is inapplicable to plaintiffs' contract claims.
B. Admiralty Tort Jurisdiction
In addition to arguing for the application ofadmiralty contract
jurisdiction, plaintiffs maintain that their tort claims against Norwalk
Maritime are subject to admiralty tortjurisdiction. "Admiralty tort
jurisdiction is determined quite differently from admiralty
contractjurisdiction." Sirius Ins. Co. (UK) Ltd. v. Collins, 16 F.3d 34
(2d Cir. 1994). In order to qualify as a maritime tort, two conditions
must be met: (1) the wrong must take place on navigable waters ("situs
requirement"); and (2) it must bear a significant relationship to
traditional maritime activity ("status requirement"). Keene Corp. v.
United States, 700 F.2d 836, 843 (2d Cir. 1983) (quoting Executive Jet
Aviation, Inc. v. City of Cleveland, 409 U.S. 249, 254-61 (1972)).
Norwalk Maritime argues that plaintiffs' claims fail to satisfy the
situs requirement for admiralty tort jurisdiction. According to Norwalk
Maritime, none of the alleged wrongful acts took place on navigable
waters. (Def Reply Mem. Supp. Mot. Dismiss at 5.) We agree with Norwalk
Maritime insofar as this argument applies to the torts of fraud and
negligent misrepresentation. These alleged torts, arising out of
representations made by Norwalk Maritime in the sale of the Conservator
to Mitlof, took place on land where the contract was consummated.
Plaintiffs' contention that torts such as these fall under admiralty
jurisdiction if the "effects" of the tort are felt on navigable water is
unpersuasive.*fn11 (Smith Pls. Mem. Opp. Mot. Dismiss at 8-9.)*fn12
Rather, in determining whether the situs requirement is satisfied, the
Court "must determine whether the tort occurred on navigable water or
whether injury suffered on land was caused by a vessel on navigable
water." Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co.,
513 U.S. 527, 534 (1995). Neither condition is satisfied here.
Therefore, admiralty tort jurisdiction does not apply to these claims.
Plaintiffs' claims of negligent repair and maintenance, however, do
meet the situs requirement for admiralty tort jurisdiction. The injuries
arising out of the Conservator's alleged defects occurred on navigable
waters. See In re Horizon Cruises Litig., 101 F. Supp.2d 204 (S.D.N.Y.
2000) (injuries occurring at sea as a result of defective products fall
under admiralty jurisdiction). Furthermore, plaintiffs' claims in this
respect clearly satisfy the requisite maritime nexus because the
plaintiffs were injured on a vessel engaged in maritime commerce. See East
River Steamship Corp., 476 U.S. at 864
(maritime nexus requirement met
when injury occurs on ship engaged in maritime commerce). We thus
conclude that only plaintiffs' claims of negligent repair or
maintenance, with a corresponding claim of failure to wam of the vessel's
dangerous conditions,*fn13 come within this Court's admiralty tort
jurisdiction. Because plaintiffs' additional claims form part of the same
"case or controversy" as plaintiffs' admiralty claims,
28 U.S.C. § 1367(a) grants this Court supplemental jurisdiction over
plaintiffs' remaining claims.*fn14 Norwalk Maritime's motion to dismiss
the Smith Amended Complaint for lack of subject matter jurisdiction is
C. Choice of Law
Plaintiffs' claims of negligent repair and maintenance, which come
within this Court's admiralty jurisdiction, are governed by federal
maritime law. "With admiralty jurisdiction comes the application of
substantive admiralty law." East River Steamship Corp., 476 U.S. at 864.
"Drawn from state and federal sources, the general maritime law is an
amalgam of traditional common-law rules, modifications of those rules,
and newly created rules." Id. at 864-65. State law, however, governs
plaintiffs' non-maritime claims. See, e.g., In re Horizon Cruises Litig.,
101 F. Supp. 2d at 207 ("With respect to any claim as to which admiralty
jurisdiction is unavailable, state law would apply."). New York's choice
of law rules determine which states' laws apply to these claims. See
North Atlantic Instruments, Inc. v. Haber, 188 F.3d 38, 43 (2d Cir. 1999)
(federal court adjudicating supplemental state law claim applies the
choice of law rules of the forum state).*fn15 In Smith II, this Court
applied New York choice of law rules to similar facts*fn16 and determined
that Connecticut law applied. 148 F. Supp. 2d at 285. We therefore hold
that Connecticut law governs plaintiffs' nonmaritime claims.
