USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 96-1798
CONCORDIA COMPANY, INC.,
Plaintiff - Appellee,
v.
ANTHONY PANEK,
Defendant - Appellant.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. W. Arthur Garrity, Jr., Senior U.S. District Judge]
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Before
Torruella, Chief Judge,
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Selya, Circuit Judge,
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and Saris,* District Judge.
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Richard H. Gens, with whom Lawrence M. Perlmutter was on
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brief for appellant.
Stephen C. Fulton, with whom Law Office of Bruce R. Fox was
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on brief for appellee.
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June 4, 1997
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* Of the District of Massachusetts, sitting by designation.
SARIS, District Judge. This case began with a bang.
SARIS, District Judge.
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In the early morning hours of March 29, 1993, Gerald Chapman, the
night watchman at Concordia Company's boat yard in South
Dartmouth, Massachusetts, awoke to the sound of an explosion.
The PROWLER, a pleasure boat owned by Anthony Panek and moored at
the boat yard, burst into flames. Although fire fighters arrived
in only a few minutes, by the time they extinguished the blaze
the PROWLER was still afloat but burned almost to its gunnels.
However, by morning the PROWLER had sunk beneath the briny waters
of Apponagansett Bay, leaving an oil slick in its wake.
A lawsuit ensued. Concordia filed a complaint alleging
a single count in admiralty for its costs of cleaning up the oil
and hauling the remains of the PROWLER out of the Bay. Panek
counterclaimed for the damage done to his boat, alleging causes
of action for breach of contract, negligence, misrepresentation,
and a violation of Chapter 93A of the Massachusetts General Laws.
Panek alleged generally that Concordia did not fulfill its
promise to provide adequate security at the boat yard and that
the lack of security caused the fire. Panek also alleged that
Concordia should have prevented the PROWLER from sinking by
adequately securing it to the dock while it was still afloat.
The case was tried to the district court with an
advisory jury. The district court found for Concordia on its
admiralty claim for all of its clean up and hauling costs.
However, it also found for Panek on his claims that Concordia was
negligent and breached its contractual duty to secure the boat by
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failing to remove the hull of the boat from the water when it was
still floating. The Court awarded damages to Panek for all of
the clean up and half the hauling costs, which resulted in an
offset judgment for Concordia for half of its hauling costs. On
appeal, Panek argues that the district court erred by denying his
request for a jury trial on his common law counterclaims. We
affirm.
I. PROCEDURAL BACKGROUND
I. PROCEDURAL BACKGROUND
Concordia's complaint included a single admiralty
count, was captioned "In Admiralty", and stated it was within the
court's admiralty and maritime jurisdiction as set forth in Fed.
R. Civ. P. 9(h). Plaintiff made no demand for a jury trial.
Panek's pleading containing the Answer and Counterclaims was
similarly captioned "In Admiralty" with no other basis of
jurisdiction stated and no jury demand made. This pleading
contained no mention of Fed. R. Civ. P. 9(h). However, in its
answer to the counterclaims, Concordia made a jury demand, which
it later withdrew. Before trial, Panek moved to bifurcate his
common law counterclaims from the complaint to allow the former
to be tried by jury. He mistakenly based his motion on a
previous request for a jury trial, which was never made, at least
in writing. The district court denied this motion.
After the close of evidence at trial, the district
court judge ruled that there was insufficient evidence to warrant
a finding on the negligence count and submitted the breach of
contract and misrepresentation counts to the advisory jury. The
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jury returned a verdict finding that Concordia was not liable for
misrepresentation but that it was liable to Panek for the breach
of contract count in the amount of $16,000 -- the total amount of
damage done to the PROWLER. The district court declined to adopt
the advisory jury's verdict on the breach of contract
counterclaim, entering its own bench judgment on all the claims
as follows: Concordia was not liable for misrepresentation or
violating Chapter 93A; Panek was liable for the admiralty claim
for $4,560.35; and Concordia was liable for negligence and breach
of contract for $3,938.50 -- the cost of the clean up and half
the hauling. The Court acknowledged it was "reversing" its
earlier determination that there was insufficient evidence on the
negligence claim with respect to Concordia's failure to prevent
the PROWLER from sinking. After offsetting the two judgments,
Panek was held liable for $621.85 plus statutory interest.
