NUFI v. Garpo ( 2019 )

17-3286
NUFI v. Garpo
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 9th day of May, two thousand nineteen.
PRESENT:
BARRINGTON D. PARKER,
RICHARD C. WESLEY,
SUSAN L. CARNEY,
Circuit Judges.
_________________________________________
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.,
as subrogee of Star of America Charters, LLC,
Plaintiff-Appellee,
v. No. 17-3286
GARPO MARINE SERVICES, INC.,
Defendant-Appellant.
_________________________________________
FOR APPELLANT: JAMES W. CARBIN (Patrick Ryan
McElduff, on the brief), Duane Morris LLP,
Newark, N.J.
FOR APPELLEE: EDWARD P. FLOOD, Lyons & Flood, LLP,
New York, N.Y.
Appeal from a judgment of the United States District Court for the Eastern District
of New York (Block, J.).
UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment entered on February 14, 2018, is
AFFIRMED.
Defendant-Appellant Garpo Marine Services, Inc. (“Garpo”), a marina and
commercial ship repair business, appeals from the district court’s judgment holding Garpo
liable for the total loss of a dinner cruise boat (the “Star of America” or the “Star”), which
was docked at Garpo’s facility when it was destroyed in October 2012 during Superstorm
Sandy. Plaintiff-Appellee National Union Fire Insurance Company of Pittsburgh, PA.
(“NUFI”), which insured the Star, sued Garpo as subrogee of the Star’s owners, seeking
damages for (1) breach of contract, (2) breach of bailment, (3) negligence, (4) breach of
warranty of workmanlike service, and (5) breach of warranty. After a four-day bench trial,
the district court found for NUFI on all five counts. The court found that the Star’s owners
had made a repair agreement with Garpo, under which the Star would be delivered on
Sunday, October 28, 2012, and hauled to dry land before the incoming storm hit on Monday
evening, October 29. The boat was not hauled to land before the storm arrived, and, during
the ensuing high winds and rains, the boat battered the staging dock to which it was tied, and
ultimately sank. The district court concluded that Garpo had a duty to take reasonable
measures to protect the Star during the storm and that it failed to do so. Garpo now
challenges the district court’s findings of fact and conclusions of law on various grounds. We
assume the parties’ familiarity with the underlying facts, procedural history, and arguments
on appeal, to which we refer only as necessary to explain our decision to affirm.
I
When reviewing a judgment entered after a bench trial, we will not set aside the
district court’s findings of fact “unless [they are] clearly erroneous.” Fed. R. Civ. P.
52(a)(6); see also Anderson v. City of Bessemer City, 470 U.S. 564, 573–74 (1985). “Where there
are two permissible views of the evidence, the factfinder’s choice between them cannot be
clearly erroneous.” Anderson, 470 U.S. at 574. In particular, we “must give due regard to the
trial court’s opportunity to judge the witnesses’ credibility.” Fed. R. Civ. P. 52(a)(6). As trier
of fact, the judge is “entitled, just as a jury would be, to believe some parts and disbelieve
other parts of the testimony of any given witness.” Diesel Props S.r.l. v. Greystone Bus. Credit II
LLC, 631 F.3d 42, 52 (2d Cir. 2011) (internal citations omitted). In contrast, we review de
novo the district court’s conclusions of law and its application of the law to the facts. See,
e.g., Henry v. Champlain Enters., Inc., 445 F.3d 610, 617–18, 623 (2d Cir. 2006). As to mixed
questions of law and fact, we review the district court’s conclusions “either de novo or under
the clearly erroneous standard, depending on whether the question is predominantly legal or
predominantly factual.” United States v. Skys, 637 F.3d 146, 152 (2d Cir. 2011) (quoting United
States v. Thorn, 446 F.3d 378, 387 (2d Cir. 2006) (alterations omitted)).
Because this case involves the storage and maintenance of a vessel “at a marina on a
navigable waterway,” it arises under our maritime jurisdiction. Sisson v. Ruby, 497 U.S. 358,
367 (1990); 28 U.S.C. § 1333(1). The general maritime law of federal courts “is an amalgam
of traditional common-law rules, modifications of those rules, and newly created rules” that
are “[d]rawn from state and federal sources.” East River S.S. Corp. v. Transam. Delaval, Inc.,
476 U.S. 858, 864–65 (1986) (citation omitted).
II
We discern no error in the district court’s determination that Garpo was liable for the
destruction of the Star under NUFI’s claim for breach of bailment. We therefore need not
address NUFI’s alternative grounds for recovery. See Figueroa v. Mazza, 825 F.3d 89, 99 (2d
Cir. 2016) (court of appeals may affirm district court decision on any ground supported by
record).
