NELSON R. SHARP; DESTINY YACHTS, LLC, Plaintiffs-Appellees/Cross-Appellants,
HYLAS YACHTS, LLC, Defendant-Appellant/Cross-Appellee, GMT COMPOSITES, INC.; FORESPAR PRODUCTS CORP., Third Party Defendants-Appellees, MASTERVOLT, INC., Third Party Defendant.
FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS [Hon. Jennifer C. Boal, U.S. Magistrate Judge]
Jeffrey S. Baker, with whom Baker and Associates, Daniel P.
Tarlow, and Copani, Tarlow & Cranney, LLC were on brief,
E. Collins, with whom Clinton & Muzyka PC was on brief,
for third-party defendant-appellee GMT Composites, Inc.
L. Jouret, with whom Jouret LLC, Warren D. Hutchison, and
LeClair Ryan PC, were on brief, for plaintiffs-appellees.
Lynch, Kayatta, and Barron, Circuit Judges.
KAYATTA, CIRCUIT JUDGE.
an eleven-day jury trial and verdict, the district court
entered judgment against Hylas Yachts, LLC and in favor of
plaintiffs Nelson Sharp and his LLC, Destiny Yachts, in the
amount of $663, 774 plus interest and costs, on account of
numerous defects in a brand-new yacht that Hylas custom built
and sold to plaintiffs. Both sides appeal. For the following
reasons, neither side persuades us to upset the judgment.
frame the principal issues raised on this appeal (Hylas's
challenges to the verdict and plaintiffs' challenge to
the judgment as a matter of law entered on one of its
claims), we summarize the relevant evidence as a reasonable
factfinder might have viewed it most favorably to plaintiffs.
See Atl. & Gulf Stevedores, Inc. v.
Ellerman Lines, Ltd., 369 U.S. 355, 364 (1962);
Acevedo-Garcia v. Monroig, 351
F.3d 547, 565 (1st Cir. 2003).
summary begins in June of 2009, when Sharp and Hylas signed a
contract for the purchase and sale of a new seventy-foot
yacht, to be named "Destiny, " for $1.99 million. A
semiretired mechanical engineer with a background in
hydraulics, Sharp had owned a boat before-two years prior, he
had purchased a fifty-four-foot sailboat from another
company-but never a vessel as big as the one he planned to
buy from Hylas, a luxury yacht seller in Marblehead,
purchase agreement between Sharp and Hylas included detailed
provisions devoted to the yacht's commissioning, the
delivery and closing, and assorted warranties. The agreement
provided that the yacht would be commissioned in Ft.
Lauderdale, Florida, and commissioning would "include
all work necessary to install all equipment . . . and place
same in good and proper operating condition." The
agreement also included a warranty provision in which Hylas
guaranteed that the yacht delivered to Sharp would be
"of excellent quality, of good workmanship and
materials, seaworthy and suitable for its intended use of
extended ocean cruising." Hylas agreed "for a
period of three (3) years after Delivery, to either fix any
warranty defects by the factory or reimburse [Sharp] for the
cost incurred in fixing it." And Hylas agreed to
indemnify Sharp from claims brought by Hylas's
subcontractors and suppliers, and to pay attorneys' fees
incurred by Sharp in handling such claims.
build the yacht, Hylas contracted with a number of vendors
who supplied, installed, and serviced certain components of
the yacht. GMT Composites, Inc. supplied the boom (a
"long spar used to extend the foot of the sail")
and all boom-related components, including the boom-furling
system, part of the gooseneck assembly, the mandrel, and the
pawl assembly. Forespar Products Corp., another vendor,
supplied the mast, the plates connecting the mast to the
gooseneck assembly, and other parts of the gooseneck
made a substantial down payment to Hylas on July 12, 2010,
from his personal bank account. The remaining balance was
paid at closing from a bank account held by Destiny Yachts,
LLC, a limited liability company Sharp set up. When Sharp
closed on and took possession of the yacht on December 4,
2010, he did so on Destiny Yachts' behalf as its sole
member. From that point forward, Destiny Yachts owned Destiny
taking possession of the yacht, Sharp sailed from Ft.
Lauderdale toward St. Thomas in the Caribbean on December 4.
About four or five hours into the maiden journey, Sharp
noticed a hydraulic fitting leaking. He turned the boat
around and a Hylas employee in Ft. Lauderdale met him the
following morning and tightened the fitting. Within a day and
a half of Sharp's second departure from Ft. Lauderdale,
though, the fitting began to leak again. A more "massive
failure" occurred a few days later when the boom came
loose, the furling motor connections and hydraulic lines
broke, and hydraulic oil spilled on Destiny's deck. When
Destiny arrived in St. Thomas, Hylas and GMT arranged for a
local rigging company called Island Rigging to repair the
boom and the hydraulics.
January 4, 2011, and February 26, 2011, Destiny sailed
through the Caribbean to Grenada. The yacht had numerous
other problems during its journey, including hydraulic system
malfunctions, malfunctions of the electronic throttle, a
broken generator, failing battery chargers, and toilet
malfunctions. Sharp corresponded repeatedly with Hylas and
GMT, expressing his dissatisfaction with the services Hylas
was rendering and frustration with the continuing problems
his crew was experiencing. Sharp later recalled spending
several weeks in Grenada trying to repair the hydraulic
system, which continued to fail, and the charging system,
which by this point "was almost non-existent." When
Sharp could not get these systems repaired, he decided to
return to Ft. Lauderdale so that Hylas could effect repairs
before Destiny would continue on to the Mediterranean.
