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Sara Michelle Simmons, As Special Administrator, Etc v. Chad Ware

February 13, 2013


Appeals from a judgment and postjudgment order of the Superior Court of Orange County, Thierry Patrick Colaw, Judge. (Super. Ct. No. 30-2009-00306440)

The opinion of the court was delivered by: O'leary, P. J.




Chad Ware appeals from the judgment entered against him in this maritime wrongful death action. Ware owned a vessel that was being used for a live-on-board marine education program for students. The decedent, an adult chaperone on the trip, drowned while "free-diving" during a daytime excursion off of the ship conducted by the operators of the educational program. The jury returned a special verdict finding the company that operated the marine education program was a negligent cause of decedent's death (apportioning 20 percent of the fault to it), and finding the decedent was also negligent (apportioning 80 percent of the fault to him), but finding no negligence on the part of Ware. The trial court subsequently granted the plaintiff's motion for judgment notwithstanding the verdict (JNOV), and entered judgment against Ware finding the uncontroverted evidence demonstrated that as a matter of law Ware and the operator of the trip were in a joint venture making Ware vicariously liable for the operator's negligence.

We conclude the trial court erred. The existence of a joint venture was not alleged in plaintiff's complaint, it was not an issue litigated at trial, the jury was not instructed on joint venture liability, and the special verdict form asked no questions concerning the existence of a joint venture. Moreover, the trial evidence did not establish that as a matter of law Ware and the trip operator were in a joint venture. Accordingly we reverse the judgment against Ware and we reverse the postjudgment order awarding plaintiff costs pursuant to Code of Civil Procedure section 998.


The Business Relationship

Scott McClung was the owner and operator of Rapture Marine Expeditions (RME), an entity he founded in the mid 1990's to conduct educational marine biology trips for students. To support their son's endeavors, McClung's parents, Eugene and Mozelle McClung, commissioned the building of the 143-foot Rapture, a ship specifically designed to suit RME's needs. The Rapture was launched in 1998 and registered in the name of Certified Marine Expeditions (CME), a company owned by the Eugene and Mozelle McClung Family Trust (the McClung Family Trust). CME chartered the Rapture exclusively to RME, and RME had a reputation as a top operator of marine education programs for students, operating programs in the Hawaiian Islands in the winter, and in the California Channel Islands during spring and fall.

When McClung's father passed away in 2006, the McClung Family Trust withdrew the family's support for McClung's business, cancelled RME's charter agreement, and placed the Rapture up for sale. At the time, RME had already booked several Hawaii trips aboard the Rapture for the winter of 2007 and had received approximately $84,820 in deposits for those trips. It had booked various Channel Islands trips as well. Without the Rapture, many of those trips would have to be cancelled. McClung began looking for a way to salvage RME.

Ware, whose family was in the charter vessel business, had known McClung for many years, and the two families were "friendly" competitors. Ware was also involved in the marine educational program charter business, founding "Adventure Cruise Lines" (Adventure Cruise), which owned the 130-foot Pacific Monarch that Ware chartered out for educational trips. But Ware admitted Adventure Cruise did not have RME's reputation or its amount of business.

When CME cancelled RME's charter for the Rapture, Ware began chartering the Pacific Monarch to RME in November 2006 for its Channel Island trips. Ware believed that if RME was to go out of business, it would have negative repercussions throughout the marine educational charter community, and could negatively impact his own company. Ware began negotiating with CME, hoping to throw McClung a "lifeline" to save RME's access to the Rapture by acquiring the Rapture and chartering it back to RME. Ware hoped that in so doing he would have a very long business relationship with RME and McClung in which he would be able to charter both his current ship, the Pacific Monarch, and the Rapture to RME for its trips. Ware chartered his vessels to other companies as well.

In January 2007, Ware and CME entered into a bareboat (aka demise) charter/purchase agreement (the CME Purchase Agreement), pursuant to which Ware took control of the Rapture as de facto owner.*fn1 The CME Purchase Agreement provided Ware would bareboat charter the Rapture for five years and required him to make the monthly $22,269 payment on the Rapture's mortgage and to bear all costs of the vessel's operation, maintenance, repair, insurance, and taxes during that time. At the end of the five years, Ware would purchase the vessel by paying off the mortgage. In addition, the CME Purchase Agreement required Ware to "be[] responsible for and indemnify[] and hold[] CME . . . harmless" for the $84,820 in deposits already received by RME for the Rapture's upcoming Hawaii trips.

Ware agreed to charter the Rapture to RME for a flat rate of $5,000 a day so RME could fulfill its outstanding Hawaii cruise obligations. There apparently was no written charter agreement between Ware and RME. The evidence adduced at trial was that RME was to provide its own crew and supplies for the trips. Ware was required to maintain and fuel the vessel at his own expense and provide a ship's engineer to perform any needed maintenance.

