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Dann Marine Towing LC v. General Ship Repair Corp.

United States District Court, D. Maryland

September 7, 2017

DANN MARINE TOWING, LC Plaintiff
v.
GENERAL SHIP REPAIR CORP. Defendant

          MEMORANDUM OF DECISION

          MARVIN J. GARBIS UNITED STATES DISTRICT JUDGE.

         The Court has conducted the bench trial of Plaintiff Dann Marine Towing, LC's (“Dann Marine”) claims against Defendant General Ship Repair Corp. (“GSR”). The Court has heard the evidence presented, reviewed the exhibits, considered the materials submitted by the parties, and had the benefit of the arguments of counsel. The Court now issues this Memorandum of Decision as its findings of fact and conclusions of law in compliance with Rule 52(a) of the Federal Rules of Civil Procedure.[1]

         The Court finds the facts stated herein based upon its evaluation of the evidence, including the credibility of witnesses, and the inferences that the Court has found reasonable to draw from the evidence.

         I. BACKGROUND

         In October 2011, the IVORY COAST, a Dann Marine tugboat, caught fire and was seriously damaged while being repaired by GSR. In this lawsuit, Dann Marine sues GSR for damages caused by the fire. As discussed herein, the Court finds neither side totally free of fault for the fire and neither side's contentions to be totally correct.

         Since the late 1960s, Dann Marine, a Maryland corporation based in Chesapeake City, Maryland, has been engaged in providing marine tug and towing services on the Chesapeake Bay and other waters along the United States East Coast, as well as in such locations as the Great Lakes, the Gulf Coast of Mexico, the Caribbean, and South America. Dann Marine owns a fleet of tugboats, one of which, built in 1967, is the IVORY COAST (“the Boat”).

         Since the 1920s, GSR has been a Maryland corporation, based in Baltimore, Maryland, that provides ship repair services. Dann Marine and GSR had a business relationship beginning about 10-15 years ago, under which GSR regularly provided repairs to Dann Marine's boats.

         A. Repair Agreement

         In September 2011, Dann Marine's Boat was active in service transporting coal for a local utility, earning $4, 900 per day. Dann Marine decided to schedule needed repairs to the Boat. Robert Dann, the Dann Marine port engineer and a part owner of the company, contacted Derick Lynch[2] of GSR and verbally described the work wanted. Derick Lynch arranged for the GSR yard manager to survey the items to be repaired on the Boat. A proposal [Def.'s Ex. 1][3] was prepared on September 30, 2011 and sent to Robert Dann to review. Robert Dann responded with a request that Dann Marine handle certain service items itself rather than pay GSR. For example, Dann Marine indicated it would provide the marine chemist certificate and supply its own power by generator rather than use GSR's shore power. The contract was finalized in the form of a “yard specification” with a job number and was dated October 5, 2011. See Def.'s Ex. 1.

         Provision number 8 on the second page of the yard specification describes the work to be done to remove and replace some of the steel along the starboard engine side of the Boat.[4] Id. This required preparation of the Boat prior to commencing hot work, [5] including cleaning the Boat's bilge and a marine chemist's certification that the boat was safe for hot work. The agreement provided that Dann Marine was to engage independent cleaners and a marine chemist to certify the Boat safe for hot work.

         B. Start of Repairs

         On or about October 6, 2010, Dann Marine brought the Boat to GSR's facility in Baltimore, Maryland to have the repairs performed. Randy Ash (“Ash”), the Boat's Chief Engineer, and a Dann Marine deckhand, Nick Jones (“Jones”) remained aboard when the Boat was left at GSR.

         In accordance with the parties' agreement, Dann Marine contracted with A2Z Environmental Group (“A2Z”) to clean the Boat's bilge in preparation for the hot work. One of Dann Marine's port engineers, Jack Collins (“Collins”), was directed to oversee that the cleaning was done to the marine chemist's satisfaction and to get the hot work certificate.

         Collins does not recall who contacted A2Z or the particular instructions given A2Z. However, A2Z field supervisor, Frank Merritt, testified that he was instructed by Collins “[t]o clean from the centerline of the boat to the starboard side to have it available for hot work.” Tr.[6] 3, 157:20-21, 160:13-16. Collins did not arrive at the Boat until the A2Z cleaning was almost complete. See Tr. 3, 30:21-25.

