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Federal Insurance Co. v. Speedboat Racing Ltd.

United States District Court, D. Connecticut

August 9, 2016

FEDERAL INSURANCE COMPANY, Plaintiff,
v.
CSH SPEEDBOAT RACING LTD., Defendant/Third Party Plaintiff,
v.
RAMBLER 100 LLC Third Party Defendant.

OMNIBUS RULING ON PENDING MOTIONS

          CHARLES S. HAIGHT, JR. Senior United States District Judge.

         "If the highest aim of a captain were to preserve his ship, he would keep it in port forever." This aphorism is attributed to St. Thomas Aquinas, [1] whose resume did not include ocean yacht racing.

         The ship involved in this action, an ocean racing yacht, did not remain in port. Rather, in August 2011, while participating in a race off the coast of Ireland, the yacht capsized in heavy seas and suffered severe damage. This litigation is about who should pay for that damage. The parties are yacht's insurer, her owner, and her operator at the time of the casualty. The suit began as an action on a policy of marine insurance, within the admiralty and maritime jurisdiction of this Court. A number of motions are pending. This Ruling resolves them all.

         I. BACKGROUND

         A. Factual History

         The former plaintiff, Federal Insurance Company ("Federal" or "Plaintiff"), commenced the action against its insured, Speedboat Racing Ltd. ("Speedboat"), by filing a "Complaint in Admiralty" [Doc. 1], alleging that Federal has no duty to pay Speedboat for damages that occurred to the mast, sails and spars of Speedboat's racing yacht known as Rambler 100 (the "Yacht") on August 15, 2011.[2] In its Complaint, Federal asserted that the Court possessed both "diversity of citizenship" subject matter jurisdiction under 28 U.S.C. § 1332 and admiralty jurisdiction pursuant to 28 U.S.C. § 1333.[3] See Doc. 1, at 2 (¶¶ 4-5).

         "Rambler 100, " the Yacht referred to in Federal's complaint, was formerly named "Speedboat, " and was owned by the corporate party also called Speedboat. The Yacht was insured under a "Masterpiece Yacht insurance policy" issued by Federal (Policy No. 0037009323) (the "Policy") to the corporate Speedboat, as assured, for up to $5, 000, 000 in damages to the Yacht. Id., at 2 (¶ 7).[4] The policy term was October 14, 2010 through October 14, 2011. Id. The Yacht was leased by Speedboat to a different entity, Rambler 100 LLC ("Rambler"), pursuant to a "Share Issuance and Shareholder Agreement" (the "Agreement") (dated October 14, 2010), which provided, inter alia, that Rambler would have exclusive use of the Yacht in the 2011 Atlantic Ocean Racing Series and would be responsible to pay "all operating expenses, repair and maintenance costs for the Yacht and its Equipment, including minor maintenance or major equipment failure, incurred during the Term and after redelivery."[5] See Doc. 10-3 (Exhibit C, "Lease Agreement, dated October 14, 2010"), at 5 (§ 4.1(a)).[6]

         Pursuant to its terms, the Agreement was to be "governed by and construed in accordance with the laws of the State of Connecticut." Id., at 10 (§ 5.4). The Agreement provided Rambler with an ownership interest in Speedboat ("one (1) redeemable share of a nominal par value of U.S. $1.00"), id., at 2 (Preamble), and exclusive use of the Yacht from October 14, 2010 to March 15, 2012, for the purpose of racing the Yacht in a series of sailing races, id., at 4 (§ 4.1 (a)).[7] Under the Agreement, Speedboat’s captain, Chris Higgins, and a member of its former crew, Bill Erkelens, were to be retained as members of Rambler's crew. Id., at 5 (§ 4.1(b)). In addition, Jackson and "one guest from a list provided by [Jackson] to Rambler" were to be allowed to accompany the vessel on all races and included as "uncompensated members of [Rambler's] crew at their request." Id., at 8 (§ 4.1(n)(1)).

         On August 15, 2011, Rambler raced the Yacht in the 2011 Rolex FastNet Race off the coast of Ireland. Doc. 20 (Speedboat's "Amended Third-Party Complaint"), at 5 (¶ 21). But, as all sailors know, "[t]he sea hath no king but God alone."[8] So it was that during the course of that race, "[f]acing 23-25 knot headwinds in heavy seas, the Yacht's canting keel snapped off just below the hull exit, whereupon the Yacht capsized, resulting in millions of dollars of damage to the Yacht."[9] Id. As a result, Speedboat claimed payment from Federal for damages to the Yacht's "sails, mast, spars and rigging in the amount of $3, 130, 000.00."[10] Doc. 1, at 3 (¶ 15).

