Petition for Writ of Certiorari — DJM, Ltd. v. Island Yachting Management, Inc.

Harm to Chattels

When one is entitled to judgment for harm to chattels not

amounting to a total destruction in value, the damages include

compensation for

(a) the difference between the value of the chattel before

the harm and the value after the harm or, at his election

in an appropriate case, the reasonable cost of repair or

restoration, with due allowance for any difference

between the original value and the value after repairs,

and

(b) _ the loss of use.

STATEMENT OF THE CASE

The Eleventh Circuit affirmed without opinion the

district court’s order granting Respondents summary judgment

dismissing five of six causes of action in Petitioner’s complaint

which claims damages only of loss of use, diminution in value,

and physical damage to a sailboat bought by Petitioner from

Respondents. The complaint alleges breach of warranty and

tort resulting in consequential damages. The district court held

that because the correction of all defects which resulted in the

claims sued on were paid for by others on Petitioner’s behalf,

Petitioner sustained no damages and thus failed to state a claim

even though the complaint sought no damages for the cost of

correcting the defects. Of the consequential damages for which

Petitioner did seek compensation, the district court held that

loss of use of a boat owned strictly for pleasure is not a

compensable item of damage in Admiralty. The court never

mentioned the remaining claims for diminution in value or

physical damages extant in the boat. In so holding the Eleventh

Circuit's decision directly conflicts with a contrary holding of

5.

this court', and decides important questions of federal law that

have not been, but should be, settled by this court.

FACTS

On January | 1, 2000, Respondents, dealers in sailboats,

transferred title to and uelivered to Petitioner, and were paid by

Petitioner for, a new sailboat. Respondents ordered the boat to

be constructed by Island Packet Yachts in Flonda. Upon

completion and delivery to Respondents, in Florida, they took

the title to the boat and pursuant to their contract with

Petitioner’s principal, John P. D’ Ambrosio, commissioned the

boat. The contract neither provided for, nor excluded or

modified any warranties. Accordingly, by operation of law,

Respondents gave Petitioner warranties under the Uniform

Commercial Code, both implied and express; the latter by virtue

ofa written Dealer Commissioning Checklist (21a), signed and

initialed by Respondent Will Ditmer.

Starting immediately upon delivery of the boat and

continuing for the next 2 years many serious defects surfaced

(la - Facts), none of which were corrected by Respondents.

Almost all the defects were corrected by the efforts of the

Petitioner in the first instance which had to find a facility to do

the work, pay for repairs, and submit bills to the manufacturer

for reimbursement, pursuant to the latter’s written limited

warranty, whose benefit did not extend to Respondents and

which excluded consequential damages.

This caused loss of use of the boat every time it had to

' The Conqueror, 166 U.S. 110, 17S. Ct. 510, 41 L.Ed.

937 (1897)

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be repaired, and resulted in a new boat whose value diminished

with each subsequent repair. The cumulative loss of use

amounted to 180 days, during the first two years. The repairs

themselves resulted in physical damage to the boat which still

exists. The record contains proof of Petitioner’s special

damages in the aggregate amount of $84,349.00.

PROCEDURAL HISTORY

Petitioner sued Respondents only for those

consequential damages, in the United States District Court for

the Middle District of Florida pursuant to the court’s Admiralty

jurisdiction and in diversity. (28 U.S.C. Sections 1333 (1), and

1332 (a)). The first five claims were in negligence, fraudulent

misrepresentation, breach of warranties, deceptive and unfair

trade practices, and strict liability. The sixth claim was in quasi

contract for money owed to repair the boat’s air conditioning

for $1,669.99. It was tried, resulting in a defendant’s verdict

and is not here under review.

Before filing an answer, Respondents moved to dismiss

the complaint pursuant to FRCP 12(b)(1) for lack of jurisdiction

over the subject matter. In May 2003, the court, Hon. John E.

Steele, U.S.D.J, denied the motion and upheld both admiralty

and diversity jurisdiction.

Upon completion of discovery, Respondents moved for

summary judgment, contending that since the boat was usable,

except when it was being repaired, and since all repairs were

made and paid for by the manufacturer, Petitioner had sustained

no damages. The court, Hon. Sheri Polster Chappell, U.S.M.J.,

agreed and dismissed the first five claims.

Upon receiving Respondent’s motion, Petitioner

Te

cross-moved for partial summary judgment for liability under

FRCP 56(c). To prove its claims for loss of use, diminution in

value and physical damage to the boat, Petitioner submitted four

affidavits and 50 documents attesting to the defects and time

lost, including opinions of a marine surveyor as to the

diminished value and of a charterer of sailboats as to charter

costs. Although Respondents offered no affidavits in response,

the court ruled as it did, never directly addressed Petitioner’s

cross motion, and never addressed the claims for diminution in

value or the subsisting physical damage. As to loss of use, the

court held that federal maritime law will not compensate for the

loss of use of a private pleasure boat.

The Eleventh Circuit Court of Appeals affirmed without

opinion.

REASONS FOR GRANTING THE WRIT

THE DECISION BELOW PRESENTS

IMPORTANT, UNSETTLED QUESTIONS

OF FEDERAL LAW, AND CONFLICTS

WITH U.S. SUPREME COURT AND

STATUTORY LAW

a) Summary Judgment

FRCP Rule 56(a), by its very terms, is concerned with

a party’s “claim, counterclaim, or cross-claim". The district

court granted Respondents summary judgment because it found

that Petitioner suffered no damages because “ali of the alleged

defects were repaired by the manufacturer at the manufacturer’s

expense" (8a). That holding might be germane if those were

the damages Petitioner sued for. However, they are not. It is

a classic non-sequitur. While this court encouraged the federal

courts to make better use of summary judgment in disposing of

claims where there was no reasonable expectation that a rational

trier of fact could find for the non-moving party’, the decision

below takes the Rule into the realm of the surreal since the

court below dismissed Petitioner’s claims for consequential

damages having mistaken them’ for a claim which was never

made for direct damages, i.c., the cost of repairs.

The court below used summary judgment in a way never

authorized by Rule 56 or this court. The district court decided

the case as if it were faced with a Rule 12(b)(6) motion for

failure to state a claim. In so doing it created a claim never

pleaded by Petitioner, then decided it as if it were being tried,

dismissing out of hand a multitude of factual questions raised

by Petitioner which should have gone to trial. This rested on no

precedent or history.

Petitioner suggests that this court could never have

intended such an approach or result on a motion for summary

judgment and a cross-motion for partial summary judgment.

b) Consequential Damages

Respondents’ case, validated by the courts below, is that

since defects were corrected, Petitioner was made whole.

? In a trilogy, Matsushita Elec. Indus. Co. v. Zenith Radio, 475

U.S. 574, 106 S.Ct. 1348, 89 L.Ed. 2d 538 (1986), Cellotex Corp. v.

Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed. 2d 265 (1986); and

Anderson v. Liberty Lobby Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed. 2d

202 (1986), the United States Supreme Court clarified the criteria to be

applied by the District and Circuit Courts in summary judgment motions.

In Matsushita, at p. 1356, supra, the court went further than any prior case

in holding that a court can evaluate the plausibility of evidence.

9-

However, Petitioner’s case has nothing to do with the cost of

fixing defects but only their number, the amount of time it took

to fix them, and their aftermath - loss of use of the boat, its

diminution in value and physical damage - all of which should

have been avoided entirely had Respondents done the things

they were paid to do in commissioning the boat, and had they

found and corrected the defects before Petitioner had to do so

on its own time when it should have been enjoying the boat,

which was the only reason it was bought in the first place. The

proof in the record is that of 53 items which Respondents

represented they had properly inspected, installed, and checked,

as evidenced by The Dealer Commissioning Checklist (21a),

half failed. Most of those that failed, especially the most

serious, failed within the first two months after delivery.

