Martz v. Horazdovsky

Decision Date10 May 2022
Docket Number20-35985, No. 21-15187
Citation33 F.4th 1157
Parties William MARTZ ; Jane Martz, as owners of a Nautique vessel for Limitation of Liability, Plaintiffs-Appellants, v. Andrew HORAZDOVSKY, Claimant-Appellee. Fish N Dive LLC ; Honu Group LLC; Honu Watersports LLC; Matthew J. Zimmerman, Plaintiffs-Appellants, v. Tyler Brown; James A. Liotta, as Personal Representative of the Estate of T.T., Deceased estate T.T.; Tsogt Natsagdorj, Individually, and as Next Friend of K.T., a Minor next friend K. T; Enkhsuvd Batbold; Hawaii Sports, Inc., Claimants-Appellees, Padi Worldwide Corporation; Padi Americas, Inc., Real-Parties-in-Interest-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Michael R. Williams (argued), Bush Seyferth PLLC, Kalamazoo, Michigan; Jonathon A. Katcher, Pope & Katcher, Anchorage, Alaska; for Plaintiffs-Appellants William Martz and Jane Martz.

Yale H. Metzger (argued), Law Offices of Yale H. Metzger, Anchorage, Alaska; Daniel I. Pace, Pace Law Offices, Anchorage, Alaska; for Claimant-Appellee Andrew Horazdovsky.

Marker E. Lovell Jr. (argued), Michelle L. Tommey, and R. Hudson Hollister, Gibson Robb & Lindh LLP, Emeryville, California, for Plaintiffs-Appellants Fish N Dive LLC, Honu Group LLC, Honu Watersports LLC, and Matthew J. Zimmerman.

Michael K. Livingston (argued), Mark S. Davis, Loretta A. Sheehan, Thomas M. Otake, and Amalia L. Fenton, Davis Levin Livingston, Honolulu, Hawaii, for Claimants-Appellees Tyler Brown, James A. Liotta, Tsogt Natsagdorj, Enkhsuvd Batbold, and Hawaii Sports Inc.

Before: Kim McLane Wardlaw, Eric D. Miller, and Bridget S. Bade, Circuit Judges.

OPINION

MILLER, Circuit Judge:

When a vessel is involved in an accident, the Shipowner's Limitation of Liability Act allows the owner to limit its liability to the value of the vessel and pending freight. 46 U.S.C. § 30505. To enjoy the benefit of that limit, the owner must bring a separate limitation-of-liability action "within 6 months after a claimant gives the owner written notice of a claim." 46 U.S.C. § 30511(a).

In each of these two cases, which we have consolidated for decision, counsel for a victim of a maritime accident wrote to the vessel owners and suggested that the victim might be interested in pursuing litigation against the responsible parties. The owners then brought a limitation-of-liability action, but they did not do so until more than six months after receiving the letter. In each case, the district court determined that the letter constituted "written notice of a claim" and dismissed the action as untimely.

These cases present two issues of first impression in this circuit: first, whether the six-month statute of limitations in section 30511(a) is a jurisdictional rule, and second, what constitutes "written notice of a claim" sufficient to start the running of the limitations period. Reviewing the grant of summary judgment de novo, Yu v. Albany Ins. Co. , 281 F.3d 803, 806 (9th Cir. 2002), we hold that the statute of limitations is not jurisdictional and that a "written notice of a claim" has three elements: the notice must (1) be in writing, (2) clearly state that the victim intends to bring a claim or claims against the owner, and (3) include at least one claim that is reasonably likely to be covered by the Limitation Act. Because neither of the letters at issue informed the vessel owners of the claimant's intention to bring a covered claim against the owners, neither constituted "written notice of a claim" that started the running of the limitations period. It follows that both limitation-of-liability actions were timely. We therefore reverse in both cases and remand for further proceedings.

I
A

On June 9, 2018, Reagan Martz was operating his parents' boat on Flat Lake, Alaska, when he collided with an inflatable raft being towed by another vessel. The collision killed Jennifer Horazdovsky, one of the occupants of the raft.

