KOCH REFINING COMPANY, Plaintiff,
v.
JENNIFER L. BOUDREAUX MV, her engines, boiler, etc., in
rem., et al., Defendants.
In re in the Matter of JENNIFER L. BOUDREAUX MV and Ocean
Towing Service, Inc., as owners of the MV Jennifer L.
Boudreaux praying for exoneration from and/or limitation of
liability: Ocean Towing Service, Inc., Appellant-Cross-Appellee,
and
G & B Marine, Inc., Third-Party-Defendant-Appellant, Cross-Appellee,
v.
CONTINENTAL INS., CO., 5801 Associates, Ltd., and Ocean
Transport Corp., Claimants-Appellees-Cross-Appellants.
In re in the Matter of OCEAN TRANSPORT CORPORATION, as owner
pro hac vice of the barge Ocean Transporter praying for
exoneration from or limitation of liability: Ocean
Transport Corp., et al., Third-Party-Plaintiffs,
Ocean Transport Corp., Third-Party-Plaintiff-Appellee, Cross-Appellant,
v.
G & B MARINE, INC., et al.,
Third-Party-Defendants-Appellants, Cross-Appellees,
5801 ASSOCIATES, LTD., et al., Plaintiffs,
v.
CONTINENTAL INSURANCE COMPANY, Defendant.
No. 94-30509.
United States Court of Appeals,
Fifth Circuit.
June 25, 1996.
Fred E. Salley, Lee M. Peacocke, Salley & Associates, Metairie, LA, for Appellants.
James G. Burke, Jr., Burke & Mayer, New Orleans, LA, for Continental Ins.
Charles E. Lugenbuhl, Nathan P. Horner, Lugenbuhl, Burke, Wheaton, Peck, Rankin & Hubbard, New Orleans, LA, for 5801 Associates, Ltd. & Ocean Transport.
Appeals from the United States District Court for the Eastern District of Louisiana.
Before POLITZ, Chief Judge, and JONES and BENAVIDES, Circuit Judges.
EDITH H. JONES, Circuit Judge:
This case arises out of the 1987 sinking of a barge, the T/B OCEAN TRANSPORTER ("the barge"), while in the tow of the M/V JENNIFER L. BOUDREAUX ("the tug"). After a bench trial, the district court found the tug 2/3 liable and the barge 1/3 liable, and awarded the barge's owners $2.67 million. Both parties now appeal the judgment. Two issues seem to us most worthy of discussion: the court's decision to disqualify Richard Vinas as an expert witness, and the denial of prejudgment interest. Upon consideration of these issues and the othеrs raised by the parties, however, we affirm.
I. BACKGROUND
The barge was owned by 5801 Associates, Ltd. ("5801"). It had been constructed in 1979 and was extended in 1980 by the addition of a notch extension to its stern. In 1986, 5801 bareboat chartered the barge to Ocean Transport Corporation ("OTC"). In 1987, OTC procured a charter from Koch Chemical Corporation ("Koch") to transport paraxylene from Corpus Christi, Texas to Wilmington, North Carolina. OTC hired Oсean Towing Services, Inc. ("Ocean Towing") to tow the barge to Wilmington. Ocean Towing owns the tug and is an affiliate of G & B Marine Service, Inc. ("G & B") (G & B and Ocean Towing are collectively referred to as "the tug interests").
On November 24, 1987, the JENNIFER L. BOUDREAUX left Corpus Christi with the barge in tow. She was initially under orders to rendezvous off Galveston, Texas with another tug, the AMERICAN PATRIOT, so this second tug could tow the barge to Wilmington. However, the AMERICAN PATRIOT developed engine problems, and Todd Lyons, the secretary/treasurer and comptroller of G & B, determined that the JENNIFER L. BOUDREAUX could make the entire voyage. At that time, he directed the JENNIFER L. BOUDREAUX to proceed to Wilmington and to stop for fuel in Miami, Florida. Lyons later determined the Miami stop was not necessary, and instructed the tug to proceed directly to Wilmington and to follow a course in the Gulf Stream to save time and fuel.
Neither the tug's captain or crew hаd ever been in the Atlantic north of Jacksonville, Florida. The only chart on board showed the coastline from Brownsville, Texas to Charleston, South Carolina. It did not depict their final destination of Wilmington and did not detail ports along the East coast. Although detailed charts were available en route, the crew did not attempt to obtain them.
On December 3rd, the tug received several gale warnings, due to an аpproaching cold front, from the National Weather Service. Winds of 30-40 knots and seas of 8-14 feet were forecast for the following afternoon and evening. The tug reported them to Lyons. He advised the tug that the weather system would move away from it, and directed it to remain on course in the Gulf Stream. Later that evening, weather conditions began to deteriorate as the gale approaсhed. Despite the steadily worsening weather, the tug reduced its speed but continued in the Gulf Stream. The tug received several more gale warnings that night.