         A2Z spent about eleven hours[7] cleaning the Boat's two diesel fuel tanks and pressure washing the bilge. The starboard and port sides of the bilge are connected at the centerline. A2Z removed the deck plates and removed all the liquid from the lowest point of the bilge.[8] It then performed a more detailed and thorough cleaning of the starboard side by scraping, bagging any solid residue (such as rags, bottle caps, debris), degreasing, pressure-washing, and finally, vacuuming up the liquids again from the lowest point of the bilge. A2Z did not perform the detailed cleaning on the port side of the bilge. The deck plates were left open for the marine chemist's inspection.

         David Capen (“Capen”) has been a marine chemist since 1981 and was regularly hired by both Dann Marine and GSR. Capen arrived to inspect the Boat on Thursday, October 6, 2011 just as A2Z was finishing its cleaning.[9] Collins, signed off on the A2Z cleaning service, and met with Capen.

         Collins described to Capen the scope of work that was planned for the Boat.[10] Capen inspected the port fuel oil tank, the starboard aft fuel oil tank, and the engine room bilge, and took a number of sensor readings[11] to determine if the atmosphere was safe for workers and safe for limited hot work. At about 4:30 p.m. on Thursday, October 6, 2011, Capen issued to Dann Marine a marine chemist certificate that stated, in pertinent part:

Port [Fuel Oil Tank] Aft, [Starboard Fuel Oil Tank] Aft, Engine Room > Atmosphere Safe for Workers[, ] Safe for Limited Hot Work . . . .
Notes
(1) Hot Work Limited to replace rub rail [Starboard] Side No Closer than 6” of [Forward Fuel Oil Tank].
(2) Hot Work in Aft [Fuel Oil Tanks] ([Port/Starboard]) repair of vents and sounding Tubes.
(3) Maintain Fire Watch and Ventilation during all hot Work
(4) [Shipyard Competent Person[12] to Recheck daily prior hot Work.

Pl.'s Ex. 2.

         The hot work commenced on the Boat the next morning, Friday, October 7, 2011. Walter Wise (“Wise”), GSR's shop supervisor, was designated as the Shipyard Competent Person (“SCP”). He reviewed the hot work certificate to determine the limitations. Prior to starting the cutting in the engine room, a fire watch and equipment was set up in the engine room, a fire blanket was placed to cover the starboard generator at the aft of the engine room, and Wise performed his SCP inspection and report and posted the report with the chemist's hot work certificate by the engine room door. Steven Williams (“Williams”) began cutting out old steel at the aft of the engine room and moving forward.

         As the old steel was removed by cutting from the inside, new steel could then be fitted and welded on from the outside of the Boat by other GSR workers. At some point later on Friday, Ash drained, [13] dismantled, and removed the upper part of the starboard fuel manifold to make room for the cutting to be done on Monday. The deckhand, Jones, assisted with the dismantling, and Wise, noting them struggling with the manifold, helped them lift it up and set it down on the deck-plate on the port side of the engine room. Later on, the GSR night-shift covered the open manifold pipes with rags and tape to keep debris from getting in from their needle-gunning[14] activities preparing for Monday's cutting.

         C. The Day of the Fire

         Hot work continued on the Boat on Monday, October 10, 2011, starting at about 7:00 a.m. Wise performed the required SCP inspection and report and posted the report in the envelope with the chemist's hot work certificate by the engine room door. His inspection included a visual spot check of the bilges as well as the use of a “sniffer”[15] to test O2 (oxygen) and LEL (Lower Explosive Limit)[16] levels to ensure that the area was still safe for hot work.

         Wise assigned Subhas Sankar (“Sankar”) to be the fire watch and showed him what to do. Sankar and Williams prepared for cutting by setting up lights, bringing in and draping the cutting torch hoses[17] so they weren't on the deck where they could be tripped over, bringing in a charged garden (water) hose with a squeeze nozzle at the end, and stuffing fire blanket pieces in the holes on the ledge[18] under the area where Williams would be cutting. Sankar was responsible for keeping an eye on the welding on the outside of the engine room as well as Williams' cutting on the inside.

