Universal Towing Co. v. Barrale, 78-1486

Citation595 F.2d 414
Decision Date18 April 1979
Docket NumberNo. 78-1486,78-1486
PartiesIn the Matter of the Complaint of Universal Towing Company, a corporation, for Exoneration from or Limitation of Liability, UNIVERSAL TOWING COMPANY and Nilo Barge Line, Inc., Appellees, v. Carla BARRALE, Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

James R. Dowd, of Dowd, Oates, St. Louis, Mo. (argued), Edward L. Dowd and Francis M. Oates, St. Louis, Mo., on brief, for appellant.

Gary T. Sacks, St. Louis, Mo. (argued), and Robert D. Nienhuis, of Goldstein & Price, St. Louis, Mo., on brief, for appellee, Universal Towing Co.

Peter B. Hoffman, of Kortenhof & Ely, St. Louis, Mo. (argued), and Joseph M. Kortenhof, St. Louis, Mo., on brief, for appellee, Nilo Barge Line, Inc.

Before HEANEY and ROSS, Circuit Judges, and TALBOT SMITH, Senior District Judge. *

HEANEY, Circuit Judge.

Carla Barrale appeals from the denial of her motion to dissolve an injunction and vacate an ad interim stipulation entered by the District Court pursuant to the Limitation of Liability Act, 46 U.S.C. § 181 Et seq. 1 We reverse.

On February 22, 1977, Joseph V. Barrale, an employee of Universal Towing Company, proceeded on a vessel owned by Universal to a worksite on the Mississippi River near East Carondelet, Illinois. At that site, Barrale proceeded to transfer cargo from barge SBI-831 to barge BML-1 using a crane owned by Universal. The barges were under the control of Nilo Barge Line, Inc., during the transfer process. During the transfer operation, Barrale fell from barge BML-1 into the Mississippi River and drowned.

In April, 1977, Carla Barrale filed a two-count complaint against Universal and Nilo in the St. Louis Circuit Court. 2 In the first count, brought pursuant to the Jones Act, 46 U.S.C. § 688, Barrale alleged that her husband's death resulted from Universal's negligence. In the second count, brought under the Missouri Wrongful Death Statute, Mo.Stat.Ann. § 537.080, Barrale alleged that Nilo's negligence caused her husband's death. Barrale sought damages of one million dollars on each count.

On August 3, 1977, Universal filed a complaint in the District Court under the Limitation of Liability Act, seeking either exoneration from liability or limitation of liability. Universal also filed an ad interim stipulation that fixed the value of Universal's interest in its vessels involved in the accident at $85,000. The District Court thereafter entered an order approving the ad interim stipulation and enjoining the institution and prosecution of any legal proceeding against Universal except the limitation proceeding if it involved a claim arising out of the accident. This injunction, obviously, prevented Barrale from continuing her action in the St. Louis Circuit Court.

On September 9, 1978, Barrale moved to dissolve the restraining order on the ground that her claim was the sole claim that would arise in the limitation proceeding. Thereafter, on September 23, 1977, she filed her claim for one million dollars against Universal in the limitation proceeding. On November 16, 1977, Nilo filed a motion for leave to file a late claim since the time set by the District Court for filing claims had passed. After the court granted the motion, Nilo filed a claim against Universal seeking indemnity for any amount for which it might be held liable to Barrale, together with its costs and attorney's fees expended in defending Barrale's claim.

On November 30, 1977, Barrale filed a motion for leave to continue prosecution of her state court action. In this motion, she stipulated that the alleged value of the vessels was proper, conceded the right of Universal to litigate all issues pertaining to the limitation of liability in the District Court and waived any possible claim of res judicata as to damages based on the state court judgment.