         B. Procedural History

         In its Complaint, Federal requested declaratory judgment pursuant to 28 U.S.C. § 2201 that it has no duty to pay Speedboat for the damages at issue to the "spars and sails" of the Yacht which occurred on the occasion of the 2011 Rolex Fastnet Race.[11] Federal asserted that those damages were explicitly excluded from coverage under the terms of the Policy. In particular, Federal quoted the exclusion provision in the Policy, as follows:

"Spars and Sails." We do not cover any loss to spars running or standing rigging, sail, spinnakers or gennakers that occurs while your yacht is being raced.

Doc. 1, at 1 (¶ 1).

         With respect to the damages claimed by Speedboat, Federal asserted that they occurred "[d]uring a race" when "the keel failed and the Yacht immediately heeled over, " causing the mast and sails to break off and suffer damage. Id. Consequently, Federal sought "a declaratory judgment claiming that it has no duty to pay the damages for the mast and sails because they were damaged while the Yacht was being raced[, ] which loss is excluded under the [P]olicy." Id.

         Speedboat answered the Complaint [Doc. 8] and filed a Third-Party Complaint [Doc. 10] against Rambler, alleging that Rambler had breached the Agreement. In its third-party complaint, Speedboat specified that "[t]his Court has diversity jurisdiction over this action pursuant to 28 U.S.C. § 1332 because Speedboat and Rambler are citizens of different States and the amount in controversy exceeds $75, 000, exclusive of interest and costs." Doc. 10, at 2 (¶ 6). Speedboat also asserted that the Court "has jurisdiction of this action pursuant to 28 U.S.C. § 1367 because the claims asserted in this Third-Party Complaint are within the Court's supplemental jurisdiction, as the claims in this Third-Party Complaint are so related to the claims in the Complaint previously filed by the Plaintiff [Federal] that they form part of the same case of controversy."[12] Id. at 3 (¶ 7).

         Speedboat thereafter filed an "Amended Third-Party Complaint" [Doc. 20] pursuant to Federal Civil Rule 15(a)(1)(B), as a "matter of course."[13] In that pleading, Speedboat asserted that if "Plaintiff [was] held to be not responsible to pay Speedboat on its claim for damages to said 'spars and sails, ' this Court should enter a judgment that Rambler is liable to and must pay Speedboat for such damages pursuant to the terms of the Share Issuance and Shareholder Agreement." Doc. 20, at 2 (¶ 2). Also, in this amended pleading, Speedboat based the Court's jurisdiction solely upon supplemental jurisdiction, no longer citing diversity of citizenship between Speedboat and Rambler. Id., at 2-3 (¶ 6). Speedboat simply alleged that "the claims in this Third-Party Complaint are so related to the claims in the Complaint previously filed by the Plaintiff [Federal] that they form part of the same case or controversy." Id.

         Rambler filed counterclaims against Speedboat for breaches of the Agreement and for failing to disclose to Rambler that the keel fin was dangerously defective. In its pleading, Rambler, like Speedboat, pled that the Court has supplemental jurisdiction over its claims under 28 U.S.C. § 1367. See Doc. 29 (Rambler's Answer to Amended Third Party Complaint), at 15 (¶ 3). As pled by Speedboat and Rambler, all claims between them ultimately became "based only on the Court's section 1367 supplemental jurisdiction" without citing an underlying jurisdictional basis.[14] See Doc. 45 (Speedboat's brief), at 5.

         Thereafter, the Court referred the action to Magistrate Judge Joan G. Margolis for a settlement conference in January of 2013. That conference occurred in March of 2013 and was followed by a second conference in May of 2013. The entire case did not settle. However, on June 7, 2013, Federal and Speedboat filed a "Stipulation of Discontinuance, " which stated that "plaintiff's action against the defendant Speedboat Racing Ltd[.] is hereby discontinued with prejudice and without cost to either party." Doc. 43, at 1. Federal was terminated as Plaintiff in this action and, as Speedboat asserts, "the only remaining, unsettled claims in this suit are the claims between Speedboat and Rambler."[15] Doc. 45, at 5.

         The first motion the Court will resolve is Speedboat's motion to dismiss for lack of subject matter jurisdiction. Speedboat argues that due to changed circumstances - the termination of Federal as Plaintiff in this action -the Court lacks subject matter jurisdiction. Id. Specifically, "the remaining parties in this case lack diversity of citizenship."[16] Doc. 45, at 4. Speedboat thus urges the Court to dismiss the remaining claims, focusing on the balance of the "traditional values of judicial economy, convenience, fairness, and comity." Doc. 45, at 7 (citing Kolari v. New York-Presbyterian Hosp., 455 F.3d 118, 122 (2d Cir. 2006)). Because the Court "has not expended significant resources on the case or addressed any substantive dispositive motions, Speedboat respectfully requests that the Court exercise its discretion, pursuant to 28 U.S.C. § 1367(c)(3), to dismiss Speedboat's claims without prejudice and to dismiss the claims of the Third-[P]arty Counterclaim Plaintiff, Rambler 100 LLC."[17] Doc. 45, at 4.

