Sawyer Brothers, Inc. v. Island Transporter, LLC , 887 F.3d 23 ( 2018 )

United States Court of Appeals
For the First Circuit
No. 16-2470
SAWYER BROTHERS, INC.; RYAN SAWYER; and ROSS SAWYER,
Plaintiffs, Appellees,
v.
ISLAND TRANSPORTER, LLC; and M/V ISLAND TRANSPORTER
(O.N. 1087160),
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Nancy Torresen, U.S. District Judge]
Before
Barron, Selya, and Lipez,
Circuit Judges.
Terence G. Kenneally, with whom Clinton & Muzyka P.C. was on
brief, for appellants.
Twain Braden, with whom Leonard W. Langer and Thompson Bowie
& Hatch LLC were on brief, for appellees.
April 3, 2018
LIPEZ, Circuit Judge. Sawyer Brothers, Inc. hired
Island Transporter, LLC to ferry three construction vehicles and
their drivers from Rockland, Maine to North Haven, Maine. The M/V
ISLAND TRANSPORTER encountered rough seas while traversing
Penobscot Bay, and two of the vehicles tipped over onto the
vessel's port bulwark. Sawyer Brothers, Inc., and its owners Ryan
and Ross Sawyer (collectively, "Sawyer Brothers"), subsequently
filed this maritime action, claiming that the ship captain was
negligent and seeking damages for property loss and emotional
distress.
Following a bench trial, the district court found in
favor of Sawyer Brothers and awarded $257,154.03 in damages,
including $100,000 for the Sawyers' emotional distress. On appeal,
Island Transporter, LLC and M/V ISLAND TRANSPORTER (collectively,
"Island Transporter") challenge both the district court's
negligence finding and its damages award.
With the exception of one minor damages issue, we agree
with the district court's well-reasoned decision, including its
determination on an issue of first impression in our circuit --
that a plaintiff within the zone of danger can recover for
negligent infliction of emotional distress in maritime cases. We
therefore affirm its judgment in substantial part, vacating only
one element of the damages award.
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I.
In December 2014, Sawyer Brothers was hired to construct
a foundation in North Haven, an island in Penobscot Bay.1 It
engaged Island Transporter to ferry a cement truck, a Mack truck,
and a pickup truck, along with the Sawyers themselves and the
cement truck's driver, from Rockland Harbor to North Haven Harbor.
The M/V ISLAND TRANSPORTER began its run to North Haven on the
morning of December 11, 2014, with Richard Morse as its captain
and James McIntyre as its mate.
The National Oceanic and Atmospheric Administration
("NOAA") provides mariners with weather information by making
periodic forecasts and publishing data from weather buoys. For
forecasting purposes, NOAA divides the ocean into forecast areas,
two of which are relevant to this case. The route taken by the
M/V ISLAND TRANSPORTER that morning fell within the southern
portion of the Penobscot Bay area. The Coastal Waters area from
Stonington to Port Clyde ("Coastal Waters") borders the Penobscot
Bay area to the south.
At the time the vessel departed -- approximately 8:30
a.m. -- the most recent forecast from NOAA predicted southerly
1 We summarize the background facts of this case only to the
extent necessary to contextualize our analysis. For a more
detailed recitation, see Sawyer Brothers, Inc. v. M/V Island
Transporter, No. 15-cv-00338-NT, 2016 WL 6537575 (D. Me. Nov. 3,
2016).
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winds of 10-20 knots with waves of 2-4 feet for the Penobscot Bay
area. For the Coastal Waters area, NOAA predicted significantly
higher waves of 8-11 feet, with wind gusts up to 30 knots. These
predicted wave heights represent the average of the highest one
third of all waves -- a measurement known as "significant wave
height." Thus, when a forecast predicts waves of 2-4 feet, it is
reasonable to expect some waves to be higher than 4 feet.
NOAA also publishes data from weather buoys maintained
by the North Eastern Regional Association of Coastal Ocean
Observing Systems. One such buoy, known as the F01 buoy, is
proximate to the route taken by the M/V ISLAND TRANSPORTER. Data
from the buoy is published hourly online and on the radio. At
7:30 a.m. on December 11, 2014, the buoy recorded a significant
wave height of 6.3 feet, with 10.7 seconds between waves, and wind
speeds of 18.7 knots. At 8:30 a.m., the significant wave height
was 6.7 feet, with 5.3 seconds between waves. By 9:30 a.m., the
significant wave height had increased to 7.1 feet, with 5.3 seconds
between waves.
Captain Morse relied on the forecast for the Penobscot
Bay area the morning of December 11, but disregarded the Coastal
Waters forecast because his route did not cross into that area.
It was part of Captain Morse's normal routine to check the F01
buoy's data, though he has no specific recollection of checking
the buoy's data on that particular morning. In any event, Captain
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Morse determined that the forecast allowed for safe passage to
North Haven, and he arrived at Rockland Harbor to load the vehicles
and passengers.
Once aboard, Ryan Sawyer sat in Sawyer Brothers' 1987
Mack truck, which was situated at the vessel's bow, with the
truck's cabin facing forward. The truck was mounted with a 1992
Copma knuckleboom crane, capable of extending 68 feet and lifting
2,400 pounds. Ross Sawyer sat in Sawyer Brothers' pick-up truck,
which was located in the middle of the vessel, facing the stern.
Dana Martin, who is not a party to this suit, sat in his loaded
cement truck, which was situated at the vessel's stern, with the
truck's cabin facing forward toward the bow. Mate McIntyre placed
chocks at all three vehicles' wheels to help stabilize them for
the trip. He did not take the additional precaution of chaining
the vehicles to the "D rings" located on the vessel's deck.
Conditions were mild as the vessel left the dock. Once
the ship cleared the protected waters of Rockland Harbor and
entered the stretch of open water between the mainland and North
Haven, calm seas gave way to a far more tumultuous environment.
