Concordia Co. v. Panek

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 96-1798

CONCORDIA COMPANY, INC.,

Plaintiff - Appellee,

v.

ANTHONY PANEK,

Defendant - Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. W. Arthur Garrity, Jr., Senior U.S. District Judge]

Before

Torruella, Chief Judge,

Selya, Circuit Judge,

and Saris,* District Judge.

Richard H. Gens, with whom Lawrence M. Perlmutter was on

brief for appellant.
Stephen C. Fulton, with whom Law Office of Bruce R. Fox was

on brief for appellee.

June 4, 1997

* Of the District of Massachusetts, sitting by designation.

SARIS, District Judge. This case began with a bang.
SARIS, District Judge.

In the early morning hours of March 29, 1993, Gerald Chapman, the

night watchman at Concordia Company's boat yard in South

Dartmouth, Massachusetts, awoke to the sound of an explosion.

The PROWLER, a pleasure boat owned by Anthony Panek and moored at

the boat yard, burst into flames. Although fire fighters arrived

in only a few minutes, by the time they extinguished the blaze

the PROWLER was still afloat but burned almost to its gunnels.

However, by morning the PROWLER had sunk beneath the briny waters

of Apponagansett Bay, leaving an oil slick in its wake.

A lawsuit ensued. Concordia filed a complaint alleging

a single count in admiralty for its costs of cleaning up the oil

and hauling the remains of the PROWLER out of the Bay. Panek

counterclaimed for the damage done to his boat, alleging causes

of action for breach of contract, negligence, misrepresentation,

and a violation of Chapter 93A of the Massachusetts General Laws.

Panek alleged generally that Concordia did not fulfill its

promise to provide adequate security at the boat yard and that

the lack of security caused the fire. Panek also alleged that

Concordia should have prevented the PROWLER from sinking by

adequately securing it to the dock while it was still afloat.

The case was tried to the district court with an

advisory jury. The district court found for Concordia on its

admiralty claim for all of its clean up and hauling costs.

However, it also found for Panek on his claims that Concordia was

negligent and breached its contractual duty to secure the boat by

-2-

failing to remove the hull of the boat from the water when it was

still floating. The Court awarded damages to Panek for all of

the clean up and half the hauling costs, which resulted in an

offset judgment for Concordia for half of its hauling costs. On

appeal, Panek argues that the district court erred by denying his

request for a jury trial on his common law counterclaims. We

affirm.

I. PROCEDURAL BACKGROUND
I. PROCEDURAL BACKGROUND

Concordia's complaint included a single admiralty

count, was captioned "In Admiralty", and stated it was within the

court's admiralty and maritime jurisdiction as set forth in Fed.

R. Civ. P. 9(h). Plaintiff made no demand for a jury trial.

Panek's pleading containing the Answer and Counterclaims was

similarly captioned "In Admiralty" with no other basis of

jurisdiction stated and no jury demand made. This pleading

contained no mention of Fed. R. Civ. P. 9(h). However, in its

answer to the counterclaims, Concordia made a jury demand, which

it later withdrew. Before trial, Panek moved to bifurcate his

common law counterclaims from the complaint to allow the former

to be tried by jury. He mistakenly based his motion on a

previous request for a jury trial, which was never made, at least

in writing. The district court denied this motion.

After the close of evidence at trial, the district

court judge ruled that there was insufficient evidence to warrant

a finding on the negligence count and submitted the breach of

contract and misrepresentation counts to the advisory jury. The

-3-

jury returned a verdict finding that Concordia was not liable for

misrepresentation but that it was liable to Panek for the breach

of contract count in the amount of $16,000 -- the total amount of

damage done to the PROWLER. The district court declined to adopt

the advisory jury's verdict on the breach of contract

counterclaim, entering its own bench judgment on all the claims

as follows: Concordia was not liable for misrepresentation or

violating Chapter 93A; Panek was liable for the admiralty claim

for $4,560.35; and Concordia was liable for negligence and breach

of contract for $3,938.50 -- the cost of the clean up and half

the hauling. The Court acknowledged it was "reversing" its

earlier determination that there was insufficient evidence on the

negligence claim with respect to Concordia's failure to prevent

the PROWLER from sinking. After offsetting the two judgments,

Panek was held liable for $621.85 plus statutory interest.

