Summary
In Inland Rivers, the majority of the court decided that the rebuttal evidence also constituted sufficient evidence to carry the insured's burden of persuasion.
Summary of this case from Owens-Illinois, Inc. v. Aetna Cas. Sur. Co.Opinion
No. 80-568
Decided April 8, 1981.
Insurance — Marine — Loss under "perils of the sea" clause — Recovery allowed, when — Insured's burden of proof.
APPEAL from the Court of Appeals for Hamilton County.
On Saturday, April 21, 1973, a barge owned by Inland Rivers Service Corporation, appellant, and designated the MCB-1558, carried 1,426 tons of gravel up the Ohio River from Patriot, Indiana, to a landing terminal in Cincinnati. On April 21 or 22, while moored with other barges, the MCB-1558 sank, carrying its cargo with it to the bottom of the Ohio River. Appellant filed a claim against its marine insurance carrier, Hartford Fire Insurance Company, appellee, which the latter refused to pay.
Appellant filed an action in the Court of Common Pleas of Hamilton County against appellee, seeking recovery under the "perils of the sea" clause of its marine insurance contract. Appellant argued that the sinking was caused by a hole punctured in the river side of the barge below the water line. Although appellant was unable to identify who or what caused the hole, it offered evidence to show that the hole was caused by an external instrumentality and that it may have resulted from bridge construction work downstream. Appellee asserted that the loss was caused by bad bottomry and neglect, and therefore was not within the coverage of the insurance policy. The case was argued to the trial court without the intervention of a jury, and, at the conclusion of the evidence, that court entered judgment in favor of appellant in the amount of $25,146 plus six percent interest from September 28, 1973. The trial court found that the insurance policy was in effect on the date of the loss and that the MCB-1558 was a constructive total loss. The court also found "[t]hat at the inception of the policy the vessel was in a seaworthy condition, by stipulation, and thereafter, during the currency of the policy, the insured exercised due diligence to keep the vessel seaworthy, and in all respects fit, tight and properly manned, equipped and supplied, and is entitled to recovery against the defendant, Hartford." The court further stated "[a]s to the cause of the sinking, in this court's mind it still remains unresolved, and unanswered."
Upon appeal, the Court of Appeals modified the judgment of the trial court by deleting the award of damages against appellee. The Court of Appeals held that appellee was entitled to a judgment in its favor due to appellant's failure "to present evidence of probative force sufficient to prove by a preponderance that the loss was caused by a peril or risk covered by the policy." The Court of Appeals held further that appellant's evidence "utterly failed to prove what or who caused the puncture in the hull, the most likely point of entry of the water."
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Messrs. Lindhorst Dreidame and Mr. James M. Moore, for appellant.
Mr. Edward K. Halaby, for appellee.
The cause before us concerns recovery for a loss under a "perils of the sea" clause of a marine insurance policy.
This clause reads, in relevant part: "Touching the adventures and perils which this company is contended to bear and take upon itself, they are of the waters named herein, fire, lightning, earthquake, assailing thieves, jettisons, barratry of the master and mariners and all other like perils that shall come to the hurt, detriment or damage of the vessel named herein."
Marine insurance policies have long insured against various "adventures and perils" which may befall vessels and cargo. Usually included among those risks are perils "of the seas" or "of the waters." Coverage extends to fortuitous losses occurring through extraordinary action of the sea. Extraordinary action of the wind and waves is a sea peril, as are collision, foundering, stranding, and striking on rocks and icebergs. Gilmore Black, The Law of Admiralty (1975 Ed.), at pages 72-73. Even damage to a moored vessel by its striking a sharp object constitutes a peril of the sea where it results from extraordinary and unforeseen factors and not from the inherent weakness of the vessel itself. Annotation, 85 A.L.R. 2d 446, 448. Ordinary wear and tear on a vessel is not, however, contemplated as a peril of the sea. 11 Couch on Insurance 434, Section 43:112.
