Garb v. Garb

• Decision Date: 19 December 2019
• Docket Number: Civil Action No. 18-11769(FLW)
• Parties: LAWRENCE GARB, Petitioner, v. MINDY GARB, Claimant.
• Court: U.S. District Court — District of New Jersey

LAWRENCE GARB, Petitioner, v. MINDY GARB, Claimant.

Civil Action No. 18-11769(FLW)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

December 19, 2019

*NOT FOR PUBLICATION*

OPINION

WOLFSON, Chief District Judge

:

This suit involves an alleged injury sustained by Claimant Mindy Garb ("Claimant") aboard Petitioner Lawrence Garb's ("Petitioner") vessel on June 25, 2016, during an afternoon venture on Barnegat Bay in New Jersey. Petitioner filed this action seeking exoneration from or limitation of liability pursuant to 46 U.S.C. § 30501, et seq., and Rule F of the Supplemental Rules for Certain Admiralty and Maritime Claims and Asset Forfeiture Actions of the Federal Rules of Civil Procedure. In the instant matter, Claimant moves to dismiss Petitioner's Second Amended Complaint (the "Motion"). For the reasons set forth herein, Claimant's Motion to Dismiss is DENIED.

I. BACKGROUND

For the purposes of this motion, the facts are recounted from the Second Amended Complaint and assumed as true. Petitioner is the owner of a 2006, 18-foot Sugar Sand Mirage vessel (the "vessel"). (Pet'r's Second Am. Compl. ("SAC") ¶ 5, ECF No. 12.) This action arises from an incident which occurred on June 25, 2016, while Claimant, Petitioner, and four others, were traveling aboard Petitioner's vessel on Barnegat Bay. (Pet'r's SAC ¶ 16.) Claimant, Petitioner's sister, allegedly sustained injuries when, at approximately 2:00 p.m., "a speedboat traveling northbound appeared suddenly in the navigation channel, approaching [Petitioner's] vessel at a high rate of speed," creating a sudden wake which in turn contacted the vessel, and which purportedly caused Claimant to hit her back against the seat. (Pet'r's SAC ¶¶ 31-44.) On May 31, 2018, Claimant filed an action against Petitioner in the Superior Court of New Jersey, Law Division, Essex County, alleging state common law claims of negligence, which Claimant states "likely exceeded the value of Petitioner's interest in the vessel on the date of the alleged incident." (Pet'r's SAC ¶ 55.) Petitioner removed the matter to the United States District Court for the District of New Jersey pursuant to 28 U.S.C. §§ 1333, 1441, and 1446. (Not. of Removal, ECF No. 1, Garb v. Garb et al., No. 18-9940(KM)(MAH) (D.N.J. filed May 31, 2018).) Claimant moved to remand under the "savings to suitors" clause of the United States Constitution. (Mot. to Remand, ECF No. 3, Garb.) The Honorable Kevin McNulty, U.S.D.J., remanded the matter to the Superior Court of New Jersey on June 19, 2018, upon a stipulation to remand by the parties. (Stipulation, Order, ECF Nos. 4-5, Garb.)

On July 18, 2018, while the state litigation was pending, Petitioner filed this suit for Exoneration from or Limitation of Liability as Owner of a 2006, 18-foot bow rider boat pursuant to 46 U.S.C. § 30501, et seq., and Rule F of the Supplemental Rules for Certain Admiralty and Maritime Claims and Asset Forfeiture Actions of the Federal Rules of Civil Procedure. Petitioner amended his Complaint on July 26, 2018. (Pet'r's Compl. ¶ 1, Pet'r's First Am. Compl. ("FAC"), ECF Nos. 1-2.) In filing this action, Petitioner triggered an automatic stay of the concurrent state court proceeding under 46 U.S.C. § 30511(c). On September 28, 2019, Claimant moved to dismiss Petitioner's FAC for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).(Claimant's First Mot. to Dismiss, ECF No. 6.) The Court granted Claimant's Motion to Dismiss, finding that Petitioner failed to plead a factual basis to support exoneration from or limitation of liability; the Court reasoned that Petitioner offered a bare and conclusory denial of negligence, and separately, of privity or knowledge, in his Amended Complaint in the form of a single statement for each element, which was insufficient to survive Rule 12(b)(6). (See Letter Order 4-5, ECF No. 11.) The Court permitted Petitioner to file a second amended complaint to cure these deficiencies. (Id. at 5.) Petitioner filed the SAC on May 14, 2019. (Pet'r's SAC, ECF No. 12.) Claimant filed the instant Motion to Dismiss on May 23, 2019. (Claimant's Mot. to Dismiss, ECF No. 13.)

