Opinion
Case No. 3:03-cv-293-J-16HTS.
June 29, 2004
ORDER
Before the Court is Claimant Timothy W. Hood's ("Hood") Motion to Dissolve Injunction (Dkt. 109), to which Petitioner Williams Marine Construction and Services, Inc. ("Williams Marine") filed a Response and Memorandum of Law in Opposition (Dkt. 110). Both parties have also filed memoranda addressing the effect of Omne Staff Leasing, Inc.'s ("Omne") pending bankruptcy proceedings on this limitation of liability case (Dkts. 132 134). At the pretrial conference, the Court further ordered (Dkt. 130) the parties to file memoranda addressing the issue of whether the Court should dissolve the state court injunction previously entered in this case, and both parties responded by filing memoranda addressing the Court's discretion to dissolve the injunction (Dkts. 135 136). The Court heard oral arguments from the parties regarding the dissolution issue on June 23, 2004.
I. Background
This case had its origin in Duval County Circuit Court when, on November 15, 2002, Claimant Hood filed an action against Williams Marine and Omne based on general maritime and admiralty law, as well as the Jones Act, 46 U.S.C. App. § 688. Hood claimed that while working on board Barge 0-1, he sustained injuries to his left foot on October 9, 2002. This Court's involvement began on April 11, 2003, when Williams Marine, owner of Barge 0-1 and the Workboat Colt filed its Verified Complaint for Exoneration from or Limitation of Liability Pursuant to Rule 9(h), Federal Rules of Civil Procedure and 46 U.S.C. § 183, et seq. (Dkt. 1). According to the Complaint, as of October 9, 2002, the Barge 0-1 and Workboat Colt, along with the Link-Belt Speeder Model 78 boom crane located on the barge, were "tight, staunch, properly equipped, supplied and crewed, and in all respects seaworthy and fit for their intended use" while located in Florida territorial waters at a construction site in Naples, Florida. Dkt. 1, ¶ 2.
Williams Marine alleges that the accident occurred on board the barge without its privity or knowledge, and as such it should be exonerated from or limited in its liability. Id. at ¶ 6. Williams Marine filed a bond in the amount of $102,420 with the Court, representing its limitation fund of $91,000, plus interest. Id. at ¶ 16; Dkt. 2. On April 16, 2003, the Court entered an Order (Dkt. 3) enjoining all claims and proceedings, including those in the Duval County Circuit Court, against Williams Marine, Barge 0-1, the crane and the Workboat Colt.
Both Omne and Hood filed claims against Williams Marine and its vessels in this action pursuant to Supplemental Rule F, Federal Rules of Civil Procedure. Omne made its claim under a Client Service Agreement between it and Williams Marine, wherein Omne was to employ the ther-current employees of Williams Marine and then lease the employees back to Williams Marine, providing payroll services and workers' compensation for the employees. Omne stated that the true nature of Hood's job responsibilities on board the barge took him outside of state workers' compensation laws, and as such, Omne cross claimed against Williams Marine for breach of the Client Service Agreement. Omne further argued that Williams Marine must indemnify it for any liability found pursuant to Hood's claims, due to the alleged breach of agreement.
On April 27, 2004, the Court granted Hood's Motion for Summary Judgment regarding Omne's claim seeking a portion of or all of the potential limitation fund in this case (Dkt. 112). In its Order, the Court ruled that Omne's claims in this action were insufficient to entitle it to all or a portion of the limitation fund. Instead, Omne's claims for breach of contract and indemnification were personal claims unrelated to the master-servant relationship in this case, and therefore they were not properly raised as claims in this limitation action filed pursuant to the supplemental admiralty rules. The Court accordingly ruled that Omne is not entitled to any limitation fund proceeds in this action, but the Court otherwise denied the motions for summary judgment filed by Hood and Williams Marine (Dkt. 112). No other dispositive motions are currently pending in this action.
Hood now seeks to dissolve the injunction against the state court proceedings entered long ago by this Court, as he now claims this limitation case is a single claimant action that can be stayed in favor of his right to a jury trial in state court. Williams Marine opposes any dissolution of the injunction, arguing that Omne still has cross-claims against it in state court, and that Omne could potentially raise additional claims in this limitation action. Moreover, Williams Marine has informed this Court that Omne has filed for bankruptcy in the United States Bankruptcy Court for the District of New Jersey (Dkt. 117). Accordingly, pursuant to 11 U.S.C. ¶ 362, the filing of the bankruptcy case by Omne automatically stays all pending actions affecting the debtor or its estate.
