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In re Hlywiak

May 13, 2009

IN RE DAVID HLYWIAK, AS OWNER OF VESSEL M/V 50/50 FOR EXONERATION FROM OR LIMITATION OF LIABILITY.
J.J.C. BOATS, INC., PLAINTIFF,
v.
MARC HLYWIAK, DAVID HLYWIAK, AND JOHN DOES 1-10, DEFENDANTS.



The opinion of the court was delivered by: Irenas, Senior District Judge

OPINION

This is an admiralty action concerning a collision between two vessels - the Twilight and the 50/50, which occurred on July 1, 2005. Plaintiff J.J.C. Boats is the owner of the Twilight. The issues for trial are (1) liability for the collision and (2) the extent of damages sustained by Plaintiff. Presently before the Court is Defendants' Motion in Limine, seeking to preclude Plaintiff from offering evidence of any damages other than those attributable to the fair market value of the Twilight prior to the casualty.

For the reasons that follow, the Motion will be granted in part and denied in part. Plaintiff's potential damages will be limited to the fair market value of the Twilight prior to the casualty plus prejudgment interest, along with compensation for the refunded proceeds of the voyage the Twilight was performing at the time of the collision with the 50/50.

I.

Plaintiff proposes to introduce testimony about two types of damages. First, Plaintiff intends to prove that it is entitled to recover the fair market value of the Twilight, to the extent it exceeds $200,000, along with prejudgment interest.*fn1 Second, Plaintiff intends to demonstrate it is entitled to $29,132.33 in "additional damages."

Defendants contend that none of the "additional damages" sought by Plaintiff are recoverable pursuant to long-standing maritime law. According to Plaintiff, the $29,132.33 in additional damages*fn2 is comprised of:

(1) Annual Fees paid to the United States Coast Guard and the Borough of Wildwood Crest in 2005.

(2) Mortgage Interest paid to Boardwalk Bank on the Twilight for the period of July, 2005, through December, 2005.

(3) Advertising purchased by Plaintiff for the 2005 season, including Printing Costs and Distribution Costs.

(4) Annual Maintenance and Equipment Purchases to ready the Twilight for the 2005 season.

(5) Refund to Passengers on board the Twilight on the day of the collision with the 50/50 ($840).

(6) Seasonal Dock Rental for the months the Twilight was unable to use the dock following the collision.

As explained further below, the applicable law of damages varies based on whether the case is one involving a total loss or a partial loss. A constructive total loss case is one that involves a vessel "whose damage is repairable but the cost of repairs exceeds the pre-collision value." 2 Thomas J. Schoenbaum, Admiralty and Maritime Law 115 (4th ed. 2004).*fn3 A partial loss case is one in which "the pre-collision value of the vessel is greater than the reasonable cost of repairs[.]" In re Lebeouf Bros. Towing Co., Inc., 588 F.Supp. 130, 131 (E.D. La. 1984).

In this case, the estimated repairs on the Twilight would have been $197,272; the insurance coverage on the vessel was $200,000. In re Hlywiak, No. 06-2504, slip op. at 6-7 (D.N.J. Jun. 30, 2008) (Hlywiak I); In re Hlywiak, 573 F.Supp.2d 871, 873 (D.N.J. Aug. 27, 2008) (Hlywiak II). Although the insurance coverage in this case slightly exceeded the estimated cost of repairs, this Court recognized that vessel owners are permitted to claim a constructive total loss ...


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