II. STANDARDS OF REVIEW
II. STANDARDS OF REVIEW
The primary dispute on appeal is whether the district
court erred by failing to submit Panek's common law claims to a
non-advisory jury. Panek argues that he retained his right to a
jury on his common law claims under the "saving to suitors"
clause of 28 U.S.C. 1333(1).1 We review claimed errors of law
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1 The saving to suitors clause provides:
The district courts shall have original
jurisdiction, exclusive of the courts of the
States, of: (1) Any civil case of admiralty
or maritime jurisdiction, saving to suitors
in all cases all other remedies to which they
are otherwise entitled.
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de novo. Windsor Mount Joy Mut. Ins. Co. v. Giragosian, 57 F.3d
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50, 53 (1st Cir. 1995) (citing Williams v. Poulos, 11 F.3d 271,
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278 (1st Cir. 1993); Blanchard v. Peerless Ins. Co., 958 F.2d
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483, 487 (1st Cir. 1992)). Panek also challenges the district
court's calculation of damages. "The district court's findings
of fact, however, will not be set aside unless they are
demonstrated to be clearly erroneous." Id. at 53 (citing
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Williams, 11 F.3d at 278; Fed. R. Civ. P. 52(a)).
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III. DISCUSSION
III. DISCUSSION
A. The Claimed Right to a Jury
A. The Claimed Right to a Jury
The first issue the Court considers is whether the
counterclaimant waived any right to a jury he may have retained
by designating his counterclaim as "In Admiralty" with no jury
demand.
If this suit had involved only non-admiralty claims,
Panek would have had a right to a jury trial on his common law
claims. Fed. R. Civ. P. 38(a) provides that "[t]he right of
trial by jury as declared by the Seventh Amendment to the
Constitution or as given by a statute of the United States shall
be preserved to the parties inviolate." Any party can preserve
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its right to a jury by making a timely demand for a jury trial,
Fed. R. Civ. P. 38(b), and once the demand is made, both parties
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must consent before it can be withdrawn, Fed. R. Civ. P. 38(d),
39(a). See Dell'Orfano v. Romano, 962 F.2d 199, 202 (2d Cir.
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28 U.S.C. 1333(1).
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1992) ("A plaintiff is entitled to rely on a defendant's jury
demand to preserve his own right to a jury trial....").
When claims which could be characterized as either
admiralty or common law claims are raised in a case, a party's
right to a jury trial becomes more complex. Cf. Fed. R. Civ. P.
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38(e) (providing that "[t]hese rules shall not be construed to
create a right to trial by jury of the issues in an admiralty or
maritime claim within the meaning of Rule 9(h)"). Generally,
there is no constitutional right to jury trial for admiralty
claims. See Fitzgerald v. United States Lines Co., 374 U.S. 16,
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19 (1963). Congress has, however, created a statutory right to a
jury trial for certain admiralty claims. See, e.g., 28 U.S.C.
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1873 (1994) (Great Lakes Act); 46 U.S.C.App. 688 (1988) (Jones
Act). In addition, the Supreme Court has held that plaintiffs
who assert both a Jones Act claim, which creates a statutory
right to a jury trial on the law side of the court, and closely
related admiralty claims for unseaworthiness and maintenance and
cure are entitled to a jury trial on both kinds of claims.
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Fitzgerald, 374 U.S. at 21 (holding that "only one trier of fact
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should be used for the trial of what is essentially one lawsuit
to settle one claim split conceptually into separate parts
because of historical developments"); see also Charles Alan
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Wright & Arthur R. Miller, 9 Federal Practice and Procedure
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2315 (1995).
When a claim sounds both in admiralty and in common
law, a plaintiff can preserve his right to a jury by following
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certain procedures. Pursuant to the so-called "saving to
suitors" clause, 28 U.S.C. 1333(1), the federal district courts
have "original jurisdiction, exclusive of the courts of the
states," over admiralty and maritime cases, saving to suitors in
all cases all other remedies to which they are otherwise
entitled. Lewis v. United States, 812 F. Supp. 620, 626 (E.D.
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Va. 1993). Interpreting the "saving to suitors" clause to
reserve to plaintiffs the right to a common law remedy "in all
cases where the common law is competent to give it," the Supreme
Court held that "the common law is as competent as the admiralty
to give a remedy in all cases where the suit is in personam
against the owner of the property." Leon v. Galceron, 78 U.S.
