In re Brava Cruz, L.L.C.

• Decision Date: 27 July 2020
• Docket Number: CIVIL ACTION NO. 1:20-CV-16
• Citation: 475 F.Supp.3d 646
• Parties: In the MATTER OF the Complaint of BRAVA CRUZ, L.L.C., owner of the M/V "Brava Cruz" Official No. 663950 Zimco Marine, L.L.C., and Texgulmarco Company, Inc. for Exoneration From or Limitation of Liability
• Court: U.S. District Court — Southern District of Texas

475 F.Supp.3d 646

In the MATTER OF the Complaint of BRAVA CRUZ, L.L.C., owner of the M/V "Brava Cruz" Official No. 663950 Zimco Marine, L.L.C., and Texgulmarco Company, Inc. for Exoneration From or Limitation of Liability

CIVIL ACTION NO. 1:20-CV-16

United States District Court, S.D. Texas, Brownsville Division.

Signed July 27, 2020

David Patrick Willis, III, David Willis, P.C., Brownsville, TX, for Brava Cruz, LLC.

James H. Hunter, Jr., Esteban Delgadillo, Royston Rayzor et al., Brownsville, TX, for Zimco Marine, LLC, Texgulmarco Company, Inc.

OPINION AND ORDER

Fernando Rodriguez, Jr., United States District Judge

Claimant Abelardo Torres injured his finger while aboard the shrimping vessel Brava Cruz ("The Vessel"). In a Texas state court, he sued the Vessel owner (Brava Cruz, L.L.C.) and related entities (Zimco Marine, L.L.C. and Texgulmarco Company, Inc.) for personal injuries. The three companies then filed this lawsuit under the Limitation of Liability Act, 46 U.S.C. § 30501 et seq. , seeking to limit their liability to the value of the Vessel and its pending freight. (Complaint, Doc. 1; Ad Interim Stipulation for Value, Doc. 2)

Torres now moves to dismiss Petitioners’ Complaint on the grounds that they did not file the limitation action within six months after receiving written notice of his claim, as required by the governing statute. (Motion, Doc. 5) For the following reasons, the Court concludes that Petitioners did file within the permissible time period, warranting denial of the Motion.

I. Jurisdictional Facts and Procedural History

In November 2018, Torres worked as a crewman aboard the Vessel, which Brava Cruz owned.¹ (Id. at 2) Torres alleges that during the voyage, a venomous stingray fell from a shrimping net and stung his left ring finger. (Id. ) When his injury worsened, the Vessel's Captain asked Zimco "for permission to return to shore to seek medical treatment for Mr. Torres", but Zimco instructed the Captain to keep the Vessel out at sea. (Id. ) On December 4, the Vessel returned to shore and Torres filled out an incident report at the Zimco and Texgulmarco offices. (Id. at 2–3) That same day, Torres "was admitted to the Emergency Room ... to undergo amputation of his injured finger", although ultimately, medical providers only removed a portion of his finger. (Torres Reply, Doc. 13, 1)

On December 27, Torres's counsel delivered a letter to Harley Londrie, the registered agent for all three Petitioners. (Motion. Doc. 5, 3) The correspondence identified Torres as the "Client" and provided the correct accident date—i.e. , November 1, 2018. (Dec. 2018 Letter, Doc. 5-1, 2) As resolution of the pending Motion turns largely on the content of this letter, the Court provides the entirety of the document:

Please be advised that this law firm has been employed by the referenced person [Torres] to represent his claim against you or your insurance carrier, if any, arising from an accident that occurred on the captioned date.

The State of Texas requires all businesses to have liability insurance. A Texas liability insurance policy provides that you must send to your insurance adjuster a copy of every demand you receive from us, as well as, all citations, subpoenas and other legal notices. Otherwise, such policy will be void and of no force and effect. Please forward this letter to your insurance agent who wrote the policy or your insurance adjuster, if you have one.

If you do not have liability insurance, please contact me at this office in order to discuss a settlement of the case with you. Please respond upon receipt of this letter so that we may avoid having to take legal action against you.

(Id. )

After receiving the letter from Torres's counsel, Londrie, as manager and records custodian for Brava Cruz, conducted an investigation. He "reviewed documents in the file for [the referenced] fishing trip" and reached several conclusions, including, as examples:

• "[U]pon returning to port on December 4, 2018, Mr. Torres reported a bad infection on one of his fingers;"

• Torres told the Captain of the vessel and "another witness" that "the infection was not related to his work on the vessel;" and

• "[D]espite denying being injured while working on as a header, Mr. Torres was instructed to immediately see a doctor".

