Hocking v. Port Harbor Marine, Inc.

Opinion

STATE OF MAINE SUPERIOR COURT CUMBERLAND, ss. CIVIL ACTION DOCKET NO: CV-09-093 )'" . • I J 0-"/ I

THEODORE W. HOCKING,

Plaintiff,

v. ORDER PORT HARBOR MARINE, INC.,

Defendant

Defendant Port Harbor Marine, Inc.'s partial motion for summary

judgment on counts I, negligence, and II, breach of contract, is before the Court.

Plaintiff Theodore W. Hocking has cross-motioned for partial summary

judgment on count II. Port Harbor Marine has failed to prove that it has an

adequate affirmative defense by law, and its motion is denied on both counts.

Hocking's motion for summary judgment on count II is also denied because

there remain disputes of material fact as to whether Port Harbor Marine

negligently performed the parties' bailment contract.

BACKGROUND The parties stipulate the following facts pursuant to M.R. Civ. P. 56(h).

Port Harbor Marine, Inc. (Defendant) is a business that sells, stores, and services

boats. In the fall of 2007 Theodore Hocking (Plaintiff) arranged for Defendant to

haul his 1972 Chris Craft Flybridge 33 powerboat out of Sebago Lake and into

winter dry-storage. The actual hauling occurred in late October 2007. Defendant

floated the boat onto a trailer fitted with hydraulically articulated arms designed 1 to secure the boat in place. Defendant then began to tow the boat and trailer out

of the water via a ramp. At the top of the ramp one of the trailer's hydraulic arms

failed, causing the boat to fall and suffer damage.

Plaintiff had signed a pre-printed "Boat Space Rental Agreement" before

his boat was hauled out of the water and damaged. The Agreement states that it

covers a period from November 1, 2007 to April 30, 2008. The form's backside

contains terms and conditions, one of which states:

[Plaintiff] agrees to have the watercraft covered by a full marine insurance package (hull coverage as well as indemnity and liability coverage). [Plaintiff] agrees to release and discharge [Defendant] from any and all responsibility or liability for injury (including death), loss, or damage to persons or property in connection with [Defendant's] docking facility or marina. This release and discharge shall cover without limitation any loss or damage resulting from [Defendant's] employees parking or hauling [Plaintiff's] boat ....

On February 12, 2009 Plaintiff filed his three-count complaint alleging

negligence, breach of contract, and a third claim for an unrelated incident. The

third claim has been settled and dismissed. On August 25,2009 Defendant filed

its motion for partial summary judgment on count I, negligence, and count II,

breach of contract. Defendant argues that the quoted language from the

Agreement is a valid insurance procurement and liability waiver clause that

shields it from all liability on either count. Defendant alternatively argues that it

strictly complied with all of the terms the contract and its failure to haul the boat

without damage does not constitute a breach.

Plaintiff opposes Defendant's motion and brought his own cross-motion

for summary judgment on count II, breach of contract. Plaintiff argues that the

Agreement is inapplicable to the hauling that occurred before the named

effective date of November 1, 2007, and that it is an invalid attempt to waive

liability in any event. Plaintiff also argues that the hauling contract he had with 2 Defendant, whatever its basis, implicitly required Defendant to perform the job

without damaging the boat. Plaintiff claims that Defendant's admitted failure to

do so constitutes a breach of contract.

DISCUSSION

Summary judgment is appropriate where no genuine issues of material

fact exist and the moving party is entitled to judgment as a matter of law. M.R.

Civ. P. 56(c); see also Levine v. RB.K. Caly Corp., 2001 ME 77,

655. The parties first dispute the construction and validity of their written

Agreement. As the Agreement is unambiguous, the construction of its terms

presents a question of law for the Court to decide. Hopewell v. Langdon, 537 A.2d

602,604 (Me. 1988).

1. The Agreement's Insurance Provision

The law disfavors contractual provisions that purport to excuse a party

from liability for its own negligence and subjects such waivers to a heightened

level of judicial scrutiny. Hardy v. St. Clair, 1999 ME 142,

(quoting Doyle v. Bowdoin College, 403 A.2d 1206, 1207 (Me. 1979)). By contrast,

insurance procurement clauses acting as "waivers of subrogation are encouraged

by the law and serve important social goals: encouraging parties to anticipate

risks and to procure insurance covering those risks, thereby avoiding future

litigation and facilitating and preserving economic relations and activity."

Reliance Nat'l Indem. v. Knowles Indus. Servo Corp., 2005 ME 29,

225-26 (quoting Acadia Ins. CO. V. Buck Constr. Co., 2000 ME 154,

515, 520) (internal quotations omitted). The courts' receptivity to these different

types of provisions charts the difference between"a party indemnifying another

3 for its own negligence" in the former, versus "parties allocating risk to insurers"

in the latter. Id. at C][ 15, 868 A.2d at 226 (citing Acadia Ins. Co., 2000 ME 154, C][ 18,

756 A.2d at 520).

The Agreement at issue in this case combines an insurance procurement

clause with an absolute liability waiver under the heading "Insurance." The

insurance procurement clause states: "[Plaintiff] agrees to have the watercraft

covered by a full marine insurance package (hull coverage as well as indemnity

and liability coverage)." The clause goes on to release Defendant from all liability

that might arise in connection with Defendant's facility from any cause. To the

extent that this is a waiver of subrogation in which the parties have "relieved[d]

each other of liability to the extent each is covered by insurance," it is supported

by public policy and enforceable. Reliance Nat'l Indem., 2005 ME 29, C][ 13, 868

A.2d 220,225-26. Thus, Defendant may correctly argue that Plaintiff should first

look to his insurer for indemnification, and seek to recover from the Defendant

only after his insurance fails to make him whole. See id. at C][ 15, 868 A.2d at 226

("In cases involving waivers of subrogation ... there is no risk that an injured

party will be left uncompensated ....").

