In re Complaint Mykolenko, Civil No. 2018-28

• Decision Date: 04 March 2019
• Docket Number: Civil No. 2018-28
• Parties: IN THE MATTER OF: THE COMPLAINT OF DANIEL MYKOLENKO AND NOELLE MYKOLENKO, AS OWNERS OF THE S/V NADIYA, HIN# RAC4711E303, FOR EXONERATION FROM OR LIMITATION OF LIABILITY, Petitioners.
• Court: U.S. District Court — Virgin Islands

IN THE MATTER OF: THE COMPLAINT OF DANIEL MYKOLENKO AND NOELLE MYKOLENKO,
AS OWNERS OF THE S/V NADIYA, HIN# RAC4711E303,
FOR EXONERATION FROM OR LIMITATION OF LIABILITY, Petitioners.

Civil No. 2018-28

DISTRICT COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN

March 4, 2019

ATTORNEYS:

Andrew C. Simpson
Law Offices of Andrew Simpson
St. Croix, U.S.V.I.
For Daniel Mykolenko and Noelle Mykolenko.

ORDER

GÓMEZ, J.

Before the Court is the motion of the S/V NADIYA to approve an ad interim stipulation and to issue a monition and injunction.

I. FACTUAL AND PROCEDURAL HISTORY

Daniel and Noelle Mykolenko (the "Mykolenkos") own the sailing vessel NADIYA ("NADIYA"). On September 6, 2017, the NADIYA was docked at the Compass Point Marina. The Mykolenkos hired Charter House Yacht Club to ensure that the NADIYA was safely docked during the passage of Hurricane Irma.

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During Hurricane Irma, the NADIYA allegedly broke free from her moorings and struck two other vessels, the M/V Stop Talking and the Pantagon II. All three vessels were damaged. The Mykolenkos allege that the potential damage from the M/V Stop Talking and the Pantagon II are expected to exceed the post-hurricane value of the NADIYA. The Mykolenkos further allege that any damage caused by the NADIYA was not due to any fault or negligence on their part.

The Mykolenkos assert that the value of the NADIYA after Hurricane Irma is no more than $120,000. In support of their assertion, the Mykolenkos direct the Court to the declaration of Bob Goodchild, an accredited marine surveyor, and the declaration of Captain William Howe, of Howe Marine Surveys, both of whom conclude that the NADIYA is worth no more than $120,000.

On May 18, 2018, the Mykolenkos filed the instant complaint and a motion seeking approval of an ad interim stipulation and the issuance of a monition.

II. DISCUSSION

The Limitation of Liability Act grants shipowners the right to limit liability for injury and damage claims arising out of accidents involving their vessels. See 46 U.S.C. § 30501, et

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seq. As the Supreme Court has explained, the animating purpose of the Act:

was to encourage shipbuilding and to induce the investment of money in this branch of industry by limiting the venture of those who build the ships to the loss of the ship itself or her freight then pending, in cases of damage or wrong happening, without the privity, or knowledge of the shipowner, and by the fault or neglect of the master or other persons on board.

Hartford Acc. & Indem. Co. of Hartford v. S. Pac. Co., 273 U.S. 207, 214 (1927). To that end, the Act provides that the liability of a shipowner arising out of a maritime accident "shall not exceed the value of the vessel and pending freight," so long as the accident occurred "without the privity or knowledge of the owner." 46 U.S.C. § 3505. These protections extend to the owners of pleasure vessels. See Keys Jet Ski, Inc. v. Kays, 893 F.2d 1225, 1228-29 (11th Cir. 1990).

Supplemental Rule F of the Federal Rules of Civil Procedure outlines the procedure to be followed in limitation actions. First, a shipowner must file a complaint in an appropriate district court within six months of receiving written notice of a claim. Fed. R. Civ. P. Supplemental Rule F(1); see also 46 U.S.C. § 30511(a). Thereafter, the shipowner must deposit with the court "a sum equal to the amount or value of the owner's interest in the vessel . . . , or approved security therefor." Supplemental Rule F(1); see also 46 U.S.C. § 20511(b)(1). If the

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shipowner opts to provide the district court with approved security for the cost of the vessel, he must also give security "for interest at the rate of 6 percent per annum from the date of the security." Supplemental Rule F(1). Additionally, the shipowner must provide security for costs and "such sums, or approved security therefor, as the court may from time to time fix as necessary to carry out the provisions of the statutes as amended." Id.; see also 46 U.S.C. § 30511(b)(1).

After a shipowner files a limited liability complaint and complies with the requirements of Supplemental Rule F(1), the district court must stay all proceedings against the shipowner that involve issues arising out of the subject matter of the limitation action. See Supplemental Rule F(3); 46 U.S.C. § 30511(c). The district court will then issue a monition "direct[ing] all potential claimants to file their claims against the shipowner in the district court within a specified period of time." Gorman v. Cerasia, 2 F.3d 519, 523 (3d Cir. 1993) (internal quotation marks omitted); see also 46 U.S.C. § 30511(c); Supplemental Rule F(3)-(4). Additionally, "[o]n application of the plaintiff the court shall enjoin the further prosecution of any action or proceeding against the plaintiff or the plaintiff's property with respect to any claim subject to limitation in the action." Supplemental Rule F(3).

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III. ANALYSIS

The Mykolenkos have moved for entry of an ad interim stipulation and the issuance of a monition and an...