Doc. No.: 753
Date: November 3, 2000
Recreational Boating Fall 99
COMMITTEE ON RECREATIONAL BOATING
NEWSLETTER, FALL 1999
Editor: Frank P. DeGiulio
At it Again — The Calhoun Saga Continues
Nearly a decade after twelve year old Natalie
Calhoun’s tragic death in a jet ski accident in Puerto Rico waters, the
U.S. District Court for the Eastern District of Pennsylvania has written
the latest chapter in the on-going saga. Calhoun v. Yamaha Motor Corporation,
40 F.Supp.2d 288, 1999 AMC 1777 (E.D.Pa. 1999). Rather than bringing the
story to a close, the District Court’s decision appears to lay the foundation
for Calhoun II — the sequel.
In July 1989, Natalie Calhoun, a Pennsylvania
resident vacationing with her family in Puerto Rico, was killed when a
jet ski that she was operating collided with an anchored pleasure boat
near Palmas Del Mar. Her parents filed suit against the jet ski manufacturer
under the Pennsylvania Wrongful Death and Survival Statutes in the U.S.
District Court for the Eastern District of Pennsylvania, seeking damages
for loss of earnings, support, services and society, as well as funeral
expenses and punitive damages.
In a 1993 decision, the District Court concluded
that federal maritime law and not state law governed the remedies available
for the death of a non-seaman in state territorial waters. The District
Court, therefore, found that the plaintiffs’ claims for loss of future
earnings and punitive damages were precluded.
On appeal, the Third Circuit reversed, holding
that “in the absence of clear federal interest, the balance tips in favor
of allowing state law to apply” and remanded the case to the District Court
to determine whether the law of Pennsylvania or Puerto Rico should be applied
to define the remedies available. Calhoun v. Yamaha Motor Corp.,
40 F.3d 622, 1995 AMC 1 (3d Cir. 1994) (reported in 4 Boating Briefs
No. 2 (Mar.L.Ass’n. 1995)). Yamaha petitioned for certiorari to
the U.S. Supreme Court.
In a decision perceived by many practitioners
as result-oriented and one having profound impact on the law of recreational
boating, the Supreme Court unanimously affirmed the Third Circuit’s decision
in Yamaha Motor Corp. v. Calhoun, 516 U.S. 199, 1996 AMC 305 (1996).
The Court squarely held that state law is to be applied to determine the
remedies available for the death of a non-seafarer in state territorial
waters. See 5 Boating Briefs No. 1 (Mar.L.Ass’n. 1996). The
case was remanded to the District Court for further consideration of whether
the law of Pennsylvania or Puerto Rico would apply to determine what damages
The latest pronouncement by the District Court
appears to set the stage for yet another run to the Supreme Court. On remand,
consistent with the directives of the Third Circuit and the Supreme Court,
the District Court first considered the issue of whether the law of Pennsylvania
or Puerto Rico should apply to define the damages available for Natalie’s
death. The District Court concluded that federal choice of law rules should
guide the analysis since the Supreme Court agreed that the action fell
within the court’s admiralty jurisdiction. Applying this analysis, the
District Court concluded that Puerto Rican law applied to the Calhouns’
punitive damages claim which was, therefore, precluded because Puerto Rico
does not permit recovery of punitive damages. Further, the court found
that the law of Pennsylvania should apply to define the scope of available
But the District Court did not stop there. Relying
on the final footnote of the Supreme Court’s decision, the District Court
concluded that another issue remained to be decided. In the closing footnote
of its opinion, the Supreme Court had stated:
The Court of Appeal also left open, as do we,
the source — federal or state — of the standards governing liability, as
distinguished from the rules on remedies. We thus reserve for another day
reconciliation of the maritime personal injury decisions that rejected
state substantive liability standards, and the maritime wrongful-death
cases in which state law has held sway.
The District Court took this comment as a directive
from the Supreme Court to decide the issue of whether substantive federal
or state law was to apply to define the standards governing liability.
The District Court reviewed the convoluted history
of Supreme Court decisions which have addressed the substantive rights
and remedies available for personal injury and death of non-seamen in territorial
waters. The Supreme Court decisions clearly mandate that federal maritime
law is to govern both the substantive rights and the available remedies
of a non-seafarer who is injured in state waters. Before Calhoun,
nearly all federal courts also applied federal maritime law to define the
substantive rights and available remedies in the case of the death of a
non-seafarer in state waters.
