Opinion
Civil No. 03-6039-TC.
June 17, 2004
ORDER
Defendant, in a motion for summary judgment, asserted the affirmative defense of limitation of liability pursuant to the Limitation of Liability Act. The court found that the defense was timely raised, but ruled that the defense would be considered, if necessary, after the jury had considered the merits of plaintiff's claims and determined damages. Order of October 15, 2003 (#22). The jury having reached a verdict for plaintiff, and having awarded damages in excess of the value of the vessel on which he served and its cargo at the time of his injury, it is now the court's obligation to consider whether the limitation of liability defense should be applied.
The parties disagree about the potential value of the vessel and its cargo; plaintiff asserts that it is at least $2,250,000, while defendant asserts it to be between $1,400,000 and $1,650,000. In any event, my determination that limitation is inappropriate under the facts of this case makes it unnecessary for me to reach the valuation question.
BACKGROUND
Based on the stipulations of the parties and the evidence that was presented at trial, I find the following facts.
Although I have independently considered the evidence in determining the facts for purposes of the limitation defense, I note that my findings are consistent with the jury's verdict that defendant was negligent.
The F/V SILVER SPRAY was built in 1990 under the supervision of Bill Jacobsen, one of the founders of defendant Silver Spray Seafoods, L.L.C., for the purpose of fishing and crabbing the Alaska fisheries for the benefit of the company. Jacobsen, who served as a representative of defendant at the jury trial of this case, is described as the manager of the SILVER SPRAY, and he was involved in many aspects of designing of the vessel, providing input on such matters as the location of the wheelhouse, the height of the deck rails, the type of pots that would be used and the way they would be launched. As the "managing owner" of the vessel, Jacobsen was involved in establishing the operating procedures used on the vessel, and hired and fired the vessel's captain. He turned over the hiring and firing of crew members, as well as their training, to the vessel's captain. He did not require that the captain keep a detailed ship's log, nor did he require that the captain report crew injuries to him unless the captain deemed the injury to be significant.
The first captain of the SILVER SPRAY that Jacobsen hired, Terrance Greenawald, came on as soon as the boat was launched. After taking several trips on the vessel, Greenawald requested that Jacobsen have video cameras and monitors installed to monitor the deck from the wheelhouse because there was a blind spot near the pot launcher that he could not observe from his station. The equipment was installed, but at some point failed, possibly due to salt-water corrosion. The camera equipment was not repaired until after plaintiff was injured.
Captain Greenawald had reason to want the cameras available: in his nine years as captain, he had witnessed somewhere between thirty and fifty occasions where a seaman had his foot dangerously close to a loop of line, including one time where the seaman actually had his boot yanked off after getting his foot caught in a line. Bill Jacobsen was aware of the potential hazard of working so close to the lines; in 1972, while he was a crewman on a different fishing vessel, he saw a crewmate caught by the line as a pot was launched overboard. In that instance, Jacobsen was able to cut the line before the crewman was pulled overboard.
A pot weighs approximately 600 pounds. Thus it presented an extreme danger for a crewman to be caught in a line attached to a pot as it was being launched.
In 1999, Jacobsen fired Greenawald for falling asleep at the wheel and failing to set the watch alarm, causing the SILVER SPRAY to collide with some shallow rocks. Jacobsen hired Clint Parks, plaintiff's uncle, as the SILVER SPRAY's new captain.
Plaintiff Damon Renfrow first worked aboard the SILVER SPRAY during the summer of 1998, between his junior and senior years in high school. At that time, the vessel was fishing for cod in Alaska, and Renfrow worked in the on-board processor for a trip and as a baiter for a trip. His training, such as it was, was "on-the-job" training, where he briefly observed someone doing the job he was to be assigned, and/or had it described to him, and then was expected to do it himself. After the two trips had been completed, he returned to Oregon and completed his senior year of high school.
After he graduated from high school, Renfrow returned to the vessel in June 1999, where he again worked as a baiter and then as an extra deckhand, earning a small crew share while assisting the full crew members. He also had some brief time working the block, where he would feed the block (put the line in it), pull the buoys aboard, and coil the line as the pots came aboard. On that trip, the pots were being picked up and not launched. Plaintiff did not work as a block man again until the trip in which he was injured. Again, his training was brief and "on-the-job."
In December 1999, Renfrow was a full crew member on the SILVER SPRAY as it departed Newport, Oregon to travel to Alaska. It arrived in Alaska in January and remained there through the time plaintiff was injured, on February 19, 2000.
