In The Matter Of The Complaint Of Catamaran Holdings LLC

Decision Date22 November 2010
Docket NumberCIVIL NO. 10-00230 SOM/KSC
PartiesIN THE MATTER of THE COMPLAINT OF CATAMARAN HOLDINGS, LLC, a Nevada Limited Liability Company, as owner, and MARINE CHARTERS, INC., a Hawaii Corporation, as owner pro hace vice, of the M/V PRIDE OF MAUI, O.N. 983360, for the Exoneration from or Limitation of Liability.
CourtU.S. District Court — District of Hawaii
ORDER GRANTING CLAIMANTS' MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION
I. INTRODUCTION.

On April 21, 2010, Catamaran Holdings, LLC, and Marine Charters, Inc., owners of the M/V Pride of Maui, filed a Complaint for the Exoneration from or Limitation of Liability. Plaintiffs bring this action under 28 U.S.C. § 1333, the admiralty and maritime jurisdiction statute. Claimants Mildred Winham and Bruce Winham move to dismiss the action, arguing that the court lacks federal subject matter jurisdiction over the case. The court agrees and grants the motion to dismiss.

II. FACTUAL BACKGROUND.

This action involves a motor vehicle accident that occurred on or about April 2, 2009, in Ma'alaea Harbor, Maui, Hawaii. On the date of the incident, Larry Doty was employed by Marine Charters, Inc., as a crew member and dive master. See Claimants' Mot. Dismiss 5, ECF No. 24. According to his deposition, Doty typically started his the day at the North Pier, where the M/V Pride of Maui, O.N. 983360 ("vessel"), was located. See Depo. of Larry Gene Doty, Jr. 67, Mot. to Dismiss, Ex. C ("Doty Depo."). He usually tied the boat to the dock, got on the vessel, washed the bow and window, and helped the scuba instructor with scuba equipment. See id. After these activities, the vessel would move from the North Pier to the South Pier, where additional supplies and equipment were loaded, and crewmembers and passengers boarded the vessel. See Opp'n 67, ECF No. 50. Typically, Doty and the other crew members rode the company van from the North Pier to the South Pier. See Doty Depo. 71. This movement allegedly facilitated parking and allowed crew members to leave when the vessel's voyage ended. See Opp'n 8. At the South Pier, Doty was typically responsible for grabbing scuba tanks, loading equipment, and collecting guest boarding passes. See Doty Depo. 72-73.

On or about April 2, 2009, Doty drove his truck to the Ma'alaea Harbor to report to work. See id. at 76. He parked his car in the North Pier parking lot and boarded the vessel to tie off the boat and wash the deck. See id. at 77-78. Afterwards, Doty drove his own truck instead of using the company van to go from the North Pier to the South Pier. See id. at 80, 90-93.

Doty admits that the company van was available to him and that he saw it in the parking lot on the day of the incident. Id. at 80.

Doty's truck hit Mildred Winham while she was walking in the South Pier parking lot. See Claimants' Mot. Dismiss 2. The Winhams were making their way along the South Pier to board a passenger excursion vessel operated by Pacific Whale Foundation. See Opp'n 1-2. Mildred Winham allegedly suffered serious and permanent injuries to, among other things, her leg, foot, and shoulders. See Answer 9, ECF No. 15. Bruce Winham, Mildred Winham's spouse, allegedly sustained mental and other injuries as a result of the incident. See Am. Compl. 5 6, ECF No. 6.

III. PROCEDURAL HISTORY.

This incident has given rise to more than one legal action. On May 5, 2009, the Winhams filed a lawsuit against Larry Doty in the Circuit Court of the Second Circuit, State of Hawaii, for damages allegedly arising from the incident. See Am. Compl. 5 11, ECF No. 6. On July 23, 2009, Doty filed for Title 11 bankruptcy in United States Bankruptcy Court, District of Hawaii. See Claimants' Mot. Dismiss 3-4, ECF No. 24. On October 26, 2009, the Winhams filed an Amended Complaint to add Marine Charters, Inc., as a defendant to the lawsuit, and asserted various claims such as respondeat superior and negligence. See ECF No. 24-3.

On November 23, 2009, Plaintiffs filed their Answer and denied the Winhams' allegation that Doty was acting within the scope of his employment when the incident occurred. See Answer 5 13, ECF No. 24-6. On April 8, 2010, the Winhams filed another Amended Complaint to add Pacific Whale as a Defendant. See ECF No. 50-1.