         Rambler "concedes that this Court has no diversity jurisdiction over this case, " Doc. 48, at 5. However, Rambler objects to Speedboat's "Motion to Dismiss" and moves for leave to amend its pleadings to "clarify that this Court has (a) admiralty jurisdiction pursuant to 28 U.S.C. § 1333 over all of Speedboat's claims and over six of Rambler's counterclaims because they concern a maritime contract and (b) supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over Rambler's two additional counterclaims because they form part of the same case or controversy." Doc. 48, at 4. In particular, Rambler asserts that the parties' pleadings demonstrate that the "Share Issuance and Shareholder Agreement" is a maritime contract and that agreement's choice-of-law provision does not defeat admiralty jurisdiction. In sum, Rambler concludes that the Court has admiralty subject matter jurisdiction and may move forward with this action.

         The Court will resolve Speedboat's "Motion to Dismiss" [Doc. 44] by determining whether this Court's admiralty jurisdiction extends to the remaining disputes between the remaining parties, Speedboat and Rambler. If the Court has subject matter jurisdiction on that basis, the Court will also rule on Rambler's "Motion for Leave to Amend" [Doc. 46] its Answer and Counterclaims, Speedboat's "Motion to Stay Discovery" [Doc. 52], and Rambler's "Motion to Compel Discovery" [Doc. 57].

         II. DISCUSSION

         A. Speedboat's Motion to Dismiss for Lack of Subject Matter Jurisdiction

         1. Subject Matter Jurisdiction

         Federal district courts are courts of limited jurisdiction under Article III, Section 2 of the United States Constitution. See, e.g., Chicot Cnty. Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 376 (1940), reh'g denied, 309 U.S. 695 (1940). The question of subject matter jurisdiction is fundamental so that a court must raise the issue sua sponte, of its own accord, when the issue is not addressed by the parties. Mansfield, Coldwater & Lake Michigan Rwy. Co. v. Swan, 111 U.S. 379, 382 (1884). See also Joseph v. Leavitt, 465 F.3d 87, 89 (2d Cir. 2006) ("Although neither party has suggested that we lack appellate jurisdiction, we have an independent obligation to consider the presence or absence of subject matter jurisdiction sua sponte."), cert. denied, 549 U.S. 1282 (2007); Univ. of South Alabama v. American Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999) ("a federal court is obligated to inquire into subject matter jurisdiction sua sponte whenever it may be lacking").

         If subject matter jurisdiction is lacking, the action must be dismissed. See Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action."). See also Manway Constr. Co. v. Housing Auth. of Hartford, 711 F.2d 501, 503 (2d Cir. 1983) ("It is common ground that in our federal system of limited jurisdiction any party or the court sua sponte, at any stage of the proceedings, may raise the question of whether the court has subject matter jurisdiction; and, if it does not, dismissal is mandatory.") (citations omitted).

         In general, a federal district court may exercise subject matter jurisdiction over an action if there is either: (1) "federal question" jurisdiction, applicable to "all civil actions arising under the Constitution, laws, or treaties of the United States, " 28 U.S.C. § 1331; or (2) there exists "diversity of citizenship, " complete diversity of citizenship between the plaintiff and all defendants and the amount in controversy "exceeds the sum or value of $75, 000, exclusive of interest and costs, " 28 U.S.C. § 1332(a).[18] See also Strawbridge v. Curtiss, 3 Cranch 267, 1806 WL 1213, at *1 (February Term 1806); Da Silva v. Kinsho Int'l Corp., 229 F.3d 358, 363 (2d Cir.2000) (delineating two categories of subject matter jurisdiction).

         In the case at bar, there are no pending federal claims. Moreover, neither Speedboat nor Rambler has presented sufficient facts to establish its citizenship for diversity purposes as either a limited liability company or a corporation. See n.12, supra. Therefore, if diversity of citizenship were asserted as the only potential basis for subject matter jurisdiction, the Court would be forced to inquire further of the parties regarding their citizenship.[19] However, the Court has an additional, alternative basis for subject matter jurisdiction: admiralty jurisdiction. As requested by Speedboat, and in light of the parties' agreement that there is no diversity jurisdiction, the Court will address admiralty jurisdiction before investigating the citizenship of the parties, if necessary.[20]

         2.Admiralty Jurisdiction

         Pursuant to 28 U.S.C. § 1333(1), Congress granted district courts "admiralty" jurisdiction over "[a]ny civil case of admiralty or maritime jurisdiction." That jurisdiction encompasses "all contracts . . . which relate to the navigation, business, or commerce of the sea." Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 199 (2d Cir. 1992) (internal quotation marks and citations omitted), aff'd, 968 F.2d 196 (2d Cir. 1992); accord Garanti Finansal Kiralama A.S. v. Aqua Marine & Trading, Inc., 697 F.3d 59, 65 (2d Cir. 2012) ("[T]he delegation of cognizance of 'all civil cases of admiralty and maritime jurisdiction' to the courts of the United States . . . extends over all contracts, (wheresoever they may be made or executed, or whatsoever may be the form of the stipulations, ) which relate to the navigation, business or commerce of the sea.") (quoting DeLovio v. Boit, 7 F.Cas. 418, 444 (C.C.D. Mass.1815) (No. 3, 776) (Story, J.) (emphasis added)).

