Products Liability Law Daily Wrap Up, DAMAGES—AIRCRAFT AND WATERCRAFT—W.D.La.: Despite steps to ensure sea vessel standards met, cumulative negligent acts could warrant punitive damages, (Apr 29, 2022)

By Patricia K. Ruiz, J.D.

The dispute hinged on the placement of fuel water separator filters in the bilge, an allegedly high corrosion area.

A federal district court in Louisiana denied a motion to dismiss and/or motion for partial summary judgment as to punitive damage claims relating to an explosion and fire on a sea vessel that resulted in passenger injuries. The court found that an accumulation or series of negligent acts or omissions can and should be viewed together to determine whether a defendant acted out of gross negligence, willful misconduct, or a wanton or reckless disregard (Gonzalez v. Sea Fox Boat Co Inc., April 22, 2022, Cain, J.).

On July 29, 2018, an explosion and fire occurred on a 2014 Sea Fox Commander equipped with two 2013 Yamaha F150XA engines and two 2015 Yamaha MAR-FUELF-IL-TR 10-Micron Water/Fuel Separating Filters 90GPH, used to filter particulate matter and water from fuel before it reaches the engines. The Sea Fox Company, Inc., (Sea Fox) designed and manufactured the vessel and sold it to Paradise Marine Center, which then sold it to a consumer. When the consumer picked up the vessel on or about July 27, 2018, he did not check for standing water because the plug was out of the vessel.

Explosion on sea vessel. At the time of the explosion, one of the vessel’s passengers was attempting to change the vessel’s batteries; two other passengers were on the boat. These three individuals did not inspect the vessel for fuel leaks prior to launching and did not review any manuals regarding the vessel prior to the accident. The injured claimants, who filed the instant lawsuit, dispute the fact that the vessel design was audited by the National Marine Manufacturers Association (NMMA) and was certified under the standards of the American Boat and Yacht Counsel (ABYC). The claimants also dispute an assertion by Sea Fox that the location of the filters was compliant with ABYC requirements. An expert for the injured parties testified that, in his experience as a naval architect, marine surveyor, or marine engineer, he never encountered fuel water separators that leaked as a result of corrosion.

Sea Fox moved to dismiss claims for punitive damages, citing Louisiana public policy prohibiting punitive damage awards unless authorized by statute. Sea Fox argued that the only available avenue for recovering punitive damages in this suit is under general maritime law requiring that a plaintiff plead and prove that the defendant’s conduct was “so egregious as to constitute gross negligence, reckless or callous disregard for the rights of others, or actual malice or criminal indifference.”

Placement of filters. The injured parties contended that Sea Fox should have placed the fuel water separator filters in a different location to avoid the risk of corrosion. Sea Fox argued that testimony and evidence showed that the claimants’ own expert agreed that there was no issue with the placement of the filters and that mounting the filters in a different location would not make corrosion impossible. Sea Fox submitted summary judgment evidence showing that: (1) mounting fuel water separator filters in the bilge is common practice; (2) the vessel complied with applicable regulations and standards, and (3) Sea Fox voluntarily undertook the effort to ensure the vessel met applicable standards. Sea Fox argued that its conduct showed that it did not exhibit the required conduct to sustain a claim for punitive damages.

Accumulation or series of acts or omissions. The injured parties argued that numerous actions and inactions by Sea Fox in the manufacturing of the vessel potentially could constitute a pattern of negligence to show Sea Fox had a reckless or callous disregard for the rights of others: (1) the failure to have a build-plan for the boat; (2) failure to have drawings that purportedly matched the manufacture of the boat and placement of the filters; (3) failure to install the filters in the location shown on an inspection report of another similar vessel; (4) installing the filters in an unsafe and highly corrosive environment; and (5) failure to have warnings of fire and explosion due to fuel leakage from areas where fuel may actually leak or sparks may ignite. The court found that an accumulation or series of negligent acts or omissions can and should be viewed together to determine whether a defendant acted out of gross negligence, willful misconduct, or a wanton or reckless disregard. The court held that the injured parties submitted summary judgment evidence sufficient to create a genuine issue of material fact as to the potential liability of Sea Fox for punitive damages.

The case is No. 2:19-CV-00130 LEAD.

Attorneys: Timothy J. Young (Young Law Firm) for Hugo Gonzalez. David R. Frohn (MG+M Law Firm) for Sea Fox Boat Co. Inc. Thomas M. Flanagan (Flanagan Partners LLP) for Yamaha Motor Corp. USA.

Companies: Sea Fox Boat Co. Inc.; Yamaha Motor Corp. USA

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