In Otal Investements, Ltd. v. M/V TRICOLOR, et al, the Second Circuit faced a collision in the English Channel. On a foggy night in the English Channel nine years ago, the M/V KARIBA approached the M/V CLARY and altered course to avoid her. Alas, the M/V KARIBA struck the M/V TRICOLOR, which subsequently sank. The district court, in a bench trial, found the M/V KARIBA 100% liable. The Second Circuit found all three vessels had violated navigational regulations and were all partially liable. On remand, the district court found the M/V CLARY’s owners could not limit their liability and found liability as follows: 63% to the M/V KARIBA, 20% to the M/V CLARY, and 17% to the M/V TRICOLOR.
The district court’s analysis was unique. It first addressed liability. finding that all three vessels violated the regulations, it started with each party 1/3 liable, but it increased the liability of the M/V KARIBA because the M/V KARIBA had deviated most sharply from the standard of care. The court next addressed causation. Finding the M/V KARIBA’s breach of the standard of care, far more than any other vessel’s, caused the collision, it increased that vessel’s fault.
The district court was not perfect. The district court denied the petition for limitation of liability filed by the M/V CLARY, finding the M/V CLARY’s owners knew, or should have known, that the M/V CLARY had an inadequate lookout. The district court found the owners had constructive knowledge because a lookout would be paid overtime. The owners would have access to the overtime logs, so they could tell whether the vessel typically had a lookout or not. The Second Circuit reversed, finding there was inadequate proof in the record that lookouts would be paid overtime. Therefore there was inadequate proof to determine whether the owner had privity and knowledge. The Second Circuit remanded.
Author: Harry Morse