III. Plaintiffs' Claims
A. Negligent Repair and Maintenance
Plaintiffs' negligent repair and maintenance claims are governed by
admiralty law. "The common law rules of negligence apply in admiralty
law." Diesel Tanker Ira & Bushey, Inc. v. Tug Bruce A. McAllister, No. 92
Civ. 5559, 1994 WL 320328, at *6 (S.D.N.Y. June 29, 1994); see also East
River Steamship Corp., 476 U.S. at 864. Under common law principles, a
plaintiff sets forth a prima facie case of negligence if he establishes:
(1) the existence of a duty owed by the defendant to the plaintiff (2)
breach of that duty; (3) proximate causation of the plaintiffs'
injuries; and (4) damages. See Petitt v. Celebrity Cruises, Inc.,
153 F. Supp.2d 240, 252 (S.D.N.Y. 2001).
Norwalk Maritime contends that it owed no duty to plaintiffs to repair
or maintain the Conservator while it owned the vessel, or to warn of the
alleged defects. Plaintiffs respond that the existence of a duty of care
in maritime negligence actions is determined by the "foreseeability
rule," which imposes liability for those injuries which are foreseeable.
(Smith Pls. Mem. Opp. Mot. Dismiss at 12-14). Applying this analysis,
plaintiffs maintain that, based on its knowledge of the Conservator's
alleged defects and Mitlofs intended use, Norwalk Maritime could have
foreseen that the vessel would capsize, and thus had a duty that ran to
plaintiffs to wam Mitlof.
The pivotal issue presented is whether Norwalk Maritime owed a duty to
plaintiffs. The existence or nonexistence of a duty is a question of law.
Mayer v. Cornell Univ., No. 96-7600, 1997 WL 32916, at *2 (2d Cir. Jan.
8, 1997). Although plaintiffs are correct in their assertion that
foreseeability of harm is a prerequisite to liability, it does not govern
the threshold question of whether a duty exists. As explained by the
Second Circuit, "[i]n tort cases, foreseeability is often confused with
duty. Foreseeability is applicable to determine the scope of duty
— only after it has been determined that there is a duty." McCarthy
v. Olin, 119 F.3d 148, 156 (2d Cir. 1997) (internal quotation omitted).
Thus, the question presented here is whether Norwalk Maritime owed a duty
to passengers of the Conservator under plaintiffs' negligence theory.
Plaintiffs' theory of liability is that Norwalk Maritime was negligent
in failing to repair and maintain the Conservator before transferring
ownership of the vessel, and failing to warn purchasers and users of the
vessel's dangerous propensities — a theory sounding in products
liability. Concepts of products liability, based on negligence and strict
liability, have been adopted as part of maritime law. East River
Steamship Corp., 476 U.S. at 865. The RESTATEMENT (THIRD) OF TORTS:
PROD. LIAB. § 1(a) (previously RESTATEMENT (SECOND) OF TORTS §
402A),*fn17 provides: "[o]ne engaged in the business of selling products
who sells a defective product is subject to liability for harm to persons
or property caused by the product defect." In order to recover for the
harm caused by the Conservator's alleged defects under strict liability,
plaintiffs must show that Norwalk Maritime was "in the business of selling
products." However, the rule "applies only to commercial sellers who are
engaged in the business of selling or distributing the type of product
that harmed plaintiff The rule does not apply to an occasional seller of
such products." Id. at § 1, Comment c. Because Norwalk Maritime is
not in the business of selling boats, it cannot be held liable to
plaintiffs under any theory of strict products liability. See, e.g.,
Gonzalez v. Rutherford Corp., 881 F. Supp. 829 (E.D.N Y 1995) (casual or
occasional sellers not liable under doctrine of strict liability).
As part of plaintiffs' products liability claim premised on
negligence, they allege that Norwalk Maritime owed a duty to wam
purchasers and users of the vessel's dangerous propensities. (Smith Am.
