In re Pac. Mar. Freight, Inc.

• Decision Date: 21 June 2018
• Docket Number: Case No.: 3:17–CV–2441–MMA–BGS
• Citation: 316 F.Supp.3d 1214
• Parties: In the MATTER OF the Complaint of PACIFIC MARITIME FREIGHT, INC., dba Pacific Tugboat Service, a California Corporation, for Exoneration From or Limitation of Liability
• Court: U.S. District Court — Southern District of California

316 F.Supp.3d 1214

In the MATTER OF the Complaint of PACIFIC MARITIME FREIGHT, INC., dba Pacific Tugboat Service, a California Corporation, for Exoneration From or Limitation of Liability

Case No.: 3:17–CV–2441–MMA–BGS

United States District Court, S.D. California.

Signed June 21, 2018

Sterling J. Stires, Holmes, Weddle & Barcott, P.C., San Diego, CA, for Pacific Maritime Freight, Inc.

ORDER GRANTING CLAIMANT'S MOTION TO DEFAULT ALL NON APPEARING CLAIMANTS, LIFTING INJUNCTION, AND STAYING ACTION

HON. MICHAEL M. ANELLO, United States District Judge

Pacific Maritime Freight Inc., doing business as Pacific Tugboat Service ("PTS" or "Limitation Plaintiff"), brings this action pursuant to the Limitation of Vessel Owner's Liability Act ("the Limitation Act" or "the Act"), 46 U.S.C. § 30501 et seq. , seeking exoneration from or limitation of liability for claims arising from an August 14, 2016 incident involving the M/V Chief. See Doc. No. 1. The Court admonished all persons asserting claims subject to limitation under the Act to file their claims with this Court, and enjoined all other actions with respect to such claims, pursuant to Rule F of the Supplemental Rules for Certain Admiralty and Maritime Claims and Asset Forfeiture Actions of the Federal Rules of Civil Procedure ("the Supplemental Rules"). See Doc. No. 4; 46 U.S.C. § 30511 ; Fed. R. Civ. P. F(3). Pursuant to Rule F(4), the Court set a deadline of January 16, 2018, which it later extended to March 1, 2018, to file any claims against PTS arising from this incident. See Doc. No. 4; Fed. R. Civ. P. F(4). Candy Wimbley ("Claimant") filed an Answer and Counterclaim against PTS asserting causes of action for claims arising from the August 14, 2016 incident. See Doc. Nos. 13, 14. Claimant now moves to default all non-appearing claimants, lift the injunction restraining other actions, and stay this action pending her pursuit of relief in state court. See Doc. No. 18. For the reasons set forth below, the Court GRANTS Claimant's Motion, LIFTS the injunction, and STAYS this action.

BACKGROUND

On or about August 14, 2016, a fire broke out on board the M/V Chief (the "vessel") while it was moored alongside the PTS pier in San Diego Bay. See Doc. No. 1 ¶ 2, 8. Henry Wimbley, Jr. ("Wimbley" or "decedent"), a PTS employee, was aboard the vessel, and perished as a result of the fire. See id. PTS, as owner and operator of the vessel at the time of the incident, filed a complaint in admiralty seeking limitation of liability for claims arising from the incident pursuant to the Limitation Act on December 5, 2017. See id. ¶ 17; 46 U.S.C. § 30505. PTS simultaneously filed an application for an injunction barring all other actions with respect to claims subject to limitation under the Act, pursuant to the Act and Rule F of the Supplemental Rules. See Doc. No. 3; 46 U.S.C. § 30511 ; Fed. R. Civ. P. F(3).

On March 1, 2018, Claimant Candy Wimbley, as administrator and personal representative of decedent's estate, filed an Answer and Counterclaim against PTS on behalf of the estate seeking damages under admiralty and state law causes of action. See Doc. Nos. 13, 14. Claimant alleges that PTS's negligence resulted in decedent's injuries and death, while PTS contends that decedent's lit cigarette and negligent conduct were the only causes of the fire and death. See Doc. Nos. 1 ¶ 8, 14 ¶ 40.

On May 1, 2018, Claimant filed a motion to default all non-appearing claimants, lift the injunction restraining other actions, and stay this action while she pursues her claims in state court. See Doc. No. 18. PTS filed an Opposition to this Motion, arguing that Claimant has no standing in this action, to which Claimant replied. See Doc. Nos. 25, 26.

