In re: Felgate et al
Filing
82
ORDER denying 42 Motion for Summary Judgment; denying 46 Motion to Dismiss for Lack of Jurisdiction; denying 60 Motion for Summary Judgment; denying 61 Motion to Dismiss for Lack of Jurisdiction. The Court denies the 42 , 46 , 60 , and 61 motions for the reasons set forth in the attached ruling.This case will proceed to a concursus proceeding in July 2020 in which the Court will determine the issues of ownership, liability, and limitation. The parties' joint trial memor andum is due May 15, 2020. Should the parties wish to engage in settlement discussions with a Magistrate Judge, they must jointly request a referral within 10 days of the date of this decision. Within 7 days of the referral the parties must con sult with the assigned magistrate judge and schedule the settlement conference. No extensions will be granted to engage in settlement discussions or to fulfill the terms of a settlement. Signed by Judge Vanessa L. Bryant on 3/30/2020. (Dannenmaier, Katherine)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
IN THE MATTER OF THE COMPLAINT
of
ALAN FELGATE and JOHN ALLEN WALKER,
as Owners of a 1987 Flying Junior Sailboat,
for Exoneration from or
Limitation of Liability,
Petitioners
IN THE MATTER OF THE COMPLAINT
of
CLINTON SAILING CLUB
as Owner of a 1987 Flying Junior Sailboat,
for Exoneration from or
Limitation of Liability,
Petitioners
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No. 3:18-cv-910 (VLB)
No. 3:17-cv-1286 (VLB)
March 30, 2020
ORDER AND RULING ON MOTIONS FOR SUMMARY JUDGMENT AND MOTIONS
TO DISMISS [Dkts. 42, 60, 46, 61]
Petitioners Clinton Sailing Club, Inc., Alan Felgate, and John Allen Walker
(collectively, “Petitioners”) filed this action seeking exoneration from or limitation
of liability for injuries suffered by Julia Farnoli on August 17, 2016 while she was
on board a Flying Junior One Design sailboat (the “Vessel”). Petitioners each claim
to be an owner of the Vessel. Claimant Laura Farnoli (“Claimant” or “Ms. Farnoli”)
brings claims as parent and next friend of minor child Julia Farnoli. Petitioners
seek an order either (1) adjudging them not liable for any claims for loss, damage,
or injury arising out of the incident; or (2) limiting their liability to the value of the
1
Vessel as of the date of the alleged incident, in the maximum amount of $1,000.00.
Claimant asks the Court to dismiss the case for lack of subject matter jurisdiction
Before the Court are the Petitioners’ motions for summary judgment [Dkts.
42 (Felgate and Walker Mot. Summ. J.), 60 (Clinton Sailing Club Mot. Summ. J.)],
and Claimant’s Motions to Dismiss for Lack of Jurisdiction [Dkts. 46 (Claimant Mot.
Dismiss as to Walker and Felgate), 61 (Claimant Mot Dismiss as to Clinton Sailing
Club)]. Petitioners seek summary judgment on the grounds that there exists no
evidence of negligence as a matter of law and that Claimant waived liability, so they
are exonerated from all liability. Claimant seeks to dismiss Petitioner’s complaint
on the grounds that the Petitioners are not entitled to limitation because Felgate
and Walker are not owners of the Vessel, and Clinton Sailing Club had privity or
knowledge of the relevant negligence. For the reasons set forth below, the Court
DENIES each motion.
I.
Background
A. Limitation of Liability Actions
The Limitation of Liability Act, (the “Limitation Act”), 46 U.S.C. § 30501 et
seq., 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.” Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 446 (2001).
“Congress passed the Limitation Act in 1851 ‘to encourage ship-building and to
induce capitalists to invest money in this branch of industry.’” Id. (citing Norwich
& N.Y. Transp. Co. v. Wright, 13 Wall. 104, 121 (1871)).