Respondents’ defaults resultéd in their breach of U.C.C.

warranties which arose from the sale pursuant to Fla. Stat.

Sections 672.313, 672.314, and 672.315, both express and

implied. Each time a defect surfaced, Respondents breached

their warranty as to that item, damaging Petitioner as follows:

1) The item needed to be repaired or replaced, 2) Petitioner lost

the use of the boat pending repairs, 3) the boat depreciated on

account of the repairs, and 4) it remained physically damaged.

Fla. Stat. 672.714 authorizes the cost of repairs and diminution

in value. Fla. Stat. 672.715 authorizes consequential damages

for loss of use. See: Miles v. Kavanaugh, 350 So.2d. 1090 (Fla.

3 DCA, 1977).

Just as in the case of breaches of warranties, the same

categories of damages, direct and consequential, are recoverable

in Florida when they arise on account of tort. Florida has

adopted the Restatement II of Torts, Sections 928, 931; See:

AT&T Corp. v. Lanzo Const. Co., Florida, 747 F.Supp. 2"

1223 (SD FI 1999).

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As in Florida, every other state’s law allows recovery

for consequential damages to chattels, whether due to tort or

breach of warranty; whether in state or federal court. See:

Buyer’s Incidental & Consequential Damages from Seller’s

Breach Under U.C.C. Section 2-715, 96 A.L.R. 3 299 (1979);

Commercial Damages, Charles L. Knapp, 2005, Vol. 2, Page

35B-41, Consequential Damages; Restatement II of Torts,

supra.

Of the three kinds of consequential damages claimed by

Petitioner, the district court decided only one, loss of use, (12a).

It neither discussed nor specifically decided the other two,

diminution in value and physical damage caused by the repairs.

It nevertheless dismissed all three.

c) Loss of Use

Included in every state’s law as a consequential

damage is loss of use of the chattel. See: 96 A.L.R. 3 299,

supra, at p. 362. B. consequential losses, Section 13, Loss of

Use (1979); Recovery for Loss of Use of a Motor Vehicle

Damaged or Destroyed, 18 A.L.R. 3" 497, 537, Section 15

(1968); Knapp, Commercial Damages, supra, which states at

paragraph 35 B.06(3)ii, "One of the most common types of

consequential damages is loss of use."”

‘Jerry Alderman Ford Sales, Inc. v. Bailey, 291 N.E.2d 92, 12

U.C.C. Rep. Serv. 47, modified and reh'g denied by 294 N.E.2d 617, 12

U.C.C. Rep. Serv. 442 (Ind. Ct. App. 1973). See also Aries v. Palmer

Johnson, Inc., 735 P.2d 1373, 4 U.C.C. Rep. Serv. 2d 85 (Ariz. Ct. App.

1987) (loss of use measured by reasonable rental value of $1,000 per day

for a total of $100,000); Audlee v. New England Tank Indus. Of New

Hampshire, Inc., 1985 US. Dist. LEXIS 12400, at *16 (D. Mass. i985).

(loss of use of tank awarded as consequential damage in case involving the

explosion and fire at a jet aircraft fuel storage facility).

-l1-

In Jerry Alderman Ford Sales, Inc. v. Bailey, 291

N.E.2d 92, the court held:

Thus to restrict the measure of damages to a

difference in market value is to ignore that the

right to use property is perhaps the most

important incident of its ownership.

The cases in Florida are representative of the uniformity

of the cases throughout the country, whether in state court or

federal court applying state law, and regardless of the kind of

property or basis for the claim. Given liability, loss of use is

recoverable. Alonso v. Fernandez, 379 So.24 685 (Fl. 3% DCA

1980) (private automobile); Airtech Service, Inc. v. MacDonald

Construction Co., 150 So.2d 465 (FI. 3% DCA 1963) (airplane);

Badillo v. Hill, 570 So.2d 1067 (Fl. 5* DCA 1990) (private

automobile); Miles v. Kavanaugh, 350 So.2d 1090 (F1.3" DCA

1977) (misrepresentation and breach of warranty) (airplane);

Finkel v. Challenger Marine Corp., 316 F. Supp. 549 (SD FI.

1970) (private pleasure yacht); Maserati Automobiles Inc. v.

Caplan, 522 So.2d 993 (F1 3" DCA 1988) (breach of warranty);

AT&T Corp v. Lanzo Const. Co, Florida, 747 F. Supp.2d 1223

(SD Fi, 1999) (Fiberoptic cable); Cochran v. Roscioli Yacht

Sales, Inc., 642 So.2d 1106 (Fl 4* DCA 1994) (53 foot private

pleasure yacht); Meakin v. Drier, 209 So.2d 252 (F1.2d DCA

1968) (private automobile).

In MCI] Worldcom Network Services Inc. v. Mastec, Inc.,

370 F.3" 1074 (11" Cir. 2004), the court, in a suit to recover

damages for loss of use of a fiber-optic cable, began its

discussion as follows at p. 1076:

Under Florida law, loss of use damages are

available for an individual or entity whose

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chattel has been damaged by another party.

Meakin v. Drier, 209 So.2d 252, 254 (F.2d

Dist. Ct. App. 1968).

In the case at bar,( 12a), the district court held as follows:

The Plaintiff claims $50,000 in damages for loss

of use while the boat was out of service for

repairs. It is well settled that demurrage (loss of

profits) “will only be allowed when the profits

have actually been or may reasonably supposed

to have been lost and the amount of such profits

is proven with reasonable certainty." Central

State Transit & Leasing Corp. v. Jones Boat

Yard, Inc. 206 F.3d 1373, 1376 (11"Cir. 2000).

"It is not the mere fact that a vessel is detained

that entitles the owner to demurrage.” /d. There

must be a pecuniary loss, and not a mere

inconvenience arising from an inability to use

the vessel for the purpose of zasure. /d.

When contrasted with the district court’s holding in the case at

bar, MCI, supra, highlights the reason why Petitioner asks this

court to grant certiorari. MC] was decided in May, 2004. In

May 2005 the 11th Circuit affirmed, without opinion, the

district court’s dismissal, summarily, as a matter of law, of

Petitioner’s claim for loss of use. In the cross motion for partial

summary judgment the claim was supported by voluminous

evidence of the loss, and the value thereof, using the very

principles authorized by Meakin v. Drier, supra; the rental

value of the exact boat owned by Petitioner, based on the

opinion, in the record, of a boat charter company president, in

the same locale, for the exact time periods claimed by

Petitioner. Petitioner's proof went unopposed. Why was

2%.

Petitioner’s claim dismissed and MCI’s claim allowed?‘

Because the courts below felt themselves constrained to apply

the one exception to the uniform “loss of use" rule - the

exception which arises in federal courts sitting in Admiralty

applying federal maritime law to the loss of use by an owner of

a private recreational boat. Th rationale was amply elucidated

by the Eleventh Circuit in Cvntral State Transit & Leasing

Corp. v. Jones Boat Yard, Inc., 206 F.3 1373 (11" Cir. 2000)

cited by the district court below in its decision (12a).

The exception is based on the federal courts’

understanding of federal maritime law, applied by federal courts

only to private recreational boats. It takes several forms, all

illogical, all draconian, all mistaken. One form is that which is

articulated by the district court in its decision, quoting from

Central State, supra; where the court below wrote (12a):

‘It is not the mere fact that a vessel is detained

that entitles its owner to demurrage.’ There

must be a pecuniary loss and not a mere

inconvenience arising from an inability to use

the vessel for the purpose of pleasure.

