Opinion
Case No. 02-22644 Civ-Martinez-Klein.
September 30, 2004
ORDER SETTING FORTH FINDINGS OF FACT AND CONCLUSIONS OF LAW FOLLOWING NON-JURY TRIAL
This is a case of admiralty and maritime jurisdiction within the meaning of Rule 9(h) of the Federal Rules of Civil Procedure and pursuant to 28 U.S.C. § 1333. Biscayne Towing Salvage, Inc. ("Biscayne Towing") claims a salvage award in an amount of $100,000.00, plus attorney's fees and expenses, for services rendered to M/V La Dolce Vita, its owner, and insurer. The Court conducted a non-jury trial in this action on March 16, 2004 and March 17, 2004. Having carefully considered the testimony and evidence, the briefs of counsel, and for the reasons set forth below, the Court enters the following Findings of Fact and Conclusions of Law in accordance with its obligations under Rule 52 of the Federal Rules of Civil Procedure
I. FINDINGS OF FACT
1. Kilo Alfa, Ltd. ("Kilo") was the owner of M/Y La Dolce Vita at all relevant times. Kilo purchased the M/Y La Dolce Vita in 1998 for $1.7 million. The yacht was insured for $1.7 million, with a deductible of $17,000.00.2. On the evening of June 19, 2002, the M/Y La Dolce Vita was docked at Deering Bay Marina ("Deering Bay") in Miami, Florida Security guards from the marina notified Heinz Righetti ("Righetti"), of Kilo, by telephone that the M/Y La Dolce Vita was taking on water, and the stern was down in the water. Righetti called the M/Y La Dolce Vita's caretaker, Craig Jones ("Jones") to handle the problem.
3. Jones received Righetti's call at 11:18 p.m. In response to the call, Jones called Atlantis Marine Towing ("Atlantis") for assistance. Atlantis did not respond to the telephone call, so Jones called Biscayne Towing and requested assistance. Jones explained the situation and requested that Biscayne Towing send a truck with a pump to Deering Bay to pump out the yacht. Biscayne Towing did not have a truck available, but offered to send a rescue vessel. Jones testified he would have preferred a truck, but agreed to the rescue vessel. After speaking to Biscayne Towing, Jones did not call any other rescue services, such as the fire department, nor did Jones call another private company.
4. Captain Harry "Cory" Offut ("Offut"), president and owner of Biscayne Towing, took Jones' call. Offut testified Jones stated the M/Y La Dolce Vita was sinking in Deering Bay and requested immediate assistance. Offut denied discussing contract terms with Jones, such as limiting Biscayne Towing's services to providing a dockside pump-out Offut also denied Jones requested a truck and stated Jones wanted and agreed to the rescue vessel.
5. Biscayne Towing responded to the call from Kilo with one rescue vessel, which included Captain David Donis ("Donis"), equipment, and supplies appropriate for marine salvage and towing. The Biscayne Towing vessel was an island hopper with a maximum speed of twenty-two knots.
6. Donis testified that sometime after 11:00 p.m., he received a call from Offut. Donis was on call twenty-four hours a day, seven days a week as an employee of Biscayne Towing. At the time of the incident, Donis lived in an apartment at the Four Ambassadors on Southwest 8th Street and Brickell Avenue on the bay. The Biscayne Towing vessel was at the Four Ambassadors' marina, and the vessel was fueled and loaded with the necessary equipment.
7. Jones immediately departed his residence on Key Biscayne after contacting Biscayne Towing. He arrived at the gates to Deering Bay at 11:59 p.m. Upon arrival at the dock, he noticed captains from two neighboring vessels had placed additional lines attaching the M/Y La Dolce Vita to the dock. Jones looked in the lazarette, observed water and went into the pilot house to check the electrical panel. No one from Biscayne Towing was on the scene when Craig Jones arrived.
8. Jones noticed water was discharging from the bilge pumps through the stern of the yacht. The yacht was somewhat down by the stern with a slight port list. Photographs were admitted into evidence documenting the flotation of the yacht upon arrival.
