W. Towboat Co. v. Vigor Marine, LLC

575 F.Supp.3d 1318

WESTERN TOWBOAT COMPANY, Plaintiff–Counterclaim Defendant,

v.VIGOR MARINE, LLC, Defendant–Counterclaim Plaintiff.

No. C20-0416-RSM

United States District Court, W.D. Washington, at Seattle.

Signed December 16, 2021

J. Stephen Simms, Pro Hac Vice, Simms Showers LLP, Baltimore, MD, Anthony J. Gaspich, Gaspich Law Office PLLC, Bainbridge Is, WA, for Plaintiff–Counterclaim Defendant.

Adam Murray, Schwabe Williamson & Wyatt, Vancouver, WA, Christopher H. Howard, David R. Boyajian, Molly J. Henry, Schwabe Williamson & Wyatt, Seattle, WA, Noah Jarrett, Schwabe Williamson & Wyatt, Portland, OR, for Defendant–Counterclaim Plaintiff.

BENCH ORDER, FINDINGS OF FACT, AND CONCLUSIONS OF LAW

RICARDO S. MARTINEZ, CHIEF UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

This case is before the Court for judgment on Plaintiff Western Towboat Company ("Western")’s and Defendant Vigor Marine, LLC ("Vigor")’s cross-motions for breach of contract and Vigor's counterclaim for maritime negligence arising from the sinking of the YFD-70 Drydock in the Monterey Bay National Marine Sanctuary. A bench trial was held to adjudicate the breach of contract claims and whether Vigor was liable for comparative negligence. For the reasons stated in the following Findings of Fact and Conclusions of Law, the Court finds that both parties have failed to prevail on their cross-claims for breach of contract. The Court furthermore enters Judgement in favor of Vigor on its cross-claim for maritime negligence, with Vigor bearing 60% of the fault for the Drydock's sinking inside the marine sanctuary and Western bearing 40%.

II. BACKGROUND AND PROCEDURAL HISTORY

A. Factual Background

Vigor owns and operates shipyards that utilize drydocks. Dkt. #75 at 3. Western owns and operates tugboats, including the OCEAN RANGER. On April 14, 2016, Vigor sold a decommissioned YFD-70 Drydock ("the Drydock") to Amaya Curiel Corporation ("Amaya Curiel"). The Drydock was a three-section steel structure constructed in 1945, with a center section running 368 feet long and 118 feet wide and two end sections each 80 feet long and 118 feet wide. With both end sections attached, the total length of the vessel was 528 feet. The YFD-70 was one of three drydocks in its class, the others being the YFD-69 and the YFD-71.

On October 4, 2016, Western and Vigor entered into an agreement ("the Tow Agreement") providing that Western tow the Drydock from Seattle to Amaya Curiel's shipyard in Ensenada, Mexico. The Tow Agreement stated that Vigor would pay a lump sum hire of $142,800 in addition to fuel charges. Id. at 3-4. The Tow Agreement further stated that that "Customer [Vigor] shall pay Owner [Western] the lump sum hire identified above, which shall be fully and irrevocably earned upon commencement of services, even if the Tug, Tow and/or cargo is lost and/or the voyage is delayed, frustrated or cancelled, except to the extent loss, delay, frustration, or cancellation arises from the negligence or willful misconduct of Owner [Western]." Id.

The Tow Agreement required Vigor to "use due diligence to tender the [Drydock] in a seaworthy condition." Id. Parties agree that Vigor disclaimed any express or implied warranty of seaworthiness of the Drydock. Id. at 3-4. In preparation for the tow, Vigor contracted Captain Richard Shaw, a marine surveyor with Bowditch Marine, Inc., to survey the Drydock before its voyage to Ensenada. Id. at 4. The report prepared by Captain Shaw concluded that the intended voyage could be safely made subject to the tow recommendations set forth in his survey.

On October 17, 2016, the tow commenced from Seattle with Western's tug OCEAN RANGER towing the Drydock. The crew of the OCEAN RANGER first reported a list in the tug's logbook on or around 2:30 PM on October 25, 2016. Id. The tug and Western reported the list to Vigor and to the U.S. Coast Guard. At the time, the Drydock was not within the boundaries of a marine sanctuary. By early morning of October 26, 2016, the Drydock was about .92 miles inside the border of the Monterey Bay Marine Sanctuary ("the Marine Sanctuary"), at which point the OCEAN RANGER released the Drydock and the Drydock sank.

In a letter dated January 19, 2021, the U.S. National Oceanic and Atmospheric Administration ("NOAA") advised Vigor, Western, and Amaya Curiel of their potential liability under the National Marine Sanctuaries Act ("NMSA") for damages arising from the Drydock's sinking in the Marine Sanctuary and invited them to "work cooperatively" with NOAA to complete an injury assessment, develop restoration actions, and assist with restoring injured sanctuary resources. Dkt. # 40-13 at 4. In response to NOAA's investigation, Vigor chartered a research vessel and a Remote Operated Vehicle to survey the ocean floor to confirm the location of the Drydock. Dkt. #75 at 5.