         "Admiralty jurisdiction over contract claims is determined by reference to the nature and subject of the contract." Ziegler v. Rieff, 637 F.Supp. 675, 677 (S.D.N.Y. 1986).[21] See also Commercial Union Ins. Co. v. Blue Water Yacht Club Ass'n, 239 F.Supp.2d 316, 319 (E.D.N.Y. 2003). "The crucial question is whether the relevant agreement has a 'maritime flavor.'" Ziegler, 637 F.Supp. at 677 (citation omitted).

         As the United States Supreme Court has articulated, "[t]he only question is whether the transaction relates to ships and vessels, masters and mariners, as agents of commerce.” Kossick v. United Fruit Co., 365 U.S. 731, 736 (1961) (citation and quotation marks omitted).[22] See also, e.g., Omaha Indem. Co. v. Whaleneck Harbor Marina, Inc., 610 F.Supp. at 154, 155-56 (E.D.N.Y. 1985) (When a contract "relates to ships in their use as ships or to commerce or transportation in navigable waters, there is admiralty jurisdiction.") (citation, internal quotation marks, and bracket omitted).

         For example, it is well established that contracts relating to service or repair of a vessel are maritime in nature. Ziegler, 637 F.Supp. at 677 (citation omitted). Moreover, contracts providing for seasonal storage of a vessel are maritime contracts. Id. See also Selame Assoc., Inc. v. Holiday Inns, Inc., 451 F.Supp. 412, 418 (D.Mass.1978) ("A contract to provide wharfage or storage is a maritime contract and a breach of this contract is cognizable in admiralty.")(citations omitted)..

         In addition, an admiralty court generally has jurisdiction over contracts to charter a boat or vessel. Armour & Co. v. Ft. Morgan S.S. Co., 270 U.S. 253, 256 (1926) (a "charter party" is a maritime contract and "hence enforceable in a court of admiralty"). See also Fednav, Ltd. v. Isoramar, S.A., 925 F.2d 599, 601 (2d Cir. 1991) ("It is well-established that a charter party agreement is a maritime contract.") (citing, inter alia, Armour & Co., 270 U.S. at 259); Jack Neilson, Inc. v. Tug Peggy, 428 F.2d 54, 55 (5th Cir. 1970), cert. denied, 401 US. 955 (1971) ("We hold that the charter provisions of the contract are maritime in nature, are severable, and within the admiralty jurisdiction of the district court."). See also, e.g., Compass Marine Corp. v. Calore Rigging Co., 716 F.Supp. 176, 180 (E.D. Pa. 1989) (dispute arising out of charter agreement of vessel in service is cognizable under the admiralty and maritime jurisdiction of the federal courts), aff'd sub nom., Appeal of Calore Rigging Corp., 891 F.2d 279 (3d Cir. 1989), and aff'd, 891 F.2d 280 (3d Cir. 1989); Natasha, Inc. v. Evita Marine Charters, Inc., 763 F.2d 468, 468 (1st Cir. 1985) (holding "admiralty does have jurisdiction if the charter portion of the sale contract is readily 'separable' from the rest of the contract.").

         On the other hand, in general, "[i]t is well settled that, while a contract for the use or charter of a vessel is maritime in nature, the contract for a sale of a vessel is non-maritime." Sea Trade Mar. Corp. v. Coutsodontis, No. 09-CV-488 (BSJ) (HBP), 2012 WL 3594288, at *4 (S.D.N.Y. Aug. 16, 2012) (citing, inter alia, The Ada, 250 F. 194, 196 (2d Cir. 1918)). See also Aggelikos Prostatis Corp. v. Shun Da Shipping Grp. Ltd., 646 F.Supp.2d 330, 332 (S.D.N.Y. 2009) ("It is 'elementary hornbook law that a contract for the sale of a vessel is not within the admiralty jurisdiction of the district courts.'") (quoting Int'l Shipping Co., S.A. v. Hydra Offshore, Inc., 675 F.Supp. 146, 150 (S.D.N.Y.1987), aff'd, 875 F.2d 388 (2d Cir. 1989)); Kalafrana Shipping Ltd. v. Sea Gull Shipping Co., 591 F.Supp.2d 505, 507 (S.D.N.Y. 2008) ("It has long been the rule in the Second Circuit that a contract for the sale of a vessel is not a maritime contract."). See also generally 12 Am. Jur. 2d Admiralty § 60 ("A contract for the sale of a vessel is generally not within a federal court's admiralty jurisdiction because such a contract is not maritime in nature.").

