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Oberto v. Platypus Marine, Inc.

United States District Court, W.D. Washington Tacoma

February 22, 2018

STEPHEN J. OBERTO and KIM S. OBERTO, husband and wife, Plaintiffs,
PLATYPUS MARINE, INC., a Washington corporation Defendant.


          BENJAMIN H. SETTLE United States District Judge.


         In the world of commerce, disputes arise when expectations of parties to a contract are not fulfilled. When those unmet expectations are spelled out as contractual obligations, a cause of action for a breach of contract is often the result. Stephen and Kim Oberto (“Obertos”) come to this court seeking damages from Platypus Marine, Inc. (“Platypus”) because they claim that their yacht, MAXIMO, suffered damages caused by Platypus when it breached the contract to paint the vessel by delivering a faulty paint job.

         At the conclusion of the three-day trial the Court ruled that Platypus had breached the contract it entered into with the Obertos for the work of painting the hull above the waterline when it admittedly failed to apply the specified Awlgrip paint manufactured by AkzoNobel “according to Manufacturer's specifications and procedures.” Now the Court awards damages to the Obertos in the amount of $58, 775.86.

         Because of Platypus' failure to properly test any suspect layers of paint over which the coating was to be applied, it was learned after the paint job was completed that some of the coatings underneath the new paint had been a one-part system which was incompatible with the new Awlgrip two-part system. The consequence of this discovery was that the new coatings left the surface soft, blistering and disintegrating in spots throughout the MAXIMO's hull. Had a test been performed before the work had begun, as prescribed by the manufacturer, the parties would have learned that the new coating would likely not have adhered properly unless the surface of the hull was taken down at least to the fairing layer.[1]

         While there was some dispute as to whether the incompatible layers included the fairing compound, the most persuasive evidence was that layer 7, and not layer 9, as shown in Exhibit 39, was fairing compound. The compatibility test performed by AwlGrip revealed that layer 7 was incompatible with the AwlGrip two-part topcoat. Consistent with those findings, AwlGrip, through Exhibit 48 entitled “Awlspec, ” dated November 10, 2014 at Bates No. 386, prescribed taking the hull “back to its original gel coat surface.” Platypus now objects to this statement asserting that it is hearsay, but no such objection was made at trial on this agreed exhibit. Marine surveyor Ronald M. Reisner (“Reisner”) in his testimony supported the AwlGrip recommendation that all coatings be removed back to the original gel coat. His testimony, based upon his years in the field of marine surveying and boat building, that layer 9 was gel coat and not fairing compound, was the most clear and explicit evidence presented concerning the interpretation of the AwlGrip test results.

         What relevance this dispute has to the Court's decision is questionable. Neither the Obertos nor Platypus entered into a contract that contemplated taking off all undercoatings, including fairing compound, down to the gel coat. This option was considered and rejected by the Obertos in conversations held at the inception of the relationship and contract as memorialized in the Captain's Report, which was admitted as Exhibit 45. The scope of work was limited to sanding and painting. Had the compatibility test been performed, a different contract involving substantially more work and cost could have been considered and either the parties would have agreed (1) to have the more extensive and expensive work performed; (2) to proceed with the work that was ultimately performed; or (3) that no contract would be entered into and no work would be performed.

         At the conclusion of the trial the Court asked the parties to address through post-trial briefing, among other things, the questions of whether Platypus could have and would have cured the breach through the honoring of its warranty or whether the Obertos foreclosed that opportunity.

         Platypus had attempted to satisfy the Obertos by proposing a couple of different solutions to addressing the paint problems. These included a “scuff and shoot, ” consisting essentially of sanding out the imperfections and reapplying a coat of paint, or to do essentially the same work but apply white paint instead of the blue, which would perform better since less solar heat would develop and thereby reduce the potential for blistering and detachment of undercoatings. Apparently, neither of these options were acceptable to the Obertos.

         Discussions for cure did not end abruptly, as often is the case when parties in contract disputes reach an impasse and further discussions are ruled out. Here, the last communication on the matter from Judson Linnabary, the owner of Platypus, to the Obertos was in a letter dated November, 13, 2014, and admitted at trial as Exhibit 58, in which the alternatives for cure were laid out.