Following Calhoun, while it is clear that
the remedies available for the death of a non-seafarer in state waters
are to be governed by state law, the separate issue of whether substantive
federal or state law controls is, according to the Eastern District of
Pennsylvania, now in doubt.
The District Court began its analysis of the substantive
law issue by voicing its opinion that:
As a conceptual matter...that federal law defines
the substantive rights of a claimant seeking redress for a death occurring
in territorial waters — would appear to accomplish the reconciliation of
personal injury and wrongful death cases averted to by the Supreme Court
as a doctrinal goal the Court looks forward to achieving at some future
However, following this well reasoned observation,
the court proceeded to analyze the decisions of the Third Circuit and the
Supreme Court in Calhoun and found that the decisions mandated the
conclusion that state substantive law, rather than federal maritime law,
governs the rights of the parties in the case of the death of a non-seafarer
in state waters.
The District Court certified its findings to the
Third Circuit Court of Appeals. The Third Circuit granted the appeal on
April 13, 1999 and the case remains pending before that court.
The District Court’s latest decision, if upheld
on appeal, will have a
far reaching and perhaps more profound impact
on recreational boating
law than the Supreme Court’s Calhoun decision
itself. The decision deals yet another body blow to the principle of maritime
uniformity. Application of state substantive law to the death of a non-seafarer
in state waters will bring to the fore a host of potential conflicts between
state and federal maritime law on a variety of issues including applicable
statutes of limitation, standards of care, duties, rules governing contributory
negligence and joint and several liability, contribution rights and classes
of beneficiaries. Stay tuned.
Cruise Line Exonerated in Jet Ski Accident
In the winter of 1997, Barbara Mashburn was seriously
injured when a jet ski operated by Mark Hommen collided with a jet ski
on which she was a passenger off Coco Cay in the Bahamas. The jet ski on
which Mrs. Mashburn was riding was operated by her husband and was stopped
when the collision occurred. Both jet skis were owned by Royal Caribbean
Cruises, Ltd., which rented them to the respective operators.
Royal Caribbean filed a Complaint for Exoneration
from or Limitation of Liability as the owner of both jet skis pursuant
to the Limitation of Liability Act, 46 U.S.C. §181 et seq.,
in the U.S. District Court for the Southern District of Florida. Royal
Caribbean posted security in the amount of $7,200 for the combined value
of the two vessels pursuant to Rule F of the Supplemental Admiralty Rules.
Mrs. Mashburn filed a claim in the limitation
action for her injuries. She alleged that Royal Caribbean, as owner and
lessor of the jet skis, was negligent in various respects. Mashburn claimed
that Royal failed to properly train and supervise the operators, allowed
too many vessels to be operated in a restricted area, failed to enforce
safety rules, failed to check operators for intoxication and failed to
equip the jet skis with a sound signaling device.
The District Court found that Royal Caribbean
was entitled to exoneration from liability and granted its motion for summary
judgment. Complaint of Royal Caribbean Cruises, Ltd., __ F. Supp.
2d __, 1999 WL 556892 (S.D. Fla. 1999). In considering the motion for summary
judgment, the trial court applied the two-step analysis required in a limitation
proceeding under In re Complaint of Hercules Carriers, 768 F.2d
1558 (11th Cir. 1985). Under the two-step analysis, the claimant initially
bears the burden of proving negligence or unseaworthiness attributable
to the vessel owner. If the claimant fails to carry this burden the vessel
owner is entitled to exoneration from liability. If the claimant carries
the initial burden, the court must then determine whether the owner lacked
privity or knowledge of the acts of negligence or the unseaworthy condition
so as to be entitled to limit its liability to the value of the vessel.
The evidence before the District Court demonstrated
that the jet ski operators received instructions from Royal Caribbean employees
regarding the safe operation of the watercraft and viewed a manufacturer’s
instructional video. Operation of the jet skis was permitted only in one
direction on a marked course and was supervised by Royal employees. Finally,
the operators signed a Waiver and Release pursuant to which they assumed
all risk of injury and agreed not to hold Royal Caribbean liable for any
loss or personal injuries sustained.
