Opinion
3:03-CV-1763 (EBB).
March 22, 2005
RULING ON PENDING MOTIONS
INTRODUCTION
The initial Motion filed in this admiralty case was to Dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6). However, Claimant, Marsha Calomino ("Claimant"), submitted exhibits with her moving papers, as did Plaintiff/Petitioner ("Petitioner"), with his opposition. None were either attached to the Petition For Exoneration From or Limitation of Liability, nor were they incorporated by reference in that Petition. "When material outside the complaint is presented to and not excluded by the court, `the motion shall be treated as one for summary judgment and disposed of as provided in [Federal Rule of Civil Procedure] 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion. . . .'"Chambers v. Time Warner, Inc., 282 F.2d 147 (2d Cir. 2002) citing Federal Rule of Civil Procedure 12(b)(6) (alteration in original). The parties herein were notified of the Court's intention to convert this Motion to a Motion for Summary Judgment and neither determined to submit any additional support for their present positions. Accordingly, this Motion to Dismiss will be construed by this Court as a Motion for Summary Judgment and is ready for decision.
STATEMENT OF FACTS
The Court sets forth only those facts deemed necessary to an understanding of the issues raised in, and decision rendered on, this Motion.
The parties' versions of the incident herein are like the proverbial ships which pass in the night. Suffice it to say, they agree that Claimant was injured on a boat owned and navigated by Petitioner. Any agreement ends there.
Claimant has filed a state court Complaint against Petitioner, claiming negligence, in many forms. In response, the present admiralty claim was filed in this Court, seeking, first, exoneration from all liability or, second, limitation of liability up to the value of the boat, which does not exceed $32,000. The Petitioner denies any negligence and further alleges that any damages arising out of the incident occurred "without the privity or knowledge" of Petitioner.
The Court notes that, when asked in a recorded statement given to Petitioner's insurance company what caused the accident, inasmuch as Claimant had just stated that Petitioner was driving his boat "fairly slowly", Claimant responded, "[i]t seemed to me that the boat, a boat came next to us and I don't know whether he was going fast or it was just the way he was going but there was a wake, I guess you call it a wake. There was a big . . . wave sort of and our boat just tilted." Petitioner's Exhibit at 4.
On October 27, 2003, the Honorable Warren W. Eginton entered an Order staying Claimant's state court action and approved the stipulation of value of the boat, $32,000, between Petitioner and his insurance carrier, which value was determined by averment of a yacht broker, who is in the business of the valuation and the selling of various types of vessels. The broker had conducted research as to the valuation of like vessels to Petitioner's, including size and characteristics. See Affidavit of Value and Pending Freight, Doc. No. 3, Exhibit A. Claimant moved for, and was granted, an extension of time until this Motion is decided to file her claim of damages.
LEGAL ANALYSIS
I. The Standard of Review
In a motion for summary judgment the burden is on the moving party to establish that there are no genuine issues of material fact in dispute and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). See also Anderson v. Liberty Lobby, 477 U.S. 242, 256 (1986) (plaintiff must present affirmative evidence in order to defeat a properly supported motion for summary judgment).
If the nonmoving party has failed to make a sufficient showing on an essential element of his case with respect to which he has the burden of proof at trial, then summary judgment is appropriate. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "In such a situation, there can be `no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Id. at 322-23. However, "[i]f, as to the issue on which summary judgment is sought, there is any evidence in the record from which a reasonable inference could be drawn in favor of the opposing party, summary judgment is improper." Gummo v. Village of Depew, 75 F.3d 98, 107 (2d Cir. 1996).
The court is mandated to "resolve all ambiguities and draw all inferences in favor of the nonmoving party. . . ." Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d. 520, 523 (2d Cir.), cert. denied, 506 U.S. 965 (1992); Heilweil v. Mt. Sinai Hospital, 32 F.3d 718, 721 (2d Cir. 1994). "Credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge."Anderson, 477 U.S. at 255, quoted in Keeney v. City of New London, 196 F.Supp.2d 190, 195 (D.Conn. 2002).
