Ne. Research Llc v. Vessel

790 F.Supp.2d 56

2011 A.M.C. 645

NORTHEAST RESEARCH, LLC, Plaintiff,

v.ONE SHIPWRECKED VESSEL, HER TACKLE, EQUIPMENT, APPURTENANCES and CARGO, located within two nautical miles of a circle with the center point at the coordinates 42 degrees 33 minutes North Latitude, and 79 degrees 36 minutes West Longitude, in rem Defendant,State of New York, Claimant.

Case No. 04–CV–645A.

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

March 25, 2011.

John Kuzdale, Dunkirk, NY, John F. Prescott, Jr., Depew, NY, Peter Hess, Law Office of Peter E. Hess, Esq., Wilmington, DE, for Plaintiff.David Joseph State, NYS Attorney General's Office, Buffalo, NY, for Defendant.

DECISION AND ORDER

INTRODUCTION

RICHARD J. ARCARA, District Judge.

Plaintiff NorthEast Research, LLC, commenced this admiralty in rem action by filing a complaint against One Shipwrecked Vessel located in 170 feet of freshwater in the New York waters of Lake Erie asserting title to the vessel under maritime law.¹ The State of New York intervened and filed an answer asserting title to the vessel under the Abandoned Shipwreck Act of 1987, 43 U.S.C. §§ 2101 et seq. (“ASA”), the Submerged Lands Act (“SLA”), 43 U.S.C. § 1302 and various provisions of New York State Law.

The State filed a motion for summary judgment asserting ownership under the ASA. Plaintiff cross-moved for partial summary judgment seeking a salvage award under maritime law, and asserting that the State has failed to prove its claim under the ASA.

On May 27, 2010, Magistrate Judge Leslie G. Foschio, to whom this matter was referred, issued a Report and Recommendation recommending that the State's motion for summary judgment be granted, that the plaintiff's motion be denied, and that title be awarded to the State under the ASA. Alternatively, the Magistrate Judge found that title should be awarded to the State under New York's Education Law and New York Public Lands Law, but that plaintiff was not entitled to any salvage award.

Plaintiff filed objections to the Report and Recommendation, and the State filed a response. On September 9, 2010, this Court held oral argument. For the reasons stated, the Court grants summary judgment in favor of the State under the ASA, and denies plaintiff's motion for a salvage award.

BACKGROUND ²

Plaintiff is a Massachusetts limited liability company with its principal place of business in Dunkirk, New York, and is engaged in the business of locating and salvaging submerged shipwrecks. Plaintiff asserts title to the vessel, its tackle, equipment, appurtenances and cargo, under maritime law. The vessel is a Great Lakes schooner (sometimes referred to herein as the “Dunkirk Schooner”), a two-masted wooden sailing ship, approximately 80 feet in length on deck and 19 feet in beam, and is embedded in submerged lands of New York in the eastern basin of Lake Erie, near Dunkirk, New York. According to plaintiff, the vessel is a schooner built between 1790 and 1810, and lost sometime after 1835 and before 1850. The Dunkirk Schooner rests 170 feet deep in the freshwater of Lake Erie. Because of the depth of water, “technical diving” is required to dive the wreck.³

Plaintiff contends that the Dunkirk Schooner is actually the CALEDONIA, built in 1799 by British North West Trading Company, and used in the fur trade making voyages between Fort Erie, Canada and Mackinac, Michigan. At the outbreak of the War of 1812, the Upper Great Lakes were under British control and the CALEDONIA was conscripted for British military service, converted from a schooner to a brig-of-war, with two square-rigged masts and outfitted with guns, and used to transport British troops. In 1813, an American boarding party captured the vessel for the United States, conscripting the vessel into the United States Army. After the War of 1812, the CALEDONIA was sold to Pennsylvania merchants Rufus Reed (“Reed”) and John Dickson (“Dickson”), who refitted the vessel as a commercial schooner, renamed it the GENERAL WAYNE, and used the vessel to ferry runaway slaves across Lake Erie to freedom in Canada as part of the Underground Railroad. The last documented evidence of the GENERAL WAYNE clearing any Great Lakes port is 1818.

Plaintiff obtained an Assignment of Ownership Interest & Claim of Title from Hannah Reed Mays (“Mays”), a descendant of Rufus Reed (“Mays Assignment”), wherein Mays attempts to convey all of her right, title and interest, if any, in the Dunkirk Schooner to plaintiff. Although other descendants have been found, no others have assigned their potential ownership interest in the CALEDONIA/GENERAL WAYNE to plaintiff. Specifically, the State has provided the Court with an affidavit from Nancy Potter, a descendant of Dickson, wherein she affirms that she and her mother and brother have been contacted by plaintiff requesting that they assign their ownership interest in the vessel to plaintiff, but they have refused to do so. See Potter Affidavit, Dkt. 60.

