United States 9th Circuit Court of Appeals Reports
MADEJA v. OLYMPIC PACKERS, LLC., 310 F.3d 628 (9th Cir. 2002) Sampson MADEJA; Jose L. Rodriguez; Michael Steven Mallars; Solvi Olafsson; Olafur Skagvik, Plaintiffs-Appellants, v. OLYMPIC PACKERS, LLC, in personam; M/V Fierce Packer O.N. 546488, her engines, tackle, stores, and equipment freight, In Rem, Defendants-Appellees. No. 01-16447. United States Court of Appeals, Ninth Circuit. Argued and Submitted May 10, 2002. Filed October 31, 2002. Page 629
[EDITORS’ NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] Page 630
[EDITORS’ NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] Page 631
Jay Lawrence Friedheim, Honolulu, HI, for the plaintiffs-appellants.
John O’Kane, Jr., Honolulu, HI, for the defendants-appellees.
Appeal from the United States District Court for the District of Hawaii; Susan Oki Mollway, District Judge, Presiding. D.C. No. CV 00-0190 SOM.
Before: WALLACE, TASHIMA, and TALLMAN, Circuit Judges.
TASHIMA, Circuit Judge.
Sampson Madeja (“Madeja”), Jose Rodriguez (“Rodriguez”),
Michael Steven Mallars (“Mallars”), Solvi Olafsson
(“Olafsson”), and Olafur Skagvik (“Skagvik”) (collectively
“Appellants”) appeal from the district court’s final
judgment in this admiralty action, entered after a bench
trial, denying them relief on the majority of their claims,
filed in personam against Olympic Packer, LLC (“Olympic”),
and in rem against the vessel Fierce Packer, for, inter
alia, unpaid wages, penalty wages, and wrongful discharge.
We have jurisdiction pursuant to 28 U.S.C. § 1291,
and we affirm.
I. BACKGROUND
Olympic, a Washington limited liability corporation, is
the legal owner of the Fierce Packer, a 163-foot ship
chartered to Interisland Maritime Services, Inc. (“IMAR”),
on November 29, 1999. The “Bareboat Charter Agreement”
required that IMAR be responsible for all operating, crew,
maintenance, repair, and insurance costs during the charter
period. During the IMAR charter period, Olympic played no
role either in the hiring and control of the crew, or in
the navigation of the ship.
While negotiating the charter agreement, Ron Ellis
(“Ellis”), the president of IMAR, inquired as to the
availability of a crew for the Fierce Packer. Ellis was put
in touch with Skagvik, who had previously served as master
of the Fierce Packer on a number of voyages operated by
Olympic. Ellis hired Skagvik to be captain of the Fierce
Packer on November 29, 1999, orally promising him $275 a
day for his work on the ship during the IMAR charter
period, Page 632 and asked him to put a crew together.
Skagvik never signed a written employment contract with
IMAR. On the same day, Ellis hired Mallars as chief
engineer, orally promising him $250 a day for his work on
the ship during the IMAR charter period. Like Skagvik,
Mallars never signed a written contract with IMAR for his
employment, though he did initial certain parts of a
document that Ellis showed him that outlined his job
responsibilities, but omitted his wage and the duration of
his employment.
The Fierce Packer set sail from Seattle, Washington, to
Honolulu, Hawaii, on November 30, 1999. Upon arriving in
Honolulu, additional crew were hired to work on the Fierce
Packer. Ellis hired Rodriguez as a deckhand/cook on December
18, 1999, orally promising him $125 a day for his work on
the Fierce Packer. While Rodriguez never signed an
employment contract with IMAR, he initialed the same
document that was initialed by Mallars. On January 11,
2000, Ellis hired Madeja to be a mate on the Fierce Packer
at the rate of $200 a day. Madeja worked on the Fierce
Packer for only a short time, ending his employment there
on January 28, 2000.[fn1] Finally, on January 31, 2000,
Skagvik hired his son, Olafsson, (with Ellis’ approval) to
work as chief mate at the rate of $200 a day. Olafsson flew
from Seattle to Honolulu with the expectation that he would
be reimbursed for travel expenses exceeding $500. While
Olafsson knew of the IMAR charter when he agreed to work on
the Fierce Packer, and considered himself IMAR’s employee,
he never signed a written employment contract with IMAR.
