Favorito v. Pannell

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                                     
                                 ____________________
        No. 93-2377

                             CHRISTINE FAVORITO, ET AL.,

                               Plaintiffs, Appellants,

                                          v.

                              NICHOLAS PANNELL, ET AL.,

                                Defendants, Appellees.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF RHODE ISLAND

                    [Hon. Ronald R. Lagueux, U.S. District Judge]
                                             ___________________

____________________

                                Breyer,* Chief Judge,
                                         ___________

                           Campbell, Senior Circuit Judge,
                                     ____________________

                               and Cyr, Circuit Judge.
                                        _____________

____________________

Barry I. Fredericks for appellants.
             ___________________
             James  T. Shirley, Jr., with whom Haight, Gardner, Poor & Havens,
             ______________________            ______________________________
        Francis X.  Byrn, Jeanne-Marie  Downey, Roberts, Carroll,  Feldstein &
        ________________  ____________________  ______________________________
        Peirce and Dennis Roberts were on brief for appellees.
        ______     ______________

____________________

                                    June 22, 1994
                                                     
                                 ____________________
                            
        ____________________

             *Chief Judge Stephen  Breyer heard oral argument in  this matter,
        but  did not participate in the drafting  or the issuance of the panel
        opinion.   The remaining  two panelists  therefore issue  this opinion
        pursuant to 28 U.S.C.   46(d).

CYR, Circuit Judge.  This admiralty action stems from a
                    CYR, Circuit Judge.
                         _____________

          late evening boating accident  which resulted in serious injuries

          to plaintiffs-appellants.   Although plaintiffs  obtained default

          judgments against the  operator of  the boat in  which they  were

          riding at the time  of the accident, the district  court directed

          entry  of judgment  as a  matter of  law in  favor  of defendant-

          appellee  Pendragon Marine Ltd., the  owner of the  boat, and the

          plaintiffs appealed.  Finding no error, we affirm.

I
                                          I

                                      BACKGROUND
                                      BACKGROUND
                                      __________

The S/Y DOLPHIN, a 75-foot sailing sloop, was moored in

          Newport  Harbor for the 1990  charter season.   She was crewed by

          Captain Gordon  Percy, defendant Nicholas Pannell,  the engineer,

          and Robert Sass,  deckhand.   On Friday, July  27, 1990,  Captain

          Percy disembarked  for a weekend  in Cape Cod,  leaving defendant

          Pannell  in  charge.   Prior  to  disembarking, Percy  instructed

          Pannell that he  was not to  bring guests aboard  the yacht,  the

          DOLPHIN's 12-foot inflatable tender  was to be left on  deck, and

          the  public launch service (for which the DOLPHIN held a season's

          pass) was to be used for conveyance between the yacht and  shore.

Appellants Christine Favorito and Lenka Viducic arrived

          in  Newport the same  day.  As  fate would have  it, come evening

2
                                          2

Favorito and Viducic met defendant Pannell,  who invited them and

          a  third woman  aboard the DOLPHIN  for a  party.   Shortly after

          reaching the  DOLPHIN via  the public launch  service, appellants

          asked  to  be returned  to  shore.   By  this time  it  was after

          midnight and the  public launch service was  no longer operating.

          Disregarding Captain  Percy's  orders, Pannell  offered to  ferry

          appellants  to shore in the 12-foot inflatable tender.  En route,

          the inflatable  collided  with two  other vessels  moored in  the

          harbor.  Investigators opined that Pannell had been operating the

          tender  at   an  excessive  speed.     Favorito  suffered  facial

          lacerations and a broken jaw.  Viducic received back injuries and

          a  laceration   to  the   forehead.    Both   required  extensive

          reconstructive and cosmetic surgery.

                    Appellants   instituted  the  present   action  in  the

          District of  Rhode Island against Pannell  and appellee Pendragon

          Marine Ltd.   In due course, the case came to  trial.1  On motion

          by  Pendragon, the district court withdrew the case from the jury

          at  the conclusion  of plaintiffs-appellants'  case and  directed

          entry of judgment as  a matter of law pursuant to Fed. R. Civ. P.

