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In re Massman, Traylor, Alberici

United States District Court, Eastern District of Missouri, Eastern Division

March 23, 2015




This matter is before the court on claimant’s motion to dismiss the complaint and to lift the stay of proceedings entered on July 17, 2014. Also before the court is claimant’s motion to increase the limitation fund. The issues are fully briefed.

I. Background

Petitioners bring this action for exoneration from or limitation of liability pursuant to 46 U.S.C. §§ 30501–12. The petitioners are joint venture Massman, Traylor, Alberici and its members (collectively referred to as “MTA”), who were involved in constructing a bridge over the Mississippi River near St. Louis, Missouri. At all relevant times, MTA was the owner of Barge MCC 467.

Claimant Jennifer Seyler was employed by a contractor to work on MTA’s bridge construction project. On March 19, 2012, Seyler was working on the barge when she fell from a ladder and was injured. Seyler brought suit against MTA in the Circuit Court of the City of St. Louis, alleging that MTA knew the barge was unsafe and unseaworthy. In the state court action, Seyler asserts a negligence claim and a claim under the Jones Act, 46 U.S.C. § 30104. MTA denies liability and contends that the Jones Act is inapplicable because Seyler was not MTA’s employee.

After the state court lawsuit was filed, MTA brought this action to limit any liability to Seyler to the value of the barge, which they claim is $275, 000. Pursuant to 46 U.S.C. § 30511(b) and Fed.R.Civ.P. Supp. R. F(1), MTA filed a Letter of Undertaking in which MTA’s insurer states that it agrees to pay up to $275, 000 plus interest if Seyler succeeds on her claims, but “strictly subject to the terms, conditions, and limits of [MTA’s] insurance policy.” [Doc. #6-1, at 2] On July 17, 2014, the court entered an order approving the barge valuation of $275, 000 and staying the state court case pending final disposition of the instant action. [Doc. #9]

Seyler has filed a stipulation conceding that all issues related to limitation of liability are to be determined by the district court and consenting to waive any claim of res judicata relevant to the issue of limitation of liability. She also agrees that she will not seek to enforce against MTA any judgment that may be entered in her favor or in favor or any other party in excess of the limitation fund as determined by the district court. Seyler contends, however, that the value of the barge is more than $275, 000 and she asks the court to order an independent appraisal. She also seeks to increase MTA’s potential liability up to the value of all the vessels that were involved in the bridge construction project on the day of the accident. Moreover, Seyler disputes that MTA’s letter of undertaking satisfies 46 U.S.C. § 30511(b) and Fed.R.Civ.P. Supp. R. F(1) because (1) MTA did not provide security until twelve days after it filed the complaint and (2) the insurer reserved the right to refuse payment based on the terms and conditions of MTA’s insurance policy.

II. Discussion

A. Stay of state court proceedings

“While 28 U.S.C. § 1333(1) does grant to the federal district courts exclusive jurisdiction over suits brought pursuant to the Limitation Act . . . the same statute also ‘sav[es] to suitors in all cases all other remedies to which they are entitled.’” Riverway Harbor Serv., St. Louis, Inc. v. Bridge & Crane Inspection, Inc., 263 F.3d 786, 791 (8th Cir. 2001) (quoting 28 U.S.C. § 1333(1)). Hence, “two jurisdictional possibilities” are presented: “shipowners desire exclusive federal jurisdiction to limit their liability and avoid encountering a jury trial, and claimants seek ‘other remedies’ such as jury trials in state court.” Id. (citing cases).

The Eighth Circuit has recognized that “[i]n two kinds of limitation cases, the federal courts have permitted claimants to pursue their remedies in a forum of their own choosing.” Universal Towing v. Barrale, 595 F.2d 414, 418 (8th Cir. 1979). The first type of case is one in which the limitation fund exceeds the total of all claims. Id. (citing cases). The second type of case is one in which “there is only one claim which exceeds the value of the fund.” Id. (citing cases). In that situation, “a claimant may pursue his common-law remedies in state court provided he files a stipulation in the district court which concedes that all questions of limitation of liability are reserved for the admiralty court.” Id. at 419 (citing cases). Here, Seyler is the only claimant, so the single claim exception applies. When one of the two exceptions applies, “it is an abuse of the court’s discretion to fail to dissolve the injunction against other legal proceedings, and thus deprive a claimant of his choice of forum.” Valley Line Co. v. Ryan, 771 F.2d 366, 373 (8th Cir. 1985). Thus, if Seyler’s stipulation is adequate, the court must lift the stay.

A claimant’s stipulation is adequate if it includes (1) an acknowledgment that the district court has exclusive jurisdiction to determine all issues relating to the shipowner’s right to limit its liability, including determination of the value of the limitation fund and (2) a waiver of any right to claim res judicata based on a judgment from another forum. See Magnolia Marine Transp. Co. v. LaPlace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992) (citing cases); Valley Line, 771 F.2d at 373 & n.3 (citing cases); see also Riverway Harbor Serv., 263 F.3d at 792.

MTA argues that Seyler’s stipulation is inadequate because she does not agree to forego collecting from putative co-defendants or third parties who, in turn, might seek contribution from MTA in excess of the liability fund. But Seyler has stipulated that she will not enforce any judgment against MTA in excess of the liability fund, even if that judgment is rendered against a third party and owed to her from MTA on the third party’s behalf. Seyler, of course, cannot bind third parties with her stipulations, and neither 46 U.S.C. § 30511(b) or Fed.R.Civ.P. Supp. R. F(1) require her to do so.

MTA next argues that the stipulation is inadequate because Seyler disputes the value of the barge and whether the value of other vessels should be taken into account in determining the amount of the limitation fund. MTA’s argument is unpersuasive, as Seyler has stipulated that the district court has sole authority to determine whether MTA qualifies for limited liability and, if so, in what amount. Seyler need not concede that MTA’s proposed limit of $275, 000 is correct in order for her to proceed in state court on the question of whether MTA is liable at all. Further, the court will enter an order enjoining Seyler from collecting on ...

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