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COMMERCIAL UNION INSURANCE v. BLUE WATER YACHT CLUB

January 17, 2003

COMMERCIAL UNION INSURANCE COMPANY AS SUBROGEE OF MICHAEL CANTAMESSA AND THE EMPLOYERS' FIRE INSURANCE COMPANY AS SUBROGEE OF CHARLES DURSO, PLAINTIFFS,
v.
BLUE WATER YACHT CLUB ASSOCIATION, JOHN QUATTROCCHI, THOMAS SCHWANTER, AND BARBARA KAHN, DEFENDANTS.



The opinion of the court was delivered by: Arthur D. Spatt, United States District Judge

MEMORANDUM OF DECISION AND ORDER

In this case, the plaintiffs the Commercial Union Insurance Company ("Commercial") as subrogee of Michael Cantamessa ("Cantamessa") and The Employers' Fire Insurance Company ("Employers' Fire") as subrogee of Charles Durso ("Durso") allege that the defendants the Blue Water Yacht Club Association ("Blue Water"), John Quattrocchi ("Quattrocchi"), Thomas Schwanter ("Schwanter") and Barbara Kahn ("Kahn") are liable for damages to Cantamessa's and Durso's motor boats caused during a fire at the Blue Water indoor storage facility. The claims include negligence, breach of bailment and breach of contract. Presently before the Court are motions by the defendants to dismiss the complaint for lack of subject matter jurisdiction pursuant to Rule 12(h)(3) of the Federal Rules of Civil Procedure. In the alternative, Blue Water moves to dismiss the complaint for failure to state a claim upon which relief can be grant pursuant to Rule 12(b)(6).

I. BACKGROUND

The facts are taken from the complaint unless otherwise noted. In August 2001, Cantamessa and Durso stored their motor boats at the Blue Water marina in Merrick, New York. At that time, Commercial insured Cantamessa's boat and Employers' Fire insured the boat owned by Durso's.

On August 13, 2001, a fire erupted in the indoor storage facility at the Blue Water marina. A preliminary investigation revealed that the origin of the fire was in the boats owned by Quattrocchi, Schwanter or Kahn which were each stored at the facility. The fire caused severe damage to the two boats at issue. Pursuant to the terms of their insurance policies, Commercial paid Cantamessa $24,955.02 and Employers' Fire paid Durso $8,470.03 to cover the loss of the boats.

On December 28, 2001, the plaintiffs filed the instant subrogation action against the defendants alleging that they were responsible for the fire damage to the boats owned by Cantamessa and Durso. The complaint alleges admiralty jurisdiction and sets forth claims for negligence, breach of bailment and breach of contract. The defendants now move to dismiss the action under Rule 12(h)(3) for lack of subject matter jurisdiction on the ground that there is no admiralty jurisdiction. In the alternative, Blue Water moves to dismiss the complaint against it under Rule 12(b)(6) for failure to state a claim on the ground that Blue Water's individual agreements with Cantamessa and Durso preclude liability for damages to their boats.

II. DISCUSSION

A. Subject Matter Jurisdiction

When evaluating subject matter jurisdiction, district courts may consider affidavits and other materials beyond the pleadings to resolve the jurisdictional question. See Robinson v. Gov't of Malaysia, 269 F.3d 133, 141 n. 6 (2d Cir. 2001); Antares Aircraft, L.P. v. Fed. Republic of Nigeria, 948 F.2d 90, 96 (2d Cir. 1991), vacated on other grounds, 505 U.S. 1215 (1992); Exch. Nat'l Bank of Chicago v. Touche Ross & Co., 544 F.2d 1126, 1130 (2d Cir. 1976). District courts must accept as true all material factual allegations in the complaint, but will not draw inferences favorable to the party asserting jurisdiction. Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998); Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir. 1992). Hearsay statements contained in affidavits may not be considered. Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir. 1986).

1. Admiralty Jurisdiction

Congress has granted district courts the power to entertain "[a]ny civil case of admiralty or maritime jurisdiction." 28 U.S.C. § 1333(1). That jurisdictional power encompasses "all contracts . . . which relate to the navigation, business, or commerce of the sea." Atl. Mut. Ins., 968 F.2d at 199 (internal quotation marks and citations omitted). In determining whether admiralty jurisdiction exists with regard to a contract claim, a court must refer "to the nature and subject of the contract." Omaha Indem. Co. v. Whaleneck Harbor Marina, Inc., 610 F. Supp. 154, 155 (E.D.N.Y. 1985); Ziegler v. Reiff, 637 F. Supp. 675, 677 (S.D.N.Y. 1986). When a contract "relates to ships in their use as ships or to commerce or transportation in navigable waters, there is admiralty jurisdiction." Omaha Indem. Co., 610 F. Supp. at 155-56 (internal quotation marks and citations omitted).

In this case, Cantamessa and Durso stored their boats at the Blue Water marina under the terms of an agreement which required mandatory winterizing and servicing of their boats. This storage and service agreement sufficiently relates to ships in navigable waters to establish admiralty jurisdiction. See Commercial Union Ins. Co. v. Used Boat Haven, No. 94-0448, 1996 WL 191960, at *2 (S.D.N.Y. Apr. 22, 1996) ("It has long been held that contracts to repair and store vessels fall within the Court's admiralty jurisdiction, whether the vessels are kept on land or in the water.") (citing Royal Ins. Co. of Am. v. Long Beach Marine Land, 1989 A.M.C. 2090 (S.D.N.Y. Apr. 30, 1987); Ziegler, 637 F. Supp. at 677;Omaha Indem., 610 F. Supp. at 156-57)). Accordingly, admiralty jurisdiction with regard to the plaintiff's contract claim.

Further, because the remaining tort claims arise from the same nucleus of operative facts as the contract claim, the Court has supplemental jurisdiction over those claims. See Commercial Union, 1996 WL 191960, at *5 n. 2 (exercising supplemental jurisdiction over tort claims that arise from the same facts as the contract claim); Royal Ins., 1989 A.M.C. at 2092 (same); Ziegler, 637 F. Supp. at 677 (same); Omaha Indem., 610 F. Supp. at 157 (same). Blue Water's argument that Sisson v. Ruby, 497 U.S. 358, 110 S.Ct. 2892 (1990) restricts the use of supplemental jurisdiction in tort actions involving boats is without merit. Sisson does not address supplemental jurisdiction but rather analyzes a tort claim under admiralty jurisdiction. 497 U.S. at 359-74, 110 S.Ct. at 2892. Furthermore, Blue Water's argument that since Sisson federal courts have held a boat stored on storage racks or on land is not on navigable waters and have refused to exercise supplemental jurisdiction over those related-tort claims is also incorrect. See ...


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