B. Procedural History

Western filed this action against Vigor on March 16, 2020, alleging breach of maritime contract to recover the $187,462.01 Vigor owed Western for its tug services under the Tow Agreement. Dkt. #1. Western also sought a declaratory judgment that Western was not responsible for the sinking of the Drydock in the Marine Sanctuary, thereby exculpating it from liability to the United States in any forthcoming enforcement action under the NMSA. Id. at ¶¶ 24-26. Vigor counterclaimed for breach of maritime contract based on Western's alleged failure to render reasonable assistance in the event the Drydock became "disabled ... or otherwise unable to continue the voyage," causing Vigor to incur costs to cooperate with NOAA and creating potential liability to the United States under the NMSA. Dkt. #15 at ¶¶ 36-38. Vigor also counterclaimed for general maritime negligence based on Western's failure to exercise reasonable care in towing the sinking drydock into the Marine Sanctuary and for unjust enrichment based on the costs Vigor expended to cooperate with NOAA. Id. at ¶¶ 33-35, 40-45.

On June 21, 2021, this Court concluded as a matter of law that Western failed to exercise prudent seamanship by releasing the Drydock inside the Monterey Bay National Marine Sanctuary ("Marine Sanctuary"). Accordingly, the Court granted summary judgment on Western's counterclaim for maritime negligence. Dkt. #77 at 38. The Court likewise concluded that to the extent parties sought preemptive relief from liability to the United States under the National Marine Sanctuaries Act ("NMSA"), such claims were properly dismissed for lack of subject matter jurisdiction. Id. at 16. Furthermore, in an order on parties’ post-trial briefing, the Court concluded that Vigor cannot collect from Western those costs already reimbursed by Vigor's insurers. Dkt. #108 at 10.

Between June 28 and July 7, 2021, the Court conducted a bench trial on parties’ cross-claims for breach of contract under the Tow Agreement and the question of Vigor's comparative negligence with respect to the Drydock's sinking. At trial, Western presented testimony from Paul Torrey, Vigor's shipyard manager at the time parties entered into the Tow Agreement; Captain Richard Shaw, the marine surveyor of the Drydock; Robert Eske, Vigor's former operations manager; Jeffrey Slesinger, Western's safety and training director; Captain Stephen McGavock, the captain of the OCEAN RANGER; Daniel Keen, a naval architect employed by Vigor; Kiel Jacobson, the second mate on the OCEAN RANGER; John Cowgill, the chief mate on the OCEAN RANGER; Fred Pickhardt, an expert in marine weather forecasting; Bob Shrewsbury III, Western's owner; Russell Shrewsbury, Western's port captain; Dr. Patrick Hudson, an expert in ocean engineering with respect to drydock configuration and structure, and Dr. Kriebel, an expert in ocean engineering with respect to wave conditions. Vigor Marine presented testimony from Dan Keen, Michael Naylor, an expert in drydock engineering; Rear Admiral Gilmour, an expert in tug and barge safety; Russell Johnson, an expert in maritime incident investigation; Dawn Cartwright, Vigor's vice president of human resources and risk management, and Ken Campbell, an expert in marine weather forecasting.

The Court has carefully considered the testimony of each of the witnesses, the parties’ trial exhibits, the parties’ proposed Findings of Fact and Conclusions of Law, and the closing arguments of counsel. The following constitutes the Court's Findings of Fact and Conclusions of Law pursuant to Fed. R. Civ. P. 52(a). The trial court is empowered to judge the credibility of the witnesses. See Spokane Arcade, Inc. v. City of Spokane , 75 F.3d 663, 665 (9th Cir. 1996) ; Zivkovic v. S. Cal. Edison Co. , 105 Fed. Appx. 892, 893 at n.1 (9th Cir. 2004) (citing Anderson v. City of Bessemer City, N.C. , 470 U.S. 564, 575, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985) ). To the extent certain findings of fact may be deemed conclusions of law, or certain conclusions of law be deemed findings of fact, they shall each be considered conclusions or findings, respectively.

III. FINDINGS OF FACT

The Court incorporates by reference the Stipulation of Facts attached to the Agreed Pretrial Order. See Dkt. #75. The following additional findings of fact are made by the Court and based upon a preponderance of the evidence presented at trial.

A. Structural Condition of Drydock

1. The Drydock was NAVSEA certified until 2013. Dkt. #102 at 31:6-7. NAVSEA is a government agency whose certification is required for a drydock to dock a Navy ship. Dkt. #105 at 186:11-12. To earn NAVSEA certification, continual maintenance must be performed on a drydock to ensure it is structurally sound. Id. at 123:1. 2. Vigor allowed the NAVSEA certification for the Drydock to lapse in 2013 because the Navy ships in the market for lifting were too large for the Drydock to service. Dkt. #103 at 183:8.

3. That same year, engineering company Heger Dry Dock, Inc. ("Heger") performed an ultrasonic gauging survey on the Drydock. The purpose of the survey was to evaluate the Drydock's condition for...