Court Opinion

ID: 2960426
Source: CourtListenerOpinion
Date Created: 2015-09-17 17:49:12.386438+00
Date Added: 2024-06-11T15:00:28.391570
License: Public Domain

08-0639-cv
Zerega Avenue v. Hornbeck Offshore

                               UNITED STATES COURT OF APPEALS

                                     FOR THE SECOND CIRCUIT

                                        August Term 2008

Heard: March 23, 2009                                         Decided: July 6, 2009

                                     Docket No. 08-0639-cv

- - - - - - - - - - - - - - - - - - - - -
ZEREGA AVENUE REALTY CORP. and FRED
TODINO & SONS, INC.,
     Plaintiffs-Counter-Defendants-
     Appellees,

                               v.

HORNBECK OFFSHORE TRANSPORTATION, LLC,
     Defendant-Counter-Claimant-
     Cross-Defendant-Appellant.
- - - - - - - - - - - - - - - - - - - - -

Before: FEINBERG, NEWMAN, and KATZMANN, Circuit Judges.

        Appeal from the January 8, 2008, judgment of the United States

District Court for the Southern District of New York (Kevin N. Fox,

Magistrate Judge), awarding damages resulting from an allision between

a barge and a bulkhead.               The Court of Appeals rules that the District

Court erred in applying the Oregon rule to create a presumption with

respect to causation, and in precluding expert testimony offered by

the Defendant.

        Judgment reversed, award vacated, and case remanded.
                                  Joseph T. Stearns, New York, N.Y. (Gino A.
                                    Zonghetti, Kenny, Stearns & Zonghetti
                                    LLC, New York, N.Y., on the brief), for
                                    Defendant-Appellant.

                                  Alex Spizz, New York, N.Y. (Scott A.
                                    Markowitz, Todtman Nachamie Spizz &
                                    Johns, P.C., New York, N.Y., on the
                                    brief), for Plaintiffs-Appellees.

JON O. NEWMAN, Circuit Judge.

     This appeal primarily concerns the proper application of the

presumption of fault, applicable in maritime law, known as the “Oregon

rule.” See The Oregon, 158 U.S. 186 (1895).            Defendant-Appellant

Hornbeck Offshore Transportation, LLC (“Hornbeck”) appeals from the

January 8, 2008, judgment of the District Court (Kevin N. Fox,

Magistrate Judge), finding Hornbeck liable to Plaintiffs-Appellees

Zerega Avenue Realty Corp. (“Zerega”) and Fred Todino & Sons, Inc.

(“Todino & Sons”) for more than $1.5 million in damages. See Zerega

Avenue Realty Corp. v. Hornbeck Offshore Transportation, LLC, No. 04

Civ. 9651, 2007 WL 3125318 (S.D.N.Y. Oct. 23, 2007).       The damages were

awarded because of an allision1 between Hornbeck’s barge and a bulkhead

on Zerega’s property abutting Westchester Creek in Bronx County, New

York.        Hornbeck principally claims that the Court erred by applying a

presumption in favor of Zerega on the issue of causation and by

        1
            “An allision is a collision between a moving vessel and a

stationary object.” Weyerhaeuser Co. v. Atropos Island, 777 F.2d 1344,

1346 n.1 (9th Cir. 1985).
                                       -2-
excluding the testimony of Hornbeck’s experts.          We conclude that the

Oregon rule’s presumption of fault does not shift from a plaintiff the

burden of proving causation, and that the preclusion of Hornbeck’s

expert testimony was an abuse of discretion. We therefore reverse the

judgment, vacate the award, and remand.

                                 Background

      Zerega and Todino & Sons own property along Westchester Creek

(the “Zerega property”).      At the waterfront of the Zerega property,

there is a bulkhead (also called a retaining wall or relieving

platform) and, farther inland, a one-story office building with a

basement.    Hornbeck owns and operates the tug STAPLETON SERVICE (the

“tug”) and the Barge ENERGY 2201 (the “barge”), which is approximately

250 feet long and 50 to 60 feet wide.

      In October 2005, the Plaintiffs-Appellees commenced an action for

damages against their insurance carriers and Hornbeck.          The amended

complaint alleged that on October 29, 2002, Hornbeck’s barge, while

being pulled by its tug, struck the bulkhead on the Zerega property

due   to   Hornbeck’s   negligent   operation   while   traveling   south   on

Westchester Creek.      It further alleged that the allision resulted in

the rapid and severe weakening of the bulkhead, which caused most of

the bulkhead to collapse nearly two weeks later.            The Plaintiffs-

Appellees sought damages for repair of the bulkhead and the office

building.    After a four-day bench trial, the Magistrate Judge found

Hornbeck liable for negligently causing damage to the bulkhead and the
                                     -3-
office building and entered an award of $1,505,353, plus pre- and

post-judgment interest, in favor of Zerega and Todino & Sons.2

     The Magistrate Judge, trying the case by consent, see 28 U.S.C.

§ 636(c), found that Hornbeck’s tug was pulling the barge, in light

condition, southbound in Westchester Creek toward Unionport Bridge.

The tug was being operated by Mate Steven Spurlock with assistance

from Training Mate Eric Fuerstinger. Spurlock and Fuerstinger stalled

the vessels in the immediate vicinity of the Zerega property in mid-

afternoon, while waiting in the narrow channel for the Unionport

Bridge to open.    During that time, Spurlock became concerned that the

stern of the barge was drifting too close to the bulkhead of the

Zerega property, and that the wind, which the Court found to be

blowing toward the bulkhead, would cause the barge in its light

condition to hit the retaining wall.     Spurlock maneuvered the tug in

an attempt to straighten the barge.       As the Court found, Spurlock

could not see the rear end of the barge while operating the tug, and

Fuerstinger did not have a direct view of the rear of the barge on the

starboard side.

     The Court found, on the testimony of four witnesses, that the

barge allided with the bulkhead structure on the Zerega property.

Christopher Todino (“Todino”), principal of Todino & Sons, and his

     2
         The insurance company defendants have apparently settled, and,

in any event, are not named in the judgment.
                                 -4-
business guest, Michael Justino (“Justino”), were meeting in an office

located at the southern end of the office building at around 3:30 p.m.

They each testified that they suddenly felt a strong jolt and observed

from the office window a barge being pulled away from the Zerega

property by a tug.      Louis Bruno, an office manager of Todino & Sons,

working in the center of the office building at around 3:30 p.m.,

testified that he felt a thump, heard Todino and Justino yelling, and

ran to a window from which he observed a barge being pulled away from

the bulkhead by a tug.     Laura Bruno, vice-president of Todino & Sons,

testified that, upon hearing Todino and Justino yelling, she went to

a window of the office building and observed a barge being pulled away

from the Zerega property by a tug.

     At trial, there was no dispute that on November 11, 2002, nearly

two weeks after the allision, a significant portion of the bulkhead on

the Zerega property collapsed into Westchester Creek.           However, the

parties disputed the cause of the collapse and sought to introduce the

opinions of expert witnesses to support their competing theories.

Zerega was permitted to introduce the expert testimony of Steven

Schneider (“Schneider”), a professional engineer, that the bulkhead

structure collapsed because either: (a) Hornbeck’s barge struck the

retaining wall, causing the piles to shift, and, as the piles moved

back,   they   ripped   the   planking   hardware   off   the   steel,   which

undermined the retaining wall; or (b) timber or a pole, latched on to

Hornbeck’s barge, was dragged along the face of the retaining wall,
                                    -5-
like a stick being pulled along a picket fence, and destroyed the

planking that was holding the earth underneath the structure in place,

thereby causing the structure to collapse.

     The    Court   precluded        Hornbeck   from    introducing    the   expert

testimony of Roderic Ellman (“Ellman”) and Pierce Power (“Power”),

both professional engineers. Preclusion was ordered because the Court

deemed Hornbeck to have failed to comply with a pretrial order of the

Court.     That order stated that “on or before March 22, 2006, the

parties shall provide to the Court such information as they reasonably

believe    will     enable     the     Court    to     fulfill   the   gatekeeping

responsibilities imposed upon it by the Supreme Court in Daubert v.

Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786

(1993).”

     Ellman, one of the precluded witnesses, would have offered the

opinion that the cause of the bulkhead collapse was horizontal forces

applied from the direction of the land against the bulkhead structure,

whose wood pilings had become disconnected due to the corrosion of the

metal fasteners and had deteriorated due to the natural biological

decay of the timber.         Power would have offered the opinion that the

barge did not strike the bulkhead.

     Although the testimony of Ellman was precluded, Hornbeck was

permitted to introduce other evidence regarding the deterioration of

the bulkhead.     Hornbeck introduced the pretrial deposition testimony

of Paul Cirillo, who owned the Zerega property from the late 1960s to
                                         -6-
the mid-1990s, that a sinkhole would develop in the bulkhead structure

every eight to twelve months and require filling, and that in July and

August of 2002, he observed a small sinkhole in the bulkhead of the

Zerega     property,   which    grew    larger    over    time.      Spurlock   and

Fuerstinger also stated through direct testimony that they observed a

sinkhole on the Zerega property when they passed it on October 29,

2002.      The District Court determined that the testimony of Cirillo,

Spurlock, and Fuerstinger lacked credibility in light of the totality

of   the    evidence   and    inconsistencies      brought   out    during   cross-

examination. See Zerega Avenue Realty Corp., 2007 WL 3125318, at *3 &

n.3.     Apart from that testimony, the only other evidence on which

Hornbeck relied was the testimony of Stanley White (“White”), Zerega’s

expert on the amount of damages.                 White acknowledged on cross-

examination     that   more    than    one    plausible    explanation    for   the

bulkhead’s collapse existed and that certain hardware was missing from

the area where the bulkhead collapsed, but also stated that the

hardware could be at the bottom of the Creek.

       In determining Hornbeck’s liability, the District Court applied

what is known in admiralty law as the “Oregon rule.”               The Court stated

the rule as follows: “It is a well-established proposition of maritime

collision law that when a moving vessel collides with a stationary

object, an inference of negligence arises and the burden is then upon

the owners of the vessel to rebut the inference of negligence.” Id. at

*5 (internal quotation marks omitted).             The Court ruled that, once
                                        -7-
Zerega established that the barge struck the bulkhead, a presumption

arose that the barge was being negligently operated.                       The Court

further ruled that Hornbeck could rebut that presumption by showing,

by a preponderance of the evidence, that it acted with reasonable

care, that the allision was the fault of the stationary object, or

that the allision was an unavoidable accident. See id. at *6.

      Implicitly      concluding     that    Hornbeck     had   not   rebutted     the

inference of negligent operation, the Court then applied the Oregon

rule to the issue of causation, casting on Hornbeck the burden of

rebutting a presumption that its negligence caused Zerega’s damages.

See id. at *5-*6 & n.4.3       In evaluating Hornbeck’s evidence, the Court

      3
          The Court’s use of the presumption is placed in some doubt by the

last sentence of footnote 4: “[E]ven if the burden of proof remained

on   the     plaintiffs   to   establish     causation    and   damages,    once    an

inference of negligence arose, the plaintiffs met their burden.” The

sentence could mean either that the inference of negligence is what

enabled the Plaintiffs to meet their burden on causation and damages

or that, independent of any presumption, the Plaintiffs met their

burden      on   causation   and   damages   by   their   evidence.      The     Court

apparently relied on the presumption when it stated as a conclusion:

“[T]he defendant failed to rebut the presumption of fault, on the part

of the tug and barge, for (a) striking the plaintiffs’ bulkhead

structure, through the negligent operation of the vessel; and (b)
                                -8-
ruled that Hornbeck “failed to proffer evidence at the trial that

would establish, by a preponderance, that the cause of the collapse of

the plaintiffs’ bulkhead structure was its deterioration and unsound

condition.” Id. at *6.   The Court therefore held Hornbeck liable and,

finding White’s testimony as to damages to be credible, awarded

Plaintiffs-Appellees $1,505,353 for the damage to the bulkhead and the

office building, with pre- and post-judgment interest.