9. Jones testified Donis arrived in the rescue vessel at about 12:40 a.m., while Donis testified he arrived at 12:15 a.m. Upon arrival, Donis docked the vessel several slips away from the M/Y La Dolce Vita. The Biscayne Towing vessel was used as a means of transport for Donis and the equipment. The Biscayne Towing vessel was not used to render any services to the yacht, nor was it in danger.
10. Donis began pumping water out of the M/Y La Dolce Vita using a single three-inch gasoline pump. Once the pump was running, it was evident the pump was pumping out more water than was entering the vessel. The water level started to fall. At that point, Donis, over Jones' objection, dove into the water to search for the source of the leak.
11. After Donis came out of the water, he entered the engine room and located the source of the water Jones objected to Donis entering the engine room, because with the rising water two generators began running. Jones believed the generators, in combination with the water and aluminum ladder down into the engine room, posed a dangerous situation.
12. In the engine room, Donis determined the source of water entering the vessel was the starboard main engine raw water intake strainer. The nuts on top of the strainer were loose and permitted water to flow in between the base of the sea strainer and the top Donis tightened the nuts, which reduced entry of water.
13. When Jones raised the issue of billing, Donis told him the Biscayne Towing office would take care of it.
14. At approximately 3:00 a.m., the yacht was de-watered and floating securely Jones testified Donis left at approximately 3:00 a.m., while Donis testified he left between 3:30 a.m. and 4:00 a.m. Before leaving, Donis left an automatic pump on the M/Y La Dolce Vita The pump continued to work all night, and Jones remained on the yacht all night.
15. During the pump out no efforts were made by Biscayne Towing to protect the environment. Oily water was evacuated from the M/Y La Dolce Vita's bilge, pumped directly into Deering Bay No oil containment booms were placed around the vessel. The engine compartment, engines and exterior of the vessel were coated with oil residue.
16. Biscayne Towing returned at about 10:00 a.m. on June 20, 2002, to tow the M/Y La Dolce Vita to Norseman Shipbuilding ("Norseman") on the Miami River. At Norseman, the engines were pickled and properly preserved from damage resulting from water intrusion.
17. The M/Y La Dolce Vita was hauled out of the water Norseman Shipbuilding, where certain work was performed at Kilo's direction.
18. Twenty eight Thousand Four Hundred Twenty-four Dollars and Twenty-seven Cents ($28,424.27) were spent to clean up the M/Y La Dolce Vita and to preserve the vessel pending sale.
19. The M/Y La Dolce Vita has a six and a half (6½) foot draft The yacht was in approximately nine foot ten inches of water at the time leaving an additional three to six feet of submersion depth before the vessel hit bottom. The boat would not have become fully submerged had the boat continued to have sunk to the bottom. Kilo presented evidence showing that if the M/Y La Dolce Vita had sunk to the bottom of the slip, water would have risen to the level of the main salon deck, in which case the vessel still would have had substantial worth.
20. The insurer paid to Kilo the amount of $480,000.00 for the loss suffered to M/Y La Dolce Vita from the incident which is the subject of Biscayne's salvage claim.
21. Kilo sold the M/Y La Dolce Vita in January 2003 for $570,000.00. The yacht was sold through word of month, rather than being formally listed with a yacht broker. The yacht was sold in "as in where is" condition. The evidence shows that because of the June 19, 2002 incident, the yacht lost value.
22. The normal night rate for Biscayne Towing at that time was $175.00 per hour. Biscayne Towing also charged $300.00 per hour for use of the three-inch pump.
There was also a discounted hourly rate of $140.00 per hour. There is no evidence Kilo was eligible for this rate.
23. The normal day rate for towing is $150.00 per hour per boat. The morning after the partial submersion, the boat was towed to Norseman on the Miami River. The tow to Norseman took one and a half (1½) hours, and Biscayne Towing used two boats.
