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In re Complaint of Lavender

United States District Court, S.D. Florida, Miami Division
Sep 30, 2004
Case Number: 03-60757-CIV-MARTINEZ-KLEIN (S.D. Fla. Sep. 30, 2004)

Opinion

Case Number: 03-60757-CIV-MARTINEZ-KLEIN.

September 30, 2004


REVISED REPORT AND RECOMMENDATION THAT RESPONDENT JOSEPH FULLEN'S MOTION TO DISMISS BE GRANTED


THIS CAUSE came before the Court for a hearing on July 15, 2004, on Respondent Joseph Fullen's Motion to Dismiss Petition for Lack of Subject Matter Jurisdiction. ( D.E. No. 49). Respondents Jon Royce Ridgeway and Robert Balkunas joined in and adopted Fullen's motion to dismiss. (D.E. No. 54, 64). After considering the motion, the evidence presented, oral arguments, and being otherwise advised, the Court recommends the motion to dismiss be GRANTED for the following reasons:

This motion was referred to the undersigned for submission of proposed findings of fact and recommendation for disposition pursuant to 28 U.S.C. § 636(b)(1) and the Magistrate Rules of the Local Rules of the Southern District of Florida. (D.E. 37, 50).

Background

In the early morning of October 23, 2002, a fire started aboard the Midtowner IV while the 62' recreational sailboat was on land undergoing repairs at Playboy Marine in Dania Beach, Florida. The Midtowner IV had been purchased one week earlier by Jon and Ted Lavender ("Petitioners") of Pennsylvania. The fire damaged four other vessels in the immediate vicinity: SeaClusion owned by Joseph Fullen; the Marlin Darlin owned by Jon Royce Ridgeway; the Dorado owned by Robert Balkunas; and the Yankee Nomad owned by Grady Gardner respectively ("Respondents"). Each of these boats was also on land at the time.

The cause of the fire is unknown. However, under the instant set of facts, the cause of the fire is not material to the Court's determination of whether admiralty jurisdiction lies.

Playboy Marine is located on the Dania Cutoff, a waterway that connects to the Intracoastal Waterway which in turn connects to the Atlantic Ocean. The area is commonly referred to as "Port Everglades," in reference to the nearby large commercial port on the Intracoastal Waterway. The Dania Cutoff itself is used mostly by recreational vessels, and is lined on either side with marinas that perform repair work on such vessels. Playboy Marine is one such facility, and is one of the largest do-it-yourself repair yards in the area. Boats in need of land-based repairs move from the Dania Cutoff into Playboy Marine's haul-out slip and are lifted from the water by crane, then placed in rows on blocks or stilts approximately 20 to 30 feet from each other. At the time of the fire in question, there were three rows of boats on blocks: two of the rows were approximately 50 feet apart and the third was approximately 100 feet away from the middle row. The facility is surrounded by a fence and locked at night. Playboy Marine has no marina for in and out use by boat owners and it has no dry-storage facilities. Dry storage entails keeping boats which are used on a regular basis on land, ready to be placed in the water, rather then keeping them constantly in the water.

After purchasing the Midtowner IV, Petitioners hired Captain Edwin Beach to perform maintenance and repairs to the boat before sailing her to her new base in the Chesapeake Bay. On October 22, 2002, Captain Beach sailed the Midtowner IV to Playboy Marine to have her seacocks replaced. The boat was expected to remain there for seven to ten days. The Midtowner IV was removed from the water and placed on blocks in the middle row, in the fourth slot from the haul-out slip, about 100 to 150 feet from the haul-out slip and 200 feet from the Dania Cutoff. One or two of the vessel's seacocks were removed. Captain Beach's employee stopped work on the boat and left for the day at approximately 4:30 p.m. with the seacocks still withdrawn from the hull. As a result, the boat was not seaworthy. The next morning (October 23rd) at approximately 7:00 a.m., Captain Beach received a phone call from one of his workers advising him that the Midtowner IV was on fire. Playboy Marine was locked and no one was working on the boat at the time.

Seacocks are ball valves located on the hull of certain boats that allow drainage of excess water. If the seacocks are removed, the vessel will sink if placed in the water.

Customarily, only one or two seacocks are removed from the hull of a vessel at any one time.

Although Petitioners maintain that the vessel was seaworthy because it sailed to the boatyard under its own power, once it was removed from the water, transported across the yard, placed on blocks, and had its seacocks removed, it was not seaworthy at that time.