II. STANDARDS OF REVIEW
II. STANDARDS OF REVIEW

The primary dispute on appeal is whether the district

court erred by failing to submit Panek's common law claims to a

non-advisory jury. Panek argues that he retained his right to a

jury on his common law claims under the "saving to suitors"

clause of 28 U.S.C. 1333(1).1 We review claimed errors of law

1 The saving to suitors clause provides:

The district courts shall have original
jurisdiction, exclusive of the courts of the
States, of: (1) Any civil case of admiralty
or maritime jurisdiction, saving to suitors
in all cases all other remedies to which they
are otherwise entitled.

-4-

de novo. Windsor Mount Joy Mut. Ins. Co. v. Giragosian, 57 F.3d

50, 53 (1st Cir. 1995) (citing Williams v. Poulos, 11 F.3d 271,

278 (1st Cir. 1993); Blanchard v. Peerless Ins. Co., 958 F.2d

483, 487 (1st Cir. 1992)). Panek also challenges the district

court's calculation of damages. "The district court's findings

of fact, however, will not be set aside unless they are

demonstrated to be clearly erroneous." Id. at 53 (citing

Williams, 11 F.3d at 278; Fed. R. Civ. P. 52(a)).

III. DISCUSSION
III. DISCUSSION

A. The Claimed Right to a Jury
A. The Claimed Right to a Jury

The first issue the Court considers is whether the

counterclaimant waived any right to a jury he may have retained

by designating his counterclaim as "In Admiralty" with no jury

demand.

If this suit had involved only non-admiralty claims,

Panek would have had a right to a jury trial on his common law

claims. Fed. R. Civ. P. 38(a) provides that "[t]he right of

trial by jury as declared by the Seventh Amendment to the

Constitution or as given by a statute of the United States shall

be preserved to the parties inviolate." Any party can preserve

its right to a jury by making a timely demand for a jury trial,

Fed. R. Civ. P. 38(b), and once the demand is made, both parties

must consent before it can be withdrawn, Fed. R. Civ. P. 38(d),

39(a). See Dell'Orfano v. Romano, 962 F.2d 199, 202 (2d Cir.

28 U.S.C. 1333(1).

-5-

1992) ("A plaintiff is entitled to rely on a defendant's jury

demand to preserve his own right to a jury trial....").

When claims which could be characterized as either

admiralty or common law claims are raised in a case, a party's

right to a jury trial becomes more complex. Cf. Fed. R. Civ. P.

38(e) (providing that "[t]hese rules shall not be construed to

create a right to trial by jury of the issues in an admiralty or

maritime claim within the meaning of Rule 9(h)"). Generally,

there is no constitutional right to jury trial for admiralty

claims. See Fitzgerald v. United States Lines Co., 374 U.S. 16,

19 (1963). Congress has, however, created a statutory right to a

jury trial for certain admiralty claims. See, e.g., 28 U.S.C.

1873 (1994) (Great Lakes Act); 46 U.S.C.App. 688 (1988) (Jones

Act). In addition, the Supreme Court has held that plaintiffs

who assert both a Jones Act claim, which creates a statutory

right to a jury trial on the law side of the court, and closely

related admiralty claims for unseaworthiness and maintenance and

cure are entitled to a jury trial on both kinds of claims.

Fitzgerald, 374 U.S. at 21 (holding that "only one trier of fact

should be used for the trial of what is essentially one lawsuit

to settle one claim split conceptually into separate parts

because of historical developments"); see also Charles Alan

Wright & Arthur R. Miller, 9 Federal Practice and Procedure

2315 (1995).

When a claim sounds both in admiralty and in common

law, a plaintiff can preserve his right to a jury by following

-6-

certain procedures. Pursuant to the so-called "saving to

suitors" clause, 28 U.S.C. 1333(1), the federal district courts

have "original jurisdiction, exclusive of the courts of the

states," over admiralty and maritime cases, saving to suitors in

all cases all other remedies to which they are otherwise

entitled. Lewis v. United States, 812 F. Supp. 620, 626 (E.D.

Va. 1993). Interpreting the "saving to suitors" clause to

reserve to plaintiffs the right to a common law remedy "in all

cases where the common law is competent to give it," the Supreme

Court held that "the common law is as competent as the admiralty

to give a remedy in all cases where the suit is in personam

against the owner of the property." Leon v. Galceron, 78 U.S.