On November 25, 2009, Plaintiffs filed a Notice of Removal, removing the case from the Second Circuit Court to this court on the basis of admiralty or maritime jurisdiction. See ECF No. 24-7. The Winhams filed a Motion to Remand to State Court on the basis that the federal court lacked subject matter jurisdiction, as the tort case filed in state court was not an admiralty or maritime case. See id. The Winhams and Plaintiffs subsequently entered into a Stipulation to Remand to State Court, which this court approved and filed. See ECF No. 24-9.

Initiating a separate legal action, Plaintiffs filed the present Complaint for Exoneration from or Limitation of Liability. See Compl., ECF No. 1. They filed an Amended Complaint on April 30, 2010. See Am. Compl., ECF No. 6. On July 14, 2010, the Winhams filed their Answer and incorporated by reference the allegations and claims from their state-court action. See ECF No. 50-2. On August 30, 2010, Pacific Whale filed its Answer and asserted claims against Plaintiffs for equitable indemnity, contribution, and declaratory relief. See Opp'n 12. On September 13, 2010, Plaintiffs filed a Counterclaim against Pacific Whale, seeking to shift any liability onto them. See Opp'n 12-13.

In the present motion, the Winhams argue that Plaintiffs's Complaint must be dismissed because admiralty jurisdiction is lacking.

IV. STANDARD OF REVIEW.

A court's subject matter jurisdiction may be challenged under Rule 12(b)(1) of the Federal Rules of Civil Procedure. "A party invoking the federal court's jurisdiction has the burden of proving the actual existence of subject matter jurisdiction." See Thompson v. McCombe, 99 F.3d 352, 353 (9th Cir. 1996).

A jurisdictional challenge may be facial, relying on the pleadings. When examining a facial attack on subject matter jurisdiction under Rule 12(b)(1), courts assume the plaintiffs' factual allegations to be true and draw all reasonable inferences in the plaintiffs' favor. Doe v. See, 557 F.3d 1066, 1073 (9th Cir. 2009).

A jurisdictional challenge may alternatively be based on facts submitted to the court that go beyond the pleadings. On a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, the court is not "restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction." McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988). "Once the moving party [converts] the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction." Savage v. Glendale Union High Sch., 343 F.3d 1036, 1040 n.2 (9th Cir. 2003).

"The requirement that the nonmoving party present evidence outside his pleadings in opposition to a motion to dismiss for lack of subject matter jurisdiction is the same as that required under Rule 56(e) that the nonmoving party to a motion for summary judgment must set forth specific facts, beyond his pleadings, to show that a genuine issue of material fact exists." Trentacosta v. Frontier Pac. Aircraft Indus., Inc., 813 F.2d 1553, 1559 (9th Cir. 1987). When ruling on a jurisdictional motion involving factual issues that also go to the merits, the moving party "should prevail only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law." Casumpang v. Int'l Longshoremen's & Warehousemen's Union, 269 F.3d 1042, 1060-61 (9th Cir. 2001).

V. ANALYSIS.

The United States Constitution grants original jurisdiction to federal courts to hear admiralty claims.

See U.S. Const. art. III, § 2, cl. 1. This jurisdiction, codified at 28 U.S.C. § 1333(1), allows the filing of claims related to maritime torts and maritime contracts.

Plaintiffs have filed this action under the Limitation of Liability Act ("LOLA"), which provides that "the liability of the owner of a vessel for any claim, debt, or liability... shall not exceed the value of the vessel and pending freight." See 46 U.S.C. § 30505(a). The owner of a vessel may bring a civil action in a district court of the United States for limitation of liability. 46 U.S.C. § 30511(a). Under Rule F(1) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions, a vessel owner must file a complaint in district court within six months after receipt of a written claim and either pay into court the value of vessel and freight, or transfer the owner's interest in the vessel and freight to a trustee appointed by the court. See Esta Later Charters, Inc. v. Ignacio, 875 F.2d 234, 236 (9th Cir. 1989). The court is then able to adjudicate the claims, determining whether the vessel owner is liable and whether the owner may limit liability.

On May 17, 2010, this court issued an order that Plaintiffs had complied with Rules F(1) and F(2) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. See ECF No. 10. Plaintiffs now seek to exonerate or limit their liability to $700,000, the purported value of the vessel under LOLA. See Am. Compl. ¶¶ 14-16.

LOLA does not provide an independent basis for admiralty jurisdiction. A court exercising jurisdiction over a complaint seeking exoneration from or limitation of liability must have independent admiralty jurisdiction over the underlying tort giving rise to the limitation action. See Seven Resorts, Inc. v. Cantlen, 57 F.3d 771, 772-73 (9th Cir. 1995).

A party seeking to invoke federal admiralty jurisdiction over a tort claim must satisfy conditions...

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