While in Hawaii under the IMAR charter, the Fierce Packer
went on three trips to Christmas and Fanning Islands. The
first trip was from December 21, 1999, to January 4, 2000;
the second trip was from January 13 to 27, 2000; and the
final trip was from February 4 to 17, 2000.
After the second trip, Skagvik and Mallars spoke with Kim
Hansen (“Hansen”), the president of Kim Hansen Enterprises,
Inc. (“KHE”), a subsidiary corporation of Olympic
responsible for managing the Fierce Packer. They told
Hansen that Ellis was behind on payments to the crew and
that shippers were beginning to complain about Ellis.
Hansen asked Skagvik and Mallars to investigate the
possibility of conducting further cargo runs to Christmas
and Fanning Islands through Hansen, rather than through
IMAR. Soon after, Olafsson and Mallars spoke with Leif
Anderson (“Anderson”), the vice-president of IMAR, about
the possibility of continuing cargo operations under
Hansen’s management. Anderson supported this proposal and,
on February 17, 2000, transmitted a letter to Hansen asking
that Olympic take over management of the Fierce Packer.
When the Fierce Packer returned to Honolulu on February
17, 2000, Mallars, Olafsson, Rodriguez, and Skagvik learned
that IMAR was in bankruptcy and that they had been fired
for (allegedly) consuming alcohol while on the Fierce
Packer. That same day, Skagvik called Hansen to inform him
of IMAR’s bankruptcy and the crew’s termination. Hansen
asked Skagvik to stay on the Fierce Packer, keep it
operational, and wait for Paul Schultz (“Schultz”), a KHE
employee and the Fierce Packer’s vessel operations manager,
who would be traveling to Hawaii from Korea. According to
Skagvik, Olafsson, and Mallars, Hansen asked that the rest
of Page 633 the crew stay on the Fierce Packer to await
Schultz’s arrival. Skagvik, Mallars, and Olafsson complied
with this request; Rodriguez terminated his employment on
the Fierce Packer on February 17, 2000. While Skagvik
maintained that Hansen promised the crew payment for its
work on the vessel after February 17, 2000, Hansen denied
making any commitments to Skagvik on behalf of KHE or
Olympic.[fn2] On February 21, 2000, Schultz arrived in
Honolulu. While Appellants asserted that Schultz orally
promised to pay them for work performed after being fired by
IMAR on February 17, 2000, Schultz denied having made any
commitments to the crew in that regard.[fn3]
After Schultz arrived, Skagvik, Mallars, and Olafsson
worked under his direction. They maintained the Fierce
Packer’s systems and generators, kept the ship clean, made
necessary repairs, informally kept “watch” on the ship, and
moved the vessel three times to accommodate other cargo
ships. Additionally, Schultz, Skagvik, Mallars, and
Olafsson further investigated the possibility of an
additional cargo trip to Christmas and Fanning Islands
under Hansen’s management. While neither Schultz nor Hansen
committed the Fierce Packer to another cargo voyage,
Skagvik, Mallars, and Olafsson created a flier to advertise
the runs, faxed copies of the flier to potential customers,
talked with customers by cellular phone about the
possibility of cargo transport,[fn4] and received some
cargo from customers to ship to Christmas and Fanning
Islands.[fn5]
At some point after February 21, 2000, Schultz received a
check for $8,000 owed to IMAR for cargo transported during
the IMAR charter period. The check was written to “cash”
and Olafsson cashed the check for Schultz because Schultz
did not have the requisite two pieces of identification.