The next day, December 4th, the tug encountered, exactly as forecasted, winds of 25 to 35 knots and seas of 12 to 14 feet with occasional 20 foot swells. The weather conditions in the Gulf Stream were significantly worse than those closer to shore. On December 3rd and 4th, thе maximum seas halfway between the Gulf Stream and the shore were 10 feet. Within ten miles of the shore, the seas reached a maximum of 4 feet.
During the storm, the barge was constantly splashed with water and rolled from side to side. It frequently plowed beneath 20 foot swells. The barge's deck and raised trunk were continually covered with water from approximately noon on December 3rd to 8:00 p.m. on December 4th.
At that time, the tug was hit by a series of large waves and the tow line snapped. The crew attempted to retrieve the barge, but could not because the tug's shackle, which connected the tow line to the barge's bridge, had broken. For about an hour, the barge rolled from side to side as it was pounded by waves. Gradually, it began to sink, and finally sank completely around midnight on December 6th. The barge was then in waters 200 fathoms deep and was 120 miles from shore. Neither the barge nor its cargo has been recovered.
The expected lawsuits were filed: 5801 and OTC sued the barge's insurer, Continental Insurance Company ("Continental"); the cargo owner Koch sued Ocean Towing and G & B; Ocean Towing and G & B sued for limitation of liability; and OTC, 5801, and Continental sued for limitation of liability (Continental, 5801, and OTC are collectively referred to as "the barge interests"). The cases were consolidated.
Koch settled its claims before trial. In May 1993, 5801, OTC, and Continental also settled their dispute and agreed to assert a joint claim for the barge's loss, leaving two (consolidated) cases for trial. The barge interests were suing the tug interests for negligent towing, seeking to recover for the barge's loss. In turn, the tug interests were suing for limitation of liability and to recover towage fees and related expensеs.
After the bench trial in September 1993, the district court found the tug interests to be 2/3 at fault and the barge interests to be 1/3 at fault for the barge's sinking. It awarded the barge interests $2.67 million, but denied pre-judgment interest on the award. The district court denied the tug interests' claims for limitation of liability and towage fees.
Both parties timely appealed and cross-appealed the judgment. The tug interests argue the district court 1) abused its discretion in disqualifying expert witness Richard Vinas; 2) abused its discretion in permitting expert Norman Antrainer to testify about the barge's value; 3) erred in finding the tug breached its duties of seaworthiness and care; 4) erred in denying their petition for limitation of liability; and 5) erred in denying towage fees. The barge interests argue the district court 1) clearly erred in finding the barge unseaworthy; and 2) abused its discretion in denying pre-judgment interest.II. DISCUSSION
A. Disqualification of Richard Vinas
The tug interests contеnd the district court erred in disqualifying expert witness Richard Vinas.1 Vinas had originally been retained as an expert by Continental in its insurance dispute with 5801 and OTC. Continental paid him approximately $8000, received two detailed written reports of his opinions, and listed him as a "will call" expert for the scheduled August 1990 trial date. This date was suspended. It is not clear when Continental released him.2 At trial three years later, Vinas remained listed as a "will call" expert by the barge interests, although they rested without calling him.
On September 23, 1993, the barge interests discovered that the tug interests had made ex parte contacts with Vinas and had apparently retained him in August 1993. The following day, the barge interests moved to disqualify Vinas as a witness and to sanction the tug interests for their actions. The district court heard argument, and, after reviewing memoranda from both sides, disqualified Vinas. It concluded Continental had retained Vinas, had provided him with confidential information, and "[had] not release[d] Vinas to use the information he had compiled and received in his work on the case." The tug interests appeal Vinas's disqualification.
Federal courts have the inherent power to disqualify experts, Campbell Ind. v. M/V GEMINI,
In disqualification cases other than those in which the expert clearly switched sides, lower courts have rejected a "bright-line" rule and have adopted the following test:
First, was it objectively reasonable for the first party who claims to have retained the expert to conclude that a confidential relationship existed?
Second, was any confidential or privileged information disclosed by the first party to the expеrt?
Mayer v. Dell,
The party seeking disqualification bears the burden of proving these elements. Cordy v. Sherwin-Williams Co.,
Initially, a court must determine whether the retaining party and the expert had "a relationship which permitted [the retaining party] reasonably to expect that any communication ... would be maintained in confidence by [the expert]." In re Ambassador Group, Inc. Litigation,
In the instant case, the district court did not clearly err in finding that Continental had a reasonable expectation of confidentiality with Vinas and that such expectation continued after Vinas was "discharged" by Continental. Their relationship is more aptly described as a "long-standing series of interactions" than an initial consultation. Continental paid Vinas $8000 and had received several written reports from him.
The court must next determine whether Vinas received, or had reasonable access to, confidential information. Such information would include "discussion of the [retaining party's] strategies in the litigation, the kinds of experts [the party] expected to retain, [the party's] views of the strengths and weaknesses of each side, the role of each of the [party's] witnesses to be hired, and anticipated defenses." Mayer,
Continental contends its counsel "spent considerable time with Mr. Vinas explaining his entire thеory of the case as well as trial tactics for the 1990 trial." It also contends the counsel "furnished Mr. Vinas with documents that had been generated in preparation for the trial of this matter and participated in the formulation of graphics by Mr. Vinas." The tug interests asserted that Vinas's knowledge was limited to technical information about the barge's condition. The district court found Vinas did receive confidential informаtion. Given the competing arguments, this finding is not clearly erroneous.
