CENTRAL STATE TRANSIT & LEASING
CORPORATION, Plaintiff-Appellant, Cross-Appellee,
JONES BOAT YARD, INCORPORATED,
Defendant-Cross-Claimant, Cross-Defendant, Appellee,
United States Court of Appeals,
March 20, 2000.
Appeals from the United States District
Court for the Southern District of Florida. (No. 92-10158-CV-DTKH),
Federico A. Moreno, Judge.
Before BLACK and HULL, Circuit Judges,
and GOODWIN(*), Senior Circuit
BLACK, Circuit Judge:
Appellant Central State Transit
& Leasing Corporation appeals the amount of damages awarded
to it in the district court's judgment against Appellee Jones
Boat Yard. Appellant claims the district court erred in failing
to award loss of use damages and in limiting Appellee's liability
to its percentage of fault. On cross appeal, Appellee asserts
that the district court was clearly erroneous in finding that
Appellee was grossly negligent. We conclude the district court
did not err.
Appellee Jones Boat Yard is engaged
in the business of berthing and repairing vessels on the Miami
River. On November 22, 1988, Appellee contracted to purchase
a floating dry dock from Conrad Industries (Conrad), a Louisiana
corporation. Conrad constructed the dry dock and delivered it
to Appellee on April 13, 1989. Between May 22, 1989, and April
26, 1990, Appellee used the floating dry dock four separate times
to berth four different ships. On all four occasions, although
none of the vessels were damaged, "the dry dock exhibited
serious listing and instability, and [on] at least one of these
instances ..." a vessel experienced a listing of up to 15
degrees. After each of these incidents, Appellee contacted Conrad,
who told Appellee that the listing problem was the result of
On December 22, 1989, Appellant
authorized William Hinsch, the Captain of Appellant's ship, the
BLACKHAWK, to execute a work order with Appellee for use of its
drydock. The BLACKHAWK is documented by the United States Coast
Guard as a purely private pleasure vessel and has never been
chartered by Appellant. The work order provided that Appellee
would have no liability for damage to the vessel unless caused
by its "gross negligence." In addition, the work order
limited Appellee's aggregate liability to $300,000.
On May 15, 1990, Appellee towed
the BLACKHAWK into the floating drydock. Captain Hinsch refused
to allow Appellee to attach the steel cables from the dock directly
to the vessel, and instead required that the steel cables be
attached to the vessel's nylon rope lines. Appellant released
Appellee from any liability for damage caused by using the nylon
There is a dispute as to how the
accident occurred. One witness, Calvin Kreidt, stated that the
vessel "listed a little to the starboard side," and
then slowly listed back to port. As the drydock started listing
to port, Kreidt heard one of the starboard ropes "go 'pop'."(1) Prior to the "pop," Kreidt
stated that the vessel did not shift inside the drydock, nor
did any of the keel blocks inside the dock move. As the vessel
moved to port, Kreidt stated that he could see the keel block
being kicked out from underneath the vessel.
Arthur Sargent, an expert retained
by Appellant, gave a slightly different account of the accident.
According to Sargent, as the drydock listed, the bilge blocks
moved away from the vessel, allowing the keel of the vessel to
rotate and fall off its keel blocks. This movement placed an
unusual strain on the nylon ropes, causing them to snap and break.
Sargent claimed that the vessel fell off the blocks because the
blocks were unsatisfactory and also stated that the bilge blocks
dropped out of position because they were not secured properly
with locks. Sargent also determined that the dry dock was not
designed or constructed properly by Conrad. According to Sargent,
if the dry dock had been designed properly by Conrad, the accident
would not have happened.
