Columbus-America Discovery Group v. Atlantic Mutual Insurance

203 F.3d 291
CourtCourt of Appeals for the Fourth Circuit
DecidedFebruary 14, 2000
Docket98-2120, 98-2198
StatusPublished
Cited by4 cases

This text of 203 F.3d 291 (Columbus-America Discovery Group v. Atlantic Mutual Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Columbus-America Discovery Group v. Atlantic Mutual Insurance, 203 F.3d 291 (4th Cir. 2000).

Opinion

OPINION

WIDENER, Circuit Judge:

The appellant, Columbus-America Discovery Group, appeals three orders of the district court: an order entering a previously signed agreed order of settlement and dismissal, a sua sponte order of the district court partially vacating the previously entered agreed dismissal order, and a third order unsealing the inventory of the treasure recovered by Columbus-America from the shipwreck S.S. Central America. For the reasons that follow, we affirm in part, vacate in part, reverse in part, and remand the case to the district court for further proceedings consistent with this opinion.

I.

In 1857, the S.S. Central America sank in the Atlantic Ocean during a powerful storm. Many fives were lost as well as substantial sums of gold belonging to passengers and a large commercial shipment of gold in route from California to New York. In 1988, after years of searching, the Columbus-America Discovery Group, a group of scientists, engineers, ocean explorers, and other experts led by scientist and ocean engineer Thomas G. Thompson, found the sunken ship at the bottom of the ocean 160 miles off the South Carolina coast. (974 F.2d at 455, 742 F.Supp. at 1330).

After finding the Central America, Columbus-America Discovery Group (hereinafter referred to as Columbus-America or CADG) brought an in rem proceeding in admiralty seeking to establish ownership of and the right to salvage the defendant ship and its cargo of gold and other artifacts. The district court found that Columbus-America was a first salvor under substantive admiralty law and thereby entitled to salvage the ship without interference and to the exclusion of other salvors. In its order of August 18, 1989, the district court granted Columbus-America an injunction which permanently enjoined and restrained any other persons from conducting search, survey, or other salvage operations of the site. Columbus-America Discovery Group, Inc. v. Unidentified, Wrecked and Abandoned Sailing Vessel, 87-363-N, (E.D.Va. Aug. 18, 1989).

On September 29, 1989, the Underwriters and other insurers or their successors-in-interest intervened in the in rem proceeding, each claiming that it had underwritten the risk of loss and had paid claims for portions of the lost gold which all together totaled approximately $1,219,189.00. On April 3, 1990, the district court entered an order closing the action to the fifing of additional claims against the defendant ship or to any items recovered therefrom whether recovered prior thereto or subsequently. Columbus-America Discovery Group, Inc. v. Unidentified, Wrecked and Abandoned Sailing Vessel, No. 87-363-N (E.D. Va. April 3, 1990).

Following a trial, the district court entered its final order and opinion on August 14,1990 holding that the Underwriters had abandoned any interest they may have had in the gold and that Columbus-America was entitled to keep everything recovered from the ship. Columbus-America Discovery Group, Inc. v. Unidentified, Wrecked and Abandoned Sailing Vessel, 742 F.Supp. 1327, 1348 (E.D.Va.1990). The Underwriters appealed and a divided panel of this court held that the district court erred in applying the law of finds, rather than the law of salvage. The panel remanded the case to the district court to apply the law of salvage and for discovery and determination of the appropriate salvage award for Columbus-America. Columbus-America Discovery Group v. Atlantic Mut. Ins. Co., 974 F.2d 450, 468 (4th Cir.1992), cert. denied, 507 U.S. 1000, 113 S.Ct. 1625, 123 L.Ed.2d 183 (1993).

*296 Following discovery and trial on remand, the district court entered an order on November 18, 1993 finding that Columbus-America was entitled to a salvage award of 90 percent of the recovered gold allegedly insured by the Underwriters. An issue at that time, as now, was the marketing of the gold. The district court found that all parties agreed that a marketing plan was necessary. The court credited the reasoning of several marketing experts who were of opinion that the marketing plan should extend for some period of years. The court instructed the parties to agree to a central authority to conduct marketing of the gold and to present the court with a detailed plan for marketing, or if the parties could not agree, to make such recommendations to the court. Unable to agree on which party should act as the central marketing authority, the Underwriters asked the court to direct an award to the parties in kind. In an order entered January 13, 1994, the district court denied this request, finding that this approach was contrary to the Underwriters’ earlier position, to the testimony of the experts, and to the greater weight of the evidence on the issue of marketing. The court then designated Columbus-America as the central marketing authority based on the work Columbus-America had already performed in consulting with numerous marketing experts, Columbus-America’s collection of a great quantity of information concerning marketing, and Columbus-America’s far greater interest in a successful and proper marketing because of its investment in the project and its significantly higher share of the salvage award.

The Underwriters again appealed, and Columbus-America cross-appealed on the grounds that the individual Underwriters had not established proof of what portion of the gold, if any, to which they were actually entitled. A panel of this court affirmed the district court’s judgment that Columbus-America was entitled to a salvage award of 90 per cent of the treasure. We also affirmed the district court’s order that the gold should be marketed as a whole with Columbus-America acting as the central marketing authority. Columbus-America Discovery Group v. Atlantic Mut. Ins. Co., 56 F.3d 556 (4th Cir.), cert. denied, 516 U.S. 938, 116 S.Ct. 352, 133 L.Ed.2d 248 (1995). 1

On remand, the district court provided certain terms and conditions under which Columbus-America was to proceed with marketing the remaining gold. See order and judgment of April 19, 1996. Following the death of the district court judge, Richard B. Kellam, the case was reassigned to Judge Clarke, and he issued a very similar marketing order on August 13,1996. 2

Over the following months, the relationship between the remaining Underwriters and Columbus-America became more contentious. Despite the marketing evidence relied on by the district court and the district court’s statement in its order of April 19, 1996 that “the property has not yet been converted to money and will not be for some five or more years,” the Underwriters pushed for immediate sale of the gold and their share of the proceeds or for division of the gold in specie. Columbus-America sought to keep the gold together and argued for the development of the' long-range marketing approach recommended by its marketing experts, which it argued would also help protect and satisfy investors in the project. Between August 14, 1996 and May 1998, there were some 61 docket entries in the case, the majority of which involved the marketing issue. On May 14, 1998, the district court announced that it had removed Columbus-America as marketer.

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Bluebook (online)
203 F.3d 291, Counsel Stack Legal Research, https://law.counselstack.com/opinion/columbus-america-discovery-group-v-atlantic-mutual-insurance-ca4-2000.