On January 26, 2007, two days after Ware acquired the Rapture from CME, the vessel sailed to Hawaii to begin RME's already booked trips. RME kept the same basic crew it was already using on the Pacific Monarch, which included McClung as the ship's master. All of the crew were RME employees, with four exceptions. Ware went as the ship's engineer. Ware also took Adventure Cruise employee Jamin Martinelli, who worked on his other vessel, hoping to "acclimate her into the engineer position." Martinelli was a licensed dive master, but Ware testified she did not go as dive master on the Rapture. McClung, however, testified Martinelli was the ship's dive master and as such she would have been responsible for any scuba diving operations (if there even were to be any) but she would have had nothing to do with any decisions regarding swimming, snorkeling, or free-diving excursions. Additionally, there was some question as to whether McClung's captain's license (a 100-ton near coastal license) allowed him to transport the Rapture across the open ocean to Hawaii. Accordingly, Ware's uncle, Jozeph Alfoldi, who had the higher level 1600-ton license was ship's master on the transport voyage, and he stayed on as a "second captain" once the vessel got to Hawaii. Ware's brother, Jason Ware (Jason), also a licensed captain, joined the ship in Hawaii as another "second captain" (first mate).

All witnesses who testified at trial as to the Rapture's operations in Hawaii agreed McClung was the undisputed ship's master, Alfoldi and Jason served only as second captains. There was evidence that Jason made statements to Coast Guard officers after the drowning accident that lead to this action, and in his deposition, indicating that although McClung was ship's master, Jason considered himself to be the person who was really "in charge" of the vessel because it belonged to his brother. But Jason testified at trial that McClung was indisputably in charge of the vessel during the trip and any authority Jason had was delegated to him by McClung as ship's master.

The Accident

In February 2007, RME was conducting a three-day excursion off the island of Lanai for a group of high school students and their chaperones. One of the chaperones was the decedent, Jeremiah Johnson, a 36-year-old biology, marine biology, and ocean sciences teacher from the high school. Johnson had chaperoned other RME trips. Johnson was known to be an experienced "waterman," i.e., someone very proficient and comfortable in the ocean. He was a very strong swimmer, life-long surfer (including big wave surfing), certified scuba diver, water polo player and experienced "free-diver" (i.e., diving without use of any underwater breathing apparatus).

The group was transported from the Rapture to the snorkeling site, Shark Fin Rock, in inflatable boats crewed by RME employees. The RME crew/life guards gave a safety briefing to the participants, which included that they could only swim on the inshore side of Shark Fin Rock (apparently, the seaward side had a steep drop off and difficult currents), and that they must utilize the "buddy system" when diving.

Unexpectedly, as the crew was getting participants into the water on the inshore side of the boat, Johnson dove off the other side of the boat by himself toward the prohibited seaward side of Shark Fin Rock and swam down for a free-dive. He never came back up. The inflatable boats ferrying the group for the excursion did not have scuba gear on board. McClung and others who were still on board the Rapture quickly donned scuba gear, scrambled to the accident site, and found Johnson but could not revive him. Johnson drowned after he apparently suffered a "shallow water blackout" (loss of consciousness underwater).


Johnson's widow, Sara Michelle Simmons, as special administrator of his estate, filed the instant wrongful death action. The complaint originally named only RME as a defendant; Ware and McClung were subsequently named as defendants by "Doe" amendments. (CME was also named a Doe defendant but later dismissed.) The complaint alleged RME negligently allowed Johnson to "take an unplanned, unsupervised free[-]dive" knowing such a dive exposed him to substantial risk of injury. At trial, Simmons presented evidence concerning the warnings given about the currents and the ocean topography around Shark Fin Rock, and the safety training and the safety protocols employed by the Rapture's crew.

Simmons' complaint contained no allegations of a joint venture between Ware and McClung/RME or any allegations concerning their business relationship. The complaint did contain a single sentence allegation that "each [d]efendant was the agent and employee of every other co-[d]efendant, and . . . was acting in the scope and authority of said agency and employment . . . ." The existence of a joint venture was not mentioned in Simmons' opening argument or closing argument.

The trial court did not instruct the jury regarding the existence of a joint venture between Ware and McClung/RME. It was given Simmons' requested instructions that: (1) "a corporation like [RME] can act only through its officers, or employees" and the negligence of a corporation's "officer, or employee" is imputed to the corporation; and (2) the parties agreed that at the time of Johnson's death the Rapture was owned by Ware and was being operated by RME and McClung, and Simmons claimed Johnson's death was caused by the negligence of all three defendants.*fn2 In closing arguments, Simmons argued Ware was liable as owner of the vessel. She argued that in Ware's rush to acquire the Rapture, because there was so little time between when he gained control of the vessel and when it had to be available to RME in Hawaii, Ware "did not have the opportunity to do what a reasonably prudent owner would have done" before allowing the vessel to be used for the kinds of excursions RME would be engaging in. Simmons argued that as owner of the vessel, Ware had a duty to ensure there were proper safety protocols and equipment in place. The special verdict form contained no questions regarding the existence of a joint venture between Ware and McClung/RME.

The jury returned the special verdict form finding RME, McClung, and Johnson were negligent, but finding Ware was not negligent. The jury found RME's and Johnson's negligence were the cause of Johnson's death, but McClung's negligence was not. The jury found the total damages were $7,559,508, and it ...

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