It is undisputed that one seeking to recover on an insurance policy generally has the burden of proving a loss and demonstrating coverage under the policy. See, generally, 30 Ohio Jurisprudence 2d 934, Insurance, Section 1024. The issue in the instant case is whether, under a "perils of the sea" clause, the insured sustains this burden by merely showing that the probable cause of a leak (which results in a loss) is external to the vessel, or whether the insured must also show exactly who or what caused the leak.
Paragraph six of the syllabus in Western Insurance Co. v. Tobin (1877), 32 Ohio St. 77, reads as follows: "When a steamboat is shown to have been seaworthy at the time she was insured, and no intervening circumstance occurs to render her unseaworthy, her seaworthiness is presumed to continue; but when, during the life of the policy, she springs a dangerous leak, without apparent cause, a new presumption arises — that of unseaworthiness; yet, as this new presumption is not a conclusive one, the owners are not required, to entitle them to recover for the loss, to show the identical cause of her loss, but may show a probable cause."
Applying Tobin, supra, to the instant case, we conclude that the record shows that the barge was seaworthy when it was insured and that no intervening circumstance arose to render it unseaworthy. The record further shows that the barge sprang a dangerous leak without apparent cause, thus raising a rebuttable presumption that it was unseaworthy when it sank. To overcome that presumption, the appellant needed to show a probable cause of the loss by a peril of the sea. This burden could be satisfied by showing that the loss probably resulted from a fortuitous cause external to the barge. However, appellant had no burden to prove exactly who or what may have caused the dangerous leak.
The record reveals that appellant offered expert evidence that a hole found in the side plate of the barge, below the water line, had been "punched in" by an instrumentality external to the vessel, and that the hole was the cause of the sinking. We find this evidence to be sufficient to support the trial court's finding that appellant overcame the presumption of unseaworthiness and carried its burden of persuading the finder of fact that the loss resulted from a covered "peril of the sea."
For the foregoing reasons, the judgment of the Court of Appeals is reversed.
Judgment reversed.
W. BROWN, P. BROWN, SWEENEY, LOCHER, HOLMES and C. BROWN, JJ., concur.
Emulating Sherlock Holmes, who once solved a crime based on the dog that did not bark, the majority inferentially reasons that a peril of the sea caused the sinking of the barge based on what was not proved at trial. Unlike the famous fictional detective, however, the majority floats far off course on their voyage of analyzing the burden of proof in marine casualty litigation. I cannot sign aboard for this cruise and must, therefore, respectfully register my dissent.
Initially, it should be noted that the phrase "peril of the sea" has been defined as:
"Perils of the sea embrace all kinds of marine casualties, such as shipwreck, foundering, stranding, collision, and every specie of damage done to the ship or goods at sea by the violent action of the winds or waves. They do not embrace all losses happening on the sea, or a peril whose only connection with the sea is that it arises aboard ship, or all damage of which the sea is the cause, but only those perils which are of the sea." (Emphasis added.) 45 Corpus Juris Secundum, Insurance, Section 854, at pages 934-935. See, also, Gilmore Black, The Law of Admiralty (1975 Ed.), at pages 72-73.
It is a universal principle of insurance and maritime law that the insured has the burden of proving, by a preponderance of the evidence, that the damage to the vessel was caused by an insured risk, i.e., a peril of the sea. S. Felicione Sons Fish Co. v. Citizens Cas. Co. (C.A. 5, 1970), 430 F.2d 136, certiorari denied, 401 U.S. 939; Northwestern Mut. Life Ins. Co. v. Linard (C.A. 2, 1974), 498 F.2d 556; Automobile Ins. Co. of Hartford v. Central Nat. Bank Sav. Trust (The Lakeland cases) (C.A. 6, 1927), 20 F.2d 619; Kermani v. Ins. Co. of North America (1932), 142 Misc. 542, 255 N.Y.S. 687; 19 Couch on Insurance 2d 655, Section 79:361.
