Dredge recovers for lost work
The award of $11.7 million in damages to the owner and operator of a dredge that was struck by an orange juice tanker was upheld by the U.S. Court of Appeals for the 2nd Circuit in a summary order. (Great Lakes Bus. Trust v. M/T Orange Sun. 2nd Cir. 12-1270-cv. April 30.)
Great Lakes Dredge & Dock Co.’s dredge New York was struck by the tanker Orange Sun on Jan. 24, 2008 in New Jersey’s Newark Bay.
The dredge was out of service for 194 days after the collision.
Both parties agreed, in admiralty, plaintiffs may recover damages for “the loss of profits or of the use of a vessel pending repairs, or other detention, arising from a collision or other maritime tort,” but only when “profits have actually been, or may be reasonably supposed to have been, lost, and the amount of such profits is proven with reasonable certainty.”
The 2nd Circuit said the district court’s opinion was “thorough and well-reasoned” and affirmed its conclusion that Great Lakes proved lost profits with reasonable certainty.
It said plaintiffs were not (contrary to what the defendants argued) required to demonstrate the dredge had lost a specific contract in order to recover damages, because — as the district court found after a three-day bench trial — “there was an active market for the dredge (both in New York and in other U.S. locations)” when the accident occurred and afterwards.
The court said that factual finding was not clearly erroneous, and in light of it finding there was an “active market” for services provided by the dredge. The court permissibly determined that it was reasonably certain the dredge would have found work or moved on to additional work sooner, if not for the accident. No more specific finding of particular lost contracts or opportunities was necessary to sustain an award of damages for lost profits.
It also affirmed the district court’s calculation of the dredge’s lost profits, in which it found the vessel would have been used about 92 percent of the time that it lost while undergoing repairs.
The defendants contended the utilization rate was erroneous because it was derived from an unusually busy period, but the 2nd Circuit said it was proper to consider the state of the market in which the dredge would have been operating if not for the accident.
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