United States District Court, S.D. California
ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT [ECF NO. 90.]
Ted Moskowitz, Chief Judge
November 4, 2016, Defendant Marine Group Boat Works, LLC
(“MGBW”) filed a motion for summary judgment.
(MGBW Mot. Summ. J. (“MGBW's MSJ”), ECF No.
90.) For the reasons discussed below, the motion is denied.
April 2014, Captain Roger M. Trafton (“Trafton”)
of Plaintiff Bear, LLC's (“Bear”) 102-foot
motor vessel (“the Polar Bear”)
scheduled a maintenance visit for the Polar Bear at
MGBW. (Decl. of Scott Sokul, in Supp. of MGBW's MSJ Ex.
(“MGBW's Ex.”) 3, ECF No. 90-8,
164:8-165:16.) On May 6, 2014, while on its way to San Diego,
the Polar Bear struck the submerged Zuniga Jetty at
the entrance to the San Diego Harbor, damaging the bottom of
the hull and causing water to leak in. (Id. at
153:16-19; 169:10-21.) Trafton navigated the Polar
Bear under its own power to the San Diego U.S. Customs
dock where two divers inspected the hull of the boat and
determined that a stabilizer had been damaged. (Id.
at 174:1-177:10.) The divers packed the stabilizer opening,
which stopped the ingress of water into the hull.
(Id. at 177:11-178:15.)
its own power, the Polar Bear traveled from the U.S.
Customs dock to MGBW's shipyard. (Id. at
179:16-19.) As a safety measure, the Polar Bear was
accompanied by two small towboats. (Id. at
179:16-23.) The Polar Bear arrived at MGBW on May 7,
2014. Upon arriving at MGBW, the Polar Bear was
placed in lifting slings and positioned to be lifted out.
(MGBW's Ex. 5, ECF No. 90-10, 707:20-711:4.) Trafton
disembarked the Polar Bear and went to the MGBW
office while Larry Jodsaas, Bear's sole member, remained
on the vessel. (MBGW's Ex. 3 191:5-7; 196:15-18.) Once at
the office, a MGBW receptionist handed Trafton a standard
MGBW work order contract (“Contract”) to sign on
a clipboard. (Id. at 192:1-193:17.) The front side
of the Contract listed the work that MGBW was to perform,
while the back side contained the terms and conditions.
(MGBW's Ex. 16, ECF No. 90-21.) Trafton read the front
side of the Contract and signed it on behalf of Jodsaas.
(MGBW's Ex. 3 130:14-24.) Trafton did not read the back
side that detailed the terms and conditions. (Id.
131:1-4.) The Contract describes the scope of the work as:
“Haul Out, Block & Launch” and “Lay
days charged at $2.00 per ft./per day. No charge for day of
haul and day of launch.” (MGBW's Ex. 16, 2.) Just
above the signature line, the front side of the Contract
states: “I hereby authorize the above repair work to be
performed. I acknowledge that I have received a copy of, and
have read, understood and agree to the terms and conditions
of this Contract, including those on the reverse side
hereof.” (MGBW's Ex. 16, 2.) The back side contains
several provisions limiting MGBW's liability that state
in relevant part:
THIS AGREEMENT, consisting of this Work Order
(“Order”), is entered into between Marine Group
Boat Works, LLC, (“Contractor”) a California
limited liability company, the Owner identified on the
reverse thereof, (“Owner”), and the therein named
vessel (“the Vessel”), on the following terms and
1. STATEMENT OF WORK.
Contractor agrees to furnish materials, parts, supplies, and
labor to perform the work described in the Order (hereinafter
“Work”). Owner has specifically requested the
Work set forth in the Order, shall inspect the progress of
the Work from time to time as he deems necessary, and has
satisfied himself as to the suitability for his intended
purposes of all machinery, parts, equipment, supplies and
accessories to be installed pursuant to this Agreement.
3. WARRANTY EXCLUSIONS.
THE WARRANTIES SET FORTH IN PARAGRAPH 2 ARE GIVEN IN LIEU OF
ALL OTHER WARRANTIES, WHETHER EXPRESSED, IMPLIED OR
STATUTORY, CONTRACTOR DISCLAIMS ANY WARRANTY, EXPRESS OR
IMPLIED, THAT THE MATERIALS ARE MERCHANTABLE OR FIT FOR ANY
PARTICULAR USE OR PURPOSE.
