Opinion
3:21-cv-00903-YY
07-30-2024
CLINTON HEINZ and FORREST W. MEADOWS, Plaintiffs, v. SE HARMONY CORPORATION, BRIGHT CHARTER SHIPPING LTD., and SINCERE INDUSTRIAL CORPORATION, Defendants.
FINDINGS AND RECOMMENDATIONS FINDINGS
Youlee Yim You, United States Magistrate Judge
Plaintiffs Clinton Heinz and Forrest W. Meadows filed this action for negligence arising from injuries they claim to have suffered during the repositioning of the M/V Ansac Splendor while it was docked at the Port of Longview, Washington, on June 28, 2018. Am. Compl. ECF 35. Defendants are the owners, operators, and managers of the vessel. The complaint alleges that while the vessel was being repositioned, “one of the ship's forward spring lines snapped under excessive tension and hit . . . Heinz at a speed of about 500 miles per hour,” causing him to suffer numerous physical and emotional injuries Id. at 3-5. Byron Jacobs, a co-worker who was next to Heinz, was killed. Meadows claims he was in the “zone of danger” and witnessed these traumatizing events, resulting in emotional harm and distress. Id. at 5-8.
After the original complaint was filed in June 2021, the case progressed for two years during which time plaintiffs attempted to put together evidence to support their motion for default judgment. Hearings regarding the motion for default judgment were set and canceled by plaintiffs, and then, in July 2023, plaintiffs moved to file an amended complaint, which was granted. ECF 32, 33. Plaintiffs filed their amended complaint on July 6, 2023, and due to lack of activity in the case, on March 19, 2024, the court ordered plaintiffs to show cause why the case should not be dismissed for lack of prosecution. ECF 39. Thereafter, plaintiffs filed a Motion for Default Order (ECF43), at which point, counsel for defendants appeared for the limited purpose of challenging service and jurisdiction, and filed the instant motion to dismiss the action or quash service, which is the subject of these Findings and Recommendations. Am. Mot. Dismiss, ECF 58.
In their motion to dismiss, defendants contend that (1) Judge Simon's January 2019 Order and Injunction entered in SE Harmony Corporation, et al., No. 3:18-cv-02201-SB, bars plaintiffs' claims, and (2) service is invalid because plaintiffs served the summonses and complaint on a vessel agent with no current connection to defendants and not on defendants themselves. Defendants' motion to dismiss should be granted, and this case should be dismissed with prejudice.
I. Limitation of Liability Act
The Limitation of Liability Act of 1851 (“Limitation Act”), 46 U.S.C. § 30501 et seq., “permits vessel owners ‘to limit their liability (if any) to their interest in the vessel and its freight, provided that the loss was incurred without their privity or knowledge.'” Matter of Willamette Jet Boat Excursions, LLC, 638 F.Supp.3d 1209, 1211-12 (D. Or. 2022) (quoting In re Complaint of Ross Island Sand & Gravel, 226 F.3d 1015, 1017 (9th Cir. 2000), and citing Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 446 (2001) (“The [Limitation] Act allows a vessel owner to limit liability for damage or injury, occasioned without the owner's privity or knowledge, to the value of the vessel or the owner's interest in the vessel.”)). The claims subject to limitation include “any . . . injury by collision, or any act . . . occasioned, or incurred, without the privity or knowledge of the owner.” 46 U.S.C. § 30523(b).
The vessel owner “may bring a civil action in a district court of the United States for limitation of liability.” 46 U.S.C. § 30511(a). The decision in Willamette Jet Boat Excursions, describes the procedure as follows:
“When an action has been brought under [the Limitation Act] and the owner has complied with [the security requirement], all claims and proceedings against the owner related to the matter in question shall cease.” 46 U.S.C. § 30511(c). After an action to limit liability has been brought in federal court and the plaintiff-in-limitation has met the necessary requirements, the district court will issue notice requiring all persons who have claims arising out of the same accident to assert them in the district court. This does not amount to an affirmative finding that the shipowner is entitled to protection under the Limitation Act. Instead, this ensures that the question of limitation of liability is decided in the proper forum and in a single action. A claimant may contest the shipowner's “right to exoneration from or the right to limitation of liability.” Fed.R.Civ.P. Supp. F(5). “When this occurs, the district court ‘determines, in a proceeding known as a concursus, issues such as liability, the privity and knowledge of the shipowner, and if necessary, the distribution of the limitation fund.' ” In re Matter of Dushkin, 2021 WL 2815837, at *2 (D. Ala. July 6, 2021) (quoting In re Complaint of Aloha Jetski, LLC, 920 F.Supp.2d 1143, 1146 (D. Haw. 2013)).638 F.Supp.3d at 1211-12.
