Opinion
03-CV-0023E(Sr), 03-CV-0205E(Sr)
July 25, 2003
MEMORANDUM and ORDER
This decision may be cited in whole or in any part.
Plaintiffs filed, suit in the New York. State Supreme Court, Erie County, December 12, 2002 for personal injuries (and derivative loss) stemming from a boating accident that occurred on August 7, 2002 while Paul Voytovich was a student in defendants Basic Sail Program." Defendants removed this action on January 13, 2003. Plaintiffs filed a motion to remand on May on the ground that this Court lacks subject matter jurisdiction.
This action is related to In re Zimmerman, 03-CV-0205E (Sr), in which the defendants (petitioners therein) seek to limit their liability to the value of the subject vessel (purported to be $2,500) under 46 U.S.C. app. § 185 et seq., In an Order dated April 18, 2003, this Court directed defendants/petitioners to, inter alia, file and serve an amended petition to rectify specified deficiencies. An Amended Petition was filed in Voytovich on May 19, but not in Zimmerman. Consequently, this Court deems the Zimmerman petitioners to be in default of this Court's April 18 Order for falling to have filed an amended petition as directed. Accordingly, petitioner's petition for limitation of liability will be denied.
If the only problem with the petition were the fact that it was filed in Voytovich rather than Zimmerman, this Court would be inclined to consolidate the two actions and treat the Amended Petition as having been properly filed. Such, however, is not the only deficiency with the petition. Indeed, petitioners again failed to comply with Rule F of the Supplemental Rules For Certain Admiralty And Maritime Claims ("Rule F"). First, petitioners failed to either deposit with the Court the value of the vessel or transfer to a trustee the owner's Interest in the vessel. Second, the Amended Petition falls to plead with specificity the facts on the basis of which the right to limit liability is asserted ***" as required by Rule F. Indeed, the petition appears to undertake notice pleading Inasmuch as it falls to allege facts that would permit this Court to find that petitioners are entitled to limited liability — i.e., the Amended Petition failed to specify why petitioners lacked knowledge or privity of the event that caused Voytovich's injuries. Third, the Amended Petition falls to plead what actions and proceedings are pending. Voytovich was pending when the Amended Petition was filed, but it was not referred to in the Amended Petition. Accordingly, this Court will dismiss the petition with prejudice for failure to comply with Rule F despite this Court's previous admonition to do so.
Additionally, the Amended Petition — which was filed May 19, 2003 — stated that it was filed six months or less from September 16, 2002." Although May 19, 2003 is more than six months after September 16, 2002, this Court Would have treated the Amended Petition as timely filed — if it had been filed in Zimmerman as opposed to Voytovich — because it was filed within the time provided by this Court's Order dated April 18, 2003. It is now, however, too late to file a timely petition in Zimmerman.
See Rule F; Bayview Carter Boats, Inc. v. Sullivan, 692 F. supp. 1480, 1482-1483 (E.D.N.Y. 1988) imultaneous with the filing of the petition the owner must deposit with the Court a sum of money equal to his potential limited liability or transfer to a trustee, for the benefit of claimants, his interest in the vessel. 46 U.S.C. App. § 185"); In re Compania Naviera Marasia S.A., 466 F. Supp. 900, 901 (S.D.N.Y. 1979) (holding that the petitioning shipowner must give security at the time of filing the complaint"); see generally James Wm. Moore, 29 Moore's Federal Practice § 708.01 (3d ed. 2003) (discussing the requirements of Rule F). But see Guey v. Gulf Ins. Co., 46 F.3d 478, 480 (5th Cir. 1996) (holding that the six-month requirement of Rule F and section 185 does not apply to the posting of security). Although courts have permitted petitioners in Limitation of Liability actions to file a pleading referred to as a Stipulation of (or for) Value, ibid., petitioners have merely offered to stipulate that the value of the subject vessel is $2,500 — and have not filed the requisite pleading, Even if petitioner's purported ad interim stipulation were deemed acceptable under Rule F, other deficiencies in the Amended Petition remain.
See Wright, Miller, Marcus, Federal Practice Procedure: Civil 2d § 3252 (1997) (noting Rule F3 requires a considerable degree of specificity")
This Court now turns to plaintiffs remand motion. Under 28 U.S.C. § 1333(1), federal jurisdiction exists in [a]ny civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled. Consequently, the saving to suitors clause of section 1333(1) permits plaintiffs to seek common law remedies to which they may be entitled; plaintiffs are thus entitled to proceed in state court. See Lewis v. Lewis Clark Marine, Inc., 531 U.S. 438, 443-454 (2001). Unlike the situation in Lewis, however, petitioners/defendants failed to comply with Rule F.
See also Pierpoint v. Barnes, 94 F.3d 813, 816 (2d Cir. 1996) ("Admiralty excepts a class of cases from the general rule that cases which could originally have been filed in federal court are removable to federal court at the option of the defendant. Common law maritime cases filed in state court are not removable to federal court due to 28 U.S.C. § 1333's saving to suitors clause.") cert. denied, 520 U.S. 1209 (1997); In re Great Lakes Dock Dredge Co., 895 F. Supp. 604, 608-609 (S.D.N.Y. 1995) (discussing the relationship between the Limitation of Liability Act and the saving to suitors clause of section 1333).
Consequently, Liangnes v. Green, 282 U.S. 531, 540-541 (1931), and its progeny are also distinguishable from the present case.