Its most extreme form was articulated by the court in

Oppen v. Aetna Insurance Co., 485 F.2d 252 (9" Cir. 1973).

The court held:

* The U.S. District Court for the Southern District of Florida

dismissed MCI’s case for loss of use based on failure to prove damages.

The Eleventh Circuit certified the questions of the quantum of damage

claimed by MCI to the Florida Supreme Court which has not rendered an

opinion as of this writing. Supreme Court of Florida Docket Number

SC04-948.

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Under federal maritime law loss of use of a

private pleasure boat is not a compensable item

of damage. /d. at p. 257.

The Oppen court attributed its holding to a now 108 year old

case: The Conqueror, 166 U.S. 110, 17 S.Ct. 510, 41 L.Ed. 937

(1897). The route from 7he Conqueror to Oppen to the

Petitioner's case has been a long one. Petitioner suggests that

Oppen and like cases both before and after Oppen are evidence

of an unintended consequence of The Conqueror.

It is only in the last 50 years or so that the federal courts

which have dealt with the unique circumstances of loss of use

by the owner of a boat bought solely for pleasure, have made

their way to Oppen and Central State and the cases cited by the

latter case at pp 1376, 1377. Along the way they ran hard

aground. In Snavely v. Long, 592 F.2d 296 (6" Cir. 1979) for

example, the court describes the rule of The Conqueror as

" ironclad..." Jd. at p. 298.

This court is respectfully asked to note just how ironclad

the rule is. No matter the proof, no matter the extent of the loss

of use, unless a private pleasure boat can prove loss of profits

commercial in nature, its owner has no standing to recover

damages for loss of use; damages available to all others, in al!

other courts. Snavely, supra, calls it, "The rule against

demurrage for pleasure boats..." /d. at p. 299. Petitioner

suggests it is a rule which stands the law on its head.

However, it was not always so. In 1918, Learned Hand,

then a district judge in the Southern District of New York, in

his decision in The Vanadis 250 F. 1010, upheld a claim for loss

of use of a private yacht. There, he referred with approval to

the 2™ Circuit decision in The Eros 251 Fed. 45, 163 C.C.A.

-15-

295 (2™ Cir. 1918). In The Vanadis, Judge Hand specifically

recognized the efficacy of a claim for "loss of recreation.” With

prescience, he understood the value of the use of a boat as an

item of pleasure and the loss of that pleasure as a compensable

item of damage, now taken for granted by the laws of every

state involving all manner of things from airplanes, to boats, to

cars and cables. He also correctly assessed The Conqueror and

its holding as follows:

On principle it seems to me impossible that we

should draw any distinction between yachts and

any other property capable of use only as a

means of recreation or pleasure. Nobody has

any hesitation about such as are consumable,

like wines, or flowers, or perfumes, or tobacco.

It would be a fatuous defense against an action

for injuries to such as these to prove that the

owner would certainly have consumed them

himself. Furthermore, if the defendant had

wrongfully destroyed a yacht or motorcar, he

would be hardier than most, were he to offer to

show that the owner was bound not to sell or to

let it. Yet surely, there can be no distinction, at

least it would seem so, between the loss of a

part of the recreation derivable from such

property and the loss of the whole. All of them

in the end are consumable, and the difference is

only in the extent of the loss.

But it is urged that the contrary is established in

The Conqueror, 166 U.S. 110, 17 Sup.Ct. 510,

41 L.Ed. 937. I must concede that some of the

language in that case, broken from its context,

lends itself to that conclusion, but the decision

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involved nothing us the kind. It turned upon the

dubiousness of the proof of value of the yacht.

Doubtless that is a necessary condition of

damages, here as elsewhere. We are all

accustomed to the purchase and sale of

pleasures and recreation, whether they be

embodied in the use of things, like this, or in

entertainment, like the stage. They have an

exchange value, like the uses of any other parts

of the appropriable world, which answer our

native dispositions. The test is, as in every other

case, their value in exchange, for the purpose of

the recovery is to effect the result of an

exchange. I see no reason to think that, if the

exchange value of the yacht’s use in The

Conqueror, supra, had been established in a

cusiomary way, the libelant would have had

further difficulty in his recovery.

In 1932, Justice Cardozo took the same measure of The

Conqueror in his decision in Brooklyn Eastern District

Terminal v. United States, 287 U.S. 170, 53 §.Ct. 103, 77 L.Ed.

240, albeit by way of dicta, where he agreed that loss of use of

a private pleasure boat is a compensable item of damage. The

court referred to cases from the early part of the 20" Century

when loss of use of a boat was held compensable ".. .:f there has

been a substantial impairment of that enjoyment for which such

vessels are maintained." 287 U.S. at p. 175. (Emphasis added).

Justice Cardozo pointed out that The Conqueror did not hold

that loss of use of enjoyment is per se not compensable, only

that it must be a “substantial disturbance of enjoyment,”

properly proved, in order to warrant damages. 287 U.S. at p.

175.

-]7-

The Conqueror did not establish the draconian

proposition attributed to it by the recent cases. It requires a very

careful reading. It mixes holding and dicta indiscriminately. Its

essence, however, is that it found Mr. Vanderbilt’s evidence

insufficient ‘o prove that he was damaged when his "...

seagoing, S.uvoner-rigged, screw steamship,182 2 feet long,

nearly 25 feet wide, and of 372 tons burden", 17 S. Ct. 510, 512

was detained over the winter when it was ordinarily not used.

Mr. Justice Brown, writing for the court, opined that "...a mere

inconvenience arising from an inability to use the vessel for the

purposes of pleasure," did not entitle the owner to demurrage.

However, the court continued: "In other words, there must be a

loss of profits in its commercial sense." Id. at p.519. This latter

rested on no precedent or history. It does not comport with the

current law of loss of use. It is not the holding of the case.

Otherwise the court, in principal, speaks in terms

whereby it acknowledges the value of loss of use of the

Vanderbilt yacht. The court observed that: "The best evidence

of damage suffered by detention is the sum for which vessels of

the same size and class can be chartered in the market." Jd. at p.

516. However, Mr. Vanderbilt’s boat was not of a class

regularly chartered.

Petitioner suggests that Judge Hand’s and Justice

Cardozo’s assessments of The Conqueror are correct.

Coincidentally, Petitioner’s boat did belong to a class of vessels

regularly chartered in Florida whose loss of use can be

accurately computed.

d) Lack of Clarity

This case presents the important unanswered question

of whether the owner of a private boat, bought solely for

recreation, which never carns money commercially, should be

summarily denied the benefits of the laws applicable to every

other kind of chattel, by virtue of its involvement in a lawsuit

where the applicable law is maritime in nature and the forum is

the federal court.

The choice of forum is not always up to the vessel

owner; nor is the choice of law. A collision, or allision, or an

accident on navigable waters will often mandate the application

of admiralty law despite the vessel owner’s desires. See: Mink

v. Genmar Industries, Inc. 29 F.3" 1543, 1546 (11 Cir. 1994).

The complete departure by federal courts sitting in

admiralty on cases involving private boats from the uniform

loss of use law of all other jurisdictions is an anomaly. It is not

supported either by precedent or by history. It dismisses out of

hand the benefits of the law of contracts since a warranty is

essentially a contract, Filley v. Pope, 115 U.S. 213, 6 S.Ct. 19,

29 L.Ed. 372 (1885), Sanders v. Munson, 74 F. 649, 651, 20

C.C.A. 581 (2™ Cir. 1896), whose breach entails damages for

loss of use, even if the yacht is used for pleasure only. The

Eros, supra, 251 F. 45, 47. It dismisses as well, damages in

tort. Restatement II of Torts, Section 928; AT&T Corp., supra.