April 7, 2011, the yacht left Grenada for Ft. Lauderdale.
During the trip, the clevis pin fell out of the boom, causing
the boom to completely fall off the mast. Sharp eventually
put in at Ft. Lauderdale to undergo repairs. Hylas sent the
hydraulic system manufacturer to replace the controls for the
hydraulic system, and sent the charging system manufacturers
to replace the charging system. A GMT technician repaired the
damage done when the boom fell.
continued to arise. They included boom-fitting, mandrel,
foot-track, and hydraulic oil issues. Destiny eventually
docked in Newport, Rhode Island, where it underwent eight
days of repairs. Graham Robertson, who joined the crew as
Destiny's captain in June 2011, recalled that GMT
performed all of the repairs; nobody from Hylas was involved.
23, 2011, Destiny left Rhode Island for the Mediterranean.
Sharp received an email from Hylas's vice president, Kyle
Jachney, the day before the yacht departed, stating that
Jachney planned to come see the yacht and conduct sea trials.
Destiny departed before Jachney made it, however. While the
yacht was sailing across the Atlantic, Robertson noticed that
in addition to emerging problems with the mandrel foot track
and the sail feeder, the bolts in the boom fitting connecting
the boom to the mast appeared to be loosening. Destiny could
not be sailed, and had to travel using a motor to get to the
Azores for repairs; nobody there could fix it, so it made its
way unrepaired to Palma de Mallorca.
27, 2011, Sharp forwarded to Jachney an email he had received
from Robertson describing all of these problems, and Sharp
asked Jachney to "provide your insights and suggested
course of action." Roughly two weeks later, Sharp, who
had at this point made his way to Palma de Mallorca to tend
to Destiny, emailed Jachney again to state that he had
received no response to his email request, and that he and
Destiny's crew were going to "proceed to the best
of [their] ability to effect a fix that will still salvage
part of the Summer in the Mediterranean." Sharp
indicated that he would be forced to conduct repair work and
he expected Hylas to reimburse him for the work and the value
of the lost use of the yacht. He also reminded Jachney that
Hylas did not ever provide Destiny's hydraulic system
schematics despite Sharp's request for them in early May
the advice of mechanics who said some of the parts connecting
the boom and mast were undersized, Sharp had the mast
connection rebuilt and increased the size of the clevis.
Still, subsequent emails he sent to Jachney and David
Schwartz, the president of GMT, alerted Hylas and GMT that
Destiny continued to experience problems with loosening
screws and bolts in the boom along with continual hydraulic
31, 2011, Destiny left Palma de Mallorca and experienced more
problems, this time with the pawl (the component used to
raise and lower the sail). After stopping for more repairs in
Sardinia, Destiny resumed its journey through the
Mediterranean on August 5, 2011.
October 13, 2011, plaintiffs sued Hylas, alleging breach of
contract, breach of warranties, negligence,
misrepresentation, and violations of Massachusetts General
Laws chapter 93A. Hylas impleaded GMT and Forespar, and GMT
leveled fourth-party contract claims against plaintiffs based
on a bill it issued that was allegedly never paid.
Destiny headed back across the Atlantic in November 2011,
more screws in the boom-to-mast connection broke or loosened.
Robertson noticed that bolts in the gooseneck were shearing;
he instructed the crew to check them twice a day, and at
least one bolt required tightening at each check. The pawl
assembly again had problems, as did the bolts in the
gooseneck assembly, so the yacht sailed the last few days
into the Carribean under reduced sail. After the yacht made
its way to Newport, Rhode Island from Ft. Lauderdale in June
2012, Sharp eventually had the boom replaced in early
September 2012. No further significant problems ensued.
case went to trial in July 2015. Plaintiffs claimed damages
of $1, 019, 066, consisting of $320, 000 in lost charter
revenue, $364, 514 in depreciation during the 8-1/2 months
when Destiny could not be used, $140, 789 to replace the
gooseneck and boom, and assorted lesser amounts for other
repairs, travel, lost time, and marina and diversion
jury signed a special verdict form in which they found that
Hylas's breach of contract and breaches of implied and
express warranties rendered it liable to Sharp in the amount
of $663, 774. The jury also found that GMT breached its
contract with Hylas and breached an express warranty and
implied warranties of merchantability and workmanlike
conduct, and that at least one of these breaches proximately
caused harm to Hylas. But the jury found that Hylas was
entitled to no damages from GMT, the liability findings
notwithstanding. The jury found against Hylas on all of its
contract claims against Forespar, and found that plaintiffs
did not breach a contract with GMT or become unjustly
enriched by failing to pay an unpaid bill. A few months
later, the magistrate judge found against plaintiffs on their
chapter 93A claims. Hylas's post-trial motions were
denied, and Hylas and plaintiffs both appealed.
complains that the jury verdict holding it liable to Sharp
for a substantial sum was necessarily inconsistent with the
jury's verdict that GMT, the boom supplier, breached
contractual commitments and warranties given to Hylas, yet
owed Hylas no damages. Hylas also argues that the district
court improperly dismissed its indemnification claim against
GMT, and that the verdict was tainted by erroneous
instructions, improperly admitted evidence, and a failure to
hold Sharp accountable for the spoliation of evidence.
Plaintiffs, in turn, press on cross appeal the contention
that they were entitled as a matter of law to multiple
damages and attorneys' fees under Massachusetts state
law. Mass. Gen. Laws ch. 93A, § 11. As we will explain,
none of these arguments persuade us.