Nonetheless, Williams Marine continues to oppose the dissolution of the injunction because it is apparently concerned that Omne could seek recovery pursuant to its cross-claim in state court, thereby subjecting it to liability beyond the current limitation fund. Williams Marine therefore urges the Court to maintain the injunction and proceed to judgment in these limitation proceedings. For the reasons stated below, however, the Court finds that it should now dissolve the injunction, stay this case, and allow Hood to proceed to jury trial against Williams Marine in Duval County Circuit Court.
II. Discussion
Hood argues that as a single claimant in this limitation proceeding, he should now be able to proceed in state court on his Jones Act and maritime claims against Williams Marine, as long as he properly "stipulates" to the preservation of Williams Marine's limitation rights in this action. See, e.g., Lewis v. Lewis Clark Marine, 531 U.S. 438, 454 (2001) (holding that as long as court is satisfied that vessel owner's right to seek limitation is protected, the decision to dissolve the injunction is within the district court's discretion); Ex parte Green, 286 U.S. 437 (1932). In single claimant cases such as this one, Hood points out that courts have consistently dissolved injunctions and preserved the single claimant's right to proceed to jury trial in state court. See also In re Helena Marine Service, Inc., 564 F.2d 15 (8th Cir. 1977); In re Two "R" Drilling Co., Inc., 943 F.2d 576 (5th Cir. 1992); In re Tetra Applied Technologies, Inc., 362 F.3d 338, 340 (5th Cir. 2004). Here, this Court has already held that Omne is not entitled to any portion of the potential limitation fund, because any potential recovery from Williams Marine would be based strictly on a personal contract theory, which is wholly outside of this limitation action. Hood therefore urges this Court to dissolve the state court injunction while retaining jurisdiction to later proceed on Williams Marine's limitation of liability action.
To that end, Hood has stipulated that Williams Marine is entitled to and has the right to litigate all issues relating to limitation of liability in this Court; that Hood will not seek payment of any judgment in state court, should one be awarded, that exceeds the $102,420 current value of the limitation fund; that Hood will not seek to litigate any limitation issues in state court, and waives any res judicata argument relative to those claims in this Court; and that this Court has full and exclusive authority to decide any issues related to Williams Marine's entitlement to limitation of liability under 46 U.S.C. § 182, et seq. See Dkt. 135, pp. 1-2. In other words, Hood claims he has fully stipulated to the protection of all of Williams Marine's rights to proceed with this limitation action, and that he will not contest any of those rights until (and if) this Court once again assumes jurisdiction over this limitation action upon completion of the state court action.
Hood states that he does not agree that the $102,420 represents the full value of the limitation find, and he admits that he is seeking to increase this security, but he stipulates that this Court has full and exclusive authority to decide these issues, and until they are decided, he will not seek to recover any judgment beyond the $102,420 amount.
Williams Marine argues extensively against any dissolution of the injunction, strenuously asserting that this limitation action should proceed to judgment prior to any proceedings in Duval County Circuit Court. According to Williams Marine, Omne could still pursue its cross-claim against Williams Marine in state court based on fraud, breach of contract indemnity and contribution, and defense costs, meaning that Williams Marine's limitation rights would not be adequately protected should the injunction be dissolved. Due to the "avenues of potential recovery" against Williams Marine, it argues that it could be exposed to liability beyond the limitation fund, particularly since Omne has not joined in the "stipulations" protecting Williams Marine's rights. In other words, even though the Court has disposed of any rights Omne claimed to have with regard to the limitation find, and even though there is an automatic stay in place due to Omne's bankruptcy proceedings, Williams Marine continues to argue that this is not a true "single claimant" case that would justify a dissolution of the state court injunction.
Williams Marine concludes that "[u]ntil Hood obtains Omne's signature to the required stipulations, there remains a viable back-door possibility to expose Williams to liability beyond the limitation find." Dkt. 136, pg. 4. Williams Marine asserts that in state court, even though Omne is in bankruptcy and therefore subject to the automatic stay, it could still use its claim against Williams Marine as a "sword," while Williams Marine would be "powerless" to litigate its claim against Omne or prevent recovery beyond the limitation fund. Williams Marine further contends that "given the liberal amendment possibilities in the state courts," Omne could somehow amend its claims to include maritime indemnity or contribution, thereby purportedly taking its claims outside of the "personal contract" context discussed by this Court in denying entitlement to the limitation fund. Id. at pg. 9; see also Beiswenger Enterprises Corp. v. Carletta, 86 F.3d 1032, 1043 (11th Cir. 1996).
