Port Arthur Towing Co. on Behalf of M/V Miss Carolyn for Exoneration from Limitation of Liability v. John W. Towing, Inc.

• Decision Date: 18 January 1995
• Docket Number: No. 94-40102,94-40102
• Citation: 42 F.3d 312
• Parties: In the Matter of the Complaint of PORT ARTHUR TOWING CO. on Behalf of the M/V MISS CAROLYN for Exoneration from or Limitation of Liability. PORT ARTHUR TOWING CO., etc., Plaintiff-Appellee, v. JOHN W. TOWING, INC., et al., Defendants, Harris Jarreau, Defendant-Appellant, and Joshua Verdin, Defendant-Appellee. In the Matter of JOHN W. TOWING, INC., as Owner and Operator of the M/V JOHN W., Praying for Exoneration from or Limitation of Liability. JOHN W. TOWING, INC., etc., Plaintiff-Appellee, v. Gerald PREJEANT, et al., Defendants, Harris Jarreau, Defendant-Appellant, and Joshua Verdin, Defendant-Appellee. (Summary Calendar).
• Court: U.S. Court of Appeals — Fifth Circuit

Page 312

42 F.3d 312

1995 A.M.C. 1816

In the Matter of the Complaint of PORT ARTHUR TOWING CO. on

Behalf of the M/V MISS CAROLYN for Exoneration

from or Limitation of Liability.

PORT ARTHUR TOWING CO., etc., Plaintiff-Appellee, v. JOHN W. TOWING, INC., et al., Defendants, Harris Jarreau, Defendant-Appellant, and Joshua Verdin, Defendant-Appellee.

In the Matter of JOHN W. TOWING, INC., as Owner and Operator

of the M/V JOHN W., Praying for Exoneration from

or Limitation of Liability.

JOHN W. TOWING, INC., etc., Plaintiff-Appellee, v. Gerald PREJEANT, et al., Defendants, Harris Jarreau, Defendant-Appellant, and Joshua Verdin, Defendant-Appellee.

No. 94-40102

(Summary Calendar).

United States Court of Appeals, Fifth Circuit.

Jan. 18, 1995.

John M. Robin, James P. Desonier, Covington, LA, for appellant.

Hunter W. Lundy, Jackey W. South, Lundy & Dwight, Lake Charles, LA, for Port Arthur Towing, Co. Wilton E. Bland, III, C. William Emory, Hebert, Mouledouz & Bland, New Orleans, LA, for John W. Towing, Inc.

Appeal from the United States District Court for the Western District of Louisiana.

Before DUHE, WIENER and STEWART, Circuit Judges.

PER CURIAM:

A collision of two barge tows resulted in injuries to the vessels and some crew members. Owners and operators of the two vessels involved in the collision filed suit under the Limitation of Liability Act (the "Act") ¹ in federal district court seeking to limit their respective liabilities to the values of the respective vessels. The district court held that the shipowners were entitled to limit their liability and thus stayed concurrent state court actions involving the incident. The district court subsequently held, inter alia, that both shipowners were entitled to exoneration from liability to one of the claimants--Defendant-Appellant Harris Jarreau--as he had failed to prove medical causation, i.e., that he was injured in the accident. Jarreau appealed, arguing that the court erred by (1) staying state court proceedings, and (2) concluding that both shipowners were entitled to exoneration from liability for his claims. Finding no error, we affirm.

I FACTS AND PROCEEDINGS

Underway at night, the lead barge in the tow of the M/V MISS CAROLYN, a vessel owned by the Port Arthur Towing Company, Inc. ("PATCO"), rammed the stern of the M/V JOHN W., a vessel owned by John W. Towing, Inc. ("JWT"). As a result of this collision, several seamen, including Jarreau and Defendant-Appellee Joshua Verdin, both serving on the M/V JOHN W. at the time, filed suit in state court stating claims under the Jones Act and General Maritime Law for injuries that they allegedly suffered in the mishap. ²

In response, JWT and PATCO filed separate limitation complaints in federal district court, invoking that court's admiralty jurisdiction and praying for exoneration from or limitation of liability on claims arising from the collision. These actions were consolidated, after which JWT filed a cross claim against PATCO seeking indemnification, court costs, and attorneys' fees. All parties agreed to have the cases adjudicated by a magistrate judge.

A concursus was deposited into the registry of the district court, which then issued an order staying all related state court proceedings. Jarreau, Verdin, and JWT tried to negotiate a mutually agreeable stipulation that would enable Jarreau and Verdin to have the stay lifted and pursue their claims in state court. Agreement on a mutually acceptable stipulation could never be reached, however, so the three parties voluntarily abandoned their efforts to produce such a stipulation. Eventually Jarreau and Verdin--but not JWT--did enter into a stipulation, then moved the court to lift the order staying the state court actions. But as JWT was not a party to the agreement, the court denied this motion.