The District Court concluded that the collision
and Mrs. Mashburn’s injuries were caused solely by the individual negligence
of the operator of the other jet ski and that Royal Caribbean was not negligent
in any respect and was entitled to exoneration. In the alternative, the
court also found that even if Royal had not been entitled to exoneration,
it would be entitled to limit its liability because none of Royal’s owners
or senior management were present at the scene or had knowledge of any
alleged act of negligence.
Primary Assumption of Risk Doctrine Bars Claim
by Tube Rider
In Record v. Reason, 86 Cal. Rptr. 2d 547,
1999 AMC 2380 (Cal. Ct. App. 1999), the Court of Appeal held that “tubing”
is a sport to which the doctrine of primary assumption of risk applies.
The doctrine bars recovery for a defendant’s negligence not rising to the
level of intentional or reckless conduct. In June 1994, Michael Record
accompanied Brian Reason and others for a day of water skiing and “tubing”
on Castaic Lake. Record suffered spinal injuries when he fell off an inner
tube being towed by a boat operated by the defendant Reason.
Michael Record brought a civil action against
Reason in California state court to recover for his injuries. The defendant
filed a motion for summary judgment, arguing that the primary assumption
of risk doctrine precluded any recovery against the defendant as a matter
of law. Conflicting evidence was presented to the trial court in connection
with the defendant’s motion. The defendant testified that he was operating
the boat at a speed of no more than 25 miles an hour in accordance with
the safety instructions on the inner tube, that the incident occurred during
a gradual left turn and that the plaintiff had fallen off the tube on two
prior occasions the same day without incident or complaint. The plaintiff
presented testimony from a witness who claimed that the boat’s speed was
at least 30 miles an hour, that the incident occurred when the defendant
made a sharp turn to the left and that the defendant had previously stated
that the “object” was to try to knock the rider off the tube. In addition,
the plaintiff testified that the defendant was aware of his prior neck
injury and that, prior to the ride, he told the defendant to “go slow and
take it easy because I don’t want to get hurt.” The plaintiff admitted
that falling off a tube is a common occurrence and that some people try
to turn sharply to increase the thrill of the ride.
The trial court concluded that there was no triable
issue of fact regarding application of the primary assumption of risk doctrine
and granted summary judgment in favor of the defendant. The plaintiff appealed.
On appeal the plaintiff contended that “tubing”
is not a sport to which the primary assumption of risk doctrine applies
or, in the alternative, that the existence of triable issues of fact rendered
the trial court’s grant of summary judgment improper.
The California Court of Appeals began its analysis
by noting that the issue of whether the doctrine of primary assumption
of risk applies in a particular case is a question of law for the court.
The court also distinguished the primary assumption of risk doctrine from
the assumption of risk defense under California law, noting that when applicable,
the doctrine serves as a complete bar to recovery. The court held that
when the doctrine applies, the plaintiff is held as a matter of law to
have relieved the defendant of a duty of reasonable conduct.
Noting that the issue of whether the assumption
of risk doctrine applies to “tubing” appeared to be one of first impression,
the Court of Appeals reviewed numerous decisions in which the doctrine
had been applied to water skiing, sport fishing, white water rafting, downhill
skiing, baseball, fishing and golf. The court held that the doctrine applies
when a plaintiff voluntarily participates in a sporting event or activity
involving certain inherent risks. The doctrine reduces the applicable duty
of care based on the rationale that “the activity involves inherent risks
which cannot be eliminated without destroying the sport itself.” The court
held that the doctrine applies to a recreational or sporting activity “if
the activity is done for enjoyment or thrill, requires physical exertion
as well as elements of skill, and involves a challenge containing a potential
risk of injury.” The court held that “tubing” meets these criteria and
rejected the plaintiff’s argument that the doctrine was inapplicable.
The plaintiff argued in the alternative that even
if the doctrine applies generally to “tubing,” the trial court erred in
granting summary judgment because the doctrine’s application in the particular
case depended on resolution of triable issues of fact. The plaintiff contended
that the doctrine would not apply if the jury believed his alleged admonition
to the defendant to “go slow and take it easy.” The Court of Appeals, however,
rejected this argument, holding that “a party cannot change the inherent
nature and risk of a sport by making a unilateral request that other participants
play less vigorously...a defendant’s liability must be based on ‘the nature
of the sport itself’ rather than ‘the particular plaintiff’s subjective
knowledge and expectations.’”