         Nonetheless, if the maritime part of a contract is the primary objective of the contract and/or separable from the nonmaritime part, then admiralty jurisdiction exists. See, e.g., Compagnie Francaise De Navigation a Vapeur v Bonnasse, 19 F.2d 777, 779-80 (2d Cir. 1927) (Hand, J.), cert. denied, 275 U.S. 551 (1927); Atl. Mut. Ins. Co., 775 F.Supp. at 104. See also Sirius Ins. Co. (UK) v. Collins, 16 F.3d 34, 36 (2d Cir. 1994) ("The test [for determining a maritime contract] has . . . been loosened considerably so that admiralty jurisdiction is held to cover also contracts whose nonmaritime elements are 'incidental' to a primarily maritime purpose, as well as the separable maritime portions of mixed contracts that are not primarily maritime, if these can be separately litigated without prejudice.") (citations omitted); Tradhol Int'l, S.A. v. Colony Sugar Mills Ltd., No. 1:09-CV-00081 (RJH), 2009 WL 2381296, at *5 (S.D.N.Y. Aug. 4, 2009) ("The premise of the severability doctrine is that a court may divide a contract into its component parts and pronounce some but not all of them 'salty.'"), aff'd, 354 F.App'x 463 (2d Cir. 2009); Jack Neilson, Inc. v. Tug Peggy, 428 F.2d 54, 60 (5th Cir. 1970) ("it has long been recognized that where the maritime elements of a contract are susceptible to separate adjudication admiralty jurisdiction may be exercised to that extent") (citation and internal quotation marks omitted), cert. denied, 401 U.S. 955 (1971) . See also generally 29 A.L.R. Fed. 325, II. § 6[a] (captioned "Mixed contracts") ("where a contract contains both maritime and nonmaritime covenants, . . . admiralty may assume jurisdiction of a claim based upon the maritime part of the contract").

         Recently, courts have blurred the bright line between the sale of a vessel and certain maritime provisions to find that "when determining whether a contract is a maritime contract, one should focus on whether the principal objective of the contract is maritime commerce, rather than on whether the non-maritime components are properly characterized as more than 'incidental' or 'merely incidental' to the contract." Kalafrana Shipping Ltd. v. Sea Gull Shipping Co. Ltd., 591 F.Supp.2d 505, 509 (S.D.N.Y. 2008).[23] As Justice O'Connor articulated on behalf of a unanimous Supreme Court in Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 14 (2004), "the fundamental interest giving rise to maritime jurisdiction is the protection of maritime commerce. . . . [and] [t]he conceptual approach vindicates that interest by focusing the Court's inquiry on whether the principal objective of a contract is maritime commerce." See also Sirius Ins. Co. (UK) v. Collins, 16 F.3d 34, 36 (2d Cir. 1994) ("the court should consider 'whether an issue related to maritime interests has been raised, ' 968 F.2d at 199, bearing in mind that the 'fundamental interest giving rise to maritime jurisdiction is the protection of maritime commerce.'") (citing and quoting Atlantic Mutual Ins. Co. v. Balfour Maclaine Int'l, Ltd., 968 F.2d 196, 200 (2d Cir. 1992)(some internal quotation marks omitted).

         Under this "conceptual" or "principal objective" approach, endorsed by the Second Circuit, "if the maritime elements of a contract are the principal or primary objective of the contract, " there is admiralty jurisdiction. F.H. Bertling Holding KG v. Ranhill Engineers & Constructors Sdn. Bhd., 591 F.Supp.2d 377, 383 (S.D.N.Y. 2008) (citing, inter alia, Folksamerica Reinsurance Co. v. Clean Water of New York, Inc., 413 F.3d 307, 314-15 (2d Cir. 2005)). Alternatively, employing the "severability" exception, if "the claim [at issue] arises from a breach of maritime obligations that are severable from the non-maritime obligations of the contract, " there is "federal maritime jurisdiction." F.H. Bertling Holding KG, 591 F.Supp.2d at 383 (citation omitted).

         Implementing the conceptual approach to determine whether there is admiralty jurisdiction, the Court must focus its inquiry on whether the nature of the contract or transaction includes maritime elements: whether provisions relate to the navigation, business or commerce of the sea. If the Court finds that the primary objective of the contract is maritime in nature, there is admiralty jurisdiction. Otherwise, under the severability test, if certain components of the contract are maritime, while others are not, the Court must determine whether the maritime provisions are separable from the non-maritime ones. If the maritime provisions are separable, there is admiralty jurisdiction over the claims arising under them.