2
Supplemental Admiralty and Maritime Claims Rule F (“Rule F”) provides the
procedure for limitation. Rule F requires that the vessel owner file a complaint
seeking exoneration or limitation of liability “[n]ot later than six months after
receipt of a claim in writing.” After the complaint is filed, Rule F sets forth the
following procedures:
The district court secures the value of the vessel or owner's interest,
marshals claims, and enjoins the prosecution of other actions with
respect to the claims. In these proceedings, the court, sitting without
a jury, adjudicates the claims. The court determines whether the
vessel owner is liable and whether the owner may limit liability. The
court then determines the validity of the claims, and if liability is
limited, distributes the limited fund among the claimants.
Lewis, 531 U.S. at 448, quoted in In re Henry Marine Serv., Inc., 136 F. Supp. 3d 401,
403 (E.D.N.Y. 2015). The Limitation Act does not affect the liability of a master,
officer, or seaman, even if the individual is also an owner of the vessel. 46 U.S.C.A.
§ 30512.
B. Factual Background 1
1. The Vessel and the Parties
The Vessel is a Flying Junior (FJ) One Design sailboat, with a fair market
value of not more than $1,000. [Dkt. 47 at 21 (Ex. C: June 19, 2017 Survey of
Vessel)]. Its title owner is Clinton Sailing Club. Id. The Vessel was equipped with
1
The following facts are taken from the evidence as well as the facts in
Petitioners’ Local Rule
56(a)(1) Statement supported by the evidence in light of Farnoli’s failure to file a
Local Rule 56(a)(2) Statement. See D. Conn. Civ. L. R. 56(a)3 (“Failure to provide
specific citations to evidence in the record as required by this Local Rule may
result in the Court deeming admitted certain facts that are supported by the
evidence in accordance with Local Rule 56(a)1. . . .”).
3
boom rope cleats. [Dkt. 77-1 (Ex. G, J. Farnoli Dep. Dec. 9, 2019) at 56; see also
[Dkt. 44-5 (Ex.E: J. Farnoli Feb. 15, 2019 Dep.) at 30:9-19]. 2
Clinton Sailing Club, Inc (“Clinton Sailing Club”) is a 501(c)(3) nonprofit
organization dedicated to providing sailing lessons to children ages eight to
eighteen in the Clinton, Connecticut community regardless of their ability to pay.
[Dkt. 42-1 (56(a)1 Statement of Facts), ¶1].
Petitioner Alan Felgate (“Felgate”) was a founder of the Clinton Sailing Club.
[Dkt. 42-1, ¶1]. Felgate has been a member of the board since its founding in 2016
and was its President at the time of the accident. Ibid. He is not involved in sailing
lessons. Ibid. Felgate recruited a board of directors and raised funds. [Dkt. 52-3
(Ex. 3: June 14, 2019 Felgate Dep.) at 21:3-4]. Felgate met with the town of Clinton
to obtain use of their beach space. [Dkt. 52-3 at 25:8-15].
John Allen Walker is also a founding board member of Clinton Sailing Club.
[Dkt. 42-1, ¶3]. He was later employed by Clinton Sailing Club as a certified sailing
instructor. Ibid. He was present on the day of the incident, and rigged the Vessel.
[Dkt. 42-1, ¶20]. He examined the Vessel after the accident and found that it was in
good condition: it was still properly rigged and nothing aboard was broken. Ibid.
Walker helps organize fundraising activities including silent auctions, pub events,
2
Julia Farnoli contests this, stating in an unsigned affidavit dated in 2020 that the
Vessel did not have cleats for the main rope. [Dkt. 75 (Ex. 1 (Farnoli 2020
Unsigned Affidavit) at ¶ 19]. The Court finds that this affidavit does not create a
genuine issue of material fact. Hayes v. N.Y.C. Dep't of Corr., 84 F.3d 614, 619 (2d
Cir. 1996) (“[A] party may not create an issue of fact by submitting an affidavit in
opposition to a summary judgment motion that, by omission or addition,
contradicts the affiant's previous deposition testimony.”).