Video captured on Ryan Sawyer's cellphone shows the vessel's bow
dipping up and down, as sizeable waves crash aboard, peppering the
Mack truck's windshield with sheets of ocean water. As Ryan Sawyer
continued to film, a sequence of waves hit the starboard side of
the ship and caused the truck to tip toward the vessel's port side
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until the vehicle struck the port bulwark. The truck rested
diagonally against the bulwark, with the driver-side door angled
downward and the passenger-side door angled upward. Ryan Sawyer
feared that he would be trapped in the truck's cabin as it went
overboard, or as the ship capsized. After a minute or two, he was
able to escape the cabin by standing on the side of the driver's
seat, pushing open the passenger-side door, lifting himself out of
the cabin, and jumping down to the deck.
At the other end of the vessel, Dana Martin was sitting
inside the cement truck as it also tipped over, striking the port-
side bulwark, and resting against it diagonally.2 Martin honked
the truck's horn to alert everyone to the situation, and then
managed to exit the truck's cabin through its driver-side door.
Ross Sawyer watched the scene unfold and feared that the cement
truck and the Mack truck would tip overboard with Martin and his
brother trapped inside. He also feared that the ship would
capsize, and he would drown.
Although the weight of the vehicles against the port-
side bulwark caused the M/V ISLAND TRANSPORTER to develop a
significant list of 37 degrees, Captain Morse navigated the ferry
to North Haven harbor without further incident. The Sawyers
2 This case does not involve damages for the cement truck.
Though the record does not disclose whether the cement truck was
owned by Dana Martin or his employer, neither is a party in the
case.
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managed to walk away physically uninjured, but their Mack truck
sustained enough damage that their insurer would later deem it a
total loss.
Sawyer Brothers filed suit against Island Transporter in
August 2015, alleging negligence and seeking damages for its Mack
truck, lost profits, damaged construction supplies, and emotional
distress. Following a three-day bench trial, the district court
found that Captain Morse was negligent in failing to lash down the
Mack truck and the cement truck. It awarded Sawyer Brothers
$126,859.03 for replacing the Mack truck, $5,025 for damaged
plywood panels that the Mack truck was carrying, $25,270 for lost
profits, and $100,000 for emotional distress. Island Transporter
now appeals the district court's finding of negligence and each
damages award.
II.
A. Standard of Review
Island Transporter challenges the subsidiary factual
findings upon which the district court based its negligence
determination. Where a district court conducts a bench trial and
serves as the factfinder, we review its factual findings for clear
error. See N. Ins. Co. of N.Y. v. Point Judith Marina, LLC, 579
F.3d 61, 67 (1st Cir. 2009); Sierra Fria Corp. v. Donald J. Evans,
P.C., 127 F.3d 175, 181 (1st Cir. 1997). Accordingly, we will set
aside a trial court's factual findings only if "after careful
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evaluation of the evidence, we are left with an abiding conviction
that those determinations and findings are simply wrong." N. Ins.
Co. of N.Y., 579 F.3d at 67 (quoting Jackson v. United States, 156
F.3d 230, 232-33 (1st Cir. 1998)).
Island Transporter's challenge to the district court's
damages award rests on both factual and legal grounds. We review
the district court's factual determinations in fixing damages for
clear error. See La Esperanza de P.R., Inc. v. Perez y Cia. de
P.R., Inc., 124 F.3d 10, 21 (1st Cir. 1997); Reilly v. United
States, 863 F.2d 149, 166 (1st Cir. 1988). We review its legal
conclusions de novo. See Lawton v. Nyman, 327 F.3d 30, 42 (1st
Cir. 2003) ("The district court's method of calculating damages in
this case is essentially a conclusion of law, to which we give
full review.").
B. Negligence
While the familiar elements of negligence -- duty,
breach, causation, and damages -- apply in maritime cases, we look
to "the principles of maritime negligence" to provide substance to
each element. La Esperanza de P.R., Inc., 124 F.3d at 17; see
also Canal Barge Co. v. Torco Oil Co., 220 F.3d 370, 376 (5th Cir.
2000) (reciting the elements of negligence in a maritime case).
Thus, under maritime negligence law, "a shipowner owes the duty of
exercising reasonable care towards those lawfully aboard the
vessel who are not members of the crew." Kermarec v. Compagnie
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Generale Transatlantique, 358 U.S. 625, 630 (1959). A private
carrier, such as Island Transporter, also assumes a duty "to
exercise due care in the protection of the goods committed to [its]
care." Commercial Molasses Corp. v. N.Y. Tank Barge Corp., 314
U.S. 104, 110 (1941). "Under this standard, the degree of care
required must be in proportion to the apparent risk." Muratore v.
M/S Scotia Prince, 845 F.2d 347, 353 (1st Cir. 1988). A captain
breaches his duty of reasonable care "if he 'makes a decision which
nautical experience and good seamanship would condemn as
inexpedient and unjustifiable at the time and under the
circumstances.'" DiMillo v. Sheepscot Pilots, Inc., 870 F.2d 746,
748 (1st Cir. 1989) (alteration omitted) (quoting The Lizzie D.
Shaw, 47 F.2d 820, 822 (3d Cir. 1931)). We have long recognized
that, for a captain, the duty of reasonable care clearly includes
a "duty to monitor and take into account weather conditions." Id.
The district court found that Captain Morse breached his
duty of care by failing to utilize the M/V ISLAND TRANSPORTER'S D-
rings to lash down the construction vehicles. This negligence
determination was based in part upon the district court's
subsidiary finding that the weather conditions that caused the
incident were foreseeable. More specifically, the court
determined that the weather information available to Captain Morse
would have apprised him of a likelihood of rough seas. The
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district court also found that the incident was not caused by two
unforeseeable rogue waves.
Island Transporter challenges both of these subsidiary
factual findings. It asserts that the weather information
available to Captain Morse would not have apprised him of rough
seas along his route, and maintains that the incident was caused
by two unpredictable rogue waves. Under its view of the facts,
Island Transporter argues that Captain Morse did not breach his
duty of care because the incident was unforeseeable.
1. Available Weather Information
The district court determined that Captain Morse could
have reasonably anticipated 5-7.5 foot seas on the voyage. It
reached this conclusion by averaging the 2-4 foot seas forecasted
for the Penobscot Bay area and the 8-11 foot seas forecasted for
the Coastal Waters area. Island Transporter believes this
calculation was clearly erroneous because the M/V ISLAND
TRANSPORTER'S route remained entirely within the Penobscot Bay
area. Thus, according to Island Transporter, only that area's
forecast was relevant to Captain Morse. Given the much calmer 2-
4 foot predicted seas, he could not have reasonably foreseen the
conditions the M/V ISLAND TRANSPORTER would encounter.