Appellant brought suit against Appellee
and Conrad seeking money damages for injury to Appellant's vessel,
the BLACKHAWK. Appellant asserted that both Appellee and Conrad
were "negligent, grossly negligent, and showed wilful, reckless,
and wanton disregard of" Appellant's property. Appellant
settled its claim against Conrad for $150,000 and dismissed with
prejudice its claim against Conrad. Appellee and Conrad dismissed
without prejudice their cross claims against each other for contribution
and indemnity. Thereafter, the trial proceeded solely against
The district court found that Appellee
and Conrad were both "negligent and that their negligence
operated in concert to cause injury to" Appellant in the
amount of $125,000. The district court attributed 75% of the
damage to Conrad and 25% of the damage to Appellee. The district
court agreed that Conrad had constructed and designed the dry
dock poorly, finding that
[t]he dry dock had been improperly
designed and constructed by Conrad so that as it rose in the
water and approached upon the water surface, that is on its pontoon
deck, it listed from one side to the other, thus the dry dock
was unstable and unsuitable for the purpose it had been intended
and for which it was constructed.
The district court also found that
Appellee had performed its work with "gross negligence"
and accordingly directed Appellee to pay $31,250 (25% of $125,000).
Specifically, the Court found that Appellee was grossly negligent
given the four prior experiences in which Appellee saw that the
drydock was unstable and unsafe. The district court determined,
however, that Appellant was not entitled to any "loss of
use" damages for the time the BLACKHAWK was being repaired.
On appeal, Appellant claims the
district court erred in denying loss of use damages. Appellant
also argues the district court erred by apportioning the fault
among Appellee and Conrad. Finally, on cross appeal, Appellee
maintains the district court's finding that Appellee's conduct
was grossly negligent is clearly erroneous.
We review the district court's findings
of fact for clear error and review its conclusions of law de
novo. See American Dredging Co. v. Lambert, 153 F.3d 1292,
1295 (11th Cir.1998).
A. Loss of Use Damages
The seminal case regarding damages
for loss of use of a pleasure boat is The Conqueror, 166
U.S. 110, 17 S.Ct. 510, 41 L.Ed. 937 (1897). In The Conqueror,
the Supreme Court stated that the law is well settled that "the
loss of profits or of the use of a vessel pending repairs, or
other detention, arising from a collision or other maritime tort,
and commonly spoken of as 'demurrage,' is a proper element of
damage." The Conqueror, 166 U.S. at 125, 17 S.Ct.
at 516. The Court noted that "[i]t is equally well settled,
however, that demurrage will only be allowed when profits have
actually been, or may be reasonably supposed to have been, lost,
and the amount of such profits is proven with reasonable certainty."
Id. The Court then emphasized that
[i]t is not the mere fact that a
vessel is detained that entitles the owner to demurrage. There
must be a pecuniary loss, or at least a reasonable certainty
of pecuniary loss, and not a mere inconvenience arising from
an inability to use the vessel for the purpose of pleasure....
In other words, there must be a loss of profits in its commercial
133, 17 S.Ct. at 519.
More recently, we have recognized
the continuing validity of the general rule set forth in The
Conqueror. See Ove Skou v. United States, 478 F.2d 343, 345
(5th Cir.1973) (citing with approval The Conqueror )(2); Bolivar County Gravel Co. v. Thomas
Marine Co., 585 F.2d 1306, 1308 n. 2 (5th Cir.1978) (same);
The Wolsum, 14 F.2d 371, 377 (5th Cir.1926) (same). In
Ove Skou, we specifically held that "[d]emurrage
'will only be allowed when profits have actually been, or may
be reasonably supposed to have been, lost, and the amount of
such profits is proved with reasonable certainty.' " Ove
Skou, 478 F.2d at 345 (quoting The Conqueror, 166
U.S. at 125, 17 S.Ct. at 516). In addition, several other circuits
have recognized the continuing validity of The Conqueror's
rule for loss of use damages. See Dow Chemical Co. v. The
M/V Roberta Tabor, 815 F.2d 1037, 1042 (5th Cir.1987) (citing
with approval the general rule from The Conqueror ); Snavely
v. Lang, 592 F.2d 296, 299 (6th Cir.1979) (noting that "the
Court is constrained to view The Conqueror as retaining
its full vitality"); Oppen v. Aetna Ins. Co., 485
F.2d 252, 257 (9th Cir.1973) (citing The Conqueror as
support for the assertion that "loss of use of a private
pleasure boat is not a compensable item of damages").