The four boats closest to the Midtowner IV — all out of water on blocks — sustained damage from the fire. Specifically, the boat next to and north of the Midtowner IV (approximately 20-30 feet away) was damaged; two boats directly behind and west of the Midtowner IV (about 50 feet away) were damaged; and a fourth boat two slots away from and to the south of the Midtowner IV (about 40-60 feet away) was damaged. The boat that was closest to the water was the one to the south of the Midtowner IV; it was approximately 100 to 150 feet from the haul-out slip and 200 feet from the Dania Cutoff. Other boats on land in the immediate vicinity were not affected by the fire, and there was at least one boat situated between the damaged boats and the water's edge that sustained no damage. No other boat on or near the water was damaged. None of the boat owners was present at the time of the fire.

Petitioners subsequently filed suit in this court for exoneration from or limitation of liability under admiralty jurisdiction. Petitioners seek to be exonerated from liability for any damage to other vessels, or alternatively, if found liable, to be limited in liability to $45,000, the amount of their interest in the Midtowner IV after the fire. Respondent Fullen, later joined by Respondents Ridgeway and Balkunas, moved to dismiss Petitioners' action for lack of subject matter jurisdiction, contending there is an insufficient connection to traditional maritime activity to sustain admiralty jurisdiction in this Court.

Discussion

Admiralty law applies, and this court's jurisdiction is invoked, when the elements of the "navigable waters" locality test supplemented with a "significant relationship to traditional maritime activity" nexus test are met. Executive Jet Aviation Inc., v. Cities of Cleveland, Ohio, 409 U.S. 249, 258-61 (1972) (A "purely mechanical application of the locality test" alone does not suffice as a predicate for admiralty jurisdiction); Sea Vessel, Inc. v. Reyes, 23 F.3d 345, 348 (11th Cir. 1994); Lewis Charters, Inc. v. Huckins Yacht Corp., 871 F.2d 1046, 1051 (11th Cir. 1989). A party seeking to invoke federal admiralty jurisdiction must satisfy conditions of both location and of connection with maritime activity. Jerome B. Graubert, Inc. v. Great Lakes Dredge Dock Co., 513 U.S. 527, 534 (1995).

Under the locality test, if a tort occurs on navigable waters, the action usually is within admiralty jurisdiction. Executive Jet, 409 U.S. at 253; American Eastern Dev. Corp. v. Everglades Marina, Inc., 608 F.2d 123, 125 (5th Cir. 1979). A court applying the location test must determine whether the tort occurred on navigable waters or whether injury suffered on land was caused by a vessel on navigable waters. Graubert, 513 U.S. at 534. In the present case, since all the boats damaged by the fire were located on land, the Court must determine whether the vessel which caused the injury was on navigable waters. If the locality test is met, Petitioners must still meet the nexus test.

When applying the nexus test, two queries are involved: (1) did the incident have a "potentially disruptive impact on maritime commerce?" and (2) does a "substantial relationship" exist "between the activity giving rise to the incident and traditional maritime activity?" Sisson v. Ruby, 497 U.S. 358, 364 (1990); Sea Vessel, 23 F.3d at 350. Admiralty jurisdiction does not exist in the present case because, as discussed infra, neither the locality test nor nexus test has been met. The Locality Test fails because the boats were withdrawn from navigation.

Petitioners assert that federal jurisdiction may be invoked independently through the Limitation of Liability Act, 46 U.S.C. § 181 et seq., but the Eleventh Circuit has held to the contrary. Sea Vessel, 23 F.3d at 348 n. 6; Lewis, 871 F.2d at 1054 (admiralty jurisdiction may not be based solely upon the Limitation of Liability Act "in the absence of a significant relationship between [a party's] claim and traditional notions of maritime activity.").

The threshold question here requires determination of whether Petitioners' vessel was on navigable waters when it caused injury to the other vessels.

Admiralty jurisdiction applies if the boats were not withdrawn from navigation. American Eastern, 608 F.2d at 124. In American Eastern, several pleasure boats and part of a marina were destroyed by a fire that was set by the marina's owner. Though the boats were kept in dry storage, they were fully operational; they were in and out of the water regularly. Id. They were launched and removed from the water by forklift. Id. The boats were stored in this manner "to obviate storage in salt water with attendant costs of maintenance (including keeping the boats barnacle-free)." Id. The court looked at the pattern of use of the boats and reasoned that since they were in and out of the water almost weekly, their status was analogous to that of vessels docked at a marina. Id. at 125. The dry storage, incident to their regular use, was a substitute for wet mooring or docking. Id. at 124. Thus, the court held that the boats on land were not withdrawn from navigation and that the contracts for their dry storage were within admiralty jurisdiction. Id. at 124-25.