On that day, crewman Dan Delaurentis was operating the hydraulic controls for the pot launcher, while Renfrow was on the block. Renfrow's job as block man on this trip, which, unlike his other experience as block man, involved both recovering and launching pots, was to feed the incoming line into the block, pull the buoys aboard, coil the line, and make the pots ready for relaunching after they had been emptied and re-baited. He also assisted in pushing the pot off the launcher when it launched, and threw the buoys after the pot was in the water. The launching procedure on the SILVER SPRAY was such that the block man necessarily worked near the line as the pot was being launched, and the hydro man needed to look away — at least briefly — as he launched the pots, as the hydraulic controls were not facing the pot but faced approximately ninety degrees away.
On the launching that resulted in plaintiff's injury, Delaurentis looked away for a couple of seconds after making sure Renfrow had not stepped into a coil of line. Renfrow was walking over to the pot to lift it over one of the J-hooks that he believed the pot was hung up on. Delaurentis, facing the controls, launched the pot, and when he looked back at the launcher Renfrow's leg was caught up in the line trailing the pot and Renfrow was quickly "roped" tight to the ship's rail. Nearby crewman acted quickly to cut the line from both sides, freeing Renfrow from the entanglement, but the damage had been done. The SILVER SPRAY headed for Sand Point, Alaska, with all speed, and upon arrival there approximately seven hours later he was flown by jet to Anchorage. He underwent immediate emergency surgery, but the attempt to save his crushed leg was unsuccessful and ultimately his injuries necessitated an above-the-knee amputation.
Plaintiff tried his case to a jury, which found defendant negligent but attributed fifty-percent of plaintiff's injury to his own contributory negligence. The jury found that the SILVER SPRAY was not unseaworthy. It assessed plaintiff's damages at $4,582,000, with economic damages of $1,832,000 and non-economic damages of $2,750,000. After reducing the award based on the jury's finding of contributory negligence, the award to plaintiff — absent a limitation of liability — would be $2,291,000.
DISCUSSION
The Limitation Act provides, in relevant part, that:
The liability of the owner of any vessel, whether American or foreign . . . for any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred, without the privity or knowledge of such owner or owners, shall not . . . exceed the amount or value of the interest of such owner in such vessel, and her freight then pending.46 App. U.S.C. § 183(a). The court conducts a two-part analysis to determine whether liability is to be limited:
(1) what, if any, acts of negligence or conditions of unseaworthiness caused the accident, and (2) whether the vessel owner had knowledge or privity of those same acts of negligence or conditions of unseaworthiness.Nelson v. Fairfield Industries, Inc., 1993 A.M.C. 370, 1992 WL 472366, *1 (D.Or. 1992) (citing In re Sause Bros. Ocean Towing, 769 F. Supp. 1147, 1151 (D.Or. 1991).
The parties disagree on the effect of the jury's general finding of negligence on the court's independent task of determining whether there was privity or knowledge of the owner thereto. Defendant, citing Nelson, supra, and Inacio v. Northern Lights, 1986 A.M.C. 252 (D.Mass. 1983), inter alia, argues that the court should independently come to its own conclusion on whether negligence was proven and whether defendant had privity or knowledge of the conditions leading to the negligence. Plaintiff, in contrast, cites to Avera v. Florida Towing Corp., 322 F.2d 155 (5th Cir. 1963), inter alia, for the argument that as the jury found the defendant negligent, it is on defendant to now prove that it was without privity or knowledge on each and every charge of negligence. I agree with the decision of Judge Jones in theNelson case that the court should make independent findings on the question of negligence, based on the evidence presented at trial. Whether or not it is defendant's burden to prove a lack of privity is somewhat academic under the circumstances in this case, as I find, based on the evidence presented, that defendant was in privity with many of the conditions in which I find that defendants were negligent and which were contributors to plaintiff's injury.
Plaintiff alleged twenty-one specific grounds of negligence in his trial memo, and submitted evidence supporting them to the jury during trial. Based on the evidence presented, I find that plaintiff proved defendant's negligence in the following particulars:
The verdict form provided to the jury was a general verdict form, and did not specifically delineate the twenty-one grounds. However, as Judge Jones stated in Nelson, the court's role is to independently find whether defendant was negligent, consistent with the jury's verdict, and then determine whether the owner or owners had privity or knowledge of the negligent acts or conditions. As I find that defendant was negligent in many of the particulars alleged by plaintiff, my findings are clearly consistent with the jury's finding that defendant was negligent. That the jury found plaintiff contributorily negligent does not detract from its finding the defendant was negligent. Nor does the fact that it found the SILVER SPRAY was not unseaworthy compel the finding that the jury necessarily found that only ship procedures were negligently performed; as noted by plaintiff, the causation standard for negligence was substantially lower than that for unseaworthiness, and the jury could have found for the plaintiff on each allegation of negligence and still found the vessel legally seaworthy.