The district court conducted a hearing, at the conclusion of which it exonerated JWT from all liability and found PATCO solely responsible for the collision. The magistrate judge then determined after a bench trial that Jarreau had not proved that he sustained any injury as a result of the collision; thus PATCO was entitled to exoneration from Jarreau's claim.

The court found that, although Jarreau chronically suffers from degenerative disc pathology, his condition did not result from the collision but antedated it. Dr. Edmund C. Landry, Jr., an orthopedic surgeon who examined Jarreau at the request of PATCO and JWT, stated that x-rays of Jarreau's back taken less than a month after the accident After considering this evidence, the court concluded that "there is no objective evidence to aid the doctors in determining whether Jarreau, in fact, was injured in the accident at issue. This determination is totally dependent upon Jarreau's credibility when he says that he had no prior back problems but had the onset of pain either immediately or shortly after the accident." The court then considered evidence bearing on Jarreau's credibility.

showed that the degenerative change predated the accident by more than a year and probably resulted from some prior trauma. Dr. John D. Jackson, Jarreau's treating physician who did not review the x-rays, could not say that the objective pathology was caused by the collision. Jarreau testified that he had no prior back problems and that his back started hurting either immediately or shortly after the accident.

In the court's recap of that evidence, it noted that (1) the captain of the M/V MISS CAROLYN testified that immediately after the accident Jarreau stated that he was not injured; (2) another crew member of the M/V MISS CAROLYN testified that Jarreau told him that he was not injured, but that he was going to sue anyway; and (3) four to five days after the accident Jarreau gave a statement in which he denied being injured. In addition to these statements, which were inconsistent with Jarreau's trial testimony, the court noted that Jarreau's manner and demeanor on the witness stand weighed against his credibility. Accordingly, the court found Jarreau's testimony not credible and ruled that he had failed to establish that he was injured in the collision.

Jarreau appealed, contending that the court erred in denying his motion to lift the order staying the state court proceedings, and in finding that PATCO and JWT were entitled to exoneration from liability for his claims, because Jarreau had failed to prove that the collision caused his injuries. ³

II ANALYSIS

A. STAYING THE STATE COURT PROCEEDINGS

A shipowner facing potential liability for a maritime accident may file suit in federal court seeking protection under the Act, a statute that permits a shipowner to limit his liability for damages or injuries arising from a maritime accident to "the amount or value of the interest of such owner in such vessel, and her freight then pending," ⁴ if the accident occurred without the shipowner's "privity or knowledge." ⁵ "When a shipowner files a complaint seeking limited liability, the federal district court stays all related claims against the shipowner pending in any forum, and requires all claimants to assert their claims in the limitation court." ⁶ This accords with the federal courts' exclusive jurisdiction of suits brought under the Act. ⁷

Although it has granted such exclusive jurisdiction to the federal courts, Congress has also " 'sav[ed] to suitors ... all other remedies to which they are otherwise entitled' " (the "saving-to-suitors clause"). ⁸ We have previously recognized that "this statutory framework has created 'recurring and inherent conflict' between the saving-to-suitors clause, with its 'presumption in favor of jury trials and common law remedies,' and the 'apparent exclusive jurisdiction' vested in the admiralty courts by the Act." ⁹ In connection The Act therefore is directed at maritime misfortunes in which the losses claimed exceed the value of the vessel and its freight. ¹¹ But when a shipowner is not exposed to potential liability in excess of that amount, the shipowner's absolute right to limit its liability is not implicated and "the saving-to-suitors clause dictates that the admiralty court must allow suits pending against the shipowner in a common law forum, in this case the state court, to proceed." ¹² Over the years, courts have identified several exceptional circumstances in which a district court must permit a state action to proceed, even though a limitation action has been filed in federal court. Today we must determine whether the district court was here faced with such a situation.

with this tension, we have noted that "[t]he court's primary concern is to protect the shipowner's absolute right to claim the Act's liability cap, and to reserve the adjudication of that right in the federal forum." ¹⁰

1. When A Stay Is Appropriate

As we recently explained, "[c]laims may proceed outside the limitations action (1) if they total less than the value of the vessel, or (2) if [all] claimants stipulate that the federal court has exclusive jurisdiction over the limitation of liability proceeding and that [the claimants] will not seek to enforce a greater damage award until the limitation action has been heard by the federal court." ¹³ In this case, multiple claimants sought more in damages than the total value of the vessels and their pending cargo; thus, to proceed in state court, all claimants were first required to enter into a stipulation that would protect the shipowner's right to limit its liability.

2. Adequacy of the Stipulation

The district court denied Jarreau's motion to lift the order staying his state court action, finding that the claimants had not entered into a stipulation sufficient to protect PATCO's interests. Jarreau argues that this was error, insisting that both he and Verdin, the only other crew member remaining in the suit at that time, had proposed an adequate stipulation.

But the record is clear that the stipulation proposed by Jarreau and Verdin was...