8. OWNERS ASSUMPTION OF RISK.
(a) Except as provided in paragraphs 2 and 6 above, Owner
accepts the risk of all losses hereafter occasioned by the
acts or omissions of the Contractor in the performance of the
Work, whether in the nature of negligence, strict liability,
or otherwise, and agrees to purchase and maintain such
insurance against such risks as Owner deems prudent and shall
look only to said insurance for compensation or damages
related to any such loss regardless of the legal or physical
responsibility thereof, subrogation against Contractor is
(b) Owner accepts the risk of, and Contractor shall have no
legal liability whatsoever, under any circumstances for, the
tortuous or criminal acts of any third party, included but
not limited to theft, conversion, and malicious mischief.
9. FINANCIAL LIMITATION.
In no event shall Contractor's aggregate liability to all
parties in interest arising under this Agreement or the Work
for all damages, including, but not limited to, any tort
damages, exceed $25, 000 or the sum received by Contractor
under this Agreement, whichever is less.
10. INDEMNITY, INSURANCE AND WAIVER OF SUBROGATION.
(a) Owner shall indemnify and hold Contractor harmless of any
claim, loss, cost, liability or expense, including reasonable
attorney's fees incurred in defense thereof, arising from
the intentional or negligent acts or omissions or Owner or
his agents, employees or independent contractors, or the
failure of Owner of his agents, employees or independent
contractors to comply with the provisions of this Agreement.
Said indemnification shall encompass and include any and all
claims by third parties arising under this Agreement or the
Work performed hereunder, except claims by employees,
subcontractors or vendors of Contractor for goods, services
or employee benefits, as the case may be.
(b) During the period the Vessel is present in
Contractor's boatyard or other place or repair agreed to
between Contractor and Owner, Owner shall purchase and
maintain such types and amounts of insurance as Owner deems
reasonable and prudent to protect against risks assumed by
Owner under this Agreement. As to all such policies or
insurance and all claims made thereon, for himself and his
insurers, Owner specifically waives all right of subrogation
against Contractor, its subsidiaries, affiliates, agents,
officers, directors and employees.
(Id. at 3.) (typographical errors in original)
Trafton signed the Contract, the Polar Bear was
hauled out of the water and set on blocks in the yard where
it remained until the fire. (Decl. of Eric Lundeen, in Supp.
of MGBW's MSJ, ECF No. 90-2, ¶ 7.) From May 22, 2014
through early June, 2014, Trafton executed numerous separate
work change orders for repairs to the Polar Bear,
including a May 22, 2014 order (“Change Order
1002”) for the removal of lead ballast and foam in the
work space and hot work repairs to the hull. (MGBW's Ex.
11-13, ECF Nos. 16-18.) Each change order specified that it
was in addition to the original Contract, which would remain
otherwise unchanged and in full force and effect. (MGBW's
Ex. 11, 2.)
18, 2014, MGBW obtained a hot work permit authorizing hot
work to be performed on June 19, 2014. (MGBW's Ex. 29,
62:19-64:6.) On June 19, 2014, the Polar Bear caught
fire while welders of Universal Steel Fabrication, Inc.
(“USF”), a subcontractor hired by MGBW, were
performing hot work. (Decl. of Todd Roberts, in Supp. of
MGBW's MSJ, ECF No. 90-4, ¶¶ 9-10.) The fire
resulted in the destruction of the Polar Bear.
December 16, 2014, Bear filed this action against MGBW,
alleging six causes of action: (1) Breach of Contract; (2)
Negligence; (3) Gross Negligence; (4) Breach of Implied
Warranty of Workmanlike Performance; (5) Breach of Bailment;
and (6) Fraud. (Compl. ECF No. 1.)
judgment is appropriate under Rule 56 of the Federal Rules of
Civil Procedure if the moving party demonstrates the absence
of a genuine issue of material fact and entitlement to
judgment as a matter of law. Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). A fact is material
when, under the governing substantive law, it could affect
the outcome of the case. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986); Freeman v.
Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute as
to a material fact ...