Alternatively, the plaintiff contended that there
was a triable issue of fact as to whether the defendant’s conduct rose
to the level of recklessness. The Court of Appeals recognized that the
primary assumption of risk doctrine does not insulate a defendant from
liability resulting from intentional or reckless conduct that is “totally
outside the range of ordinary activity involved in the sport.” Nonetheless,
the court held that, even assuming the truth of all evidence submitted
by the plaintiff, the defendant’s conduct was merely negligent and within
the inherent risk of the “tubing” activity.
Recreational Use Immunity Statutes
A number of states have enacted recreational use
statutes that may be relevant to claims arising in connection with the
use and operation of pleasure craft. See, e.g., Cal.Civ.Code §
846, Conn.Gen.Stat. § 52-557, 7 Del.Code Ann. § 5904, Fla.Stat.Ann.
§ 375.251, N.J.Stat.Ann. § 2A:42A, 68 Pa.Stat.Ann. § 477,
Wash.Rev.Code § 4.24.210. While the specific provisions vary, each
statute is intended to provide immunity from negligence to landowners who
permit their property to be used for recreational purposes without charge.
Most statutes contain exceptions for intentional or reckless conduct and
for injuries caused by dangerous latent conditions. Recreational use statutes
figured prominently in two recent recreational boating cases.
In Howard v. United States, 181 F.3d 1064
(9th Cir. 1999), the Ninth Circuit considered whether the U.S. Government
was immune from liability for negligence under the Hawaii Recreational
Use Statute, Haw.Rev.Stat. § 520-1 et seq., in connection
with a claim for personal injuries sustained by the plaintiff at Hickam
Air Force Base on Oahu. The plaintiff, the wife of a military officer,
was injured on a recreational boating dock located on the base while attending
a sailing instructor course offered by a non-governmental organization.
The dock facility was not open to the general public and the plaintiff
paid an attendance fee to the sailing course organizers. The plaintiff
sued the federal government for her injuries. The District Court granted
summary judgment in favor of the United States based on the Hawaii Recreational
Use Statute. Plaintiff appealed.
On appeal, the Ninth Circuit noted that under
the Hawaii statute, a landowner is immune from liability for ordinary negligence
if the land is made available for recreational use without charge. The
plaintiff advanced various arguments as to why the statute should not apply.
The court rejected the plaintiff’s arguments, including her contention
that the act should not apply because she was a business invitee who was
present only to attend a paid instructional course and not for recreational
purposes. The decision of the District Court was affirmed.
The Supreme Court of Washington considered the
applicability of Washington’s Recreational Use Statute to a pleasure boat
casualty in Ravenscroft v. Washington Water Power Co., 136 Wash.2d
911, 969 P.2d 75 (Wa. Sup.Ct. 1999). Robert Ravenscroft was seriously injured
when a boat in which he was a passenger struck a submerged tree trunk while
operating on Long Lake reservoir. Ravenscroft sued the land owner, Washington
Water Power Company, and Spokane County, alleging that the county was responsible
for regulating boating safety on the lake.
The evidence demonstrated that the power company
had raised the level of Long Lake, thereby submerging a formerly wooded
area where the accident occurred. The trees were cut off but the stumps
remained, submerged below the water surface. No buoys or warning signs
marked the submerged stumps. It was undisputed that the reservoir was available
to the public for boating without charge.
At the trial court level, the power company moved
for summary judgment on the basis of Washington’s Recreational Use Statute,
RCW 4.24.200 et seq. The trial court denied the defendant’s motion,
ruling that an exception to the statute for “known, dangerous, artificial,
latent conditions” could apply in the circumstances of the case. The Washington
statute provides that: “Nothing...shall prevent the liability of...a landowner...for
injuries sustained to users by reason of a known dangerous artificial latent
condition for which warning signs have not been conspicuously posted...”
On appeal, the Court of Appeals reversed the trial court and remanded with
directions to dismiss the plaintiff’s claim. Review was granted by the
state Supreme Court.
The Supreme Court of Washington considered the
issue of whether
an unmarked, submerged tree trunk constitutes
a known, dangerous, artificial and latent condition within the meaning
of the exception to the grant
of immunity under the Washington statute. The
evidence showed that
the power company knew of the existence of the
stumps and that their presence in the channel constituted a dangerous condition.
Although the accident was caused by contact with a submerged, rooted tree
stump, the court held that the “condition” was artificial within the meaning
of the statute because it existed solely through the human effort of raising
the water level, cutting the trees and leaving stumps in the channel. Finally,
the court held that the issue of whether the condition was “latent” within
the meaning of the statutory exception was a question of fact based on
whether the injury causing condition would have been readily apparent to
the ordinary recreational user and, therefore, the trial court’s grant
of summary judgment was improper.
Court Upholds Prohibition Against Launching
Recreational Craft at Public Beach
In 1992, the City of North Myrtle Beach in South
Carolina enacted an ordinance prohibiting the launching or beaching of
motorized watercraft on public beaches between the hours of 9:00 a.m. and
5:00 p.m. from May 15 to September 15 annually. Bob Barnhill, an operator
of a jet ski rental business on a public beach within the city limits,
commenced a declaratory judgment action seeking the determination that
the ordinance was unconstitutional.
A referee appointed by the trial court found that
the ordinance was invalid because it exceeded the City’s police power,
was preempted by state law and violated the South Carolina Constitution.
The Supreme Court of South Carolina upheld the
ordinance in Barnhill v. City of North Myrtle Beach, 333 S.C. 482,
511 S.E.2d 361 (S.C. 1999). The court held that the ordinance was within
the City’s police power because it was reasonably related to the purpose
of promoting public safety. While affirming the referee’s finding that
state statutes preempted the entire field of regulating vessels on navigable
waters, the court held that the ordinance was not preempted because it
related solely to regulation of the beaches. Finally, the court rejected
the referee’s finding that the ordinance violated Article XIV § 4
of the state Constitution which provides that “All navigable waters shall
forever remain public highways free to citizens of the State and the United
States without tax, impost or toll imposed...” In this regard the court
held that although the Constitution does not permit a complete prohibition
of the use of navigable water, the public’s access to navigable water is
subject to reasonable regulation for a legitimate legislative purpose.
Towing Endorsement Held to Constitute a Warranty
Gary MacLean, the captain of a vessel owned by
Flagship Marine Services, Inc., was seriously injured in 1994 while his
vessel was towing a 61 foot commercial vessel. Flagship, a licensee of
Sea Tow Services, Int’l., was in the business of providing towage assistance
to vessels in distress. MacLean sued for his injuries. Flagship agreed
to settle his claim for $545,000.
Flagship was insured under a policy issued by
Commercial Union Insurance Company. The policy contained a “Tow Endorsement”
which provided as follows: “In consideration of the rate and premium charged,
it is understood and agreed that coverage is hereby provided for the towage
of yachts up to 50 feet in length. The towage of yachts in excess of 50
feet is subject to prior approval of underwriters with additional premium
to be agreed, if any.”
Commercial Union denied coverage for MacLean’s
injuries based on the Tow Endorsement and commenced a declaratory judgment
action in the U.S. District Court for the Southern District of New York.
Commercial Union moved for summary judgment on the Tow Endorsement. The
District Court, focusing on the use of the term “yacht” in the wording,
concluded that the endorsement excluded coverage for towage of yachts (i.e.,
non-commercial vessels) in excess of 50 feet but did not preclude coverage
for towage of commercial vessels, regardless of size. Following a bench
trial the District Court entered judgment in favor of Flagship on the question
of coverage. Commercial Union appealed.
On appeal, the Second Circuit reversed the decision
of the District Court and held that Commercial Union had no duty to defend
or provide coverage to Flagship in connection with MacLean’s claims. Commercial
Union Ins. Co. v. Flagship Marine Services, Inc., __ F.3d __, 1999
WL 639170 (2d Cir. 1999). In construing the policy, the Second Circuit
first considered the issue of whether the Tow Endorsement constituted a
warranty or an exclusion from coverage. Flagship contended that the endorsement
was merely an exclusion and, therefore, should be construed against the
insurer if ambiguous.