II. The Standard As Applied A. The Statute of Limitations
The limitations period in this case is set forth in 46 U.S.C Section 185, which provides, in pertinent part:
The vessel owner, within six months after a claimant shall have given to or filed with such owner written notice of claim, may petition a district court of the United States of competent jurisdiction for limitation of liability within the provisions of this chapter, as amended. . . .
Claimant argues that the series of letters from her counsel to Petitioner's insurance underwriter sufficed to give him notice of her claim. The Court disagrees. Where no ambiguity exists in a statute, this Court will not import any. Section 185 plainly requires written notice of a claim be given to the owner. The cases cited by Claimant, if they are applicable at all, undermine her position, rather than support it.
First, she states, "[i]t has long been held that a series of letters can suffice to constitute the presentment of a claim.[In] Re: [The Steamtug] S H No. 7, [Inc.], 32 F.Supp. 282 (E.D.N.Y. 1940)." Nowhere in this case does there exist any reference whatsoever to any letter, never mind "a series of letters." Rather, the Steamtug Court wrote but one solitary sentence regarding the notice of the claim therein: "Within a period of six months after the notice of claim against the petitioners was received, petitioners filed in this Court the petition for limitation of liability." Id. at 282. The Court is bewildered by this citation as authority for her proposition that the letters to Petitioner's insurance company were sufficient notice.
Next, Claimant cites In re Lewis, 190 F.Supp.2d 885 (M.D.La. 2002) and [In] Re: Oceanic Fleet, Inc., 807 F.Supp. 1261 (E.D.La. 1992) for the proposition that "[a]lso, disclosure of a claim and acknowledgment thereof can trigger the six-month period." Claimant's Memorandum of Law at 3. In Lewis, the court held that a letter sent was sufficient notice of claim, inasmuch as the letter had been sent directly to the owner. It then held:
The letter must inform potential defendants of: the facts of the incident; the claimant's belief that the vessel owner is to blame for the damage; and, the claimant's intention to seek damages from the vessel owner. The letter must also "reveal a `reasonable possibility' that the claim is subject to limitation." In re Specialty Marine Services, Inc, 1999 WL 147680 at * 1 (E.D.La. 1999) . . . A letter that does not advise a potential defendant, who is a potential petitioner in limitation, of these points does not constitute sufficient notice. Complaint of Okeanos Ocean Research Foundation, Inc., 704 F.Supp 412 (S.D.N.Y. 1989).Lewis, 190 F.Supp.2d at 888.
In Oceanic Fleet, a series of letters gave proper notice as, when taken together, they gave the requisite notice of a seaman's claim against the vessel to trigger the six-month period for the vessel owner to file the Section 185 petition; the letters referred to litigation, a deposition, possibility of settlement negotiations, and were entitled "In re: GUNTHER vs. OCEANIC FLEET, INC. AND OFF-SHORE MARINE SERVICES, INC." Oceanic Fleet, 807 F.Supp. at 1262.
These cases are inapposite to the present litigation. There has never been any written notice of claim sent to Petitioner, let alone one containing the required details of Lewis and Oceanic Fleet. In contradistinction, the eleven letters attached as Exhibit A to Claimant's Motion discuss, time and again, the medical reports which counsel intends to submit for payment under Respondent's insurance policy. In one of the letters, counsel writes: "I would still appreciate talking with you about a possible resolution of this claim." In a second, he states: "Also, as Ms. Calomino's active medical treatment is ended, this may be an appropriate time to discuss a resolution of the claim." These are the sole references, in letters spanning two and onehalf years, to the possibility of some kind of payment to Claimant. In fact, the single reference to the "facts of the incident", Lewis, 190 F.Supp.2d at 888, is to be found in a letter dated December 11, 2001, from a marine liability specialist to Claimant. That letter commences: "According to our conversation, you were injured when the boat hit a wake causing you to fall." Surely, this letter is the antithesis of the notice required by Section 185 and the cases discussed herein. Inasmuch as Claimant has failed to meet the notice standards of any of the cases she cites, or those researched by this Court, summary judgment on the statute of limitations is DENIED.