From this sum, Schultz paid $1,000 each to Skagvik,
Mallars, and Olafsson, and $500 to Rodriguez.[fn6] And at
some point Page 634 between February 21 and March 5, 2000,
Schultz asked the crew if they would be willing to work for
half their usual wage. Skagvik and Mallars refused this
offer and left Honolulu on March 5, 2000.[fn7] According to
Schultz, only Olafsson agreed to the arrangement. However,
while Olafsson remained on the Fierce Packer until March
17, 2000, he denied having agreed to a reduced rate of
pay.[fn8]
Skagvik and Mallars were not paid for work done between
February 18 and March 5, 2000. Olafsson was not paid for
work done between February 18 and March 17, 2000. Beginning
February 17, 2000, Appellants repeatedly made demands on
Olympic, through KHE, for their unpaid wages. Shortly
thereafter, Appellants commenced this action and had the
Fierce Packer arrested as security for their wage claims.
Olafsson remained on the vessel nearly 24 hours a day,
taking care of the Fierce Packer while it was in custody.
To secure the Fierce Packer’s release, Olympic paid
Appellants’ wage claims, as demanded in the affidavits
attached to their Verified Complaint, and posted a $135,000
bond.[fn9]
The litigation over who owed the wages and in what amounts
proceeded and, shortly before trial, Appellants attempted
to obtain a statement and documents from Anne Stevens
(“Stevens”), an agent of Olympic. Appellees moved to
exclude this evidence at trial and the court granted this
motion, finding that Appellants’ request was untimely.
After trial, the district court found that the Fierce
Packer was liable in rem for wages due under the IMAR
charter, but that the vessel was discharged of this
liability when Olympic paid Appellants’ wages to get the
Fierce Packer released from custody. The court also found
that Olympic was liable in personam for wages due
Appellants in the post-IMAR charter period and awarded
compensatory damages and pre-judgment interest from the
date the wages were due. The court, however, denied
Appellants’ penalty wage claim under 46 U.S.C. §
10313, finding that there was no discrete, specific, or
imminent voyage planned for the Fierce Packer during the
post-IMAR charter period. Additionally, the district court
rejected Appellants’ wrongful termination claims and
request for attorney’s fees.
II. STANDARD OF REVIEW
The judgment of the district court, sitting in admiralty
without a jury, Page 635 is reviewed for clear error.
McAllister v. United States, 348 U.S. 19, 20, 75 S.Ct. 6,
99 L.Ed. 20 (1954); Simeonoff v. Hiner, 249 F.3d 883, 888
(9th Cir. 2001). Findings of fact made in admiralty are
reviewed for clear error. Evanow v. M/V Neptune, 163 F.3d
1108, 1113 (9th Cir. 1998). An admiralty court’s
conclusions of law are reviewed de novo. Fireman’s Fund
Ins. Cos. v. Big Blue Fisheries, Inc., 143 F.3d 1172, 1175
(9th Cir. 1998). Evidentiary rulings by an admiralty court
are reviewed for an abuse of discretion. Evanow, 163 F.3d
at 1113. A district court’s order denying a Rule 15(b)
motion to conform the pleadings to the evidence is reviewed
for an abuse of discretion. Martinez v. Newport Beach City,
125 F.3d 777, 785 (9th Cir. 1997), rev’d on other grounds,
Green v. City of Tucson, 255 F.3d 1086, 1093 (9th Cir.
2001) (en banc); Campbell v. Bd. of Trs. of Leland Stanford
Jr. Univ., 817 F.2d 499, 506 (9th Cir. 1987). An admiralty
court’s decision to award attorney’s fees and costs is
reviewed for an abuse of discretion. B.P.N. Am. Trading,
Inc. v. Vessel Panamax Nova, 784 F.2d 975, 976-77 (9th Cir.
1986).
