DATE: Wednesday, September 17, 1997         TAG: 9709170448

SECTION: LOCAL                   PAGE: B5   EDITION: FINAL 

SOURCE: BY MARC DAVIS, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   89 lines

YACHT OWNER CAN'T GET PUNITIVE DAMAGES IN RUDEE INLET LAWSUIT

The owner of a $1.5 million yacht that ran aground in Rudee Inlet last year is not entitled to damages that would punish Virginia Beach for failing to maintain the inlet, a federal judge ruled Tuesday.

But the boat owner may still get up to $1.5 million in compensation from the city for his wrecked boat.

At a hearing Tuesday, Judge Robert G. Doumar ruled that two Virginia Beach officials who were sued over the wreck - City Manager James K. Spore and Public Works Director Ralph A. Smith - cannot be held liable for the boat's grounding. By law, city officials are generally immune from lawsuits seeking money damages for their official actions.

That means the boat owner, Yacht Sales International of Miami Beach, cannot collect damages to punish the city over the wreck. Governments are generally immune from punitive damage.

But Doumar delayed ruling on whether the yacht owner is entitled to $1.5 million for the city's failure to warn the captain of the sand-filled inlet.

The case is scheduled for trial on Oct. 15.

At Tuesday's hearing, both sides asked Doumar to rule before trial. The city asked Doumar to throw out the case. The yacht owner asked Doumar to award damages without a trial.

The 66-foot yacht ran aground on its maiden voyage from Atlantic City, N.J., on Feb. 8, 1996. It was bound for a boat show in Miami.

After sailing eight hours from New Jersey, the yacht captain planned to stop at the Rudee Inlet marina for fuel and provisions, spend the night, then resume his trip. Instead, the boat got caught on sand in about 3.8 feet of water in the inlet. It remained stuck there for three days and was swamped and gutted by crashing waves.

In March, the yacht company sued Virginia Beach, Spore and Smith. The lawsuit sought $1.5 million in compensatory damages and $500,000 in punitive damages.

In court, the company's attorney, Edward J. Powers, argued that Spore intentionally sacrificed boaters' safety by not maintaining the inlet. Spore could do that, Powers argued, because he knew the Army Corps of Engineers would dredge the inlet every spring, after it filled in during the winter.

In court papers, Powers said Virginia Beach has slashed its dredging budget for Rudee Inlet from $2 million a year in 1988 to $689,000 a year in 1996.

``In short, Mr. Spore consciously sacrificed safety in his attempt to cut costs,'' Powers argued in court papers.

The city denied this. It argued that the ``downsizing'' of city government did not affect the city's ability to maintain the inlet. It also argued that Spore is not responsible for allocating city money, only for recommending spending to the City Council. ``It is speculation that passage of the budget plaintiff now advocates would have prevented this, or any other accident,'' the city argued in court papers.

In court Tuesday, Doumar asked why Spore and Smith should be held responsible for the City Council's spending decisions.

As a result, Powers dropped Smith as a defendant, but not Spore. ``Somebody must be held accountable,'' Powers said.

The judge ruled that Spore is not liable. ``He is immune from suit in this case. . . . I am not about to submit him to the vagaries of the lawsuit,'' Doumar said.

That left the city as the sole defendant.

The case now boils down to how much notice the city gave the yacht captain, Doumar said.

The city says it issued a warning to mariners before the accident that Rudee Inlet is subject to shoaling and may be as shallow as 2 feet in places. The yacht draws 5 feet.

The yacht owner, however, says Virginia Beach revoked that warning by circulating an underwater survey showing boats would have more room to pass if they kept to the south side of the inlet. There, Powers argued, the map shows a depth of 9 feet, although the boat ran aground in 3.8 feet.

The city argued that that map was not intended for navigational purposes, and was so marked. Doumar was dubious.

``Then why give it to the fishing center?'' Doumar asked. ``Were they going to pass it out as souvenirs or something?''

Doumar urged both sides to settle the case, then promised a ruling before the Oct. 15 trial.

In two weeks, however, another Rudee Inlet trial is scheduled.

The owner of a charter dive boat is suing the city for running aground in Rudee Inlet in November 1996. The company, Atlantic Dive Charter, is suing for $100,000 in compensation and $500,000 in punitive damages.

In light of Doumar's ruling Tuesday, punitive damages are unlikely in that case. The trial is set for Sept. 30, but both sides are discussing a settlement. ILLUSTRATION: D. KEVIN ELLIOTT/File photo

Although a judge ruled out punitive damages, the owner of this $1.5

million yacht that ran aground in Rudee Inlet last February may

still be entitled to money for the city's failure to warn the

captain of the sand-filled inlet. KEYWORDS: LAWSUIT

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