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National Union Fire Insurance Company of Pittsburgh PA v. SPX Flow US, LLC

United States District Court, S.D. Florida

August 15, 2019

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA, as subrogee, Plaintiff,
v.
SPX FLOW US, LLC, Defendant.

          FINDINGS OF FACT AND CONCLUSIONS OF LAW

          BETH BLOOM, UNITED STATES DISTRICT JUDGE

         THIS CAUSE is before the Court following a bench trial that began on April 4, 2019 and ended on April 11, 2019. The Parties submitted their closing arguments in writing following the filing of the trial transcripts. ECF Nos. [115] and [117]. Plaintiff National Union Fire Insurance Company of Pittsburgh PA (“National Union”) submitted proposed findings of fact and conclusions of law before and after trial. ECF Nos. [81] and [116]. Defendant SPX Flow US, LLC (“SPX Flow”), submitted proposed findings of fact and conclusions of law before trial. ECF No. [82]. The Court has carefully considered the evidence presented at trial, the applicable law, and the Parties' submissions. Set forth below are the Court's relevant findings of fact and conclusions of law.

         I. INTRODUCTION

         Plaintiff is an insurance company that insured a motor yacht owned by Lena Aquilla (“Mrs. Aquilla”) named Belissimo (the “Vessel”). Defendant distributes and sells marine impeller pumps. On July 28, 2016 the Vessel sustained damages due to an engine overheat and resulting fire. The Parties agree that the impeller pumps in the Vessel were distributed by Defendant and that the starboard impeller pump (the “Subject Impeller Pump”) failed prior to the engine overheating. However, the Parties disagree as to what caused the Subject Impeller Pump to fail. Plaintiff alleges that the Subject Impeller Pump malfunctioned because Defendant manufactured, constructed, assembled, inspected, and sold the Subject Impeller Pump such that it was defective, dangerous, and unsafe for its intended uses. ECF No. [5] ¶¶ 15-16. On the other hand, Defendant contends that the Subject Impeller Pump failed because it “ran dry, ” meaning that it ran with insufficient water to prevent friction and heat from building up within the Subject Impeller Pump.

         Plaintiff filed this action on March 14, 2018, alleging that the Subject Impeller Pump was defective and caused the resulting damage to the Vessel. Plaintiff asserts product liability claims under theories of negligence (Count I) and strict liability (Count II) against Defendant. See ECF No. [5]. The Plaintiff seeks damages in the amount of $278, 207.40 and an award of costs. Defendant argues that Plaintiff has not met its burden of establishing that a product defect caused the Subject Impeller Pump failure or that the Subject Impeller Pump failure was the proximate cause of the subject fire.

         II. FINDINGS OF FACT

         a. The companies involved

         Plaintiff National Union is a Pennsylvania insurance company with its principal place of business in New York. Defendant SPX Flow is a Delaware limited liability company with its principal place of business in North Carolina and is engaged in the distribution and sale of marine impeller pumps. The Parties submitted the following stipulation: “For purposes of this trial only, the parties stipulate that SPX Flow is the proper entity for liability arising out of a manufacturing defect in the subject [impeller] pump, if any.” ECF No. [79] at 3.

         b. The Vessel

         The Bellissimo is a 44-foot vessel, Model Talaria 44. On or about September 5, 2002, Mrs. Aquilla purchased the Vessel from the Talaria Company, LLC d/b/a The Hinckley Company, LLC (“Hinckley”). At all material times, the Vessel had been equipped with Yanmar engines. Each engine is sold with an impeller pump attached to it. The Vessel had a starboard impeller pump (the Subject Impeller Pump) and a port impeller pump. Each Yanmar engine is cooled by a closed cooling system that uses glycol as well as a raw water cooling system. Through a heat exchanger, seawater is circulated to absorb the heat from the glycol. The heated seawater is then expelled back into the sea. The purpose of the raw water impeller pump is to draw the seawater in and pump it into the heat exchanger. The seawater enters the Vessel through an intake grill located on the bottom of the hull. The spinning impeller blades inside the impeller pump draw the seawater into the pump, which is then pumped into the heat exchanger.

         c. Engine sensors

         The Vessel was equipped with several engine sensors, including an engine coolant-level sensor, an engine temperature sensor, and a seawater flow sensor. The seawater flow sensor is the first line of defense to a failure within the seawater system. It detects when there is a shortage of raw water being circulated through the engine. It is designed to alert before the engine or boat sustains damage. At the time Hinckley sold the Vessel, the seawater flow sensor was connected to the engine and operational. However, it was not connected to the alarm buzzer system on the Vessel's console. Without being connected to the alarm buzzer system, no alarm would sound in the event that the seawater flow sensor detected a seawater flow shortage.