          50(a)(1) on the ground  that no rational jury could  find against

          Pendragon on any of the three causes of action. 

____________________

               1Although  duly served,  Pannell failed  to appear;  default
          judgments  were  obtained  by  Favorito  ($250,000)  and  Viducic
          ($100,000).

                                          3
                                          3

II
                                          II

                                      DISCUSSION
                                      DISCUSSION
                                      __________

A  judgment entered as a matter of law pursuant to Fed.

          R.  Civ. P. 50(a)(1) is subject  to plenary review under the same

          stringent standard incumbent  upon the trial  court in the  first

          instance:

                    [W]e  must  examine   the  evidence  and  the
                    inferences  reasonably extractable  therefrom
                    in   the   light  most   hospitable   to  the
                    nonmovant.  To affirm withdrawal of any claim
                    from the jury, we  must find that, so viewed,
                    the   evidence    would   permit   thoughtful
                    factfinders   to   reach  but   one  reasoned
                    conclusion.

          Fashion House, Inc.  v. K-Mart  Corp., 892 F.2d  1076, 1088  (1st
          ___________________     _____________

          Cir. 1989).2  

A.   Negligent Retention
          A.   Negligent Retention
               ___________________

                    The  first cause of action  we address is  a variant on

          the traditional tort  of negligent  hiring:  "an  employer has  a

          [continuing] duty  to retain in its service  only those employees
                                ______

          who are  fit and competent."  Welsh Manuf. v.  Pinkerton's, Inc.,
                                        ____________     _________________
                              
          ____________________

               2Absent   a   federal   liability   scheme,   the  governing
          substantive law in an  admiralty action is drawn from  common law
          tort principles  which comport with  the tenets of  maritime law.
          Lyon  v. RANGER  III, 858  F.2d 22,  27 (1st  Cir. 1988).   Rhode
          ____     ___________
          Island provides the principal  source of tort law relating  to an
          accident within its coastal  waters.  See id. (Massachusetts  law
                                                ___ ___
          applies  to  accident 1/4  mile off  Cape  Cod).   Ultimately, of
          course,  federal common  law  supersedes a  particular state  law
          formulation  with  which it  conflicts.   Puerto  Rico v.  SS ZOE
                                                    ____________     ______
          COLOCOTRONI, 628 F.2d 652, 672 (1st Cir. 1980), cert. denied, 450
          ___________                                     _____ ______
          U.S. 912 (1981).

                                          4
                                          4

474 A.2d 436,  441 (R.I.  1984) (emphasis  added) (citing,  e.g.,
                                                                      ____

          DiCosala v. Kay, 450 A.2d  508 (N.J. 1982)).  An employer  is not
          ________    ___

          responsible  for employee  torts committed  outside the  scope of

          employment unless the  employer (1)  had "reason to  know of  the

          particular unfitness, incompetence or dangerous attributes of the
          __________

          employee"  and  (2) "could  reasonably  have  foreseen that  such
                                                                       ____

          qualities  created a risk of  harm to other  persons."  DiCosala,
          _________                                               ________

          450 A.2d 516 (emphasis added); accord Johnson v. Usdin Louis Co.,
                                         ______ _______    _______________

          591 A.2d 959, 961 (N.J. 1991).  

                    One week  after joining  the DOLPHIN's  crew, defendant

          Pannell was  stopped  by the  Harbormaster  for exceeding  the  5

          m.p.h. speed limit in Newport Harbor, and received a warning.  On

          June 27, Pannell  again was  stopped for exceeding  the 5  m.p.h.

          limit, and  received a  ticket.  The  next day Captain  Percy was

          summoned to the Harbormaster's office, where he was informed that

          it  was his  responsibility to  ensure that  his crew  adhered to

          harbor  rules, and that  further infractions could  result in the

          DOLPHIN's exclusion from Newport  Harbor.  Captain Percy in  turn

          delivered a stern lecture to Pannell and Sass.  

                    There  were  no  further  incidents,  and   the  record

          contains no  evidence of  recklessness or other  unreliability on

          the part of Pannell, until the date of the accident approximately

          one  month later.    Indeed, Percy  testified  that he  had  been

          pleased with Pannell's overall  performance and described Pannell

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as  a  good  engineer  and  a responsible  crewman.    Appellants

          presented no evidence to the contrary.