         3.Interpretation of the Agreement: Co-Ownership and/or Lease

         "The rules for the construction and interpretation of maritime contracts are essentially the same as those delineated in the non-maritime caselaw." Sea Hunters, LP v. S.S. PORT NICHOLSON, No. 2:08-CV-272 (GZS), 2015 WL 1206487, at *10 (D. Me. Mar. 17, 2015). The Court thus turns to the terms of the Agreement to determine their intended meaning.

         The basic principles of contract interpretation under Connecticut law, which governs, are well established: "(1) [t]he intention of the parties is controlling and must be gathered from the language of the [contract] in the light of the circumstances surrounding the parties at the execution of the instrument; (2) the language must be given its ordinary meaning unless a technical or special meaning is clearly intended; [and] (3) the [contract] must be construed as a whole and in such manner as to give effect to every provision, if reasonably possible." Sartor v. Town of Manchester, 312 F.Supp.2d 238, 242-43 (D. Conn. 2004) (quoting Peter-Michael, Inc. v. Sea Shell Assoc, 244 Conn. 269, 275 (1998)). The parties' "intention is to be determined from the language used, the circumstances, the motives of the parties and the purposes which they sought to accomplish." Sartor, 312 F.Supp.2d at 243 (citing Peter-Michael, 244 Conn. at 276). Where the language of a contract is clear and unambiguous, the court's determination of contractual intent becomes a question of law for the court. See, e.g., Tallmadge Bros., Inc. v. Iroquois Gas Transmission Sys., L.P., 252 Conn. 479, 495 (2000) ("the interpretation and construction of a written contract present only questions of law, within the province of the court . . . so long as the contract is unambiguous and the intent of the parties can be determined from the agreement's face") (quoting 11 S.Williston, Contracts, at 77-83 (§ 30:6) (4th ed. 1999)).

         "Contract language is unambiguous when it has a definite and precise meaning, unattended by danger of misconception in the purport of the [contract] itself, and concerning which there is no reasonable basis for a difference of opinion." Brunoli v. Brunoli & Sons, 993 F.Supp. 66, 73 (D.Conn.1997) (quoting Care Travel Co. v. Pan Am. World Airways, 944 F.2d 983, 988 (2d Cir. 1991)). Moreover, "the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous." Levine v. Massey, 232 Conn. 272, 279 (1995). Rather, the court must give the terms "their natural and ordinary meaning, " Kelly v. Figueiredo, 223 Conn. at 31, 35 (1992), and interpret them "with each provision read in light of the other provisions, " United Illuminating Co. v. Wisvest-Connecticut, LLC, 259 Conn. 665, 670 (2002).

         In the case at bar, the Agreement's terms are clear and unambiguous and should be given their natural and ordinary meaning. Their interpretation by the Court thus presents a question of law.

         The Agreement, entitled "Share Issuance and Shareholder Agreement, " states that 49, 999 out of 50, 000 shares of Speedboat - "a Cayman Islands exempted company limited by shares" - each valued at one dollar ($ 1.00), are owned by one Alexander Jackson. Doc. 10-3, at 2. The remaining individual share ("New Share") was to be issued to Rambler for the purchase price of "One Dollar, " and become "redeemable by [Speedboat] upon the terms set forth" in the Agreement, which included, if no prior terminating event occurred, automatically upon termination of the Agreement (i.e., after the conclusion of the races for which the Yacht was leased).[24] Id. During the entire term of the Agreement, the sole Director of Speedboat was and would continue to be "Alexander E. Jackson, " id., at 4 (§ 3.1); and Speedboat was and would remain "the record owner of the Yacht, " id., at 9 (§ 4.2(b)).

         Most importantly to Rambler, under the Agreement, Rambler obtained "[e]xclusive use of the Yacht" to participate in the series of "eight races in the Atlantic Ocean Racing Series in 2011." Id., at 4-5 (§ 4.1). In return, Rambler was required to pay all operating expenses, repair and maintenance costs, racing fees, crew employee salaries and benefits, and all ancillary costs of such races.[25] Id., at 5 (§ 4.1(a)).

         Even during the races, Speedboat retained certain control over the Yacht by requiring Rambler to hire Speedboat's captain, Chris Higgins, on a full-time basis "through the last race sailed under this Agreement, " and hire crew member Bill Erkelens to serve "as a crew member in each sailboat race in which the Yacht participates."[26] Id., at 5 (§ 4.1(b)). Furthermore, Speedboat placed "Use Restrictions" on Rambler's use of the yacht, limiting operation "to the navigational limits as set forth in the Yacht's insurance policy, " mandating use "for pleasure" purposes only, and banning drugs and weapons on board. Id., at 6 (§ 4.1(e)). Speedboat also banned "any permanent modifications to the Yacht" unless listed in the Agreement and/or after "prior written express consent of [Jackson]." Id., at 8 (§ 4.1(m)). Furthermore, Rambler could not rename the Yacht or change "associated graphics" unless "all such changes shall be reversed at the end of the [Agreement's] Term at the expense of Rambler." Id.