A bailment is “the delivery of goods by their owner to another for a specific purpose,
and the acceptance of those goods by the other, with the express or implied promise that the
goods will be returned after the purpose of the delivery has been fulfilled.” Goudy & Stevens,
Inc. v. Cable Marine, Inc., 924 F.2d 16, 18 (1st Cir. 1991). Different forms of bailment give rise
to different duties on the part of the bailee (the party in temporary possession). A “bailment
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for mutual benefit” arises where, among other circumstances, the bailor hires the bailee to
“store” or “do some work upon the property,” 19 Williston on Contracts § 53:11 (4th ed.),
including in contracts for the repair of ships. See Goudy, 924 F.2d at 18 (“It has long been
established that the law of bailment is applicable to suits for damages to or loss of a vessel
that has been left with another for purposes of repair.”).
Where the evidence establishes a bailment for mutual benefit, the bailee owes a duty
of “ordinary care in relation to the property and is responsible only for ordinary negligence.”
19 Williston § 53.11. Although the plaintiff-bailor bears the burden of proving the damage
for which it seeks recovery, that “prima facie burden may be met by the [plaintiff-bailor]
showing that the [property] was delivered in good condition,” and returned damaged. GTS
Indus. S.A. v. S/S “Havtjeld,” 68 F.3d 1531, 1537 (2d Cir. 1995). That showing then triggers a
presumption that the damage was caused by the bailee’s negligence, requiring a bailee to
“produc[e] proof showing that the cause of loss was not one involving its negligence.” Id. In
Commercial Molasses Corp. v. New York Tank Barge Corp., the U.S. Supreme Court justified this
presumption by explaining that bailees are generally in a better position than bailors to know
the cause of the loss and should therefore be charged with a duty to come forward to show
an absence of their own liability. 314 U.S. 104, 111 (1941). Without such a showing, it
taught, the “trier of fact [is] free to draw an inference unfavorable to him.” Id.
The district court correctly articulated the law of bailments as set forth above, found
that Garpo made an “oral [agreement] to repair the Star” and that this “created a bailment
when the vessel was delivered to the marina,” giving rise to a presumption of negligence
against Garpo when it returned the Star destroyed. Nat’l Union Fire Ins. Co. of Pittsburgh, PA. v.
Garpo Marine Services, Inc., No. 14-cv-6481 (FB) (PK), 2017 WL 4157264, at *3 (E.D.N.Y.
Sept. 19, 2017).
Garpo argues that the district court erred in its application of the law. It contends
that neither a bailment nor a presumption of negligence arose because the Star was not
properly delivered to it, and the Star’s owner never transferred “exclusive” control of the
vessel to Garpo because the owner retained its keys after tying it up at the Garpo dock.
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Garpo relies on the law of wharfingers—owners or keepers of a dock—to advance its
argument.
Wharfingers, unlike those who undertake to repair or store a vessel, merely provide
vessels a place to dock or moor while their owners retain free access to them. Because the
vessel owners retain access, a wharfinger’s possession of the vessels left at its property is
generally not exclusive of the vessels’ owners. The bailee’s presumption of negligence
therefore does not arise. United States v. Mowbray’s Floating Equip. Exc., Inc., 601 F.2d 645, 647
(2d Cir. 1979). Indeed, wharfingers owe a duty of reasonable care only insofar as they are
responsible for maintaining their docks—not the vessels they allow to tie up there. Milo v.
Biegler, 86 A.D.2d 503, 503-04 (1st Dep’t 1982). Garpo contends that it fulfilled that limited
duty and therefore is not liable for the Star’s loss.
We disagree. First, we see no clear error in the district court’s finding that Garpo had
an “oral [agreement] to repair the Star,” Garpo, 2017 WL 4157264 at *3, and that Garpo
authorized the Star’s owners “to dock the [Star] at the marina until it could be hauled onto
dry land” on the morning before the storm was expected to arrive. Id. at *1. The agreement,
the court found, was to transfer control of the Star to Garpo for the purpose of hauling it
from the water and storing it to await scheduled repairs. Although such an agreement shares
some qualities of both bailment and wharfinger services, we think it more akin to an
agreement to store or repair a vessel (which creates a bailment for mutual benefit and gives
rise to a presumption of negligence), than it is to an agreement for wharfinger services
(which does not).
Further, Garpo’s contention that the Star’s owner made the “unilateral decision to
leave the vessel, locked, at a closed shipyard on a Sunday evening,” Appellant Reply Br. at
12, thus failing to effect delivery necessary to create a bailment, is in direct conflict with the
district court’s factual findings. The district court found that the Star was delivered on a
Sunday, before the storm arrived the following Monday, in accordance with the agreement
between Garpo and the Star’s owners. Garpo also confirmed delivery and Garpo’s
acceptance of the Star by phone on Monday morning: the district court found that, on that
morning of the looming storm, Garpo’s owner and office manager spoke with the Star’s
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owners by telephone and told them that the Star would not be taken out of the water and
would remain at the staging dock throughout the storm, but that “steps would be taken to
secure and protect the Star during the storm.” Garpo, 2017 WL 4157264 at *2. This manner
of delivery, agreed upon beforehand, was sufficient to create a bailment.
