Lyons v. Rienzi & Sons, Inc.

863 F.Supp.2d 213

Kelly M. LYONS, Plaintiff,

v.RIENZI & SONS, INC., Defendant.

Rienzi & Sons, Inc., Third–Party Plaintiff,

v.Staten Island Yacht Sales, Inc., Genmar Yacht Group LLC, f/d/b/a Carver Boat Corporation LLC, Marquis Yachts, LLC, Carver Boat Corporation LLC, Donald L. Blount & Associates, Nuvolari–Lenard Naval Design, and Does 1 through 5, Third–Party Defendants.

No. 09–CV–4253.

United States District Court, E.D. New York.

April 12, 2012.

Paul T. Hofmann, Hofmann & Schweitzer, New York, NY, for Plaintiff.

John F. Karpousis, Susan Lee, Freehill, Hogan & Mahar LLP, New York, NY, for Third–Party Plaintiff.

Jeffrey D. Smith, Varnum LLP, Kalamazoo, MI, for Third–Party Defendant Marquis Yachts, LLC.

MEMORANDUM AND ORDER

JACK B. WEINSTEIN, Senior District Judge:

+-------------------+
¦Table of Contents  ¦
+-------------------¦
¦                   ¦
+-------------------+

+------------------------------------------------------------+
¦I. ¦Introduction                                      ¦216  ¦
+---+--------------------------------------------------+-----¦
¦   ¦                                                  ¦     ¦
+---+--------------------------------------------------+-----¦
¦II.¦Facts and Procedural History                      ¦217  ¦
+------------------------------------------------------------+

+----------------------------------------------------------------------------+
¦    ¦A.  ¦The Manufacture of the Brianna  , Her Purchase by Rienzi,  ¦217   ¦
¦    ¦    ¦and Her Warranty                                           ¦      ¦
+----+----+-----------------------------------------------------------+------¦
¦    ¦B.  ¦The Bankruptcy of Genmar and the Creation of Marquis       ¦218   ¦
+----+----+-----------------------------------------------------------+------¦
¦    ¦C.  ¦The Approval Order and the Asset Purchase                  ¦218   ¦
+----+----+-----------------------------------------------------------+------¦
¦    ¦D.  ¦Subsequent Bankruptcy Proceedings and Relief from the      ¦220   ¦
¦    ¦    ¦Automatic Stay                                             ¦      ¦
+----+----+-----------------------------------------------------------+------¦
¦    ¦E.  ¦Hearing on Motion for Summary Judgment                     ¦220   ¦
+----------------------------------------------------------------------------+

+----------------------------------------------------------------------------+
¦    ¦                                                               ¦       ¦
+----+---------------------------------------------------------------+-------¦
¦III.¦Law                                                            ¦221    ¦
+----------------------------------------------------------------------------+

+------------------------------------------+
¦  ¦A.¦Summary Judgment Standard       ¦221¦
+--+--+--------------------------------+---¦
¦  ¦B.¦Choice of Law                   ¦221¦
+--+--+--------------------------------+---¦
¦  ¦C.¦Successor Liability             ¦222¦
+------------------------------------------+

+----------------------------------------------------------------------------+
¦    ¦    ¦1. ¦Effect of Bankruptcy Sale Order on Successor Liability ¦222   ¦
+----+----+---+-------------------------------------------------------+------¦
¦    ¦    ¦2. ¦Common–Law Background                                  ¦223   ¦
+----+----+---+-------------------------------------------------------+------¦
¦    ¦    ¦3. ¦The Jones Act, FELA, and Successor Liability: Federal  ¦223   ¦
¦    ¦    ¦   ¦Common Law                                             ¦      ¦
+----+----+---+-------------------------------------------------------+------¦
¦    ¦    ¦4. ¦Admiralty Claims and Federal Common Law                ¦224   ¦
+----------------------------------------------------------------------------+

+--------------------------------------------------+
¦  ¦D. ¦Enforcement of Forum Selection Clauses¦224 ¦
+--------------------------------------------------+

+------------------------------------------------------------+
¦   ¦                                                  ¦     ¦
+---+--------------------------------------------------+-----¦
¦IV.¦Application of Law to Facts                       ¦224  ¦
+------------------------------------------------------------+

+------------------------------------------+
¦  ¦A.¦Preliminary Considerations      ¦224¦
+--+--+--------------------------------+---¦
¦  ¦B.¦Direct Liability                ¦225¦
+--+--+--------------------------------+---¦
¦  ¦C.¦Successor Liability of Marquis  ¦225¦
+------------------------------------------+

+----------------------------------------------------------------------------+
¦    ¦    ¦1. ¦Effect of Limited Relief from Stay on the Approval     ¦225   ¦
¦    ¦    ¦   ¦Order                                                  ¦      ¦
+----+----+---+-------------------------------------------------------+------¦
¦    ¦    ¦2. ¦Successor Liability: Federal Common Law and New York   ¦225   ¦
¦    ¦    ¦   ¦Law                                                    ¦      ¦
+----------------------------------------------------------------------------+

