Court Opinion

ID: 4381233
Source: CourtListenerOpinion
Date Created: 2019-03-27 12:00:24.625656+00
Date Added: 2024-06-11T09:24:38.291957
License: Public Domain

Case: 18-14956    Date Filed: 03/27/2019     Page: 1 of 8

                                                             [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT
                         ________________________

                               No. 18-14956
                           Non-Argument Calendar
                         ________________________

                     D.C. Docket No. 0:16-cv-62467-CMM

TRI-LADY MARINE, LTD.,
a Marshal Island Company,
d.b.a. Triumphant Lady,

                                                               Plaintiff - Appellant,

                                     versus

BISHOP MECHANICAL SERVICES, LLC,

                                                              Defendant - Appellee,

AQUA-AIR MANUFACTURING,
a division of James D. Hall Co, a Florida Company,

                                                        Defendant - Cross-Claimant,

ELITE MARINE YACHT SERVICES, LLC,

                                                     Defendant - Cross-Defendant.
              Case: 18-14956     Date Filed: 03/27/2019   Page: 2 of 8

                           ________________________

                   Appeal from the United States District Court
                       for the Southern District of Florida
                         ________________________

                                 (March 27, 2019)

Before WILSON, WILLIAM PRYOR and HULL, Circuit Judges.

PER CURIAM:

      Tri-Lady Marine, Ltd., appeals the summary judgment against its complaint

for a breach of contract and of implied and express warranties by Bishop

Mechanical Services, LLC. The district court ruled that the parties’ contract limited

Tri-Lady to recovering direct damages, which it did not seek to collect. We affirm.

                                I. BACKGROUND

      Tri-Lady hired Bishop Mechanical to install a marine chiller unit on the

Triumphant Lady, a yacht. Bishop Mechanical sent Tri-Lady a proposal to install a

compressor, which Tri-Lady signed. The proposal included a project agreement

that contained a statement of workmanship and separate clauses that barred

indemnification for losses and expenses connected to its work and that limited its

liability for damages. The limitation clause excluded liability for consequential

damages:

         UNDER NO CIRCUMSTANCES, WHETHER ARISING IN
         CONTRACT, TORT (INCLUDING NEGLIGENCE), EQUITY
         OR OTHERWISE, WILL BISHOP MECHANICAL SERVICES,
         LLC BE RESPONSIBLE FOR LOSS OF USE, LOSS OF

                                          2
              Case: 18-14956     Date Filed: 03/27/2019    Page: 3 of 8

         PROFIT, INCREASED OPERATING OR MAINTENANCE
         EXPENSES, CLAIMS OF CUSTOMER’S TENANTS OR
         CLIENTS,   OR   ANY  SPECIAL, INDIRECT  OR
         CONSEQUENTIAL DAMAGES.

Bishop later received a chiller unit instead of a condenser, and Tri-Lady agreed to

pay additional labor costs to install the chiller unit. Bishop issued Tri-Lady a

supplemental invoice, which it paid.

      The chiller unit failed. Water inside the evaporator heat exchanger froze,

which caused leaking in the chilled water piping throughout the yacht.

Investigators discovered that the water hoses for the chilling unit had been

plumbed in reverse.

      Tri-Lady filed in the district court for New Jersey a complaint against

Bishop Mechanical, which was transferred to the Southern District of Florida and

consolidated with a related action against the manufacturer and seller of the

chilling unit. Tri-Lady attached the installation proposal to its complaint and cited

to it as the “Contract between Tri-Lady and Bishop . . . involving the installation of

a . . . Chiller Unit.” Tri-Lady alleged that the contract contained “express[]

warrant[ies] that [the] work [by Bishop] would be done in a workmanlike manner

and be of the ‘best possible service’ and be ‘free of defects,’ and that [Bishop]

would ‘insure system piping integrity.’” Tri-Lady demanded as damages its

expenses for “repair of the Vessel, mold and mildew damage, dockage expenses

                                           3
                  Case: 18-14956   Date Filed: 03/27/2019   Page: 4 of 8

and crew [wages] while the Vessel [sat] idle, loss of use . . . and loss of Charter

income . . . .”

       Bishop Mechanical moved for partial summary judgment and argued that the

limitation clause was enforceable under the law of New Jersey and barred Tri-Lady

from recovering its requested damages. Tri-Lady responded that the limitation

clause was inapplicable because Bishop Mechanical waived its right to enforce the

clause by failing to raise it as an affirmative defense in its answer. Alternatively,

Tri-Lady argued that a material factual dispute existed whether the clause in the

installation proposal applied to the work that Bishop later performed. During a

hearing on the motion, Tri-Lady demanded as additional damages the expenses it

had incurred paying its insurance deductible, buying a marine compressor,

replacing “soft goods,” and restoring damaged veneer on the yacht.

       The district court entered summary judgment in favor of Bishop Mechanical.

Initially, the district court granted Bishop Mechanical a partial summary judgment

on the ground that Tri-Lady could not recover any of the damages demanded in its

complaint. The district court ruled that “no genuine material dispute [existed about

whether] . . . the limitation of damages clause . . . b[ound] Tri-Lady” because it

made a “judicial admission” that the clause “appl[ied] to the installation of the

Chilller . . . when it sued Bishop relying on” the proposal. The district court also

ruled that the limitation on damages was not an affirmative defense; that the

                                           4
               Case: 18-14956      Date Filed: 03/27/2019    Page: 5 of 8

limitation clause explicitly barred damages for nonuse of the yacht, foregone

charter income, dockage expenses, and crew costs; and that the clause also barred

consequential damages for the insurance deductible and the expenses for repairs to

and refurbishment of the yacht, for mold and mildew remediation, and for a new

compressor. After Tri-Lady confirmed that it was not demanding direct damages,

the district court entered a final judgment for Bishop Mechanical.