Complt. ¶ 171(b) & (c).) In determining whether Norwalk Maritime had
a duty to wam of the Conservator's alleged defects under admiralty law,
we find the tort principles
articulated in the RESTATEMENT (SECOND) OF
TORTS § 388 applicable here.*fn18 Under section 388:
One who supplies directly or through a third person
a chattel for another to use is subject to liability
to those whom the supplier should expect to use the
chattel . . . for physical harm caused by the use of
the chattel in the manner for which and by a person
for whose use it is supplied if the supplier
(a) knows or has reason to know that the chattel is
or is likely to be dangerous for the use for which
it is supplied, and
(b) has no reason to believe that those for whose
use the chattel is supplied will realize its
dangerous condition, and
(c) fails to exercise reasonable care to inform them
of its dangerous condition or of the facts which
make it likely to be dangerous.
Comment c to this section explains that the term "supplier" applies
broadly to "any person who for any purpose or in any manner gives
possession of a chattel for another's use. . . ." According to this broad
definition, Norwalk Maritime qualifies as a supplier under § 388.
Furthermore, Comment d to § 388 states that "[o]ne supplying a
chattel to be used or dealt with by others is subject to liability under
the rule stated in this Section, not only to those for whose use the
chattel is supplied but also to third persons whom the supplier should
expect to be endangered by its use." (Emphasis added.) Applying the
requirements of § 388 to plaintiffs' allegations, we hold that
plaintiffs may adduce facts to support a claim that Norwalk Maritime
breached a duty owed to plaintiffs. If Norwalk Maritime knew or had
reason to know that, as a result of the vessel's latent defects and
limitations, the Conservator would be dangerous for Mitlofs intended
use, and had reason to believe that Mitlof would not discover these
defects, it could be found liable to prospective passengers under §
388 for failure to warn of the dangerous conditions.*fn19 Because
Norwalk Maritime may have owed the Conservator's users a duty to warn of
defects, Norwalk Maritime's motion to dismiss plaintiffs' claims
involving its negligent failure to warn is denied.*fn20
B. Negligent Misrepresentation and Fraud
As they did with respect to their claim of negligent failure to wam,
plaintiffs contend that Norwalk Maritime committed the tort of negligent
misrepresentation because it knew of the Conservator's defects and
limitations, yet failed to disclose this information to Mitlof.*fn21
to plaintiffs' argument, Norwalk Maritime's duty to disclose
the Conservator's shortcomings extended to prospective passengers of the
vessel because it knew those individuals would rely on its representation
that the vessel was safe. Norwalk Maritime moves to dismiss plaintiffs'
claims of negligent misrepresentation on the grounds that plaintiffs do
not plead facts sufficient to state a claim. Under Connecticut law, in
order to sustain a claim of negligent misrepresentation, plaintiffs must
allege that: 1) the defendant made representations of fact which it knew
or should have known to be false; 2) it knew or should have known that
the plaintiff would rely on those representations; 3) the plaintiff
justifiably relied on the information; and 4) the plaintiff suffered a
detriment or damages as a result of such reliance. See D'Ulisse-Cupo v.
Board of Dirs. of Notre Dame High School, 520 A.2d 217, 223 (Conn.
1987); Larobina v. First Union Nat'l Bank, No. CV990170845S, 2001 WL
1681842, at *7 (Conn. Super. Ct. Dec. 13, 2001).
Plaintiffs are unable to sustain their claims of negligent
misrepresentation. All of the alleged misrepresentations were made to
Mitlof, not plaintiffs, in connection with his purchase of the
Conservator.*fn22 Most importantly, plaintiffs do not allege the
requisite element ofjustifiable reliance by plaintiffs on Norwalk
Maritime's alleged misrepresentations. "[P]laintiffs must prove
justifiable and detrimental reliance on [the] misrepresentations to
prevail on their claims of . . . negligent misrepresentation." Cohn v.
Massachusetts Mut. Life Ins. Co., 189 F.R.D. 209, 216 (D. Conn. 1999).
There is no allegation, in either the Thorson Complaint or the Smith
Amended Complaint, that plaintiffs relied upon, or were even cognizant
of, any representation made byNorwalk Maritime. Plaintiffs were most
likely unaware that Norwalk Maritime had been the seller of the
Conservator. Any suggestion that plaintiffs relied on a representation by
Norwalk Maritime in boarding the vessel is implausible. Plaintiffs'
claims of negligent misrepresentation against Norwalk Maritime are thus
Plaintiffs' fraud claims fail for similar reasons. See Cohn, 189
F.R.D. at 216 (justifiable reliance is also a required element of fraud
under Connecticut law). The factual allegations relating to the claims of
fraud are the same as those advanced with respect to the negligent
misrepresentation claims; namely, that Norwalk Maritime was aware of, yet
failed to disclose, the dangerous propensities of the Conservator.
