Plugging Leaks with a Release Instrument

In Watson v. Moger, No.20-5433 (W.D. Wash. Aug. 10, 2021), plaintiffs – owners of a boat they desired to ship over land from California to Oregon – filed suit under the Carmack Amendment, claiming defendants – owners of a transportation company – damaged their boat during transit.

Of interest here is a release instrument executed by one of the plaintiffs in favor of the defendants, entitled a “Wood Boat/Hull Release.” (“Release”). The Release, executed on his behalf by Mr. Watson’s wife, co-plaintiff Sarah Watson, provided

I, Eric Watson, understand that my boat is used and may have latent or obvious defects. These defects may cause damage to my boat a 1962 Chris Craft originally 45 foot with add on boat anchor and swim deck that makes it 50 ft.

I therefore hold Moger Yacht Transport and its assigns harmless from damages attributable to these latent or obvious defects. I relieve Moger Yacht Transport of any liability or responsibility for damages that may result from the transport of my boat from time of loading to time of unloading on April 4, 2019.

A carrier, under the Carmack Amendment, “may establish rates for the transportation of property . . . under which the liability of the carrier for such property is limited to a value established by written or electronic declaration of the shipper or by written agreement between the carrier and shipper if that value would be reasonable under the circumstances surrounding the transportation.” 49 U.S.C. § 14706(c)(1)(A).

Citing OneBeacon Ins. Co. v. Haas Indus., Inc., 634 F.3d 1092, 1099 (9th Cir. 2011), the Court ruled that the Defendants complied with the requirements to limit their liability to the Watsons under the Carmack Amendment. Defendants “have shown that they indicated to the Plaintiffs that they would not ship the boat absent execution of the release, and so gave the Plaintiffs ‘a reasonable opportunity to choose between two or more levels of liability.’ The Plaintiffs do not dispute that the release was executed . . ., obtaining their ‘agreement as to their choice of carrier liability limit.”

Responding to Plaintiffs argument that the release was limited to latent or obvious defects, and did not extent to ordinary or gross negligence, the Court, referring to the “any liability or responsibility for damages” language contained in the release, stated that “[t]he plain language of the release encompasses the asserted ‘negligence or gross negligence’ and damages here.”

Shippers should always carefully review contracts, bills of lading, and other instruments presented for their signature by transportation companies and brokers. This is especially important when considering a document designated as a release, waiver, or other potential limitation of liability. If in doubt, confer with competent counsel.