         Towards the end of the morning, Wise came by to let Sankar know he was being reassigned after lunch to a different task in the shipyard. The cutting stopped at about 11:15 to allow 15 minutes for a cooldown before Williams and Sankar left the engine room for their lunch break at around 11:30. After lunch, Sankar did not return to the engine room but went over to dry dock as he'd been assigned. Williams returned to the engine room to resume work, accompanied by Wise, who took over the fire watch duties from Sankar. They arrived back at the engine room at around 12:10.

         Ash, the Boat engineer, was working on board during the morning and recalls working on paperwork in either his stateroom or the wheelhouse. He reported taking his lunch break at noon in the Boat's galley. After his lunch break, Ash went to the engine room to perform some repair work on the starboard generator. Ash does not recall anyone working in the engine room while he was on lunch break, but he testified that when he went down in the engine room after lunch to begin working on the starboard generator, he saw a GSR worker cutting in the forward starboard side of the engine room in the area where the fuel manifold had been removed. Ash Depo. 74, ECF No. 73-1. Ash does not recall seeing anyone other than Williams in the engine room at that time.

         When Wise and Williams arrived in the engine room after lunch, they prepared to start the cutting work again. Wise spot-checked the bilge by lifting a couple of the bilge plates in the forward engine room. He checked with a flashlight to see if there was any liquid and found that the bilge was dry. Wise gave a light spray of water up against the side of the hull to wet it down a little in the area where Williams would be cutting. Williams plugged the holes in the ledge with fire cloth under the area where he would be cutting, and Wise checked it. Wise positioned himself in front of the starboard engine where he could also keep an eye on the welding in the aft part of the engine room.

         Williams resumed cutting in the starboard forward end of the engine room. He was crouched on the ledge, which was about six feet above the engine room deck, and he was cutting just underneath the main deck, which was about eight feet above the engine room deck. Just behind him and slightly aft was the wooden toolbox that was below where the fuel manifold had been removed. Williams had not placed a fire blanket on the painted wooden box because he felt it was in a “safe zone.” Tr. 4, 30:14-24.[19] As he continued to cut, Williams felt a heatwave under him, “intense enough to burn the hair out of [his] nostrils.” Tr. 4, 34:14-15. He looked down through his burning shield[20] and saw that he was engulfed in flame. He turned off the torch and cast it aside to his right, knocked the shield off with his hardhat, stretched over with one foot to step down on the wooden box and “hit the deck.” Tr. 4, 37:17-38:14.

         Williams saw Wise spraying water on the fire with the garden hose, but the water seemed to make the fire worse rather than better. Wise dropped the hose, and Williams tried spraying the fire with the garden hose but the flames reacted by intensifying. Wise picked the hose back up and continued spraying water. Believing it must be an oil fire, Williams grabbed one of the Boat's CO2 extinguishers and attempted to put out the fire by aiming it at the bilge area from which it appeared to him the flames were coming. But, the extinguisher didn't have any effect at putting out the flames. Realizing he wasn't doing any good, Williams threw the extinguisher down and headed for the stairs leading out of the engine room. On the way out, Williams saw Ash who was about to come help him fight the fire with another fire extinguisher. Williams told him to get out too, and they both exited the engine room through the starboard side door. Wise stayed where he was for a few seconds longer still trying to douse the fire with water to no avail. The smoke and heat was escalating quickly, and Wise left the engine room shortly after Williams and Ash, exiting through the starboard aft door.

         A call was made to 9-1-1, and fire department equipment was dispatched. Williams was told that he secured the tanks delivering gas and oxygen to the cutting torch, but he does not recall doing it. Ash saw Jones on the dock and asked him to call the Dann Marine office to let them know about the fire. The GSR crew nearby ran fire hoses and began to fight the fire. By 1:30 p.m., the fire department was on the scene, Christian LaPense (“LaPense”), Dann Marine's compliance manager, had left his office in Chesapeake City and was on his way to GSR, and Derick Lynch was actively helping coordinate with the fire response team.

         Foam was required to fight the fire, which was designated a Class B[21] (fueled by combustible liquid) fire. The port generator had been left running, so Ash explained to the firefighters how to turn it off by using the emergency shutoff in the galley. However, the firefighters could not access the shutoff, because it was already under boiling water from the firefighting. Instead, the firefighters went down into the engine room to shut it off according to Ash's instructions. By about 2:00 p.m., the fire was out and the generator secured.

