Court Opinion

ID: 200590
Source: CourtListenerOpinion
Date Created: 2011-02-07 04:55:49+00
Date Added: 2024-06-11T15:09:39.709578
License: Public Domain

Not For Publication in West's Federal Reporter
                 Citation Limited Pursuant to 1st Cir. Loc. R. 32.3

         United States Court of Appeals
                         For the First Circuit

No. 02-1860

                 NORTHERN VOYAGER LIMITED PARTNERSHIP;
              ONEBEACON AMERICA INSURANCE COMPANY f/k/a/
                  COMMERCIAL UNION INSURANCE COMPANY,

                         Plaintiffs, Appellants,

                                        v.

          CROSS SOUND FERRY, INC. AND JOHN WRONOWSKI,

                          Defendants, Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT

                  FOR THE DISTRICT OF MASSACHUSETTS

               [Hon. Rya W. Zobel, U.S. District Judge]

                                Before
                       Torruella, Circuit Judge,
              Campbell and Stahl, Senior Circuit Judges.

     Michael J. Rauworth, with whom Cetrulo & Capone LLP were on
brief, for appellants.
     Thomas J. Muzyka, with whom Robert E. Collins and Clinton &
Muzyka, P.C. were on brief, for appellees.

                                August 5, 2003
            TORRUELLA, Circuit Judge. Plaintiffs-Appellants Northern

Voyager Limited Partnership ("Northern Voyager") and OneBeacon

America Insurance Company appeal the dismissal of their claims

against Defendants-Appellants Cross Sound Ferry ("Cross Sound") and

its president, John Wronowski, in litigation related to the 1997

sinking of the F/T NORTHERN VOYAGER ("NORTHERN VOYAGER").             The

district court determined that the plaintiffs, who alleged two

violations of Mass. Gen. Laws ch. 93A for unfair trade practices,

failed to state a claim for which relief can be granted.         We agree.

                                   I.

            The NORTHERN VOYAGER sank off the coast of Gloucester,

Massachusetts on November 2, 1997.       The sinking was the result of

an allegedly faulty rudder dropping out of the vessel, causing

severe flooding aboard the NORTHERN VOYAGER.

            The NORTHERN VOYAGER, and a sister ship, the F/T NORTHERN

TRAVELER ("NORTHERN TRAVELER") were managed by Atlantic Trawlers,

Inc., principally by its employee, Jerry Shervo.        At some point in

1997, Shervo contacted Thames Shipyard & Repair Company ("Thames")

to have repair work performed on the two vessels.       Thames is owned

and operated by John Wronowski, who also owns Cross Sound.         Thames

agreed to perform repair work on the NORTHERN VOYAGER and NORTHERN

TRAVELER;    the   repair   work   included,    among    other    things,

withdrawing, refurbishing and reinstalling both rudders in each

vessel.   During the course of these repairs, the appellants allege

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that two separate incidents occurred which constituted unfair trade

practices by the appellees.       For clarity's sake, we will present

the appellants' two factual scenarios separately and then assess

whether either scenario is sufficient to support a claim under

Chapter 93A.

          1.        Cross Sound's Subordination of the
                    NORTHERN VOYAGER's Service Needs

          The NORTHERN VOYAGER and NORTHERN TRAVELER were delivered

to Thames's shipyard in May and June of 1997 and were raised on

drydock together with a third vessel, the NEW LONDON.            The NEW

LONDON is a passenger and freight ferry owned and operated by

Wronowski and Cross Sound.        To remove a vessel from drydock, a

drydock must be flooded to permit the vessel to float free of the

dock.   Consequently, when vessels share a drydock, none of the

vessels can be returned to service until the repair work for all of

them is complete, since prematurely flooding the drydock would also

flood any vessel that still had holes in its hull.

          Thames completed its repairs of the NEW LONDON prior to

completing   work   on   the   NORTHERN   VOYAGER.   According   to   the

appellants, Wronowski and Cross Sound diverted work away from the

NORTHERN VOYAGER in favor of completing work on the NEW LONDON.

Further, the appellants claim that appellees caused the work on the

NORTHERN VOYAGER to be hastened to allow the drydock to be flooded,

so that Wronowski could return the NEW LONDON to service more

quickly. According to appellants, the appellees' haste resulted in

                                   -3-
improper   performance   on    the   work    of   the    NORTHERN      VOYAGER's

starboard rudder.     Therefore, under the appellants' theory, the

subordination of NORTHERN VOYAGER's interests to those of the NEW

LONDON should be deemed an unfair business practice that eventually

resulted in the loss of the NORTHERN VOYAGER.

           2.      Failure to Disclose Information Relevant
                   to the Condition of the NORTHERN VOYAGER

           The   appellees    performed     similar     rudder   work    on   the

NORTHERN VOYAGER's sister ship, the NORTHERN TRAVELER, a few weeks

prior to the repairs on the NORTHERN VOYAGER.           In October 1997, the

NORTHERN TRAVELER began to experience steering problems.                   Cross

Sound supervisor Tom Shaughnessy was sent out to investigate.                  It

turned out that the steering problem was caused by the loosening of

a retaining nut on the vessel's port rudder. The nut had loosened

to the point that the NORTHERN TRAVELER's rudder was on the verge

of dropping out of the vessel.

           Shaughnessy   notified      Wronowski        about    the    NORTHERN

TRAVELER's rudder problem.       Wronowski dispatched Brian Laffey, a

Cross Sound employee, to correct the problem.             Laffey boarded the

NORTHERN TRAVELER, raised the rudder, tightened the rudder nut, and

secured it by welding it into place.

