By Robert Freeman of Proskauer
When the crewmembers of the fishing boat, the Citation, finally hand-lined aboard a record-setting 883-pound, 14-foot-long blue marlin after a three-hour long battle in federal waters off the coast of North Carolina, it was as if they had hauled in a waterlogged treasure chest filled with over $900,000—the first place prize of the 2010 Big Rock Blue Marlin Tournament in which they were competing.
No other fish caught in the tournament came close. An elated Captain Eric Holmes said, “To catch a fish this big … it’s something. It really is. We got lucky and it’s good to be lucky.”
But unfortunately for Captain Holmes and his crewmates, their three-hour long tussle was only the precursor to a courtroom prizefight that is now nearly three years in the making.
It seems they weren’t that lucky after all.
As the Citation journeyed back to the tournament weigh station with the blue marlin, First Mate Peter Wann reviewed the Tournament Rules. Rule 9 stated that the “North Carolina Division of Marine Fisheries will require a [coastal] recreational fishing license for anyone participating in fishing aboard a vessel” and that participants are responsible for “knowing all state and federal regulations.” Unsure of whether he possessed a valid coastal license, Wann whipped out his laptop and purchased one online before the Citation reentered state waters.
The license Wann purchased on board the Citation would soon become an albatross around his neck. Crystal Coast Tournament, the operator of the tournament, learned during routine polygraph tests of Captain Holmes and Wann (required by Tournament Rule 17) that Wann did not possess a valid coastal license at the time the blue marlin was hooked. The Tournament Rules Committee and Board of Directors determined that Wann’s failure to have a valid coastal license was a violation of the Tournament Rules and disqualified the Citation and its catch.
Black Pearl Enterprises, which owned the Citation, and its managing members filed a lawsuit in the North Carolina Superior Court against Crystal Coast Tournament and others seeking to overturn the disqualification. During the proceedings, the plaintiffs discovered that presiding Judge John E. Nobles, Jr. and defendants’ counsel, Claud R. Wheatley, III, were buddies. Black Pearl filed a motion for Judge Nobles to recuse himself based on Wheatley’s testimony that he and Judge Nobles practiced law together for a number of years and vacationed together multiple times after the plaintiffs filed their complaint and while the case was pending. Judge Nobles heard the motion himself and denied it, finding that there was no evidence that his objectiveness was compromised. As to the merits of the case, Judge Nobles applied a test requiring evidence of fraud, bad faith, or arbitrariness to overturn the decision of a tournament committee and torpedoed the case on summary judgment, ruling in favor of the defendants on all counts.
The Citation plaintiffs wasted no time in appealing the decision to the North Carolina Court of Appeals, which affirmed Judge Nobles’s trial court decision in its entirety in Topp v. Big Rock Foundation, Inc.
All was not lost, however. Judge Robert C. Hunter wrote a dissenting opinion advocating the reversal of Judge Nobles’s ruling for two reasons. First, Judge Nobles should have referred the motion to another judge for an independent hearing because it would be reasonable to question the impartiality of his ruling based on Wheatley’s testimony. Second, summary judgment was inappropriate because, based on the facts presented, the decision to disqualify the Citation and its catch from the tournament was arguably an arbitrary one resulting in a breach of the contract between the plaintiffs and Crystal Coast Tournament.
Judge Hunter opined that by paying the tournament entry fee of $18,025 and catching the largest blue marlin in the tournament, the plaintiffs had essentially entered into a contract with Crystal Coast Tournament for the prize money—a contract that Crystal Coast Tournament could only be excused from in the event of the plaintiffs’ material breach. According to the Tournament Rules, disqualification is not required when a boat breaches one of the Rules; Rule 20 merely states that a boat “may be disqualified” in such cases. Judge Hunter interpreted the discretion of the Rules Committee and Board of Directors to imply that they must consider whether a violation of the rules is material and what penalty is warranted. If a violation is insignificant, some penalty short of disqualification may be appropriate. If Wann’s failure to possess a coastal license were not a significant violation of the Rules, Judge Hunter reasoned, it would not excuse the defendants from their obligations under the contract, which included refraining from arbitrary disqualifications. The plaintiffs’ violation of the tournament rules did not afford them any competitive advantage. Further, Judge Hunter noted, Wann acquired a coastal license before reentering state waters with the blue marlin. Therefore, Judge Hunter concluded, the Citation’s disqualification raises a genuine issue of material fact as to whether the decision of the Rules Committee and Board of Directors was arbitrary and therefore a breach of the parties’ contract.
Judge Hunter’s opinion by itself did not win the day for the Black Pearl, but it did open the door to a successful appeal to the state’s highest court. On January 25, 2013, the Supreme Court of North Carolina hooked into the reasoning of Judge Hunter’s dissenting opinion and remanded the case for a new trial.
The tides may be turning for the Citation crew as it pushes off from shore once again, with the hope that, this time, the court will take its bait.