Inasmuch as this Court will dismiss the petition in Zimmerman, there remains no basis of federal jurisdiction in this case. Although the affirmative defense of limitation of liability may be raised by pleading after the six-month period set forth in Rule F and section 185, defendants have not so pled and this Court thus lacks subject matter jurisdiction. Furthermore, this Court declines defendants request to treat the Amended Petition as an affirmative defense. As noted above, there are two ways in which to claim a right to limit liability and they are not interchangeable. Nonetheless, defendants may attempt to assert the limitation of liability defense in state court. Accordingly, plaintiff's motion to remand will be granted.
Inasmuch as the defendants never pled Limitation of Liability as an affirmative defense, limitation of liability was never an issue in Voytovicvh. See Murray v. N.Y. Cent. R.R. Co., 287 F.2d 152, 153-154 (2d Cir.) (distinguishing section 183 (affirmative defense) from section 185 (petition for limitation of liability)), cert. denied, 366 U.S. 945 (1961); Deep Sea Tankers v. Long Branch, 258 F.2d 757, 772-773 (2d Cir. 1958) (same), cert. denied, 358 U.S. 933 (1959); Grant v. Etoile Le Blanc, 1996 WL 679730, at *2 (N.D.N.Y. 1996) (same); Moore, supra note 3, at § 708.01 [11] (same). But see Lewis, at 446 (discussing section 183 in a case involving a petition filed by a shipowner pursuant to section 185); Complaint of Dammera Vandertieide, 836 F.2d 750, 753 (2d Cir. 1988) (failing to distinguish between section 183(a) and section 185). Moreover, the petition in Zimmerman will be dismissed, thus eliminating limitation of liability as a possible basis for subject matter jurisdiction in any event. See McCsarthy Bros. Co./Clark Bridge, 83 F.3d 821, 827 (7th Cir.) ("[A]shipowner's guarantee of a federal admiralty forum is tentative at best. Failure to meet statutory prerequisites is one way the shipowner may lose the guarantee. Where the shipowner fails to meet certain prerequisites for the limitation action, the claimant's original choice of a state forum will return to the forefront."), cert. denied, 519 U.S. 950 (1996); Bayview Charter Boats, supra note 3, at 1481, 1486-1487 (finding no basis for subject matter jurisdiction where shipowner's petition was dismissed and where affirmative defense of limitation of liability was raised in state court pleading); Moore, supra note 3, at § 708.02 (noting that all of the circuit courts of appeal to have addressed the issue have held that the Limitation of Liability Act does not create a basis for federal jurisdiction").
See Murray, supra note 7, at 153 (holding that limitation of liability may be raised in a responsive pleading pursuant to section 183(a) outside of the six-month period set forth in section 185); Deep Sea Tankers, supra note 7, at 772-773 (same); Sana v. Hawaiian Cruises, Ltd., 181 F.3d 1041, 1047 (9th Cir. 1999) (same).
Defendants cannot create subject matter jurisdiction by pleading limitation of liability as an affirmative defense. Louisville Nashville R.R. Co., v. Motley, 211 U.S. 149, 152 (1908) (holding that an anticipated defense may not be used to establish subject matter jurisdiction); Tennessee Gas Pipeline v. Houston Cas. Ins. Co., 87 F.3d 150, 153 (5th Cir. 1996) (holding that maritime claims require an independent basis of subject matter jurisdiction for purposes of removal); In re Vatican Shrimp, 820 F.2d 674, 677 (5th dr.) (holding that limitation of liability defense raised in state court defensive pleading was insufficient to establish federal subject matter jurisdiction), cert. denied, 484 U.S. 953 (1987); Bayview Charter Boats, supra note 3, at 1486-1487 (holding that the well-pled complaint rule prohibits a shipowner from removing a case where the only basis for federal jurisdiction would be the affirmative defense of limitation of liability); see also ibid,(distinguishing Deep Sea Tankers on the ground that the affirmative defense of limitation of liability Was raised in an answer filed in federal court).
Bayview Charter Boats, supra note 3, at 1483 (noting that the limitation defense may be pleaded in an answer to either a federal or state court action"); Moore, supra note 3, at $708.02 (citing De Pinto v. O'Donnell, 293 N.Y. 32 (1944) and stating that "New York's highest court implicitly held that the state court could consider all limitation issues"); cf. Christopher S. Morin, Note, The 1851 Shipowner's Limitation of Liability Act: A Recent State Court Trend to Exercise Jurisdiction over Limitation Rights, 28 Stetson L. R. 420, 436-451 (1998) (noting that several state supreme courts have held that state courts have jurisdiction to make limitation of liability determinations where a section 185 petition was not filed). But see Bayview Charter Boats, supra note 3, at 1487 (holding that shipowner's failure to file a timely petition resulted in its inability to claim the limitation defense); Vatican Shrimp, supra note 9, at 678 (same); Grant, supra note 7, at *2 (same) Moore, supra note 3, at § 708.02 ("A. vessel owner who waits to raise a limitation in the answer, and does not file a limitation complaint within six months following the receipt of written notice of the claim, takes a considerable risk of losing the right to limit.").
Accordingly, it is hereby ORDERED that petitioners petition is dismissed, that plaintiffs motion to remand is granted, that the Clerk of the Court shall remand this action to the New York State Supreme Court, County of Erie, and that these cases shall be closed in this Court.