Evanow

The tug Neptune (in rem), the barge KRS-160-6 (in rem), Dahl Tug & Barge Company, Port Gardner Tug and Barge Company, KRS Marine, and Tacoma Boat Building Company (defendants) appeal from a judgment and an award of costs entered against them after an eight day bench trial before a magistrate judge. Evanow, Abee, and Dunham (plaintiffs) cross-appeal, arguing that the trial court improperly offset their damages. In addition, plaintiffs seek sanctions for a frivolous appeal. The district court had jurisdiction pursuant to 28 U.S.C. § 636 (c) and 28 U.S.C. § 1333 . We have jurisdiction over these timely filed appeals pursuant to 28 U.S.C. § 1291 . We affirm the *1112 judgment, but reverse and remand the award of costs.

I

This case arises out of a contract to aid the Neptune and its barge when the Neptune was disabled and facing severe storm conditions. The main issues in the appeal are whether the contract is one for salvage, whether the plaintiffs are entitled to recover under the contract, and whether the plaintiffs were negligent in their effort to render aid.

A.

Tacoma Boat Building Company contracted with Port Gardner Tug & Barge (Port Gardner) to transport a landing craft…