         The bilge's electrical submersible pumps stopped working once the generator was shut off. Because the Boat had leaking packing glands, [22] submersible pumps were used to pump overboard any water that collected in the bilge's containment area. With no electricity to power the pumps, water collected in the bilge, from both the firefighting and the leaking. Dann Marine arranged to have the bilge pumped out by A2Z. In addition to a significant amount of water, about 350 gallons of fuel was pumped out of the bilge after the fire. This fuel may have come from leaking fuel.

         After being cleared by the firefighters, Ash returned to the engine room and saw that the sight glass[23] had been damaged and was leaking fuel. Ash turned off the valve, and the sight glass leaking stopped. Ash testified that the leaking sight glass could account for the 350 gallons of fuel that was later pumped out of the bilge. Ash Depo. 60:20-61:1.

         Dann Marine's compliance manager, LaPense, arrived at the Boat around 2:45-3:00 p.m. The fire was then out and one of the fire trucks was leaving GSR, but the fire department was still securing the scene. LaPense identified himself to one of the firefighters and received permission to access the Boat and document its condition. At that time, it was still very hot in the engine room, with water dripping, steam, foam, and water- soaked debris everywhere. The catwalk and deck around the engine room was warped and heat-damaged. The mess deck and galley were severely damaged, and the upper level of the Boat was smoke-damaged. LaPense took pictures and coordinated getting supplies for Ash and Jones and checking them into hotel rooms. Robert Dann arrived at GSR about an hour after LaPense and reviewed the Boat's damage along with Derick Lynch.

         At some point in the afternoon, the Coast Guard arrived. Seeing a potential environmental problem with the water and oil accumulating in the bilge, the Coast Guard directed Derick Lynch to put the Boat on dry dock the next morning. However, Robert Dann instructed Derick Lynch not to put the Boat on the dry dock and made alternate arrangements to resolve the liquid accumulation situation.[24]

         D. Post-fire Investigation

         GSR and Dann Marine notified their respective insurers, who dispatched fire investigators the day after the fire, October 11, 2011, to investigate the origin and cause of the fire. Aaron Redsicker (“Redsicker”), a certified fire investigator hired by Dann Marine's insurance company, arrived at the Boat on the morning of October 11, 2011 to begin his investigation.[25]The Coast Guard[26] and the Baltimore City fire department also conducted an investigation.

         On October 12, 2011, Stephen Murphy (“Murphy”), a marine surveyor[27] hired by Dann Marine and its insurer, met with Lee Goldberg (“Goldberg”), the surveyor representing GSR and its insurer, and LaPense, and did an initial[28] walk-through of the Boat to assess the extent of damage. Murphy drafted an initial report with recommendations, including a recommendation that qualified diesel mechanics look at the engines to see whether the fire or the efforts to put out the fire had caused any damage to the engines. Soon after, Flag Service and Maintenance Inc. (“Flag”) was dispatched to do an inspection, and they provided an initial estimate to repair the engines and generators.[29]

         GSR requested a joint survey.[30] Murphy testified that he believed he was doing a joint survey, but a joint report was never actually produced. Murphy testified that he drafted and signed a survey report and provided it to Goldberg and LaPense on October 17, 2011, but Goldberg gave it back to him unsigned.

         Murphy, Goldberg, and another surveyor[31] returned to the Boat for a follow-up visit on October 26, 2011. At that time, GSR was re-welding the hole on the side of Boat, [32] installing the rub rail and shell plate, stripping the loose gear that had been damaged in the fire, and cleaning the Boat in general. After that visit, on November 11, 2011, Murphy sent an email[33] to Goldberg confirming that he had prepared a revised Field Survey Report but was continuing to make further corrections and revisions and would submit a revised draft for review within a couple weeks. In the November 11 email, Murphy also noted that Robert Dann would be supervising and coordinating all repair operations on board the Boat and that Christopher Dann wanted all future visits to the Boat to be pre-scheduled appointments made through Dann Marine's representative, Murphy.

