773 F.3d 596 (5th Cir. 2014), 14-40326, In re Complaint of RLB Contracting, Inc.

Docket Nº:14-40326
Citation:773 F.3d 596
Opinion Judge:PER CURIAM:
Party Name:In re: In the Matter of the Complaint of RLB CONTRACTING, INCORPORATED, as Owner of the Dredge " Jonathan King Boyd" and its Engine, Tackle, and Gear for Exoneration or Limitation of Liability, RLB CONTRACTING, INCORPORATED, as Owner of the Dredge " Jonathan King Boyd" and its Engine, Tackle, and Gear for Exoneration or Limitation of Liability, Pet
Attorney:For RLB CONTRACTING, INCORPORATED, as Owner of the Dredge Jonathan King Boyd and its Engine, Tackle, and Gear for Exoneration or Limitation of Liability, Petitioner - Appellant: Francis I. Spagnoletti, David Stephen Toy, Megan Ann Whitlock, Spagnoletti & Company, Houston, TX; Phillip A. Wittmann...
Judge Panel:Before DAVIS and HAYNES, Circuit Judges.[*]
Case Date:December 03, 2014
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 596

773 F.3d 596 (5th Cir. 2014)

In re: In the Matter of the Complaint of RLB CONTRACTING, INCORPORATED, as Owner of the Dredge " Jonathan King Boyd" and its Engine, Tackle, and Gear for Exoneration or Limitation of Liability, RLB CONTRACTING, INCORPORATED, as Owner of the Dredge " Jonathan King Boyd" and its Engine, Tackle, and Gear for Exoneration or Limitation of Liability, Petitioner - Appellant

v.

MARK BUTLER, Individually and as Heir to the Estate of Sammi Butler; JOSEPH SIGLE, Individually and on behalf of BS, a minor child; LINDA BUTLER, Claimants - Appellees

No. 14-40326

United States Court of Appeals, Fifth Circuit

December 3, 2014

Page 597

[Copyrighted Material Omitted]

Page 598

Appeal from the United States District Court for the Southern District of Texas.

For RLB CONTRACTING, INCORPORATED, as Owner of the Dredge " Jonathan King Boyd" and its Engine, Tackle, and Gear for Exoneration or Limitation of Liability, Petitioner - Appellant: Francis I. Spagnoletti, David Stephen Toy, Megan Ann Whitlock, Spagnoletti & Company, Houston, TX; Phillip A. Wittmann, Stone Pigman Walther Wittmann, L.L.C., New Orleans, LA.

For MARK BUTLER, Individually and as Heir to the Estate of Sammi Butler, Claimant - Appellee: Franklin Baldwin Daniel, Essmyer & Daniel, P.C., Houston, TX.

For JOSEPH SIGLE, Individually and on behalf of BS, a minor child, Claimant - Appellee: Franklin Baldwin Daniel, Essmyer & Daniel, P.C., Houston, TX; Walter P. Fontenot, Law Offices of Walter Fontenot, Liberty, TX.

For LINDA BUTLER, Claimant - Appellee: Darwin John Seidel, Houston, TX.

Before DAVIS and HAYNES, Circuit Judges.[*]

OPINION

Page 599

PER CURIAM:

Petitioner-Appellant RLB Contracting, Inc. (" RLB" ) filed this action under the Limitation of Liability Act (" Limitation Act" or " Act" ), 46 U.S.C. § 30501 et seq., seeking to limit its liability to $750,000, the value of the dredge vessel, " Jonathan King Boyd" (the " Vessel" ), after a fatal allision between a fishing boat and the Vessel's dredge pipe. Claimants-Appellees Mark Butler, Joseph Sigle, and Linda Butler (collectively, " the Butlers" ), occupants or representatives of occupants of the fishing boat, had previously sued RLB in Texas state court for personal injuries and property damage, and for the wrongful death of one occupant, Butler's twelve-year-old daughter Sammi (" S.B." ). In response to RLB's limitation action, the Butlers contended that RLB had missed the Limitation Act's six-month jurisdictional deadline for invoking the protections of the Act.1 After examining a series of letters exchanged between counsel for the parties, the district court agreed that, more than six months before RLB filed the limitation action, it had received written notice of a potential claim which had a " reasonable possibility" of exceeding the value of the dredge. The court therefore granted the Butlers' motion for summary judgment and dismissed RLB's action as time-barred. Reviewing the district court's ruling de novo, we affirm.