(11 Wall.) 185, 191 (1870). This statute permits plaintiffs to

retain a right to a jury for "saving-clause claims"2 -- those

admiralty claims that could have also been tried to a jury at

common law -- by either bringing suit in state court or in the

general jurisdiction of federal court. See generally Odeco Oil &

Gas Co., Drilling Division v. Bonnette, 74 F.3d 671, 674 (5th

Cir. 1996) ("The saving to suitors clause evinces a preference

for jury trials and common law remedies in the forum of the

claimant's choice."). Consequently, a plaintiff's saving-clause

decision determines whether the judge or a jury will act as fact-

finder for saving-clause claims.

2 See Barbara Bennett Woodhouse, Comment, Powell v. Offshore

Navigation, Inc.: Jurisdiction Over Admiralty Claims and the

Right to Trial by Jury, 82 Colum. L. Rev. 784, 787 (1982)

(describing common law claims also sounding in admiralty as
"saving-clause claims").

-7-

Where claims are cognizable either in admiralty or in a

nonmaritime ground of federal jurisdiction, Rule 9(h) sets forth

the procedure by which a plaintiff indicates his choice to

proceed in admiralty for a saving-clause claim in federal court.

Fed. R. Civ. P. 9 advisory committee note; see generally

Woodhouse, supra, at 79 (noting that after the unification of

admiralty and civil procedure rules in 1966, the "saving clause

option to choose whether to proceed in admiralty or diversity has

been retained in Rule 9(h), which permits the suitor to identify

his claim as an admiralty claim in order to have admiralty

procedures applied"). Rule 9(h) provides in pertinent part:

A pleading or count setting forth a claim for
relief within the admiralty and maritime
jurisdiction that is also within the
jurisdiction of the district court on some
other ground may contain a statement
identifying the claim as an admiralty or
maritime claim for the purposes of Rules
14(c), 38(e), and the Supplemental Rules for
Certain Admiralty and Maritime Claims.

Fed. R. Civ. P. 9(h).

"The impact of the 9(h) election is that all claims are

tried by the court, rather than the jury." Insurance Co. of N.

Am. v. Virgilio, 574 F. Supp. 48, 50 (S.D. Cal. 1983) (citing

Charles Alan Wright & Arthur R. Miller, 9 Federal Practice and

Procedure 2315 at 76 (1971); Arkwright-Boston Mfrs. Mut. Ins.

Co. v. Bauer Dredging, 74 F.R.D. 461, 461 (S.D. Tex. 1977)). A

waiver of the right to a jury is implicit in this election. See

Koch Fuels, Inc. v. Cargo of 13,000 Barrels of No. 2 Oil, 704

F.2d 1038, 1041 (8th Cir. 1983) ("Generally, such an election

-8-

precludes a jury trial."); Romero v. Bethlehem Steel Corp., 515

F.2d 1249, 1252-53 (5th Cir. 1975) (denying plaintiff's request

for a jury trial because complaint alleged that the "basis for

jurisdiction is the admiralty and maritime jurisdiction"); McCann

v. Falgout Boat Co., 44 F.R.D. 34, 42 (S.D. Tex. 1968) ("Rule

38(e) ... preserves for admiralty and maritime cases the

plaintiff'sright toforecloseademandbydefendantforjurytrial....").

When the case itself is hybrid -- that is, the

complaint is designated as in admiralty and a compulsory

counterclaim contains saving-clause claims -- as the case is

here, matters become even more complicated. See generally Billy

Coe Dyer, Note, The Jury on the Quarterdeck: The Effect of

Pleading Admiralty Jurisdiction When a Proceeding Turns Hybrid,

63 Tex. L. Rev. 533, 537 (1984) (analyzing the problem of hybrid

actions). In hybrid cases, the question arises whether the

plaintiff's 9(h) designation should control the procedures for

the entire case or whether the court should attempt to

accommodate the counterclaimant's Seventh Amendment right.

There is a split of authority on this issue. Some

courts have concluded that a plaintiff's Rule 9(h) election

characterizes the whole action regardless of any Seventh

Amendment right the counterclaimant may have had to a jury trial.

See, e.g., Virgilio, 574 F. Supp. at 51 (denying jury trial on a

compulsory counterclaim filed by an insured in response to a

declaratory judgment action by an insurance company); Arkwright-

Boston Mfrs. Mut. Ins. Co., 74 F.R.D. at 461 (same); Camrex Ltd.

-9-

v. Camrex Reliance Paint Co., Inc., 90 F.R.D. 313, 317 (E.D.N.Y.