         Murphy visited the Boat again on December 12, 2011. Goldberg learned of the visit and emailed Murphy to question the status of the joint report and to schedule a visit on December 16, 2011 to check on the status of repairs. Murphy responded on the morning of December 16, 2011, advising that he was waiting to update the Field Survey Report until the full extent of damages were known given that additional damages, such as salt water damages to the engines, were still being uncovered. Murphy suggested that a final joint survey coincide with a visit to the Boat and to Flag Maintenance where the main engine power packs were being taken for inspection and overhaul. Goldberg responded an hour later that he planned to stop by the Boat that afternoon for a check-up visit. However, before he could do so, Cary Lynch advised Goldberg that Claudio Crivici (“Crivici”), who had been retained by GSR to provide a comprehensive damages and repair recommendation, was in contact with Murphy and planning a visit on Monday, December 19, 2011. Crivici followed up with an email to Goldberg a couple of hours later advising of the plan to meet at the Boat on Monday morning to perform a survey and obtain a signed survey report. Goldberg agreed to attend the joint survey on Monday, December 19, 2011.

         Late in the day on Saturday, December 17, 2011, Dann Marine moved the Boat out of the GSR shipyard with GSR equipment still on board, [34] without GSR's knowledge, but with approval from the Coast Guard. On Sunday, December 18, 2011, Christopher Dann sent an email to Goldberg, Crivici, the Lynches, Murphy, and others stating that no further surveys, visits, or investigations would take place on the Boat unless Dann Marine's insurers expressed the need.

         Murphy continued to work with Dann Marine's insurance company, reviewing the repairs and commenting on each invoice submitted regarding whether it was claim-related[35] or not.

         The heads were pulled from the engines just prior to Murphy's survey at Dann Marine's headquarters in Chesapeake City, Maryland in February 2012. Murphy noted rust spots on the heads as well as the engines. The engines were then fully disassembled and pulled from the Boat and delivered to Marine Systems in Chesapeake, Virginia, where they were inspected by Murphy in May 2012. Murphy suggested to Dann Marine's insurance company that an engine specialist evaluate the engine damages. Murphy went back to Chesapeake, Virginia in July 2012 to inspect the engines with Robert Newman (“Newman”), who had been selected as the engine specialist. Newman provided a report[36] to the insurance company in August 2012. Murphy and Newman were later retained as damages experts by Dann Marine.

         E. The Lawsuit

         Dann Marine filed the Complaint [ECF No. 1] on May 30, 2012, asserting five counts under admiralty jurisdiction:

. Count I - Breach of Contract,
. Count II - Breach of Implied Warranty of Workmanlike Performance,
. Count III - Negligence, . Count IV - Gross Negligence, and
. Count V - Breach of Bailment.

         GSR answered the Complaint on September 26, 2012, asserting multiple defenses including one stating that the terms and conditions of the contract contain an exculpatory clause that expressly precludes Dann Marine from any recovery of any damages, or in the alternative, limits GSR's liability to the amount of $300, 000.00 of actual damages proven at trial. Answer, ECF No. 14. GSR also asserted that Dann Marine's own negligence precluded recovery, it failed to mitigate damages, and that evidence had been spoliated by not allowing proper survey and assessment of damages. Id.

         After discovery, on January 13 and 30, 2014, Dann Marine and GSR filed cross-motions for partial summary judgment [ECF Nos. 32, 35] on the enforceability of the exculpatory clause in GSR's terms and conditions. The Court, by Judge Quarles, issued its decision on July 10, 2014, holding that the exculpatory clause did not limit GSR's liability to Dann Marine but only to third parties. Mem. Opinion 13, ECF No. 38. GSR's motion [ECF No. 32] was denied, and Dann Marine's motion [ECF No. 35] was granted. Id. at 14; Order 1, ECF No. 39.

         The five-day bench trial was held June 20-24, 2016, followed by post-trial briefing, and closing arguments were held on March 8, 2017. During closing argument, GSR again raised the exculpatory clause defense and asserted that there were two separate clauses, one of which had not previously been ruled on by Judge Quarles, and contending that Dann Marine was precluded from recovering damages in the event of fire, regardless of negligence or cause. On April 18, 2017, Dann Marine filed Plaintiff's Objection & Motion to Strike [ECF No. 107] GSR's arguments for enforcement of the contractual exculpation of all liability. That motion is also now ripe for decision.