The tug interests contend that Continental abandoned any claim to confidentiality after designating Vinas as a "will call" witness whose report was circulated among the parties in 1990. The tug interests believe they could have dispelled any notion that Continental divulged confidential information to Vinas had the court allowed an evidentiary hearing on thе disqualification motion. In some situations, a hearing may be required, but this was not one of them. The substance of Vinas's report clearly revealed that, had he not been a "will call" witness, it would have embodied confidential disclosures. But although he was originally designated a "will call" witness, it should have become clear by May 1993, when Continental switched sides, that Continental no longer desired to put into evidence his report on the cause of the sinking. During the three-year hiatus from 1990 to 1993, moreover, no party had an incentive to pursue Vinas's testimony, so his designation as a "will call" witness became immaterial. The tug interests could have deposed Vinas at any time, of course. All of these facts were sufficiently evident to the trial court to render an evidentiary hearing superfluous, especially in the late stages of trial.
Lowеr courts have also "balance[d] the competing policy objectives in determining expert disqualification." English Feedlot,
"The main policy objectives militating against disqualification are ensuring that parties have access to expert witnesses who possеss specialized knowledge and allowing experts to pursue their professional calling." English Feedlot,
In this case, the district court noted that the tug interests could have secured their own naval architect in June 1990, over three years before trial. While the tug interests suggest that Continental manipulated the pretrial witness list to "keep him away" from them, the tug interests did not even allege in response to the disqualification motion that they certainly intended to call Vinas. The contention of dependency on his testimony rings somewhat hollow in light of that coyness.
Moreover, we are troubled that the tug interests did not directly notify their opponents before trial that they would be calling Vinas to testify. Instead, counsel for the tug interests made several ex parte contacts with Vinas and apparently employed him as their consultant in August 1993, but the barge interests only accidentally learned of this arrangement after their side had rested.
We conclude the district court did not abuse its discretion in disqualifying Vinas under this very limited and specific factual scenario.
B. Denial of Pre-Judgment Interest
The barge interests contend the district court abused its discretion in denying pre-judgment interest on their $2.67 million award. The district court gave two reasons for its denial: 1) the fact that both parties were at fault for the barge's sinking; and 2) the extraordinary delays in the trial due to the insurance dispute among the barge interests and the reassignment of the case from Judge Collins to Judge Heebe. Weighing against the denial of prejudgment interest, the court also noted the $2.67 million award was not substantially less than the amount sought by the barge interests.
In maritime cases, an award of pre-judgment interest is the rule rather than the exception. Orduna S.A. v. Zen-Noh Grain Corp.,
The district court's first reason for denying pre-judgment interest was that both parties were at fault for the barge's sinking. Contrary tо the argument made by the tug interests, the Supreme Court decisively rejected this rationale in City of Milwaukee v. National Gypsum, supra, holding that "neither a good faith dispute over liability nor the existence of mutual fault justifies the denial of pre-judgment interest."
In passing, however, the Supreme Court endorsed in part the district court's second reason for denying prejudgment interests, i.e. the extraordinary delay in reaching trial. See City of Milwaukee, --- U.S. at ----,
While it is true that trial delays do not generally constitute a peculiar circumstance, Socony Mobil Oil Co., Inc. v. Texas Coastal and Int'l., Inc.,
In the instant case, trial was delayed for two years because of the insurance dispute among the barge interests; neither of the tug interests was a party to that suit. Trial was delayed an additional nine months because of the criminal investigation of the presiding judge. Overall, three trial dates were upset, and trial did not occur until 3 1/2 years after the first trial date. The district court did not clearly err in finding that these delays constituted a peculiar circumstance.
We conclude that the district court did not abuse its discretion in denying prejudgment interest.
C. Other Issues
The district court authored a long, meticulous opinion embodying his findings and conclusions. From their opposing perspectives, the parties have challenged numerous legal and factual asрects of his analysis. The issues they raise were summarized at the outset of this opinion, and we have considered each of them in light of oral argument, the briefs, and the record. Having done so, it is clear that this case was hard-fought among skilled and experienced counsel before an attentive judge. We are not persuaded that the court clearly erred in his fact findings, committed reversible errors of lаw or reversibly abused his discretion.
CONCLUSION
For these reasons, the judgment of the trial court is AFFIRMED.
Notes
Additionally, the tug interests' brief alleges the district court improperly did not allow them to arrange ex parte meetings with expert witnesses A.J. Herkes, Norman Antrainer, and Ed Shearer. We do not address this issue because it was not developed on appeal
Continental contends it discharged Vinas in May 1993, after the insurance dispute with 5801 and OTC was settled. The tug interests contend Continental discharged him in the summer of 1990