                    Appellants contend  that a  jury could  reasonably have

          found that Captain  Percy was negligent  to retain Pannell  after

          learning  of the  two speeding  incidents, and  they insist  that

          dismissal  from employment  was  Pendragon's only  recourse.   We

          conclude,  however, that  the  district court  judgment is  amply

          supported  by  the  record  evidence  viewed  in the  light  most

          favorable to appellants.

                    Appellants  do not  identify, let  alone consider,  the

          particular employee  qualities most pertinent to  their negligent

          retention claim.   This would be  a very different case  were the

          appropriate inquiry (as appellants would have it) whether Captain

          Percy  had  reason to  believe that  Pannell  might speed  in the

          harbor.   However, the proper  threshold inquiry     the sine qua
                                                                   ____ ___

          non to appellants'  negligent retention claim    is whether there
          ___                 _________ _________

          is  any evidence  that Captain  Percy had  "reason to  know," see
                                                                        ___

          DiCosala,  450 A.2d  516, that  Pannell might  misappropriate the
          ________

          DOLPHIN's  tender  for personal  use in  direct violation  of the

          Captain's order.3  
                              
          ____________________

               3Careful  scrutiny   exposes      as  pure   speculation    
          appellants'  allegations that Pannell violated other orders given
          by  Captain Percy.  For  example, appellants point  out that both
          times Pannell was stopped for speeding in the harbor it was after
          6:00 p.m.   Consequently, they  speculate, Pannell's  use of  the
          boat  on  both those  occasions must  have  been in  violation of
          Captain Percy's orders  because Pannell was using the  boat after
          hours.  However, Captain  Percy testified, without contradiction,

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                                          6

It  would not be reasonable to infer    based solely on

          the  two speeding  incidents     that  Captain Percy  should have

          foreseen, see id., that  Pannell would disobey a direct  order by
                    ___ ___

          transporting personal  guests in the DOLPHIN's  tender during the

          Captain's  absence.   And  absent any  evidence  that it  was not

          reasonable  for  Captain Percy  to rely  on  the adequacy  of the
                                             ____

          precautions  taken  before   disembarking,  the  prior   speeding

          incidents  did not give rise to a reasonably foreseeable "risk of

          harm to  other persons," id.,  and the negligent  retention claim
                                   ___

          fails as a matter of law.  

                    The district court correctly rejected the position that

          an  employee  must be  dismissed  in  such circumstances  without

          regard to the  adequacy of the  employer's precautions against  a

          recurrence of  the relevant employee  conduct.  See  Usdin Louis,
                                                          ___  ___________

          591 A.2d at 961-62.  "Public policy dictates that there should be

          no liability absent a showing that the employer reasonably should

          have foreseen an unreasonably enhanced hazard." Id.  We hold that
                                                          ___

          a  negligent  retention  claim  does not  lie  absent  sufficient
             _________  _________

          evidence  to  enable  a rational  factfinder  to  infer that  the

          employer reasonably  should  have foreseen  that its  precautions
                              
          ____________________

          that the  crew was allowed to use the tender or dinghy (1) during
          working hours; (2) on ship's  business; or (3) at any  other time
          with  his express permission.  There is no evidence whatever that
          Pannell  violated Percy's  orders  on either  occasion, nor  that
          those  incidents took  place "outside  working hours,"  let alone
          involved nonbusiness or unauthorized  purposes.  Thus, the record
          is  devoid of evidence that Pannell ever disobeyed an order prior
              ______
          to the night of the accident.  

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                                          7

were inadequate  to protect persons in  appellants' position from

          an unreasonable risk of  harm resulting from a recurrence  of the

          employee behavior of which the employer had prior notice.