On December 19, 1977, the District Court denied Barrale's motions. It concluded that Barrale had not demonstrated that this was a single claim case because Nilo's claim created a multiple claim situation. It relied on our decision in Helena Marine Service, Inc. v. Sioux City, 564 F.2d 15 (8th Cir. 1977), Cert. denied, 435 U.S. 1006, 98 S.Ct. 1875, 56 L.Ed.2d 387 (1978), in reaching its conclusion. The court refused to dissolve the injunction or to vacate the ad interim stipulation.

Barrale renewed her motion to dissolve the injunction on April 20, 1978. With her motion, Barrale filed a consent to the allowance and priority of Nilo's claim. The consent provided in relevant part Claimant Barrale is willing to consent, and does hereby consent, to the allowance of the Claim of Nilo Barge Line, Inc., for its attorney's fees and costs herein, in such amounts as may be fixed by the Court, and Claimant Barrale further consents that such amount, as it may be fixed by the Court, may be deducted and paid out of the funds available in this proceeding before the payment of any judgment that may be recovered by Claimant Barrale.

Barrale argued that Nilo's indemnification claim and her claim were one claim for purposes of the Limitation Act. She also argued that by consenting to the allowance and priority of Nilo's costs and attorney's fees, the action became a single claim case. The District Court denied the motion on June 14, 1978, and Barrale appealed.

The Limitation of Liability Act provides that a shipowner's liability to damage claimants is limited to his interest in the vessel and its freight provided that the loss is incurred without his privity or knowledge. 3 46 U.S.C. § 183. An owner seeking to invoke the Act must petition the District Court for a limitation of liability and must deposit with the court an amount equal to the value of his interest in the vessel and its freight or give security for such value. 46 U.S.C. § 185; Fed.R.Civ.P. Supplemental Rule F. This amount constitutes the fund from which damage claims are satisfied. 4 Thereafter, the District Court issues a notice to all potential claimants requiring them to file their claims with the court within a specified time. Fed.R.Civ.P. Supplemental Rule F(4). The District Court also issues an injunction preventing further prosecution of any other action against the owner if the action involves a claim subject to limitation. Fed.R.Civ.P. Supplemental Rule F(3). See, e. g., Helena Marine Service, Inc. v. Sioux City, supra at 17; Pershing Auto Rentals, Inc. v. Gaffney, 279 F.2d 546, 547 (5th Cir. 1960). After all claims have been filed, the District Court determines if a loss occurred; whether there was negligence; if there was negligence, whether it was without the privity and knowledge of the owner; and if limitation is granted, how the fund should be distributed. 5 Farrell Lines, Inc. v. Jones, 530 F.2d 7, 10 (5th Cir. 1976); Petition of Trinidad Corporation, 229 F.2d 423, 428 (2d Cir. 1955).

The primary purpose for limitation proceedings is to provide a concourse for the determination of liability where the asserted claims exceed the value of the vessel. Lake Tankers Corp. v. Henn, 354 U.S. 147, 151-152, 77 S.Ct. 1269, 1 L.Ed.2d 1246 (1957); Anderson v. Nadon, 360 F.2d 53, 57 (9th Cir. 1966). As stated by the Second Circuit in Petition of Moran Transp. Corp., 185 F.2d 386, 389 (2d Cir. 1950), Cert. denied, 340 U.S. 953, 71 S.Ct. 573, 95 L.Ed. 681 (1951),

(T)he purpose of limitation proceedings is not to prevent a multiplicity of suits but, in an equitable fashion, to provide a marshalling of assets the distribution pro rata of an inadequate fund among claimants, none of whom can be paid in full.

Accord, Petition of Trinidad Corporation, supra at 428.

Insofar as limitation proceedings deprive claimants of the right to a trial by jury, they conflict with the provisions of 28 U.S.C. § 1333 which provides in part:

The district courts shall have original jurisdiction, exclusive of the courts of the States, of:

(1) Any civil case of admiralty or maritime jurisdiction, Saving to suitors in all cases all other remedies to which they are otherwise entitled. (Emphasis added.)

The federal courts, recognizing the significance of jury trials to claimants, have attempted to reconcile the "saving to suitors" clause with the purpose of the Limitation Act.