There was also a discounted hourly rate of $125.00 per hour. There is no evidence Kilo was eligible for this rate.
24. Sully Sutherlin is a principal of US Auctions com, formerly Bent Boat, LLC. U.S. Auctions is the highest volume damaged boat seller in the United States. Sutherlin is an associate member of the Society of Accredited Marine Surveyors and has expertise in valuation and selling damaged boats on a daily basis.
25. Sutherlin inspected the M/Y La Dolce Vita on August 27, 2002. His inspection determined there was no visible damage to the hull or superstructure. Premised upon his experience selling similarly damaged boats, he determined a reasonable post-value pre-repair sale value of the vessel was approximately Five Hundred Thousand Dollars ($500,000.00)
26. It is Sutherlin's opinion that a sale price of $570,000.00 was an extremely good price given the condition observed on August 27, 2002.
27. Toby E "Tuck" Phillips, Jr., is a surveyor for TMS National, which is a surveying company mainly for insurance companies related to the marine industry. Phillips has worked for TMS National since 2000 and conducts 750 800 marine surveys a year, typically regarding cause of loss and scope of damages.
28. Phillips measured the water depth at the Deering Bay slip where the M/Y La Dolce Vita was located. Phillips compared his measurements with the yacht's dimensions and photos of the incident to determine how much further the yacht would have submerged if it had sunk to the bottom of the slip. Phillips then reviewed the yacht and its effects to determine approximately how much additional damage, or loss, would have resulted from the yacht sinking to the bottom of the slip. Phillips concluded the additional damage would have been approximately $80,000.00.
29. Captain Timothy Morgan ("Morgan") is a professional salvor. He operates Sea Tow Fort Lauderdale, a large marine quick-response towing and salvage business. Morgan has significant experience salvaging vessels. Morgan stated there was a minimal degree of peril to the vessel. The M/Y La Dolce Vita was not sinking at a rapid rate. The yacht was in calm water tied to the dock with less than six additional feet of water in which to submerge. If the yacht had sunk further, the additional damage would have been minimal, and the cost of re-floating the yacht would have been approximately $20,000.00.
30. Morgan testified Donis voluntarily and unnecessary dove underneath the boat to determine the source of the leak and went into a flooded engine room to turn off a generator. Any risk involved in diving under the vessel or stopping of the generator was self-induced peril on the part of Donis and not required by exigencies of the circumstances. These acts did not contribute to the de-watering operations.
31. Morgan also testified the skill level to de water the vessel was minimal. The value of property employed to de-water the vessel was minimal. The cost of a single gasoline pump is approximately $400.00. Biscayne Towing was on scene for approximately three hours. During that period of time, Donis was simply manning a gasoline powered pump
32. Any of the foregoing factual findings which may represent conclusions of law are adopted as conclusions of law. See Miller v. Fenton, 474 U.S. 104, 114-15 (1985).
II. CONCLUSIONS OF LAW
1. "The law of salvage is a concept with roots deeply embedded in antiquity." B.V. Bureau Wijsmuller v. United States of America, 702 F.2d 333, 335 (2d Cir. 1983). Salvage law "originated to preserve property and promoted commerce," which remain "compelling goals." Id. at 337-38. As a result, a salvage award is not merely payment for services rendered, but rather "a reward given for perilous services, voluntarily rendered, and as an inducement to seamen and others to embark in such undertakings to save life and property." Id. at 338 (quoting The Blackwall, 77 U.S. (10 Wall) 1, 14 (1870).
2. Against this backdrop, the Court must determine whether this case concerns salvage or a dockside pump-out. To determine this is salvage, the Court must find three elements; marine peril, service voluntarily rendered, not required by duty or contract; and success in whole or in part, with the services rendered having contributed to such success. The "Sabine," 101 U.S. 384 (1880).