Island Transporter's position overlooks an abundance of
testimony suggesting that the Coastal Waters forecast was relevant
to assessing the sea conditions along the vessel's route. Though
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the route fell entirely within Penobscot Bay, it came close to the
northern border of the Coastal Waters area. The wind on the
morning of December 11 was blowing from a southerly direction;
that is, from the open seas of the Coastal Waters area toward the
Penobscot Bay area. Maine State Ferry Captain Almer Dinsmore
testified that, given the direction of the wind and the route's
proximity to the Coastal Waters area, the Coastal Waters forecast
was highly relevant to assessing the predicted weather conditions
along the route. He opined that it would have been unreasonable
in those circumstances for a ship captain to rely solely on the
Penobscot Bay forecast.
Other witnesses echoed this sentiment. Both Mate
McIntyre and Maine State Ferry Service Port Captain Daniel McNichol
represented that they rely on both areas' forecasts when they sail
comparable routes. Island Transporter's own weather expert
testified that it would be unreasonable to think there would be an
abrupt transition -- from 2-4 foot seas in Penobscot Bay to 8-11
foot seas in the Coastal Waters area -- right at the boundary of
the two zones.3 Island Transporter's nautical expert similarly
testified on cross examination that it would be a mistake to rely
solely on the Penobscot Bay forecast. Even Captain Morse conceded
3 Sawyer Brothers elicited this testimony after it called
Island Transporter's weather expert, Ken McKinley, as a witness in
its case-in-chief.
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that it is generally prudent to rely on more than one piece of
weather information in making navigational decisions, and that the
Coastal Waters forecast is in some circumstances relevant to the
Rockland-to-North Haven route.
Given this testimony, the district court's finding that
the information available to Captain Morse would have apprised him
of a likelihood of rough conditions did not rest on a clearly
erroneous view of the facts. To the contrary, the record contains
ample testimony to support the court's conclusion that the Coastal
Waters area forecast was relevant to predicting the weather
conditions along the M/V ISLAND TRANSPORTER'S route.
2. The Rogue Wave Theory
Island Transporter challenges the district court's
finding that the incident was not caused by two "rogue waves." A
rogue wave is classified as such if it is more than twice the
significant wave height. Although the record does not reveal
precisely how often rogue waves occur, expert testimony
established that so-called "extreme waves" -- those reaching about
double the significant wave height -- occur once every thousand
waves. Rogue waves are not only larger, but also rarer than
extreme waves.
The only evidence at trial supporting Island
Transporter's rogue wave theory was Captain Morse's testimony. He
testified that two rogue waves hit the vessel in quick succession,
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causing the cement truck and the Mack truck to tip against the
port bulwark. According to Captain Morse, these waves were 12-15
feet high, and anomalous compared to the other waves the vessel
had encountered.
The district court found Captain Morse's testimony to be
not credible for a number of reasons. It noted that Captain Morse
was the only witness who testified to having seen the rogue waves.
The court also stated that the Coast Guard incident report filed
by Island Transporter identified the offending waves as being 10-
12 feet, not 12-15 feet. Such waves were foreseeable -- not rogue
-- considering the predicted wave heights for the Penobscot Bay
and Coastal Waters areas, as well as the F01 buoy data. Perhaps
most damaging to Captain Morse's testimony is the video recorded
by Ryan Sawyer from the Mack truck's cabin. The district court
observed that the video depicted a series of similarly sized waves,
not two anomalous swells.
We have repeatedly said that "in a bench trial,
credibility calls are for the trier." Carr v. PMS Fishing Corp.,
191 F.3d 1, 7 (1st Cir. 1999). We see no basis here for deviating
from that principle. Indeed, the district court aptly supported
its credibility assessment by finding that Ryan Sawyer's video,
the weather data, the Coast Guard report, and the lack of
corroborating testimony contradicted Captain Morse's position.
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Our review of that evidence confirms that the court's decision to
reject the rogue wave theory was not clearly erroneous.
C. Damages for the Mack Truck
The district court awarded Sawyer Brothers $126,859.03
for the loss of its Mack truck, after finding that the truck's
fair market value could not be established, and using as the
relevant measure of damages Sawyer Brothers' replacement cost.
The court assessed that cost as $206,859.03. It then deducted
$80,000 to account for Sawyer Brothers' insurance recovery,
resulting in the $126,859.03 award.
Island Transporter challenges this award on three
grounds. First, it assails the district court's finding that the
truck's fair market value could not be reasonably established.
Second, it argues that the court committed legal error by failing
to deduct the Mack truck's salvage value from Sawyer Brothers'
damages. Third, it challenges the court's decision to treat Sawyer
Brothers as the real party in interest for its Mack truck,
asserting instead that the company's insurer was the real party in
interest.
1. Fair Market Value vs. Replacement Cost
The parties agree that the ordinary measure of damages
under maritime law for property deemed a total loss is the
property's fair market value, less its salvage value. See Dimillo,
870 F.2d at 752 ("[W]here a vessel is adjudged a complete loss,
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the damages will be derived by calculating the vessel's value and
deducting therefrom the salvage proceeds, if any there be."); Texas
Co. v. R. O'Brien & Co., 242 F.2d 526, 527 (1st Cir. 1957) (stating
that "the normal measure of damages is the vessel's fair market
value").4 Courts determine fair market value based on the price
paid for comparable property on the open market. See Standard Oil
Co. of N.J. v. S. Pac. Co., 268 U.S. 146, 155 (1925); Moench v.
Marquette Transp. Co. Gulf-Inland, 838 F.3d 586, 592 (5th Cir.