That the Star’s owner kept the keys, rather than giving them to Garpo at delivery,
does not negate this conclusion. As described by Garpo’s owner, the hauling process
involves pulling the vessel by hand onto a travel lift positioned in the water. The travel lift
then removes the vessel from the water. The vessel’s engine cannot run during the lifting
process, and so the handler does not need access to the keys at all. The district court thus
correctly found that a bailment was created upon the Star’s delivery to Garpo.
III
Garpo next argues that the district court clearly erred in concluding that, “Sandy’s
arrival and likely impact were foreseeable far enough in advance to allow Garpo to take
protective measures.” Id. at *3. Garpo contends that the trial evidence showed that, by 10:00
a.m. on Monday—approximately nine hours before the storm hit—the danger posed by the
mounting winds prevented Garpo both from moving the Star from the staging dock where it
was tied up over to the more secure pontoon dock—which was, at any rate, already full by
10:00—and from moving the Star to dry land.
There is no question—and Garpo does not dispute—that Garpo was aware of the
impending storm well before 10:00 Monday morning. In the days before the storm, Garpo
allowed other vessels to berth at Garpo’s safer pontoon dock for purposes of weathering the
storm. Ultimately, none of these vessels sustained serious damage. This (if not the forecasts)
demonstrates that Garpo knew well before 10:00 on Monday morning to expect the storm’s
arrival and that the pontoon dock was likely to fill up. Based on Garpo’s agreement with the
Star’s owners, Garpo personnel knew or should have known that the Star would be delivered
to Garpo’s less secure staging dock over the weekend—around the same time that the other
vessels were docking at the pontoon dock in preparation for the storm. Garpo’s owner also
testified that he knew that the staging dock where the Star was tied, unlike the pontoon
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dock, was an unsafe location for the boat during a storm. Thus, Garpo could have, and
should have, taken measures to protect the Star before 10:00 on Monday morning—at a
minimum, by securing it to the steel pontoon dock with additional lines.
According to the testimony and the facts found by the district court, however, no
Garpo personnel made any attempt to better secure the Star. When the Star’s owners
contacted Garpo on Monday morning, rather than warn them that the staging dock was
unsafe, Garpo’s owner and the company’s office manager both simply advised the owners
not to worry and told them that Garpo would take precautions. This was insufficient.
IV
Finally, Garpo argues that the district court abused its discretion by limiting Garpo’s
cross-examination of Dorit Zeevi-Farrington, the Star’s co-owner, whose testimony the
district court credited in finding an agreement to haul and repair the Star between Garpo and
the Star’s owners. Determining “[t]he permissible scope and extent of cross-examination” is
committed to the discretion of the district court. United States v. Rahme, 813 F.2d 31, 37 (2d
Cir. 1987). Further, “the trial court has discretion regarding the mode . . . of interrogating
witnesses to make the presentation effective for the ascertainment of truth and to avoid
needless consumption of time.” United States v. Lanza, 790 F.2d 1015, 1020 (2d Cir. 1986)
(internal quotation marks omitted).
Here, the district court limited cross-examination conducted by Garpo’s counsel
because (as the judge explained) he perceived the line of questioning to be ground already
covered. The specific impeachment evidence that Garpo complains of not being able to
explore sufficiently—the fact that Zeevi-Farrington’s deposition testimony differed in
material ways from her trial testimony—had already been sufficiently addressed earlier in
counsel’s cross-examination of Zeevi-Farrington. When the district court asked what
Garpo’s counsel had been prevented from asking, counsel identified nothing specific and
responded only that he thought “we could get into it a little [] deeper.” App’x 365. The
district court was well within its discretion to reject this unpersuasive justification for further
questioning. The district court’s active role in managing the “scope and extent of cross-
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examination” of Zeevi-Farrington did not unduly impair Garpo’s ability to present its
defense. In its post-trial proposed findings of fact before the district court, Garpo made the
same argument as it makes here—that inconsistencies conclusively discredit Zeevi-
Farrington’s testimony. The district court was thus aware of Garpo’s argument and the
evidence in support, but rejected it and credited Zeevi-Farrington’s testimony. We see no
abuse of discretion in that decision.
* * *
We have considered Appellant’s remaining arguments and conclude that they are
without merit. For the reasons set forth above, the judgment of the District Court is
AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
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