The State disputes plaintiff's assertions with regard to the identity of the Dunkirk Schooner. According to the State's retained expert, Arthur Cohn, the vessel is not the CALEDONIA/GENERAL WAYNE, but instead a “nameless 1830s schooner that sank carrying grain.” See Cohn Report, Dkt. 47, Exh. B, at ¶ 56. Cohn believes that the amount of cargo recovered from the cargo hold suggests the vessel sank with a full load of grain and hickory nuts while traveling east on Lake Erie, in the fall, when grains in the Midwest are harvested and hickory nuts are plentiful.

The Magistrate Judge determined that it was unnecessary to ascertain the identity of the Dunkirk Schooner because, even if the Dunkirk Schooner was the CALEDONIA/GENERAL WAYNE as plaintiff contends, the State demonstrated title to the vessel under the Abandoned Shipwreck Act of 1987.

DISCUSSION

Pursuant to 28 U.S.C. § 636(b)(1), this Court must make a de novo determination of those portions of the Report and Recommendation to which objections have been made. Upon a de novo review of the Report and Recommendation, and after reviewing the submissions and hearing argument from the parties, the Court adopts Magistrate Judge Foschio's recommendation to grant summary judgment in favor of the State under the Abandoned Shipwrecks Act of 1987, 43 U.S.C. §§ 2101 et seq. (“ASA”).

Under the ASA, the United States asserts title to any abandoned shipwreck that is:

(1) embedded in submerged lands of a State;

(2) embedded in coralline formations protected by a State on submerged lands of a State; or

(3) on submerged lands of a State and is included in or determined eligible for inclusion in the National Register.

43 U.S.C. § 2105(a). Title is then automatically transferred to the State in which the abandoned ship is located. See 43 U.S.C. § 2105(c). Therefore, a state acquires title to a shipwreck under the ASA, when the wreck is: (1) abandoned and (2) falls under one of the three enumerated categories. See Sea Hunt Inc. v. The Unidentified Shipwrecked Vessel or Vessels, 221 F.3d 634, 640 (4th Cir.2000), cert. denied, 531 U.S. 1144, 121 S.Ct. 1079, 148 L.Ed.2d 956 (2001). If title to the Dunkirk Schooner meets the criteria under the ASA, title vests in the State and no salvage is awarded. See Fairport Int'l Exploration v. The Shipwrecked Vessel known as the Captain Lawrence, 177 F.3d 491, 498 (6th Cir.1999) (explaining that post-enactment of the ASA, “[i]f a diver now discovers a long-lost ship embedded in the submerged lands of a State, a finding of abandonment leaves the diver with neither title nor a salvage award....”).

The Magistrate Judge found that it was undisputed that the Dunkirk Schooner is embedded in the submerged lands of New York. See Report and Recommendation, Dkt. No. 62, at 24. Neither party objects to that finding. Therefore, the second element of the State's ASA claim is satisfied. As the first element—abandonment—the parties dispute whether the State has met its burden on that issue.

The ASA does not define the term “abandoned.” In California v. Deep Sea Research, Inc., 523 U.S. 491, 118 S.Ct. 1464, 140 L.Ed.2d 626 (1998), the Supreme Court clarified that “the meaning of ‘abandoned’ under the ASA conforms with its meaning under admiralty law” id. at 508, 118 S.Ct. 1464, but provided no other guidance in determining whether the abandonment requirement has been met. As the Magistrate Judge correctly noted, there is a split of circuit authority as to whether abandonment must be proven by an express relinquishment of title, or whether abandonment can be inferred from the surrounding circumstances. For example, in Columbus–America Discovery Group v. Atlantic Mut. Ins., 974 F.2d 450 (4th Cir.1992), the Fourth Circuit adopted the position that an intent to abandon must demonstrate by a “clear and unmistakable affirmative act” ( i.e., express abandonment):

While abandonment has been simply described as “the act of deserting property without hope of recovery or intention of returning to it,” Nunley v. M/V DAUNTLESS COLOCOTRONIS, 863 F.2d 1190, 1198 (5th Cir.1989), in the lost property at sea context, there is also a strong actus element required to prove the necessary intent. Zych v. The Unidentified, Wrecked and Abandoned Vessel, 755 F.Supp. 213, 214 (N.D.Ill.1990); THE NO. 105, 97 F.2d 425, 426 (5th Cir.1938). “Abandonment is said to be a voluntary act which must be proved by a clear and unmistakable affirmative act to indicate a purpose to repudiate ownership.” THE PORT HUNTER, 6 F.Supp. 1009, 1011 (D.Mass.1934). The proof that need be shown must be “strong ..., such as the owner's express declaration abandoning title.” T. Schoenbaum, Admiralty and Maritime Law, § 15–7, at 512 (1987)....

Id. at 461. Other circuits have held that abandonment may be found by circumstantial evidence. In Deep Sea Research, Inc. v. Brother Jonathan, 89 F.3d 680 (9th Cir.1996), vacated by 523 U.S. 491, 118 S.Ct. 1464, 140 L.Ed.2d 626 (1998), the Ninth Circuit adopted the following test for abandonment:

...