B.   Negligent Entrustment
          B.   Negligent Entrustment
               _____________________

                    The  second cause  of  action  asserts  that  Pendragon

          negligently  entrusted  the  tender  to Pannell.    Rhode  Island

          essentially hews to  the common  law rule, see  Sabourin v.  LBC,
                                                     ___  ________     ____

          Inc.,  731 F. Supp. 1145  (D. R.I. 1990)  (surveying Rhode Island
          ____

          law),  that "the owner  . . .  may be held  liable for entrusting

          [its]  vehicle to an incompetent, reckless or unfit driver if the

          owner knew  or should  have known  of the driver's  incompetence,

          inexperience  or  recklessness."  Id.   at  1148.4    A  rational
                                            ___

          factfinder could find no entrustment on this evidence.

____________________

               4This articulation comports with the Restatement: 
                    It is negligence to  permit a third person to
                    use a thing or to engage in an activity which
                    is  under the  control of  the actor,  if the
                    actor knows  or should know that  such person
                    intends or is  likely to use the  thing or to
                    conduct  himself  in the  activity in  such a
                    manner as to create  an unreasonable risk  of
                    harm to others.

          Restatement (Second) of Torts   308 (1965).  See also Restatement
          _____________________________                ___ ____ ___________
          (Second) of Torts    390  (1965) ("One who  supplies directly  or
          _________________
          through a third person a chattel for the use of  another whom the
          supplier knows to be  likely because of his youth,  inexperience,
          or otherwise, to use  it in a manner involving  unreasonable risk
          of physical harm to  himself and others whom the  supplier should
                                                  ____ ___  ________ ______
          expect to  share in or  be endangered by  its use, is  subject to
          ______ __  _____ __ __  __ __________ __  ___ ___
          liability  for  physical  harm  resulting  to  them.")  (emphasis
          added).

                                          8
                                          8

Appellants focus almost  exclusively on whether  it was

          negligent for  Captain Percy  to entrust the  tender to  Pannell,

          when in  fact there was  no entrustment, negligent  or otherwise.

          There  is no evidence that Captain Percy permitted Pannell to use
                    __                             _________

          the tender in his absence.  Rather, the uncontroverted deposition
                                                  ______________

          testimony of Captain Percy established that he prohibited guests,

          directed  Pannell  to  utilize  the public  launch  service,  and

          forbade use of the DOLPHIN's tender or dinghy.5  

                    Were  it not  for the  unusual procedural  posture, our

          discussion of the negligent entrustment claim would be at an end.

          It was appellants who  introduced Captain Percy's deposition into

          evidence, notwithstanding  the fact  that it cut  sharply against

          their   negligent  entrustment  claim.     On   appeal,  however,

          appellants urge us to vacate  the district court judgment because

          the  jury  might  have  disbelieved  Captain  Percy's  deposition

          testimony.    In other  words,  appellants argue,  judgment  as a

          matter  of law  was  improper because  the  jury might  not  have

          believed that Percy forbade Pannell to use the tender. 

                    The  Supreme  Court  has   pointed  out  that  Rule  50

          (judgment  as a  matter of  law) and  Rule 56  (summary judgment)

          "mirror"  one another.  Anderson v. Liberty Lobby, Inc., 477 U.S.
                                  ________    ___________________

____________________

               5Asked why he  had not taken the key to  the tender's engine
          when he left, Captain Percy  responded: "The answer is I left  it
          for safety reasons as well as the fact that . . . if I  felt that
          they  would have used the dinghy, I wouldn't have trusted them. I
          wouldn't have left the boat [in the first place]."

                                          9
                                          9

242,  250  (1986).    See  also  Fed.  R.  Civ.  P.  50  advisory
                                ___  ____

          committee's  notes  accompanying  1991  amendment  (stating  that

          incorporation  of the  Rule  56 "judgment  as  a matter  of  law"

          standard into Rule 50  was intended to "link the[se]  two related

          provisions").  It is  well established that "a mere  challenge to

          the credibility  of a  movant's witnesses without  any supporting

          evidence" does not raise a trialworthy issue of  fact.  Moreau v.
                                                                  ______

          Local  Union No. 247, 851  F.2d 516, 519  (1st Cir. 1988) (citing
          ____________________

          Anderson, 477 U.S. at  256); Blanchard v. Peerless Ins.  Co., 958
          ________                     _________    __________________

          F.2d  483,  490  (1st   Cir.  1992)  (noting:     nonmovant  must

          demonstrate  "genuine  dispute" as  to  credibility  in order  to

          resist summary judgment); 10A Charles  A. Wright, et al., Federal
                                                                    _______