It singles out the American pleasure boating community

for deprivation of the benefits of the law. It is unfair to that

community which, according to the latest statistics compiled by

the National Marine Manufacturers Association, numbered 12.8

million boats registered in the United States in 2003, from

outboard powered rowboats and dinghies, to megayachts (28a).

At the tum of the last century only Vanderbilts and their

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peers owned private boats. That has changed. So should the

law. This court has not directly visited this area of the law since

The Conqueror. Petitioner suggests that the mischief created

during the intervening 108 years by the mistaken interpretation

of that case should be set aright at this time. The lack of clarity

engendered by The Conqueror has been the subject of

continuing controversy on the part of both judges and lawyers

who fault the illogical imposition of a hard case which resulted

in bad law on innocent litigants unjustly deprived of rightful

damages. See: Nordasilla Corporation v. Norfolk Shipbuilding

& Drydock Corporation, 1982 A.M.C. 99 (E.D.Va. 1981):

Also, while the arguments against speculative

damages may have some merit, a rule of law

which allows no damages for loss of use for a

pleasure craft, no matter what its nature and no

matter what the length of time, appears on the

surface to be draconian. /d. at p. 106.

Courts which have expressed reservations about the

soundness of the interpretation given to The Conqueror have,

by and large, felt constrained, nevertheless, to defer to it. The

Oppen, supra, court, faced with a contention that The

Conqueror was not the beacon it has been purported to be, and

should limit its application accordingly, held:

In our view it takes a new and contrary holding

of the Supreme Court before we are relieved of

our obligation to follow previous holdings of

that Court. /d. at 485 F.2d 257, F.N. 12.

Given the lack of clarity as to exactly what The Conqueror

held, ar” given the injustice of requiring the owner of a boat

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bought solely for recreation, which never has and never will

earn income or profit, to have to prove loss of profit of a

commercial nature before being able to be compensated for its

loss of use, Petitioner respectfully strongly urges this court to

accept the invitation extended by the 9" Circuit in Oppen.

This court should take a new look at the law properly

applicable to this case and others like it. Only this Court can

redirect American admiralty law and federai courts which apply

it, into the mainstream regarding consequential damages for

loss of use of private recreational boats, from which both have

strayed.

Petitioner respectfully suggests it should do so for the

sake of justice. te apm

CONCLUSION

For all the foregoing reasons, Petitioner respectfully

requests that the Supreme Court of the United States grant

review of this matter.

Respectfully Submitted

John P. D’ Ambrosio

Counsel of record

D’ AMBROSIO & D’ AMBROSIO, P.C.

Attorneys for Petitioner

42 Main Street

..._ Irvington, New York 10533

(914) 591-5400

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

FORT MYERS DIVISION

Filed Mar. 23, 2004

DJM, LIMITED, Case No. 2:02-cv-617 FM-SPC

Plaintiff,

-VS-

ISLAND YACHTING MANAGEMENT, INC., formerly

ISLAND YACHTING CENTRE, INC., ISLAND YACHTING

CENTRE, LLC, WILL DITMER and IAN JARMAN,

This matter comes before the Court on Defendant Island

Yachting Management, Inc.’s Motion for Summary Judgment

(Doc. # 62-1) filed on January 14, 2004, and Plaintiff DJM

Limited’s Cross Motion for Summary Judgment and

Opposition to Defendant’s Motion for Summary Judgment

(Doc. # 64-1) filed on January 23, 2004. Both parties have filed

responses to the respective Motions for Summary Judgment

and the Motions are now ripe for review.

FACTS

On June 26, 1999, the Plaintiff purchased a new

sailboat, an Island Packet Yacht 320 (Boat), from Island

Yachting Management, Inc. (Island Yachting) for

approximately $197,000.00, which included outfitting and

commissioning. The manufacturer has not been named as a

defendant in this case.

2a

The Plaintiff and his son in law, who flew in from New

London, Connecticut to aid the Plaintiff in sailing the Boat to

Marco Island, were scheduled to take delivery on November

29, 1999. However, when they arrived there were still several

systems that needed to be installed. The Plaintiff also requested

that several changes be made to Boat’s systems. Because the

Boat was not ready for delivery on that date, the Defendant

reimbursed the Plaintiff's son in law for his travel expenses.

The Boat was finally delivered to the Plaintiff, Mr. John

D’Amborsio, the Principal in DJM, Limited, on January 11,

2000.

Before each boat is delivered to the new owner the

Manufacturer requires the seller to complete a dealer

commissioning checklist. The commissioning checklist is a

basic list ensuring that all of the Boats basic components,

electronics, and rigging have been checked and that the new

owner has been oriented to all the onboard systems. Will

Dittmer, a sales associate for Isiand Yachting, completed the

Manufacturer’s commissioning checklist. Dittmer stated that

while he did not personally check each item on the list he did

verify with his initials that each task was complete. When the

Boat was delivered, the Plaintiff was taken on a “shake down”

cruise to orient the Plaintiff with the Boat’s operating systems.

Since taking delivery of the Boat, the Plaintiff has taken

numerous overnight trips including a week to ten (10) day trip

sailing in and around Pine Island Sound and in the Spring of

2003, the Plaintiff sailed the Boat to the Florida Keys.

However, the Plaintiff alleges that the Boat had a number of

defects that caused the Boat to be unseaworthy. For example,

upon delivery, the top of the main mast was bent a ft and to the

right above the spreader. The Plaintiff also alleges that the air

conditioner which was supplied by Marine Air Systems and

installed by Sea Hag Yacht Systems had rusted, the hatch

3a

leaked, the GPS system did not function, the roller furler failed

to operate correctly, there was a whining in the drive train ard

the prop shaft, and a defective and leaking hose connector

running from the hot water lieater caused water damage.

On March 17, 2000, the Plaintiff spoke with Robert K.

Wardwell, an employee of Marco River Marine, about some of

his concerns with the Boat. Wardwell inspected the Boat on

March 21, 2000 and on March 22, 2000. Wardwell and the

Plaintiff motored the Boat to Marco River Marine where

Wardwell hauled the Boat and began removing the prop and the

related stem tube. Wardwell discovered that the cutlass bearing

inside the stern tube was too small for the stern tube and

contacted Mr. Tom Broome at Island Packet yachts

(Maufacturer). Waidwell told Broome some of the problems

that the Plaintiff was experiencing. Broome told Wardwell that

the mast was bent because the tension on the backstays was too

great and the problem was corrected. On March 27, 2000,

Broome sent Wardwell a new stern tube and cutlass bearing

which he then installed. On March 30, 2000, Wardwell

inspected the rudder and found that the rudder would not turn

as far to the right as it would to the left. Upon further

inspection, Wardwell found a piece of wood glued near the

steering mechanism that was blocking the steering mechanisms

ability to fully turn to the mght. Wardwell removed the

obstruction and readjusted the steering and auto pilot. On

March 30, 2000, the Boat was refloated and on March 31,

2000, a crew was sent from Seco South by the Manufacturer to

replace and re-rig the mast. On April 4, 2000, Ken Brown from

Seco South returned and began repairs to the roller furling unit

which were completed on April 7, 2000.

In mid April 2000, the whine in the drive train or a

similar noise returned. On April 13, 2000, marina personnel

tested the Boat. They trimmed the propeller and the noise was

4a

eliminated. In September of 2000, the Plaintiffasked Wardwell

to look at his GPS system. Wardwell found that the GPS

system had not been connected and he connected it. Later in

October of 2000, the GPS system failed and Wardwell installed

a new BNC connector (GPS antenna connection) and

reconnected the GPS system. On March 16, 2001, Wardwell

repaired a freshwater hose that someone had drilled a hole in

which allowed water to drain into one of the Boat’s lockers. On

February 20, 2002, the Plaintiff had Wardwell replace the

Boat’s water heater because of some leaks created by a faulty

hose connector which had caused the water heater to rust. All

of the Plaintiff's repairs costs were either paid or reimbursed by

the Manufacturer.

