Opinion
CIVIL ACTION NO. 00-1931 SECTION "N"
May 23, 2001
ORDER AND REASONS
Before the Court are Defendant Gulf Tran, Inc.'s (1) Motion in Limine to Exclude Evidence of Damages, and (2) Motion to Enforce Court Order and to Extend Deadline for Defendant's Expert Reports. For the following reasons, the Motion to Exclude is DENIED, the Motion to Enforce is GRANTED IN PART and DENIED IN PART, and the Motion to Extend is GRANTED.
A. BACKGROUND
This dispute arises over a jet sled allegedly lost at sea. Pursuant to a charter agreement, Defendant Gulf Tran, Inc. agreed to transport certain materials, including a jet sled, offshore for Plaintiff Torch, Inc. On or about January 20, 2000, the items were loaded aboard Gulf Tran's vessel, the M/V SEARCHER, which departed the Dulac, Louisiana dock bound for Torch's vessel, the M/V MIDNIGHT BRAVE, at approximately 11:00 a.m. En route to the M/V MIDNIGHT BRAVE, the jet sled was lost overboard. Torch claims that the jet sled's loss was caused by Gulf Tran's negligence and seeks damages.
B. LAW AND ANALYSIS
1. Motion in Limine to Exclude Evidence of Damages.
Gulf Tran moves to exclude Torch's evidence of damages pursuant to Federal Rule of Evidence 104(b), which provides:
In its memorandum, Gulf Tran cites Rule "104" without specifying any subdivision. Gulf Tran does not cite any case or standard of review from which the Court could infer a particular subdivision either. Nonetheless, the Court may infer that Gulf Tran does not bring its motion pursuant to subdivision (c) or (d), since this is a non-jury, civil case. Instead, the Court infers that Gulf Tran has filed its motion pursuant to subdivision (b) because determining which measure of damages to use in a particular case is "conditioned upon" the type of evidence adduced. For all practical purposes, Gulf Tran seems to be making a summary judgment argument, but the Court will proceed under the Rules of Evidence at Gulf Tran's request.
When the relevancy of evidence depends upon the fulfillment of a condition of fact, the court shall admit it upon, or subject to, the introduction of evidence sufficient to support a finding of the fulfillment of the condition.
"In determining whether [a party] has introduced sufficient evidence to meet Rule 104(b), the trial court neither weighs credibility nor makes a finding that the [party] has proved the conditional fact by a preponderance of the evidence. The court simply examines all the evidence in the case and decides whether the [fact-finder] could reasonably find the conditional fact . . . by a preponderance of the evidence." Huddleston v. United States, 485 U.S. 681, 690, 108 S.Ct. 1496, 1501, 99 L.Ed. 2d 771 (1988).
Here, Gulf Tran argues that Torch has failed to adduce sufficient evidence to show that the typical market value measure of damages is inappropriate. Therefore, it argues, Torch should not be allowed to present evidence regarding replacement cost, which is an alternative method of calculating damages. In opposition, Torch argues that it constructed the lost jet sled itself out of parts bought, in part, at deeply discounted prices at an August 1998 McDermott auction. In constructing the jet sled, Torch argues that it "created a one of a kind piece of equipment uniquely suited to work with the MIDNIGHT BRAVE" at a great cost savings. Opp'n Mem. p. 2. Both parties cite King Fisher Marine Service, Inc. v. NP Sunbonnet, 724 F.2d 1181 (5th Cir. 1984), to support very different positions.
In King Fisher, the plaintiffs barge sank while in tow by the defendant, and the parties disagreed as to how damages should be calculated. The defendant favored a market damage method, which would result in an award of $30,000, the amount for which the plaintiff had purchased the barge at arms-length two days prior to its demise. In contrast, the plaintiff argued that the barge's price in the barge market was not determinative of its value because its unique capabilities made it more valuable for use as a dry dock. The district court agreed with the plaintiff, and the Fifth Circuit affirmed. The Fifth Circuit stated:
It is fundamental that when a vessel is lost or damaged "the owner is entitled to its money equivalent, and thereby to be put in as good a position pecuniarily as if his property had not been destroyed." Standard Oil Company v. Southern Pacific Company, 268 U.S. 146, 155, 45 S.Ct. 465, 466, 69 L.Ed. 890 (1924). To further this policy courts have long held that where a vessel is a total loss the measure of damages is the market value at the time of the loss. Id. at 155, 45 S.Ct. at 466. Where there are insufficient sales to establish a market other evidence such as replacement cost, depreciation, expert opinion and the amount of insurance can also be considered to determine the value of the lost vessel. See Greer v. United States, 505 F.2d 90, 93 (5th Cir. 1974); Carl Sawyer, Inc. v. Poor, 180 F.2d 962, 963 (5th Cir. 1950).724 F.2d at 1185. The Fifth Circuit agreed that the evidence supported a finding that the lost barge "had special qualities . . . that filled legitimate commercial needs that would not be recognized in the market' price of the barge." Id. at 1187. Given those special qualities, a replacement barge could not be used for the same purposes as the lost barge "without considerable modification." Id. at 1186. Accordingly, the Fifth Circuit found that the district court did not clearly err in awarding the plaintiff "the value of the lost barge measured by its cost of replacement." Id. at 1187. See also E.I. DuPont de Nemours Co., Inc. v. Robin Hood Shifting Fleeting Serv., Inc., 899 F.2d 377 (5th Cir. 1990) (affirming district court's decision to award replacement cost where lost barge's qualities were unique such that no market value could be determined); The President Madison, 91 F.2d 835 (9th Cir. 1937) (damages for loss of boat specially designed for use on local river measured by replacement cost rather than market cost).