II. LEGAL STANDARD

A. Standard of Review

Pursuant to Rule 12(b)(6), the Court is entitled to dismiss a complaint that fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). In evaluating a motion to dismiss a complaint for failure to state a claim under Rule 12(b)(6), the Court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine, whether under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cty. Of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Rule 8 requires "a short and plain statement that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555 (2007) (internal citations omitted). "When there arewell-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Iqbal, 556 U.S. at 679. To determine the sufficiency of a complaint, a district court must engage in three-part analysis: (1) "identifying the elements of the claim," (2) "reviewing the complaint to strike conclusory allegations," and (3) "looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part of the inquiry are sufficiently alleged." Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).

B. Limitation of Liability

"Congress enacted the Limited Liability Act in 1851 to promote investment in the commercial shipping industry," and structured the Act to accomplish this by allowing owners of vessels to limit their liability "for any claim, debt, or liability" to "the value of the vessel and pending freight" for "any loss, damage or injury by collision, or any act, matter, thing, loss, damage or forfeiture done, occasioned, or incurred, without the privity or knowledge of the owner." Gorman v. Cerasia, 2 F.3d 519, 523 n.3 (3d Cir. 1993); 46 U.S.C. § 30505(a)-(b); see also The British Transp. Comm'n v. United States, 354 U.S. 129, 133 (1957). A limitation action against a shipowner differs from an ordinary lawsuit against a shipowner in two respects. "First, it introduces the issue of limitation of liability, a special form of relief or affirmative defense asserted by the shipowner. Second, the proceeding is initiated by the shipowner rather than the claimant actually seeking recovery." Bankers Trust Co. v. Bethlehem Steel Corp., 761 F.2d 943, 948 n.14 (3d Cir. 1985) (citation omitted).

To examine whether a limitation of, or exoneration from, liability is appropriate, courts employ a two-step process: (1) "what acts of negligence or conditions of unseaworthiness¹ causedthe accident," In re Red Rock Ventures, LLC, No. 09-2003, 2010 WL 1372076, at *2 (D.N.J. Mar. 31, 2010), and (2) "whether the owner of the vessel had 'knowledge or privity' of these acts of negligence or conditions of unseaworthiness." Id. As the Third Circuit has instructed, the burden of proof in seeking exoneration or limitation is divided. In the first instance,

[t]he claimant must prove that the destruction or loss was proximately caused by negligence on the vessel. Once negligence has been shown to be the cause, the burden then shifts to the shipowner to demonstrate that he comes within the statutory exemption because there was neither design, neglect, privity, nor knowledge on his part.

Bankers Trust, 761 F.2d at 948 n.14 (citing Coryell v. Phipps, 317 U.S. 406, 409 (1943); Farrell Lines, Inc. v. Jones, 530 F.2d 7 (5th Cir. 1976); Waterman S.S. Corp. v. Gay Cottons, 414 F.2d 724 (9th Cir. 1969); In re G.b.R.M.S. Caldas, 350 F. Supp. 566 (E.D. Pa. 1972), aff'd 485 F.2d 679 (3d Cir. 1973)). Thus, on the issue of liability, the damage claimants have the burden of proof while on the issue of limitation, the shipping interests have the burden of proof. See Gorman, 2 F.3d at 523 (explaining that "in a proceeding known as a concursus, the district court, sitting in admiralty without a jury, determines 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 [limitation] fund should be distributed").

"Where individual owners are concerned, 'privity or knowledge' has been defined to mean 'some personal participation of the owner in fault or negligence which caused or contributed to the loss or injury.'" In re Complaint of Cirigliano, 708 F. Supp. 101, 104 (D.N.J. 1989)(quoting Coryell, 317 U.S. at 441) (second citation omitted); see also In re Roberto, Civ No. 86-657, 1986 WL 15685, at *2 (D.N.J. Sept. 26, 1986) (determining that finding a collision occurred without the 'privity or knowledge' of the operator of the vessel requires a further factual inquiry).

In her Motion, Claimant argues that Petitioner fails to state a plausible claim for exoneration or limitation for two reasons: first, the owner of a vessel is not entitled to exoneration or limitation when he is also "the operator and negligent party who caused the accident harming Claimant." (Claimant's Moving Br. 5, ECF No. 13-1); second, Petitioner's SAC "again contains nothing more than bare, unsupported conclusory statements that do not give rise to relief." (Id.)

More specifically, Claimant contends that under 46...