I. FACTS AND PROCEEDINGS

A. Fishing boat accident

On July 1, 2011, the Vessel was engaged in dredging operations near Anahuac in Chambers County, Texas. A fishing boat carrying Mark Butler, his son Joseph Sigle, Sigle's son B.S., and Butler's daughter S.B., collided with a floating dredge pipe associated with the Vessel. All occupants of the fishing boat were thrown overboard, suffering various physical injuries, and S.B. was killed. The Butlers contend that the dredge pipe was inadequately marked and that RLB had negligently failed to post warnings of ongoing dredging operations. The Coast Guard initiated an investigation shortly after the accident.

B. Legal proceedings

Mark Butler filed suit against RLB in Texas state court on June 14, 2012, and RLB was served with the state court petition on July 2.2 RLB filed its limitation of liability action in federal district court on December 28, 2012, seeking to limit its liability to the $750,000 value of the Vessel.

The Butlers filed a motion to dismiss the limitation action as untimely, contending that RLB had received written notice of the claim more than six months prior to the time it filed the limitation action. According to the Butlers, their counsel had sent RLB's counsel numerous emails between July 26, 2011, and June 14, 2012,

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each of which addressed the Butlers' pending claim.

The case was referred to a magistrate judge who issued a Report and Recommendation (" R& R" ) which concluded that, on the basis of those emails, RLB had received the required notice and thus missed the six-month window for filing a limitation action. The district court, after converting the Butlers' motion to dismiss to a motion for summary judgment, adopted the R& R, granted summary judgment to the Butlers, and dismissed the limitation action as time-barred.

C. Pre-suit correspondence

At the heart of this dispute is a series of letters, mostly exchanged via email, between RLB's two lawyers, Andrew Schulz and Wayne Pickering, and Butler's counsel, Frank Daniel. On July 26, 2011, a few weeks after the accident, Daniel sent Schulz a letter via fax, informing him that Daniel had been retained by the Butlers.3 He asked Schulz for " any information [he] or [RLB] may have regarding the cause of the accident, in addition to all witnesses and interested parties." He also made an overture toward settlement, informing Schulz that Daniel " would welcome the opportunity to discuss with [Schulz] [his] thoughts moving forward." Finally, Daniel wrote that " [t]his letter will also serve as notice to your client to preserve all evidence as listed in the attached notice." An attachment to the letter, titled " Notice to RLB Contracting, Inc.," gave Schulz and RLB " notice not to destroy, conceal or alter any paper or electronic files or other data." The attachment further noted that " failure to comply with this notice can result in severe sanctions being imposed by the Court {and liability in tort} for spoliation of evidence or potential evidence." Daniel advised that he expected to obtain this evidence " [t]hrough discovery."

Schulz responded to Daniel the same day via email. In it, he stated that because " the investigation [was] ongoing, . . . any substantive information w[ould] remain part of [his firm's] work product until the investigation [was] complete." These references to " the investigation" meant the Coast Guard investigation of the accident.

On August 19, 2011, Daniel sent Schulz an email stating that " it might behoove [them] to seriously consider mediation before any lawsuit." Daniel expressly based this recommendation on information that he had gathered about " the nature of the injuries, bystander claims, graphic photos, [and] the PTSD claims" of his clients and other witnesses, as well as from a meeting with Linda Butler's attorney. Daniel referenced the additional pain that his clients would have to endure " if [they] are forced to litigate and go through depositions."

On August 24, 2011, Schulz wrote to Daniel, rejecting his proposal to mediate and noting that " any attempt to evaluate the case would be futile" until the Coast Guard investigation was complete. Daniel wrote back the next day, reiterating that mediation was their " best option" as " investigations will only tell us so much." Schulz responded: " Okay. But I cannot imagine a carrier just throwing out your number of $3M, without more, just to your clients." He added that they could " keep the dialogue going." There was another exchange of emails on October 28, primarily dealing with preservation of the fishing boat for any future litigation.

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The record reflects no correspondence for the next seven months. Then, on May 30, 2012, Daniel sent one last mediation offer to Schulz, noting that, as the Coast Guard investigator had released his report, Daniel " wanted to check with [Schulz] one last time about pre-suit mediation." Schulz replied that he would check with Pickering and the " carrier" (presumably, RLB's insurance carrier). Later that day, Daniel wrote to Schulz requesting an RLB safety manual and a witness's name in preparation for any possible mediation. He also advised Schulz that he would be taking a statement from a boater who had allided with the dredge pipe on the same day as had his client. Finally, Daniel's email addressed possible...

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