The Second Circuit held that when read in the
context of the policy as a whole, the endorsement was a warranty by which
the insured promised to limit its towing activities to the towing of yachts
less than 50 feet in length. The court then noted that under maritime law
and the law of New York, breach of a warranty by the insured is a complete
defense to coverage irrespective of causation but that under Florida law
(where the incident occurred), the breach must be causally related to the
loss so as to result in an increase in the risk assumed by the insurer.
The appellate court found it unnecessary to make a choice of law determination
based on the facts of the case. The Second Circuit held that the Tow Endorsement
was unambiguous on its face when considered in the context of the entire
policy. The court concluded that the endorsement was an affirmative statement
of coverage which necessarily implied that “towage of anything other than
yachts up to 50 feet in length” was not covered. The court supported its
opinion by noting that the endorsement replaced a standard provision of
the policy excluding coverage for towage of any vessel or craft so that
absent the endorsement there would be no coverage whatsoever for towing
operations. Flagship admitted that the vessel towed at the time of MacLean’s
injuries was a 61' long commercial vessel. The court concluded, thus, that
Flagship had breached the warranty. Further, the Second Circuit held that
the wording of the endorsement itself, which referred to the premium charged
and provided for additional premium for extended coverage, demonstrated
that the breach was material to the risk assumed by Commercial Union.
Other Recent Cases
Lady v. Outboard Marine Corp., __ F.Supp.2d
__, 1999 WL 641653 (S.D.Miss. 1999). Plaintiff’s product liability claims
against a manufacturer for failure to install a propeller guard on a recreational
boat are preempted by federal law consistent with the Eleventh Circuit’s
decision in Lewis v. Brunswick Corp., 107 F.3d 1494 (11th Cir. 1997).
Beckman v. Rick’s Watercraft Rentals, 719
So.2d 1025, 1999 AMC 678 (Fl.Ct. App. 1998). Plaintiff’s product liability
and negligence claims against a jet ski manufacturer and rental agency
for personal injuries are barred by the three year maritime statute of
limitations, 46 U.S.C. § 763a.
Trump v. Cantieri Di Baia, S.P.A., 1999
WL 705431 (S.D.N.Y. Sept. 10, 1999). Ivana Trump’s suit against the Italian
shipyard and seller of the yacht M/Y IVANA for defective design
and breach of contract was dismissed for lack of personal jurisdiction
under F.R.C.P. 12(b)(2) where, aside from plaintiff’s residence, the only
contact with New York occurred when the yacht was present in New York waters
for fourteen days.
North American Specialty Ins. Co. v. Bader,
__ F.Supp.2d __, 1999 WL 528247 (D.N.J. 1999). An insurer brought a declaratory
judgment action seeking a determination of no coverage under a boat policy
for a third party death claim arising from a collision with the decedent’s
boat. The insurer’s summary judgment motion based upon the defendant/insured’s
alleged violation of the doctrine of uberrimae fidei for failure
to disclose the replacement of the boat’s existing engines with high performance
engines was denied. The evidence failed to show that the alleged misrepresentation
would have been material to the underwriter’s evaluation of the risk.
Travelers Property Cas. Corp. v. Pendergraft,
1998 WL 856101 (E.D.La. Dec. 9, 1998). The court granted an insurer’s declaratory
judgment motion, finding no duty by the insurer to defend or to provide
coverage under a homeowner’s policy for third party liability claims arising
from the insured’s operation of a rented 85 horsepower jet ski where the
policy contained a watercraft exclusion which limited coverage to claims
arising from the operation of craft of 50 horsepower or less if the craft
was not owned by or rented to the insured.
Lecy v. Bayliner Marine Corp., 973 P.2d
1110, 1999 AMC 1469 (Wa.Ct.App. 1999). Applying federal substantive admiralty
law, a state appellate court granted a new trial and vacated a judgment
in favor of the plaintiff on product liability claims following a jury
trial. The appellate court found the trial court had erred in allowing
a special verdict form which permitted the jury to consider negligence
in design after finding that the product was not unreasonably dangerous
as designed under a strict product liability theory.