## Facts

- Freeport Sulphur Company owned a sulphur dock on the Mississippi River at Port Sulphur, Louisiana.
- On March 21, 1971, the S/S Hermosa struck the upstream end of the dock and a driftwood deflector while attempting to moor, causing substantial structural damage.
- The dock was properly lit, designed, and constructed under applicable permits; the deflector and upstream end were not intended as berthing surfaces.
- The Hermosa approached without tug assistance and was under the control of a compulsory state river pilot.
- Repairs cost $84,141.20 and increased the dock’s useful life from an estimated 25 remaining years to 35 years total after repair (a 10-year life extension).
- The district court found liability clear, awarded repair costs, reduced them for betterment, and also awarded an additional sum for the forced early capital outlay.
- The vessel owner appealed only the damages calculation.

## Issues

1. How should maritime property-damage awards be calculated when repairs extend the useful life of the damaged structure beyond its pre-casualty expectancy?
2. Whether the betterment credit should be computed using the pre-casualty remaining life (25 years) or the post-repair total useful life (35 years) as the denominator in a useful-life-extension fraction.
3. Whether an injured party may recover a separate amount for being compelled to incur the improvement cost earlier than it otherwise would have.

## Decision

- Liability was affirmed; the collision established responsibility for resulting damage.
- The Fifth Circuit affirmed awarding reasonable repair costs subject to a betterment deduction to prevent the plaintiff from being placed in a better economic position than before the casualty.
- The court held the district court used the wrong denominator for the betterment calculation; the fraction must use the post-repair total useful life (35 years), not the pre-casualty remaining life (25 years).
- The court rejected or sharply limited any separate “early-capitalization” or “prepayment” award because it would overcompensate once betterment is properly credited.
- The judgment was modified and remanded for recomputation of damages consistent with these instructions.

## Legal Principles

- In maritime collision cases, the usual measure of property damage is the reasonable cost of repairs necessary to restore the property to its pre-casualty condition.
- When repairs materially extend useful life or otherwise confer betterment, damages must be reduced to avoid unjust enrichment.
- Courts may use a flexible useful-life-extension approach rather than mandatory straight-line depreciation.
- Under a useful-life-extension method, the betterment credit should reflect the proportion of the post-repair total useful life attributable to the added life created by the repairs.
- A separate award for the timing of the forced capital expenditure is generally unavailable where the plaintiff already receives repair costs reduced by an appropriate betterment credit.

## Conclusion

The Fifth Circuit held that admiralty repair-cost damages must be reduced for betterment using a fraction based on the post-repair total useful life, and that a plaintiff ordinarily may not recover an additional sum solely because the improvement cost was incurred earlier than planned.


Freeport Sulphur Co. v. S/S Hermosa, 526 F.2d 300 (5th Cir. 1976)