Over the next few weeks, two different lawyers representing Jennifer Horazdovsky's husband, Andrew Horazdovsky, wrote to the Martz family's lawyer asking for Reagan Martz's insurance information. Horazdovsky then retained a third lawyer, Robert Stone, and on December 4, 2018, Stone sent a three-page letter to the Martzes' lawyer with the subject line "Re: Horazdovsky v. Reagan Martz, William and Jane Martz." In the letter, Stone described the facts underlying the accident as he understood them. He wrote that "Reagan Martz, son of William and Jane Martz, was drinking heavily at a party sponsored by William and Jane Martz" and that "Reagan was a permissive user of a boat owned by his parents." To Stone, the facts "suggest[ed] that Reagan Martz was severely intoxicated, and that as a result of such intoxication, he collided with a raft occupied by Jennifer Horazdovsky"; he added that "Reagan Martz fled the scene, changed from the boat to a jet ski, and continued to flee the scene until he was ultimately apprehended." But Stone said that he was "not yet certain whether William Martz or Jane Martz bear any responsibility." Noting that he "would like to avoid unnecessarily naming parties to a lawsuit," he requested information about the ownership of the relevant property at Flat Lake and any insurance policies covering the Martzes. The Martzes' lawyer responded a few days later, stating that Reagan Martz had no relevant insurance coverage, that "[t]here is no basis for William and Jane Martz having any liability for this accident," and that "we have not tendered this claim to any insurance companies."

On June 4, 2020, Andrew Horazdovsky, individually and as the personal representative of Jennifer Horazdovsky's estate, sued Reagan, William, and Jane Martz in Alaska state court, seeking damages under various tort theories. Two weeks later, William and Jane Martz brought an action in the District of Alaska for limitation of liability under section 30511(a). Horazdovsky moved for summary judgment on the ground that the action was untimely.

The district court granted the motion. It held that written notice of a claim "need not make an unequivocal demand to the vessel owner for compensation for a loss; it is enough if the notice presents a reasonable possibility of a claim subject to limitation." Applying that rule, the court noted that the correspondence to the Martzes came "by way of [Horazdovsky's] attorneys, immediately lending it some formality and import," and that Stone's letter was "captioned with reference to the adversarial posture of the parties." The court also observed that Stone's letter "outline[d] a theory of liability that implicates the vessel owners." Although acknowledging that Stone's letter was "tentative" in that it referred only to the possibility of legal action, the court reasoned that when read in its entirety, the letter constituted notice of a claim. Because the Martzes did not file their limitation action until more than a year after they received Stone's letter, the court concluded that the action was untimely.

B

On January 5, 2019, 13-year-old T.T. drowned during an open-ocean scuba-diving excursion near Honolulu. The excursion was conducted by Honu Watersports LLC, doing business as Island Divers Hawaii, on a vessel owned by Fish N Dive LLC; both companies are controlled by an entity owned by Matthew Zimmerman.

Two days after the accident, Loretta Sheehan, an attorney representing T.T.'s family, wrote to Zimmerman to inform him that Sheehan had "been retained to investigate the death of [T.T.] on January 5, 2019, while he was participating in a drift dive with ... Island Divers Hawaii," and to request that Zimmerman preserve "any and all evidence potentially related to this incident" including "photographs, videos, logs, [and] captain manifests." The letter warned that T.T.'s family would "consider it spoliation of evidence if Island Divers Hawaii alters, modifies, or destroys the evidence involved in this accident." Zimmerman's counsel acknowledged receipt of the letter and advised Sheehan to direct further communications to counsel and not to Zimmerman or any employees of Honu Watersports.

On September 19, 2019, T.T.'s estate and family sued Zimmerman, Honu Watersports, and Fish N Dive in Hawaii state court, seeking damages based on the accident. On November 5, 2019, Fish N Dive brought this action in the District of Hawaii for limitation of liability under section 30511(a).

We pause at this point to observe that the designation of the parties in actions of this kind can be confusing. Like the Martzes in the Alaska case, Fish N Dive is the defendant in the state-court tort action but the plaintiff in the federal limitation-of-liability proceeding. Courts often refer to such parties as the "limitation plaintiffs," but we think it is clearer to call them the "vessel owners" and to describe their adversaries as the "claimants."

Arguing that the limitation-of-liability action was untimely under section 30511(a), T.T.'s estate and family moved to dismiss for lack of subject-matter jurisdiction or, in the alternative, for summary judgment.

The district court denied the motion to dismiss. Noting that "[t]here is no clear jurisdictional language in the text of § 35011(a)," the court concluded that the limitations period in the statute "is a claims processing rule, not a jurisdictional requirement." It therefore held that the timeliness of the limitation action "will be determined under the summary judgment standard."

The district court granted the motion for summary judgment. The court held that to constitute "written notice of a claim," a communication must "inform[ ] the shipowner of an actual or potential claim." The court considered the reference to "spoilation of evidence" and the statement that the firm had been "retained to investigate the death of [T.T.]" sufficient to satisfy that requirement. And it concluded that the letter conveyed a claim reasonably subject to limitation because a wrongful death claim would...

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