B. "Knowledge or Privity"
Claimant contends that, inasmuch as Petitioner was the sole owner and operator of the boat, his "knowledge or privity" of any negligent conditions is presumed as a matter of law; thus, there can be no limitation of liability and the Petition seeking same must be dismissed by this Court. The Court is forced to disagree with Claimant's position. A finding of negligence attributable to a vessel owner is generally not sufficient to establish by itself the owner's privity or knowledge, inasmuch as the order of proof in a limitation proceeding requires a two-step procedure:
[A] determination of whether a shipowner is entitled to limit his liability involves a two-step analysis. As stated in Farrell Lines Inc. v. Jones: "First, the court must determine what acts of negligence or conditions of unseaworthiness caused the accident. Second, the court must determine whether the shipowner had actual knowledge or privity of those same acts of negligence or conditions of unseaworthiness." Moreover, once a claimant satisfies the initial burden of proving negligence or unseaworthiness, the burden of proof shifts to the shipowner to prove lack of knowledge or privity.In re Complaint of Hercules Carriers, Inc., 768 F.2d 1558, 1563 (11th Cir. 1985), quoting Farrell Lines, Inc. v. Jones, 530 F.2d 7, 10 (5th Cir. 1976).
The foregoing rationale has been applied by the majority of courts, which have held that an "owner at the Helm" does not entitle a claimant to summary disposition of a limitation proceeding. See, e.g., Blackler v. F. Jacobus Transportation Co., 243 F.2d 733, 735 (2d Cir. 1957) (citations omitted);Petition of Klarman, 295 F.Supp. 1021, 1022-23 (D.Conn. 1968) (citations omitted)
"In the case of individual owners, it has been commonly held or declared that privity as used in the statute means some personal participation of the owner in the fault or negligence which caused or contributed to the loss or injury." Corytell v. Phipps, 317 U.S. 406, 411 (1942) (citations omitted). Further, "[p]rivity, like knowledge, turns on the facts of particular cases." Id. (emphasis added). The term "knowledge" is used in its every day meaning, i.e., did Petitioner "know" of the alleged negligent conditions on his boat, on which the state court complaint is based? One "who is not on notice as to the existence of any defect in [the boat] cannot be denied the benefit of limitation as regards a loss. . . ." Id. at 412.
Negligence under maritime law contains the same elements as under common law. See Petition of the Kinsman Transit Co., 338 F.2d 708, 721 (2d Cir, 1964). Claimant must establish duty, breach of duty, and causation. See id. Under maritime law, a vessel owner owes passengers a duty to use reasonable care under the circumstances. Kermarec v. Compagnie Generale Transatlantique, 358 U.S. 625, 630 (1959). This duty of care, however, does not render the vessel owner the insurer of his guest's safety. See Monteleone v. Bahama Cruise Line, Inc., 838 F.2d 63, 64-64 (2d Cir. 1988).In the Matter of the Complaint of Jules S. Cornfield as Owner of the Vessel "CARA ANN" for Exoneration from or Limitation of Liability, Memorandum, Decision and Order After Bench Trial, Civil Action No. 02-CV-3331 (JS) (E.D.N.Y, November 23, 2004) (dismissing claim of negligence and exonerating Petitioner).
Will an expert witness conclude that Petitioner's responsive maneuvers to the wake he confronted were negligent? Did he "negligently alter the seat of the boat, negligently fail to warn the claimant, and negligently operate the boat"? Claimants' Memorandum of Law at 5. It is patently obvious that these are "genuine issues of material fact", to be determined by this Court as the trier of fact in an exoneration/limitation petition. Resultantly, summary judgment is inappropriate.
C. Petitioner's Cross Motion
Petitioner asserts that "Marcia Calomino's reliance on Plaintiff/Petitioner William Livolsi's actual knowledge of the August 18, 2001 incident and her reliance on verbal communications and `in time' correspondence should be disregarded and stricken from this Court's record." Petitioner's Memorandum of Law at 15. The Court is unsure of the basis for this motion, It would appear that Petitioner believes these arguments are somehow unlawfully put forward. He postulates: "Simply put, the case law is clear that only a written notice of claim containing the proper elements will constitute the written notice required under 46 U.S.C. § 185." Id. (emphasis in original). This is a statement of his legal position. Claimant took another position. That's what litigation is all about. The idea that support for a position which is in opposition to that of a party should be stricken from the record is wholly untenable.
D. Claimant's Cross-Motion
Claimant, in her reply brief, sets forth a "Cross-Motion For Relief From Stay of State Court Proceedings and for Dissolution or Stay of the Complaint For Exoneration From or Limitation of Liability", based on her right to a jury trial embodied in the "savings to suitors" clause of 28 U.S.C. Section 1333 (1982) (setting forth exclusive jurisdiction in federal courts for the adjudication of admiralty and maritime claims but "saving to suitors all other remedies to which they are entitled"). "This is a recurring and inherent conflict in admiralty law." Complaint of Dammers Vanderheide, 836 F.2d 750, 754 (2d Cir. 1988) (case upon which Claimant herein relies). Reconciling the functions of an admiralty court in limiting liability under the Limitation Act, which proceeds in equity without a jury, with the claimant's right to a trial by jury for common law and statutory claims, has not always been a smooth pathway to follow. However, after a plethora of courts analyzed this conflict, it was determined that "[in] resolving possible conflicts, the courts have developed two exceptions to the district court's exclusive jurisdiction and the absence of a jury right in limitations actions." Newton v. Shipman, 718 F.2d 959, 962-63 (9th Cir. 1983) (per curiam). First, if the limitation fund exceeds the value of all the claims, pro rata distribution is not necessary, and the district court must permit claimants to pursue their separate claims at law and to exercise their right to a jury.Lake Tankers Corporation v. Henn, 354 U.S. 147, 152. (1956). This exception is not applicable inasmuch as Claimant alleges that her damages exceed the fund. In the case herein, because there exists only one claimant, she relies on the second exception, which provides: "when a lone claimant brings an action in excess of the limitation fund, the district court must lift the stay against other proceedings if the claimant concedes the district court's exclusive jurisdiction to determine all issues relating to the limitation of liability" See, e.g., Ex parte Green, 286 U.S. 437, 438-40 (1932) (value of vessel and freight is limit of [petitioner's] liability).
In the Dammers decision, the Court of Appeals for the Second Circuit determined exactly what concessions such a claimant must make in order to dissolve the stay. In that case, the district court vacated that portion of an earlier order entered by it in a limitation/exoneration proceeding, which had stayed a previouslyfiled state court action sounding in negligence. The district court judge did so, however, only after the claimants had filed a stipulation conceding certain rights of the petitioner and recognizing certain aspects of the district court's jurisdiction over the matter. Specifically, the district court held that, in order that the stay be lifted, a claimant must: (1) file her claim in the limitation proceeding; (2) where a stipulation for value has been filed in lieu of the transfer of the boat to a trustee, concede the sufficiency of the amount of the stipulation; (3) consent to waive any claim of res judicata relevant to the issue of limited liability based on any judgment obtained in the state court; and (4) concede petitioner shipowner's right to litigate all issues relating to limitation in the limitation proceeding. Complaint of Dammers Vanderheide, 660 F.Supp. 153, 1156 (S.D.N.Y. 1987). After Claimants had complied, the district court dissolved the stay. In affirming this decision, the Second Circuit noted, with approval, "[i]n allowing the claimants to pursue their state court action against the shipowners, the district court retained jurisdiction and `continue[d] the stay against entry of judgment and consequent enforcement of any recovery achieved in that [state] proceeding pending the outcome of this limitation proceeding.'" Dammers, 836 F.2d at 758, quoting Dammers, 660 F.Supp. at 160. Thus, petitioners' rights in the federal court were absolutely protected by these concessions and stipulations. Dammers, 836 F.2d at 759.