On July 31, 2001, the Plaintiff informed the Defendant

that the Boat’s air conditioning system was rusting. The

Plaintiff alleged that rust damage to the Boat’s air conditioning

system was cause by the Defendant because of improper

installation of the air conditioner unit. The air conditioning unit

was originally installed by Sea Hag Systems. The Plaintiff did

not approve of the original installation and requested that the

Defendant install the unit in another location. The Defendant

made the modifications according to the Plaintiff's

specifications. However, the manual used for installing the air

conditioner states that the condensation hose leading from the

drain pan should be attached directly to a sealed sump pump

and drained directly out of the boat. The condensation hose was

installed without a sump pump and instead led directly to the

boat’s bilge water and then indirectly was pumped out of the

boat. Marine Air denies liability stating that the drain pan and

braces supporting the air conditioner rusted because of the

improper installation of the condensation drain hose. To date

no one has paid for the repairs to the Boat’s air conditioning

unit which totaled $1669.99. As a result, the Plaintiff filed the

present action.

Sa

SUMMARY JUDGMENT STANDARD OF REVIEW

Summary Judgment is appropriate only when the Court

is satisfied that “there is no genuine issue as to any material

fact” and the moving party is entitled to judgment as a matter

of law. Fed. R. Civ. P. 56c). An issue is genuine if there is

sufficient evidence such that a reasonable jury could return a

verdict for either party. Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 248 (1986). Similarly, an issue is material if it may

affect the outcome of the suit under governing law. /d.

The moving party bears the burden of showing the

absence of any genuine issue of material fact. Celotex Corp. v.

Catrett, 477 U.S. 317, 323 (1986). In deciding whether the

moving party has met this initial burden, the Court must review

the record and all reasonable inferences drawn from the record

in the light most favorable to the non-moving party. Whatley v.

CNA Ins. Co., 189 F.3d 1310, 1313 (11" Cir. 1999). Once the

Court determines that the moving party has met it burden, the

burden shifts and the non-moving party must present specific

facts showing that there is a genuine issue for trial that

precludes summary judgment. Matsushita Elec. Indus. Co. Ltd.

v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). “The

evidence presented cannot consist of conclusory allegations,

legal conclusions or evidence which would be inadmissible at

trial.” Demyan v. Sun Life Assurance Co. of Canada, 148 F.

Supp.2d 1316, 1320 (S.D. Fla. 2001) (citing Avirgan v. Hull

932 F.2d 1572, 1577 (11 Cir. 1991)). Failure to show

sufficient evidence of any essential element is fatal to the claim

and the Court should grant the summary judgment. Celotex,

477 U.S. at 322-323. Conversely, if reasonable minds could

find genuine issue of material fact then summary judgment

should be denied. Miranda v. B & B Cash Grocery Store, Inc.,

975 F.2d 1518, 1532 (11" Cir. 1992).

6a

DISCUSSION

The Plaintiff's complaint alleges negligence, fraudulent

misrepresentation, breach of implied warranty of

merchantability, deceptive trade practice, strict liability in tort

and money owed for damage to the ships air conditioning unit.

The parties have filed cross Motions for Summary Judgment

alleging that there are no genuine issues of material fact and

that each side is entitled to judgment as a matter of law. The

Plaintiff claims are based on his allegations that the Boat was

not seaworthy at the time of purchase. The Defendant argues

that the vessel was seaworthy and that the Plaintiff suffered

neither monetary nor physical damages and therefore all the

claims should fail.

Was th aw ?

The Plaintiff argues that defective gear constitutes a

breach of the vessel owner’s duty to provide a seaworthy ship.

Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S. Ct. 872

(1946). The Warranty of Seaworthiness Doctrine is a creation

of twentieth century judicial policy concerning risk distribution

in the shipping industry and essentially depends on neither

common law tort nor contract concepts. Delome v. Union

Barge Kine Co., 444 F.2d 225, 230 (11" Cir. 1971). Under

general admiralty law, the seaworthiness doctrine simply means

that a vessel is reasonably fit for its intended purpose. Vierling

v. Celebrity Cruises, Inc., 339 F.3d 1309, 1312 n. 22 (11 Cir.

2003).

The Plaintiff's reliance on Sieracki is misplaced. The

Supreme Court’s ruling in Sieracki has been overuled by

subsequent Supreme Court decisions and by statute. Northern

Marine Terminal Co. v. Caputo, 432 U.S. 249, 261-262, 97S.

Ct. 2348, 53 L.Ed.2d 320 (1977) (eliminating a ship owners

7a

liability for unseaworthiness for injuries to longshoreman

caused by a third party under Sieracki; Ducrepont v. Baton

Rouge Marine Enterprises, Inc., 666 F. Supp. 882, 884 (E.D.

La. 1987) (holding the Congress specifically overruled Sieracki

by statute holding that an injured plaintiff could no longer hold

a shipowner liable for injuries caused by transitory defects nor

for any unsafe condition caused by a third party). In essence,

the doctrine of unseaworthiness applied in Sieracki can no

longer be used to hold a repairer or employer liable for any

unsafe condition under the theory that the employer or owner

of the vessel had breached an express or implied warranty of

workman like performance to the vessel. /d.

The Plaintiff runs down a litany of possible accidents

that might have occurred “if” one of the Boat’s systems had

failed which, in turn, might have caused the ship to be

unseaworthy. Therefore, the Plaintiff claims that since the Boat

had some defects that might have caused some potential

problems he is entitled to summary judgment.

The Plaintiff's assumptions have no legal basis. First,

the seaworthiness doctrine does not infer that all errors in the

vessel have been eradicated. Delome, 444 F.2d at 230. Second,

the alleged failures never occurred and all of the potential

malfunctions were repaired by the manufacturer without any

costs to the Plaintiff. Moreover, the Plaintiff acknowledged that

he was able to take pleasure cruises on the boat and thus, the

Boat was able to function at its intended purpose. Delome, 444

F.2d at 230. Consequently, the Boat was seaworthy under the

definition of seaworthiness applied in the Eleventh Circuit.

intiff’'s Clai

The Plaintiff alleges that the Defendant was negligent

because it failed to discover and/or repair the Boat’s

mechanical problems during the dealer commissioning process.

Under Florida law, the elements of a negligence cause of action

are: (1) the defendant must have a legal duty to design and

manufacture a product reasonable safe for use; (2) the

defendant must breach that duty; (3) the plaintiff must suffer an

injury legally caused by the breach of that duty; and (4) the

plaintiff must have suffered damages. /ndemnity Ins. Co. of

North America v. American Aviation, Inc., 344 F.3d 1136, 1146

(11" cir, 2003). The Plaintiff must prove all four elements to

establish negligence on the part of the Defendant. Prichett v.

E.I. DuPont De Nemours & Co., 1994 WL 150834 (M.D. Fla.

April 21, 1994). While the Plaintiff claims that the Defendant

did not pay for the damages, all of the alleged defects were

repaired by the manufacturer at the manufacturer’s expense.

The Defendant was not required to pay and thus, the Plaintiff

has suffered no injury or damages. Consequently, the Plaintiff's

charge of negligence fails to meet the standard elements of a

negligence action under Florida iaw. The Plaintiff failed to

show sufficient evidence of an essential element of his claim

for negligence, as a result, the Court must grant the summary

judgment in favor of the Defendant, Celotex, 477 U.S. at 322-

323.