Unlike in American Eastern, here all the boats damaged by the fire that started on the Midtowner IV were removed from navigation. Specifically, these vessels were on land either undergoing or awaiting to undergo repairs. Playboy Marine has no dry-storage facilities where fully-operational vessels can be moved in and out of the water on a regular basis incident to their regular use. The boats damaged here were not being kept in dry storage as an alternative to wet mooring or docking, and they were not being moved in and out of the water on a regular basis. Because the damaged boats were all withdrawn from navigation, the locality test has not been met.

Furthermore, neither Petitioners' nor any of the other boats could have been "readily placed in the water at anytime," as Petitioners suggest. See Petitioners' Memorandum in Opposition to the motion to dismiss, at 3 (D.E. No. 53). According to Captain Beach, Playboy Marine generally required a day's notice to launch a boat that had been hauled on land, and it would take approximately one to two hours to prepare to launch Petitioners' vessel which was missing a few seacocks: the seacocks would have to be replaced, hoses put on, the boat placed on the travel lift, and then it could be launched in the water. The other vessels were in the yard for repair and would have been subject to similar constraints before they could be placed in the water.

Failure to establish the first prong is sufficient in and of itself to deny admiralty jurisdiction. Even if the locality test were met, however, the nexus requirement cannot be established for the reasons set forth below. The Nexus Test fails because the incident involved an insufficient connection with maritime activity.

Maritime jurisdiction exists when a "potential hazard to maritime commerce arises out of activity that bears a substantial relationship to traditional maritime activity." Sisson, 497 U.S. at 362 (citation omitted). In Graubert, the Supreme Court clarified the Sisson nexus standard:

The connection [nexus] test raises two issues. A court, first, must "assess the general features of the type of incident involved". . . to determine whether the incident has "a potentially disruptive impact on maritime commerce[.]" Second, a court must determine whether "the general character" of the "activity giving rise to the incident" shows a "substantial relationship to traditional maritime activity."
513 U.S. at 534 (citations omitted).

Resolving the first prong requires analysis as to whether the incident itself was of a sort with the potential to disrupt maritime commerce. The incident must be viewed at an intermediate level of abstraction. Merely characterizing it as a fire provides insufficient context to decide individual cases. At the other extreme, to declare that the fire only damaged pleasure boats ignores the potential impact of such an incident on nearby commercial navigation. Id. at 538-39. Employing the foregoing standard, the incident here should be described as a fire on a vessel on dry land which damaged other vessels on dry land at a distance sufficiently far away from any navigable waterway that it did not pose any potential danger or disruption to maritime commerce. Thus, Petitioners have failed to satisfy the firstGraubert nexus factor.

The second Sisson nexus factor requires looking at whether the general character of the activity which gives rise to the incident shows a substantial relationship to traditional maritime activity. This is a much closer question. Certainly, repair or maintenance work on a vessel docked at a marina on a navigable waterway is sufficiently closed related. Id. at 367. So is repair of a vessel which is dry docked. Sea Vessel, 23 F.3d at 351. Repairs to a vessel in dry dock, i.e., when it has been lifted above the water and remains in place over the water, are very different from repairs to a vessel which has been hauled out of the water onto land. Sea Vessel quoted from The Robert W. Parsons, 191 U.S. 17, 33-34 (1903):

Dry dock as used by the courts is a specific term. As the Eleventh Circuit explained in Sea Vessel, 23 F.3d at 346 n. 3, a shiplift type dry dock acts like a large elevator which can be lowered into the water, and once the vessel is lifted, it stays in place over the water while repairs are made.

All injuries suffered by the hulls of vessels below the water line, by collision or stranding, must necessarily be repaired in a dry dock, to prevent the inflow of water, but it has never been supposed, and it is believed the proposition is now for the first time made, that such repairs were made on land. Had the vessel been hauled up by ways upon the land and there repaired, a different question might have been presented, as to which we express no opinion. . . .
23 F.3d at 348.