2016). If fair market value cannot be determined, courts may
resort to alternative measures of damages. See, e.g., Standard
Oil, 268 U.S. at 155 ("Where there is no market value, . . . other
evidence is resorted to."); Moench, 838 F.3d at 592.5
Island Transporter argues that the evidence at trial
allowed the district court to establish the Mack truck's fair
market value, making the court's decision to resort to replacement
4 In addressing the damages analysis for the Mack truck, both
the parties and the district court relied primarily on case law
dealing with damaged vessels. See, e.g., Standard Oil Co. of N.J.
v. S. Pac. Co., 268 U.S. 146 (1925); Dimillo, 870 F.2d at 746;
Greer v. United States, 505 F.2d 90 (5th Cir. 1974). Although the
Mack truck is not a vessel, the rule for measuring damages to cargo
is materially similar to the rule for measuring damages to vessels.
See Columbia Brick Works, Inc. v. Royal Ins. Co. of Am., 768 F.2d
1066, 1068–69 (9th Cir. 1985) (explaining that the proper measure
of damages for cargo is based on market value, but that courts may
use other indicators of value when market price proves inaccurate).
5 See also Ill. Cent. R.R. v. Crail, 281 U.S. 57, 64–65 (1930)
("The test of market value is at best but a convenient means of
getting at the loss suffered. It may be discarded and other more
accurate means resorted to, if, for special reasons, it is not
exact or otherwise not applicable.").
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cost erroneous. Specifically, Island Transporter contends that
the court should have relied on its valuation expert's estimate of
the truck's fair market value, or on Ryan Sawyer's lay testimony
regarding fair market value.
Island Transporter's expert assessed the Mack truck's
fair market value at $38,000. He reached this figure by employing
a peculiar methodology. Sawyer Brothers had filed an insurance
claim following the incident, and its insurer took possession of
the Mack truck as part of the claim's settlement. A third party
then listed the truck for sale for $39,500. The valuation expert
used this listing as the benchmark to estimate the Mack truck's
fair market value. However, the expert testified that when he
made this estimate, he did not realize that the Mack truck had
been listed for sale in its damaged condition.
The district court rejected the expert's valuation,
finding that his methodology was "seriously discredit[ing]." We
agree. The expert erroneously assessed the value of the undamaged
Mack truck based on its listing price in its damaged condition.
Given his flawed methodology, the district court was not obligated
to rely on the expert's conclusion in awarding damages for the
Mack truck.
Ryan Sawyer also offered an opinion as to the Mack
truck's value. Disputing the valuation expert's $38,000 estimate,
Ryan opined that the truck was worth $80,000 to $90,000. He then
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testified at length about his attempts to find a replacement truck,
explaining that -- to suit Sawyer Brothers' needs -- the company
required a truck with a minimum 68-foot crane, a flatbed to hold
equipment, four outriggers, and certain other features. The truck
would also have to be capable of passing Department of
Transportation and Occupational Safety and Health Administration
safety inspections. Despite reviewing truck listings for months,
Ryan stated that he could not find a replacement that met these
specifications. Eventually, he located a 2006 Sterling crane truck
in Wisconsin. Sawyer Brothers purchased and then modified the
truck to suit its needs, at a total cost of $206,859.03, according
to the district court. Ryan testified that this was the least
expensive truck he could locate.
In finding that the Mack truck's fair market value could
not be reasonably established, the district court did not mention
Ryan Sawyer's testimony that the truck was worth $80,000 to
$90,000. This omission does not undermine the court's finding.
As an initial matter, the phrase "fair market value" is a term of
art under maritime law. It refers to a specific measure of
valuation, based on the price of "contemporaneous sales of like
property . . . bought and sold in the market." Standard Oil, 268
U.S. at 155. Ryan, a lay witness, was not provided with this
definition when he testified, and offered no indication that the
basis for his valuation was sales of "like property." Id. Indeed,
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when asked by Sawyer Brothers' attorney to provide a basis for his
estimate, Ryan appeared not to understand the line of questioning.
Apparently realizing that Ryan would not be able to
articulate a basis for his valuation, Sawyer Brothers' attorney
began asking him about the unique features of the Mack truck, and
his prolonged search for replacing it. As noted above, Ryan
responded to this line of questioning by explaining that he was
unable to find any comparable trucks on the market after months of
searching. In other words, Ryan testified, at considerable length,
that the market lacked any sales of "like property" that could be
used to establish the Mack truck's fair market value. Id. This
fact is precisely what justified the district court's decision to
resort to an alternative measure of damages. The balance of Ryan's
testimony thus undermined his lay assessment of the truck's fair
market value and supported the court's finding that the fair market
value could not be established. For these reasons, the district
court was not obligated to rely on his estimate of the truck's
value.6
2. The Salvage Value Deduction
As noted, the district court determined that Sawyer
Brothers' replacement cost was $206,859.03. It then reduced that
6 Island Transporter does not challenge the district court's
choice of replacement cost as the alternative measure of damages,
so we do not reach that issue.
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amount by $80,000 to account for the company's insurance recovery,
and awarded Sawyer Brothers $126,859.03 for the Mack truck. Island
Transporter argues that the district court should have also reduced
the award by the Mack truck's salvage value, which it asserts was
$39,500. See Dimillo, 870 F.2d at 752. We do not agree.
A careful review of the record shows that Sawyer Brothers
forfeited the Mack truck's salvage value to its insurer following
the incident. Ryan Sawyer testified that Sawyer Brothers filed a
claim with its insurance company, and the insurer deemed the Mack
truck a total loss. Sawyer Brothers then settled its insurance
claim for $80,000, and -- importantly -- the insurer took
possession of the damaged Mack truck as a condition of the payment.
The salvage value thus became the insurer's property, and the
district court correctly abstained from further reducing the
damages award.
3. Real Party in Interest
Pursuant to Federal Rule of Civil Procedure 17(a), all
civil actions must be "prosecuted in the name of the real party in
interest." When an insurer has paid the entire loss suffered by
its insured, the insurer becomes the real party in interest. See
United States v. Aetna Cas. & Sur. Co., 338 U.S. 366, 380–81
(1949); State Farm Mut. Liab. Ins. Co. v. United States, 172 F.2d
737, 739 (1st Cir. 1949). However, when an insurer pays only part
of the loss suffered by its insured, the insured remains a real
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party in interest together with the insurer. See Aetna Cas. &
Sur. Co., 338 U.S. at 381; State Farm Mut. Liab. Ins. Co., 172
F.2d at 739.
