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Keywords

contractbreach of contractjurisdictiondamagesattorneyappeal

contractjurisdictionappellantappellee

Related Cases

Natasha, Inc. v. Evita Marine Charters, Inc., 763 F.2d 468, 1986 A.M.C. 490, 2 Fed.R.Serv.3d 422

Facts

In 1982, Natasha, Inc. sold its yacht, the EVITA, to Evita Marine Charters, Inc. (EMC) for $1.4 million, with an agreement that Natasha could use the boat for four weeks post-sale. After the sale, disputes arose regarding the charter dates and conditions, leading EMC to impose additional terms that Natasha found unacceptable. Natasha sued EMC after EMC refused to provide the boat for the agreed dates, claiming that EMC's demands constituted a breach of contract.

In 1982 Natasha, Inc., the appellee, sold its yacht (called the EVITA) to Evita Marine Charters, Inc. (“EMC”), the appellant.

Issue

Does an admiralty court have jurisdiction over a charter contract that forms part of a larger contract to sell a boat?

Does an admiralty court, which normally has jurisdiction over contracts to charter a boat, not have jurisdiction when the charter contract forms part of a larger contract to sell the boat?

Rule

Admiralty jurisdiction applies if the charter portion of a sale contract is readily separable from the rest of the contract.

The well established answer to this question is that admiralty does have jurisdiction if the charter portion of the sale contract is readily ‘separable’ from the rest of the contract.

Analysis

The court determined that the charter provisions were clearly separable from the sale contract, as they were contained in a separate clause and elaborated upon in separate letters. The court found that EMC's repudiation of the charter agreement occurred after the sale terms had been executed, thus allowing for the maritime obligations to be enforced separately without prejudice to the rest of the contract.

The contract's provisions governing Natasha's 'charter' of the yacht seem to us, as they did to the district court, clearly separable from the rest of the sale contract.

Conclusion

The court affirmed the district court's judgment in favor of Natasha, awarding damages for EMC's breach of contract and imposing double costs and attorney fees due to the frivolous nature of the appeal.

We have decided to assess such a penalty here for two reasons.

Who won?

Natasha, Inc. prevailed in the case because the court found that EMC had breached the charter contract and that the appeal was without merit.

The court found for Natasha.

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