LEGAL STANDARD

Article III, § 2, of the United States Constitution vests federal courts with original jurisdiction over all cases of admiralty and maritime jurisdiction. U.S. CONST. art. III, § 2. The Judiciary Act of 1789 codified this grant of exclusive admiralty and maritime jurisdiction, but included a "savings to suitors" clause, which the Supreme Court has since construed as granting state courts concurrent jurisdiction over some admiralty and maritime claims and preserving the right to pursue common law remedies in such actions. Lewis v. Lewis & Clark Marine, Inc. , 531 U.S. 438, 439, 121 S.Ct. 993, 148 L.Ed.2d 931 (2001) ; 28 U.S.C. § 1333(1). Pursuant to the savings to suitors clause, litigants in admiralty and maritime actions are not necessarily limited to pursuing only those remedies recognized by substantive admiralty and maritime law, which may differ from those available under common law. Lewis , 531 U.S. at 439, 121 S.Ct. 993. Admiralty and maritime laws also provide unique rights and procedures not available under traditional common law, such as the rights afforded under the Limitation Act. See 46 U.S.C. § 30505.

Congress passed the Limitation Act to encourage investment in the ship-building industry by protecting owners from excessive liability for claims related to their vessels. Lewis , 531 U.S. at 446, 121 S.Ct. 993. The Act provides that an owner's liability for certain claims related to the vessel "shall not exceed the value of the vessel and pending freight." 46 U.S.C. § 30505. Claims subject to limitation under the Act are "those arising from any embezzlement, loss, or destruction of any property, goods, or merchandise shipped or put on board the vessel, any loss, damage, or injury by collision, or any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred, without the privity or knowledge of the owner." Id. The Act authorizes a vessel owner to petition a district court sitting in admiralty jurisdiction for limitation of liability. Id.

The Act further provides that when an owner properly brings a complaint seeking limitation, "all claims and proceedings against the owner related to the matter in question shall cease." Id. Rule F of the Supplemental Rules implements this provision by requiring that "on 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." Fed. R. Civ. P. F(3).

The Limitation Act and Rule F operate together with 28 U.S.C. § 1333 to give federal courts exclusive jurisdiction to determine whether a vessel owner is entitled to limited liability. See 46 U.S.C. § 30511 ; Fed. R. Civ. P. F(3); 28 U.S.C. § 1333(1). However, the Limitation Act and the savings to suitors clause may conflict "because one gives suitors the right to a choice of remedies while the other gives vessel owners the right to seek limited liability in federal court." Lewis , 531 U.S. at 439, 121 S.Ct. 993. The Supreme Court has recognized two exceptions to vessel owners' general right to consolidate claims in a limitation action in federal court, carved out of the Limitation Act by the savings to suitors clause. See id. Claims may proceed outside a limitation action where (1) there is only a single claimant in the action, or (2) the total value of the claims does not exceed the value of the limitation fund. Id. By requiring certain stipulations of claimants, courts can permit claimants to pursue common law remedies in state court while also protecting vessel owners' rights to seek limited liability under the Act where either of the two foregoing scenarios arises. See id. Where one of these exceptions applies and a claimant makes the requisite stipulations to protect the owner, a district court abuses its discretion in declining to dissolve a previously granted injunction against all other actions. Langnes v. Green, 282 U.S. 531, 51 S.Ct. 243, 247, 75 L.Ed. 520 (1931).

DISCUSSION

1. Entry of Default as to Non–Appearing Claimants

As an initial matter, PTS does not oppose Claimant's motion in so far as she seeks entry of default as to all non-appearing claimants. See Doc. No. 25. At the outset of this action, pursuant to Rule F(4), the Court set a deadline for all persons to file any claims against PTS arising from the August 14, 2016 incident. That deadline expired after March 1, 2018, and Rule F(5) states that all claims "shall be filed and served on or before the date specified in the notice provided for in subdivision (4) of this rule." See Doc. No. 7; Fed. R. Civ. P. F(4)–(5). At this time, all non-appearing claimants have "failed to plead or otherwise defend" in the present action, and therefore entry of default is appropriate under Federal Rule of Civil Procedure 55(a). See Fed. R. Civ. P. 55(a) ("When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default."). The Court will direct the Clerk of Court to enter default accordingly.

2. Claimant Has Standing in This Action

PTS opposes Claimant's motion to stay this action on the grounds that factual issues as to Claimant's standing must be resolved before the Court can rule on Claimant's motion. See Doc. No. 25. PTS asserts that "if the Claimant is not the ‘personal representative’ [of the decedent ]..., Claimant has no standing in this matter." See id. As PTS points out, "the term personal representative requires some designation by a court that the individual seeking to prosecute the wrongful death action is an administrator of the decedent's estate." Complaint of Cosmopolitan Shipping Co., S.A. , 453 F.Supp. 265, 266 (S.D.N.Y. 1978). Claimant has provided documentation showing that the Superior Court of North Carolina appointed Claimant Candy Wimbley the personal representative of decedent's estate, thus resolving any issue as to Claimant's representative status. See Doc. No. 26–1; id. PTS also contends that if the decedent was not a "seaman" under applicable admiralty law, Claimant has no standing in this action. See Doc. No. 25. PTS argues that only a seaman or...