Moreover, Williams Marine contends that the fact that Hood is now challenging the sufficiency of the limitation fund could somehow cause it to be subject to liability beyond the current fund amount, and therefore it is in the best interest of economy to determine any limitation entitlement before proceeding in state court. Id. Williams Marine argues that this case is not similar to Lewis Clark because, unlike that case, this case does not conclusively involve a "single claimant" and Hood's proposed "stipulations" are insufficient to wholly protect Williams Marine's right to limit its liability Here, Hood is claiming the limitation fund is inadequate, he has not waived the defense of issue preclusion (as opposed to res judicata), he has not obtained Omne's signature on the stipulations, and he has not stipulated that the value of his claim is less than the value of the vessel involved in this case. Furthermore, Williams Marine asserts that any delay in adjudication of these proceedings — given the fact that its operations have been shut down and the vessels are no longer in its possession — will make it "increasingly unlikely that the persons and equipment necessary for a fair adjudication of Petitioner's limitation rights will be readily available if at all." Id. at pg. 8.
The Court finds Williams Marine's arguments to be without merit. Not only are Hood's stipulations, reaffirmed during oral argument in this Court, sufficient to fully protect Williams Marine's right to ultimately proceed in this limitation proceeding, but there is no viable possibility that Williams Marine will be subjected to liability in excess of the established limitation fund prior to the conclusion of these proceedings. As Hood's counsel correctly pointed out at oral argument, even if Omne were permitted to pursue its cross-claims against Williams Marine in state court (a proposition this Court finds extremely doubtful, given the automatic stay in bankruptcy), those claims have already been determined to be "personal" in nature, and accordingly they have nothing to do with the limitation fund at issue in this case.
The Court has already ruled that under no circumstance is Omne entitled to all or a portion of this potential limitation fund, and there is no possibility that Omne could somehow lay claim to any of the funds involved in this case. Should Omne be permitted to pursue its claims against Williams Marine, the Court has already determined that those claims are unrelated to this case. Therefore, this action is in fact a "single claimant" case wherein Omne's status has no bearing on any potential limitation of liability.
In fact, Hood's counsel correctly noted that the deadline for filing potential claims in this case passed long ago, and as such any attempts by Omne to file new or additional claims in this case would be time-barred.
In addition, the Court has discretion to stay this single-claimant case and allow the state court proceedings to proceed because Hood has filed the proper "stipulations" to protect Williams Marine's right to seek limitation of liability in this Court. Hood has stated unequivocally that this Court has full and exclusive jurisdiction to determine any limitation of liability, and that he will waive any res judicata argument in this Court that he may believe arises from the state court action. Furthermore, although Hood does not agree that the $102,420 limitation fund amount represents the full value of the vessels at issue in this case, he has stipulated that he will not seek payment of any judgment, if awarded in state court, in excess of that amount until this limitation action is concluded.See also In re Tetra Applied Technologies, 362 F.3d at 343;In re Two "R" Drilling, 943 F.2d at 578.
By waiving any claim to res judicata, this Court assumes, and now holds, that Hood is waiving any claim preclusion argument (including issue preclusion) in this limitation of liability action.
In other words, Hood is agreeing that all issues concerning limitation of liability, including entitlement to limitation and sufficiency of the fund, will be completely and exclusively handled in this Court, without any prejudice to Williams Marine arising from the state court proceedings until the conclusion of this case. Under these circumstances, these stipulations are sufficient to justify dissolving the injunction in this single-claimant action.
Accordingly, upon due consideration, it is hereby ORDERED and ADJUDGED:
1. Claimant Hood's Motion to Dissolve Injunction (Dkt. 109) is GRANTED.
2. The injunction entered pursuant to the Court's April 16, 2003 Order (Dkt. 3) is hereby DISSOLVED and the claims and proceedings pending in the Duval County Circuit Court, against Williams Marine, Barge 0-1, the crane and the Workboat Colt, may now proceed.
3. The above-captioned case is hereby STAYED until further order of the Court, with the Court retaining jurisdiction to exclusively determine all limitation of liability issues in this action upon completion of the state court proceedings.
4. The parties are hereby ORDERED to advise this Court immediately upon completion of the proceedings in Duval County Circuit, so the Court may lift this stay and proceed with this limitation action, if necessary. The parties shall inform the Court of the status of the state court proceedings no later than ninety (90) days from the date of this Order.