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(11 Wall.) 185, 191 (1870). This statute permits plaintiffs to
retain a right to a jury for "saving-clause claims"2 -- those
admiralty claims that could have also been tried to a jury at
common law -- by either bringing suit in state court or in the
general jurisdiction of federal court. See generally Odeco Oil &
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Gas Co., Drilling Division v. Bonnette, 74 F.3d 671, 674 (5th
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Cir. 1996) ("The saving to suitors clause evinces a preference
for jury trials and common law remedies in the forum of the
claimant's choice."). Consequently, a plaintiff's saving-clause
decision determines whether the judge or a jury will act as fact-
finder for saving-clause claims.
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2 See Barbara Bennett Woodhouse, Comment, Powell v. Offshore
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Navigation, Inc.: Jurisdiction Over Admiralty Claims and the
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Right to Trial by Jury, 82 Colum. L. Rev. 784, 787 (1982)
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(describing common law claims also sounding in admiralty as
"saving-clause claims").
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Where claims are cognizable either in admiralty or in a
nonmaritime ground of federal jurisdiction, Rule 9(h) sets forth
the procedure by which a plaintiff indicates his choice to
proceed in admiralty for a saving-clause claim in federal court.
Fed. R. Civ. P. 9 advisory committee note; see generally
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Woodhouse, supra, at 79 (noting that after the unification of
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admiralty and civil procedure rules in 1966, the "saving clause
option to choose whether to proceed in admiralty or diversity has
been retained in Rule 9(h), which permits the suitor to identify
his claim as an admiralty claim in order to have admiralty
procedures applied"). Rule 9(h) provides in pertinent part:
A pleading or count setting forth a claim for
relief within the admiralty and maritime
jurisdiction that is also within the
jurisdiction of the district court on some
other ground may contain a statement
identifying the claim as an admiralty or
maritime claim for the purposes of Rules
14(c), 38(e), and the Supplemental Rules for
Certain Admiralty and Maritime Claims.
Fed. R. Civ. P. 9(h).
"The impact of the 9(h) election is that all claims are
tried by the court, rather than the jury." Insurance Co. of N.
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Am. v. Virgilio, 574 F. Supp. 48, 50 (S.D. Cal. 1983) (citing
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Charles Alan Wright & Arthur R. Miller, 9 Federal Practice and
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Procedure 2315 at 76 (1971); Arkwright-Boston Mfrs. Mut. Ins.
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Co. v. Bauer Dredging, 74 F.R.D. 461, 461 (S.D. Tex. 1977)). A
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waiver of the right to a jury is implicit in this election. See
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Koch Fuels, Inc. v. Cargo of 13,000 Barrels of No. 2 Oil, 704
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F.2d 1038, 1041 (8th Cir. 1983) ("Generally, such an election
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precludes a jury trial."); Romero v. Bethlehem Steel Corp., 515
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F.2d 1249, 1252-53 (5th Cir. 1975) (denying plaintiff's request
for a jury trial because complaint alleged that the "basis for
jurisdiction is the admiralty and maritime jurisdiction"); McCann
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v. Falgout Boat Co., 44 F.R.D. 34, 42 (S.D. Tex. 1968) ("Rule
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38(e) ... preserves for admiralty and maritime cases the
plaintiff'sright toforecloseademandbydefendantforjurytrial....").
When the case itself is hybrid -- that is, the
complaint is designated as in admiralty and a compulsory
counterclaim contains saving-clause claims -- as the case is
here, matters become even more complicated. See generally Billy
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Coe Dyer, Note, The Jury on the Quarterdeck: The Effect of
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Pleading Admiralty Jurisdiction When a Proceeding Turns Hybrid,
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63 Tex. L. Rev. 533, 537 (1984) (analyzing the problem of hybrid
actions). In hybrid cases, the question arises whether the
plaintiff's 9(h) designation should control the procedures for
the entire case or whether the court should attempt to
accommodate the counterclaimant's Seventh Amendment right.
There is a split of authority on this issue. Some
courts have concluded that a plaintiff's Rule 9(h) election
characterizes the whole action regardless of any Seventh
Amendment right the counterclaimant may have had to a jury trial.
See, e.g., Virgilio, 574 F. Supp. at 51 (denying jury trial on a
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compulsory counterclaim filed by an insured in response to a
declaratory judgment action by an insurance company); Arkwright-
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Boston Mfrs. Mut. Ins. Co., 74 F.R.D. at 461 (same); Camrex Ltd.
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v. Camrex Reliance Paint Co., Inc., 90 F.R.D. 313, 317 (E.D.N.Y.