          Practice  and  Procedure: Civil    2726,  at 119  (2nd  ed. 1983)
          _______________________________

          ("[S]pecific facts must  be produced in order  to put credibility

          in  issue  .  .  .  [u]nsupported  allegations .  .  .  will  not

          suffice.").   As  the  Supreme Court  explained  in  Anderson  v.
                                                               ________

          Liberty Lobby:  
          _____________

                    Respondents argue,  however, that  . .  . the
                    defendant  should seldom  if ever  be granted
                    summary judgment  where . . .  the jury might
                    disbelieve him or his witnesses . . . .  They
                    rely on Poller v. Columbia  Broadcasting Co.,
                            ______    __________________________
                    368 U.S. 464, 82 S. Ct. 486,  7 L. Ed. 2d 458
                    (1962),  for this  proposition.   We  do  not
                    understand  Poller, however,  to hold  that a
                                ______
                    plaintiff may defeat  a defendant's  properly
                    supported  motion for  summary judgment  in a
                    conspiracy  or  libel   case,  for   example,
                    without offering any  concrete evidence  from
                    which  a  reasonable  juror  could  return  a
                    verdict in his favor and by merely  asserting
                    that  the  jury  might,  and  legally  could,

                                          10
                                          10

disbelieve  the  defendant's   denial  of   a
                    conspiracy or of  legal malice.   The  movant
                    has the  burden of  showing that there  is no
                    genuine  issue of fact,  but the plaintiff is
                                                 ___ _________ __
                    not  thereby relieved  of his  own burden  of
                    ___  _______ ________  __ ___  ___ ______  __
                    producing in turn evidence that would support
                    _________ __ ____ ________ ____ _____ _______
                    a jury  verdict.  Rule 56(e)  itself provides
                    _ ____  _______
                    that  a party  opposing a  properly supported
                    motion for summary judgment may not rest upon
                    mere allegation or  denials of his  pleading,
                    but  must set  forth  specific facts  showing
                    that there is a genuine issue for trial.

          477 U.S. at 256 (emphasis added).  

                    Thus,  we think  it  clear under  Rule  50, as  in  the

          summary judgment context, that a bare assertion that the opposing
                                           ____ _________

          party's   uncontroverted  evidence   might   be  disbelieved   is

          insufficient to resist judgment as a matter of law on an issue as

          to  which the party resisting judgment bears the burden of proof.

          See,  e.g., Niemann v. Rogers,  802 F. Supp.  1154, 1157 (D. Del.
          ___   ____  _______    ______

          1992) (noting that plaintiff  bears burden of proving entrustment

          element  in negligent  entrustment  claim).   Were it  otherwise,

          Rules  50 and 56 could  be rendered virtually  useless, merely on

          the  strength  of a  nonmovant's  supposition  that the  movant's

          uncontroverted evidence might be disbelieved.  

                    The authorities are in  substantial accord that  "where

          the alleged entrustor has prohibited the entrustee from operating

          the automobile or using the instrumentality in question, there is

          no responsibility because there  has been no entrustment."   J.D.

          Lee & Barry A. Lindahl, Modern Tort Law     33.01 (Rev. ed. 1988)
                                  _______________

          (citing   Farney v. Herr,  358 S.W.2d 758,  761 (Tex. 1962) ("The
                    ______    ____

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doctrine  of negligent entrustment may  not be so  extended as to

          impose  liability upon  the alleged  'trustor' for  the negligent

          operation  of a  vehicle  which he  had  expressly forbidden  the

          alleged 'trustee' to  drive.")); Kimble v.  Muller, 417 P.2d  178
                                           ______     ______

          (Wyo. 1966) (upholding summary judgment  in favor of defendant on

          negligent entrustment claim where defendant father had instructed

          his reckless-driving son  not to use automobile except for travel

          to and  from work and school,  but left the vehicle  at home with

          the  son when  the  father  worked the  night  shift).   In  sum,

          appellants'   negligent   entrustment  claim   founders   on  the

          uncontroverted testimony that Captain Percy  specifically ordered

          Pannell not to use the tender  during his absence.  As appellants

          relied  entirely on  the totally  unsupported speculation  that a

          jury  might disbelieve Captain  Percy's uncontroverted testimony,

          the district court properly granted judgment as a matter of law. 