III. DISCUSSION
A. Attorney’s Fees
Initially, we reject Appellants’ request in the district
court for attorney’s fees. The equitable grant of
attorney’s fees is appropriate in admiralty only when the
shipowner acted arbitrarily, recalcitrantly, or
unreasonably. Vaughan v. Atkinson, 369 U.S. 527, 531-32, 82
S.Ct. 997, 8 L.Ed.2d 88 (1962); Kopczynski v. The
Jacqueline, 742 F.2d 555, 559 (9th Cir. 1984). Appellants
assert that Olympic acted with bad faith both before[fn10]
and during[fn11] the litigation, and that the district
court therefore erred when it refused to award them
attorney’s fees.
These allegations of bad faith fail because there is no
evidence that Olympic was intentionally dishonest or
recalcitrant either in refusing to pay Appellants’ wage
claims or in defending against these claims. The district
court reasonably concluded that Olympic justifiably
expected the crew to seek payment from IMAR for work
performed during the IMAR charter period,[fn12] and that
Hansen and Schultz were credible witnesses when testifying
that they never promised to compensate Page 636 the crew
for post-IMAR work on the Fierce Packer. These finding of
good faith are not clearly erroneous; as such, they are
entitled to deference. See Exxon Co. v. Sofec, Inc., 54
F.3d 570, 576 (9th Cir. 1995) (“Special deference is paid to
a trial court’s credibility findings.”), aff’d, 517 U.S.
830, 116 S.Ct. 1813, 135 L.Ed.2d 113 (1996).[fn13] Finally,
there is no evidence that Olympic was intentionally
dishonest or recalcitrant during the course of litigation.
The district court clearly has discretion to award punitive
attorney’s fees when shipowners, for example, frustrate
seamen’s claims by willfully disregarding court orders,
Noritake Co. v. M/V Hellenic Champion, 627 F.2d 724, 730 n.
5 (5th Cir. 1980), or by frivolously delaying litigation, H
& A Trading Co. v. Margo Farms Caribe, Inc., 1992 WL
319688, at *7 (D.P.R. 1992). There simply is no evidence in
the record, however, to substantiate Appellants’ claim that
the district court abused its discretion by not finding
Olympic guilty of such obstruction.
B. Rule 15(b) Amendment
Additionally, the district court correctly denied
Appellants’ motion under Federal Rule of Civil Procedure
15(b) to conform their complaint to the evidence. While
leave to amend should be granted freely until the defendant
files a responsive pleading, after such point, leave to
amend “should be granted unless amendment would cause
prejudice to the opposing party, is sought in bad faith, is
futile, or creates undue delay.” Yakama Indian Nation v.
Wash. Dep’t of Revenue, 176 F.3d 1241, 1246 (9th Cir. 1999)
(citation and internal quotation marks omitted), cert.
denied, 528 U.S. 1116, 120 S.Ct. 935, 145 L.Ed.2d 813
(2000). With regard to the penalty wage claims (except
those against Olympic for wrongful termination), the
district court clearly considered these claims on the
merits, making Appellants’ Rule 15(b) motion irrelevant.
With regard to Appellants’ wrongful termination claim,
while the district court did exclude consideration of this
claim against Olympic, it denied the motion because Olympic
did not have sufficient notice. Because “Rule 15(b) does
not permit amendments to include issues which are only
inferentially suggested by incidental evidence in the
record,” Campbell, 817 F.2d at 506, and because the record
supports the district court’s finding that Olympic would
have been prejudiced by lack of notice, we conclude that
the district court did not abuse its discretion in denying
Appellants’ Rule 15(b) motion.
The district court also correctly rejected Appellants’
Rule 15(b) motion to cure, for purposes of their in rem
action, a failure to verify the amount of post-IMAR wages
due. Appellants never explain how a motion to conform could
have cured their non-verified complaint. Given the
complaint’s complete absence of post-IMAR wage
verification, merely “conforming” the complaint would not
have cured the verification deficiency.[fn14] Thus, the
district Page 637 court did not abuse its discretion in
denying the motion to conform the complaint to the
evidence.
