United States District Court, E.D. North Carolina, Southern Division, Admiralty
NEW HAMPSHIRE INSURANCE, COMPANY, AS SUBROGEE OF SANCTUARY, LLC Plaintiff,
BENNETT BROTHERS YACHTS, INC. Defendant.
C. DEVER III CHIEF UNITED STATES DISTRICT JUDGE
December 28, 2017, the court granted Bennett Brothers Yachts,
Inc.'s ("Bennett Brothers") motion for summary
judgment [D.E. 36]. On January 15, 2018, New Hampshire
Insurance Company ("NHIC") moved to amend the
judgment [D.E. 38] and filed a memorandum in support [D.E.
39]. On January 26, 2018, Bennett Brothers responded in
opposition [D.E. 40]. On February 1, 2018, NHIC replied [D.E.
41]. As explained below, the court grants NHIC's motion
to amend the judgment.
Rule of Civil Procedure 59(e) permits a court to alter or
amend a judgment. See Fed.R.Civ.P. 59(e). The decision to
alter or amend a judgment pursuant to Rule 59(e) rests within
the sound discretion of the district court. See,
e.g.. Dennis v. Colleton Colleton Med. Ctr..
Inc.. 290 F.3d 639, 653 (4th Cir. 2002); Hughes v.
Bedsole. 48 F.3d 1376, 1382 (4th Cir. 1995). The Fourth
Circuit has recognized three reasons for granting a motion to
alter or amend a judgment under Rule S9(e): "(1) to
accommodate an intervening change in controlling law; (2) to
account for new evidence not available [previously]; or (3)
to correct a clear error of law or prevent manifest
injustice." Zinkand v. Brown 478 F.3d 634, 637
(4th Cir. 2007) (quotations omitted); see Bogart v.
Chapell. 396 F.3d 548, 555 (4th Cir. 2005); Pac.
Ins. Co. v. Am. Nat'l Fire Ins. Co.. 148 F.3d 396,
403 (4th Cir. 1998). In other words, the court may grant a
Rule 59(e) motion if "the court has misapprehended the
facts, a party's position, or the controlling law."
Anderson v. Waste Mgmt. of Wilmington. No.
7:15-cv-14-FL, 2016 WL 3211957, at *3 (E.D. N.C. June 7,
2016) (unpublished); Sobel v. United States. 571
F.Supp.2d 1222, 1229 (D. Kan. 2008).
insured Sanctuary LLC's Motor Yacht ("the
Vessel"), a sixty-foot power catamaran, for $2, 985,
000. See Compl. [D.E. 1] ¶ 1. On July 30, 2015, the
Vessel struck a submerged object in the intracoastal waterway
in South Carolina. See [D.E. 28] 2. On July 31, 2015, Bennett
Brothers agreed to haul the Vessel to its facility for
additional examination and repair. See Compl. ¶ 5;
Answer [D.E. 10]¶5. On August 1, 2015, Bennett Brothers
dropped and damaged the Vessel while moving the Vessel to
land for repairs. See Compl. ¶ 5; [D.E. 22] ¶ 1.
NHIC sued Bennett Brothers for breach of contract, breach of
implied warranty of workmanlike performance, and negligence,
and requested $2, 190, 686.72 in damages, representing the
constructive total loss of the Vessel. Compl. ¶¶
13, 15, 19. NHIC calculated the total loss as follows:
insured value of the Vessel ($2, 985, 000) less salvage value
($794, 313.28). See Def. Ex. F [D.E. 23-6] 3. On September
18, 2017, Bennett Brothers moved for summary judgment and
argued that NHIC cannot, as a matter of law, recover its
claimed damages. See [D.E. 20, 21].
this case, NHIC repeatedly changed its theory of recovery.
For example, in supplemental disclosures and interrogatories,
NHIC stated that it was not seeking damages for the
Vessel's constructive total loss, but in opposition to
defendant's motion for summary judgment, NHIC argued that
the Vessel was a constructive total loss. Compare
Def. Ex. L [D.E. 23-12], and Def. Ex. M [D.E. 23-13] 2, with
[D.E. 28] 8. Alternatively, NHIC argued that it should
recover damages based on the Vessel's diminution in value
or the estimated cost of repairs immediately following the
accident. See Id. at 15; Def. Exs. L, M.
December 28, 2017, the court held that NHIC cannot, as a
matter of law, recover damages for the Vessel's
constructive total loss. See [D.E. 35] 6. The court also held
that "NHIC never amended its complaint to seek damages
for diminution in value or cost of repairs. Instead, NHIC
discussed these theories in supplemental disclosures,
discovery, and briefing, " and that "[e]stablishing
damages for cost of repairs or diminution in value requires
proving a separate set of facts from constructive total
loss." Id. at 7. Thus, because NHIC never
amended its complaint to add these claims, the court granted
Bennett Brothers's motion for summary judgment.
motion to alter the judgment, NHIC argues that it was not
required to amend its complaint because pursuing damages for
diminution in value (or estimated cost of repairs) did not
"alter the elements of the causes of action articulated
in the Complaint, nor require additional facts to
prove[.]" [D.E. 39] 5. Upon review, the court agrees
that NHIC did not have to amend its complaint because
pursuing damages for diminution in value or estimated cost of
repairs did not alter the elements of the causes of action or
require additional facts to be proven.
NHIC repeatedly changed its theory of recovery, the theories
are premised on the same facts. NHIC cites three theories of
recovery: (1) constructive total loss; (2) diminution in
value; and (3) cost of repairs. As for the calculation of
constructive total loss, a vessel is a constructive total
loss when the cost of repairs exceeds the fair market value
of the vessel immediately before the damage occurred. See
Gaines Towing & Transp.. Inc. v. Atlanria Tanker
Corp.. 191 F.3d 633, 635 (5th Cir. 1999) (per
curiam); Self Towing. Inc. v. Brown Marine Servs..
Inc.. 837 F.2d 1501, 1506 (11th Cir. 1988); Hewlett
v. Barge Bertie. 418 F.2d 654, 657 (4th Cir. 1969). As
for the calculation concerning diminution in value, the
diminution in value is "the value of the vessel before
and after the collision." Stevens v. F/V Bonnie
Doon. 731 F.2d 1433, 1436 (9th Cir. 1984); see
LaConner Assocs. Ltd. Liab. Co. v. Island Tug & Barge
Co.. No. C07-175RSL, 2008 WL 8415154, at *4 (W.D. Wash.
June 16, 2008) (unpublished). Diminution in value, however,
is calculated based on the estimated cost of repairs. See
Stevens. 731 F.2d at 1436; Hewlett. 418 F.2d at
658; LaConner. 2008 WL 8415154, at *4; Detroit
& Cleveland Navigation Co. v. The Elbert H. Gary.
161 F.Supp. 570, 577 (E.D. Mich. 1958). Thus, all three
theories of recovery require determining the Vessel's
fair market value immediately before the damage, the
Vessel's fair market value immediately after the damage,
and the reasonable cost of repairs that would restore the
Vessel to its pre-collision condition. Accordingly, the
court grants NHIC's motion to amend the summary judgment
order and vacates the judgment. NHIC may not pursue damages
for constructive total loss of the Vessel. See [D.E. 35] 6.
NHIC can, however, pursue damages for the diminution in value
or estimated cost of repairs.
the court GRANTS NHIC's motion to amend the judgment
[D.E. 38] and VACATES the judgment. The court DENIES the
motion for bill of costs [D.E. 37]. The parties shall engage
in a court-hosted settlement conference with United States
Magistrate Judge Gates. Judge Gates will contact the parties
about the settlement conference.