronounced himself satisfied with the repairs, <br>PMS put the ship back into service.  When Carr took her to sea on <br>December 14, 1991, the crew, under his direction, checked <br>repeatedly for leaks.  They discovered none during the first <br>twenty-two hours of the voyage. <br>  Around noontime on December 15, the bilge alarm sounded.  <br>Inspection revealed water in the engine room up to the floorboards.  <br>When pumping proved futile, Carr notified the Coast Guard, which <br>began to evacuate the crew by means of a basket suspended from a <br>helicopter.  As the ship's captain, Carr was the last to depart.  <br>With no one left to hold the basket's tether and winds of gale <br>proportions blowing, the basket swung into the rigging, its cable <br>snapped, and Carr sustained serious injuries when it tumbled to the <br>deck. <br>  Carr subsequently sued PMS, charging negligence and <br>unseaworthiness.  PMS stipulated that the ship was unseaworthy at <br>the time of the mishap and the negligence count (brought under the <br>Jones Act) dropped out of the case.  After a seven-day trial, the <br>presiding magistrate judge, see 28 U.S.C.  636(c), with the aid of <br>an advisory jury, see Fed. R. Civ. P. 39(c), found that the <br>vessel's unseaworthy condition proximately caused Carr's injuries.  <br>Accordingly, he adjudged PMS liable. <br>  In the ensuing LOL proceeding, the parties submitted <br>additional evidence.  The judge reserved decision and later wrote <br>a thoughtful rescript.  In it, he found that PMS lacked both <br>privity to and knowledge of the vessel's unseaworthy condition and <br>limited PMS's liability to the vessel's current value.  Since the <br>F/V JANE & URSULA had ended the voyage on the ocean floor, it had <br>no ascertainable worth.  Thus, Carr took nothing. <br>                                II <br>  Before scrutinizing the trial court's rulings, we <br>summarize certain maritime principles that pertain here. <br>  Under federal admiralty law, a shipowner owes its crew a <br>seaworthy vessel.  See Seas Shipping Co. v. Sieracki, 328 U.S. 85, <br>90 (1946).  To satisfy this obligation, the vessel must be  <br>reasonably fit for its intended use.  See Mitchell v. Trawler <br>Racer, Inc., 362 U.S. 539, 550 (1960); Ferrara v. A. & V. Fishing, <br>Inc., 99 F.3d 449, 453 (1st Cir. 1996).  As Justice Harlan <br>elucidated the concept in an oft-quoted passage, the ship must be <br>"one that is staunch and strong, that is fitted out with all proper <br>equipment and in good order, and that carries a sufficient and <br>competent crew and complement of officers."  Gutierrez v. Waterman <br>S.S. Corp., 373 U.S. 206, 216-17 (1963) (Harlan, J., dissenting).  <br>A shipowner is absolutely liable for injuries arising from the <br>vessel's unseaworthiness.  See Mitchell, 362 U.S. at 549; Seas <br>Shipping, 328 U.S. at 94. <br>  The Limitation of Liability Act, excerpted in the <br>margin, cabins this liability.  It provides, in general terms, <br>that an owner's liability cannot exceed the value of its interest <br>in the vessel (and her freight, then pending).  The interest is to <br>be valued as of the end of the voyage on which the loss or damage <br>occurs.  See Petition of Zebroid Trawling Corp., 428 F.2d 226, 228 <br>(1st Cir. 1970) (citing The City of Norwich, 118 U.S. 468, 490 <br>(1886)); 3 David E.R. Woolley, Benedict on Admiralty  63, at 7-29 <br>through 7-30 (7th ed. 1998). <br>  If the owner-friendly Limitation of Liability Act is <br>viewed as an exception to the rule of absolute liability for <br>unseaworthiness, there is an exception to the exception:  this <br>limitation applies only if the shipowner lacked "privity or <br>knowledge" of the act or condition that caused the injury.  46 <br>U.S.C. app.  183(a).  "Privity or knowledge" can be actual or <br>constructive.  See Spencer Kellogg & Sons, Inc. v. Hicks, 285 U.S. <br>502, 512 (1932).  Either way, the term usually implies some degree <br>of culpable participation or neglected duty on the shipowner's <br>part:  that, for example, it committed a negligent act, or knew of <br>an unseaworthy condition but failed to remedy it, or through the <br>exercise of reasonable diligence could have prevented the <br>commission of the act or the onset of the condition.  See Coryell <br>v. Phipps, 317 U.S. 406, 411 (1943); Joia v. Jo-Ja Serv. Corp., 817 <br>F.2d 908, 913 (1st Cir. 1987). <br>  LOL proceedings lend themselves to a bifurcated analysis.  <br>See Estate of Muer v. Karbel, 146 F.3d 410, 415-16 (6th Cir. 1998) <br>(collecting cases); Joia, 817 F.2d at 912.  First, the court must <br>determine whether negligence or unseaworthiness caused the <br>accident.  Second, the court must determine whether the shipowner <br>was privy to, or had knowledge of, the causative agent (whether <br>negligence or unseaworthiness).  When a corporation owns the <br>vessel, the test is whether culpable participation or neglect of <br>duty can be attributed to an officer, managing agent, supervisor, <br>or other high-level employee of the corporation.  See Coryell, 317 <br>U.S. at 410-11; Cupit v. McClanahan Contractors, Inc., 1 F.3d 346, <br>348 (5th Cir. 1993); Empresa Lineas Maritinas Argentinas, S.A. v. <br>United States, 730 F.2d 153, 155 (4th Cir. 1984).  In all events, <br>an entitlement to limitation requires an antecedent finding that <br>the vessel owner was not privy to, and had no knowledge of, the <br>decisive act of negligence or condition of unseaworthiness. <br>  LOL proceedings engender a divided burden of proof.  The <br>claimant bears the initial devoir of persuasion vis--vis <br>negligence and unseaworthiness.  See EAC Timberland v. Pisces, <br>Ltd., 745 F.2d 715, 720 (1st Cir. 1984).  If the claimant succeeds <br>in that first-stage endeavor, the burden then shifts to the <br>shipowner to establish its lack of privity and knowledge.  See <br>Coryell, 317 U.S. at 409; Hercules Carriers, Inc. v. Claimant State <br>of Fla., 768 F.2d 1558, 1564 (11th Cir. 1985).  Both the claimant's <br>and the shipowner's burdens contemplate proof by a fair <br>preponderance of the evidence. <br>                               III <br>  In the case at hand, the parties stipulated that the F/V <br>JANE & URSULA  was unseaworthy when she sank.  The trial court <br>readily concluded that this unseaworthiness proximately caused <br>Carr's injuries and that liability existed.  Neither side contests <br>that ruling, but Carr appeals from the court's second-stage <br>determination that PMS satisfied the requirements for a statutory <br>limitation of its liability.  His appeal rests on two grounds.  <br>First, he claims that the court misapprehended the burden of proof <br>and, accordingly, that PMS never proved that it lacked knowledge of <br>unseaworthiness.  Second, he calumnizes the court's factual <br>findings, especially the finding that the vessel was seaworthy when <br>it set sail on December 14, and asks us to find the facts <br>differently.  Both arguments lack force. <br>                                A <br>  Carr first asseverates that the trial court misapplied <br>the law because it did not require PMS to prove that it lacked <br>knowledge of the specific condition of unseaworthiness that <br>precipitated the sinking. To the extent that this asseveration <br>presents a question of law as opposed to a question of fact, it <br>sparks de novo review.  See United States v. Conley, 156 F.3d 78, <br>82 (1st Cir. 1998); McCarthy v. Azure, 22 F.3d 351, 354 (1st Cir. <br>1994). <br>  In mounting this challenge, Carr notes that neither PMS <br>nor the magistrate identified any particular condition of <br>unseaworthiness as having caused the vessel to sink.  Building on <br>that foundation, he relies mainly on language gleaned from <br>Terracciano v. McAlinden Constr. Co., 485 F.2d 304 (2d Cir. 1973), <br>in which the Second Circuit stated that, to shoulder its burden of <br>proof at the second stage of an LOL proceeding, <br>    a defendant must show how the loss occurred, <br>  together with its lack of privity to or <br>  knowledge of the asserted cause.  If it cannot <br>  show how the loss occurred, a defendant must <br>  exhaust all the possibilities, and show that <br>  as to each it was without the requisite <br>  privity or knowledge. <br> <br>Id. at 307-08.  This language, however, cannot be taken literally.  <br>By its own admission, the Terracciano court based its statement on <br>an earlier opinion.  See id. at 308 & n.14 (citing and quoting The <br>S.S. Hewitt, 284 F. 911 (S.D.N.Y. 1922)).  In that seminal case, <br>Judge Learned Hand made it quite clear that, to achieve a <br>limitation of liability, a shipowner need not "go[] over the <br>possibilities, item by item."  The S.S. Hewitt, 284 F. at 912.  <br>Rather, the shipowner must "undertake[] to prove that, whatever the <br>cause of the loss, he was ignorant of it; that burden he <br>undertakes, with all the possibilities which it may involve."  Id.  <br>Judge Hand's opinion is proof positive that the literalist spin <br>that Carr places on Terracciano is not the law. <br>  The rule to which we subscribe is that, at the second <br>step of the LOL analysis, the trier must determine whether the <br>shipowner was privy to, or had knowledge of, the particular act of <br>negligence or condition of unseaworthiness that the claimant proved <br>in the first stage.  See Suzuki of Orange Park, Inc. v. Shubert, 86 <br>F.3d 1060, 1062 (11th Cir. 1996); Joia, 817 F.2d at 912; see also <br>3 Benedict on Admiralty, supra, 91, at 8-167 (describing as <br>"better reasoned" the rule that, "[w]here some fault is shown, the <br>petitioner then bears the burden of proof to show its lack of <br>privity in or knowledge of that fault") (emphasis supplied) <br>(citing, inter alia, Porto Rico Lighterage Co. v. Capitol Constr. <br>Co., 287 F.2d 507 (1st Cir. 1961)).  As Judge Brown so eloquently <br>put it, only those specific actions that a claimant submitted to <br>the jury in the liability phase can "afford the basis for inquiry <br>as to privity and knowledge."  Avera v. Florida Towing Corp., 322 <br>F.2d 155, 159-60 (5th Cir. 1963).  In that sense, then, the <br>specificity of the claimant's proof in the first stage of the LOL <br>proceeding determines the level of specificity at which the <br>defendant's second-stage proof must operate. <br>  It follows that where, as here, there is a general <br>finding of unseaworthiness in the first stage of an LOL proceeding, <br>the shipowner's proof concerning privity and knowledge suffices as <br>long as the shipowner shows by a fair preponderance of the evidence <br>that it took appropriate steps to ensure, and reasonably believed, <br>that "the ship was well found, properly manned, and staunch, tight, <br>and adequately equipped."  The S.S. Hewitt, 284 F. at 912.  That <br>showing need not be made mechanically, checking off each and every <br>conceivable cause of the loss, but, rather, permits a more global <br>approach   one that entails an overall sifting and weighing of the <br>relevant evidence.  See id. <br>  In the instant case, the ship sank.  There was evidence <br>that water filled the engine room, thus affording some indication <br>of the whereabouts of a specific leak.  But the crew members who <br>testified could not pinpoint the leak's location.  On this record, <br>then, the general cause of the sinking   unseaworthiness   was <br>known, but no more specific cause could be ascertained.  Faced with <br>this evidentiary predicate, the trial court appropriately addressed <br>the question of whether the shipowner lacked any actual or <br>constructive knowledge of the vessel's generic unseaworthiness, or, <br>to use Judge Hand's language, whether the shipowner, "whatever the <br>cause of loss, . . . was ignorant of it."  Id.  The court then <br>answered this query affirmatively.  We think that once Terracciano <br>is put into context, it supports, rather than undermines, this <br>approach.  Moreover, as long as they are supported by the record, <br>the court's findings are adequate to bottom a limitation of <br>liability, without requiring PMS to go further and show that it <br>lacked knowledge as to any and all possible causes of the sinking. <br>                                B <br>  This brings us to Carr's other assigned error:  his claim <br>that the trial court's factual findings were clearly erroneous.  <br>The applicable standard of review is forbidding; an appellate court <br>will disturb findings made by a judicial officer at a bench trial <br>only if, after reviewing the record as a whole, it comes away with <br>an abiding conviction that the factfinder stumbled badly.  See <br>Reliance Steel Prods. Co. v. National Fire Ins. Co., 880 F.2d 575, <br>576 (1st Cir. 1989); see also Fed. R. Civ. P. 52(a).  Perscrutation <br>of the record in this case yields no such conviction. <br>  The record contains testimony from which a factfinder <br>reasonably could conclude that PMS purchased a used vessel that it <br>reasonably believed was sound; that when problems developed, it <br>commissioned inspections and repairs by competent professionals; <br>that it accepted the advice of those professionals; that PMS spent <br>nearly $100,000 on repairs in a period of approximately two months; <br>and that, when the ship sailed on December 14, 1991, the owner <br>reasonably believed that she was problem-free.  