C. Verification of Post IMAR Wages
Admiralty Supplemental Rule C(2)(a) of the Federal Rules
of Civil Procedure provides that when a party pursues an in
rem action to enforce a maritime lien, the complaint for
such an action must be verified. United States v. Argent
Chem. Labs., Inc., 93 F.3d 572, 574 (9th Cir. 1996) (“Under
the Supplemental Rules for Certain Admiralty and Maritime
Claims . . ., an in rem action begins with a complaint that
must `be verified on oath or solemn affirmation’ and that
must `describe with reasonable particularity the property
that is the subject of the action.'”) (quoting Supplemental
Rule C(2)).
Although Appellants’ affidavits were attached to their
complaint, these affidavits only pertained to wages due as
of February 17, 2000; they were completely silent with
regard to wages due Appellants for the post-IMAR period.
Appellants never filed supplemental affidavits to verify
the complaint’s allegations of wages due for the post-IMAR
period.[fn15] The district court correctly concluded that
because Appellants’ claims for wages owed during the
post-IMAR charter period were not verified, “no lien
attached to the Fierce Packer, in rem.”
Appellants contend that their claims should be considered
in light of the trial testimony for the purpose of
verification. But they have cited no case which holds that
an unverified complaint can be cured by trial
testimony.[fn16] To the contrary, controlling precedent
dictates that Appellants’ failure to verify their complaint
deprived the district court of in rem jurisdiction. United
States v. $84,740.00 U.S. Currency, 900 F.2d 1402, 1405
(9th Cir. 1990), rev’d on other grounds, Republic Nat’l
Bank v. United States, 506 U.S. 80, 89, 113 S.Ct. 554, 121
L.Ed.2d 474 (1992); see also Pizani v. M/V Cotton Blossom,
669 F.2d 1084, 1090 (5th Cir. 1982) (“Supplemental Rule
C(2) of the Federal Rules of Civil Procedure . . . requires
the filing of a verified complaint as a prerequisite to
obtaining in rem jurisdiction.”); Amstar Corp. v. M/V
Alexandros T., 431 F.Supp. 328, 334 (D.Md. 1977) (“Both
Supplemental Rule B(1) and Supplemental Rule C(2) require
that an action of this sort be instituted by means of a
verified complaint.”), aff’d, 664 F.2d 904 (4th Cir. 1981).
Given that the complaint failed entirely to verify the
post-IMAR wage claims, the district court lacked in rem
jurisdiction over those claims. Accordingly, the district
court correctly held that no lien for Appellants’ wage
claims could attach to the Fierce Packer in rem for
post-IMAR period wage claims.
D. Other Wage and Penalty Claims
Olympic also is not liable in personam either for
pre-February 17, 2000, wages due Appellants, or for
wrongful termination penalty wages under Page 638 46
U.S.C. § 10313(c).[fn17] Appellants contend that the
district court erred in finding that Olympic had sufficient
cause to withhold payment of IMAR-period wages, thereby
erroneously exonerating Olympic from in personam liability
for IMAR-period penalty wages. Appellants contend that
Olympic, as the Fierce Packer’s owner, had no cause to deny
its liability for these wages on account of the lien
against the vessel for unpaid IMAR charter period wages.
This contention, however, ignores that a valid “bareboat”
charter agreement existed between Olympic and IMAR through
February 17, 2000. Under this charter, IMAR became the
Fierce Packer’s de facto owner and, as such, only IMAR is
liable in personam for these seamen’s wage claims. See
Everett v. United States, 284 F. 203, 205 (9th Cir. 1922).
Ownership of the Fierce Packer reverted back to Olympic
after IMAR’s bankruptcy, but, given IMAR’s “ownership” of
the Fierce Packer during its charter period, it was
reasonable for Olympic to conclude that it was not liable
in personam for IMAR’s wrongful discharge of Appellants and
that IMAR was ultimately responsible for the crew’s
pre-February 17, 2000, wage claims. While the crew could
(and did) pursue their in rem claims against the Fierce
Packer, which ultimately required Olympic to pay the crew’s
IMAR-period wages to get its vessel released from arrest,
Olympic justifiably denied in personam liability. See Mateo
v. M/S KISO, 41 F.3d 1283, 1289 (9th Cir. 1994) (explaining
that the phrase “without sufficient cause” in §
10313(g) means “arbitrary, unwarranted, unjust, and
unreasonable conduct”).
