Ferry Boat Owner Unable to Limit Liability in Wreck with Speedboat

An interesting case recently arose out of the Northern District of California. A ferry boat captain was found partially responsible for a collision in which he was using his cell phone in the minutes before his boat wrecked into a speedboat on the San Francisco Bay.

In February of 2013, Harry Holzhauer and David Rhoades were traveling by speedboat in the San Francisco Bay when a ferry crashed into their boat. The driver, Holzhauer, was killed in the collision and Rhoades, who owned the boat, was seriously injured. The widows of Holzhauer and Rhoades both filed claims against the ferry captain and the ferry owner, alleging the captain negligently used his cell phone immediately before the accident occurred.  At the trial, Plaintiffs presented evidence that showed that the ferry made a course and speed change about two minutes before the collision and that the captain of the ferry made a two-minute cell phone call at 4:07 pm, just before the 4:09 pm collision.

After hearing the evidence, the jury returned a verdict in favor of the plaintiffs in the amount of $5,276,306, broken down as $3,729,559 to Rhoades and $1,546,747 to Holzhauer. Further, the jury found the ferry Captain to be 30% at fault and Holtzhauer 70% at fault, reducing Holtzhauer’s award to $464,024.00.

In a post-trial motion, the defense attempted to invoke the Limitation of Liability Act (LLA), arguing that the LLA limited their potential exposure to the value of the ferry. The LLA allows a vessel owner to limit their liability for damages or injury caused by their vessel  if the damage is “occasioned without the owner’s privity or knowledge.”

In order to limit the ship owner’s liability, the LLA first requires the plaintiff to establish the negligent act which caused the plaintiffs’ loss. Here, the plaintiffs argued that Captain Shonk negligently used of his cell phone in the minutes prior to the collision. The defendants agreed that this was the most likely basis for the jury’s finding of negligence and the court found that this conclusion was supported by substantial evidence.

Next, the ship owner must prove that the negligent act was outside its “privity or knowledge.” Privity or knowledge is the owner’s personal participation in or knowledge of a negligent act, or having the means of gaining knowledge of the negligence, and failing to adopt the appropriate means to prevent it. In other words, the ship owner must prove it was not aware of or could not reasonably become aware of the negligent act which caused plaintiff’s damages.

The court found that the defendant in this case failed to meet its burden and did not prove that it had no privity or knowledge. Specifically, the court found that the defendant ship owner had no company policy prohibiting the use of cell phones by its captains, despite having actual knowledge that its captains used cell phones. Defendant therefore could not claim that the foreseeable use of a cell phone was outside of its privity or knowledge.

Accordingly, the court denied the defendant’s motion to limit its liability and upheld the jury’s verdict, which was presumably greater than the value of the ferry.

Broussard & David is a Lafayette based law firm consisting of attorneys which have the experience and expertise necessary to handle cases of this nature. The attorneys at Broussard & David will fight to obtain fair compensation for any damages or injuries you or a loved one has suffered as a result of the negligence of another. Contact the attorneys at Broussard & David to discuss your legal rights at (337) 233-2323(local) or (888) 337-2323 (toll-free).

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