Cargill, Inc. v. Kopalnia Rydultowy Motor Vessel

304 F. App'x 278
CourtCourt of Appeals for the Fifth Circuit
DecidedDecember 22, 2008
Docket08-30101
StatusUnpublished
Cited by4 cases

This text of 304 F. App'x 278 (Cargill, Inc. v. Kopalnia Rydultowy Motor Vessel) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cargill, Inc. v. Kopalnia Rydultowy Motor Vessel, 304 F. App'x 278 (5th Cir. 2008).

Opinion

PER CURIAM: *

The issue on appeal involves whether depreciation is to be assessed on the costs of repairing a section of Cargill, Incorporated’s (“Cargill”) wharf on the Mississippi River in Westwego, Louisiana. The M/V KOPALNIA RYDULTOWY (“the Ship”) damaged a small portion of the wharf in September 2005 when it was docked negligently. Appellants challenge the calculation of damages awarded by the district court because they represent the full, undepreciated cost of repairs and attorneys’ fees. For the following reasons, we AFFIRM the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

The facts of the accident are not in dispute. In September 2005, the Ship collided with Cargill’s wharf on the Mississippi River in Westwego, Louisiana. Prior to the collision, the wharf was fully functional. The Ship struck a portion of the wharf that includes a walkway bridge used to reach ships docked at Cargill’s wharf. Cargill replaced the damaged components. In September 2006, Cargill filed suit against Kopalnia for damage to its wharf as a result of the negligent docking and landing of the Ship.

In addition, on the date of the accident, the Master of the Ship signed a Berth Application for the use of the Cargill Westwego Elevator (the “Berth Application”) before bringing the Ship into the wharf. Pursuant to the Berth Application, the Master bound the Ship and her owner to the terms of the published tariff eoncern *280 ing use of the Cargill berth at the Westwego Elevator (“Tariff’). The Berth Application and the incorporated Tariff both contained indemnity provisions. The Tariff’s indemnity clause included the reimbursement of Cargill’s attorneys’ fees for any injury to its property arising out of the acts or omissions of the Ship or her owners.

During a bench trial, the Ship’s owners and operators, Cepheus Shipping, Ltd., Polish Steamship Co., and Polska Zeluga Morska (collectively with the Ship, “Kopalnia”), stipulated that the negligence of the Ship’s docking maneuver and resulting hard landing caused the collision and resulting damage to an eighty-foot long section of Cargill’s 1,440-foot long wharf. In addition to liability, the parties stipulated that the actual cost of repairs was $408,328.94. The parties proceeded only as to the correct measure of damages— specifically, whether those repair costs should be depreciated for any extension of the useful life of the structure.

In a December 19, 2007 Order, the district court held that repair costs should not be depreciated, awarding the full repair costs to Cargill in damages, and further holding that Cargill was entitled to indemnification of its attorneys’ fees and costs from Kopalnia under the Berth Application, later determined to be $66,479.87. Kopalnia appeals the measure of damages and award of fees.

CARGILL’S DAMAGES

Kopalnia argues that the district court misapplied the law and reached an erroneous factual finding when it determined that repair costs should not be depreciated because the damaged walkway was “essential” to Cargill’s wharf. Kopalnia asserts that the district court was required to first analyze the extent of the section’s prior deterioration and to what extent the repairs extended that walkway section’s useful life. Cargill responds that the district court applied the law correctly, and its factual finding that the repaired wharf walkway was an “essential element” of Cargill’s wharf is not clearly erroneous.

This court reviews de novo the legal standard applied by the district court to calculate damages. See Harken Exploration Co. v. Sphere Drake Ins. PLC, 261 F.3d 466, 477 (5th Cir.2001) (stating issues of law with respect to the determination of damages are reviewed de novo). We review findings of fact for clear error. Fed. R.Civ.P. 52(a); Bursztajn v. United States, 367 F.3d 485, 490 (5th Cir.2004).

Cargill is entitled to the cost of repairing its wharf to its pre-tort condition. See Freeport Sulphur Co. v. S.S. Hermosa, 526 F.2d 300, 304 (5th Cir.1976) (explaining that the purpose of damages for maritime tort is to place the injured party as nearly as possible in the condition it would have occupied if the accident had not occurred). When repairs improve a damaged structure to a better than pre-tort condition, thus providing an extra benefit to the tort victim, a measure of depreciation is applied to the repairs costs to reduce damages. Id. at 305 (“[Wjhere the expected useful life of the property after repairs is the same as it was at the time of its acquisition by the plaintiff, the straight-line depreciation formula should be applied”).

Clearly, depreciation does not apply in every case. Id. at 305. “[Wjhere the repairs do not extend the useful life of the property as it existed just before the collision, there should be no deduction for depreciation.” Brunet v. United Gas Pipeline Co., 15 F.3d 500, 505-06 (5th Cir.1994) (quoting Freeport Sulphur, 526 F.2d at 305-06). If the repaired wharf walkway is “integral” to Cargill’s wharf — because the repaired section will not be replaced inde *281 pendently and/or retained when the rest of the wharf is rebuilt — and the repairs do not extend the useful life of the entire wharf, repair costs will not be depreciated. See Brunet, 15 F.3d at 505-06 (holding that repair costs not subject to depreciation because damaged pipeline crossing was part of a larger system and would require replacement when larger pipeline system was replaced).

The applicable depreciation inquiry is whether the instant walkway will be replaced again when the wharf as a whole, or at least the section of the wharf of which the walkway is a part, reaches the end of its useful life. See Brunet 15 F.3d at 506; Freeport Sulphur, 526 F.2d at 304-06. If so, Cargill will not receive the benefit of any useful life extension, and no depreciation should be taken. Id.; see also Oregon v. Tug Go-Getter, 468 F.2d 1270, 1273-74 (9th Cir.1972) (“Under these circumstances it is of no significance that the pier could be separately repaired or even replaced. (So could a single wall of a building.)”) (emphasis added); BP Exploration, 147 F.Supp.2d 333, 341-42 (D.N.J.2001) (applying Brunet and holding no depreciation applicable, because “when the entire pipeline is eventually replaced, it is unlikely that these pieces of pipes would be left for replacement even further in the future, and if that were the course of action, any savings would be de minimis ” because the particular repaired pipes were integral to the facility and them replacement added no useful life to the facility).

The district court, applying

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