Bodnar v. Hi-Lex Corp.

919 F. Supp. 1234, 1996 A.M.C. 1661, 1996 U.S. Dist. LEXIS 3532, 1996 WL 138569
CourtDistrict Court, N.D. Indiana
DecidedJanuary 29, 1996
DocketCivil No.: 3:91-CV-565-TS
StatusPublished
Cited by8 cases

This text of 919 F. Supp. 1234 (Bodnar v. Hi-Lex Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bodnar v. Hi-Lex Corp., 919 F. Supp. 1234, 1996 A.M.C. 1661, 1996 U.S. Dist. LEXIS 3532, 1996 WL 138569 (N.D. Ind. 1996).

Opinion

ORDER

SPRINGMANN, United States Magistrate Judge.

This matter is before the Court on the Third-party Defendants’ Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(6). On July 9,1990, Jeffrey and Jennifer Bodnar filed the present products liability action based on alleged defects in the design of the throttle control system of their pleasure boat. Originally, the Plaintiffs sued four defendants: Outboard Marine Corporation (manufacturer of the boat’s motor), Det-Mar Corporation (who assembled and marketed the instrument panel assembly), Renken Boat Manufacturing Company (manufacturer of the hull and deck and assembler of the boat) and Hi-Lex Corporation (manufacturer of the throttle control system and allegedly the throttle cable). In the complaint, the Plaintiffs properly invoked this Court’s jurisdiction under 28 U.S.C. § 1332.

The Court granted Summary Judgment in favor of Defendant Det-Mar, on June 27, 1991, and in favor of Defendant Outboard Marine Corporation on July 10, 1991. The remaining two Defendants, Renken Boat Manufacturing Company and Hi-Lex Corporation, filed third-party complaints against Terpstra’s Blue Water Marine on July 5, 1991, and June 28, 1991, respectively. Terpstra’s Blue Water filed its motion to dismiss on August 27, 1991. The motion is fully briefed.

FACTUAL BACKGROUND

The facts, taken in a light most favorable to the Third-party Plaintiffs, are as follows: On July 8,1988, Jeffrey and Jennifer Bodnar were motorboating off the Indiana shore of Lake Michigan. At the time of the accident, Jeffrey was in the water, having just fallen off his water skis. Jennifer Bodnar was driving the boat and proceeded to steer toward Jeffrey to pick him up. The boat came too close to Jeffrey, and its propellers struck and injured him.

The Bodnars filed suit against both Renken and Hi-Lex asserting claims for products liability (both strict liability and negligence) and a claim for loss of consortium against each of the Defendants. In their third-party complaint for contribution against Terpstra’s, Renken and Hi-Lex assert that Terpstra’s breached its duty to use reasonable care in the examination, service, sale, maintenance and repair of the Plaintiffs’ pleasure boat. Specifically, they allege that on or about June 2, 1983, Terpstra’s took in trade a Renken V-750 power boat from David Puent. After examining the boat and its component parts, Terpstra’s resold the boat to Gerald [1236]*1236Koedyker. Terpstra’s involvement did not end with the sale, however. They periodically winterized and examined the vessel to determine if there were any problems of major significance. Gerald Koedyker subsequently sold the boat to the Plaintiff's. Thereafter, on numerous occasions, Terps-tra’s performed winterization service, spring start-up service and general maintenance to the Plaintiffs’ boat. The Third-party Plaintiffs, Renken and Hi-Lex, allege that the negligence of Terpstra’s caused any damages which may be owed the Plaintiffs.

THE MOTION TO DISMISS

Terpstra’s responded to the Defendants’ third-party complaints with its motion to dismiss. In its motion, Terpstra’s argued that Indiana law applies to this case. Next, Terpstra’s contended that Indiana law prohibits the Defendants’ third-party complaints for contribution.

Both Renken and Hi-Lex responded to Terpstra’s motion to dismiss by arguing that the present case falls under the admiralty jurisdiction of this Court. Therefore, admiralty law, and not state law, should govern the propriety of the Defendants’ third-party complaint for contribution. Since admiralty law has long recognized claims for contribution, the Defendants argued, Terpstra’s motion to dismiss should be denied.

DISCUSSION

This case requires the Court to decide two issues. First, the Court must decide whether Indiana law or the law of admiralty applies to this case. Second, the Court must determine whether the prevailing law will allow third-party actions for contribution.

I.

The choice of law question presented by this case turns on the issue of admiralty jurisdiction. If the facts place the case within the Court’s admiralty jurisdiction, substantive admiralty law will apply. If the case falls outside of the Court’s admiralty jurisdiction, then the Court will maintain diversity jurisdiction alone. In cases based solely on diversity, the district court applies state substantive law. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). If this case only fell within the Court’s diversity jurisdiction, Indiana law would apply.1

The interplay between jurisdiction and the substantive law is particularly important in this case. The Plaintiffs filed their original complaint based on the diversity jurisdiction of the federal courts. Both Renken and Hi-Lex filed their third-party complaints and based jurisdiction for those complaints upon the ancillary jurisdiction of this. Court. Terpstra’s followed with its motion to dismiss and argued that Indiana law would not allow the case against Terpstra’s to go forward. Renken and Hi-Lex responded and argued for the first time that admiralty law applied to the ease. In its reply brief, Terpstra’s argued that Renken and Hi-Lex, “having been caught in the switches,” should not be allowed to invoke the substantive rules of admiralty law to this diversity case. (Third-party Defendant’s Reply Brief in Support of Motion to Dismiss at 4).

Terpstra’s argument is misplaced. The substantive rules of admiralty law will apply to a case if it falls within the Court’s admiralty jurisdiction, regardless of whether or not the parties actually invoked that jurisdiction. Carey v. Bahama Cruise Lines, 864 F.2d 201, 206 (1st Cir.1988). In Carey, the court reviewed a district court’s decision to apply Massachusetts law in a case which fit [1237]*1237within the court’s admiralty and diversity jurisdictions. The district court applied state substantive law to the case because the plaintiffs had failed to invoke admiralty jurisdiction under Fed.R.Civ.P. 9(h).2 The district court believed that the plaintiffs were not entitled to have substantive admiralty law apply. The court refused to apply admiralty law because it had both diversity jurisdiction and admiralty jurisdiction over the case, and the plaintiffs had failed to identify the ease as one arising in admiralty. Carey, 864 F.2d at 206. The First Circuit Court of Appeals overturned the district courts order. The court stated that

Rule 9(h) is a purely procedural provision. Enacted after the merger of law and admiralty jurisdictions, it permits a plaintiff whose claim is cognizable under either jurisdiction to identify his claim as an admiralty claim to obtain certain procedural benefits traditionally available under admiralty jurisdiction.... Rule 9(h) does not authorize a plaintiff to choose the substantive law that applies to his claim.

Id.

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Bluebook (online)
919 F. Supp. 1234, 1996 A.M.C. 1661, 1996 U.S. Dist. LEXIS 3532, 1996 WL 138569, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bodnar-v-hi-lex-corp-innd-1996.