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1981) ("The right to a jury trial in actions at common law ...
provides no basis for claiming a jury trial with respect to the
issues in an admiralty or maritime claim so designated (as
plaintiff has done) under Rule 9(h)....").
Other courts have allowed a separate jury trial on the
common law claims where "both parties using different triers of
fact, could prevail on their respective claims without
prejudicing the other party or arriving at inconsistent results."
Koch Fuels, Inc., 704 F.2d at 1042 (citing Fed. R. Civ. P.
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42(b)); accord Alaska Barite Co. v. Freighters Inc., 54 F.R.D.
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192, 194 (N.D. Cal. 1972) (admiralty claim tried to bench with
separate trial for permissive counterclaim). But see Royal Ins.
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Co. of Am. v. Hansen, 125 F.R.D. 5, 9 (D. Mass. 1988) (denying
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counterclaimant's request for a jury trial because of relation
between counterclaims and admiralty claim and possibility of
inconsistent results). For example, in Koch Fuels, Inc. v. Cargo
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of 13,000 Barrels of No. 2 Oil, the Eighth Circuit affirmed the
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district court's grant of a separate jury trial for the common
law counterclaim and a bench trial for the plaintiff's admiralty
claim. 704 F.2d at 1041-42. The court noted that "[a]lthough
there is no constitutional right to a jury trial in admiralty
cases," the "trial court must, whenever possible, strive to
preserve the right to a trial by jury." Id. (citing Beacon
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Theaters, Inc. v. Westover, 359 U.S. 500, 510 (1959)). The
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Eighth Circuit affirmed the district court's grant of two fact-
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finders because the parties' claims were easily separated, one
involving wrongful conversion and the other breach of contract.
Id. at 1042.
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The Court declines to resolve the difficult issue
raised by the hybrid nature of the suit because this case can be
resolved on a narrower ground. Assuming without deciding under
the Koch Fuels rationale that Concordia's designation of the
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action as arising in admiralty did not necessarily control the
entire action, we nonetheless conclude that Panek waived his
right to a jury by making a 9(h) election to proceed "In
Admiralty" without making a demand for a jury in the
counterclaim.
To begin, Rule 9(h) applied to Panek's counterclaim
because his claims for breach of contract and negligence were
saving-clause claims that could have been brought either in the
district court's supplemental jurisdiction or in admiralty.
Panek's contract with Concordia was sufficiently maritime in
nature to fall within the district court's admiralty
jurisdiction. See Kossick v. United Fruit Co., 365 U.S. 731, 735
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(1961) (marine insurance contracts); Carroll v. Protection
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Maritime Ins. Co., Ltd., 512 F.2d 4, 6 (1st Cir. 1975) (contract
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between seamen and vessel owner); T.N.T. Marine Serv., Inc. v.
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Weaver Shipyards & Dry Docks, Inc., 702 F.2d 585, 587-88 (5th
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Cir.) (contract for repairs at shipyard), cert. denied, 464 U.S.
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847 (1983). Panek's negligence claim that Concordia's lax
security caused the fire or that its failure to prevent the
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PROWLER from sinking is also maritime in nature. See Butler v.
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American Trawler Co., Inc., 887 F.2d 20, 21 (1st Cir. 1989)
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("[T]here is admiralty jurisdiction if the tort at issue 1)
occurred on navigable waters and 2) bore a significant relation
to traditional maritime activities."); Executive Jet Aviation,
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Inc. v. City of Cleveland, 409 U.S. 249, 268 (1972) (holding that
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for the purposes of admiralty jurisdiction, a tort occurs where
the negligence "takes effect," not where the negligent act
occurred). Consequently, the district court could have exercised
jurisdiction over the counterclaims either under its
"supplemental jurisdiction" pursuant to 28 U.S.C. 1367, or
admiralty, 28 U.S.C. 1333, at least with respect to the breach
of contract and negligence claims.
Having concluded that Rule 9(h) could be invoked, we
next consider whether Panek in fact made the requisite 9(h)
"identifying statement" in his counterclaim, thereby waiving his
right to a jury trial. Insurance Co. of N. Am. v. Virgilio, 574
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F. Supp. 48, 51 (S.D. Cal. 1983) ("By invoking 9(h) the plaintiff
may preclude a right to a jury trial which might otherwise
exist."). We conclude that he did, although the election could
have been more artfully made.3 While the preferred technique is
to invoke expressly Rule 9(h), Charles Alan Wright & Arthur R.