1. In providing a vessel with a crab pot launcher which, when elevated, was too high practically to throw a coil of line on top of a crab pot to be launched;
2. In providing a vessel where the hydraulic launcher controls were located behind the launcher operator;
3. In providing a vessel where the hydraulic launcher controls were not positioned to allow the launcher operator to view the launcher controls and the launcher at the same time;
4. In failing to maintain in working condition the cameras and monitors by which the captain could view the work area where pots are launched and retrieved;
5. In failing to establish safe practices, operations and procedures aboard the SILVER SPRAY for launching and retrieving crab pots;
6. In failing to monitor practices, operations and procedures for launching crab pots aboard the SILVER SPRAY to ensure that they were being conducted safely;
7. In failing to provide adequate training to crew members concerning safe practices, operations and procedures regarding launching and retrieving crab pots;
8. In using a dangerous procedure requiring that Renfrow perform his duties in a work area exposed to lines attached to crab pots being launched from the vessel;
9. In using a dangerous procedure in which pots were launched without all crew members clear of the area and line where crab pots were being launched;
10. In using a dangerous procedure requiring that the crew member closest to the lines attached to the crab pots being launched push the pots over the side.
I find that on all of these grounds, defendants had "privity or knowledge" of the negligent acts. As Judge Jones noted in Nelson, Schoenbaum's treatise on admiralty is enlightening in evaluating what constitutes privity or knowledge:
Even were the owners of the vessel without privity or knowledge, certainly all of these findings of negligence were within the privity and knowledge of the vessel's captain. As described by Schoenbaum, the privity or knowledge of the master of the vessel is "deemed conclusively" to be the privity or knowledge of the owner in cases of crew injury. See infra;see also 46 App. U.S.C. § 183(e). I find it particularly appropriate to deem such privity or knowledge to the owners in this case, where it was undisputed that the managing owner consciously delegated almost all operational control of the vessel to the captain. On one of the particulars of negligence, however, I would make one additional note, for it is an item that the owners, through Jacobsen, specifically denied actual knowledge of: I have found that defendant was negligent in failing to maintain the onboard cameras such that the captain could view the launcher and crew working near it. These cameras did not suddenly become inoperable on the trip in which Renfrow was injured in a way impossible for the owners to know or predict. Rather, the cameras had been essentially non-functional for some time due to saltwater buildup on the lenses and saltwater corrosion of the system, and were inadequate to get a detailed view of the launcher in any event. See, e.g., Transcript of 4/21/04 Proceedings (#86) at 15 (testimony of Clinton Parks). Rather than being the sort of knowledge known only to the captain that should not be imputed to the owners,see Waterman Steamship Corp. v. Gay Cottons, 414 F.2d 724, 734-735 (9th Cir. 1969), knowledge of the functionality and adequacy of cameras specifically requested by a captain as a safety issue is the sort of knowledge that a reasonable owner should have known with prudent inspection. Id. at 739.
The determination of whether the shipowner has established a lack of privity and knowledge of the fault involves a delicately balanced inquiry. Privity and knowledge exist where the owner has actual knowledge, or could have and should have obtained the necessary information by reasonable inquiry or inspection. This is of necessity a "reasonable man" test, applied on a case by case basis considering all of the circumstances. The real problem is to determine whether the shipowner or persons acting for him acted reasonably under the circumstances. A principal reason for denying limitation is because management failed to provide proper procedures for the maintenance of equipment, the training of the crew, or adequate checks to ensure the implementation of established maintenance and safety procedures. Where the shipowner and supervisory personnel are found to have acted reasonably, limitation will be granted.
For purposes of establishing privity or knowledge regarding limitation as to personal injury and death claimants, but not for property loss claimants, the privity or knowledge of the master of the vessel is deemed conclusively the privity or knowledge of the owner.
There is an unmistakable trend in the judicial decisions to interpret the "privity or knowledge" requirement of the Limitation Act to impose a heavy burden on shipowners and operators to exercise a high degree of control and supervision so as to avoid marine casualties. THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW § 15-6 (4th ed. 2004). Here, the negligent acts or omissions included the failure to properly train, the failure to provide for the appropriate maintenance of equipment (the cameras), and the failure to ensure the implementation of safe procedures, as well as design flaws that increased the likelihood of injuries such as the one suffered by plaintiff. All of these were within the privity and knowledge of at least the managing owner of the vessel, Bill Jacobsen, as he either did or should have had knowledge of each of them. The owners' failure to correct or mitigate them was a factor in bringing about plaintiff's injury, and application of the Limitation Act to these facts would be inappropriate.