NORTHERN ASSURANCE COMPANY OF AMERICA v. Heard

755 F. Supp. 2d 295, 2010 WL 5152972
CourtDistrict Court, D. Massachusetts
DecidedDecember 14, 2010
DocketCivil Action 09-10654-DPW
StatusPublished
Cited by2 cases

This text of 755 F. Supp. 2d 295 (NORTHERN ASSURANCE COMPANY OF AMERICA v. Heard) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
NORTHERN ASSURANCE COMPANY OF AMERICA v. Heard, 755 F. Supp. 2d 295, 2010 WL 5152972 (D. Mass. 2010).

Opinion

AMENDED 1 MEMORANDUM AND ORDER

DOUGLAS P. WOODLOCK, District Judge.

The question presented in this case is whether the owners of a recreational sailboat may recover detention damages for loss of the vessel’s use during their planned vacation. A late nineteenth century Supreme Court case contains categorical language on the question, leading circuits which have recently addressed the issue to conclude that detention damages are available only upon proof of loss of commercial profits and not for loss of recreational use. In two earlier readings of the case more hospitable to the recognition of recreational loss, Judge Learned Hand and thereafter Justice Cardozo, suggested that there is no meaningful difference to be found in any distinction between loss of use for profit or for recreation. Judge Hand and Justice Cardozo reasoned that the determinative issue should be whether the damages from the loss of use for either purpose can be proven adequately. Although I find the approach of Judge Hand and Justice Cardozo persuasive as a policy matter, the categorical imperative denying recovery for recreational loss has never been expressly abandoned by the Supreme Court. Accordingly, I must reluctantly allow summary judgment against the vessel owners here leaving unresolved the issue whether they can, in fact, prove the value of their recreational loss.

I. THE RISE AND FALL OF THE RENAISSANCE

During the summer of 2007, Carole Heard, a postal worker, and her husband Dennis, who worked for the Massachusetts Bay Transportation Authority, arranged their vacations so that they could use their boat the RENAISSANCE for 10 weeks from July 26, 2007 through October 8, 2007.. The RENAISSANCE, variously described in the record as a 46 to 50 foot sloop, was built in 1981. The Heards purchased her in 2002, rebuilt her over several years and then relaunched her late in 2006.

*297 On July 25, 2007, just as the vacation period was to begin, the RENAISSANCE was damaged when the Harbor Master’s boat for the Town of Winthrop allided 2 with it. The RENAISSANCE was towed to a boat yard until repairs were completed in the spring of 2008.

The Heards sought a bareboat charter replacement, but found the $5,000 per week charge for a comparable vessel beyond their reach. When they claimed reimbursement for the loss of use of the RENAISSANCE during their planned vacation, they were rebuffed by their insurer, Northern Assurance. In this litigation, Northern Assurance and the Heards seek distribution of insurance money available from the Town of Winthrop, with the Heards contending they should receive payment from these funds for the loss of use of their vessel. 3

II. THE WAKE OF THE CONQUEROR

At the end of the nineteenth century, the Supreme Court declined to award what it called “demurrage” 4 to Frederick W. Vanderbilt, the grandson of the Commodore, see generally T.J. Stiles, The First Tycoon.- The Epic Life of Cornelius Vanderbilt (2009), who Louis Auchincloss reports “died the richest of the Vanderbilts,” *298 Louis Auchincloss, The Vanderbilt Era 67 (1989), 5 for the improper detention by customs authorities of his foreign built pleasure yacht after it had been sailed across the Atlantic. The Conqueror, 166 U.S. 110, 17 S.Ct. 510, 41 L.Ed. 937 (1897). The Supreme Court rejected the customs duty grounds for the detention, holding that it was not the intention of Congress to make such a “seagoing, schooner rigged, screw steamship, 182]é feet long, nearly 25 feet wide, and of 372 tons burden” a dutiable article. Id. at 114-121, 17 S.Ct. 510.

The district court had awarded $21,742.24 in damages to Mr. Vanderbilt for losses arising out of the improper detention of the CONQUEROR, $15,000 of which was “for loss of use of the boat while detained” at a rate of $100 per day. Id. at 125, 17 S.Ct. 510 (internal quotation omitted). The Supreme Court refused to uphold the $15,000 award for loss of use, finding the evidence “insufficient.” Id. at 134, 17 S.Ct. 510. The Court took judicial notice of the duration of “the yachting season in our northern waters,” concluding that the vessel “probably would have been laid up at her wharf’ for more than half the time used to calculate detention damages. Id. It found “not the slightest evidence” that “her owner might have desired her for use in a winter’s cruise to tropical waters.” Id. The Court additionally declined to credit testimonial estimates of the cost of loss of use because the amount “was so great as, if not to shock the conscience, at least to induce the belief that it must have been estimated by witnesses who were most friendly to the owner.” Id.

Apart from its discussion of the evidence, the Court set the framework for its sufficiency analysis in categorical terms based on the nature of the loss. The Court acknowledged that it was “too well settled ... to be open to question” that “the loss ... of the use of a vessel ... is a proper element of damage.” Id. at 125, 17 S.Ct. 510. However, the Court stated that, as a basis for such damages:

[There] must be a pecuniary loss, or at least a reasonable certainty of pecuniary loss, and not a mere inconvenience arising from an inability to use the vessel for the purposes of pleasure In other words, there must be a loss of profit in its commercial sense. In all the cases in which we have allowed demurrage, the vessel has been engaged, or was capable of being engaged, in a profitable commerce, and the amount allowed was determined either by the charter value of such vessel, or by her actual earnings at about the time of the collision.[ 6 ]

*299 Id. at 133, 17 S.Ct. 510. There was no credible evidence that Mr. Vanderbilt had such use in mind for his yacht, the CONQUEROR. Id. at 133-34, 17 S.Ct. 510.

Relatively recent appellate decisions have, with greater or lesser degrees of analysis, treated The Conqueror’s language as establishing that the loss of use of a private pleasure boat is not compensable. 7 The current consensus view has been concisely summarized as follows: “Where a pleasure craft ... has no history of income, the owner is not entitled to damages for loss of use.” Gladsky v. Sessa, 2007 WL 2769494, at *5 (E.D.N.Y. Sept. 21, 2007). It bears emphasizing, however, that this recent consensus among the federal courts is not consistent with earlier reservations about the scope of The Conqueror expressed by Judge Hand and Justice Cardozo.

Two decades after The Conqueror was handed down, Judge Hand, while “conced[ing] that some of the language in

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Bluebook (online)
755 F. Supp. 2d 295, 2010 WL 5152972, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northern-assurance-company-of-america-v-heard-mad-2010.