Although the Court in The Robert W. Parsons expressed no opinion on the applicability of admiralty law to vessels hauled out of the water onto land for repairs, later cases have dealt with that issue. In Lewis, 871 F.2d at 1051-52, the Eleventh Circuit, applying an earlier four-part nexus test, had occasion to consider the relevant question utilizing guidelines that are substantially similar, if not identical to, the Sisson rule. The earlier formulation required, among other things, that the wrong must bear a significant relationship to traditional maritime activity, taking into account the traditional concepts of the role of admiralty law. That is the functional equivalent of the Sisson rule that requires the activity giving rise to the incident show a substantial relationship to traditional maritime activity.

Sisson and its progeny all involved activities either in the water or in dry dock. Repairs or storage on water, or its equivalent, are traditional maritime activities or are substantially related to them. But once dry land becomes the locus of the act, the relationship to maritime activities necessarily requires closer examination. Thus, in Lewis, which involved a fire in an enclosed land-based boat paint facility, the court analogized the boat owner's situation to that of a car owner who leaves his car at a car repair facility and later discovers it was damaged by a fire that started elsewhere in the facility. Lewis, 871 F.2d at 1052. The Lewis court saw no reason to treat the boat owner's claim to limit its liability differently than the same claim by a car owner. Id. The court found no discernable relationship between the tort and "traditional maritime activities, involving navigation or commerce on navigable waters." Id. The court held that "[a]bsent the requisite relationship to traditional maritime activity, appellant's claim does not fall within the federal court's maritime jurisdiction." Id.

In this case, the fire was not close enough to a waterway to disrupt any vessel in the water. The boat closest to the water that sustained any damage was approximately 100 to 150 feet from the haul-out slip and 200 feet from the Dania Cutoff. Another boat situated between that damaged boat and the water was not affected by the fire. Thus, the fire did not pose even a potential threat to commercial navigation. Lewis' analogy to a fire in an automotive repair facility is most appropriate here. As in Lewis, "[t]he damage that resulted from the fire, although affecting objects and facilities related to the water, did not occur where other vessels in navigation could have been affected." Id. at 1051; see also Latin American Prop. Cas. Ins. Co. v. Hi-Lift Marina, Inc., 887 F.2d 1477 (11th Cir. 1989). Absent a threat to commercial navigation, there is no discernable relationship between the tort committed and traditional maritime activities. Thus, Petitioners have failed to establish the nexus requirement as well as the location test.

Conclusion

Petitioners have failed to establish either prong needed to maintain admiralty jurisdiction. The law requires that they meet both the location test and the nexus test. Having failed to establish either, admiralty jurisdiction does not exist and this case should be dismissed for lack of subject matter jurisdiction.

Based on the foregoing, this undersigned magistrate REPORTS and RECOMMENDS that Respondent's Motion to Dismiss for Lack of Subject Matter (D.E. No. 49) be GRANTED.

DONE AND SUBMITTED.

ORDER ADOPTING MAGISTRATE'S REPORT AND RECOMMENDATION

THE MATTER was referred to the Honorable Theodore Klein, United States Magistrate Judge for a Report and Recommendation on Respondent's Motion to Dismiss Petitioner for Lack of Subject Matter Jurisdiction (D.E. No. 49). The Magistrate Judge filed an Amended Report and Recommendation (D.E. No. 79) on October 18, 2004. The Court notes the parties have not filed objections to the Magistrate Judge's Report and Recommendation present. The Court has reviewed the entire file and record and being otherwise fully advised in the premises, it is

ADJUDGED that United States Magistrate Judge Klein's Report and Recommendation (D.E. No. 79) on October 18, 2004 is AFFIRMED and ADOPTED.

Accordingly, it is

ADJUDGED that

1. Respondent's Motion to Dismiss for Lack of Subject Matter Jurisdiction (D.E. No. 49) is GRANTED. This cause is DISMISSED for lack of subject matter jurisdiction.

2. The Clerk of the Court is DIRECTED to mark this case CLOSED and DENY all pending motions as MOOT.

DONE AND ORDERED.


Summaries of

In re Complaint of Lavender

United States District Court, S.D. Florida, Miami Division
Sep 30, 2004
Case Number: 03-60757-CIV-MARTINEZ-KLEIN (S.D. Fla. Sep. 30, 2004)
Case details for

In re Complaint of Lavender

Case Details

Full title:In the Complaint of TED LAVENDER and JON LAVENDER as Owners of a 62…

Court:United States District Court, S.D. Florida, Miami Division

Date published: Sep 30, 2004

Citations

Case Number: 03-60757-CIV-MARTINEZ-KLEIN (S.D. Fla. Sep. 30, 2004)