1981) ("The right to a jury trial in actions at common law ...

provides no basis for claiming a jury trial with respect to the

issues in an admiralty or maritime claim so designated (as

plaintiff has done) under Rule 9(h)....").

Other courts have allowed a separate jury trial on the

common law claims where "both parties using different triers of

fact, could prevail on their respective claims without

prejudicing the other party or arriving at inconsistent results."

Koch Fuels, Inc., 704 F.2d at 1042 (citing Fed. R. Civ. P.

42(b)); accord Alaska Barite Co. v. Freighters Inc., 54 F.R.D.

192, 194 (N.D. Cal. 1972) (admiralty claim tried to bench with

separate trial for permissive counterclaim). But see Royal Ins.

Co. of Am. v. Hansen, 125 F.R.D. 5, 9 (D. Mass. 1988) (denying

counterclaimant's request for a jury trial because of relation

between counterclaims and admiralty claim and possibility of

inconsistent results). For example, in Koch Fuels, Inc. v. Cargo

of 13,000 Barrels of No. 2 Oil, the Eighth Circuit affirmed the

district court's grant of a separate jury trial for the common

law counterclaim and a bench trial for the plaintiff's admiralty

claim. 704 F.2d at 1041-42. The court noted that "[a]lthough

there is no constitutional right to a jury trial in admiralty

cases," the "trial court must, whenever possible, strive to

preserve the right to a trial by jury." Id. (citing Beacon

Theaters, Inc. v. Westover, 359 U.S. 500, 510 (1959)). The

Eighth Circuit affirmed the district court's grant of two fact-

-10-

finders because the parties' claims were easily separated, one

involving wrongful conversion and the other breach of contract.

Id. at 1042.

The Court declines to resolve the difficult issue

raised by the hybrid nature of the suit because this case can be

resolved on a narrower ground. Assuming without deciding under

the Koch Fuels rationale that Concordia's designation of the

action as arising in admiralty did not necessarily control the

entire action, we nonetheless conclude that Panek waived his

right to a jury by making a 9(h) election to proceed "In

Admiralty" without making a demand for a jury in the

counterclaim.

To begin, Rule 9(h) applied to Panek's counterclaim

because his claims for breach of contract and negligence were

saving-clause claims that could have been brought either in the

district court's supplemental jurisdiction or in admiralty.

Panek's contract with Concordia was sufficiently maritime in

nature to fall within the district court's admiralty

jurisdiction. See Kossick v. United Fruit Co., 365 U.S. 731, 735

(1961) (marine insurance contracts); Carroll v. Protection

Maritime Ins. Co., Ltd., 512 F.2d 4, 6 (1st Cir. 1975) (contract

between seamen and vessel owner); T.N.T. Marine Serv., Inc. v.

Weaver Shipyards & Dry Docks, Inc., 702 F.2d 585, 587-88 (5th

Cir.) (contract for repairs at shipyard), cert. denied, 464 U.S.

847 (1983). Panek's negligence claim that Concordia's lax

security caused the fire or that its failure to prevent the

-11-

PROWLER from sinking is also maritime in nature. See Butler v.

American Trawler Co., Inc., 887 F.2d 20, 21 (1st Cir. 1989)

("[T]here is admiralty jurisdiction if the tort at issue 1)

occurred on navigable waters and 2) bore a significant relation

to traditional maritime activities."); Executive Jet Aviation,

Inc. v. City of Cleveland, 409 U.S. 249, 268 (1972) (holding that

for the purposes of admiralty jurisdiction, a tort occurs where

the negligence "takes effect," not where the negligent act

occurred). Consequently, the district court could have exercised

jurisdiction over the counterclaims either under its

"supplemental jurisdiction" pursuant to 28 U.S.C. 1367, or

admiralty, 28 U.S.C. 1333, at least with respect to the breach

of contract and negligence claims.

Having concluded that Rule 9(h) could be invoked, we

next consider whether Panek in fact made the requisite 9(h)

"identifying statement" in his counterclaim, thereby waiving his

right to a jury trial. Insurance Co. of N. Am. v. Virgilio, 574

F. Supp. 48, 51 (S.D. Cal. 1983) ("By invoking 9(h) the plaintiff

may preclude a right to a jury trial which might otherwise

exist."). We conclude that he did, although the election could

have been more artfully made.3 While the preferred technique is

to invoke expressly Rule 9(h), Charles Alan Wright & Arthur R.

