Free Order - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 This action was tried to the court without a jury. This order constitutes the court's 18 findings of fact and conclusions of law under Rule 52(a), Fed. R. Civ. P. 19 I. 20 Aramark Sports and Entertainment Services, Inc. (Aramark) filed this action under 21 this court's admiralty and maritime jurisdiction, 28 U.S.C. § 1333, seeking monetary damages 22 and declaratory relief arising from Aramark's efforts to remove the wreckage of the "Canyon 23 Dreamer" houseboat from the navigable waters of Lake Powell. The defendants, Canyon 24 Dreamer, Inc., the owner of the houseboat, along with its insurer, Markel American 25 Insurance Company, and Elwin Coonts, filed a Counterclaim against Aramark, asserting that 26 Aramark's failure to use reasonable care in removing the houseboat wreckage proximately 27 28
Case 2:03-cv-01599-FJM Document 31 Filed 11/08/2005 Page 1 of 5

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

Aramark Sports & Entertainment Services,) ) Inc., ) ) Plaintiff, ) ) vs. ) ) ) Canyon Dreamer Inc., et al., ) ) Defendants. ) )

No. CV 03-1599-PHX-FJM ORDER

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caused the houseboat to sink to the bottom of Lake Powell. The defendants seek damages arising from Aramark's alleged negligence. II. At approximately 6:00 p.m. on August 15, 2002, Aramark began the task of moving the Canyon Dreamer wreckage from the Escalante Arm of Lake Powell to the Bullfrog Marina, where the wreckage could be removed from the lake. Aramark employee Joe Ligon led the effort, using a 48-foot, twin-engine work boat, named the "Scavenger." The Canyon Dreamer wreckage was tied to the Scavenger and pushed through the water toward Bullfrog Marina. At 4:00 a.m. on August 16, 2002, the Canyon Dreamer wreckage began taking on water. The wreckage was cut loose from the Scavenger and quickly sank to the bottom of Lake Powell. Aramark did not mark the area of the lake where the wreckage sank. Following a directive from U.S. Park Ranger Brian Sacia to retrieve the sunken wreckage, defendant/counter-complainant Markel American Insurance Company subsequently paid Associated Diving and Marine Contractors $30,000 to find and raise the Canyon Dreamer wreckage from the bottom of the lake. After two days of searching, however, the wreckage was never located. Aramark subsequently billed Canyon Dreamer, Inc. $5,081.30 for services rendered in attempting to remove the wreckage. Canyon Dreamer eventually paid $5,156.30 (the invoice amount plus late fees) under protest, arguing that Aramark was not entitled to compensation because it was unsuccessful in removing the wreckage. III. This case turns in part on the distinction between a "salvage" and a "tow" under admiralty law. The distinction is significant because, under the doctrine of salvage, if a salvor's efforts to save a vessel are unsuccessful, the salvor is not entitled to a salvage award. B.V. Bureau Wijsmuller v. United States, 702 F.2d 333, 339 (2d Cir. 1983). Defendants assert this theory to support their argument that they need not compensate Aramark for its services because the effort was unsuccessful.

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"Salvage" is a service that is "voluntarily rendered to a vessel needing assistance, and is designed to relieve her from some distress or danger either present or to be reasonably apprehended." Id. at 338. "Towage," on the other hand, "is rendered merely to expedite a voyage, or when a vessel is stranded in a harbor, without reference to any circumstances of danger." Atco, Inc. v. Disch Constr., 1992 WL 230482, at *6 (S.D.N.Y. Aug. 28, 1992). To determine whether a salvage service has been performed, the following elements must be present: (1) a marine peril, (2) a voluntary act by the salvor under no legal or contractual duty to the owner, and (3) success, in whole or in part, in saving the property at risk. Flagship Marine Serv., Inc. v. Belcher Towing Co., 966 F.2d 602, 604-05 (11th Cir. 1992). We conclude that none of these elements are present under the facts of this case. First, "marine peril" occurs when a vessel is exposed to "any actual or apprehended danger which might result in her destruction." Faneuil Advisors, Inc. v. O/S Sea Hawk, 50 F.3d 88, 92 (1st Cir. 1995). Here, the Canyon Dreamer had already been completely destroyed by the fire and was rendered valueless. Therefore, a salvage operation could not save this vessel from destruction. Instead, Aramark was charged with merely removing the wreckage from the lake as required by the U.S. Park Service. Defendant's argument that the vessel had value for the purpose of an insurance inspection, leading to a potential subrogation claim, is speculative at best, and is not sufficient to establish this element. Second, Aramark did not "volunteer" its services, given that Canyon Dreamer requested and received a price quote from Aramark prior to removal of the wreckage. Royal Weddingfeld Deposition at 38. This oral contract between Aramark and Canyon Dreamer constituted a towage contract. Finally, success in saving a ship or its cargo is essential to a claim for salvage; "if the property is not saved, . . . no compensation can be allowed." The Blackwall, 77 U.S. (10 Wall.) 1, 12 (1869). Here, the operation was clearly unsuccessful in that the wreckage was lost at the bottom of Lake Powell. Therefore, Defendant cannot avoid compensating Aramark based upon the law of salvage.

