B.H. Morton and Thomas Kent v. Zidell Explorations, Inc.

Morton and Kent (“appellants”), owners of a tugboat, contracted with Zidell Explorations, Inc. (“Zidell”), a shipyard, to convert their tug into a fish-processing vessel. During the course of the conversion the ship was almost completely destroyed by fire. Appellants sued for negligence, judgment was entered for Zidell, and Morton and Kent appealed. Two questions are presented here. First, is an exculpatory clause in a marine repair contract enforceable under the Supreme Court’s decision in Bisso v. Inland Waterways Corp., 349 U.S. 85 , 75 S.Ct. 629 , 99 L.Ed. 911 (1955)? We conclude that it is. Absent evidence of overreaching, exculpatory clauses in ship repair contracts are enforceable in this Circuit. Hall-Scott Motor Car Co. v. Universal Insurance Co., 122 F.2d 531 (9th Cir.), cert. denied, 314 U.S. 690 , 62 S.Ct. 360 , 86 L.Ed. 552 (1941). Second, did the trial court err in allowing Zidell to introduce evidence that appellants’ vessel was insured at the time of the fire? We conclude that it did not. We affirm.

I. FACTS AND PROCEEDING BELOW

Appellants purchased an old tugboat and orally contracted with Zidell, a marine repair and construction company, to convert it into a…