         II. DISCUSSION

         A. Breach of Contract

         A contract to repair a ship is considered a maritime contract. Kossick v. United Fruit Co., 365 U.S. 731, 735 (1961); Sea Land Indus., Inc. v. Gen. Ship Repair Corp., 530 F.Supp. 550, 556 (D. Md. 1982). “[I]n an admiralty case, a court applies federal common law and can look to state law in situations where there is no admiralty rule on point.” Ost-West-Handel Bruno Bischoff GmbH v. Project Asia Line, Inc., 160 F.3d 170, 174 (4th Cir. 1998). Although state law may serve to supplement federal maritime law, maritime law controls if the two conflict. Wells v. Libby, 186 F.3d 505, 524-25 (4th Cir. 1999) (quoting Powell v. Offshore Navigation, Inc., 644 F.2d 1063, 1065 n.5 (5th Cir. 1981)). To the extent that state law is not inconsistent with admiralty principles, “state contract law may be applicable to maritime contracts.” Ham Marine, Inc. v. Dresser Indus., Inc., 72 F.3d 454, 459 (5th Cir. 1995). Also, the Uniform Commercial Code (“U.C.C.”) is considered a source for federal admiralty law. See Princess Cruises, Inc. v. General Elec. Co., 143 F.3d 828, 832 (4th Cir. 1998) (stating that “U.C.C. principles inform admiralty law”).

         Under Maryland law, a breach of contract claim requires a plaintiff to “prove that the defendant owed the plaintiff a contractual obligation and that the defendant breached that obligation.” Taylor v. Nations Bank N.A., 776 A.2d 645, 651 (Md. 2001). The plaintiff need not prove damages resulting from the breach, because it is well settled that where a breach of contract occurs, one may recover nominal damages even when there is a failure to prove actual damages. Id. (citations omitted). But “[u]nder both tort and contract law, one claiming damages must prove that a tortious act or breach of contract was the proximate cause of the damages claimed.” CR-RSC Tower I, LLC v. RSC Tower I, LLC, 56 A.3d 170, 196 n.41 (Md. 2012)(citations omitted).

         The parties agree that the contract contained an express provision requiring GSR to provide a fire watch.[37] Dann Marine contends that GSR breached this express provision of the contract by failing to provide the necessary fire watch on the afternoon of October 10, 2011. This contention is primarily based on Ash's testimony that he did not see Wise or any other fire watch on the Boat after the mid-day lunch break.

         Dann Marine also cites as additional evidence that there was no warning to Williams about the fire, Williams rather than Wise discharged the CO2 fire extinguisher, and Wise's reported escape route from the engine room is unusual and incredible.

         Both Wise and Williams credibly testified that Wise was acting as fire watch on the afternoon of October 10, 2011. The Court accepts that Ash may not have seen Wise even though he was actually there but not visible to Ash. The Court finds that Wise was present on the Boat as fire watch on the afternoon of October 10, 2011.

         Accordingly, GSR did not breach the express provision of the contract that required it to provide a fire watch during hot work.

         B. Breach of Implied Warranty of Workmanlike Performance

         “[A] contractor in admiralty is to effect ship repairs in a workmanlike manner.” Little Beaver Enters. v. Humphreys Rys., Inc., 719 F.2d 75, 77 (4th Cir. 1983)(citations omitted). “Though the implied warranty of workmanlike performance is a legal standard, the question of what is required in a workmanlike performance is necessarily a factual question that naturally varies from case to case based on the scope and nature of the service being undertaken.” N. Ins. Co. of N.Y. v. Point Judith Marina, LLC, 579 F.3d 61, 68 (1st Cir. 2009).[38]