Further, the Fierce Packer is not liable in rem for
statutory penalty wages stemming from the late payment of
IMAR-period wages. 46 U.S.C. § 10313(g) imposes
liability only on the vessel’s “master or owner.”[fn18]
While courts have permitted in rem maritime liens against
vessels to satisfy penalty wage debts, see Governor & Co.
of the Bank of Scotland v. Sabay, 211 F.3d 261, 271 (5th
Cir. 2000), such in rem liens must stem from wage payment
delays exacted by the vessel’s “owner or master.” See id.
at 272. Given that Olympic was not the Fierce Packer’s
“owner” during the IMAR charter period, the Fierce Packer
is not liable in rem for penalty wages which accrued during
the IMAR charter period.
Olympic also is not liable for statutory wage penalties
stemming from the post-IMAR charter period. 46 U.S.C.
§ 10313(f) provides statutory wage penalties when
seamen are not promptly paid “[a]t the end of a
voyage.”[fn19] There was, Page 639 however, no discrete,
specific, or imminent voyage planned in the post-IMAR
charter period. While post-IMAR voyages to Christmas
Island, Fanning Island, or Seattle were considered, such
voyages were mere possibilities discussed among Hansen,
Schultz, and the crew, nothing more. We have previously
held that the “voyage” requirement of § 10313(f)
should be given meaning. Su v. M/V. Southern Aster, 978
F.2d 462, 469-70 (9th Cir. 1992). The complete absence of a
post-IMAR voyage by the Fierce Packer (or definitive plans
for such a voyage) renders Appellants ineligible to recover
statutory wage penalties under § 10313(f).
Further, Skagvik is statutorily ineligible for penalty
wages under 46 U.S.C. § 10313. Masters typically are
not eligible for § 10313’s penalty wage remedies.
George v. Kramo Ltd., 796 F.Supp. 1541, 1548 (E.D.La.
1992). While courts occasionally have held that masters are
eligible for relief under § 10313, such eligibility
has been found only when the “master” in fact performs the
tasks of a regular seaman. See Barber v. M/V Blue Cat, 372
F.2d 626, 628 (5th Cir. 1967). The record here does not
support such a finding. According to Skagvik, he stopped
performing master’s work once Schultz arrived in Hawaii.
However, while Skagvik did perform many of the same tasks
performed by the crew in the post IMAR charter period, such
a functional overlap does not necessarily relieve Skagvik
of his status as ship master. See Kennerson v. Jane R.,
Inc., 274 F.Supp. 28, 30 (S.D.Tex. 1967). This is not a
case where the master has formally relinquished authority,
or where the master in fact never truly possessed authority
as the vessel’s captain. Skagvik was the Fierce Packer’s
master during the entire IMAR charter period, navigating
the ship from Seattle to Honolulu, and from Honolulu to
neighboring islands. There also is evidence that Skagvik
continued to receive a master’s salary throughout the
post-IMAR period. Thus, the district court did not clearly
err in finding Skagvik statutorily ineligible for penalty
wage relief under § 10313.
E. Evidentiary Rulings
The district court did not abuse its discretion in
excluding the affidavit of Stevens, Olympic’s
Honolulu-based vessel manager, filed by Appellants shortly
before commencement of the bench trial. While Appellants
argue that Stevens is a crucial witness and that Olympic
was aware that she might be called as a witness, Appellants
had the opportunity to acquire Stevens’ testimony long
before the start of trial. It was not an abuse of
discretion for the district court to exclude such evidence
offered for the first time just two days before the
commencement of trial.
