Court Rules Crewmember Not Working in Course and Scope of Employment

In Herrera v. 7R Charter Limited, Case No. 16-cv-24031 (Aug. 3, 2018), the Southern District of Florida held in a case that we were defending on behalf of 7R Charter Limited ("7R Charter") that a crewmember was not working in the course and scope of her employment when she was aboard the yacht's alleged tender for a sea trial, when she was severely injured by an alleged phantom wake.

Photograph of boat owned by Captain

In this case, the Plaintiff was the Chief Stewardess aboard a 125-foot yacht when on a Saturday, she joined the yacht's Captain (who was her boyfriend at the time), her daughter and two other friends aboard her boyfriend's boat, a 36-foot Protector. The Protector was utilized previously as a tender to the 125-yacht during a single charter period approximately one month before the plaintiff's accident. The Captain had rented the Protector to the owner of the yacht for that charter period, as the yacht's tender was inoperable at the time. The Plaintiff suffered an injury while the persons aboard the Captain's boat were making their way to lunch. Plaintiff filed a one-count complaint against her employer, alleging Jones Act negligence in the Captain instructing her to place bow lines and fenders of the bow of the tender. At the time Plaintiff was at the bow of the boat, allegedly setting the Protector's lines, an unidentified 50' sportfishing vessel crossed the bow of the 36' boat, creating a 2-4' high wave, hitting the boat and allegedly causing the Plaintiff to fall.

The Plaintiff attempted to hold 7R Charter vicariously liable for the actions of her boyfriend in the operation of the boat that was neither owned or operated by 7R Charter. "[I]n order to hold an employer vicariously liable under the Jones Act for one employee's injury caused by the negligence of a co-employee, a plaintiff must show that the injured employee and the employee who caused the harm were both acting in the course of their employment at the time of the accident." Beech v. Hercules Drilling Co., L.L.C., 691 F.3d 566, 572 (5th Cir. 2012). To prove that the alleged negligent employee's actions were undertaken in the course of employment, the injured seaman "must show that the employee's tort was committed in the furtherance of the employer's business." Sobieski v. Ispat Island, Inc., 413 F.3d 628, 632 (7th Cir. 2005). "In order for an activity to qualify as being within the scope of employment, it must be a necessary incident of the day's work or be essential to the performance of the work. Id. at 634.

In evaluating whether the Plaintiff was working in the course and scope of her employment, the court noted that the boat was purchased for the business of chartering. The court also noted that whenever the yacht had a charter, it would rent a boat from the Captain. However, on the Plaintiff's date of accident, the yacht could not be chartered, as it was undergoing repairs. The court also noted that the Captain had sole responsibility for maintaining the boat and paying for any upkeep to the boat. The court noted that the sole issue was whether the Plaintiff and the Captain were acting "for the convenience of the defendant-employer so as to be deemed in the course of [her] employment." Howard v. Bristol Monarch, 652 F. Supp. 677, 679 (W.D. Wash. 1987).

First, the court found that Plaintiff's contract requirement that she be on call "24/7" did not require the court to find that she was acting within the scope of her employment when she suffered her injuries, as the court in Sobieski specifically rejected that exact argument. Second, the court found that the Plaintiff was not furthering 7R Charter's business interests when she suffered her injuries, as 7R Charter did not order nor was it aware that the boat was undergoing repairs or being taken out for a sea trial. Third, the court noted that there was nothing in the record to suggest that as part of her duties as Chief Stewardess, Plaintiff was responsible for securing a tender for the yacht's charters. Finally, the court noted that the events surrounding the outing demonstrated that Plaintiff's motivation for going out on the boat was not to further 7R Charter's business interests, but for pleasure purposes.

If you are interested in receiving a copy of this decision, please feel free to write to me at blog@miamimaritimelaw.co.

Rogue Insurance Adjusters in MIA Scammed Their Employer

If you have ever handled an auto insurance claim, made an insurance claim or worked for an auto insurance claims department, a call-in of a new claim is routine--in this instance, a Lexus GS350 was reportedly involved in a fender bender with a Chrysler 320 in North Miami-Dade. Within days, adjusters from a team that covers the area, reported inspecting the Lexus and authorizing a series of payments totaling over $16,000.

But according to the Miami Herald, the accident never actually happened. In fact, the exact same Lexus had been used to file at least 10 claims for phantom crashes, all signed off on by the same adjusters. The body shop that reaped most of the payouts for these claims is not real — according to Miami-Dade prosecutors, one of the companies that lists its address is, in actuality, a vacant lot in Little Haiti.

The fake crash report in September 2016 was but one of dozens of sham claims that cost GEICO more than half a million dollars and led to a series of arrests. Among those arrested: two GEICO insurance adjusters, Juan Carlos Diaz and Cesar Santiago Tapanes, who prosecutors allege got cash kickbacks for helping defraud their own company; Sepp Lewis Tevini, a mechanic who arranged the bogus claims on cars he was supposed to be servicing; and Estevenson "Skull" Dorval, who represented two auto body shops that did not exist.

It is reported that 14 people were charged in the investigation conducted by Florida's Bureau of Insurance Fraud and the State Attorney's Office. The others charged are believed to have allowed their policies to be used, or made phone calls to GEICO while impersonating crash victims. The group faces charges including grand theft, insurance fraud and racketeering. In all, at least 45 bogus claims were made, most of them on high-end cars. Some luxury car owners had no idea that their policies were being abused, primarily by their local repairers that had access to their insurance information.

This case is a warning to policyholders--check your invoices from your insurers. If your policy has increased in cost but you have not had any accidents or claims, ask why. You may be surprised by the answer.

If you wish to reach me, you may do so at blog@miamimaritimelaw.co.

DOHSA Does Not Preempt State Wrongful Death Statute in Fla State Waters

In Kipp v. Amy Slate’s Amoray Dive Ctr., Inc., 2018 Fla. App. LEXIS 7847 (3d DCA June 6, 2018), Florida's Third District Court of Appeals held that DOHSA does not preempt Florida's wrongful death statute and DOHSA does not apply to the territorial waters of the state.

Steven Kipp, was a crew member onboard a scuba dive charter boat which was owned and operated by Amy Slate’s Amoray Dive Center, Inc. On November 12, 2015, the captain took a number of customers out for a night dive with Kipp onboard. The adverse currents pushed some of the divers as far as a half mile away. In response, Kipp snorkeled out to bring the customers back in. However, while doing so,  Kipp suffered a heart attack and died.  Kipp’s widow filed a lawsuit alleging: (1) Jones Act negligence against the dive center; (2) general maritime unseaworthiness against the dive center as owner of the vessel; (3) state tort negligence against the dive center; (4) DOHSA claim against the dive center; (5) state tort negligence against the captain; and (6) DOHSA claim against the captain. The Defendants filed motions to dismiss arguing that the cause of action was controlled solely by DOHSA because the death occurred more than three nautical miles from the shore. Kipp’s widow argued that DOHSA is inapplicable because the death occurred within Florida’s territorial waters. The trial court dismissed the complaint holding that DOHSA applied and therefore the trial court did not have jurisdiction to consider the merits of the remaining issues. Kipp’s widow appealed.

The appellate court first noted that this case involves an issue of statutory interpretation. Reading DOHSA, the court found on the one hand, "DOHSA expressly applies to death on the high seas more than three nautical miles from the shore of the United States", but on the other hand, noted that “by its plain terms, [DOHSA] ‘does not affect the law of a State regulating the right to recover for death’ and ‘it does not apply to waters within the territorial limits of a state’”. The Court noted that unlike Florida, for most states, the two provisions do not conflict because their territorial waters do not extend beyond three nautical miles. However Florida's Constitution specifically extends Florida's Atlantic boundary to three miles from the coast or to the shoreward edge of the Gulf Stream, whichever is greater.

The Court distinguished the Submerged Lands Act from DOHSA, because unlike DOHSA, the SLA includes limiting language which states that “in no event shall the term boundaries . . . be interpreted as extending from the coast line more than three geographical miles into the Atlantic Ocean or the Pacific Ocean.” Id. at 7. The Court found that it is up to Congress to curtail the reach of Florida law or limit rights granted by Federal law and found that Congress did not do this with DOHSA.

Thus, the case has been reversed and remanded for further proceedings. If you are interested in receiving a copy of this opinion or wish to reach me to discuss the case further, please feel free to write to me at blog@miamimaritimelaw.co. 

Lozman's "Floating Home" Saga Ends at SCOTUS

April 22, 2017

Fane Lozman and his dog with floating home in foreground Picture from the Associated Press

The U.S. Supreme Court has rejected Fane Lozman's latest appeal in his landmark case involving the seizure and destruction of his floating home. The justices denied without comment Mr. Lozman's petition asking them to enforce their 2013 ruling by ordering the city of Riviera Beach to pay him about $365,000 for the home's value and legal fees. Lower courts also ruled against Mr. Lozman, and this was his last appeal.

The ruling obtained by Mr. Lozman in 2013 set a new standard for floating homes and other structures. As posted previously in this blog, the ruling meant that federal maritime law that calls for seizure under Supplemental Rule C could no longer be applied to disputes involving floating structures that have no traditional characteristics of a vessel, such as an engine, rudder or sails. As reported by such news sources as the AP, the Daily Business Review and other well known sources, the decision has affected thousands of floating homes and business owners across the U.S., including floating gambling casinos docked on rivers. In the cases currently before the courts, maritime lawyers, including our office, are taking a closer look at the right cases to evaluate whether the alleged vessel, is in fact a vessel under Mr. Lozman's precedent setting case. 

However in this latest submission to the U.S. Supreme Court, Mr. Lozman contended that the city should reimburse him the estimated $165,000 value of the floating home destroyed, plus $200,000 in legal fees. The city relied on a vessel survey expert to suggest that the amount of his vessel was worth far less than the amounts demanded by Mr. Lozman. The city also argued that it should not be forced to pay Mr. Lozman's attorney's fees because it was acting in good faith under the applicable law at the time before the Supreme Court decision. The city's view was adopted in full by the district court judge and upheld by the U.S. Court of Appeals for the Eleventh Circuit. Mr. Lozman's position before the Supreme Court is that these lower court rulings rejecting full reimbursement for his home, when what the lower courts are doing is attempting to provide a pyhrric victory by reimbursing him only for a destroyed vessel, worth considerably less. Mr. Lozman's  position is that these rulings fly in the face of the original Supreme Court decision.


If you are interested in obtaining in reading Mr. Lozman's brief to the U.S. Supreme Court, please feel free to contact me via this blog or at blog@miamimaritimelaw.co.