Island Transporter argues that Sawyer Brothers is not a
real party in interest because Sawyer Brothers' insurer paid its
entire loss. However, the district court properly found that
Sawyer Brothers' loss exceeded its gross insurance recovery by
$126,859.03. Sawyer Brothers was thus a real party in interest
because its insurer paid only part of its loss.
D. Damaged Panels
The district court awarded Sawyer Brothers $5,025 for
plywood panels that it found were damaged in the incident. The
only evidence offered by Sawyer Brothers pertaining to the damaged
plywood panels was the testimony of Ryan Sawyer. He testified
that the Mack truck was carrying 63 eight-foot plywood panels,
which cost an average of $120.50 each.7 Ryan estimated that
approximately 80% of the panels were damaged on the voyage, but
declared that Sawyer Brothers continued to use the panels in their
damaged condition. This was so, he explained, even though the use
of damaged panels generally results in a reduced quality of work.
7 More precisely, Ryan testified that the truck was carrying
126 four-foot panels, and that the four-foot panels were made by
cutting eight-foot panels in half. He estimated that the eight-
foot panels cost between $118 and $123 each.
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Based on this testimony, the district court found that
the incident caused damage to approximately 50 eight-foot panels.
It multiplied this quantity by a $120.50 per-panel cost to reach
a total of $6,025. The court then reduced this amount by $1,000
to account for its finding that Sawyer Brothers continued to use
"some" of the damaged panels. That is to say, the district court
did not award damages for panels that it found Sawyer Brothers
continued to use on construction projects.
The district court's findings regarding the cost of the
panels and the number of panels damaged are consistent with Ryan
Sawyer's testimony, but its finding regarding Sawyer Brothers'
continued use of the panels is not. It mistakenly concluded that
Sawyer Brothers only continued to use some of the damaged panels,
when Ryan testified that the company continued to use all of the
damaged panels. Moreover, Ryan Sawyer did not indicate that the
diminished quality of work caused by using damaged panels resulted
in any injury to Sawyer Brothers -- for example, in the form of
increased labor costs or decreased revenue. For these reasons,
the district court's $5,025 award for damaged panels rests on a
clearly erroneous view of the facts.
E. Lost Profits
The district court awarded Sawyer Brothers $25,270 in
damages for the cost of additional labor, and for certain jobs it
declined, because it could not use its Mack truck. In challenging
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this award, Island Transporter alludes to the maritime-law maxim
that when a vessel is a total loss, the owner cannot recover lost-
profit damages. See The Umbria, 166 U.S. 404, 421-22 (1897). It
argues that the rule applies to the lost profits caused by the
damage to Sawyer Brothers' Mack truck. We disagree.
In The Umbria, the Supreme Court declined to award
damages for the "probable profits" of a charter agreement entered
into shortly before a collision rendered the Iberia vessel a total
loss. Id. at 421. Lost profits, the Court explained, "may be
considered in cases of delay occasioned by a partial loss, where
the question is as to the value of the use of the vessel pending
her repairs." Id. But, where a vessel is a total loss,
the recovery of such profits is limited to the
voyage which the vessel is then performing;
since, if the owner were entitled to recover
the profits of a future voyage or charter,
there would seem to be no limit to such right
so far as respects the time of its
continuance; and, if the vessel were under a
charter which had months or years to run, the
allowance of the probable profits of such
charter might work a great practical injustice
to the owner of the vessel causing the injury.
Id. at 422.
This old rule of maritime law survives to the present
day. See, e.g., A & S Transp. Co. v. Tug Fajardo, 688 F.2d 1, 2
(1st Cir. 1982); Matter of P & E Boat Rentals, Inc., 872 F.2d 642,
648 (5th Cir. 1989). Its purpose, as stated in The Umbria, is to
protect tortfeasors from incurring overly speculative or excessive
- 22 -
liability, particularly when they damage vessels that have months,
or years, of work under agreement. 166 U.S. at 422. The owner of
such a vessel is instead expected to promptly acquire a replacement
to fulfill its chartered obligations. See Barger v. Hanson, 426
F.2d 640, 642 (9th Cir. 1970) ("[The law] considers that ships are
commodities bought and sold in the market, and that one may be
purchased to take the place of one lost . . . ." (quoting The
Hamilton, 95 F. 844, 845 (E.D.N.Y. 1899))).
The rule of The Umbria does not apply in this case for
an obvious reason. Sawyer Brothers' Mack truck was not a vessel.
It was cargo aboard a vessel.8 Island Transporter cites no case
that applies The Umbria's rule to cargo, and we see no basis for
extending the rule to such cases.
Moreover, even in the context of vessels, we have
recognized that "arguments may be made, pro and con, for [the
rule's] soundness as an original proposition." A & S Transp. Co.,
688 F.2d at 3. For example, ordinary principles of mitigation
would seem to resolve the problems involving excessive or
speculative damages identified by the Court. Indeed, in Barger,
8
As we observed, supra note 4, this distinction was not
significant in valuing the Mack truck because the well-established
rules for valuing cargo and vessels are materially similar. In
contrast, Island Transporter now seeks to extend to cargo cases a
principle of damages that has traditionally applied only to
vessels. Its position thus places the distinction between vessels
and cargo at the forefront.
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the Ninth Circuit declined to apply the rule of The Umbria in a
vessel case in part because the plaintiff had mitigated his damages
"as quickly as possible." 426 F.2d at 642. Though we have since
declined to follow Barger's decision to depart from the "well-
established" rule in vessel cases, the Ninth Circuit's reasoning
and our prior reference to the rule's questionable soundness
counsel against extending it to new ground. A & S Transp. Co.,
688 F.2d at 3 (noting that the rule is "too well-established to be
altered now, at least at our level").
We thus uphold the district court's award of lost profit
damages.9
F. Emotional Distress
The district court awarded the Sawyers each $50,000 in
damages for their emotional distress. Island Transporter
challenges this award, raising several issues related to the
standard of liability for negligent infliction of emotional
distress ("NIED") claims under the general maritime law in the
9 We also reject Island Transporter's contention that Sawyer
Brothers failed to mitigate its damages. The district court
rebuffed this argument after finding that Sawyer Brothers' cost to
rent a suitable replacement truck would have been $3,800 per month,
plus a $10,000 delivery fee. The court concluded that these costs
made renting a replacement truck to perform Sawyer Brothers' lost
work unreasonable. We find no error in this conclusion. In
addition, we note that the district court carefully circumscribed
Sawyer Brothers' damages award to the approximately six-week
period following the incident, declining to include lost profits
that it considered speculative or too attenuated.
