S.D.S. Lumber Co. v. Gregory

• Decision Date: 07 May 2021
• Docket Number: CASE NO. C20-5767 MJP
• Parties: S.D.S. LUMBER CO., Petitioner, v. Kevin GREGORY, et al., Claimants.
• Court: U.S. District Court — Western District of Washington

538 F.Supp.3d 1156

S.D.S. LUMBER CO., Petitioner,

v.Kevin GREGORY, et al., Claimants.

CASE NO. C20-5767 MJP

United States District Court, W.D. Washington, at Seattle.

Signed May 7, 2021

Matthew Clayton Crane, Meliha Jusupovic, Bauer Moynihan & Johnson, Seattle, WA, for Petitioners.

ORDER DENYING CLAIMANTS’ MOTION TO DISMISS;

GRANTING PETITIONER'S MOTION FOR PARTIAL SUMMARY JUDGMENT

Marsha J. Pechman, United States District Judge This matter comes before the Court upon Claimants’ Motion to Dismiss the Amended Complaint (Dkt. No. 37) and Petitioner's Cross-Motion for Partial Summary Judgment (Dkt. No. 42). Having read the Motion, Cross-Motion and Response (Dkt. No. 42), Replies (Dkt. Nos. 51, 54), and all related papers, the Court DENIES Claimants’ Motion to Dismiss and GRANTS Petitioner's Motion for Partial Summary Judgment.

Background

At 7:40 am on March 21, 2018, Petitioner S.D.S. Lumber Company's tugboat, the DAUBY, was navigating downriver in the main shipping channel of the Columbia River while towing two barges, one empty and one filled with wood chips. (Dkt. No. 30 ("FAC") at 2.) The fog was heavy through the channel. (Id. ) As the DAUBY approached Willow Grove Park, Claimants Kevin and Jacob Gregory were crossing the channel in a 20-foot recreational vessel when its main outboard engine died. (Id. ) The Gregorys were unable to restart the engine and the DAUBY's captain and crew did not see them. (Id. ) The DAUBY hit the Claimants’ boat and they were thrown into the river. (Id. ) The DAUBY's captain and crew continued, unaware of the collision and the Claimants in the water. (Id. ) The Claimants were rescued by nearby good Samaritans. (Id. )

1. Extent of the Damages

An ambulance arrived to treat the Claimants but Kevin Gregory told the paramedics that he and his son were both "fine," and they did not receive treatment. (Dkt. No. 43, Declaration of Matthew C. Crane ("Crane Decl."), Ex. 1 at 3.) Claimants contend they drove home to get dry clothes and then went to the hospital, but have not produced medical records, medical provider information, or any treatment information. (Id. at 2.) When the superintendent of Petitioner's marine division learned about the collision later in the day on March 21, he understood that there was no injury report. (Dkt. No. 44, Declaration of Gary Collins ("Collins Decl."), ¶ 2.)

On June 1, 2020, Claimants filed a lawsuit in Cowlitz County Superior Court against Petitioner. Gregory v. S.D.S. Lumber Co. and Gorge Leasing Co., Cause No. 20-2-00392-08. Claimants have disclosed that their damages will be limited to "garden variety" mental anguish, they "are not making claims for diagnosable mental injuries and will present no mental health treatment records or call any mental health professionals." (Crane Decl., Ex. 1 at 2.) Further, "[w]ith regard to physical injuries, Kevin and Jacob Gregory will present no medical records or call any medical providers ... [they] do not make claims for past or future wage loss or loss of wage-earning capacity. There is no claim for future medical bills." (Id. ) But Claimants hope to recover punitive damages, and in a letter to Petitioner sent May 5, 2020, Claimants valued their claims at $2,900,000. (FAC at 3; Dkt. No. 43, Declaration of Matthew C. Crane, ¶ 2.)

On July 30, 2020 Petitioner filed this action under the Limitation of Liability Act, which limits the liability of an owner of any vessel for any claim, debt, or liability to the value of the vessel and pending freight. 46 U.S.C. §§ 30501 – 30512. After the collision, the DAUBY had a value of $1,725,000 and the value of the pending freight was $12,945.80, totaling $1,737,945.80. (Id. ) Claimants now move to dismiss, arguing that Petitioner filed this action more than six months after receiving written notice of the Gregorys’ claims, and therefore outside the statute of limitations. (Dkt. No. 37.)

2. The Communications

The Parties agree that the statute of limitations began running on January 30, 2020, but dispute whether four communications before that date constitute written notice of the claims that started the statute of limitations. The first of these communications was an April 5, 2018 letter Claimants’ prior counsel, Richard Davies, sent to Petitioner's president:

Dear Mr. Spadaro:

Our law firm represents Kevin and Jacob Gregory concerning a collision that occurred on March 21, 2018 between a barge pushed by the tug Dauby and the Gregory's private fishing vessel on the Columbia River in Longview, Washington. We understand that SDS Lumber owns and operates the tug Dauby. Our early investigation indicates that the tug failed to have a proper lookout in heavy fog and failed to use fog signals. The matter is under investigation by the U.S. Coast Guard and the Cowlitz County Sheriff.

Please direct all correspondence regarding this matter to my attention. Both men were injured in the subject incident and remain under doctors’ care. If you have any questions, please let me know.