         4. Jurisdiction over the Pending Claims

         There are essentially two components to the "Share Issuance and Shareholder Agreement" (herein "Agreement") with respect to the Yacht: (1) a sale of one share of ownership ("one (1) redeemable share of a nominal par value of U.S. $1.00") in Speedboat, Doc. 10-3, at 2; and (2) a charter or lease for the use of the Yacht for a set period to sail in the 2011 season of the Atlantic Ocean Racing Series, id., at 4-5 (§ 4.1). The first contract component of a sale is non-maritime in nature. See, e.g., The Ada, 250 F. at 196. However, the second portion of the Agreement, the lease or charter of the Yacht for the specified racing season, is maritime by its terms. See, e.g., Armour & Co., 270 U.S. at 256.[27]

         At its core, this was an agreement for Rambler to sail a world-class yacht in a series of international races in the hopes of securing victory. The Agreement's maritime charter provisions contain what was manifestly the primary objective of the contract: to provide Rambler with the exclusive use of the Yacht in the 2011 Atlantic Ocean Racing Series. The sale of one share of Speedboat to Rambler was incidental to the charter (in this case, according to Speedboat to ensure that the charter was legal).[28] Therefore, under the Second Circuit's "conceptual" test, the Agreement is maritime in nature, giving rise to admiralty jurisdiction.

         Moreover, even if the charter were not the primary objective of the Agreement, the charter provisions are separable from the stated sale of the Speedboat share. Therefore, employing "severability, " even if the primary objective of the Agreement were not the charter, there is admiralty jurisdiction over the claims at bar under the "separable provision" test.

         Examining the terms giving rise to the charter, Section 4.1(a) of the Agreement provides Rambler with "[e]xclusive use of the Yacht" from October 14, 2010 to March 15, 2012 for racing purposes.[29] Doc. 10-3, at 4 (§ 4.1). The intended races of the Yacht are described as "eight races in the Atlantic Ocean Racing Series in 2011 . . . with the objective of winning the Atlantic Ocean Racing Series overall, winning a majority of the races entered, and setting records." Id., at 4-5 (§ 4.1(a)).

         "As a condition to Rambler's exclusive use of the Yacht, " Rambler agreed to "pay all operating expenses, repair and maintenance costs for the Yacht and its Equipment." Id., at 5 (§ 4.1(a)). In addition, pursuant to Section 4.1(b), Rambler agreed to retain two former Speedboat crew members. Specifically, Rambler was bound to retain the "current captain of the Yacht, " Chris Higgins, on a full time basis and with "a competitive salary consistent with the other senior members of the Yacht's crew;" and Rambler was required to hire Bill Erkelens as a crew member in each sailboat race in which the Yacht would participate.[30] Id.

         Under Section 4.1(c), Jackson and Speedboat agreed to "deliver the Yacht . . . to Rambler at Newport Shipyard, Newport, Rhode Island, " or at another agreed upon location, in "ship shape, sailable racing condition" and to inform Rambler of any "conditions, flaws, damages, or defects (latent or otherwise) of the Yacht which would render or cause the Yacht not to be in ship shape, sailable racing condition." Id., at 5 (§4.1(c)). Section 4.1(d) outlined the terms for redelivery of the Yacht by Rambler to Jackson and Speedboat at the conclusion of the Agreement's term; and Section 4.1(e) defined restrictions on the use of the Yacht, including the navigational limits of the Yacht's operation. Id., at 6 (§4.1(e)).

         These provisions are typical of those found in maritime contracts of charter party. By the same token, the claims Speedboat asserts against Rambler in its Third Party Complaint, and Rambler asserts in its counterclaims to that pleading, are typical of the sort traditionally charged as breaches of a maritime charter. For example, Count One alleges that Rambler "fail[ed] to return the Yacht in as good a condition as when delivery was taken . . . pursuant to the Lease Agreement." Doc. 20, at 6 (¶ 26) (relating to § 4.1(d)). Count Two seeks declaratory judgment that Rambler failed to secure adequate insurance coverage of the Yacht pursuant to the terms of the Lease Agreement. Id., at 6 (¶ 29) (relating to § 4.1(f)). Count Three alleges that "as a condition to Rambler's exclusive use of the Yacht, " Rambler was obligated to pay "all operating expenses, repair and maintenance costs for the Yacht, " and Rambler "fail[ed] to maintain and repair the Yacht, including repairs resulting in major equipment failures." Id., at 7 (¶¶ 34-35) (relating to § 4.1(a)). Finally, Count Four seeks attorneys' fees pursuant to Section 5.5 of the Lease Agreement. Id., at 8 (¶ 38) (relating to "Miscellaneous Provisions" in § 5, pertaining to the entire Agreement).