The claimants were also required expressly to stipulate that the fund was in excess of their claims and that if a jury awarded them more than the value of the fund, they would not seek any damages beyond the value of that fund.
In the second case upon which Plaintiff relies, Lake Tankers Corporation v. Henn, 354 U.S. 147 (1956), a case in which the fund was in great excess of the claims, the claimants, including respondent, were permitted to proceed in their state court action after they "relinquished all right to any damage in excess of the amounts set forth in their respective claims in the limitation proceeding and expressly limited recovery to those amounts. The respondent had also filed stipulations agreeing neither to increase these claims, nor to enter into a judgment in excess of those amounts, and she has waived any claim of res judicata relative to the issue of petitioner's right to limit liability if that issue should be passed on in the state court." Id. at 149. Thus, under Henn also, the present Claimant must, inter alios, stipulate that she will not attempt to recover any amount in excess of $32,000, the value of the boat as found by Judge Eginton. However, ". . . if the value of the vessel be not accepted as the limit of the owner's liability, the federal court is authorized to resume jurisdiction and dispose of the whole case." Ex parte Green, 286 U.S. at 440. Thus, if Claimant will not stipulate that the worth of Petitioner's boat is $32,000 and that this is the value of Petitioner's limitation, the stay may not be lifted.
Claimants were required only to stipulate to the amount of their claims because the value of the vessel and its freight greatly exceeded the value of said claims.
The third case relied upon by Claimant is Newton v. Shipman, 718 F.2d 959 (9th Cir. 1983). Newton held that a claimant specifically must: (1) stipulate that the value of the limitation fund equals the combined value of the vessel and its cargo; (2) waive the right to claim res judicata against the vessel owner outside of the limitation proceedings; and (3) concede the district court's exclusive jurisdiction to determine limitation of liability. Newton, 718 F.2d at 962 (emphasis added). Accord In re Red Barge Line, 160 F.2d 436, 438, cert. denied, 331 U.S. 850 (1947) (same stipulations required).
In the present case, it is beyond peradventure that Claimant has not met the requirements of the cases upon which she relies in order that this Court lift the stay. Indeed, to the contrary, she strongly asserts that "[t]he Complaint clearly shows a claim in excess of the $32,000 value of the boat in question." Nevertheless, should Claimant wish this Court to reconsider dissolution of the stay, she may file the stipulations as required herein on or before April 29, 2005, including a stipulation to the $32,000 value of Petitioner's boat as the limitation of his liability. If Claimant chooses not to do so, this Court will retain sole jurisdiction, as mandated by Ex Parte Green, 286 U.S. at 439-40.
CONCLUSION
In this case, there exist genuine issues of material fact as to negligence and knowledge or privity. Hence the Motion to Dismiss, construed as a Motion for Summary Judgment [Doc. No. 12], shall be, and hereby is, DENIED, as is Petitioner's Cross Motion to Strike Irrelevant Documents or Argument [Doc. No 19]. Finally, Claimant's Cross Motion for Relief From Stay of State Court Proceedings and Motion to Stay Complaint for Exoneration From or Limitation of Liability [Doc. No. 25] shall be, and hereby is, DENIED WITHOUT PREJUDICE to renew in accordance with the dictates of this opinion. Such filing, if any, shall be made on or before April 29, 2005. Responsive filing, if any, shall be filed in compliance with the Local Rule of Civil Procedure 7.
SO ORDERED.