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Stanton v. Bayliner Marine Corp.8/17/1992
This is an appeal from an order granting partial summary judgment in favor of defendants, Bayliner Marine Corporation (Bayliner) and Olympic Sales, Inc., d/b/a Olympic Boat Centers (Olympic Boat). The claims of plaintiffs in these consolidated cases arise from separate casualties involving two 45-foot Bayliner model 4550 motor yachts, the Moonraker and Contessa. The Moonraker was owned by James H. Stanton, Winnifred Stanton, and Stanton Investment Company. The Contessa was owned by Wiley Dean Henry and Barbara Merlino Henry. Both yachts were insured by Albany Insurance Company (Albany).
The Stantons and the Henrys both bought Bayliner motor yachts from a sales office of the Olympic Boat Centers in Seattle, Washington. The vessels were manufactured
by Bayliner, were constructed nearly identically, and were designed for recreational use. While the Stantons and the Henrys were pleasure boating, their yachts struck underwater objects: the Stantons' yacht struck a submerged rock in Puget Sound, Washington; the Henrys' yacht grounded on a reef off the coast of Vancouver Island, Canada. As a result of the collisions both boats suffered severe hull damage which caused mass flooding. Specifically, the keels of the vessels, a longitudinal extension of the hull that protrudes most deeply, penetrated on impact allowing seawater to sink the vessels rapidly. The passengers on the Stanton yacht were rescued by nearby boaters; those aboard the Henry yacht were rescued by a Canadian maritime helicopter.
The Stantons and Albany, under its subrogated interest, brought similar suits against Bayliner and Olympic Boat primarily seeking to recover the cost of replacing and repairing the yachts. They presented a declaration of a naval architect and marine engineer who stated that the design of the keel was defective and resulted in the losses for which Stanton and Albany were seeking recovery. The naval architect also stated that certain design techniques could have prevented the mass flooding.
Bayliner sought summary judgment dismissal of the bulk of Stantons' and Albany's claims on the ground that the suits predominantly sought recovery for economic losses (replacing and repairing the vessels) which are not recoverable under maritime law. The trial court granted the motion, dismissing substantially all of Stantons' and Albany's claims. This appeal followed.
Albany contends that the trial court erred in applying federal maritime law, which precludes recovery for economic losses, rather than state law, to claims arising from the grounding of two pleasure boats in navigable waters. Whether the trial court erred turns on two questions: (1)
whether admiralty jurisdiction is indeed proper here; and (2) if it is, whether admiralty law compels the choice of the federal over the state definition of "economic loss" on these facts. We consider each question in turn.
Jurisdiction
Bayliner contends, and Albany concedes, that admiralty jurisdiction applies. We agree. As a general rule, the application of maritime jurisdiction is appropriate when the event giving rise to the suit occurs on navigable waters, and the potential hazard to maritime commerce arises from an activity that bears a substantial relationship to traditional maritime activity. Foremost Ins. Co. v. Richardson, 457 U.S. 668, 73 L. Ed. 2d 300, 102 S. Ct. 2654 (1982). The second part of the test is determined by asking whether in a general sense such activity has the potential to affect maritime commerce, not whether it actually did so in the particular case at bar. Sisson v. Ruby, 497 U.S. 358, 366-67, 111 L. Ed. 2d 292, 302, 110 S. Ct. 2892 (1990); Foremost Ins. Co.
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