Miller, 5 Federal Practice and Procedure 1313 at 719 (1990),

3 Cf. Fed. R. Civ. P. Form 2(d) ("If the pleader wishes to

invoke the distinctively maritime procedures referred to in Rule
9(h), add the following or its substantial equivalent: This is an
admiralty or maritime claim within the meaning of Rule 9(h).").

-12-

the words "In Admiralty" in the caption with no accompanying

demand for a jury trial, were sufficient to constitute a 9(h)

election for admiralty procedures. See, e.g., Teal v. Eagle

Fleet, Inc., 933 F.2d 341, 345 (5th Cir. 1991) (holding that a

party need not make a specific reference to Rule 9(h) to fall

under admiralty jurisdiction).

One important factor in determining whether a claimant

has elected to proceed in admiralty is whether he demanded a jury

trial. Lewis v. United States, 812 F. Supp. 620, 627 (E.D. Va.

1993) (holding that a demand for a trial by jury "is inconsistent

with an intent to proceed in admiralty"); cf. Royal Ins. Co. of

Am. v. Hansen, 125 F.R.D. 5, 8 (D. Mass. 1988) ("Where a claim is

made in accordance with Rule 9(h), the existence of diversity as

an alternative basis of jurisdiction will not entitle plaintiff

to a jury trial."); Banks v. Hanover Steamship Corp., 43 F.R.D.

374, 376-77 (D. Md. 1967) (holding that a complaint that asserts

both admiralty jurisdiction and diversity jurisdiction is not an

adequate 9(h) designation to trigger admiralty procedures).

Panek argues that the words "In Admiralty" in the

caption of the counterclaim were merely a label and not an

"identifying statement." However, courts have held that similar

titles in the captions of complaints were sufficient to trigger

the identification mechanism in Fed. R. Civ. P. 9(h). See, e.g.,

Teal, 933 F.2d at 345. Moreover, Panek's argument that his jury

trial right was preserved by Concordia's subsequent jury trial

demand in its answer to the counterclaim is unavailing here.

-13-

While in a non-admiralty case any party may assert a demand for a

jury trial and both parties must consent to the withdrawal of the

demand, in an admiralty case, a 9(h) election for admiralty

cannot be undone by the opposing party's jury demand. See Fed.

R. Civ. P. 9(h); Craig v. Atlantic Richfield Co., 19 F.3d 472,

476-77 (9th Cir.), cert. denied, 115 S. Ct. 203 (1994) (holding

that plaintiff was not entitled to rely on a defendant's jury

demand where the defendant had neither a constitutional nor a

statutory right to make such a demand); Cateora v. British Atl.

Assurance, Ltd., 282 F. Supp. 167, 169 (S.D. Tex. 1968) (striking

defendant's jury demand because plaintiff had made 9(h) election

in favor of admiralty). In short, Concordia's jury demand was a

nullity and Panek could not rely on it.

We hold that Panek made a 9(h) election by designating

his claim as "in admiralty" with no jury demand, assuming without

deciding that he retained his right to a jury even after the

plaintiff had made its Rule 9(h) designation.4

B. Damages
B. Damages

Panek claims that the trial judge erred in not using

the advisory jury's determination of damages on the contract

count of the counterclaims. Specifically, Panek seeks to

reinstate the jury award of $16,000 to reflect the evidence in

the record that the tuna tower (worth $10,000) and the navigation

4 Because we decide the case on this ground we need not address
Concordia's further argument that the district court's judgment
should be affirmed because there was insufficient evidence under
either a breach of contract or negligence theory to find that
Concordia's breach of duty caused the fire.

-14-

and fishing equipment (worth $6,000) were destroyed in the

explosion. However, the district court found that Concordia

breached its duty to Panek only after the fire was extinguished

and after this property was burned. The district court carefully

assessed the damages proximately caused by Concordia's breach of

duty by failing to take reasonable care of the hull while it was

still afloat and by permitting the PROWLER to sink. The district

court's factual determinations of damage are reviewed only for

clear error, see Windsor Mount Joy Mut. Ins. Co. v. Giragosian,

57 F.3d 50, 53 (1st Cir. 1995), and Panek does not come close to

meeting this standard. We hold that the district court did not

clearly err in its damages findings.

AFFIRMED.
AFFIRMED.

-15-