Miller, 5 Federal Practice and Procedure 1313 at 719 (1990),
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3 Cf. Fed. R. Civ. P. Form 2(d) ("If the pleader wishes to
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invoke the distinctively maritime procedures referred to in Rule
9(h), add the following or its substantial equivalent: This is an
admiralty or maritime claim within the meaning of Rule 9(h).").
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the words "In Admiralty" in the caption with no accompanying
demand for a jury trial, were sufficient to constitute a 9(h)
election for admiralty procedures. See, e.g., Teal v. Eagle
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Fleet, Inc., 933 F.2d 341, 345 (5th Cir. 1991) (holding that a
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party need not make a specific reference to Rule 9(h) to fall
under admiralty jurisdiction).
One important factor in determining whether a claimant
has elected to proceed in admiralty is whether he demanded a jury
trial. Lewis v. United States, 812 F. Supp. 620, 627 (E.D. Va.
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1993) (holding that a demand for a trial by jury "is inconsistent
with an intent to proceed in admiralty"); cf. Royal Ins. Co. of
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Am. v. Hansen, 125 F.R.D. 5, 8 (D. Mass. 1988) ("Where a claim is
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made in accordance with Rule 9(h), the existence of diversity as
an alternative basis of jurisdiction will not entitle plaintiff
to a jury trial."); Banks v. Hanover Steamship Corp., 43 F.R.D.
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374, 376-77 (D. Md. 1967) (holding that a complaint that asserts
both admiralty jurisdiction and diversity jurisdiction is not an
adequate 9(h) designation to trigger admiralty procedures).
Panek argues that the words "In Admiralty" in the
caption of the counterclaim were merely a label and not an
"identifying statement." However, courts have held that similar
titles in the captions of complaints were sufficient to trigger
the identification mechanism in Fed. R. Civ. P. 9(h). See, e.g.,
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Teal, 933 F.2d at 345. Moreover, Panek's argument that his jury
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trial right was preserved by Concordia's subsequent jury trial
demand in its answer to the counterclaim is unavailing here.
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While in a non-admiralty case any party may assert a demand for a
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jury trial and both parties must consent to the withdrawal of the
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demand, in an admiralty case, a 9(h) election for admiralty
cannot be undone by the opposing party's jury demand. See Fed.
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R. Civ. P. 9(h); Craig v. Atlantic Richfield Co., 19 F.3d 472,
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476-77 (9th Cir.), cert. denied, 115 S. Ct. 203 (1994) (holding
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that plaintiff was not entitled to rely on a defendant's jury
demand where the defendant had neither a constitutional nor a
statutory right to make such a demand); Cateora v. British Atl.
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Assurance, Ltd., 282 F. Supp. 167, 169 (S.D. Tex. 1968) (striking
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defendant's jury demand because plaintiff had made 9(h) election
in favor of admiralty). In short, Concordia's jury demand was a
nullity and Panek could not rely on it.
We hold that Panek made a 9(h) election by designating
his claim as "in admiralty" with no jury demand, assuming without
deciding that he retained his right to a jury even after the
plaintiff had made its Rule 9(h) designation.4
B. Damages
B. Damages
Panek claims that the trial judge erred in not using
the advisory jury's determination of damages on the contract
count of the counterclaims. Specifically, Panek seeks to
reinstate the jury award of $16,000 to reflect the evidence in
the record that the tuna tower (worth $10,000) and the navigation
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4 Because we decide the case on this ground we need not address
Concordia's further argument that the district court's judgment
should be affirmed because there was insufficient evidence under
either a breach of contract or negligence theory to find that
Concordia's breach of duty caused the fire.
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and fishing equipment (worth $6,000) were destroyed in the
explosion. However, the district court found that Concordia
breached its duty to Panek only after the fire was extinguished
and after this property was burned. The district court carefully
assessed the damages proximately caused by Concordia's breach of
duty by failing to take reasonable care of the hull while it was
still afloat and by permitting the PROWLER to sink. The district
court's factual determinations of damage are reviewed only for
clear error, see Windsor Mount Joy Mut. Ins. Co. v. Giragosian,
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57 F.3d 50, 53 (1st Cir. 1995), and Panek does not come close to
meeting this standard. We hold that the district court did not
clearly err in its damages findings.
AFFIRMED.
AFFIRMED.
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