What Hurts, LLC v. Volvo Penta of the Ams., LLC (E.D. Virginia – January 5, 2024)
The court addresses whether a breach of express warranty claims falls within the court admiralty jurisdiction.
Federal courts have original and exclusive jurisdiction over any civil case of admiralty or maritime jurisdction. Contract disputes fall within admiralty jurisdiction if the nature or subject matter of the contract is maritime.
Contracts for repair, alteration, or reconstruction of a vessel which, before such work, was actively engaged in maritime commerce or navigation, generally are considered maritime contracts. However, contracts to build a ship, or contracts involving work performed on a non-maritime object, are not maritime. Uncertainty between the two are resolved in favor of admiralty jurisdiction.
The court found that the vessel was built before the underlying Release, that gave rise to the express warranty claim, was signed. Thus, the Release was a contract for the modification of a vessel and was properly considered a maritime contract.
Plaintiff’s claim, however, was for breach of an express warranty and warranty claims generally do not fall within a federal court’s original admiralty jurisdictoin because they are grounded in nonmaritime contracts, such as contracts for the sale of a vessel. But because the parties agreed in the Release to create a new limited warranty as part of their agreement to alter the vessel’s engines, the limited warranty was grounded in a maritime contract and the express warranty claim was held to fall within the court’s original admiralty jurisdiction.