         The Yanmar Marine Diesel Engine Operation Manual (the “Operation Manual”) specifically references the seawater flow sensor as part of the engine safety control system. The Operation Manual warns against operating the impeller pump without seawater. According to the Operation Manual, the cooling water piping and electrical wiring must be installed correctly. The alarm buzzer at the helm should be checked each time the engine is started to confirm it is working. If an alarm buzzer sounds during operation of the boat, the engine should be shifted to low speed immediately to investigate the cause of the alarm and inspect the engine. The engine should not be run if an alarm device is not repaired.

         When the Aquillas purchased the subject boat in 2002, Tom Aquilla (“Mr. Aquilla”) received the Operation Manual. He was aware of seawater flow sensors and their ability to alert an operator to a loss of seawater flow.

         In 2007, the starboard engine on the Vessel overheated, but no alarms on the Vessel sounded. Three or four years later, Mr. Aquilla discovered that the engine temperature sensor had not been connected to the alarm buzzer at the helm. Mr. Aquilla never checked or had anyone else check to confirm that all of the engine sensors for his boat engines were connected.

         Prior to the July 28, 2016 fire, Mr. Aquilla expressed to Shane Peacock (“Peacock”), a marine mechanic who often serviced the Vessel, Mr. Aquilla's concern that the alarm buzzer at the helm might not be loud enough to alert him to a problem while the boat was underway. This concern was not rectified.

         d. The July 28, 2016 engine fire

         On the morning of July 28, 2016, Mr. Aquilla and a friend, Bob Sween, took the Vessel out from Mr. Aquilla's home in Punta Gorda, Florida. Mr. Aquilla intended to take the Vessel 120 miles to the River Forest Yachting Center to place the Vessel in summer storage. The seas were rough. Approximately one hour into the journey, either Mr. Aquilla or Mr. Sween first heard an alarm. Mr. Aquilla testified that the alarm was “barely audible.” Mr. Aquilla looked at the gauges on the dashboard of the Vessel to figure out why the alarm was sounding. Mr. Aquilla could not see the starboard engine temperature gauge because a light bulb had burned out. Mr. Aquilla grabbed a flashlight from the galley. After returning to the helm, he saw that the temperature gauge for the starboard engine was “pegged, ” meaning that the engine coolant temperature was over 220 degrees Fahrenheit. He turned off the starboard engine.

         Mr. Aquilla continued operating the Vessel with the port-side engine toward a mile marker post. At the post, he opened the engine hatch and saw a fire in the engine room. Mr. Aquilla estimates that ten minutes passed from when he shut down the starboard engine until he discovered the fire. Mr. Aquilla put the fire out with two fire extinguishers and then operated the Vessel back to his house with the port-side engine.

         e. The Ways Boatyard

         After the incident, Mr. Aquilla left the Vessel on a lift behind his house. On August 9, 2016, he attempted to operate the Vessel in the water but encountered heavy black smoke coming from the port engine. He then operated the Vessel to the Punta Gorda Marine to have it trucked to the Ways Boatyard in Palm Beach Gardens, Florida. The Vessel remained at the Ways Boatyard during post-incident inspections.

         f. Evidence presented concerning the Subject Impeller Pump failure

         1. Direct evidence of a manufacturing defect

         Plaintiff's expert, Frank Grate (“Grate”), is primarily a research metallurgist. He is also a professional engineer in the State of Florida. He has experience with failure analysis. He is a member of the National Society of Professional Engineers, the Florida Engineering Society and the American Academy of Forensic Scientists. Grate opined at trial that the Subject Impeller Pump failed due to a manufacturing defect. According to Grate, the main cause of the Subject Impeller Pump failure was residual stresses that occurred during the manufacturing process. However, Grate was not able to identify direct evidence of residual stresses. According to Grate, that evidence could only be seen with a “scientific type” of equipment. Grate stated that he attempted to use the equipment that he “usually use[s]” but it does not work with rubber products.

         Grate also opined that porosity or voids, meaning gas holes, were contributing causes of the failure. He testified that voids and areas of porosity in the impeller blades suggest a defect in the Subject Impeller Pump. Grate identified voids and areas of porosity in several impeller blades that had broken off from the Subject Impeller Pump. However, Grate stated that a certain amount of porosity may be acceptable. He did not determine an acceptable level of voids or porosity ...


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