+------------------------------------------------------------+
¦   ¦                                                  ¦     ¦
+---+--------------------------------------------------+-----¦
¦V. ¦Conclusion on Motion for Summary Judgment         ¦226  ¦
+---+--------------------------------------------------+-----¦
¦   ¦                                                  ¦     ¦
+---+--------------------------------------------------+-----¦
¦VI.¦Future Proceedings                                ¦227  ¦
+------------------------------------------------------------+

I. Introduction

Plaintiff, a seafarer, was allegedly injured when he slipped and fell on the deck of the yacht on which he was working. He contends that the cause was a design defect-a slippery surface. He sued the vessel's owner, who claimed against other defendants; plaintiff later added his own claims against the same third-party defendants. They include the manufacturer and the intermediate seller of the yacht.

Raised in this seemingly simple tort case are a variety of areas of procedural and substantive law, including admiralty, insurance, the federal statute intended to protect seafarers, bankruptcy, the state and federal common law of products liability and successor responsibility, and conflict of laws—a veritable jurisprudential bouillabaisse. A central consideration is the overriding national policy requiring the compensation of workers aboard vessels for injuries suffered during the course of their employment.

This memorandum and order should be read in conjunction with the order granting, for lack of personal jurisdiction, the motion to dismiss of third-party defendant Nuvolari–Lenard Naval Design. See Memorandum and Order, Lyons v. Rienzi & Sons, Inc., 856 F.Supp.2d 501, No. 09–CV–4253, 2012 WL 1203688 (E.D.N.Y. Apr. 11, 2012), CM/ECF No. 133.

Kelly Lyons sued defendant Rienzi & Sons, Inc. (“Rienzi”), alleging that he was employed by Rienzi as the skipper and sole deckhand of a yacht—the Brianna—owned by defendant, and that, in August 2008, he was injured after slipping and falling while working aboard the vessel. See Photographs of Yacht, Lyons v. Rienzi & Sons, Inc., No. 09–CV–4253 (E.D.N.Y. Apr. 3, 2012), CM/ECF No. 130–5; see also Ex. B (showing the portion of the yacht where plaintiff allegedly fell).

Lyons contends that his injuries are attributable to Rienzi's negligence. Asserted is a claim brought pursuant to the Jones Act, 46 U.S.C. § 30104 et seq. Lyons also presses claims for maintenance and cure pursuant to general maritime law. See Complaint, Lyons v. Rienzi & Sons, Inc., No. 09–CV–4253 (E.D.N.Y. Oct. 2, 2009), CM/ECF No. 1.

Rienzi later brought a third-party complaint pursuant to Rule 14 of the Federal Rules of Civil Procedure against the manufacturer, the intermediate seller, and the designer of the Brianna, as well as third-party defendant and present movant Marquis Yachts, LLC (“Marquis”), an alleged successor to the manufacturer. Rienzi asserted various product liability claims against Marquis in its third-party complaint, contending that if it were held to be liable to Lyons, the third-party defendants, including Marquis, should be required to contribute to any judgment against it or to indemnify it entirely. See Third–Party Complaint, Lyons v. Rienzi & Sons, Inc., No. 09–CV–4253 (E.D.N.Y. Jan. 14, 2011), CM/ECF No. 14. Lyons, the original plaintiff, then brought his own claims against the third-party defendants. See Plaintiff's Rule 14(a) Claims Against Third–Party Defendants, Lyons v. Rienzi & Sons, Inc., No. 09–CV–4253 (E.D.N.Y. June 10, 2011), CM/ECF No. 42; see alsoFed.R.Civ.P. 14(c) (impleader of admiralty or maritime claims); Burke v. Quick Lift, Inc., 464 F.Supp.2d 150, 161 n. 10 (E.D.N.Y.2006).

Jurisdiction over Lyons' Jones Act claim is exercised pursuant to 28 U.S.C. § 1331; his complaint includes a jury trial demand. See, e.g., O'Donnell v. Great Lakes Dredge & Dock Co., 318 U.S. 36, 43, 63 S.Ct. 488, 87 L.Ed. 596 (1943); Holloway v. Pagan River Dockside Seafood, 669 F.3d 448, 451 (4th Cir.2012). Jurisdiction over Lyons' claims for maintenance and cure, and Rienzi's third-party claims, is exercised pursuant to 28 U.S.C. § 1367. See Romero v. Int'l Terminal Operating Co., 358 U.S. 354, 380–81, 79 S.Ct. 468, 3 L.Ed.2d 368 (1959).

Marquis filed the present motion for summary judgment in February 2012, seeking dismissal of the claims of Lyons and Rienzi. It contends that any claims asserted against it directly should be dismissed since it was not the designer, seller, or manufacturer of the Brianna; it also argues that it should not be held liable as a successor to the vessel's manufacturer, since it did not assume the liability asserted against it when it purchased the manufacturer's assets.

For the...