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Maritime Update: Court Refuses To Dismiss Iberville Parish Council's Claim For Economic Loss

On May 14, 2015, the Honorable Ivan L.R. Lemelle denied a motion to dismiss economic claims filed in a limitation proceeding by the Iberville Parish Council ("Parish") for expenses incurred in connection with operating passenger ferries while the Gross Tete Bridge was closed for over two months in 2014 after being struck by a vessel owned by Marquette Transportation Gulf-Inland, LLC ("Marquette").  This ruling shows that actual physical damage to property is not always needed to recover economic damages resulting from maritime negligence. 

A.   Background

On February 28, 2014, the towing vessel ST. THOMAS struck the Gross Tete Bridge, which is owned by the Louisiana Department of Transportation and Development ("DOTD") and carries traffic on LA Highway 77 across the Intracoastal Waterway in Iberville Parish.  To alleviate the inconvenience from closure of the bridge, the State of Louisiana ("State") entered into a joint venture with the Parish.  The State furnished a State-owned passenger ferry operated by the Department of Wildlife and Fisheries to the Parish as an alternative means of transportation.  The Parish obtained, constructed, maintained and staffed sites for temporary ferry landings on both sides of the Intracoastal Waterway.  The Parish filed a claim in Marquette's limitation proceeding for reimbursement of expenses incurred in performing under the agreement.  Marquette moved to dismiss the Parish's economic claims, since the Parish did not incur physical damage to its property.

B.   Arguments

Marquette argued that a party that has not incurred physical damage to its property cannot recover economic damages resulting from maritime negligence.  Therefore, the Parish could not recover the expenses it incurred in acquiring and maintaining the ferry landing properties.

The Parish maintained that its damages were not remote and there was no possibility of unlimited and/or duplicate recovery.  Furthermore, the Parish should be allowed to recover its expenses under the theory of equitable subrogation.

C.   Conclusion

Judge Lemelle held that where a loss sought to be recovered by a third party is actually an economic loss otherwise recoverable by the real party-in-interest (i.e., the party that sustained physical damage to a proprietary interest), which loss has been shifted by way of an agreement to a third party, it is properly recoverable by the party.  As such, Marquette's motion to dismiss was denied.

D.   Why Is This Important? 

  1. Actual physical damage to your property is not always required to recover economic damages resulting from maritime negligence.

  2. A party that sustains physical damage to its property as a result of maritime negligence can shift the right to recover to a third party.

  3. When contracting with a party that has sustained physical damage to its property as a result of maritime negligence, the contracting party should consider having a written agreement and evaluate whether the contract will allow it to recover its economic loss directly from the negligent party.

  4. If an economic loss otherwise recoverable by a real party-in-interest is shifted by agreement, a court will likely examine the terms of the agreement that shifts the right to recover.

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