         In addition, as Rambler asserts, four of its proposed counterclaims, "as set forth in its proposed amended pleadings, concern Jackson's and Speedboat's breaches of Sections 4.1, 4.1(a), and 4.1(c) of the Agreement, " and therefore also relate to the charter or lease of the Yacht.[31] Doc. 48 (Rambler's Brief), at 8 (citing Doc. 48-1, Counts I-IV, at 21-24). In addition, as Rambler states, another of its causes of action "concerns Jackson's and Speedboat's breach of the Agreement's implied covenant of good faith and fair dealing for, among other things, refusing to allow Rambler to repair the Yacht so that it could continue to use the Yacht through the end of the term of the Agreement." Doc. 48, at 8 (citing Doc. 48-1, Count VI, at 25-27). That cause relates to the repair provisions of the charter portion of the Agreement (§ 4.1(a)). Yet another cause of action, Rambler alleges, "is based on Speedboat's breach of the Agreement's implied warranty of seaworthiness." Doc. 48, at 8 (citing Doc. 48-1, Count V, at 24-25) (relating to "Delivery of the Yacht" in "ship shape, sailable racing condition, " pursuant to § 4.1(c)). In sum, according to Rambler, each of these "foregoing causes of action is based explicitly upon the breach of the Agreement, a maritime contract that concerns the use of a ship as a ship and that directly relates to the ship's operation, navigation, and management afloat." Doc. 48, at 8 (emphasis added).

         Given these circumstances, there is no substance to Speedboat's contention that the Agreement is not maritime in nature, but rather "a shareholders' agreement by which Jackson and Defendant became co-owners of [the] Speedboat entity, provided for its governance, provided that Rambler would finance the maintenance and operation of the Yacht . . ., and provided Rambler as a co-owner with temporary use of the Yacht, subject to certain conditions." Doc. 50, at 7.

         Speedboat asserts that "a contract under which co-owners provide for the management and operation of a vessel is entirely non-maritime in character, and is distinguishable for purposes of admiralty jurisdiction from a third-party charter." Id., at 7-8 (citing, inter alia, Ward v. Thompson (The Detroit), 63 U.S. 330, 333 (1859)). This argument fails because Speedboat's interpretation of the Agreement as a "co-owners' management agreement" for operation of a vessel misses the mark. It exalts form (such as the caption, "Share Issuance and Shareholder Agreement") over substance. This is clearly not a case where, as Speedboat asserts, Doc. 50, at 8, mutual co-owners agreed to purchase and operate a vessel together, as opposed to "one where an owner of a vessel engages another to manage or operate her." Cf. Economu v. Bates, 222 F.Supp. 988, 990 (S.D.N.Y. 1963) ("The parties . . . have agreed to purchase a vessel and thereafter to operate her for their mutual benefit; the profits were to be shared whether the operation was in the name of one or more individuals or through a corporate entity" and "[t]his is the essence of their arrangement.").

         The essence of the contract at bar was not a joint enterprise. Rather, examining the terms of the contract as a whole and interpreting all terms to give them their full meaning, the contract was primarily designed to provide Rambler with use of the Yacht "in ship shape, sailable racing condition" to participate in the Atlantic Ocean Racing Series. Rambler's nominal, one-share ownership interest expressly and automatically terminated "upon completion of the [Agreement's] Term" and for the price of "One Dollar ($1.00)."[32] Doc. 10-3, at 7 (§ 4.1(j)). Thus, upon expiration of the contract, Speedboat resumed full ownership rights; and by January 1, 2012, Speedboat and Jackson could even elect to "market or otherwise advertise the Yacht for sale."[33] Id., at 7-8 (§§ 4.1(i), (j), (n)(2), (o)).

         Speedboat accuses Rambler of using "far too simplistic a reading of the legal precedent governing the distinction between maritime and non-maritime contracts" and concluding that "[t]he mere fact that a ship is involved will not bring the cause within the jurisdiction of the admiralty court." Doc. 50, at 8 (citations omitted). Speedboat sets up a straw man and energetically knocks it down, but the argument disregards reality. Admiralty jurisdiction does not depend upon "the mere fact that a ship is involved" in the transaction between the parties. On the contrary: for the reasons stated, the Court interprets the Agreement to contain both a nominal sale and a lease (or charter) of the Yacht for the 2011 Atlantic Ocean Racing Series. The pending claims between Speedboat and Rambler relate to the Agreement's primary and/or separable maritime provisions pertaining to that lease, and consequently fall within admiralty jurisdiction.

         In sum, the main and severable purpose of the Agreement was to lease or charter to Rambler the Yacht to participate in races. "Without doubt a contract for hire either of a ship or of the sailors and officers to man her is within the admiralty jurisdiction." Kossick v. United Fruit Co., 365 U.S. 731, 735 (1961) (citing 1 Benedict, Admiralty, 366).[34] Accordingly, the charter terms of the Agreement support admiralty jurisdiction in the present case.

         5.Choice of ...


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