While the presumptions of Western Insurance Co. v. Tobin (1877), 32 Ohio St. 77, may shift the burden of producing evidence back and forth between the parties (see Ray, Burden of Proof and Presumptions, 13 Tex. L. Rev. 33, 44), the burden of proof, also known as the burden of persuasion, remains with the insured throughout the trial. The burden of proof does not shift to the insurer to prove that the loss was caused by something other than a peril of the sea. See, generally, Brunny v. Prudential Ins. Co. (1949), 151 Ohio St. 86.
Applying the foregoing principles to the facts at bar, it is evident that the record harbors two fundamental flaws. First, a review of the transcript unveils the following colloquy between the trial judge and plaintiff's-appellant's counsel:
"At this time, the Court is still unaware of what caused the sinking of the barge, I don't think the burden is upon you to show me what caused it to sink."
This statement vividly demonstrates to me that the trial court misperceived the burden of proof in this case and improperly relieved the insured of this burden by assigning it, instead, to the insurer. This, by itself, in my estimation, constitutes reversible error.
The second flaw relates to the following statement by the trial judge, the finder of fact in this case:
"We can go into great lengths to find out what caused it [the hole in the barge]. * * * The thing before the Court is that the barge did sink and it ended up on the bottom 25 to 50 feet down, and that's where we are right now. What caused it I don't know, and I don't think you know. I don't think anyone knows at this point." (Emphasis added.)
Apparently, the evidence presented after this remark did not shed any light on the cause of the sinking.
Moreover, when announcing his final decision on December 20, 1977, the trial judge stated:
"As to the cause of the sinking, in this Court's mind it still remains unresolved, and unanswered."
It seems to me that if the finder of fact could not conclude what caused the hole or the sinking, then the insured, the party with the burden of proof, did not succeed in demonstrating, by a preponderance of the reliable, probative and credible evidence, the probability, or even possibility, that such sinking was caused by a peril of the sea, a covered risk. Tobin, supra, at page 92. Evidently, the finder of fact felt that the connection between the construction vessels, the alleged peril of the sea, and the sinking was much too tenuous.
My reading of the trial judge's comments illustrates that he not only believed that the barge owner had not demonstrated that the sinking was caused by a peril of the sea, but also, that, in his mind, it was equally plausible that the sinking was caused by a leak within the barge itself, by bad bottomry or by some other non-covered risk.
Thus, construing the trial judge's comments about the conflicting expert testimony and all the evidence in a light most favorable to the barge owner, we have, at most, a case that is "in equipoise." Northwestern Mut. Life Ins. Co., supra, at page 560. Much like in baseball where "a tie goes to the runner," an insurance case in equilibrium "goes to the insurer" when the insured fails to meet its burden of proof.
I am fully cognizant of the fact that the insured, in cases like this, does not have to prove the exact cause of the sinking or offer into evidence the precise submerged object that might have caused the sinking. See Annotation, 31 A.L.R. 1378. I dissent on the basis that the finder of fact and a unanimous Court of Appeals, though rendering different judgments, concluded that the evidence did not preponderate in favor of attributing the sinking to a covered risk. Since the trial judge was in a better position than we are to evaluate the conflicting evidence and credibility of the witnesses, I submit that it is more appropriate to defer to his analysis of the competing inferences.
The record in this case is voluminous. The pleadings, transcript, exhibits and appendices occupy the better part of a file cabinet. After a long trial and a fully-developed appeal, the finder of fact and a unanimous Court of Appeals concluded, in essence, that the barge sank in some unknown manner, by some unknown object, at some unknown time. We sit as an appellate court with a limited scope of review; we do not sit as a roving band of claims adjusters with Ouija boards. How this court can, eight years after the sinking of this barge, substitute its judgment for the finder of fact and conclude that the sinking was, indeed, caused by a covered risk, remains, to me, an existential mystery.