3. Although there was a marine peril it was minimal. Even if the vessel was not pumped out that night it would not have become fully submerged due to the water depth at dock. The salvor responded to the casualty and performed services subject to Jones' request for a dockside pump out. At no time until after services were rendered did the salvor inform Jones the services rendered were to be salvage and not a pump out. There were other means available to have the vessel de-watered. Biscayne Towing was not the only salvor. Several hours would not have made a significant difference regarding the damage sustained by the M.Y. La Dolce Vita.
4. The issue before the Court is whether to enforce the verbal contract or to characterize the event as marine salvage. Biscayne Towing was initially asked to send a land-based truck with a pump. Biscayne did not have a truck available, and therefore, it was necessary to send a rescue vessel to the scene. The mere presence of a vessel rather than a land-based truck does not change the contractual relationships between the parties.
5. In order to justify a salvage claim against a vessel, a salvor must establish that his services were accepted by the vessel and not thrust on the captain or claimant owner. See, e.g., The Bolivar v. The Chalmett, F. Cas., 1611 (C.C.D. Tex. 1872); The Choteau, 9 F. 211 (C.C.D. La. 1881), The Indian, 159 F. 20 (5th Cir. 1908). While the facts of this case differ from those of the cited authority, the legal principle remains clear: the parties are free to contract.
6. Contract salvage is that type of salvage service entered into between the salvor and owners of imperiled property by which their respective representatives pursuant to an agreement to perform services. The El Frida, 172 U.S. 186 (1898). When there is a contract to undertake a salvage service or to provide some type of service to a distressed vessel, there is no "pure salvage" See B.V. Bureau Wijsmuller v. United States, 702 Fed 2d at 333. If there is a contract between the parties, then the services were rendered pursuant to the contract, not voluntarily. Flagship Marine Services v. Belcher Towing Company, 966 F.2d at 602 (11th Cir. 1992).
7. In ascertaining whether services rendered by a salvor are voluntary, the Court must look to whether the parties either entered into a contract for a given sum for the services, or an otherwise binding arrangement to pay all events, whether successful or not Flagship Marine Services, Inc., 966 F.2d at 605, The Camanche, 75 U.S. 448 (1869). The mere fact that there is no written contract for a sum certain does not preclude a finding that the services performed were not voluntary as per a special contract.
8. The lack of specific consideration given the circumstances is not fatal to the contract salvage claim. Given the insignificant expenditure of time and materials, it was clear the services sought were to be minor in nature and not the subject of prior negotiations. The evidence shows that upon custom of the community, a dockside pump-out is a minor event to be provided on a time and material basis.
9. Accordingly, the recovery in this matter is limited to the normal hourly rate which is $175.00 per hour at night and $300.00 per hour for use of a gas pump Applying this formula to the facts at hand, Biscayne Towing was on scene for approximately three hours during which time the gasoline pump was used. Allowing an hour voyage each way to and from the vessel, constitutes a total of five hours' service at $175.00 per hour, for a total of $875.00. Three-hours use of the pumps would be $900.00. Accordingly, Biscayne Towing is entitled to $1,775.00 for the time and efforts spent de-watering the yacht.
10. The one and a half (1½) hour tow time to Norseman, located on the Miami River, required two vessels Biscayne Towing claims one hour travel time to Deering Bay In as much as the vessels are based on the Miami River, Biscayne Towing is not credited with demobilization time.
11. Biscayne Towing day rate is $150.00 per hour per vessel. Two and one half (2.5) hours tow time for two vessels totals five hours of tow time. Five hours of tow time at the day rate totals $750.00. Therefore, the combined time and materials compensation due Biscayne Towing for the de-watering and tow is $2525.00.
12. If situation were pure salvage (and not contract salvage), it was salvage of the lowest order. Where salvage services "involved no unusual peril or risk of property, or any special heroism or gallantry" the salvors are to awarded slightly above a mere reward. The Alamo, 28 F.312 (C.C. Fla. 1886). See also The Hesper, 18 F.696 (C.C. Tex. 1883) (where vessel ran hard aground and was pulled off by tugs after three days in which there was no wind nor sea of any danger to ships, and the salvage services rendered presented neither risk of property, peril of life or limb, unusual expense, nor gallantry, courage or heroism, the salvage services were of the lowest grade).
13. Historically, Courts have not considered dockside pump-outs to be highly compensable In The Violet Blossom, 216 F. 379, (D.C.N.J. 1914), the court was confronted with a situation where a commercial barge 325-feet in length began taking on water. Water was over-whelming the vessel. The salvors responding pumped the vessel for two and one-half hours while seventy-five tons of cargo were discharged.
14. The actions of the salvors in The Violet Blossom are instructive in this case. In The Violet Blossom, the court stated.
The assistance rendered by the Florence did not involve the doing of any of those unusual acts which generally characterize claims founded upon the law of salvage there was no danger to the Florence and no risk incurred by her. The skill, therefore, was but that ordinarily required in pumping, and no unusual risk was taken Under the circumstances there ought not to be a large award in the case.
216 F. at. 380.
15. The reasonable value of services rendered to the M/Y La Dolee Vita, if based on the hourly rate normally contracted for by plaintiff would be $2,525.00 pursuant to the verbal request for a dockside pump-out and the subsequent tow to Norseman.
16. Where pure salvage, as opposed to contract salvage is involved, a salvage award is predicated primarily upon the value of the property actually saved by the salvors actions.
17. There is no precise formula utilized by the courts to determine a salvage award. Rather awards are established on a fact specific basis. New Bedford Rescue Marine Inc. v. Cape Jewelers Inc., 240 F. Supp. 2d 101, 115 (D Mass 2003). Application of the Blackwall factors are utilized to determine a salvage award. Of these, the most important factor is the value of that which is actually saved by the plaintiff. Margate Shipping Company v. M/V JA Oregon, 143 F.3d 976 (5th Cir. 1998).
18. In this case, the evidence establishes that which was saved was the additional damage avoided by preventing the vessel from sinking an additional few feet to the bottom of the slip.
19. The undisputed testimony of Mr. Phillips establishes this sum as slightly less than $80,000.00 Morgan's testimony established the cost of raising the yacht if it sank to bottom was approximately $20,000.00. Therefore, the Court finds the value saved by the actions of Biscayne Towing to be $100,000.00.
20. Biscayne Towing has demanded $100,000.00 for its efforts. In light of the value of the property saved, the minimal peril, and the unnecessary risks taken by Donis, such demands are overreaching. The law is clear that "where the salvor magnifies the dangers encountered, the degree of toil involved, or the value of the salved property, it is within the court's prerogative to diminish the ultimate salve award." Higgins Inc. v. The Tri State, 99 F.Supp. 694 (S.D. Fla 1951). See also Rodriquez v. Bagnni 17 F.2d 921 (9th Cir. 1927) (reducing salve award where salvor filed with court exaggerated value of the vessel and importance and duration of salvage effort).
21. Based upon the efforts expended, the peril faced, the skill required, the equipment employed, and the value of the property saved by the acts of Biscayne Towing, the Court further finds that a reasonable salvage award for the acts of Biscayne Towing is $10,000.00, which is approximately four times the computed time and material costs expended by Biscayne Towing or ten percent of the value saved by Biscayne Towing's actions.
22. Any of the foregoing conclusions of law that may represent findings of fact are adopted as findings of fact. See Miller v. Fenton, 474 U.S. at 114-15. It is hereby:
ORDERED AND ADJUDGED that
1. Biscayne Towing shall receive $10,000.00 for its efforts. Pursuant to Rule 58 of the Federal Rules of Civil Procedure, judgment shall be entered by separate written order in accordance with these Findings of Fact and Conclusions of Law.
2. All pending motions not otherwise ruled upon are DENIED as moot
3. This case is CLOSED.
DONE AND ORDERED in Chambers at Miami, Florida, this 30 day of September, 2004.