Constance Joy II, LLC v. MTU America Inc., 4:20-cv-02967

Background

Constance Joy II, LLC owned a 125-foot Benetti yacht whose MTU engines overheated after delivery; FDDA (an MTU service dealer) was engaged to service engine heat-exchanger plates in late May 2018.
FDDA technician Tyler Jakubas removed, cleaned, and reinstalled heat-exchanger plates (May 29–June 1, 2018); captain Anthony Nicholls signed the May 29 Service Repair Order (SRO) and a $7,200 card-authorization deposit.
On August 24, 2018, during a sea trial, a black rubber elbow hose on the starboard engine dislodged and sprayed seawater, damaging electrical systems and other equipment.
The court credited contemporaneous FDDA work reports and found Jakubas failed to tighten the metal O‑ring clamps when reconnecting the hose on May 31, 2018; no intervening loosening occurred thereafter.
FDDA’s SRO contained Additional Terms of Sale with a Clause 14 limiting remedies to direct damages and capping seller liability at the purchase price of the Products ($10,000.62 invoice). Captain Nicholls had apparent authority to sign.
Court found negligence by FDDA caused the damage, but enforced Clause 14 to limit recovery to the invoice amount; awarded $10,000.62 plus pre‑ and post‑judgment interest.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did FDDA negligently cause the sea‑spray damage?	FDDA failed to tighten hose clamps after reinstallation, causing hose to pop off.	The loss could have other causes; captain/engineer maintenance failures contributed.	Held: FDDA negligent; Jakubas failed to tighten clamps and that caused the injury.
Was the May 29 SRO (with Additional Terms of Sale) binding on owner?	Owner (Skolnick) says captain lacked authority to bind owner to contract terms.	FDDA says Captain Nicholls had apparent authority to sign and assent to terms.	Held: Captain had apparent authority; SRO and Terms presented as integrated document and are binding.
Is Clause 14 (limitation/cap) enforceable under maritime law?	Plaintiff contends clause should not bar consequential losses like loss of use; may be unconscionable.	FDDA contends maritime red‑letter clauses and caps are routinely enforceable.	Held: Clause 14 is clear, unequivocal, and enforceable; it limits recoverable damages to direct damages and caps liability at the invoice amount.
Are claimed categories (repairs, "other necessary expenses", lost charter, lost personal use) recoverable?	Seeks direct repair costs, other necessary expenses, lost charter revenue, and lost personal use value.	FDDA argues economic‑loss or limitation clause bars most claims; disputes many post‑incident charges.	Held: Direct repair costs and certain necessary expenses are direct damages but recovery is capped by Clause 14; loss‑of‑charter damages denied for lack of reasonable certainty/evidence; personal‑use claim barred by clause.
Was owner comparatively at fault?	Owner/management (crew) had maintenance shortcomings; FDDA argued owner/crew fault.	FDDA sought to reduce recovery via comparative fault.	Held: FDDA failed to prove comparative fault; no reduction.
Are pre‑ and post‑judgment interest awarded and at what rates?	Plaintiff sought prejudgment interest.	No dispute on entitlement.	Held: Prejudgment interest awarded at 6.29% (average prime, floor applied) from Aug 24, 2018; post‑judgment interest at federal rate (~3.85%).

Key Cases Cited

Penn Mar., Inc. v. Rhodes Elec. Servs., Inc., 41 F. Supp. 3d 507 (E.D. La. 2014) (elements and standard for maritime negligence)
In re Great Lakes Dredge & Dock Co. LLC, 624 F.3d 201 (5th Cir. 2010) (foreseeability as factor in maritime duty of care)
Crompton Greaves, Ltd. v. Shippers Stevedoring Co., 776 F. Supp. 2d 375 (S.D. Tex. 2011) (causation in admiralty may be inferred from circumstances)
Todd Shipyards Corp. v. Turbine Serv., Inc., 674 F.2d 401 (5th Cir. 1982) (standard of care for ship repairers)
Cactus Pipe & Supply Co. v. M/V Montmartre, 756 F.2d 1103 (5th Cir. 1985) (apparent authority principles in admiralty)
Jackson Marine Corp. v. Blue Fox, 845 F.2d 1307 (5th Cir. 1988) (ship master can bind owner)
Coastal Iron Works, Inc. v. Petty Ray Geophysical, Div. of Geosource, Inc., 783 F.2d 577 (5th Cir. 1986) (enforceability of red‑letter limitation clauses executed by captain)
Theriot v. Bay Drilling Corp., 783 F.2d 527 (5th Cir. 1986) (Fifth Circuit upholding clauses that limit liability for negligence)
Sander v. Alexander Richardson Invs., 334 F.3d 712 (8th Cir. 2003) (survey of enforceability of exculpatory clauses)
One Beacon Ins. v. Crowley Marine Servs., Inc., 648 F.3d 258 (5th Cir. 2011) (enforcement of exculpatory terms incorporated by reference)
Lake Charles Stevedores, Inc. v. Professor Vladimir Popov MV, 199 F.3d 220 (5th Cir. 1999) (presumption that master may contract for necessaries)