In two kinds of limitation cases, the federal courts have permitted claimants to pursue their remedies in a forum of their own choosing. The first situation exists if the limitation fund exceeds the total of all claims. See, e. g., Lake Tankers Corp. v. Henn, supra; Petition of Trinidad Corporation,supra; Curtis Bay Towing Co. v. Tug Kevin Moran, 159 F.2d 273 (2d Cir. 1947). They do so on the theory that if a limitation fund is inadequate to pay all potential claims, claimants have an interest not only in enhancing their own claims, but also in minimizing the claims of others. Petition of Trinidad Corporation, supra at 428. In such circumstances, the concourse of all claimants in the limitation proceeding is a necessary technique that is utilized to obtain an effective marshalling of assets and to achieve the Act's purpose. It prevents claimants from securing judgments in various courts that, in the aggregate, exceed the fund and, thus, assures the owner that he will not be required to pay damages in excess of the statutory limits. Consequently, the need for the limitation proceeding outweighs the claimant's interests under the "saving to suitors" clause.

If, however, the limitation fund is adequate to pay all potential claims, a concourse becomes unnecessary since the claimants are no longer competing among themselves for a greater portion of a limited fund. In this situation, the purpose of the Act will not be thwarted if claimants are allowed to proceed in a forum of their choosing. To require the claimants to proceed in an admiralty court

would transform the Act from a protective instrument to an offensive weapon by which the shipowner could deprive suitors of their...

To continue reading

Request your trial
67 cases
  • S & E Shipping Corp. v. Chesapeake & O. Ry. Co., 80-3426
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • May 12, 1982
    ...its exclusive admiralty jurisdiction to allocate an inadequate limitation fund among competing claimants. In Universal Towing Co. v. Barrale, 595 F.2d 414 (8th Cir. 1979), the Eighth Circuit, considering a series of stipulations similar to those made in this case, ruled that a district cour......
  • Beiswenger Enterprises Corp. v. Carletta, 95-2272
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • June 27, 1996
    ...F(4); see In re Dammers & Vanderheide & Scheepvaart Maats Christina B.V., 836 F.2d 750, 755 (2d Cir.1988); Universal Towing Co. v. Barrale, 595 F.2d 414, 417 (8th Cir.1979). When the damage claims have been filed, the district court proceeds to resolve the vessel owner's claim to limited li......
  • Muer, In re, 96-2111
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • July 16, 1998
    ...F(4); see also In re Dammers & Vanderheide & Scheepvaart Maats Christina B.V., 836 F.2d 750, 755 (2d Cir.1988); Universal Towing Co. v. Barrale, 595 F.2d 414, 417 (8th Cir.1979). After the damage claims have been filed, the district court may resolve the vessel owner's claim to limitation o......
  • In re Freedom Unlimited
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • February 18, 2020
    ...claims are necessarily derivative of the damage claims and thus present no "multiple claims" at all), and Universal Towing Co. v. Barrale , 595 F.2d 414, 419 (8th Cir. 1979) (same), with In re Port Arthur Towing Co. , 42 F.3d 312, 316 (5th Cir. 1995) (per curiam) (indemnifications are separ......
  • Request a trial to view additional results
1 books & journal articles
  • Recent Developments in the Shipowner's Limitation of Liability Act.
    • United States
    • Loyola Maritime Law Journal Vol. 21 No. 3, September 2022
    • September 22, 2022
    ...270 F.3d 1086 (7th Cir. 2001). (48) In re S & E Shipping Corp., 678 F.2d 636 (6th Cir. 1982). (49) Universal Towing Co., v. Barrale, 595 F.2d 414 (8th Cir. (50) Freedom Unlimited v. Taylor Lane Yacht & Ship, LLC, 2021 U.S. App. LEXIS 24524, 2021 WL 3629904 (11th Cir. 2021). (51) Id.......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT