Court Opinion

ID: 1007149
Source: CourtListenerOpinion
Date Created: 2013-07-04 19:20:59.924365+00
Date Added: 2024-06-11T09:13:59.027850
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

JOHN FERNANDEZ, III,                    
                  Plaintiff-Appellee,
                 v.
JAMES B. HAYNIE, d/b/a Financial
Solutions, a/k/a Jim Haynie,
individually; U. S. ENTERPRISES,
L.C., d/b/a U. S. Vessels, d/b/a
Financial Solutions, a/k/a U. S.
Enterprises, LLC,
              Defendants-Appellants,
                and
JAMES K. HAYNIE, d/b/a Financial                 No. 01-1831
Solutions, a/k/a Kevin Haynie,
individually; TOMMY K. HILL, d/b/a
The Covenant Group, d/b/a U.S.
Vessel Services, Incorporated, d/b/a
U. S. Vessels, individually; J. M.
CARON, d/b/a The Covenant Group,
d/b/a U. S. Vessel Services,
Incorporated, d/b/a U. S. Vessels,
individually; U. S. VESSEL SERVICES,
INCORPORATED, d/b/a The Covenant
Group, in its own behalf,
                         Defendants.
                                        
            Appeal from the United States District Court
       for the Eastern District of Virginia, at Newport News.
                Henry C. Morgan, Jr., District Judge.
                              (CA-00-9)

                      Argued: February 27, 2002
                      Decided: March 25, 2002
2                       FERNANDEZ v. HAYNIE
       Before NIEMEYER and LUTTIG, Circuit Judges, and
       Henry M. HERLONG, Jr., United States District Judge
      for the District of South Carolina, sitting by designation.

Affirmed by unpublished per curiam opinion.

                             COUNSEL

ARGUED: William Frederick Jones, WILLIAMS, MULLEN,
CLARK & DOBBINS, Richmond, Virginia, for Appellants. Philip
Norton Davey, DAVEY & BROGAN, P.C., Norfolk, Virginia, for
Appellee. ON BRIEF: William D. Bayliss, WILLIAMS, MULLEN,
CLARK & DOBBINS, Richmond, Virginia, for Appellants.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                             OPINION

PER CURIAM:

   James B. Haynie ("Haynie") appeals from two orders of the district
court. First, Haynie appeals the district court’s denial of his motion
to dismiss for lack of subject matter jurisdiction. Second, Haynie
appeals the district court’s order entering judgment and awarding
attorneys’ fees to John Fernandez, III ("Fernandez") following a
bench trial on the merits.

                                  I.

  During the time relevant to this lawsuit, Fernandez owned three
commercial fishing boats. One of Fernandez’s boats was the F/V Cap-
                         FERNANDEZ v. HAYNIE                          3
tain Layman ("Layman"). On February 1, 1998, a crewman aboard the
Layman named Chauncey Pitts ("Pitts") broke his arm. Upon assert-
ing a claim under his marine insurance for Pitts’ injury, Fernandez
learned that Haynie, his insurance broker, had misled him concerning
the nature and quality of his insurance coverage.

   In early 1997, about one year before Pitts’ injury, Fernandez con-
tracted with Haynie, an insurance broker with U.S. Enterprises, L.C.
("U.S. Enterprises"), to procure marine insurance on his fishing boats.
Haynie originally placed Fernandez’s policy with an "A" rated Ameri-
can insurance company. Later that year, the "A" rated insurance com-
pany informed Haynie that it would not renew his book of business.
After informing Fernandez of the non-renewal, Fernandez stressed to
Haynie that his insurance must be placed with another "A" rated
domestic company. For the time being, Haynie placed Fernandez’s
insurance with an unrated, offshore carrier with the understanding that
Haynie would soon find a suitable carrier.

   However, unknown to Fernandez, Haynie eventually transferred
Fernandez’s insurance to LIC Liberty Insurance Company
("Liberty"), an unrated company organized under the Exempt Compa-
nies Act of Aruba, The Netherlands Antilles. Also unknown to Fer-
nandez was the fact that Haynie and two other individuals were
actively involved in a venture to build their own marine insurance
business. The loss of Fernandez’s business would have dealt a signifi-
cant blow to Haynie’s efforts.

   When Fernandez attempted to file a claim concerning Pitts’ inju-
ries, he discovered the switch to Liberty. Pitts eventually filed a law-
suit against Fernandez to recover for his injuries on board the
Layman. Liberty failed to provide Fernandez with a defense, and the
first attorney who handled Fernandez’s case was unable to make con-
tact with Liberty.

                                  II.

   Haynie first challenges the district court’s denial of his motion to
dismiss for lack of subject matter jurisdiction. Haynie argues that the
district court improperly asserted admiralty jurisdiction over the case
because the contract to procure marine insurance is not maritime.
4                        FERNANDEZ v. HAYNIE
After a de novo review of the nature and subject matter of the contract
at issue, the court finds that the contract is maritime in nature and the
district court properly asserted admiralty jurisdiction over the case.
See Exxon Corp. v. Central Gulf Lines, Inc., 500 U.S. 603, 612
(1991).

                                  III.

   Haynie also challenges the district court’s finding of fraud and
award of attorneys’ fees to Fernandez. After conclusion of the trial,
the district court allowed Fernandez to amend his pleadings to con-
form to the evidence to state a viable cause of action for fraud. See
Fed. R. Civ. P. 15(b). The district court found that Haynie’s conceal-
ment of the switch of Fernandez’s insurance to Liberty while pursuing
his goal of creating his own marine insurance business constituted
fraud. Based on its finding of fraud, the district court awarded Fernan-
dez attorneys’ fees.

   We find that the district court did not abuse its discretion in allow-
ing Fernandez to amend his pleading to conform to the evidence. See
Quillen v. International Playtex, Inc., 789 F.2d 1041, 1043 (4th Cir.
1986) (stating that district court’s decision to allow plaintiff to amend
pleadings to conform to the evidence under Rule 15(b) is reviewed for
abuse of discretion). The district court found that Haynie committed
fraud under Virginia law. "[I]n an admiralty case, a court applies fed-
eral common law and can look to state law in situations where there
is no admiralty law on point." Ost-West-Handel Bruno Bischoff
GMBH v. Project Asia Line, Inc., 160 F.3d 170, 174 (4th Cir. 1998);
see also Su v. M/V Southern Aster, 978 F.2d 462, 472-73 (9th Cir.
1992) (applying state law definition of fraud in admiralty). After a
review of the district court’s determination of this issue, we find it to
be without reversible error. As to the district court’s award of attor-
neys’ fees, while such motions are granted infrequently, the "district
court has wide discretion in deciding motions for attorneys fees in
admiralty cases." Ost-West-Handel, 160 F.3d at 177. We cannot say
that under the circumstances of this case the district court abused its
discretion in its award of attorneys’ fees to Fernandez. We therefore
affirm the judgment of the district court.

                                                            AFFIRMED