889 F.3d 517 (9th Cir. 2018), 16-15023, Barnes v. Sea Hawaii Rafting, LLC

Docket Nº:16-15023
Citation:889 F.3d 517
Opinion Judge:NGUYEN, Circuit Judge:
Party Name:Chad Barry BARNES, Plaintiff-Appellant, v. SEA HAWAII RAFTING, LLC; Kris Henry; John Does 1-20; Mary Does 1-20; Doe Corporations 1-20; Doe Partnerships 1-20; Doe Associates 1-20; Doe Governmental Agencies 1-20; Other Entities 1-20, In Personam; M/V Tehani; Kristin Kimo Henry, Debtor in U.S. Bankruptcy Court, District of Hawaii— Chapter 13 ...
Attorney:Jay Lawrence Friedheim (argued), Admiralty Advocates, Honolulu, Hawaii; John C. Gibson, Honolulu, Hawaii; for Plaintiff-Appellant. Simon Klevansky (argued), Alika L. Piper, and Nicole D. Stucki, Klevansky Piper LLP, Honolulu, Hawaii, for Defendants-Appellees Dane S. Field, Sea Hawaii Rafting LLC,...
Judge Panel:Before: Raymond C. Fisher, Richard A. Paez, and Jacqueline H. Nguyen, Circuit Judges.
Case Date:March 28, 2018
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
SUMMARY

The Ninth Circuit reversed the dismissal of a seaman's claims in admiralty against a vessel in rem. The panel held that the district court erred by denying the seaman's maintenance requests in full, staying the action, and dismissing the vessel; the district court obtained jurisdiction over the vessel when the seaman filed a verified complaint and defendants appeared generally and litigated... (see full summary)

 
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889 F.3d 517 (9th Cir. 2018)

Chad Barry BARNES, Plaintiff-Appellant,

v.

SEA HAWAII RAFTING, LLC; Kris Henry; John Does 1-20; Mary Does 1-20; Doe Corporations 1-20; Doe Partnerships 1-20; Doe Associates 1-20; Doe Governmental Agencies 1-20; Other Entities 1-20, In Personam; M/V Tehani; Kristin Kimo Henry, Debtor in U.S. Bankruptcy Court, District of Hawaii— Chapter 13 Bankruptcy Case # 14-01475 (re: doc no. 142) also known as Kris Henry; Dane S. Field, Trustee of the bankruptcy estate of Sea Hawaii Rafting, LLC, Defendants-Appellees.

No. 16-15023

United States Court of Appeals, Ninth Circuit

March 28, 2018

Argued and Submitted June 16, 2017, Honolulu, Hawaii

Amended April 19, 2018

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Appeal from the United States District Court for the District of Hawaii, Alan C. Kay, Senior District Judge, Presiding, D.C. No. 1:13-cv-00002-ACK-RLP

Jay Lawrence Friedheim (argued), Admiralty Advocates, Honolulu, Hawaii; John C. Gibson, Honolulu, Hawaii; for Plaintiff-Appellant.

Simon Klevansky (argued), Alika L. Piper, and Nicole D. Stucki, Klevansky Piper LLP, Honolulu, Hawaii, for Defendants-Appellees Dane S. Field, Sea Hawaii Rafting LLC, and M/V Tehani.

Lisa M. Volquardsen, Kailua-Kona, Hawaii, for Defendant-Appellee Kris Henry.

Before: Raymond C. Fisher, Richard A. Paez, and Jacqueline H. Nguyen, Circuit Judges.

SUMMARY[*]

Maritime Law

The panel reversed the district court's dismissal of a seaman's claims in admiralty against a vessel in rem, issued a writ of mandamus to the district court to award the seaman maintenance, denied a motion to dismiss the appeal as moot, and remanded the case to the district court.

The seaman was injured when the vessel on which he was working exploded. He sued the vessel in rem, and he sued the company that owned the vessel and the company's owner and manager in personam, seeking to enforce his seaman's lien against the vessel.

The panel held that it had jurisdiction under 28 U.S.C. § 1292(a)(3) to review the district court's interlocutory order dismissing the seaman's claims against the vessel because the order affected the seaman's substantive rights. The panel concluded that it lacked jurisdiction to review the district court's denial of summary judgment as to a maintenance amount, but it treated the notice of appeal as a mandamus petition.

The panel held that the district court erred in staying the action when the vessel owner declared bankruptcy and in dismissing the seaman's claims against the vessel for lack of in rem jurisdiction. The panel concluded that the district court obtained jurisdiction over the vessel when the seaman filed a verified complaint and the defendants appeared generally and litigated without contesting in rem jurisdiction, and the seaman's failure to verify his amended complaint did not divest the district court of in rem jurisdiction. The district court did not lose in rem jurisdiction while the vessel remained in its constructive custody, and the court's control over the vessel, once obtained, was exclusive. The vessel owner's later-filed bankruptcy petition did not divest the district court of in rem jurisdiction. Moreover, the automatic bankruptcy stay did not affect the seaman's maritime lien against the vessel, and the bankruptcy court had no authority to dispose of the lien through the application of bankruptcy law.