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First Circuit. We uphold the award. In doing so, we conclude
that maritime plaintiffs within the "zone of danger" can recover
for NIED in the First Circuit.
1. The NIED Cause of Action
As a threshold matter, the district court assumed that
a claim for NIED is cognizable under the general maritime law in
the First Circuit. It was correct to do so. We recognized a
plaintiff's right to recover for NIED under the general maritime
law in Petition of the U.S. (Petition), 418 F.2d 264, 269 (1st
Cir. 1969). The plaintiff in Petition was a crewman who nearly
died in the cold seas after his vessel capsized. Id. at 267.
Following the incident, the plaintiff became "very depressed and
emotionally upset," and was diagnosed with "severe neurosis of an
anxiety reaction type with depressive features." Id. The district
court awarded the plaintiff damages due to his emotional distress
and accompanying physical symptoms, and the defendant appealed.
Id. at 267-68.
Surveying the common-law treatment of NIED claims, we
observed that it was "almost uniformly recognized that recovery
may be had for the physical consequences of mental disturbance, at
least where there is some contemporaneous physical impact also
resulting from [a] defendant's negligence." Id. at 268. In other
words, we described the general state of the law as imposing two
limitations on a plaintiff's ability to recover for NIED. First,
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the plaintiff had to experience a physical impact from the
defendant's negligence during the incident in question. Second,
the plaintiff's emotional distress had to have a "physical
consequence" that is "susceptible of objective determination."
Id. at 269.
We determined that the Petition plaintiff's "substantial
jolt," and the impact from being "thrown into the water as the
boat capsized," were both "sufficient to satisfy the test applied
by jurisdictions following the impact rule." Id. at 268. Since
the plaintiff satisfied the physical impact test, we found it
"unnecessary to decide whether a contemporaneous physical impact"
was "required as a prerequisite to recovery" for NIED in the First
Circuit. Id. at 269. We then proceeded to the physical
consequence issue and concluded that the plaintiff's "definite
nervous disorder" was a sufficiently "physical" injury to permit
recovery. Id.
By affirming the district court's damages award, our
decision in Petition recognized a cause of action for NIED under
the general maritime law. However, Petition left the contours of
the cause of action unresolved. It expressly declined to decide
whether a contemporaneous physical impact was a prerequisite to
recovery. And, because the Petition plaintiff suffered physical
consequences from his emotional distress, we had no occasion to
determine whether a plaintiff can recover for NIED without showing
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physical consequences within the meaning of Petition. This was
the state of our maritime NIED jurisprudence at the time this case
was tried. We recognized the cause of action, but had yet to
define its boundaries.10
2. The Zone of Danger Test
This case compels us to confront the first issue left
open by Petition: whether a plaintiff can recover for NIED under
the general maritime law without sustaining a contemporaneous
physical impact. The district court awarded the Sawyers emotional
distress damages based on their presence within the "zone of
danger," not based upon any physical impact. Island Transporter
asks us to adopt the physical impact test, and to accordingly
vacate the district court's damages award.
The "zone of danger" test applied by the district court
limits recovery for emotional injury to those "who are placed in
immediate risk of physical harm by that conduct." Consol. Rail
Corp. v. Gottshall, 512 U.S. 532, 548 (1994). In Gottshall, the
Supreme Court held that the zone of danger test applies to NIED
claims brought under the Federal Employers' Liability Act
10Our more recent pronouncements on the maritime NIED cause
of action are consistent with Petition. See Ellenwood v. Exxon
Shipping Co., 984 F.2d 1270, 1282 (1st Cir. 1993) (declining to
decide whether "a seaman may recover emotional distress damages
without showing a physical injury" (emphasis added)); Fairest-
Knight v. Marine World Distribs., Inc., 652 F.3d 94, 102 n.7 (1st
Cir. 2011) (refusing to decide whether plaintiffs had made out a
cognizable cause of action for NIED).
- 27 -
("FELA"), 45 U.S.C. §§ 51-60. Id. at 554. Section 1 of the FELA
provides railroad employees with a cause of action when they are
injured or killed as a result of their employers' negligence. 45
U.S.C. § 51. The Jones Act provides a parallel cause of action
for seamen, 46 U.S.C. § 30104, and incorporates by reference the
standard of liability under the FELA. Id. ("Laws of the United
States regulating recovery for personal injury to, or death of, a
railway employee apply to an action under this section."). Thus,
we have declared that "[c]aselaw developed under both statutes
guides subsequent interpretation of either of them." Ellenwood,
984 F.2d at 1281 n.15 (citing Mitchell v. Trawler Racer, Inc., 362
U.S. 539, 547 (1960)); see also Butynski v. Springfield Terminal
Ry. Co., 592 F.3d 272, 277 n.2 (1st Cir. 2010) ("[P]recedent under
the Jones Act is deemed instructive in FELA cases, and vice
versa.").
The zone of danger test, as articulated in Gottshall,
therefore applies to seamen alleging NIED under the Jones Act.
Given its application to seamen, we see no principled basis for
imposing the more restrictive physical impact test upon passengers
alleging NIED under the general maritime law. See Miles v. Apex
Marine Corp., 498 U.S. 19, 24 (1990) ("[L]egislation has always
served as an important source of . . . admiralty principles.");
Chan v. Soc'y Expeditions, Inc., 39 F.3d 1398, 1407–08 (9th Cir.
1994) ("[W]e look to . . . maritime statutes for guidance in
- 28 -
determining what remedies should be available in an admiralty case
. . . that falls outside the ambit of statutory maritime law.").