Although the Smith Amended Complaint does summarily state that plaintiffs
"did in fact  reasonably rely" on Norwalk Maritime's alleged fraud
(Smith Am. Complt. ¶ 162), this conclusory statement, without
additional allegations of reliance, is insufficient. This is especially
true considering the improbability of plaintiffs awareness of any
representation made by Norwalk Maritime. Moreover, allegations of fraud
are subject to the heightened pleading requirements of FED. R. CIV. P.
9(b) which provides: "In all averments of fraud or mistake, the
fraud or mistake shall be stated with
particularity. Malice, intent, and other condition of mind of a person may
be averred generally."*fn23 Furthermore, plaintiffs are required to
plead facts that give rise to a "strong inference" that Norwalk Maritime
had an intent to defraud. See, e.g., Caputo v. Pfizer, Inc., 267 F.3d 181,
191 (2d Cir. 2001). Plaintiffs have failed to satisfy the heightened
pleading standard of Rule 9(b). For example, the Smith Amended Complaint
merely states that Norwalk Maritime made "fraudulent representations" to
Mitlof and Ciesluk with respect to the condition of the vessel. (Smith
Am. Complt. ¶ 161.) However, this conclusory allegation alone fails
to give rise to a strong inference of Norwalk Maritime's intent to
defraud prospective passengers of the Conservator. Plaintiffs' fraud
claims against Norwalk Maritime are also dismissed.
C. Violation of Statutory Duty
Plaintiffs charge Norwalk Maritime with negligence per se for violating
alleged statutory duties under the Federal Boat Safety Act ("FBSA"),
46 U.S.C. § 4301 et seq. Norwalk Maritime, however, maintains that
the FBSA is inapplicable to both the Conservator and Norwalk Maritime's
actions taken with respect to the vessel.
According to 43 U.S.C. § 4301(a), the FBSA applies to "recreational
vessel[s] and associated equipment." A "recreational vessel" is further
defined as a vessel: (A) manufactured or operated primarily for
pleasure; or (B) leased, rented, or chartered to another for the latter's
pleasure. 46 U.S.C. § 2101(25). In Smith I, we held that because
Mitlof operated the Conservator as a charter for hire as well as a water
taxi, it qualified as a "recreational vessel" under § 2101(25)(B).
130 F. Supp. 2d at 582. We express no opinion as to whether the
Conservator would have qualified as a "recreational vessel" at the time
of Norwalk Maritime's transfer to Mitlof because, even assuming that the
Conservator itself came under the FBSA, Norwalk Maritime would not be
subject to the statute's provisions upon which plaintiffs impliedly base
The section of the FBSA dealing with the duty to warn of alleged
defects refers only to the duty of a recreational vessel manufacturer.
46 U.S.C. § 4310.*fn25 Plaintiffs argue that the modification and
repair that Norwalk Maritime performed on the Conservator raise a
question of fact as to whether it qualifies as a manufacturer under the
FBSA. However, a "recreational
vessel manufacturer" is defined as "a
person engaged in the manufacturing, construction, assembly, or
importation of recreational vessels". 42 U.S.C. § 2101(26). Nowhere
in this definition is it implied that one who repairs or modifies a
vessel may be considered a manufacturer. Because Norwalk Maritime was not
a boat manufacturer, but a "one-time, non-commercial seller of a used
vessel" (Def. Reply Mem. Supp. Mot. Dismiss at 13), the relevant
provisions of the FBSA are inapplicable even if the Conservator comes
under that Act. Plaintiffs' claims of violation of a statutory duty by
Norwalk Maritime are thus dismissed.
D. Breach of Contract
Plaintiffs contend that Norwalk Maritime breached its contract with
Mitlof to provide a safe, merchantable vessel with a COI valid for its
intended use — a contract to which plaintiffs were third-party
beneficiaries. Defendant responds that plaintiffs have not alleged
sufficient facts to permit a finding that they were third-party
beneficiaries under the contract between Norwalk Maritime and Mitlof.