           When Shervo became aware that the rudder nut had been

improperly secured by Thames during the May repairs, he asked

Shaughnessy if he should arrange to bring the NORTHERN VOYAGER into

port to have her rudders checked.          Shaughnessy told him that this

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was unnecessary because the problem with the NORTHERN TRAVELER's

port rudder was a one-time anomaly.

           Nevertheless, despite Shaughnessy's reassurances, there

is some evidence that he and Laffey considered the rudder-nut

problem to be more than a mere one-time anomaly.                     Laffey had

concerns about the NORTHERN TRAVELER's other rudder.                As a result,

he sought permission from Shaughnessy to inspect the NORTHERN

TRAVELER's     starboard   rudder.         Shaughnessey        authorized    the

inspection and Laffey tightened and rewelded the starboard rudder

nut to prevent it from loosening.

           The    appellants   claim   that   no    one      from   Thames   ever

informed   them   of   Laffey's   concerns.        It   is    the   appellants'

contention that Cross Sound and Wronowski had a duty to inform

Shervo of the likelihood that the NORTHERN VOYAGER was at risk of

experiencing the same rudder problem as the NORTHERN TRAVELER.

Accordingly, the appellants argue that Shaughnessy's statement that

the rudder nut problem was a one-time anomaly, combined with his

failure to notify Shervo of the additional repair work performed by

Laffey, deprived the appellants of the opportunity to perform the

same preventative maintenance on the NORTHERN VOYAGER's rudders as

had been performed on the NORTHERN TRAVELER's starboard rudder.

                                     II.

             We review the district court's findings of fact for clear

error and its conclusions of law de novo.           E.g., Commercial Union

                                     -5-
Ins. Co. v. Seven Provinces Ins. Co., 217 F.3d 33, 40 (1st Cir.

2000). While the question of "whether a particular set of acts, in

their factual setting, is unfair or deceptive is a question of

fact, the boundaries of what may qualify for consideration as a

[Chapter 93A] violation is a question of law." Saint-Gobain Indus.

Ceramics   v.   Wellons,   Inc.,   246    F.3d   64,   73   (1st   Cir.   2001)

(citation omitted).

           1.      Chapter 93A Standard

           Chapter 93A grants a cause of action to persons engaged

in commerce who suffer a loss because of "[u]nfair methods of

competition and unfair or deceptive acts or practices in the

conduct of any trade or commerce."         Mass. Gen. Laws ch. 93A, § 2.

Though the statute does not define the term "unfair," courts

applying Chapter 93A have established that a claimant must show

"objectionable conduct [that] must attain a level of rascality that

would raise an eyebrow of someone inured to the rough and tumble of

the world of commerce."      Saint-Gobain, 246 F.3d at 73 (quotation

omitted); Leings v. Forbes & Wallace, Inc., 396 N.E.2d 149, 153

(Mass. App. Ct. 1979).        Mere negligence is not sufficient to

trigger liability under the statute; instead, the statute was

enacted to punish "truly inequitable marketplace behavior" that

"unmistakably reeks of callousness."         Vmark Software, Inc. v. EMC

Corp., 642 N.E.2d 587, 597 (Mass. App. Ct. 1994) (quotations and

citations omitted).    Thus, in order to prevail under the statute,

                                    -6-
a claimant must show that the defendant's conduct falls "'within at

least   the    penumbra      of   some   common-law,   statutory,   or   other

established concept of unfairness' or is 'immoral, oppressive or

unscrupulous'" PMP Assoc. v. Globe Newspaper Co., 321 N.E.2d 915,

917 (1975), (quoted in Cambridge Plating Co. v. Napco, Inc., 85

F.3d 752, 769 (1st Cir. 1996)).

              2.      Discussion

              The district court concluded that neither of the factual

scenarios described by the appellant set forth facts sufficient to

support a claim under Chapter 93A.             We agree.    While the repair

work performed on the two vessels obviously left much to be

desired, nothing in the record or in either of the appellants' two

scenarios demonstrates any conduct by Wronowski or Cross Sound that

rises   to    the    level   of   "rascality,"    "callousness,"    or   "truly

inequitable marketplace behavior" required by the statute.

              Even   assuming     that   the   appellants   subordinated   the

interests of the NORTHERN VOYAGER in favor of the NEW LONDON by

rushing the former's repair schedule, this is not the type of

behavior Chapter 93A was intended to punish.            The statute does not

create a cause of action for a breach of contract alone unless it

rises to the level of "commercial extortion" or a similar degree of

culpable conduct. Commercial Union, 217 F.3d at 40.                 Likewise,

"breach of warranty alone does not necessarily give rise to a

Chapter 93A violation."           Saint-Gobain, 246 F.3d at 73.      At most,

                                         -7-
the appellants' subordination scenario may support a possible

interference with contractual relations claim; however, even if the

appellants could establish an interference claim, we concur with

the district court that they have not carried their burden of

showing callousness or truly inequitable marketplace behavior.

             Likewise, vague allegations of the appellees' duty to

disclose the possible rudder problem on the NORTHERN VOYAGER do not

rise to the necessary level of rascality required by the statute.

While the incident may have proved a basis for a negligence claim

against Wronowski or Thames, negligence alone is insufficient to

create liability under the statute.        Vmark Software, 642 N.E.2d at

597.

           Finally, appellants also allege that the district court

abused   its   discretion   by   denying   their   motion   to   amend   the

complaint.     Having considered appellants' arguments and reviewed

the record, we find that the court's decision was entirely within

its discretion.    See LaRocca v. Borden, Inc., 276 F.3d 22, 32 (1st

Cir. 2002).

                                   III.

           Because Northern Voyager and OneBeacon have not carried

their burden under the statute, we do not find that any of the

appellees' conduct constitutes unfair trade practices under Chapter

93A.

             Affirmed.

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