We therefore must apply the Supreme
Court's holding in The Conqueror to the facts of this
case.(3) Appellant thus is entitled
to receive loss of use damages only if able to prove, with reasonable
certainty, that profits had actually been, or may reasonably
be supposed to have been, lost. Appellant, however, failed to
meet this burden at trial. In fact, the district court specifically
found that the corporations that used the BLACKHAWK for business
purposes continued to pay fees to Appellant while the vessel
was under repair. Because Appellant did not prove, with reasonable
certainty, that profits had actually been or may reasonably supposed
to have been lost, we affirm the district court's denial of loss
of use damages.
B. Apportionment of Damages
The district court, citing McDermott,
Inc. v. AmClyde, 511 U.S. 202, 210, 217, 114 S.Ct. 1461,
1466, 1470, 128 L.Ed.2d 148 (1994), held that Appellee was liable
only for 25%, or its proportionate share, of the total damages.
In McDermott, the Supreme Court held that when one joint
tortfeasor has settled, the nonsettling joint tortfeasor's liability
should be assessed on the basis of that tortfeasor's proportionate
share. See McDermott, 511 U.S at 217, 114 S.Ct.
On appeal, Appellant argues the
district court did not have the authority to limit Appellee's
liability to its proportionate share because Appellee was not
a joint tortfeasor. Appellant asserts that because Appellant's
claim against Appellee is in contract while the claim against
Conrad was in tort, Appellee cannot be a joint torteasor. We
nevertheless conclude the proportionate share rule applies to
this case because Appellee and Conrad "operated in concert"
to cause a single injury to Appellant. See Jovovich v. Desco
Marine, Inc., 809 F.2d 1529, 1530 (11th Cir.1987) (holding
that nonsettling party benefits from proportionate share rule
for "all theories of maritime liability apportionment");
see also United States v. Reliable Transfer Co., 421 U.S.
397, 408, 95 S.Ct. 1708, 1715-16, --- L.Ed.2d ---- (1975) (stating
"when two or more parties have contributed by their fault
to cause property damage in a maritime collision or stranding,
liability for such damage is to be allocated among the parties
proportionately to the comparative degree of fault ...").
C. Appellee's Gross Negligence
To hold a party liable for gross
negligence, the district court must find that the defendant had
knowledge of the existence of circumstances which constitutes
a "clear and present danger" and yet still undertakes
"a conscious, voluntary act or omission ... which is likely
to result in injury." Sullivan v. Streeter, 485 So.2d
893, 895 (Fla. 4th Dist.Ct.App.1986) (citations omitted). On
cross-appeal, Appellee claims the district court erred in finding
Appellee was grossly negligent.
Based upon our review of the record,
we conclude the district court's finding of gross negligence
was not clearly erroneous. The evidence shows that Appellee knew
that the dry dock had exhibited potentially serious defects on
four separate occasions prior to the accident involving the BLACKHAWK.
Given these facts, the district court did not clearly err in
finding that Appellee had knowledge of the existence of circumstances
which constituted a clear and present danger and yet still undertook
a voluntary act which was likely to, and did, cause injury.
The district court did not err in
concluding Appellant was not entitled to loss of use damages
and in limiting Appellee's liability to its proportionate share
of the total damages. In addition, the district court did not
err in finding Appellee grossly negligent.
Alfred T. Goodwin, Senior U.S. Circuit Judge for the Ninth Circuit,
sitting by designation.
1. The district
court specifically found that the utilization of the nylon ropes
was "in no way responsible for the damage accrued"
to the vessel.
2. In Bonner
v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981)
(en banc), this Court adopted as binding precedent all decisions
of the former Fifth Circuit handed down prior to close of business
on September 30, 1981.
3. Two district
courts have suggested that Brooklyn Eastern District Terminal
v. United States, 287 U.S. 170, 53 S.Ct. 103, 77 L.Ed. 240
(1932), partly overrules The Conqueror. See Finkel v. Challenger
Marine Corp., 316 F.Supp. 549 (S.D.Fla.1970); Nordasilla
Corp. v. Norfolk Shipbuilding, 1982 A.M.C. 99 (E.D.Va.1981).
We disagree and conclude we are bound by The Conqueror
for purposes of deciding this case. See also Snavely,
592 F.2d at 298-99.