This is not, however, what Defendant argues. Defendant claims that the

Agreement completely absolves it of liability for the damage to Plaintiff's boat. A

contractual provision that releases a party from liability for its own negligence

will only be upheld if it "expressly spell[s] out with the greatest particularity the

intention of the parties contractually to extinguish negligence liability." Hardy v.

St. Clair, 1999 ME 142, C][ 3,739 A.2d 368, 369 (quoting Doyle v. Bowdoin College,

403 A.2d 1206, 1207 (Me. 1979)) (internal quotations omitted). In practice this has

required the provision to expressly use the word "negligence." See Lloyd v.

4 Sugarloaf Mountain Corp., 2003 ME 117, lJI 8, 833 A.2d 1, 4; Hardy, 1999 NIB 142,

lJIlJI 4, 6, 739 A.2d 368, 369-70; Emery Waterhouse Co. v. Lea, 467 A.2d 986, 993 (Me. 1983); Doyle, 403 A.2d at 1207-08.

The provision in the Agreement does not make any reference to liability

arising from Defendant's negligence, but instead purports to "release and

discharge [Defendant] from any and all responsibility or liability ...." While this

over-broad language might inferentially include a release from negligence

liability, the courts will not read such "words of general import ... as

expressing" the requisite intent necessary to effect a waiver. Emery Waterhouse

Co., 467 A.2d at 993 (citing Freed v. Great Atlantic & Pacific Tea Co., 401 F.2d 266,

270 (6th Cir. 1968)). Furthermore, provisions exempting parties from liability for

their own intentional or reckless conduct contravene public policy and are

generally void. See Reliance Nat'l Indem., 2005 ME 29, lJI 15, 868 A.2d 220, 226

(citing Lloyd, 2003 ME 117, lJI 21, 833 A.2d 1, 7 (Calkins, J., dissenting));

Restatement (Second) of Contracts § 195(1) (1981). The provision is thus legally

inoperative as a release and Defendant cannot argue that the Agreement

absolves it of liability for damaging Plaintiff's boat.

2. Defendant's Motion for Summary Judgment

Defendant has moved for summary judgment in its favor on both counts I

and II on the basis of the Agreement's liability waiver. Plaintiff has opposed

Defendant's motion solely by attacking the applicability and validity of that

waiver. As discussed above, the Agreement does not shield Defendant from

liability. Defendant's motion for summary judgment on counts I and II is

therefore denied.

5 3. Plaintiff's Motion for Summary Judgment

Plaintiff argues that Defendant breached their hauling contract by

damaging Plaintiff's boat. Defendant argues that it had no contractual duty to

haul and store the boat without damaging the vessel. Because it did haul and

store the boat, Defendant claims it fully performed its contractual obligations,

notwithstanding the damage. Alternately, Defendant claims that Plaintiff has not

shown that Defendant is at fault for the hydraulic-arm's failure, making

summary judgment on count II inappropriate.

When Plaintiff gave his boat to Defendant for the purpose of hauling the

boat from the water and storing it for the winter, they parties formed a bailment

contract. A bailment is defined as:

The delivery of personal property by one person to another in trust for a specific purpose, with a contract ... that the trust shall be faithfully executed and the property returned or duly accounted for when the special purpose is accomplished, or kept until the bailor reclaims it.

Frost v. Chaplin Motor Co., 138 Me. 274, 277, 25 A.2d 225, 226 (1942) (quoting

6 Am. Jur. 141). Bailments have been recognized in situations such as where an

automobile was given to a mechanic for lubrication service or, more relevant to

the present case, where a boat was given to a barn's owner for winter storage.

Frost, 138 Me. at 277, 25 A.2d at 226; Levasseur v. Field, 332 A.2d 765, 767 (Me.

1975). In this case Plaintiff delivered possession of his boat to Defendant so that

Defendant could haul the boat from the water and store it through the winter, so

that Plaintiff could retrieve it in the spring. "There is no doubt that [P]laintiff's

delivery and [D]efendanfs acceptance of personal property for temporary

storage on [D]efendanfs premises established a bailment." Levasseur, 332 A.2d at

767.

6 A bailee in Defendant's position "is not an insurer against the loss of [or

damage to] the bailed goods." Id. (citing Levesque v. Nanny, 142 Me. 390, 392, 53

A.2d 703, 704 (1947)). However, bailment contracts must be performed observing

a duty of ordinary care. 8A Am. Jur. 2d Bailments § 29 (2008); see Levasseur, 332

A.2d at 767. Negligent performance thus breaches the contract and exposes the

bailee to liability. See Levasseur, 332 A.2d at 767; Walters v. U.S. Garage, Inc., 131

Me. 222, 224, 227, 160 A. 758, 758, 760 (1932). "[A] showing of loss or damage [to]

the bailed property[] gives rise to a presumption of bailee negligence." Levasseur,

332 A.2d at 767 (citing Northeast Aviation Co. v. Rozzi, 144 Me. 47, 48, 64 A.2d 26

(1949)).

Defendant admits that the boat was damaged during Defendant's

performance of the Agreement, but denies fault. Plaintiff, in tum, has not

produced any evidence on the record showing that Defendant breached its duty

of care. The Court cannot find that Defendant breached the bailment contract

through negligent performance as a matter of law, and Plaintiff's motion for

summary judgment on count II is therefore denied.

The entry is:

The parties' Boat Space Rental Agreement does not release Defendant

from liability. Defendant's motion for summary judgment on counts I,

negligence, and II, breach of contract, is denied. Plai tion for summary

judgment on count II, breach of contract, is also

7 II

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