3) Plaintiff's Claim of Fraudulent Mi

In Florida, to prevail on a claim of fraudulent

misrepresentation, the Plaintiff must prove: (1) the defendant

made a false statement of fact; (2) known by the defendant to

be false; (3) made for the purpose of inducing the plaintiff to

act in reliance there on; (4) action by the plaintiff in reliance on

the statements correctness; and (5) the plaintiff suffered

damages or injury. Wilson v. Danek Medical, Inc., 1999 WL

1062129 (M.D. Fla. Mar. 29, 1999). The Plaintiff never

establishes that the Defendant purposefully and knowingly

9a

made statements intended to deceive him. Instead, the Plaintiff

merely recites a series of problems and subsequent repairs

which were paid for by the manufacturer. Any potential

damages or injuries were averted by the manufacturer who

replaced or repaired any defective parts at its own expense.

Accordingly, under Florida law the Plaintiff has not set forth

sufficient grounds to establish a claim of fraudulent

misrepresentation and summary judgment should be held for

the Defendant, Celotex, 477 U.S. at 322-323.

(4) Plaintiff's Claim of Breach of Implied W;

Merchantabili

The Plaintiff asserts that the Defendant breached the

implied warranty of merchantability under Florida Statute

§672.314 by delivering the Boat with defects. Under Florida

law, a warranty whether express or implied is essentially a

contract. Bland v. Freightliner LLC, 206 F. Supp.2d 1202,

1210 (M.D. Fla; 2002). The elements of a breach of contract

action in Florida are: (1) a valid contract; (2) a material breach;

and (3) damages. Jd. The Plaintiff failed to prove an essential

element of his claim that the Defendant breached the implied

warranty of merchantability because he suffered no imjuries.

Marking v. Novarus Pharmaceuticals Corp. Inc., 2002 WL.

32255405 (S.D. Fla.) holding that to establish a breach of the

implied warranty of merchantability the plaintiff must show the

product was the proximate cause of their injury).

Moreover, the implied warranty of merchantability

states that for goods to be merchantable they must be fit for the

ordinary purposes for which such goods are used. Fla. Stat.

§672.314(2)(c). No evidence was present to demonstrate that

the Boat was not able to fulfill its ordinary purpose as a

pleasure boat. In fact, the record shows just the opposite

because the Plaintiff was able to take the Boat on several week

10a

long pleasure cruises as well as numerous daily excursions in

the Marco Island area. Thus, the Defendant failed to prove an

essential element of a claim for breach of implied warranty of

merchantability and the Court should grant the summary

judgment for the Defendant, Celotex, 477 U.S. at 322-323.

5) Plaintiff's Claim of Deceptive Trade Practi

The Florida Deceptive and Unfair Trade Practices Act

(UTPA) provides that a plaintiff may initiate a civil action

against a party who has engaged in “{ujnfair methods of

competition, unconscionable acts or practices and unfair or

deceptive acts in the conduct of any trade or commerce. Stires

v. Carnival Cruise Lines Corp., 243 F. Supp. 2d 1313, 1321,

M.D. Fla. 2002). In construing what constitutes an unfair

practice or deceptive act the Court should give due

consideration and great weight to the Federal Trade

Commission's (FTC) interpretation of the equivalent federal

law. Id. (citing Kelly v. Nelson, Mullins, Riley & Scarborough,

L.L.P., 2002 WL 598427 (M.D. Fla. Mar. 20, 2002). Claims

alleging violations of the Federal Deceptive Trade Practices

Act require the heightened pleading requirements of Fed. R.

Civ. P.9(b). Stires, 243 F. Supp. 2d at 1322. Rule 9 states that

“fijn all averments of fraud or mistake the circumstances

constituting fraud or mistake shall be stated with particularity.

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

The Plaintiff alleges that the Defendant committed

defective trade practices by failing to honor any of its

warranties and did nothing about providing repairs to any of the

alleged failures to the Boat’s systems. The law states that the

Plaintiff must state with particularity the deceptions that

induced him to purchase a defective product. Stires, 243 F.

Supp. 2d at 1322. The express claims or deliberately made

iroolied claims used to induce purchase of the particular

lla

product are presumed to be material to the claim. Federal

Trade Comm'n v. SlimAmerica, Inc.,77 F. Supp. 2d 1263, 1277

(S.D. Fla. 1999). Yet, the Plaintiff fails to provide a specific

instance where the Plaintiff induced him to purchase a

defective product without either the Defendant’s or the

Manufacturer’s warranty covering any subsequent repairs. As

the record demonstrates, all of the Defendants repairs were

made and paid for by either the Manufacturer or the Defendant.

Thus, the Plaintiff failed to state with particularity a claim for

defective trade practices and summary judgment should be

granted for the Defendant, Celotex, 477 U.S. at 322-323.

(6) Plaintiff's Claim of Strict Liability in T

In Order to obtain summary judgment “the evidence

presented cannot consist of conclusory allegations or legal

conclusions.” Demyan v. Sun Life Assurance Co. of Canada,

148 F. Supp. 2d 1316, 1320 (S.D. Fla. 2001) (citing Avigan v.

Hull, 932 F.2d 1572, 1577 (11" Cir. 1991)). The Plaintiff

claims strict liability in torts but puts forth no damages or

injuries caused by the Defendant. The Plaintiff has failed to

show sufficient evidence of a material element of his claim and

thus, the Court should grant summary judgment in favor of the

Defendarit. Celotex, 477 U.S. at 322-323.

Air Conditioning Repair

The Plaintiff makes a claim for $1,669.99 for cost to

repair rust damage to the Boat’s air conditioning unit. The_

Plaintiff claims that the Defendant is liable for the repair cost

because they installed the unit improperly. The Defendant

asserts that if the unit rusted it would be the fault of Taylor

Made, the units manufacturer and that there was no expert

12a

testimony presented to show that there was a defect caused by

the Defendant's actions. Thus, a genuine issue of material fact

exists as to the nature of and liability for the rust damages to

the Boat’s air conditioning unit and summary judgment is not

appropriate when there is a genuine issue as to any material

fact. Fed. R. Civ. P. 56(c).

(8) Plaintiff's Claim for D for Loss of U:

The Plaintiff claims $50,000.00 in damages for loss of

use while the boat was out of service for repairs. It is well

settled that demurrage (loss of use profits) “will only be

allowed when the profits have actually been or may reasonably

supposed to have been lost and the amount of such profits is

proven with reasonable certainty.” Central State Transit &

Leasing Corp. v. Jones Boat Yard, Inc., 206 F.3d 1373, 1376

(11" Cir. 2000). “It is not the mere fact that a vessel is detained

that entitles the owner to demurrage,” Jd. There must be a

pecuniary loss, and not a mere inconvenience arising from an

inability to use the vessel for the purpose of pleasure. /d. Thus,

regarding the Plaintiff's claim for loss of use damages “there is

no genuine issue as to any material fact” and the Defendant is

entitled to summary judgment as a matter of law. Fed. R. Civ.

P. S6(c).

After reviewing the record and the parties’ Cross

Motions for Summary Judgment, the Court finds that there is

no genuine issue of material fact regarding the Plaintiff's

complaint except for the action alleging damages for the

$1,669.99 in repair cost for the rusted air conditioning unit.

Therefore, the Defendant's Motion for Summary Judgment is

due to be granted except for the above noted exception.

Celotex, 477 U.S. at 322-323.