The panel denied the bankruptcy trustee's motion to dismiss the appeal as moot after the trustee, with the bankruptcy court's approval, sold the vessel purportedly free and clear of the seaman's maritime lien.

The panel held that the district court erred by denying the seaman's maintenance requests in full. The panel held that when a seaman establishes his entitlement to maintenance and provides some evidence of his actual living expenses, the burden shifts to the vessel's owner to produce evidence that the seaman's actual costs were unreasonable. Whether or not the vessel's owner produces such evidence, the seaman is entitled to a maintenance award in the amount of his actual costs up to the reasonable rate in his locality. The panel issued a writ of mandamus to the district court to award the seaman maintenance for his undisputed actual and reasonable expenses of $34 per day, subject to a potential increase after trial.

ORDER AND AMENDED OPINION

The Opinion filed on March 28, 2018, is amended as follows:

1. On page 9, line 11, of the slip opinion, the word ‹ Honolulu› is replaced with ‹ his locality› and, at the end of the sentence, a footnote with the following text is added: ‹ Barnes originally presented the district court with evidence of reasonable costs in Honolulu but subsequently clarified that Kailua-Kona was the relevant locality.›

The remaining footnotes are renumbered accordingly.

2. On page 40, line 8, of the slip opinion, the word ‹ Honolulu› is replaced with ‹ his locality› enclosed in regular brackets.

No new petitions for rehearing or rehearing en banc will be accepted.

OPINION

NGUYEN, Circuit Judge:

Chad Barnes is a seaman who was injured when the boat on which he was working, the M/V Tehani, exploded. During his recovery, Barnes received some monetary assistance from either Sea Hawaii Rafting, LLC (" SHR" ), which owned the Tehani, or Kris Henry, SHR’s owner and manager, but those payments soon stopped. Seeking the ancient maritime remedy of maintenance and cure,1 among other relief, Barnes sued the Tehani in rem and SHR and Henry in personam to enforce his seaman’s lien against the vessel. Although admiralty courts normally

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handle such matters expeditiously, that did not happen here for two reasons.

First, the district court rejected Barnes’s pretrial requests to enforce SHR’s obligation to pay maintenance and cure. The court concluded that Barnes was entitled to maintenance and cure and had demonstrated his actual maintenance expenses. Nonetheless, despite undisputed evidence that Barnes was entitled to at least some of his actual expenses, the district court declined to award Barnes any maintenance until trial.

Second, when SHR declared bankruptcy after fifteen months of litigation and shortly before trial, the district court stayed Barnes’s action. The district court concluded that the Tehani was an asset of the debtor’s estate and that the automatic bankruptcy stay barred proceedings to enforce Barnes’s maritime lien against the vessel. The bankruptcy court partially lifted the bankruptcy stay to allow the district court to evaluate Barnes’s claims against SHR but expressly prohibited the district court from issuing any ruling that would affect the maritime lien’s status.

Ultimately, the district court dismissed Barnes’s claims against the Tehani. The court reasoned that it lacked in rem jurisdiction because, even though Barnes verified his original complaint, he failed to verify the amended complaint. Then, while Barnes’s appeal was pending, the bankruptcy trustee— with the bankruptcy court’s approval— sold the Tehani purportedly free and clear of Barnes’s maritime lien. The trustee subsequently moved to dismiss this appeal as moot.

We conclude that the district court erred by denying Barnes’s maintenance requests in full, staying the action, and dismissing the Tehani. The district court obtained jurisdiction over the vessel Tehani when Barnes filed a verified complaint and the defendants appeared generally and litigated without contesting in rem jurisdiction. The district court did not lose in rem jurisdiction while the Tehani remained in its constructive custody. And the court’s control over the vessel, once obtained, was exclusive. SHR’s later-filed bankruptcy petition did not divest the district court of in rem jurisdiction. Moreover, the automatic bankruptcy stay did not affect Barnes’s maritime lien against the Tehani, and the bankruptcy court had no authority to dispose of the lien through the application of bankruptcy law.

When, as here, a seaman establishes his entitlement to maintenance and provides some evidence of his actual living expenses, the burden shifts to the vessel’s owner to produce evidence that the seaman’s actual costs were unreasonable. Whether or not the vessel’s owner provides such evidence, the seaman is entitled to a maintenance award in the amount of his actual costs up to the reasonable rate in his locality. Over three years after concluding that Barnes was entitled to maintenance and had sufficiently proven his actual costs, the district court has yet to award him any maintenance.

Accordingly, we deny the trustees motion to...

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