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Defendants also contend they are not obligated to compensate Aramark, and in fact are entitled to additional damages, because Aramark failed to use reasonable care in removing the wreckage. It is well established that in a contract of towage that a tug has an "obligation to exercise the reasonable care and maritime skill that prudent navigators employ in performing similar services, and the burden of proving negligence is on the party that asserts it." Hart v. Blakemore, 410 F.2d 218, 221 (5th Cir. 1969). The towing vessel is not liable for loss resulting from the unseaworthiness of the tow unless its unseaworthiness is disclosed or is so apparent and the tug "failed to use reasonable care under the circumstances." King Fisher Marine Serv. Inc. v. The NP Sunbonnet, 724 F.2d 1181, 1184 (5th Cir. 1984). Here, we find that the unseaworthiness of the Canyon Dreamer was apparent to Aramark. The evidence shows that the Canyon Dreamer was so severely damaged by the fire that part of the pontoons were burned down to within two inches of the waterline and that "any kind of waves at all would have sent the boat to the bottom." Bob Songster Deposition at 28. Aramark employees had to pump approximately 80 gallons of water out of the pontoons before they could attempt to tow the wreckage. Further, in his deposition testimony, Utah Park Ranger Jared Jones stated that he inspected the wreckage and advised an Aramark employee that the Canyon Dreamer's pontoons were severely damaged and that the boat could not be towed without sinking. Jared Jones Deposition at 32. U.S. Park Ranger Brian Sacia also testified in his deposition that he left a message for Joe Ligon, repeating Jared Jones' warning that the wreckage would sink if towed. Brian Sacia Deposition at 18-19. Further, evidence was presented that Aramark had at its disposal floatation devices that had been used on prior occasions to prevent vessels from sinking and could have been used in this case to prevent the sinking of the Canyon Dreamer. Aramark employee, Joe Ligon, testified that had the floatation devices had been used, the wreckage would not have sunk. Joe Ligon Deposition at 64. Based on the foregoing, we conclude that Aramark failed to use reasonable care in light of the obvious unseaworthiness of the Canyon Dreamer and was therefore negligent in towing the vessel. -4Case 2:03-cv-01599-FJM Document 31 Filed 11/08/2005 Page 4 of 5

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V. Defendants contend their damages resulting from Aramark's negligence include not only the $5,156.30 they paid Aramark under the towage contract, but also the $30,000 they paid to hire a third-party salvor in order to find, raise and remove the wreckage from the bottom of Lake Powell. Park Ranger Sacia informed a representative from Markel Insurance that the sunk wreckage would have to be removed from Lake Powell. Brian Sacia Deposition at 27. Accordingly, Markel hired Associated Diving and Marine Contractors, at a cost of $30,000, to attempt to find the sunken wreckage. Pursuant to the Wreck Removal Act, 33 U.S.C. § 409, if a vessel is grounded or sunk in navigable waters of the United States, the owner of a vessel is required to use reasonable efforts to locate the sunken wreck. Failure to comply with section 409 may subject the owner to liability and various penalties. We conclude that Aramark's negligence in towing the wreckage proximately caused the defendants to suffer costs of the tow, as well as costs associated with compliance with the U.S. Park Services directive to locate the sunken wreckage. Accordingly, we find in favor of defendants on their Counterclaim (doc. 13) in the amount of $35,156.30, and against plaintiff on its Complaint (doc. 1). DATED this 4th day of November, 2005.

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