United States District Court, D. Connecticut
RULING ON SPEEDBOAT['S] AND JACKSON'S MOTION
FOR LEAVE TO AMEND ANSWER [Doc. 75]
CHARLES S. HAIGHT, JR. Senior United States District Judge.
vehemently litigated admiralty action, the current litigants,
Speedboat Racing Ltd. ("Speedboat"), Alexander E.
Jackson, and Rambler 100 LLC ("Rambler") dispute
which party is liable for damages to the yacht formerly known
as "SPEEDBOAT" (the "Yacht"), a majestic
and "highly sophisticated racing sloop, 30 meters long,
" which was "designed by Juan Kouyoumdjian of Juan
Yacht Design and built by T.P. Cookson Boatbuilders
Ltd." Doc. 20 (Speedboat's "Amended
Third Party Complaint"), at 3 (¶ 8). Speedboat,
Jackson (Speedboat's "Director"), and Rambler
entered into a "Share Issuance and Shareholder
Agreement" (the "Agreement") on October 14,
2010, which provided that Rambler would have exclusive use of
the Yacht in the 2011 Atlantic Ocean Racing Series and 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." Doc. 10-3 ("Exhibit C,
Lease Agreement, dated October 14, 2010), at 5 (§
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 the
Atlantic Ocean Racing Series, id., at 4 (§
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). 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." Id.
Speedboat submitted a claim to its insurer, Federal Insurance
Company ("Federal"), for the damages to the
Yacht's "sails, mast, spars and rigging in the
amount of $3, 130, 000.00." Doc. 1, at 3 (¶ 15).
Federal denied the claim by letter dated October 12, 2012,
and commenced the present action against Speedboat.
Id., at 4 (¶ 17). In particular, Federal filed
a "Complaint in Admiralty" [Doc. 1] seeking
declaratory judgment pursuant to 28 U.S.C. § 2201 that,
pursuant to the terms of the $5 million marine insurance
policy on the Yacht, Federal had no duty to pay Speedboat for
the damages that occurred to the Yacht on August 15, 2011.
Federal argued that said damages were explicitly excluded
from coverage under the following provision of the Policy:
"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).
explained that the damages in question 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.
Therefore, Federal requested "a declaratory judgment
claiming that it ha[d] 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
answered the Complaint [Doc. 8] and filed a Third-Party
Complaint [Doc. 10] against Rambler, alleging that Rambler
had breached the Agreement. Speedboat thereafter filed an
"Amended Third-Party Complaint" [Doc. 20] pursuant
to Federal Civil Rule 15(a)(1)(B), as a "matter of
course." In that pleading, Speedboat asserted that
"if Plaintiff [Federal 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" between Speedboat, Jackson, and Rambler. Doc.
20, at 2 (¶ 2) & Ex. C.
August 9, 2016, this Court entered an "Omnibus Ruling,
" 2016 WL 4250222, resolving a number of matters in the
case. The Ruling approved the joint stipulation of
discontinuance [Doc. 43] filed by Federal and Speedboat,
which discontinued Federal's action against Speedboat,
effectively removing Federal as plaintiff. In addition, the
Ruling denied Speedboat's motion to dismiss for lack of
subject matter jurisdiction [Doc. 44], holding that this
Court possesses admiralty jurisdiction over the pending
claims relating to the Agreement pursuant to 28 U.S.C. §
1333. Next, the Ruling granted Rambler's motion to amend
or correct its answer and counterclaims [Doc. 46], which
included leave to add Jackson as a party. The Court found
that the addition of Jackson as a party was not only
"permissible, " but likely "required, in light
of his participation as a party to the Agreement." Doc.
61, at 52. Finally, the Court denied as moot Speedboat's
motion to stay discovery [Doc. 52], and denied without
prejudice Rambler's motion to compel discovery [Doc. 57].
August 26, 2016, Rambler filed its "Second Amended
Answers and Counterclaims to Speedboat's Amended
Third-Party Complaint" [Doc. 62]. Five days later,
Rambler filed a "Third-Party Complaint" against
Jackson [Doc. 63]. On September 16, 2016, Speedboat and
Jackson filed Answers to Rambler's Second Amended
Counterclaims and Third-Party Complaint [Doc. 70].
present, Speedboat and Jackson move, pursuant to Rule
15(a)(2) of Civil Procedure, for leave to amend their Answers
[Doc. 70] to Rambler's Second Amended Counterclaims and
Third-Party Complaint [Doc. 63] to assert additional
affirmative defenses. Their proposed defenses include:
"(i) the Yacht was delivered in a safe and seaworthy
condition to Rambler, the pro hac vice owner under the Lease
Agreement (Twelfth Affirmative Defense); (ii) inapplicability
and/or waiver of the implied warranty of seaworthiness
(Thirteenth Affirmative Defense); and (iii) preemption of the
[attorney's fees and punitive damages provisions of the]
Connecticut Unfair Trade Practices Act by federal admiralty
law (Fourteenth Affirmative Defense)." Doc. 75, at 1-2.
support of their motion, Speedboat and Jackson state that the
"proposed amendment is timely, " they "have a
good faith basis for asserting their additional affirmative
defenses that is not futile, and their proposed amendments
will not delay resolution of the dispute or otherwise harm
Rambler." Id., at 2. In addition,
movants Speedboat and Jackson represent that Rambler
"does not oppose" their motion for leave to amend.
Standard to Amend Pleadings - Rule 15(a), ...