Anderson v. Nadon

• Decision Date: 11 May 1966
• Docket Number: No. 20428.,20428.
• Citation: 360 F.2d 53
• Parties: Arthur ANDERSON and Clatsop Fisheries, Inc., an Oregon corporation, Appellants, v. Gene R. NADON, Dorothy Irene Nadon and Jataboro Corporation, a corporation, Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

360 F.2d 53 (1966)

Arthur ANDERSON and Clatsop Fisheries, Inc., an Oregon corporation, Appellants, v. Gene R. NADON, Dorothy Irene Nadon and Jataboro Corporation, a corporation, Appellees.

No. 20428.

United States Court of Appeals Ninth Circuit.

March 30, 1966.

Rehearing Denied May 11, 1966.

Floyd A. Fredrickson, Lloyd W. Weisensee, of Gray, Fredrickson & Heath, Portland, Or., for appellants.

Kenneth Roberts of Mautz, Souther, Spaulding, Kinsey & Williamson, Rockne Gill, Portland, Or., Jerald S. Weigler, of Krause, Lindsay & Nahstoll, Portland, Or., for appellees.

Before MADDEN, Judge of the Court of Claims, and HAMLEY and JERTBERG, Circuit Judges.

HAMLEY, Circuit Judge:

This is an admiralty suit for exoneration from or limitation of liability for damages resulting from a collision at sea. Petitioners for this relief sought and obtained an injunction prohibiting four named respondents from commencing a state court action to recover such damages. Two of the respondents moved for an order dissolving the injunction. The motion was denied whereupon those two respondents took this appeal.

The collision occurred upon the high seas, on December 6, 1964, between two fishing vessels, the F/V EAGLE and the F/V BETTY. The BETTY sank. On June 4, 1965 the owners of the EAGLE, Gene R. Nadon, Dorothy Irene Nadon, and Jataboro Corporation, filed their petition instituting this proceeding.¹ Named as respondents were Clatsop Fisheries, Inc., (Clatsop), an Oregon corporation, which had owned and operated the BETTY, Arthur Anderson, who was the captain of the BETTY at the time of the collision and who is President of Clatsop, and Riley Linville and Uno Winters, who were members of the crew of the BETTY at the time of the collision.

Petitioners alleged that they had been advised that Anderson and Clatsop were claiming damages in the sum of $60,000 for the loss of the BETTY, and $400 for the loss of her fish catch. They alleged that Linville and Winters had also advised that they were claiming damages in excess of $1,000 for loss of personal effects, wages and other injury. Petitioners alleged that, immediately after the collision the value of the EAGLE was $32,000, and that she then had on board a catch of fish worth $2,541.28.

As a part of their petition, petitioners submitted their ad interim stipulation for value in the amount of $35,000, indicating a willingness to file a formal stipulation supported by sureties. They also alleged that the loss and damage resulting from the collision was occasioned without fault on the part of the EAGLE, her master, crew, or petitioners, and without their privity or knowledge. Petitioners asked for a determination that they are not liable to any extent. However, should it be determined that any of them are liable, petitioners asked that such liability be limited to the value of their interest in the EAGLE at the end of the voyage in question, and her pending freight.²

In response to monitions which were issued and served upon them, respondents Anderson and Clatsop appeared and filed a joint claim and answer, Respondents Linville and Winters made no appearance. In their answer, Anderson and Clatsop denied the critical allegations of the petition, particularly the allegations that petitioners are entitled to exoneration from or limitation of liability, and that the true value of the EAGLE is $32,000. They also alleged that, on the date of the collision, the EAGLE was unseaworthy, and her master and crew were negligent, all with petitioners' privity and knowledge. It was further asserted that this unseaworthiness and negligence were the proximate causes of the loss of the BETTY, her cargo, the personal effects of the master and crew, and any resulting injuries. Respondents claimed damages of approximately $90,000.

At the time of the filing of their claim and answer, Anderson and Clatsop also filed a combined ex parte stipulation and motion for the purpose of obtaining an order dissolving the injunction referred to above, so as to permit Clatsop to file a suit against petitioners in an Oregon court to recover damages for the loss of the BETTY. They therein stipulated and agreed, among other things: (1) that Anderson has a claim for loss of personal effects in the amount of $650, but has no claim for personal injuries, (2) that while Linville and Winters suffered minor personal injuries and loss of personal effects, neither of them will make a claim herein nor initiate any proceedings against the EAGLE or her owners or operators,³ (3) that Clatsop, as trustee of the claims of Linville and Winters, has advanced the amount of their respective claims,⁴ (4) that in the event the court allows Clatsop to file a state court suit against petitioner to recover damages for the loss of the BETTY, then respondents will not thereafter, in the limitation proceeding, claim as res judicata the personal liability of petitioners established in such state court action, and (5) that if Clatsop is permitted to sue in the state court respondents will not seek to enforce and collect any judgment against petitioners therein obtained, except in and through the limitation proceedings.