13a

Accordingly, it is now

ORDERED:

(1) Defendant Island Yachting Management, Inc.’s

Motion for Summary Judgment (Doc. # 62-1) is GRANTED in

part and DENIED in part. The Defendant’s Motion for

Summary Judgment as to Plaintiff's claim for Money Owed

due to damages to the Boat’s air conditioning Unit is DENIED.

As to all other counts, the Defendant’s Motion for Summary

Judgreer: is GRANTED.

(2) Plaintiff DJM Limited’s Cross Motion for Summary

Judgment and Opposition to Defendant’s Motion for Summary

(Doc. #64-1) is DENTED.

DONE AND ORDERED at Fort Myers, Florida, this

23" day of March, 2004.

s/

SHERI POLSTER CHAPPELL

UNITED STATES

MAGISTRATE JUDGE

Copies:

Counsel of record

Presiding District Judge

DCCD

l4a

CORRECTED

[DO NOT PUBLISH]

[N THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

Nos. 04-13420 and No. 04-16441

D.C. Docket No. 02-00617-CV-FTM-SPC

FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

MAY 17, 2005

THOMAS K. KAHN

CLERK

DJM, LIMITED,

Plaintiff-Appeilant,

versus

ISLAND YACHTING MANAGEMENT, INC.

f.k.a. Island Yachting Centre, Inc.,

ISLAND YACHTING CENTRE, LLC,

IAN JARMAN,

Defendants-Appellees.

15a

Appeals from the United States District Court

for the Middle District of Florida

(May 17, 2005)

Before TJOFLAT and KRAVITCH, Circuit Judges, and

MILLS*, District Judge

* Honorable Richard Mills, United States District Judge for the

16a

Central District of Illinois, sitting by designation.

PER CURIAM:

AFFIRMED. See 11" Cir. R. 36-1.°

"11° Cir. R. 36-1 provides

When the court determines that any of the following circumstances

exist:

(a) judgment of the district court is based on findings of

fact that are not clearly erroneous;

(b) the evidence in support of a jury verdict is sufficient,

(c) the order of an administrative agency ts supported by

substantial evidence on the record as a whole,

(d) summary judgment, directed verdict, or judgment on

the pleadings is supported by the record;

(e) judgment has been entered without a reversible error

of law; and an opmmion would have no precedennal

value, the judgment or order may be affirmed or

enforced without opimion

l7a

UNITED STATES COURT OF APPEALS

For the Eleventh Circuit

No. 04-13420

District Court Docket No.

02-0061 7-CV-FTM-SPC

FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

May 17, 2005

THOMAS K. KAHN

CLERK

DJM, Limited,

Plaintiff-Appellant,

versus

ISLAND YACHTING MANAGEMENT, INC.

f.k.a. Island Yachting Centre, Inc.,

ISLAND YACHTING CENTRE, LLC,

WILL DITTMER,

[IAN JARMAN,

Defendant-Appellees.

18a

Appeal from the United States District Court

for the Middle District of Florida

JUDGMENT

It is hereby ordered, adjudged, and decreed that the

attached 11" Cir. R. 36-1 affirmance without opinion included

herein by reference, is entered as the judgment of this Court.

Entered: May 17, 2005

For the Court: Thomas K. Kahn, Clerk

By: Jackson, Jarvis

ISSUED AS MANDATE

Jul 06 2005

U.S. COURT OF APPEALS

ATLANTA, GA.

19a

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 04-13420-BB

FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

JUN 24 2005

THOMAS K. KAHN

DJM, LIMITED,

Plaintiff-Appellant,

Versus

ISLAND YACHTING MANAGEMENT, INC.

f.k.a. Island Yachting Centre, Inc.,

ISLAND YACHTING CENTRE, LLC

WILL DITTMER, IAN JARMAN,

Defendanit- Appellees

On Appeal from the United States District Court for the

Middle District of Florida

20a

BEFORE: TJOFLAT and KRAVITCH,M Circuit Judges, and

MILLS", District Judge.

PER CURIAM:

The Petition (a) for rehearing filed by Appellant is

DENIED.

ENTERED FOR THE COURT:

S/

UNITED STATES CIRCUIT JUDGE

* Honorable Richard Mills, United States District Judge

for the Central District of Illinois, sitting by designation.

2la

ISLAND PACKET YACHTS

1979 Wild Acres Road, Largo FL 33771

Dealer Commissioning Checklist

Dealer yc

Model__ 320 Hull # 31

Engine__ 36M Serial # E 24528

Date of Commissioning 11/99

The following is to be used as a basic checklist for the

commissioning of your new Island Packet yacht. These

guidelines are the minimum suggested by Island Packet Y achts;

your actual commissioning procedures may exceed this basic

checklist. CHECKLIST MUST BE SIGNED AND

RETURNED FOR VALIDATION OF WARRANTY.

All work should be done in accordance with or exceed the

recommended practices of the American Boat and Yacht

Council standards where applicable, and good marine practices

as dictated by the United States Coast Guard or individual

component manuals. Because the Commissioning, including

matters on this checklist, is to be completed by personnel not

in the employ of Island Packet Yachts, the manufacturer shall

not be held liable for any omissions or errors involving

commissioning the yacht or other modifications to the yacht

after delivery to the dealer.

This checklist must be reviewed with the retail customer. A

completed Yacht Delivery Report, with dealer and owner

signatures, acknowledging this review is also required to

validate our manufacturer’s warranty.

(1) Upon Delivery to Yard or Dealership

(initials)

22a

s/__ a. Inspect hull and deck for damage.

s/ b. Verify receipt of all parts and equipment as

outlined on Ship Kit List. If a part seems to

be missing please look again. Check flaps

on boxes etc. If it is signed off it’s most

probably there.

s/ c. Verify all owner’s manuals for OEM

equipment are on board.

s/__d. Note damage or discrepancies to driver and

Island Packet Yachts.

s/ e. Install lifelines and bow rail as necessary.

s/ f. Add additional coats of Sikkons Cetol to

exterior teak as required.

Il Before Launching

(initials)

s/___a. Install additional thru-hulls as required for

optional equipment.

s/__b. Prep and paint bottom according to paint

me~ ‘facturers recommendations.

s/ c. Check propeller shaft nuts, cotter pin, zinc,

cutlass bearing and propeller for proper

installation.

s/ d. Check all seacocks, packing glands and

hose clamps for tightness, security. Close

all seacocks.

s/ e. Check rudder for free motion, proper

operation. Verify general tightness and

security of steering system.

s/ f. Check engine fluid levels (transmission,

crankcase and fresh water cooling).

Il. Lauaching

23a

(initials)

s/__ a. With yacht suspended in slings, but

floatung,check:

i. action of all thru hulls/seacocks.

ii. hose clamps, prop shaft log, rudder

stuffing box.

iii. check all lockers, bilge, for leaks

of any kind.

s/____b. Open fuel valve at tank and raw water

intake seacock.

s/__¢. With DC battery switch on, start engine:

4. check exhaust for clear water

discharge.

ii. check gauges on engine panel for

correct readouts, hour meter

operation.

in. check alternator output, propeller

stuffing box.

iv. check action of throttle/shift

control and cable; stop cable.

Vv. inspect cooling system and exhaust

system for leaks.

IV Rigging

(initials)

s/__a. Inspect all rigging for defects/kinks or

missing parts.

s/ b. Install spreaders and standing rigging on

mast. Spreader tips should be padded to

protect sails. Tape spreader bases.

s/ __¢. Check operation of all mast mounted lights

and optional equipment.

s/___d. Step mast and install rubber collar and

24a

stainless steel pin at deck partner (requires

drilling hole in mast). Caulk areas between

mast and mast boot especially at tracks.

s/__e. Tune rig per instructions in Owner’s

Manual. Follow LOOS gauge

recommendations. Secure all turnbuckles,

clevis pins and cotter pins so they are “snag

; free”.

s/____f. Install boom. Check operation of all running

rigging and halyards, sheets topping lift,

outhaul, roller furling systems, etc.