Finally, the district court did not abuse its discretion
in refusing to take judicial notice of IMAR’s bankruptcy
proceedings. While Appellants assert that judicial notice
would have revealed important information about Olympic and
IMAR, at no point do they address the district court’s
concern that the documents were not authenticated. Given
that the documents submitted by Appellants for judicial
notice were in fact not authenticated, the district court
did not abuse its discretion in refusing to take judicial
notice of IMAR’s bankruptcy proceedings.
For the foregoing reasons, the judgment of the district
court is
AFFIRMED.
[fn1] Given Madeja’s agreed-upon rate of $200 per day, he
was owed $3,600 upon his departure from the Fierce Packer.
On January 27, 2000, he was given a draw of $1,500, and was
still owed $2,100 in back wages.
[fn2] The district court found that this difference in the
parties’ factual accounts was attributable to confusion
surrounding IMAR’s bankruptcy and that there was no evidence
of any deliberate dishonesty. Ultimately, however, the
district court found Skagvik’s version of events more
convincing because (1) Hansen admitted telling Skagvik to
wait on the ship for Schultz’s arrival, (2) Hansen could
not have expected the crew to wait on the ship without
compensation, and (3) a crew was needed on the ship to keep
it protected and maintained and to continue exploring the
possibility of further cargo voyages under Hansen’s
operation.
[fn3] Because Schultz testified only through depositions,
the district court had only a limited basis upon which to
assess his credibility. The court did, however, observe
that while Olympic never had the crew sign any written
contracts for their work on the Fierce Packer, Schultz
clearly saw the crew working on the ship after they had
been fired by IMAR.
[fn4] Skagvik alleges that Schultz promised to pay for
cellular phone charges incurred while doing business for
Olympic. The district court found that Skagvik should be
reimbursed for long-distance calls made to the KHE Seattle
office and for local calls while in Honolulu. Olafsson also
rented a car when he arrived in Honolulu on February 17,
2000. While he apparently did so without first obtaining
Olympic’s permission, Schultz asked Olafsson, on February
21, to keep the car in his name, promising him that Olympic
would reimburse the expense. Olafsson never received this
reimbursement.
[fn5] While the Fierce Packer ultimately did conduct
another cargo run between Honolulu and Christmas Island
sometime before returning to Seattle, this occurred after
Appellants had terminated their employment with Olympic.
The district court found that there was insufficient
evidence to determine whether the cargo shipped in this
final run was obtained by Schultz alone, or whether it was
(in part) obtained by Skagvik, Mallars, and Olafsson.
[fn6] While the district court acknowledged that it was not
clear whether this money was offered as payment for wages
they were owed for work performed before or after being
fired by IMAR, the court found that the payment was for
work done during the IMAR charter period.
[fn7] Schultz purchased round-trip tickets to Seattle for
Skagvik and Mallars, with a return date to Honolulu of
March 12, 2000. When Skagvik returned to Seattle, he was
told by Olympic that he had to fire his lawyer if he wished
to continue working on the Fierce Packer; Skagvik did not
comply with this demand and thus he did not return to
Honolulu. When Mallars returned to Seattle, he was
contacted by Schultz who informed him that the voyage to
Christmas and Fanning Islands was not going to happen and
that he need “not . . . bother” returning to Honolulu.
[fn8] Because the district court previously found that
Olympic had hired Olafsson after the IMAR bankruptcy, and
because there was no evidence that Olafsson agreed to
reduced pay, the district court accepted Olafsson’s
testimony that he rejected Schultz’s request to work at
half pay.
[fn9] Upon release of the Fierce Packer, Olafsson’s
employment was terminated by mutual agreement. Olafsson
purchased a plane ticket back to Seattle, but was promised
that if the vessel made another cargo voyage to Christmas
or Fanning Island, he could come back to work on the
vessel. There is no evidence that Schultz promised to
reimburse Olafsson for his plane ticket, despite having
paid the airfare expenses of Skagvik and Mallars.
