Background:
Plaintiff, Marshall Graham, brought an action under the Jones Act and unseaworthiness against employer, Offshore Specialty Fabricators, and barge owner, Cashman Equipment Corporation for injuries sustained while working aboard a tugboat as a deckhand.

Graham worked for Offshore as a deckhand on a tugboat. Offshore had leased a large deck barge from CEC (Cashman Equipment Corp.). Plaintiff's tugboat was returning CEC's deck barge at the expiration of its lease and in order to tie up the deck barge, two other barges had to be moved. While Graham was walking on the deck of one of the barges, he fell partially into one of three unmarked holes while attempting to help a co-worker, Craven, who had also fallen in another hole.

Graham filed Jones Act and unseaworthiness claims against Offshore and negligence and unseaworthiness claims against CEC. Graham claimed his knee, neck, and lower back were injured. A jury found both defendants liable and that Graham was 15% contributory negligent.

The jury awarded Graham for past physical and mental pain and suffering, loss of enjoyment of life, past loss of income, and losses of future earning capacity.

Ultimately, CEC's liability was limited to $160,000, the value of the deck barge. Both CEC and Offshore appealed and Graham answered the appeal and cross appealed.

Issue:
Did this court affirm or reverse/vacate the judgment of the lower court?

Held:
Offshore claimed that CEC was improperly entitled to limitation of liability alleging that the deck barge was no longer a "vessel" when the accident occurred and notwithstanding the "vessel" status, CEC failed to meet its burden of showing that it had no "privity or knowledge of the condition that caused Graham's injury. Offshore also appealed the amount of past lost wages and loss of future earning capacity awarded to Graham.

CEC contended that the jury's answers to interrogatories were inconsistent and therefore, the court erred in denying its motion for a new trial or judgment notwithstanding the verdict.

Graham asserted that CEC should not be allowed to limit its liability and that the general damage award was reasonable and supported by evidence.

Graham and Offshore argued that CEC did not satisfy its burden of proving a lack of privity or knowledge of the dangerous condition that caused Graham's injury. CEC bought the deck barge from a company owned by Lee Dragna. Dragna testified that prior to CEC buying the barge, he walked the deck with CEC's president. Moreover, the barge had been sent to another company to remove and scrap a crane leaving a 26 foot in diameter hole prior to delivering it to CEC.

CEC's president testified that he generally does conduct "eyeball" inspections before making a purchase and that he viewed the vessel from the bank before the crane was removed and noticed no holes. This Court ultimately found that the jury erred in finding that CEC had no privity or knowledge of the dangerous condition on the deck of the barge. The Court found that the CEC's operations manager, who warned about the hole in the deck, was enough to impute knowledge/privity to CEC and therefore preclude limitation.  The hole was large and obvious in daylight and could have easily been noticed through a simple inspection.

CEC argued that the jury erred in assigning any fault to it. The Court noted that a vessel owner has a duty to take reasonable care to ensure its vessel is fit for its intended use and free from hazardous conditions that might cause injury to those on board. This Court was satisfied that the president of CEC knew the crane of the barge was being removed in order to turn it into a deck barge and that as a result, the deck of the barge would not be left in tact. In light of this, and the fact that CEC failed to inspect the vessel prior to deliver, but after the crane was removed, persuaded this Court to find that CEC was properly found liable for Graham's injuries.

Accordingly, this Court reversed the portion of the judgment limiting CEC's liability and affirmed all other aspects of the judgment.

Comment:
If an injured seaman establishes that negligence or unseawothiness caused his injuries, the vessel owner has the burden to establish a lack of privity or knowledge of the dangerous condition that caused the injury.

A corporate shipowner may be deemed to have constructive knowledge if the unseaworthy or negligent condition could have been discovered through the exercise of reasonable diligence.

The corporate owner is required to overcome a presumption that not only its officers and managers had actual knowledge but that they should have known of the unseaworthy or negligent condition that caused the injury.

Steve Gordon