      Tri-Lady moved for reconsideration and argued that the limitation clause

was invalid under the three-part test in Diesel “Repower” Inc. v. Islander

Investments Ltd., 271 F.3d 1318 (11th Cir. 2001), but the district court denied the

motion. The district court ruled that Tri-Lady never contested the enforceability of

the clause and its “motion for reconsideration [could] not serve as the occasion to

tender [its] new legal theor[y] for the first time.” The district court stated that Tri-

Lady had “mentioned Diesel ‘Repower’ Inc. in its opposition memorandum when

it challenged the indemnification clause,” not the limitation clause. The district

court also explained that it had “relied upon Diesel ‘Repower’ Inc. to illustrate that

the damages Tri-Lady [sought] [were] consequential damages” and it “had no

reason to consider or address the enforceability of the [limitation on] damages

clause” because that was “never question[ed]” by Tri-Lady.

                           II. STANDARD OF REVIEW

                                            5
              Case: 18-14956     Date Filed: 03/27/2019    Page: 6 of 8

      We review de novo the summary judgment in favor of Bishop Mechanical.

See Glob. Quest, LLC v. Horizon Yachts, Inc., 849 F.3d 1022, 1026 (11th Cir.

2017). Summary judgment is appropriate when “there is no genuine dispute as to

any material fact and the movant is entitled to judgment as a matter of law.” Fed.

R. Civ. P. 56(a).

                                 III. DISCUSSION

      Tri-Lady challenges the summary judgment on two grounds. First, Tri-Lady

argues that Bishop Mechanical waived its argument to apply the limitation clause

by failing to plead it as an affirmative defense, as required by Federal Rule of Civil

Procedure 8(c). Second, Tri-Lady argues that the district court erred in failing to

examine the limitation clause under the three-part test in Diesel Repower. Both

these arguments fail.

      Bishop Mechanical did not waive the right to enforce the limitation clause.

Even if Bishop Mechanical was required to raise the defense in its answer, under

our precedent, no waiver occurred because Tri-Lady received notice of the defense

“by some means other than pleadings” and had “a chance to rebut it.” See Grant v.

Preferred Research, Inc., 885 F.2d 795, 797 (11th Cir. 1989). Like the defendant

in Grant, Bishop Mechanical raised its defense for the first time in its motion for

partial summary judgment. See id. And, like the plaintiff in Grant, Tri-Lady “was

fully aware” that Bishop Mechanical was relying on the limitation clause and never

                                          6
               Case: 18-14956     Date Filed: 03/27/2019    Page: 7 of 8

“assert[ed] any prejudice from the lateness of the pleading” when opposing its

motion. See id. at 798. Bishop Mechanical could rely on the limitation clause as a

defense.

      Tri-Lady forfeited the opportunity to challenge the enforceability of the

limitation clause. “[A] party who fails to make a specific objection or argument in

the district court forfeits that objection or argument.” Green v. Graham, 906 F.3d

955, 963 (11th Cir. 2018) (internal quotation marks and citation omitted). Tri-Lady

contested the enforceability of the limitation clause in its motion to reconsider, but

that motion could not be used “to raise arguments which could, and should, have

been made before the judgment was issued,” Mays v. U.S. Postal Svc., 122 F.3d

43, 46 & n.5 (11th Cir. 1997).

      Even if Tri-Lady had not forfeited its argument under Diesel Repower, we

would not reach a different result. Substantive admiralty law governs the

enforceability of the limitation clause in a contract to repair a vessel in navigable

water. See Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 22 (2004); Diesel Repower,

271 F.3d at 1322–23. Bishop Mechanical argues that the Third Circuit is more

tolerant of exculpatory clauses than this Court, yet the limitation clause passes

muster even under Diesel Repower. Diesel Repower holds that “[p]arties to a

contract for the repair of a vessel may validly agree to limit the repairer’s liability”

so long as “the limited liability clause . . . clearly and unequivocally indicate[s] the

                                           7
               Case: 18-14956     Date Filed: 03/27/2019    Page: 8 of 8

parties’ intention,” the clause does “not absolve the repairer of all liability,” and

“the parties [are] of equal bargaining power to prevent overreaching.” 271 F.3d at

1324. The limitation clause stated “clearly and unequivocally” that Bishop

Mechanical was not liable for consequential damages; the clause limited the type

of damages recoverable without relieving Bishop Mechanical of all liability; and

Tri-Lady was an educated party familiar with the marine industry and capable of

bargaining with Bishop Mechanical. Diesel Repower does not, as Tri-Lady argues,

obligate Bishop Mechanical to reimburse certain charges or pay a threshold

amount to suffice as deterrence. Tri-Lady forfeited its opportunity to have the

district court undertake the “fact-specific inquiry” described in Diesel Repower, id.

at 1325, to determine whether the risk of liability that Bishop Mechanical retained

was a sufficient deterrent to negligence.

                                 IV. CONCLUSION

      We AFFIRM the summary judgment in favor of Bishop Mechanical.

                                            8