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THIELE v. ODDY'S AUTO & MARINE

November 30, 1995

STEVEN THIELE, Plaintiff, -vs- ODDY'S AUTO AND MARINE, INC., Defendant. ODDY'S AUTO AND MARINE, INC., a/k/a JIM ODDY'S AUTOMOTIVE, INC., Defendant and Third-Party Plaintiff, -vs- FOUNTAIN POWERBOATS, INC., Third-Party Defendant.

JOHN T. CURTIN, United States District Judge


The opinion of the court was delivered by: CURTIN

CURTIN, District Judge

 BACKGROUND

 The lawsuits arise out of an incident which occurred on November 1, 1990, in the Niagara River. Plaintiff Thiele's Fountain powerboat was being operated by the defendant/third-party plaintiff, Jim Oddy, when fire started in the engine compartment and ultimately forced Oddy and an employee to abandon the boat. Item 16, P 7. The boat then sank.

 Oddy was in possession of the boat because he had contracted with Thiele to build and install two 700-horsepower engines into the 40-foot boat. Major modifications to the boat were required, and were completed in September, 1990, for a quoted price of $ 30,600. Oddy was water-testing the boat at the time of the accident. Id., PP 8, 9.

 The sunken boat was ultimately hauled from the Niagara River and towed to Harbour Place, a Buffalo-area marina. On or about November 16 and 28, 1990, a group of investigators including representatives of Thiele's insurer, Metropolitan, and Oddy's insurer, the Hanover Insurance Company, and Mr. Oddy himself, inspected the remains of the boat in order to generate cause and origin reports for the respective insurance companies. Id. PP 10, 11. In addition, further opportunity to inspect the boat was offered to Mr. Oddy. Item 16, Ex. I, p. 1; Item 25, P 8, Ex. A.

 The report prepared for Hanover opines that the engine system alternators possibly caused the fire. The report's author stated in the report that the alternator for the port-side engine had been removed from its original location prior to his examination. Item 16, Ex. I, p. 2. The report prepared for Metropolitan concludes that the fire was caused by a failure of the water-cooling system to the port-side high performance header. Item 16, Ex. H, p. 4. According to the report, when the cooling system failed, the header overheated and caught fire. Id.

 Believing there was no further use for the boat, it was destroyed. Item 16, P 16. Plaintiff Thiele claims the boat was destroyed upon agreement with defendant and third-party plaintiff Oddy. Item 25, P 8. Plaintiff Thiele attaches a letter to Oddy in support of this contention, but the letter makes no reference to the destruction of the boat. Id., Ex. A. Although Oddy concedes he had some knowledge and involvement in the decision to destroy the boat, he claims he was not consulted concerning the propriety of the boat's disposal, and never agreed to its destruction. Gurbacki Aff., Item 20, P 4E.

 Fountain knew nothing about the Niagara River incident or its aftermath until contacted by Oddy's attorney by letter dated March 25, 1991. The letter was received five months after the incident, and after the boat was destroyed. Item 16, P 17.

 After the lawsuits were commenced in late 1993, Fountain's counsel filed a demand to inspect the vessel and component parts, which was served on March 25, 1994. Id., P 18, Ex. N. Fountain did not find out that the boat had been destroyed until plaintiff's responses were received in August 1994. Id., P 19, Ex. P.

 Some time after the cause of origin reports were originally prepared, the alternators, which were in the possession of Thiele's insurance company, Metropolitan, were apparently lost. Item 16, P 22. It is unclear from the parties' statements exactly when the alternators were lost. Id. But on July 28, 1995, Metropolitan's counsel informed counsel for the other parties that the alternators had been found in an office of Metropolitan's cause of origin experts. Id.

 I. The East River doctrine bars any claim against Fountain, but not against Oddy.

 It is well settled that when a tort claim arises on the high seas or navigable waters, admiralty law applies. East River S.S. Corp. v. Transamerica Delaval, 476 U.S. 858, 90 L. Ed. 2d 865, 106 S. Ct. 2295 (1985). In addition, absent a relevant ...


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