F.C. Wheat Maritime Corp. v. United States, No. 10-1906

Decided: Dec. 14, 2011

This case involved an allision (an admiralty term wherein a moving vessel collides with a stationary one) between an Army Corp of Engineers vessel and a private yacht owned by Wheat Maritime, the Marquessa. The Army vessel collided with the docked Marquessa when the moving vessel’s captain fell asleep at the helm.

The United States stipulated to liability and the parties proceeded to a bench trial on damages. The district judge sided with the United States’ experts, concluded the value of the yacht was $440,000 at the time of the allision, and entered judgment in that amount. Upon motion by the government, however, the amount was amended to allow no recovery because of a previous insurance subrogation. Wheat Maritime appealed.

The district judge used the doctrine of constructive total loss to determine damages. Using this analysis, “if the cost of repairing the vessel exceeds her pre-casualty fair market value, the limit of compensation is the vessel’s fair market value at the time of the casualty.” Wheat Maritime, however, argued that this formula was not proper because the Marquessa had been made unique and was therefore entitled to the cost of replacement. The Fourth Circuit considered this argument but held that the standard was based on the use of the vessel and not the cosmetic improvements or add-ons applied to the boat. Because the purpose of the boat was merely as a yacht and had no idiosyncratic use that justified calling it “unique,” the court affirmed the lower court’s finding of a constructive total loss.

The court also affirmed the lower court’s findings of fact that the United States’ experts were more credible than Wheat International’s and that the “special value” of the yacht to the owner, while relevant, only applied when it was not possible to establish a fair market value for the vessel. Next, the court affirmed the denial of damages for certain items on the boat including antennae and laptop computers because of a lack of evidence establishing the amount of loss with certainty. Finally, the court affirmed the amended judgment amount because requiring the Army Corp to pay Wheat Maritime would result in a double recovery for the vessel since the government had settled with the insurance company, who had already paid out over $600,000 for its loss.

Full Opinion

-C. Alexander Cable

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