(Londrie Affidavit, Doc. 11-6, 1–2) Based on his 47 years of experience and the investigation, Londrie concluded that it was not "reasonably possible that Mr. Torres’ injuries would cost more than $150.000.00 to treat" and that he "could not imagine that the removal and treatment to the tip of a single finger would cost anywhere near that amount." (Id. at 2)

In mid January 2019, a phone call occurred between Zachary Zapata (Torres's attorney) and Brava Cruz's attorney, David Willis. (Motion, Doc. 5, 3) The parties dispute the substance of that call. Zapata claims he received an "unsolicited call" from Willis, and that during the phone call, Willis acknowledged the severity of Torres's injury and that Torres's claim would likely exceed the value of the Vessel. (Zapata Affidavit, Doc. 5-2, 2) Willis denies making such statements and claims that during the call, he minimized the nature of Torres's injury and even called into question whether Torres injured himself in the course and scope of his employment. (Willis Affidavit, Doc. 11-1, 2)

On August 1, 2019, Torres sent a demand letter to Zimco, detailing the facts of the case and the claims involved, and providing an itemized list of medical expenses totaling $220,407.90. (Aug. 2019 Letter, Doc. 5-4, 5) He proposed to settle the matter for $1,750,000.00. (Id. ) In the letter, Torres did not mention Brava Cruz or Texgulmarco. (Id. at 2–4)

On October 11, Torres filed a Jones Act claim against all three companies in a Texas state court. (Motion, Doc. 5, 3; State Ct. Petition, Doc. 5-5, 2)

In January 2020, Brava Cruz, Zimco, and Texgulmarco filed the instant action, seeking to limit their liability to $209,312, the sum of the fair market value of the Vessel ($150,000) and its pending freight at the conclusion of the voyage ($59,312). (Complaint, Doc. 1)

II. Analysis

Torres moves to dismiss this action for lack of subject matter jurisdiction, alleging that Petitioners failed to timely file their Complaint within the six-month period required by the Limitation Act. (Motion, Doc. 5) Torres argues that "[a]t the very least, Complainant's proverbial 6-month clock began ticking on January 15, 2019 when [Brava Cruz's attorney] acknowledged that litigation may ensue pursuant to [the December 2018 letter]". (Id. at 5)

Petitioners disagree that either the December 2018 letter or the January 15 phone conversation provided sufficient written notice under the Limitation Act. Zimco and Brava Cruz argue that written notice did not occur until the August 2019 demand letter. (Zimco & Texgulmarco Response, Doc. 10, 8–10; Brava Cruz Response, Doc. 11, 9) Texgulmarco maintains that only the state court lawsuit, in October 2019, satisfied the statutory requirement. (Zimco & Texgulmarco Response, Doc. 10, 11–12)

A. Standard of Review

Under Federal Rule of Civil Procedure 12(b)(1), a trial court must dismiss an action for lack of subject matter jurisdiction when the Court is without the statutory or constitutional power to adjudicate the case. Home Builders Ass'n of Miss., Inc. v. City of Madison , 143 F.3d 1006, 1010 (5th Cir. 1998). The party seeking the federal forum bears the burden of proving federal jurisdiction. Stockman v. Fed. Election Comm'n , 138 F.3d 144, 151 (5th Cir. 1998). In the context of a limitation action, a court lacks subject matter jurisdiction if the petitioner fails to initiate the suit within the statutorily-prescribed time period. Complaint of Tom-Mac, Inc. , 76 F.3d 678, 682 (5th Cir. 1996) ; In re Eckstein Marine Serv. L.L.C. , 672 F.3d 310, 315 (5th Cir. 2012).

"When a party challenges subject matter jurisdiction, the court is given the authority to resolve factual disputes, along with the discretion to devise a method for making a determination with regard to the jurisdictional issue." Moran v. Kingdom of Saudi Arabia , 27 F.3d 169, 172 (5th Cir. 1994) ; see also Ctr. for Biological Diversity, Inc. v. BP Am. Prod. Co. , 704 F.3d 413, 423 (5th Cir. 2013) ("[A] district court [is] not bound by the pleadings in order to decide the Rule 12(b)(1) motion ...; rather, it [is] empowered to make factual findings that [are] determinative of jurisdiction.") (citing Williamson v. Tucker , 645 F.2d 404, 413 (5th Cir. 1981) ). "The court's authority to consider evidence presented beyond the pleadings allows it to ... [consider]" affidavits, further discovery, or oral testimony. Moran , 27 F.3d at 172. When a movant makes a factual attack, the nonmovant must establish subject matter jurisdiction by a preponderance of the evidence. Irwin v. Veterans Admin. , 874 F.2d 1092, 1096 (5th Cir. 1989).

B. Written Notice under the Limitation of Liability Act

The Limitation Act "allows a vessel owner to limit liability for damage or injury ... to the value of the vessel or the owner's interest in the vessel." In re The Complaint of RLB Contracting, Inc., as Owner of the Dredge Jonathan King Boyd its Engine, Tackle, Gear for Exoneration or Limitation of Liab. , 773 F.3d 596, 602 (5th Cir. 2014) [hereinafter RLB Contracting ] (quoting Lewis v. Lewis & Clark Marine, Inc. , 531 U.S. 438, 446, 121 S.Ct. 993, 148 L.Ed.2d 931 (2001) ) (internal quotation marks omitted). "A limitation action essentially establishes a limited fund equal to the value of the vessel and consolidates all potential claims before one federal district court." Id. at 602 n.12 (citing Lewis , 531 U.S. at 448, 121 S.Ct. 993 ). "To invoke the protections of the Act, the vessel owner must bring an action in district court ‘within 6 months after a claimant gives the owner written notice of a claim.’ " Id. at 602 (holding that "a written communication may serve as notice under the Act in lieu of a filed complaint") (quoting...