II. Prior Order Bars Plaintiffs' Claims
Pursuant to the Limitation Act, defendants previously filed a Complaint for Exoneration From or Limitation of Liability in SE Harmony Corporation, et al., No. 3:18-cv-2201-SB. The complaint described the same incident at issue in this case-injuries sustained on June 28, 2018, when “a spring line parted, snapping back in both directions” while the vessel was docked and being repositioned at the Port of Longview, Washington. Comp. 3-4 (No. 3:18-cv-02201-SB), ECF 1. The complaint stated that two men died, “[o]thers may have been in the vicinity,” and “the identities and possible injuries of any other individuals or potential claimants related to this incident remain unknown.” Id. at 4. Defendants indicated that they were aware of only one case relating to the incident, filed by Megan Jacobs, personal representative for the Estate of Byron Jacobs. Id. Defendants claimed they were not liable for the incident and submitted a surety bond with the court in the amount of alleged value of the vessel, $8.4 million. Id. at 5.
Although defendants were the plaintiffs in case no. 3:18-cv-2201-SB, they are consistently referred to as the defendants in these Findings and Recommendations.
On January 19, 2019, the court issued an Order and Injunction directing that all claims and proceedings against defendants relating to the June 28, 2018 incident “shall cease,” and enjoined “all persons and parties” from “commencing or prosecuting any claims . . . except in this proceeding.” Order & Inj. (No. 3:18-cv-02201-SB), ECF 8. The court further ordered that notice to potential claimants was to be published in the Daily Journal of Commerce and The Oregonian “once each week for four successive weeks.' Id. Any claimants were “admonished to file your respective claims with the Clerk of this Court in this proceeding” and serve defense counsel by March 15, 2019. Order Pub. Notice (No. 3:18-cv-02201-SB), ECF 9.
Subsequently, Megan Jacobs settled with defendants. Stipulated Order of Judgment (No. 3:18-cv-02201-SB). On March 16, 2020, the court issued an Order of General Default against all persons or parties who had not filed claims, finding them in default and “barred from filing any claims and answers in this or any other proceeding.” Order General Default (No. 3:18-cv-02201-SB), ECF 27.
Almost two years after the March 15, 2019 deadline had elapsed, and almost a year after the default order was entered, plaintiff Heinz filed an action against defendants in Heinz v. SE Harmony Corp., et al., 3:20-cv-00085-SB, on January 14, 2020. Heinz then voluntarily dismissed that case on June 14, 2021, and Heinz and Meadows filed this case, No. 3:21-cv-00903, two days later, on June 16, 2021.
In sum, plaintiffs failed to file their claims by March 15, 2019, by over two years. As defendants correctly contend, plaintiffs' claims are therefore barred by the Order of General Default issued on March 16, 2020, in case no. 3:18-cv-02201-SB.
In their response to defendants' motion to dismiss, plaintiffs do not refute the merits of defendants' argument other than to say they intend to “file a motion within one week to set aside the default order against them in the limitations case.” Resp. 1, ECF 71. Plaintiffs assert that “[t]he grounds” for such a motion “would be that service of the petition on them was defective.” Id. Plaintiffs' filed their response on May 21, 2024, and although more than three weeks has passed, they have yet to file a motion to set aside the default order in case no. 3:18-cv-2201-SB. Moreover, the notice issued in case no. 3:18-cv-2201-SB complied with Federal Rule of Civil Procedure, Supplemental Rule F, which requires “notice to all persons asserting claims with respect to which the complaint seeks limitation, admonishing them to file their respective claims with the clerk of the court and to serve on the attorneys for the plaintiff a copy thereof.” Rule F requires a minimum of 30 days' notice and provides “that notice shall be published in such newspaper or newspapers as the court may direct once a week for four successive weeks prior to the date fixed for the filing of claims.” The notice issued in case no. 3:18-cv-2201-SB complied with these requirements.
Defendants make other arguments regarding lack of sufficient service. It is unnecessary to reach those arguments, as plaintiffs' claim are barred by the Order of General Default issued in case no. 3:18:cv-02201-SB.
There are other motions pending in this case, including plaintiffs' Motion for Default Order, ECF 43, plaintiffs' Amended Motion to Stay, ECF 68, and defendants' Motion for Sanctions, ECF 62. If defendants' Amended Motion to Dismiss is granted, plaintiffs' motions will be moot, and defendants' Motion for Sanctions will remain to be resolved.
RECOMMENDATIONS
Defendants' Amended Motion to Dismiss, ECF 58, should be granted and this case should be dismissed with prejudice.
SCHEDULING ORDER
These Findings and Recommendations will be referred to a district judge. Objections, if any, are due Monday, July 01, 2024. If no objections are filed, then the Findings and Recommendations will go under advisement on that date.
If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendations will go under advisement.
NOTICE
These Findings and Recommendations are not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any Notice of Appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of a judgment.