When the motion was argued, Anderson and Clatsop additionally offered to file a complete disclaimer of all claims with the exception of the claim for the loss of the BETTY, if the court felt this to be necessary in order for respondents to obtain dissolution of the injunction. After the district court took the motion under advisement, but before it acted thereon, Clatsop filed an ex parte stipulation, designated a "priority consent," agreeing that any claim filed on behalf of Linville, Winters or Anderson, as such claims may be fixed by the court, should be deducted and paid out of available funds before the payment of any judgment recovered by Clatsop in its proposed state court action.

Appellants Anderson and Clatsop argue that under the circumstances related above, the district court erred in denying their motion to dissolve the injunction.

The judicial power of the United States extends to all cases of admiralty and maritime jurisdiction. Art. III, § 2 of the Constitution. Under the Judiciary Act of 1789, original jurisdiction of such cases is vested in the district courts, exclusive of the courts of the states, "* * * saving to suitors in all cases all other remedies to which they are otherwise entitled." 28 U.S.C. § 1333(1) (1964). Had no limitation proceeding been interposed, therefore, Clatsop would have been entitled to prosecute, in an appropriate state court, its in personam claims against petitioners, notwithstanding the fact that such claims are cognizable in admiralty. See Madruga v. Superior Court, 346 U.S. 556, 560, 74 S.Ct. 298, 98 L.Ed. 290.

But here a proceeding to limit liability was instituted in the district court by the owners of the EAGLE. In that proceeding Anderson and Clatsop, appearing as claimants, question the right of the owners to limit liability under the facts of this case. The determination of that issue is cognizable only in that district court proceeding. Ex Parte Green, 286 U.S. 437, 440, 52 S.Ct. 602, 76 L.Ed. 1212. Anderson and Clatsop also question the valuation petitioners have placed upon the EAGLE. We need not decide whether the determination of that issue is cognizable only in the district court proceeding, since appellants here concede that this issue should be decided by that court. But compare Red Bluff Bay Fisheries, Inc. v. Jurjev, 9 Cir., 109 F.2d 884, with George J. Waldie Towing Co. v. Ricca, 2 Cir., 227 F.2d 900, 901.

The question then arises of how to reconcile the exclusive jurisdiction of the district court to adjudicate the limitation issues with what would otherwise be the right of Clatsop, under the "savings to suitors" clause, to prosecute its in personam claim for the loss of the BETTY in an Oregon court. In other words, should the district court insist upon deciding the whole case, including the merits of the Clatsop claim, thus depriving Clatsop of its state remedy? Or should it hold the limitation proceeding in abeyance pending prosecution of the Clatsop claim in the state court after which the limitation issues, if not then moot,⁵ and the merits of the Anderson claim and those claims asserted by Clatsop as assignee of the claims of Linville and Winters would be decided by the district court? The district court chose the first of these courses.

A prime purpose of the Limitation Act is to provide a concourse for the determination of liability arising out of marine casualties where asserted claims exceed the value of the vessel, so that there can be an effective marshaling of assets. See Maryland Casualty Co. v. Cushing, 347 U.S. 409, 413-418, 74 S.Ct. 608, 98 L.Ed. 806. See, also, Lake Tankers Corporation v. Henn, 354 U.S. 147, 153, 77 S.Ct. 1269, 1 L.Ed.2d 1246; Petition of Moran Transportation Corp., 2 Cir., 185 F.2d 386, 389.

In recognition of this purpose it is generally held that when there are a multiplicity of claims, and they exceed the limitation fund as asserted by the owner, the district court should adjudicate the entire case, restraining independent state damage actions. Pershing Auto Rentals Inc. v. Gaffney, 5 Cir., 279 F.2d 546, and cases there cited; Gilmore and Black, Admiralty, § 10-17 (1957).⁶

Where there is only one claim then, even though the limitation fund is inadequate, the claimant is entitled to proceed with that claim in a state action providing district court jurisdiction to adjudicate the right to limit liability is reserved and protected. Langnes v. Green, 282 U.S. 531, 51 S.Ct. 243, 75 L.Ed. 520; Red Bluff Bay Fisheries, Inc. v. Jurjev, 9 Cir., 109 F.2d 884; see, also, Pennell v. Read, 5 Cir., 309 F.2d 455, 456. As before noted, we need not decide whether the right to adjudicate the issue of valuation must also be protected and reserved since appellants here concede exclusive district court jurisdiction as to this issue.

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