                              Discussion

     On appeal, Hornbeck makes several challenges to the District

Court’s findings and rulings.     We conclude that two of Hornbeck’s

challenges have merit.    Most importantly, we write to clarify the

proper application of the Oregon rule in maritime allision cases.

I. The Presumption of Fault

     In admiralty law, liability for collisions and allisions is based

upon a finding of fault that caused or contributed to the damage

incurred. See 2 Thomas J. Schoenbaum, Admiralty and Maritime Law

(“Schoenbaum”) § 14-2, at 89 (4th ed. 2004).   As in any tort case, the

claimant generally has the burden of proving negligence. See East

River S.S. Corp. v. Transamerica Delaval Inc., 476 U.S. 858, 859

causing the bulkhead structure’s collapse.” Zerega Avenue Realty, 2007

WL 3125318, at *3 (emphasis added).     In any event, at oral argument

the parties agreed that the presumption applies only to negligence and

not to causation.
                                  -9-
(1986) (noting that admiralty law “recognizes a general theory of

liability for negligence”); Schoenbaum § 14-2, at 100. Admiralty law,

however, recognizes a presumption, first formulated in The Oregon,

that applies when a vessel under its own power allides with an

anchored vessel or a stationary object. See 158 U.S. at 192.              Under

such circumstances, the moving vessel is presumed to be at fault and

bears the burden of rebutting the presumption by showing that the

allision was the fault of the stationary object, that the moving

vessel acted with reasonable care, or that the allision was an

unavoidable accident. See id. at 192-93; Folkstone Maritime, Ltd. v.

CSX Corp., 64 F.3d 1037, 1050 (7th Cir. 1995); Delta Transload, Inc.

v. MV Navios Commander, 818 F.2d 445, 449 (5th Cir. 1987); City of

Boston v. S.S. Texaco Texas, 773 F.2d 1396, 1398 (1st Cir. 1985) (“The

rule is well settled that when a vessel under its own power collides

with an anchored vessel or a navigational structure, the burden of

proving absence of fault or vis major rests on the pilot vessel.”).

The presumption “derives from the common-sense observation that moving

vessels do not usually collide with stationary objects unless the

vessel is mishandled in some way.” Wardell v. Dep’t of Transportation,

National Transportation Safety Board, 884 F.2d 510, 512 (9th Cir.

1989).

     The    Appellant   initially     challenges      the    District   Court’s

application of the Oregon rule on the ground that the Court erred in

finding    that   Hornbeck’s   tug   did    not   exercise   reasonable   care.
                                     -10-
Hornbeck claims that it offered evidence of reasonable care through

the testimony of Spurlock and Fuerstinger concerning the slow speed at

which the tug and barge were operated, the posting of Fuerstinger as

lookout in the wheelhouse, and the crew’s vigilance in the area of the

retaining wall.

     “Following a bench trial, we set aside findings of fact only when

they are clearly erroneous, and we give due regard to the trial

court’s credibility determinations.” Design Strategy, Inc. v. Davis,

469 F.3d 284, 300 (2d Cir. 2006) (internal quotation marks omitted).

The Court found that Spurlock navigated the unloaded barge down the

narrow channel into the immediate vicinity of the bulkhead on the

Zerega property, became concerned that the barge’s stern would drift

into the bulkhead, and tried to straighten the barge without either

his view of the stern or that of his mate.       The Court discredited

Spurlock’s and Fuerstinger’s testimony with respect to the direction

of the wind, Fuerstinger’s view of the bulkhead from the wheelhouse,

and their ability to perceive whether the barge hit the bulkhead.

     While the Court did not explicitly state that Hornbeck failed to

establish reasonable care, that is the only reasonable inference

available from the Court’s opinion.    Moreover, the Court’s invocation

of the Oregon rule and its subsequent consideration of the issue of

causation leaves no doubt that the Court found that Hornbeck’s tug was

not operated with reasonable care.    The evidence fully supports that

finding.
                                -11-
II. Causation

     Although the Oregon rule creates a presumption of negligent

operation, it does not create an additional presumption that the

allision caused whatever damages are alleged.               “[T]he Oregon rule

. . . speaks explicitly only to a presumed breach on the part of the

alliding    vessel,   and    is   not   a   presumption   regarding   either   the

question of causation (either cause in fact or legal cause) or the

percentages of fault assigned parties adjudged negligent.” In re Mid-

South Towing Co., 418 F.3d 526, 532 (5th Cir. 2005) (footnotes

omitted).    As in any negligence case, the plaintiff in a maritime

allision case bears the burden of proving by a preponderance of the

evidence that the defendant’s negligence caused the alleged damages.

See Torch Operating Co. v. M/V BLANCHE CANDIES, Civ. A. No. 92-2282,

1994 WL 320992, at *4 (E.D. La. June 28, 1994).

     In the pending case, the District Court concluded that “the

defendant failed to rebut the presumption of fault, on the part of the

tug and barge, for: (a) striking the plaintiffs’ bulkhead structure,

through the negligent operation of the vessel; and (b) causing the

bulkhead structure’s collapse.” Zerega Avenue Realty, 2007 WL 3125318,

at *6.      Applying the Oregon rule’s presumption to the issue of

causation was error.        The burden remained on Zerega and Todino & Sons

to establish that the allision resulting from Hornbeck’s negligent

operation of the tug and barge caused the alleged damages.                     The

improper use of the Oregon rule to spare the Plaintiffs-Appellees the
                                        -12-
burden of proving that the allision, resulting from the Defendants-

Appellants’ negligence, caused the alleged damages requires a remand.

III. Preclusion of Hornbeck’s Expert Testimony

      We turn now to Hornbeck’s challenge to the preclusion of its

expert witnesses.      Hornbeck argues that the District Court exceeded

its discretion in precluding sua sponte the testimony of Hornbeck’s

experts Ellman and Power due to Hornbeck’s failure to comply with an

order of the Court dated March 9, 2006.          That order stated that “on or

before March 22, 2006, the parties shall provide to the Court such

information as they reasonably believe will enable the Court to

fulfill the gatekeeping responsibilities imposed upon it by the

Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509

U.S. 579, 113 S. Ct. 2786 (1993).”            On March 21, one day before the

deadline, Hornbeck filed a motion in limine to preclude Zerega from

offering the expert opinion of Steven Schneider as to causation and

damages.     Zerega neither filed a motion in limine nor submitted any

other documents concerning its expert witnesses on or before the March

22   deadline.   On    March   31,    after   the   deadline,   Zerega   opposed

Hornbeck’s    motion    by   filing    papers,   which   included   Schneider’s

declaration describing his qualifications and the basis for his

opinions.    On May 31, Hornbeck filed affidavits containing the direct

testimony of four prospective witnesses, including Ellman and Power,

in accordance with another of the Court’s pretrial orders.               On June

12, the Court issued an order precluding Hornbeck from calling its two
                                       -13-
expert witnesses on the basis that “neither the docket sheet                     . . .

nor the Court’s chamber’s file contains any record of submissions

having been made by Hornbeck, in accordance with the Court’s March 9,

2006 order, that would have enabled the Court to determine, as

required by Daubert, the propriety of permitting Messrs. Ellman and

Power to present opinion testimony.”

     We review the District Court’s preclusion order for abuse of

discretion.    See    Softel,    Inc.      v.    Dragon    Medical   and   Scientific

Communications,      Inc.,    118   F.3d    955,    961    (2d   Cir.   1997).     “In

determining whether a district court has exceeded its discretion, we

consider the following factors: (1) the party’s explanation for the

failure to comply with the discovery order; (2) the importance of the

testimony of the precluded witness; (3) the prejudice suffered by the

opposing party as a result of having to prepare to meet the new

testimony; and (4) the possibility of a continuance.” Id. (citing

Outley v. City of New York, 837 F.2d 587, 590-91 (2d Cir. 1988)).

     Although the trial judge is accorded considerable discretion in

enforcing its pretrial orders, we conclude that the order to preclude

Hornbeck’s    two    expert   witnesses         exceeded   the   discretion   of   the

District Court.        Initially we note that the March 9 order was

susceptible to some misunderstanding, stating its requirement in terms

of what the parties themselves considered to be required for the Court

                                        -14-
to meet its Daubert obligation.4           More significantly, although both

parties failed to comply with the March 9 pretrial order with respect

to   their     own   witnesses,   only   Hornbeck     was   sanctioned   with    the

preclusion order.       Zerega was permitted to elicit the expert opinion

of Schneider, even though the documents Zerega submitted to explain

the basis for Schneider’s opinions were filed after the Court’s

deadline.       Moreover, Zerega was also permitted to call White to

testify as to damages, even though Zerega did not inform the Court of

its intention to call White until May 25.

      Furthermore, the testimony of Ellman was critical to Hornbeck’s

defense on the issue of causation.              Ellman would have offered an

opinion, based on his inspection of the bulkhead and the barge on

December 9, 2002, that the bulkhead collapse was caused by horizontal

forces applied from the direction of the land against a deteriorated,

unattached,      and   undermined   platform    and   not   by   a   barge   strike.

Without Ellman’s testimony, the opinion of Zerega’s expert Schneider

on the critical issue of causation went uncontroverted.                Power would

      4
          The parties’ conduct appears to demonstrate some misunderstanding

of the March 9 order by both sides.         It was reasonable for Hornbeck to

believe that the order required the parties to make any Daubert

challenges to their opponent’s prospective experts, which Hornbeck in

fact made in a timely manner.
                                         -15-
have offered an opinion, based on his inspection of the bulkhead, that

the allision did not occur.

      Finally, allowing Ellman and Power to testify would not have

caused prejudice to Zerega.          Zerega had already deposed Ellman and

Power during discovery, and since they were prepared to testify, there

would have been no need for a continuance.

      For these reasons, we conclude that it was an abuse of discretion

to preclude Ellman and Power from testifying.              On remand, Ellman and

Power should be permitted to testify.

IV. Other Evidentiary Rulings

      Hornbeck’s remaining arguments, challenging a number of the

District Court’s evidentiary decisions, lack merit. Hornbeck contends

that the Court should have precluded the testimony of Schneider as

unreliable    and,    in   the   absence   of    his   testimony,    dismissed   the

complaint for failure to prove that the allision caused the collapse.

The decision to admit expert testimony is left to the broad discretion

of the trial judge and will be overturned only when manifestly

erroneous. See Salem v. U. S. Lines Co., 370 U.S. 31, 35 (1962);

Boucher v. U.S. Suzuki Motor Corp., 73 F.3d 18, 21 (2d Cir. 1996).

Our   Court   has    stated   that   a   trial   judge   should     exclude   expert

testimony if it is speculative or conjectural or based on assumptions

that are “so unrealistic and contradictory as to suggest bad faith” or

to be in essence “an apples and oranges comparison.” Boucher, 73 F.3d

at 21 (internal quotation marks omitted).              “[O]ther contentions that
                                         -16-
the assumptions are unfounded go to the weight, not the admissibility,

of the testimony.” Id. (internal quotation marks omitted).

     Hornbeck’s contentions are of the latter variety.                      Hornbeck

argues     that   Schneider’s     testimony     should    have   been     barred   as

unreliable because he did not inspect the collapse of the bulkhead

until August 2005, performed no engineering calculations, and provided

nothing    approaching     an    informed    opinion     based   upon    engineering

principles. While these shortcomings may diminish the probative value

of Schneider’s testimony, it was not erroneous for the Court to admit

this testimony, which was otherwise based on witness statements,

Schneider’s inspections of the bulkhead structure from 2001 to 2002,

drawings and photographs of the bulkhead, reports and videotapes

prepared    by    the   defendants,    and    approximately      thirty    years    of

engineering experience with marine structures.

     Hornbeck also challenges the Court’s exclusion of photographs

purportedly showing sinkholes in the bulkhead that Hornbeck sought to

introduce through Christopher Todino.             At his pretrial deposition,

Todino testified that the photographs showed the Zerega property

before the allision.       The Court sustained Zerega’s objections to the

admission of the photographs for lack of a proper foundation.

     The    standard    for     admissibility   of     photographs      requires   the

witness to recognize and identify the object depicted and testify that

the photograph is a fair representation of what it purports to

portray. See Kleveland v. United States, 345 F.2d 134, 137 (2d Cir.
                                       -17-
1965).      Although Todino’s witness identified the photographs as

“pictures of the relieving platform at 1000 Zerega Avenue,” counsel

failed to follow up with the customary question as to whether the

photographs fairly and accurately portrayed the area shown.         The

objection for lack of a proper foundation was therefore properly

sustained.5

     Finally, Hornbeck argues that the District Court improperly

refused to admit the testimony and email of John Bowie, an employee of

Hornbeck, who received a report from Laura Bruno about the allision.

For the purpose of impeaching Bruno, Hornbeck sought to introduce her

hearsay statement to Bowie that no one at Zerega saw the barge strike

the bulkhead and that no one identified the name of the barge until

the name was obtained from the operator of the Unionport Bridge.    The

Court sustained Zerega’s objection to the testimony of Bowie on the

ground that it was hearsay, and rejected Hornbeck’s argument that the

statement was admissible as an admission because Laura Bruno was a

party to the action.    We conclude that the statement was admissible

under Federal Rule of Evidence 801(d)(2)(D) because Bruno, as vice-

president of Todino & Sons, was the agent of a party to the action

acting within the scope of her employment.   This error, however, was

     5
         It would have been preferable for the District Court, when

discussing the foundation issue with counsel at sidebar, to have

offered the helping hand of a properly framed follow-up question.
                                -18-
harmless because three eye-witnesses testified to feeling the impact

of the allision and immediately seeing the tug and barge pulling away,

and the District Court found their testimony to be credible.

V. Remedy

      The errors in applying the Oregon rule to the issue of causation

and in excluding Hornbeck’s expert witnesses, Ellman and Power,

require a remand.      However, the issues of Hornbeck’s negligence and

the   amount   of   damages    need    not   be    retried.    Upon    remand,     the

Magistrate Judge should retry only the factual issue of whether the

allision occurred and the issue of causation, with the burden of proof

on the Plaintiffs.      In doing so, the Magistrate Judge should make

distinct determinations as to whether the allision, if it occurred,

has been shown to have caused damage to the bulkhead and to the office

building.    If causation is found, as to either or both structures, the

findings already made as to the amount of damages sustained by both

structures may stand.         Since this was a bench trial, the Magistrate

Judge may rely on the existing record, supplemented by Ellman’s and

Power’s testimony and whatever additional evidence the Magistrate

Judge permits. The Defendants-Appellants’ request for reassignment to

a different judge is denied.

                                      Conclusion

      The   judgment   is   reversed,     the     award   vacated,    and   the   case

remanded for further proceedings consistent with this opinion.

                                         -19-