C.   Respondeat Superior
          C.   Respondeat Superior
               ___________________

                    The  third cause  of action  asserts that  Pendragon is

          vicariously liable for appellants' injuries under the doctrine of

          respondeat superior.  See  Sabourin, 731 F. Supp. at  1149 (under
          __________ ________   ___  ________

          Rhode Island law, a corporation is liable for "torts committed by

          agents  acting  within the  scope of  their  authority or  in the

          course of  their employment"); accord  Drake v. Star  Market Co.,
                                         ______  _____    ________________

          526 A.2d 517, 518 (R.I.  1987).  As the district court  correctly

          ruled, there  is no conceivable evidentiary  basis for respondeat
                                                                 __________

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                                          12

superior liability on the part of  Pendragon.  The uncontroverted
          ________

          trial evidence established beyond  peradventure that Pannell  was

          on  a frolic  and banter  of  his own,  actuated  by no  employer

          mission  whatever  and in  direct  violation  of Captain  Percy's

          explicit  instructions not  to use  the tender  and not  to bring

          guests aboard  the DOLPHIN.   See Restatement (Second)  of Agency
                                        ___ _______________________________

            228(1)(c)  (1958); see also, e.g.,  Gill Plumbing Co. v. Macon,
                               ___ ____  ____   _________________    _____

          370  S.E.2d 657 (Ga.  Ct. App. 1988)  (upholding summary judgment

          disallowing respondeat  superior claim where employee was driving
                      __________  ________

          company  vehicle   on  a   "purely  personal   mission,"  without

          authorization).

D.   Miscellaneous Orders
          D.   Miscellaneous Orders
               ____________________

                    Appellants attempted at trial  to introduce portions of

          Captain  Percy's  videotape   deposition  which  probed   various

          hypothetical circumstances  in which he might  have considered it

          appropriate  to discharge  a crew  member.   Appellants correctly

          point out that we have said that relevant hypothetical  questions

          may be put  to lay witnesses  subject to the  Rule 403  balancing

          test.  See, e.g., United States v. Ranney, 719 F.2d 1183, 1187-89
                 ___  ____  _____________    ______

          (1st Cir. 1983).   Appellants, however,  would construe our  case

          law as declaring "open season" for hypothetical questions without

          regard  to  their overriding  prejudice,  cumulativeness  and the

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                                          13

like.6   A review of the  Percy deposition satisfies us  that the

          district  court carefully  exercised its  Rule 403  discretion by

          sustaining  most,  though  not   all,  objections  interposed  by

          Pendragon.

                    Lastly,  appellants  challenge  the  denial   of  their

          belated  motion   to  amend   their  complaint  to   name  Parker

          Montgomery, beneficial  owner of the DOLPHIN,  and the Montgomery

          Group, as party defendants.  Appellants represent  that they were

          unable  to comply with the  March 12, 1993  deadline for amending

          the  complaint because they did not learn that Montgomery was the

          beneficial owner  until after Captain Percy's  deposition in June

          1993.  On the contrary, appellants acknowledged in their district

          court  pleadings   that  they   first  became  aware   of  Parker

          Montgomery's  role   in  October  1992.     Notwithstanding   the

          admonition that leave to  amend is to be "freely given,"  Fed. R.

          Civ. P. 15, the  district court did  not abuse its discretion  in

          these circumstances, see Johnston v. Holiday Inns, Inc., 595 F.2d
                               ___ ________    __________________

          890,  896 (1st  Cir. 1979),  especially since  there has  been no

          showing of prejudice. 

                    Affirmed.
                    Affirmed.
                    ________

____________________

               6But see Fed. R. Evid. 403 ("Although relevant, evidence may
                ___ ___
          be excluded if its probative value is substantially outweighed by
          the  danger of  unfair  prejudice, confusion  of  the issues,  or
          misleading the jury,  or by considerations of undue  delay, waste
          of time, or needless presentation of cumulative evidence.").

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