The limited evidence presented by the instant motion and opposition suggest that Gulf Tran might be able to prove that its jet sled was unique such that damages should be measured by replacement cost rather than market price. Accordingly, the court shall admit evidence regarding replacement cost "subject to . . . the introduction of evidence sufficient to support a finding of" uniqueness. FED. R. EVID. 104(b).
Gulf Tran's arguments regarding the sufficiency of Torch's evidence go to the weight, not the admissibility, of the evidence. For example, although Gulf Tran is correct that the Fifth Circuit has stated that "[a]ny calculation of replacement cost must be based on a replacement that is comparable to the lost item in all material respects", Margate Shipping Co. v. M/V JA Orgeron, 143 F.3d 976, 991 (5th Cir. 1998), the court went on to state that any variation must be taken into account in the calculation of replacement cost, not that any variation precludes all evidence of replacement cost, as Gulf Tran states. See id. at 992 ("Where the available replacement is less than comparable in some material way, the court must take the defect into account in calculating the overall replacement cost."). Also contrary to Gulf Tran's suggestion, King Fisher does not require a litigant to produce expert testimony to prove the absence of a market for a lost vessel. In King Fisher, the Fifth Circuit merely noted that "uncontroverted expert testimony supported" the conclusion that no accurate market price could be determined not that expert testimony was required to establish that conclusion. 724 F.2d at 1185 (emphasis added).
In its present motion, Gulf Tran certainly has identified potential weaknesses in Torch's case. To prove the "uniqueness" of the lost jet sled, it would seem necessary for Torch to contrast the lost sled's unique qualities with the qualities of a standard jet sled capable of being purchased in the standard jet sled market, if such a market exists. The total cost of purchasing a standard jet sled at market price and modifying it to suit Torch's unique needs also would seem quite relevant to the replacement cost issue. See King Fisher 724 F.2d at 1186. Given the evidence now before the Court, however, it is not clear whether this would result in a higher or lower replacement cost than would building a customized jet sled from scratch.
For all of these reasons, the Court DENIES Gulf Tran's motion to exclude.
2. Motion to Enforce Court Order and to Extend Deadline for Defendant's Expert Reports.
Gulf Tran also moves the Court to enforce the Magistrate Judge's February 22, 2001 discovery order. The Magistrate Judge ordered Torch to produce all logs or other records relating to the operation of the lost jet sled from 1997 to the date of loss and to provide vessel logs from January 1 to March 1, 2000 "[t]o the extent that Torch has not provided [the relevant] log records . . . ."
Torch's opposition papers indicate that it has satisfied the production request with respect to the operation of the jet sled. However, the papers do not provide any indication that the January 1 to March 1, 2000 vessel log production order has been satisfied. Three of Torch's exhibits relate to the jet sled and the fourth exhibit relates to the equipment loaded aboard the SEARCHER on January 19-20. Gulf Tran's motion, therefore, is DENIED as to the first item in the production order, but GRANTED to the extent that Torch has failed to comply with the second item.
Gulf Tran also requests an extension for submitting its expert reports. For some inexplicable reason, Torch's counsel informed Gulf Tran, but not the Court, that Torch did not oppose the extension. The Court GRANTS Gulf Tran's motion to extend expert report deadlines until May 31, 2001.
C. CONCLUSION
For the reasons set forth above,
IT IS ORDERED that
(1) Gulf Tran's Motion in Limine to Exclude Evidence of Damages is DENIED;
(2) Gulf Tran's Motion to Enforce Court Order is GRANTED with respect to the January 1 to March 1, 2000 vessel logs to the extent that Torch has failed to comply with the production order but DENIED with respect to the jet sled discovery, and
(3) Gulf Tran's Motion to Extend Deadline for Defendant's Expert Reports is GRANTED.