         The implied warranty of workmanlike performance is broad and has been applied to find fault where repair jobs are not performed properly and “where efforts intended to prevent damage to a ship have been ineffective.” Little Beaver, 719 F.2d at 77. While the warranty parallels a negligence standard, as opposed to strict liability, it is not necessary to find that the repairer was negligent, nor does negligence on the shipowner's part block the owner from recovering for a breach of (1st Cir. 1986)(“The shipowner's negligence does not bar [] indemnity . . . arising from an implied warranty of workmanlike service . . . . [A]pplication of [the repairer's] indemnity rests on elements of expertise, control, supervision and ability to prevent accidents . . . .”).[39] Although some circuits have apportioned fault in such cases, “the Fourth Circuit has never embraced a comparative fault approach.” Matter of Robbins Mar., Inc., 906 F.Supp. 309, 316 (E.D. Va. 1995); see also Chisholm v. UHP Projects, Inc., 205 F.3d 731, 734 (4th Cir. 2000) (“Liability for the breach of the warranty of workmanlike performance arises without fault and appears to approach strict liability.” (citing Salter Marine, Inc. v. Conti Carriers and Terminals, Inc., 677 F.2d 388, 390 (4th Cir. 1982))). “A causal connection must be established between the claimed breach and the harm suffered.” SS Amazonia v. New Jersey Exp. Marine Carpenters, Inc., 564 F.2d 5, 10 (2d Cir. 1977).

         The warranty does not imply a guarantee of results, and “the extent of the warranty depends on ‘the circumstances of (the) case relating to control, supervision, and expertise.'” Tebbs v. Baker-Whiteley Towing Co., 407 F.2d 1055, 1059 (4th Cir. 1969)(quoting H & H Ship Service Co., v. Weyerhaeuser Line, 382 F.2d 711, 713 (9th Cir. 1967)). If the repairer has performed with the requisite degree of diligence, attention, and skill, or if the repairer's efforts “have been hindered by the actions of the other contracting party, the repair firm will not be held responsible . . . .” Little Beaver, 719 F.2d at 78.

         In the instant case, GSR had a contractual duty to perform the hot work on the Boat with care and diligence. As well, GSR had a contractual duty to prevent fire on the Boat during the hot work by providing the SCP, a fire watch, and taking appropriate preventive measures. Dann Marine contends that if Wise was present on the Boat as fire watch, his performance was deficient - “the functional equivalent of not having a fire watch.” Pl.'s Post-trial Br. 15, ECF No. 90.

         The Court finds that the preponderance of the evidence establishes that Wise, as fire watch, failed to cover or remove fire hazards, such as the wooden toolbox, with fire blankets, failed to adequately spray the hull to keep it cool, and failed to respond diligently at the first sign of flame. Tr. 4, 37:6-38:22, 75:12-76:6, 111:12-17, Tr. 5, 51:14-52:8. The evidence also establishes that flames and smoke are inevitable in a hot work zone due to hot slag and sparks. Tr.4, 116:24-117:14. The Court finds that Wise failed to use the degree of diligence, attention, and skill adequate to the task of being a fire watch, and, as a result, the inevitable flames were not controlled and the Boat was damaged. Certainly, it is foreseeable that damage could result from a failure adequately to perform fire watch duties in a hot work environment.

         GSR asserts that Dann Marine failed to have the Boat properly cleaned for hot work and provided inadequate information to the chemist and argues that such failures relieve GSR of responsibility. However, Dann Marine did not prevent, nor hinder, GSR from doing its duty to inspect or take preventive measures to avoid or minimize fire during hot work. As SCP, Wise had the expertise, [40] the control, and the supervisory duty to ensure the Boat was safe for hot work before it commenced, and as fire watch, he had the duty to ensure it remained safe while the hot work was ongoing. Wise failed to take reasonable care to fulfill his duties, and his failure resulted in an uncontrolled fire that damaged the Boat. Any evidence of fault on Dann Marine's part neither relieves GSR of its duty to act competently nor precludes Dann Marine's recovery.[41]

         Accordingly, the Court finds that GSR breached the implied warranty of workmanlike performance.

         C. Breach of Bailment

         A bailment is

the relation created through the transfer of the possession of goods or chattels, by a person called the bailor to a person called the bailee, without a transfer of ownership, for the accomplishment of a certain purpose, whereupon the goods or chattels are to be dealt with according to the instructions of the bailor.