Ss g. Install club boom.

s/___h. Bend on all sails and check for proper

shape, size and operation of all control

lines. Run main reefing or (opt. furling)

system and check operation. Trim reefing

lines as necessary.

IV. Plumbing and Electrical Systems

(initials)

s/ __a Check all 12 volt breakers and associated

equipment for proper operation. Include

bulb checks on cabin, running and anchor

lights; check operation of sump pumps in

icebox, shower.

s/ b. Check manual and electric bilge pump

operation, pressure water system and

courtesy light function.

s/ c. Thoroughly flush winterizing material (if

applicable) from fresh water system.

s/ d. Fiil fuel and water tanks. Bleed air from all

hoses and hot water heater. Verify water

heater operates under power.

25a

s/___e. Check for proper operation of al! 110 volt

outlets and accessories, including batter y

charger and hot water heater.

s/__f. Check batteries for proper hold down,

charge status.

s/ g. Check for appropriate position of Y valve

and overboard discharge seacock on head

waste system.

s/__h. Check head fill and discharge hose for

leaks.

s/___i. Check proper operation of head unit(s).

VI. Stove and Oven

(initials)

s/ a. Review owner’s manual supplied with stove

and oven.

b. Fill tank with LPG and install.

c. Check all hoses, valves for leaks.

d. Perform ignition test on all burners and

oven. Verify proper operation of all stove

and oven controls and remote solenoid shut

off valve.

VIl. Dealer Sea Trial

(initials)

s/___a. Check for proper operation/installation of

all equipment.

s/__b. Calibrate electronics as necessary.

s/__c. Check engine alignment. Secure coupling

bolts and nuts with Locktite as necessary.

s/ d. Check fit of all doors, drawers and lockers.

Adjust to fit, operate smoothly.

26a

s/__¢. Water test all ports, hatches, deck hardware

and optional equipment installations.

s/__f. Clean yacht thoroughly inside and out

before delivery to owner. Add additional

coat(s) of Sikkens as needed.

VIL. Owner Sea Trial

IX

s/

(initials)

s/__a. Orient owner to all onboard systems,

including factory and dealer installed

equipment and associated owner’s manuals.

Include all electrical, mechanical and

plumbing systems.

s/__b. Familiarize owner with engine and basic

maintenance/troubleshooting procedures.

s/__c. Locate and assemble emergency tiller and

demonstrate its use.

s/___d. Demonstrate use of reefing and furling

equipment, proper sail trim and sheet lead

angels.

s/__e. Assist owner with motoring skills, _

particularly backing and close quarters

maneuverability.

s/__f. Allow time for questions, concerns and

comments from owner. Respond

accordingly and in a prompt fashion.

I certify that the above commissioning checklist has

been completed as outlined (a5 a minimum) and that a

copy of this report has been given to the customer.

Authorized Dealer Signature Date

27a

s/

Owner Signature Date

28a

2003 U.S. RECREATIONAL BOAT

REGISTRATION STATISTICS

PUBLISHED BY

Industry Statistics Department

National Marine Manufacturers Association

200 East Randolph Drive, Suite 5100

Chicago, Illinois 60601-8528

312.946.6200 nmma.org/facts

To order additional copies, visit nmma.org/facts or complete the

order form located in the back and fax to 312.946.0388

No part of this report may be reproduced or duplicated without

written permission from NMMA Statistics Department

(C) February 2005

2003 SUMMARY

Responsibility for registering recreational boats in the U.S.

falls onto the individual states that annually report their

registration data to the U.S. Coast Guard. It is from this data

that the 2003 U.S. Recreational Boat Registrations Statistics

report is compiled. Other sources used in this report include the

U.S. Census Bureau, the U.S. Oceanic and Atmospheric

Administration, and Statistical Surveys, Inc.

29a

Boat registration statistics are the basis for allocating Aquatic

Resource Trust Fund doilars among the states each year. In

addition, NMMA uses the registration data to develop its

estimates on annual state dollar sales of new boats, motors,

trailers and marine accessories. This information is available in

the year-end review of the market.

Overall Changes

In its recent release of state registrations, the U.S. Coast Guard

reports there were almost 13 million recreational boats

registered with U.S. states and territories in 2003, down 0.5

percent (-59,400 units) from the previous year.

Using data complied by Statistical Surveys, Inc. on new power

boat registrations for 46 of the 50 states (representing

approximately 94 percent of the marketplace), NMMA

estimates there were 382,900 new (model year 2003) power

boasts registered by the states during the year. In effect,

approximately 314,000 power boats were retired from the

recreational boating fleet in 2003.

REGIONAL DIFFERENCES

South Atlantic and Eastern North Central regions switched

places for the number one and two regional rankings in 2003.

South Atlantic region (Delaware, District of Columbia, Florida,

Georgia, Maryland, North and South Carolina, Virginia and

West Virginia) usurped the number one spot with 2.558 million

boats, Eastern North Central region (Illinois, Indiana, Michigan,

Ohio, Wisconsin) follows closely with 2.554 million boats. The

two regions account for forty percent boats registered in the

country.

30a

One region experienced a significant increase in registrations

during 2003 while four showed declines in the number of boats

registered.

Region with increases

* Pacific—5.3%

Declining Regions

* New England-(4.5%)

* Western South Central-(4.0%)

* Eastern North Central-(3.6%)

* Mountain-{1.2%)

3la

2003 Regional Boat Registrations

RANKING 1996 1997 1998 1999 2000

New England 510,544 531,243 532,844 542,345 533,198

Middle Atlantic 976,778 1,049,408 1,061,148 1,097,709 1,128,077

South Atlantic 2,308,255 2,338,961 2,377,420 2,435,780 2,452,549

Eastern North Central 2,457,836 2,478,547 2,558,804 2,547,574 2,582,118

Eastern North Central 960,015 983,483 1,011,270 1,034,209 897,045

Western North Central 1,522,210 1,573,102 “1,585,591 1,596,203 1,645,785

Western South Central 1,331,167 1,322,625 1,369,565 1,345,882 1,349,518

Mountain 579,270 501,179 623,797 531,942 628,000

Pacific 1,364,480 1,378,606 1,384,254 1,443,515 1,401,099

U.S. Territories 45,412 54,557 57,898 80,450 63,873

Total U.S. 12,056,975 12,309,724 12,565,961 12,735,612 12,782,143

32a

2003 Regional Boat Registrations

2003 Rank Percent

Percent

RANKING 2001 2002 2003 Order ‘03 vs’02 Of Total

New England 545,812 $58,925 531,734 9 4.5% 42%

Middle Atlantic 1,092,277 1,096,880 1,060,817 6 0 5% 8.5%

South Atlantic 2,515,687 2,532,760 2,558,049 l 1.0% 20.0%

Lastern North Central 2,532,406 2,549,531 2,553,799 2 -3. 8% 20.0%

Eastern North Central 991,586 398,363 888,780 7 0.3% 7.0%

Western North Central 1,652,527 1,564,539 1,881,312 3 0.2% 13.0%

Western South Central 1,373,190 1,379,019 -1,352,132 5 -1.9% 10.5%

Mountain 589,895 591,748 584,525 .) -12% 46%

Pacific 1,468,447 1,416,677 1,498,759 4 5.3% 11.7%

US. Territories 64,539 67,612 89,529 10 2.6% 0.5%

Total U.S. 12,876,346 12,854,054 12,784,816 0.5% 100.0%