A third-party beneficiary may enforce contractual obligations without
being an actual party to a contract. Rapaport & Benedict, P.C. v.
Stamford, 664 A.2d 1193, 1196-97 (Conn. App. Ct. 1995). "The proper test
to determine whether a [contract] creates a third party beneficiary
relationship is whether the parties to the [contract] intended to create
a direct obligation from one party to the [contract] to the third party."
Gateway Co. v. DiNoia, 654 A.2d 342, 346-47 (Conn. 1995) (emphasis in
original) (citing Knapp v. New Haven Road Constr. Co., 189 A.2d 386
(Conn. 1963)). "The parties' intent is to be determined from the terms of
the contract read in light of the circumstances attending the making of
the contract, including the motives and purposes of the parties."
Delacroix v. Lublin Graphics, 993 F. Supp. 74, 83 (D. Conn. 1997). Other
than summarily stating that they were intended third-party beneficiaries
of the contract (Thorson Complt. ¶ 69; Smith Am. Complt. ¶ 178),
plaintiffs have alleged no facts to suggest that Norwalk Maritime
intended, through its contract with Mitlof, to create obligations to
prospective passengers of the Conservator. See, e.g., Infinity Ins. Co.
v. Worcester Ins. Co., 28 Conn. L. Rptr. 278 (Conn. Super. Ct. 2000)
(granting defendant's motion to dismiss in part because there were no
allegations that the parties to a contract intended to confer a benefit
on the plaintiff). There is no indication, from the pleadings or
otherwise, that the contract between Mitlof and Norwalk Maritime was
intended as anything more than a contract for sale of the vessel.
Moreover, plaintiffs' opposition papers fail to respond to Norwalk
Maritime's argument in this respect. Because we fail to see how
plaintiffs were intended third-party beneficiaries of Norwalk Maritime's
contract with Mitlof, plaintiffs' breach of contract claims are hereby
E. Breach of Express and Implied Warranties
Plaintiffs allege that Norwalk Maritime breached certain express and
implied warranties made to Mitlof in connection with his purchase of the
Conservator. Specifically, plaintiffs' claim that Norwalk Maritime
impliedly warranted, pursuant to CONN. GEN. STAT. ANN. § 42a-2-315,*fn26
the Conservator was fit for Mitlof's intended use, and
expressly warranted, pursuant to U.C.C. § 2-313(1)(a),*fn27 that the
vessel was in excellent condition with a valid COI. (Thorson Complt.
¶¶ 74, 83; Smith Am. Complt. ¶¶ 181, 188.)
Like plaintiffs' breach of contract claims, plaintiffs' claims for
breach of express and implied warranties ultimately fail because
plaintiffs are not third-party beneficiaries of any alleged warranties
made by Norwalk Maritime to Mitlof. According to U.C.C. § 2-318
(Alternative A),*fn28 express or implied warranties extend beyond the
buyer "to any natural person who is in the household of [the] buyer or
who is a guest in [the buyer's] home if it is reasonable to expect that
such a person may use, consume or be affected by the goods and who is
injured in person by breach of the warranty." Because plaintiffs were not
family members or household guests of Mitlof at the time of the
accident, they do not fit within the category of third-party
beneficiaries to express or implied warranties recognized by Connecticut
law.*fn29 See, e.g., Halsam Co. v. Everglade, No. CV 940141045S, 1996 WL
488910, at *1 (Conn. Super. Ct. Apr. 14, 1997) (categories of third-party
beneficiaries limited to those enumerated in the statute); Wagner v.
Clark Equip. Co., No. 520641, 1995 WL 356736, at *2 (Conn. Super. Ct.
June 7, 1995) (plaintiff not a beneficiary of an implied warranty because
he was not a family member or guest in the house of the buyer).
Plaintiffs' claims for breach of express and implied warranties are
For the foregoing reasons, plaintiffs' claims of negligent repair or
maintenance, negligent misrepresentation, fraud, violation of statutory
duty, breach of contract and breach of express and implied warranties
against Norwalk Maritime are dismissed with prejudice. However, Norwalk
Maritime's motion to dismiss with respect to plaintiffs' claim of
negligent failure to warn is denied.