Danner v. Int'l Freight Sys. of Washington, LLC, 855 F.Supp.2d 433, 448 (D. Md. 2012)(quoting Broadview Apts. Co. v. Baughman, 350 A.2d 707, 709 (Md. 1976)). Under Maryland law, a bailment consists of the following elements:

(1) An existing subject-matter;
(2) A contract with a reference to the subject matter, which involves possession of it by the bailee;
(3) Delivery, actual or constructive; and
(4) Acceptance, actual or constructive.

Id.

         “[A] contract for the storage or repair of a boat constitutes a bailment agreement.” Commercial Union Ins. Co. v. Bohemia River Assocs., Ltd., 855 F.Supp. 802, 805 (D. Md. 1991)(citation omitted). The bailment imposes on the shipyard a duty of reasonable or ordinary care to avoid loss or damage during the performance of its contractual duties. Nat'l Liab. & Fire Ins. Co. v. R & R Marine, Inc., 756 F.3d 825, 830 (5th Cir. 2014).

         Under admiralty law, a rebuttable presumption of negligence is inferred if the bailor proves that the vessel was delivered in good condition and was damaged while in the exclusive possession of the bailee. Commercial Union, 855 F.Supp. at 805. The burden then shifts to the defendant, who can rebut the presumption in two ways:

(1) by affirmatively showing defendant's use of reasonable and ordinary care, or
(2) by proving that the damage was not attributable to the defendant's negligence.

Id.

         There is, however, no presumption of negligence inferred if the bailor cannot establish that the bailee had exclusive possession and control of the vessel. Id.; see also Man Ferrostaal, Inc. v. M/V Akili, 704 F.3d 77, 88 (2d Cir. 2012) (“A bailment does not arise unless delivery to the bailee is complete and he has exclusive possession of the bailed property.”).

         GSR argues that it did not have exclusive possession of the Boat. A Dann Marine chief engineer, Ash, and a deckhand, Jones, stayed aboard the Boat during the time it was at GSR until the fire. They performed maintenance repairs, ran a generator to provide power to the Boat, and removed the fuel manifold to make room for GSR's hot work. Additionally, Dann Marine's port engineer, Collins, directed and inspected the cleaning of the Boat in preparation for hot work after the Boat arrived at GSR. Dann Marine contracted with the marine chemist, Capen, and Collins met with Capen at the Boat to review the scope of work and obtain the Marine Chemist Certificate.

         A bailment becomes limited under circumstances where the owner remains or has an agent or employee responsible for the vessel, such that exclusivity of control is compromised. R & R Marine, 756 F.3d at 831. However, mere access to the vessel by the bailor or its agents does not affect exclusive possession. Goudy & Stevens, Inc. v. Cable Marine, Inc., 924 F.2d 16, 19 n.3 (1st Cir. 1991). “Rather, [exclusive possession] implies that possession and control must be of such a nature as to permit a reasonable trier of fact to infer that the bailee is in the better, or sole, position to explain what actually happened.” Id. at 19; see also Fireman's Fund Am. Ins. Co. v. Captain Fowler's Marina, Inc., 343 F.Supp. 347, 350 (D. Mass. 1971)(holding that the presumption did not apply when neither party had knowledge of the origin of a fire but the cause was ascertained).

         In Goudy, the First Circuit affirmed the lower court's finding that, “since both parties had equally unrestricted access to the vessel at all times, there was no basis for an inference of negligence . . . .” Id. In R & R Marine, the Fifth Circuit upheld the lower court's finding that the shipyard had full custody of the vessel under circumstances where the shipyard had stipulated to having full custody in the parties' agreement, and the presence of the owner's agents did not create a limited bailment. 756 F.3d at 831.

         In the instant case, there was no stipulation in the parties' agreement related to GSR accepting full custody or exclusive control. Rather, Dann Marine specifically retained control over various aspects of the repairs and had employees on board at all times prior to the fire. GSR also argues that Dann Marine's removal of the Boat after the fire without notification to GSR is evidence that GSR never had exclusive control over the Boat. However, the Court does not find Dann Marine's removal of the Boat after the fire relevant to GSR's control prior to the fire.

         The Court finds that, under the circumstances herein, only a limited bailment was created. GSR's possession and control over the Boat was not of such a nature as to permit an inference that GSR “is in the better, or sole, position to explain what actually happened.” Goudy, 924 F.3d at 19. However, even without any presumption of GSR's ...


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