The record also <br>contains ample evidence that PMS exercised due diligence in looking <br>after the seaworthiness of the F/V JANE & URSULA and that its <br>principals had no way of knowing that she was unseaworthy (or would <br>soon become so) when she left port on December 14.  This evidence <br>includes indisputable proof that PMS arranged for multiple <br>inspections, by well-credentialed inspectors, before the final <br>launch; that it mended all known defects; and that a substantial <br>period of time elapsed between the launch and the onset of trouble.  <br>Generally speaking, no more is exigible to satisfy the shipowner's <br>burden.  See Coryell, 317 U.S. at 409, 412 (explaining that, as a <br>general rule, due diligence on the shipowner's part   in <br>particular, hiring competent professionals   suffices to show lack <br>of culpable knowledge for limitation-of-liability purposes); Porto <br>Rico Lighterage, 287 F.2d at 509 (similar). <br>  Here, moreover, the capstone came out of Carr's mouth.  <br>(In this respect, it bears repeating that he is not only the <br>claimant, but also an owner of the vessel who served as its <br>master.)  Carr testified that he would not have set sail on <br>December 14 if he had any reason to suspect that the ship was <br>unseaworthy in any aspect.  As the owner with the greatest maritime <br>expertise and the most access to information about the vessel, his <br>testimony sheds much light on the lack of culpable knowledge fairly <br>attributable to the corporation. <br>  Straining to parry this series of telling thrusts, Carr <br>notes specific actions (e.g., completely removing the sheathing <br>rather than merely recaulking portions of the hull) that PMS <br>omitted during the course of renovations.  But due diligence in the <br>repair of vessels, as in other settings, is a matter of degree   <br>and it is almost always for the factfinder, not the appellate <br>court, to determine what combination of actions suffices.  By like <br>token, Carr's effort to second-guess the magistrate judge's <br>credibility determinations fizzles.  He points out that, in the LOL <br>proceeding, a key witness disavowed earlier testimony in which he <br>had suggested that the ship must have been structurally unsound.  <br>But the magistrate, citing the witness's explanation for recanting <br>his earlier testimony (he explained that, on reflection, he <br>realized that the ship would have leaked immediately in that <br>event), explicitly credited the witness's trial testimony.  We have <br>said with a regularity bordering on the monotonous that, in a bench <br>trial, credibility calls are for the trier, see, e.g., Sierra Fria <br>Corp. v. Evans, 127 F.3d 175, 181-82 (1st Cir. 1997); Anthony v. <br>Sundlun, 952 F.2d 603, 606 (1st Cir. 1991), and we see no basis <br>here for deviating from this salutary maxim. <br>  We explore one last facet of Carr's challenge to the <br>magistrate's findings of fact.  He excoriates with particular vigor <br>the finding that the F/V JANE & URSULA was seaworthy when she <br>embarked on her last trip.  The history of the vessel, Carr says, <br>shows that she was never seaworthy at any time after PMS acquired <br>her.  In his view, the ship's consistent leaks evidenced a <br>concealed structural problem and proved persistent unseaworthiness <br>predating the launch. <br>  While this inference is not implausible, it is not <br>inevitable.  For one thing, the painstaking attention given the <br>ship's condition immediately prior to her final voyage tends to <br>dispel it and to indicate that the fatal defect developed only <br>after the ship was at sea.  For another thing, Carr's own <br>testimony, noted above, belies the inference.  Finally, the March <br>1991 survey (while far from conclusive) strengthens PMS's hand.  On <br>this chiaroscuro record, the most that can be said is that the <br>evidence is susceptible to differing interpretations. <br>  That ends the matter.  When the proof supports plausible <br>but competing inferences, the trier's choice between them cannot be <br>clearly erroneous.  See Jackson v. United States, 156 F.3d 230, 233 <br>(1st Cir. 1998); Cumpiano v. Banco Santander P.R., 902 F.2d 148, <br>156 (1st Cir. 1990).  So it is here. <br>                                IV <br>  We need go no further.  The short of it is that the <br>magistrate judge did not err either in his application of relevant <br>legal rules or in his factual findings.  Unlike the F/V JANE & <br>URSULA, the decision below is watertight. <br> <br>Affirmed.</pre>

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