In so concluding, we join two circuits and a number of
district courts in recognizing that, post-Gottshall, a plaintiff
within the zone of danger may recover for NIED under the general
maritime law. See Chaparro v. Carnival Corp., 693 F.3d 1333, 1338
(11th Cir. 2012) (per curiam); Stacy v. Rederiet Otto Danielsen,
A.S., 609 F.3d 1033, 1035 (9th Cir. 2010); Blair v. NCL (Bahamas)
Ltd., 212 F. Supp. 3d 1264, 1271 (S.D. Fla. 2016); Nieto-Vincenty
v. Valledor, 22 F. Supp. 3d 153, 160 (D.P.R. 2014); Smith v.
Carnival Corp., 584 F. Supp. 2d 1343, 1355 (S.D. Fla. 2008);
Douville v. Casco Bay Island Transit, 1998 A.M.C. 2775, 2781
(D.N.H. 1998); Williams v. Carnival Cruise Lines, Inc., 907 F.
Supp. 403, 406 (S.D. Fla. 1995).11
11This case does not require us to determine whether Gottshall
counsels against applying the more permissive "relative bystander"
test to general maritime cases. Gottshall, 512 U.S. at 548. That
test allows plaintiffs to recover "for emotional distress brought
on by witnessing the injury or death of a third party (who
typically must be a close relative of the bystander) that is caused
by the defendant's negligence." Id. at 549. Gottshall rejected
the relative bystander test in the context of the FELA, in large
part because "it would be a rare occurrence for a [railroad] worker
to witness during the course of his employment the injury or death
of a close family member." Id. at 556. This reasoning does not
necessarily translate to general maritime law, where "it is not at
all 'unlikely' that a person involved in a maritime accident -- as
opposed to a railroad worker covered by FELA -- would have occasion
to witness the death or serious injury of a close family member."
Stacy, 609 F.3d at 1040 n.1 (Hall, J., dissenting). For this
reason, there may be a "principled basis" for not extending
- 29 -
3. The Scope of the Zone of Danger
Island Transporter next contends that the district court
clearly erred12 in finding that the Sawyers were within the zone
of danger when the construction vehicles tipped and the M/V ISLAND
TRANSPORTER took on a 37-degree list in tumultuous seas. A
plaintiff is within the zone of danger if he sustains a physical
impact, or is "placed in immediate risk of physical harm" by a
defendant's negligent conduct. Gottshall, 512 U.S. at 548.
Plaintiffs facing immediate physical peril or the reasonable
apprehension thereof are within the zone of danger. See Metro-
North Commuter R.R. Co. v. Buckley, 521 U.S. 424, 430 (1997)
(noting that the zone of danger cases cited by Gottshall all
involved "a threatened physical contact that caused, or might have
caused, immediate traumatic harm"); Gottshall, 512 U.S. at 555
("The zone of danger test also is consistent with FELA's central
focus on physical perils."). Indeed, it is oft repeated that "a
near miss may be as frightening as a direct hit." Gottshall, 512
U.S. at 547 (quoting Richard N. Pearson, Liability to Bystanders
for Negligently Inflicted Emotional Harm -- A Comment on the Nature
of Arbitrary Rules, 34 U. Fla. L. Rev. 477, 488 (1982)).
Gottshall to general maritime relative bystander cases, though we
do not decide that issue here.
12 Whether a plaintiff was within the zone of danger presents
a fact-dominated mixed question of law and fact, resulting in clear
error review. See Sierra Fria Corp., 127 F.3d at 181 (explaining
that fact-dominated mixed questions are reviewed for clear error).
- 30 -
Courts applying the test in maritime cases have
consistently found that plaintiffs on board vessels that
experience near misses are within the zone of danger. In Stacy,
for example, the Ninth Circuit held that a fisherman sufficiently
alleged he was in the zone of danger when a ship narrowly avoided
hitting his fishing boat, only to collide with a nearby vessel.
609 F.3d at 1034-37. Similarly, the plaintiff in In re Clearsky
Shipping Corp. was aboard a docked casino boat as a vessel collided
with a nearby wharf. No. Civ. 96-4099, 2002 WL 31496659, *1 (E.D.
La. Nov. 7, 2002). The plaintiff was "obviously in the 'zone of
danger'" as she attempted to exit the casino boat and witnessed
the other vessel coming directly toward her. Id. at *3.
In another near-miss case, a class of passengers sued a
cruise line after they experienced a severe storm on their voyage.
Williams, 907 F. Supp. at 404. The court found that the passengers
"[met] the first part of the zone of danger test in that they were
placed in immediate risk of physical impact by [the cruise line's]
conduct." Id. at 407. Finally, the case of Hutton v. Norwegian
Cruise Line Ltd. goes beyond a near miss and involves an actual
collision. 144 F. Supp. 2d 1325 (S.D. Fla. 2001). There, a
proposed class of passengers sued when their cruise ship collided
with another vessel. Id. at 1326. The lead plaintiffs were
sleeping in their cabin at the time of the collision, and then
went to their muster (emergency) station, where they saw the other
- 31 -
vessel in flames. Id. The court found that when the ships collided
the lead plaintiffs "were certainly within the zone of danger," as
they "were frightened and were placed in immediate risk of physical
harm by the Defendant's negligent conduct." Id. at 1328.
It is fair to characterize the Sawyers' experience on
board the M/V ISLAND TRANSPORTER as involving more immediate peril
than any of the cases summarized above. They were aboard a
relatively small ferry as it attempted to traverse a sea roiled by
large waves. Ryan Sawyer was in the cabin of his Mack truck as
its passenger-side wheels lifted off the ground, causing the
vehicle to tip against the vessel's bulwark. Ross Sawyer watched
as the Mack truck and cement truck tipped with his brother and co-
worker inside their respective cabins. Both Sawyers reasonably
feared that the vehicles would go overboard, or that the vessel
-- listing significantly to its port -- would capsize. Given this
series of events, the district court did not clearly err by
determining that the Sawyers were within the zone of danger.
4. The Physical Consequences Requirement
The second issue left open by Petition was whether a
plaintiff can recover for NIED under the general maritime law
without showing physical consequences of his emotional distress.
The district court assumed that this requirement applied to the
Sawyers' NIED claims, concluded that the brothers satisfied the
requirement, and awarded each of them $50,000. Island Transporter
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contends that the district court clearly erred by finding that the
Sawyers showed physical consequences of their emotional distress,
and argues that the brothers cannot recover damages for NIED absent
such a showing.
Whether the physical consequences requirement applies to
NIED claims under the general maritime law is a matter of some
disagreement among the federal courts. See, e.g., Tassinari v.
Key W. Water Tours, L.C., 480 F. Supp. 2d 1318, 1321-22 (S.D. Fla.
2007) (collecting cases). As in Petition, this case does not
require us to resolve that issue in the First Circuit. For reasons
that we will explain, it was not clearly erroneous for the district
court to conclude that the Sawyers satisfied the physical
consequences requirement. Given that their NIED claims succeed
regardless of whether the requirement applies, we, like the
district court, assume, without deciding, that the requirement
applies in this case.
The term "physical" in the physical consequences
requirement "is not used in its ordinary sense." Id. at 269. Its
meaning includes both consequences of emotional distress that are
traditionally "physical" -- e.g., heart attacks or ulcers -- and
other conditions that are "susceptible of objective
determination." Id. For example, emotional distress may
"physically" manifest as a psychological condition -- i.e., a
nervous disorder or a stress disorder -- so long as the condition
- 33 -
is capable of objective determination. See id. (categorizing
psychoneurosis as a "physical" condition); Haught v. Maceluch, 681
F.2d 291, 299 n.9 (5th Cir. 1982) (noting that "physical injury"
extends to nervous disorders, and deciding that "depression,
nervousness, weight gain, and nightmares" were "sufficient to
constitute physical injury" under Texas law).13 Whether a
particular condition falls within the NIED definition of a
"physical" consequence presents a fact-intensive question,
requiring case-by-case assessment. Cf. Atchison, Topeka & Santa
Fe Ry. Co. v. Buell, 480 U.S. 557, 570 (1987) (opining that "broad
pronouncements" in the area of emotional distress claims "may have
to bow to the precise application of developing legal principles
to the particular facts at hand").
Here, we need not probe the physical consequences
requirement's outer boundaries. The district court found that the
Sawyers experienced several symptoms properly classified as
"physical." It found that Ross Sawyer experienced ongoing
gastrointestinal distress, pain in his limbs, and pain in his
chest. As to Ryan Sawyer, the district court concluded that he
had a bout of stress-induced shingles accompanied by a high fever
and pain that felt like a heart attack. Several courts have found
13See also Sullivan v. Bos. Gas Co., 605 N.E.2d 805, 808-11
(Mass. 1993); Vance v. Vance, 408 A.2d 728, 733-34 (Md. 1979);
Corso v. Merrill, 406 A.2d 300, 307 (N.H. 1979); Restatement
(Second) of Torts § 436A cmt. c (1965).
- 34 -
that plaintiffs with comparable or lesser symptomology satisfied
the physical consequences requirement. See, e.g., Whalley v.
Sakura, 804 F.2d 580, 587 (10th Cir. 1986) (finding requirement
satisfied where plaintiff had loss of energy, fatigue, decreased
mobility, sleep disturbance, and significant depression); Doe v.
Trs. of the Univ. of Pa., 270 F. Supp. 3d 799, 828 (E.D. Pa. 2017)
(allowing claim to survive dismissal where plaintiff's alleged
physical consequences consisted of "depression, extreme anxiety,
loss of the ability to concentrate, intense feelings of
hopelessness and sadness, and the inability to sleep through the
night"); Terry v. Carnival Corp., 3 F. Supp. 3d 1363, 1370 (S.D.
Fla. 2014) (allowing emotional distress claim to survive summary
judgment where plaintiffs alleged physical consequences in the
form of continuous sleep deprivation and nightmares); Sullivan,
605 N.E.2d at 806, 810 (Mass. 1993) (finding that symptoms such as
sleeplessness, gastrointestinal distress, and nightmares allowed
a plaintiff to survive summary judgment). These cases are
consistent with the Restatement (Second) of Torts' position that
"long continued nausea or headaches may amount to physical illness,
which is bodily harm; and even long continued mental disturbance,
as for example in the case of repeated hysterical attacks, or
mental aberration, may be classified by the courts as illness,
notwithstanding their mental character." Restatement (Second) of
Torts § 436A cmt. c (1965).
- 35 -
Furthermore, the district court noted that experts for
both parties opined that Ross Sawyer could be diagnosed with Post-
Traumatic Stress Disorder ("PTSD") as a result of the incident.
One of the experts also testified that Ryan Sawyer could be
diagnosed with PTSD. A PTSD diagnosis with accompanying symptoms
has been found sufficient to satisfy the physical consequences
requirement. See Walters v. Mintec/Int'l, 758 F.2d 73, 78 (3d
Cir. 1985) (affirming emotional distress award in product
liability case based on PTSD diagnosis, headaches, insomnia, and
nightmares); Sullivan, 605 N.E.2d at 806-07, 810 (finding that
plaintiff with PTSD and related symptoms could proceed to trial on
NIED claim).
Given the substantial body of law approving of
comparable symptomologies, it was not clearly erroneous for the
district court to conclude that both brothers satisfied the
physical consequences requirement.14
14
In reaching this conclusion, we reject Island Transporter's
contention that the district court clearly erred by determining
that the Sawyers' symptoms were caused by the incident, rather
than other work-related stresses, or their investment years
earlier in a Ponzi scheme. We also reject Island Transporter's
assertion that the district court errantly relied on Maine law.
Although the court stated that Maine law does not impose the
physical consequences requirement, it did not ultimately follow
that precedent.
- 36 -
5. Summary
In sum, we hold that plaintiffs within the zone of danger
may recover for NIED under the general maritime law. We also
uphold the district court's findings that the Sawyers were within
the zone of danger, and that they experienced physical consequences
of emotional distress. Island Transporter does not challenge the
amount of the district court's award. Accordingly, we affirm the
district court's judgment awarding $50,000 to Ryan Sawyer and
$50,000 to Ross Sawyer for their emotional distress.
III. Conclusion
For the reasons discussed above, we affirm the district
court's finding of negligence, and its award of damages for the
Mack truck, lost profits, and emotional distress. We vacate the
district court's damages award for the plywood panels, and remand
with instructions to enter judgment consistent with this opinion.
The parties shall bear their own costs on appeal.
So ordered.
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