(Dkt. No. 38, Declaration of Nigel T Stacey ("Stacey Decl."), Ex. 6.) A little over a year later, on April 10, 2019, Petitioner received an updated representation letter from Mr. Davies, informing Petitioner that his "law firm no longer represents Jacob Gregory concerning the above-entitled matter. We continue to represent Kevin Greogry [sic]." (Id., Ex. 8.)

On January 27, 2020 Claimants’ present counsel called Petitioner's counsel and "discussed [his] firm's representation of Claimants, the United States Coast Guard investigation, the significant number of rules violations committed by Limitation Plaintiff, the potential punitive damage claim against Limitation Plaintiff, and the significant liability facing Limitation Plaintiff." (Stacey Decl., Ex. 8) (Declaration of James P. Jacobsen ("Jacobsen Decl."), ¶ 4.) The following day, January 28, 2020, a paralegal working with Claimant's counsel emailed Petitioner's counsel, reminding him that he spoke the previous day "about this case" and including a Dropbox link to the 195-page United States Coast Guard report on the collision. (Stacey Decl., Ex. 9.) For the reasons discussed below, the Court finds that these communications were insufficient to provide Petitioner with notice of the reasonable possibility of a claim in excess of the value of the DAUBY, $1.7 million.

Discussion

I. Claimant's Motion to Dismiss

Claimants bring this Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), arguing that Petitioner's failure to bring the limitation action within the statute of limitations deprives the Court of subject-matter jurisdiction. (Dkt. No. 37 at 8–9.) But Petitioner contends the statute of limitations is not jurisdictional. (Dkt. No. 42 at 6–8.) The Court agrees with Petitioner.

In 2015 the Supreme Court addressed the "high bar" a litigant must clear "to establish that a statute of limitations is jurisdictional." United States v. Kwai Fun Wong, 575 U.S. 402, 409, 135 S.Ct. 1625, 191 L.Ed.2d 533 (2015). "[P]rocedural rules, including time bars, cabin a court's power only if Congress has ‘clearly state[d]’ as much." Id. at 409, 135 S.Ct. 1625 (citing Sebelius v. Auburn Reg'l Med. Ctr., 568 U.S. 145, 153, 133 S.Ct. 817, 184 L.Ed.2d 627 (2013) ). "[A]bsent such a clear statement, ... ‘courts should treat the restriction as nonjurisdictional.’ " Id. at 409–10, 135 S.Ct. 1625 (quoting Auburn Reg'l Med. Ctr., 568 U.S. at 153, 133 S.Ct. 817 ). "That does not mean ‘Congress must incant magic words.’ " Id. (quoting Auburn Reg'l Med. Ctr., 568 U.S. at 153, 133 S.Ct. 817 ). "But traditional tools of statutory construction must plainly show that Congress imbued a procedural bar with jurisdictional consequences." Id. In other words, "Congress must do something special, beyond setting an exception-free deadline, to tag a statute of limitations as jurisdictional." Kwai Fun Wong, 575 U.S. at 410, 135 S.Ct. 1625.

Following Kwai Fun Wong, courts that have examined whether the Limitation Act's time bar is jurisdictional have concluded that it is not. See, e.g., Orion Marine Constr., Inc. v. Carroll, 918 F.3d 1323, 1329 (11th Cir. 2019) ("[W]e hold that the provision is an ordinary nonjurisdictional claim-processing rule, and that the district court erred in concluding otherwise."); Matter of Fish N Dive LLC, 499 F.Supp.3d 775, 782 (D. Haw. 2020) ("This Court therefore concludes that the six-month period in § 30511(a) is a claims processing rule, not a jurisdictional requirement."); Definitive Marine Survs. Inc. v. Tran, 339 F. Supp. 3d 1292, 1305 (M.D. Fla. 2018) ("[T]he law is nonjurisdictional.").

These courts have noted that the time-bar is within the procedural section—not the substantive sections—of Chapter 305. "The legislative history [of the Act] indicates that Congress, ... imposed the filing deadline merely to change the ‘old rule’ that allowed shipowners to wait to file limitation actions until after fully litigating liability by requiring them to act promptly, not to limit a court's power to decide the action." Tran, 339 F. Supp. 3d at 1306 (internal citations omitted). The Court finds this reasoning persuasive and follows these courts in finding that "[w]ith neither Congress's ‘own plain statement’ that the law is jurisdictional, nor any binding precedent to the contrary, this Court must ‘treat the time bar as a claim-processing rule.’ " Id. (quoting Kwai Fun Wong, 575 U.S. at 420, 135 S.Ct. 1625 ).

"Where, you might ask, does that leave us procedurally?" Orion, 918 F.3d at 1330. In similar cases, courts have either dismissed the Rule 12(b)(1) motion without prejudice, see, e.g., Tran, 339 F. Supp. 3d at 1308–09, or have opted to treat a Rule 12(b)(1) motion as a Rule 12(b)(6) motion, which was then converted to a summary judgment motion, see Miller v. Herman, 600 F.3d 726, 731–33 (7th Cir. 2010) ; accord Orion, 918 F.3d at 1330. Because the Parties here agree that the Court can consider the motion under the summary judgment standard (see Dkt. No. 42 at 7–8; Dkt. No....