         The Obertos' concluding communication was unclear as to what course they might take. In an email addressed to Linnabary, dated November 25, 2014 and admitted as trial Exhibit 60, the Obertos simply replied, “We are still investigating the paint issues and evaluating our options. We will let you know.”

         In the end the Court cannot and need not determine whether Platypus was denied the opportunity to cure its default. The failure to test the existing undercoats for compatibility with the AwlGrip paint product at the beginning of the work was the cause of the resulting damage to the paint, both under the new coat and the sublayers. The evidence is unclear whether either of the proposed cures by Platypus would have, in fact, solved the issues to any acceptable degree.

         The question that was left to be decided is what remedy will be imposed by the Court for Platypus' breach of contract. While there are a number of approaches that have been or could have been argued, the fundamental principle in fashioning a remedy is to make an award that, as reasonably as possible, best makes the injured party whole; that is, the one that puts the non-breaching party in the place it was before the contract was entered into, together with resulting damages, if proven, that arose from the defective performance by the breaching party.

         Given the nature of the breach of contract that arose at the inception of the work, the best available remedy for that breach is for Platypus to refund to the Obertos all moneys that it received under the contract. Although, conceivably other damages could have been claimed such as loss of use or the marginal increase in cost of removing the Platypus-applied coatings, there was no evidence admitted on these. Perhaps that is just. Whatever the problems that still exist in the MAXIMO's painted hull, no one has argued that its appearance is worse than when it first entered the Platypus boatyard. The Obertos could conclude that they can live with the paint issues and have a better paint job than they had previously, at no cost other than the cost of this litigation.

         Although the Court has determined that Platypus breached the parties' contract, Platypus' breach and its acts while discussing potential cures did not constitute a violation of the Washington Consumer Protection Act (“CPA”), RCW §19.86. In a CPA claim, the plaintiff must prove, among other requirements, that an unfair or deceptive act or practice has occurred that has an impact upon the public interest. The closest the Obertos come to establishing an unfair or deceptive act is showing that Platypus failed to produce all of the AkzoNobel report. However, this case involves a private dispute between the Obertos and Platypus based on unique facts. None of the actions of Platypus have the potential to deceive a substantial portion of the public. Moreover, the Obertos have failed to show they were damaged by any failure to produce the AkzoNobel report. Nor have the Obertos established that the failure to produce the AkzoNobel report constituted a material misrepresentation of the condition of the MAXIMO.

         In addition to the foregoing, having heard and reviewed the testimony of the witnesses, the evidence of records, and the contentions and arguments of counsel, the Court, in accordance with Rule 52(a) of the Federal Rules of Civil Procedure, makes additional findings of fact and conclusions of law as follows:


         1. Plaintiffs Obertos are the owners of the M/Y MAXIMO.

         2. Defendant Platypus is a Washington corporation with its principal place of business in Port Angeles, Clallam County, Washington.

         3. Defendant operates a shipyard with indoor painting facilities in Port Angeles, Washington.

         4. On October 22, 2013, Platypus submitted a bid to paint the MAXIMO for $120, 000, plus additional work on a time and material basis.

         5. On February 3, 2014, Stephen Oberto signed the November 27, 2013 bid committing to paint the topsides (only) of the boat for $32, 600.

         6. On or about February 4, 2014, Stephen Oberto and Platypus signed a written agreement dated February 4, 2014 to paint the MAXIMO for $125, 000 and for other repair work to be performed by Platypus on the MAXIMO. The February 4, 2014 agreement is also a part of the parties' contract for Platypus' work on the MAXIMO.

         7. The February 4, 2014 proposal provides: “Haul out vessel for complete paint from waterline up to top of mast using Awlgrip coatings. Owners choice of colors.”

         8. “Awlgrip” is a brand of marine paint and coating products manufactured by AkzoNobel Coatings, Inc., whose parent company is AkzoNobel N.V., a multinational corporation headquartered in the Netherlands (collectively, “AkzoNobel”).

         9. The February 4, 2014 proposal provides:

• “All paint finishes are guaranteed one (1) year for gloss retention and adhesion”;
• “Platypus Marine guarantees our own workmanship for a one-year time period”;
• “Any additional work or warranty will be performed at the Platypus marine facility.”

         10. The February 4, 2014 Proposal provides: “All coatings will be applied according to Manufacturer's specifications and procedures.” The manufacturer's (AkzoNobel's) specifications and procedures for the application of Awlgrip coatings are ...

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