In an August 10 opinion, the Ninth Circuit Court of Appeals held that a boat owner who is a passenger on his boat has no duty to keep a lookout unless the owner-passenger knows that the person operating the vessel is likely to be inattentive or careless, or the owner-passenger was jointly operating the boat at the time of the accident.

The ruling, in Holzhauer v. Golden Gate Bridge Highway & Transportation Dist., --- F.3d --- (9th Cir. Aug. 10, 2018), presented the Ninth Circuit with the chance to address a question of first impression: What duty of care does a boat owner riding as a passenger in his own boat owe to the operator? Relying on precedent from the Eleventh Circuit, the Ninth Circuit found “no material difference between an ordinary boat passenger and a passenger who owns the boat being used, if the boat owner entrusts the boat to a competent operator.”

Background

On February 16, 2013, lifelong friends Harry Holzhauer and David Rhoades were operating Rhoades’ 22-foot speedboat in and around the bays of San Francisco, California. Rhoades had turned operation of the boat over to Holzhauer, who had some boating experience and was considered a safe, cautious and experienced operator.

Late in the afternoon, Rhoades encouraged Holzhauer to take a final loop around the bay before returning to shore. While doing so, the speedboat collided with a 169-foot ferry operated by the Golden Gate Bridge Highway & Transportation District (GGB). A witness reported that Holzhauer was looking the opposite direction of the boat’s direction of travel at the time of the collision, and Rhoades stated that he was looking at the San Francisco skyline and did not see the ferry until immediately before the collision. Holzhauer died in the accident, and Rhoades suffered serious injuries that required weeks of hospitalization.

Holzhauer’s widow filed suit individually and on behalf of the estate, stating claims against Rhoades and GGB for negligence. Rhoades and GGB filed counterclaims against the estate for negligence and filed cross-claims against each other.

At trial, no party presented evidence of Rhoades’ negligence, and the plaintiff’s attorney agreed that Rhoades was not negligent. However, the plaintiff argued that the definition of a passenger did not include the registered owner of a boat, and that there was sufficient evidence to create liability for Rhoades as a joint operator. Following the close of evidence, Rhoades’ motion for judgment as a matter of law was granted, and the jury was informed by special instruction that Rhoades’ conduct should not be considered. The jury then returned a verdict finding Holzhauer 70 percent at fault and GGB 30 percent at fault, and awarded the plaintiff and Rhoades damages.

The plaintiff and GGB appealed, arguing first that the district court erred by treating Rhoades as a passenger only and ignoring his status as the vessel owner; and second, that even if Rhoades was merely a passenger, the evidence established that he was operating the speedboat jointly, permitting a finding of liability against him.

Legal Analysis

The Ninth Circuit first considered the “novel question” of what legal standard applies when an owner of a boat is also a passenger on the vessel. The court recognized and noted the tension between two well-established principles: the first, that every owner owes a duty of reasonable care under the circumstances to all on board; and the second, that a passenger has no duty to keep a lookout on behalf of the operator.

In its analysis of the circumstances before it, the court found significant that Rhoades had transferred operation of the boat to Holzhauer earlier in the day, and that there was no dispute as to Holzhauer’s qualifications as an operator. Under those facts, the court found that an owner-passenger’s duties more closely aligned with that of a passenger. Accordingly, the court agreed with the Eleventh Circuit’s reasoning in Weissman v. Boating Magazine, 946 F.2d 811 (11th Cir. 1991), holding that an owner-passenger has no duty to keep a lookout unless, as with an ordinary passenger, the person running the boat is known to the passenger to be inattentive or careless in their operation, or the passenger has been jointly operating the boat.

Because there was no evidence in the record that Holzhauer had exhibited inattentiveness or careless behavior prior to the accident, the court then turned to the second Weissman exception and appellants’ next contention, that Rhoades was a joint operator of the vessel.

The court quickly dismissed the contention that Rhoades was a joint operator on the grounds that he had explained certain maritime rules and procedures to Holzhauer, or because he had told Holzhauer to take another loop during their excursion. To the contrary, the court noted that Rhoades did not dictate the exact path of the boat and was not actively engaged in giving advice when the accident occurred, and therefore was not jointly operating the boat at the time of the accident, as Weissman’s second exception required.

The court also rejected the possibility that Rhoades could be found negligent for failing to give advice that may have prevented the accident, despite Rhoades’ testimony that his routine practice was to be aware of boats around his vessel, to ensure that those who drove his boat adhered to his safety standards, to watch over people who drove his boat, and to look out for traffic. Instead, the court reiterated that if Rhoades was not negligent in entrusting boat operation to Holzhauer, he stood in the position of a passenger and owed no duty to keep a lookout.

Takeaway

By affirming the district court, the Ninth Circuit avoided a circuit split and aligned itself with the Eleventh Circuit while providing clarity on the legal duty owed by owner-passengers. The opinion also identified the fact-specific inquiries that must be considered in determining when an owner-operator’s status may be transformed to that of passenger.