UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT WESTERN TOWBOAT COMPANY, Nos. 22-35195 22-35217 Plaintiff-Appellant/ Cross-Appellee, D.C. No. 2:20-cv- 00416-RSM v. VIGOR MARINE, LLC, OPINION

Defendant-Appellee/ Cross-Appellant.

Appeal from the United States District Court for the Western District of Washington Ricardo S. Martinez, District Judge, Presiding

Argued and Submitted February 17, 2023 Seattle, Washington

Filed October 31, 2023

Before: William A. Fletcher, Richard A. Paez, and Lawrence VanDyke, Circuit Judges.

Opinion by Judge W. Fletcher; Partial Dissent by Judge VanDyke 2 WESTERN TOWBOAT CO. V. VIGOR MARINE, LLC

SUMMARY *

Admiralty Law

The panel affirmed in all respects but one the district court’s judgment after a bench trial in an admiralty action brought by Western Towboat Co. against Vigor Marine, LLC; vacated an award of prejudgment interest; and remanded. Vigor hired Western to tow a drydock, which was damaged in a storm off the coast of California. In an attempt to bring the drydock to shelter in Monterey Bay, Western’s tug towed the drydock into the Monterey Bay National Marine Sanctuary, where it capsized and sank. Western sued Vigor, seeking recovery of the towing fee under its contract with Vigor and a declaratory judgment that it would not be liable for any damages or penalty sought by the government under the National Marine Sanctuaries Act (NMSA). Vigor counterclaimed for breach of contract and negligence by Western. The panel affirmed the district court’s grant of partial summary judgment to Vigor on the ground that Western was negligent as a matter of law in allowing the drydock to sink in the Sanctuary, and there were no material issues of fact regarding Western’s lack of awareness of the legal consequences of allowing the drydock to sink there. After a trial on the remaining claims, the district court denied both parties’ contract claims and held that both had * This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. WESTERN TOWBOAT CO. V. VIGOR MARINE, LLC 3

been negligent. In a comparative negligence analysis, the district court found that Vigor was sixty percent negligent and Western was forty percent negligent, and it awarded Vigor $40,000. The panel affirmed the district court’s holding that Vigor was entitled to recovery from Western of only the $100,000 that Vigor was out of pocket after reimbursement from its insurance carrier for funds it spent in seeking to mitigate damages possibly owed to the federal government under the NMSA. The panel also affirmed the district court’s comparative negligence analysis. Vacating the district court’s award of prejudgment interest on the $40,000 award against Western, the panel held that interest should run from the date of Vigor’s expenditures, rather than the date the drydock sank. The panel remanded to allow the district court to recalculate the prejudgment interest based on the correct date. The panel held that Western waived additional arguments regarding a hold harmless provision and a percentage share provision in the tow agreement. Dissenting in part, Judge VanDyke wrote that he agreed with the majority that Western waived its argument about being owed a partial contract fee. He disagreed with the majority’s holding that Western waived the argument that under the tow agreement the parties agreed to hold each other harmless for any portion of the other’s insurance deductible. Because Western’s argument was both correct