[fn10] Appellants point to the following pre-trial behavior
as evidence of Olympic’s “bad faith”: “defrauding
bankruptcy creditors” by cashing the $8,000 check owed to
IMAR; refusing to pay the crew for their IMAR-period work
“where it was clear that the vessel, in rem, owed the IMAR
wages”; refusing to pay the crew for their post-IMAR work
on the Fierce Packer; and refusing to reimburse the crew
for work-related rental car and cellular phone expenses.
[fn11] Appellants point to the following conduct as evidence
of Olympic’s “bad faith” during litigation: Hansen’s
testimony claiming that he never hired the crew after they
were fired by IMAR; defense counsel’s seeking to exclude
Stevens as a witness and claiming that he represented her
as an agent of Olympic; an alleged “discrepancy” between
Schultz’s affidavit and his deposition testimony; “threats
by Olympic” in telling the crew to fire their attorney; and
Olympic’s representation that neither Hansen nor Schultz
was its agent or employee.
[fn12] This expectation was reasonable even with the
knowledge that IMAR was in bankruptcy and even with the
understanding that the crew might be able to seek
compensation from the Fierce Packer in rem. Given that
Olympic played no role in the hiring or management of the
crew during the IMAR charter period, Olympic rightly
expected the crew to pursue their pre-February 17, 2000,
wage claims first with IMAR, and only then against the
Fierce Packer in rem. The fact that Olympic ended up paying
those wages to get the Fierce Packer released does not
imply that Olympic acted unreasonably by not originally
paying the crew their IMAR-period wages.
[fn13] The cases on which Appellants rely (mostly from the
maintenance and cure context) in which attorney’s fees were
awarded are easily distinguishable. In all of these cases,
the court found ample evidence of callous shipowner delay
and recalcitrance. See Rodriguez Alvarez v. Bahama Cruise
Line, Inc., 898 F.2d 312 (2d Cir. 1990); Hines v. J.A.
LaPorte, Inc., 820 F.2d 1187 (11th Cir. 1987); Jose v. M/V
Fir Grove, 801 F.Supp. 358, 377 (D.Or. 1992). Here, the
district court found no such evidence and, having reviewed
the record, we conclude that the district court did not
abuse its discretion in this regard.
[fn14] Appellants admitted this deficiency in the district
court:
THE COURT: [A]nd, certainly, even if you were to amend the
complaint, you can’t amend the affidavits that verify the
complaint; so —
MR. FRIEDHEIM: I acknowledge that, Your Honor.
[fn15] While Appellants sought to amend their complaint via
Rule 15(b) near the end of their case, as explained above,
this was insufficient to cure the complaint’s lack of
verification vis-a-vis its in rem lien for wages due for
the post-IMAR period.
[fn16] Appellants cite Crysen Shipping Co. v. Bona Shipping
Co., 553 F.Supp. 139 (M.D.Fla. 1982), for the proposition
that substantial compliance with the Supplemental Rules
prevents any deficiency in the verification from defeating
their claim. Even if this were controlling Ninth Circuit
law, however, there is no evidence that Appellants
substantially complied with the verification requirement
vis-a-vis their post-IMAR claims.
[fn17] This statute provides:
When a seaman who has signed an agreement is discharged
improperly before the beginning of the voyage or before one
month’s wages are earned, without the seaman’s consent and
without the seaman’s fault justifying discharge, the seaman
is entitled to receive from the master or owner, in
addition to wages earned, one month’s wages as
compensation.
46 U.S.C. § 10313(c).
[fn18] This statute provides:
When payment is not made as provided under subsection (f)
of this section without sufficient cause, the master or
owner shall pay to the seaman 2 days’ wages for each day
payment is delayed.
46 U.S.C. § 10313(g).
[fn19] This statute provides:
At the end of a voyage, the master shall pay each seaman
the balance of wages due the seaman within 24 hours after
the cargo has been discharged or within 4 days after the
seaman is discharged, whichever is earlier. When a seaman
is discharged and final payment of wages is delayed for
the period permitted by this subsection, the seaman is
entitled at the time of discharge to one-third of the
wages due the seaman.
46 U.S.C. § 10313(f). Page 640