4
care washes and regattas. [Dkt. 52-4 (Ex. 4: June 13, 2019 Walker Dep.) at 33:1524:6]. He designed Clinton Sailing Club’s website and assisted with registering
students. Id. at 51:13.
Clinton Sailing Club’s board of directors chose and hired sailing instructors,
who possessed U.S. Sailing Level 1 certifications. [Dkt. 52-3 at 43:3-44:10]. The
board authorized the procurement of Clinton Sailing Club’s FJ boats from the
University of Rochester. Id. at 35:25.
2. Julia Farnoli’s Previous Instruction
Julia Farnoli (“Farnoli”) was a student of the Clinton Sailing Club. [Dkt. 421, ¶5]. In 2016, she completed one five day sailing class with the Clinton Sailing
Club. [Dkt. 42-1, ¶5]. She “learned different parts of the boat, points of sail, how to
tack and jib, how to rig a boat.” Ibid. She testified that after the class, she “could
sail the sailboats.” [Dkt. 42-1, ¶6].
In her deposition, Farnoli explained the basics of sailing, including that the
skipper is the person who steers the boat with the tiller and who holds the
mainsheet (the line that trims the main sail). Id. at ¶ 7. Farnoli explained that
skippers face the bow (front) of the boat. Id. at ¶ 8. She testified that, on the Vessel,
the mainsheet pulls the mainsail in to make the boat go faster, or lets the mainsail
out to go slower (trimming the sails). Id. at ¶ 9.
She testified that Clinton Sailing Club taught her the sailing maneuvers of
“tacking” and “jibing,” that is, maneuvering the boat by turning it through the wind.
Id. at ¶ 10. She explained that taking and jibing involves turning the boat with the
tiller. Id. at ¶ 10. She testified that part of tacking and jibing is ducking your head
5
because the sailboat’s boom swings across the boat. Id. at ¶11. She also testified
that the Clinton Sailing Club teaches students to make an announcement before
tracking and jibing, and then to duck under the boom as it swings across the boat.
Id. at ¶14. Clinton Sailing Club never instructed Farnoli, as a skipper, to hand the
mainsheet to the crew. [Dkt. 44-5 (Ex. E: J Farnoli Feb. 15, 2019 Dep.) at 49].
3. Release
Before participating in her second sailing camp, Julia Farnoli and her father,
Greg Farnoli, signed a release of liability provided by Clinton Sailing Club. [Dkt. 444 (Ex. D: August 15, 2016 Release)]. The release provided that “this Agreement
shall be governed by the laws of Connecticut and that any dispute arising from this
Agreement shall be adjudicated in the courts located in Middlesex County,
Connecticut.” Id. The Court takes judicial notice of the fact that no federal courts
are located in Middlesex County.
4. August 17, 2016 Incident
On August 17, 2016, Julia Farnoli took the Vessel out with Theresa Tine
(“Tine”), another student, as part of a second class, and to help teach her how to
sail. [Dkt. 42-1 at ¶17]. Farnoli was the skipper. Id. at ¶ 17. The conditions were
different from those she had experienced: it was colder and the waves were bigger.
[Dkt. 44-3 at 40:15-23]. No one seemed very comfortable. Ibid. People were a little
bit cautious and scared. Ibid. She was assigned to the boat by an employee of the
Clinton Sailing Club. Id. at 41:13-23.
While in the navigable waters of the Clinton Harbor, Farnoli handed the
mainsheet to Tine so that Farnoli could figure out the direction of the wind. Id. at ¶
6
18. Farnoli faced away from the boat trying to find clues for the wind. Id. at ¶ 18.
Tine shouted her name, and, when Farnoli turned to face her, the Vessel’s boom
hit her. Id. at ¶ 18. Unconscious, she fell into the water, and sustained a broken and
deformed nose, among other injuries. [Dkt. 44-5 54:20-56:16].
Neither party provides evidence that there was any problem with the Vessel
the day of the Vessel. Id. at ¶ 19 (Farnoli statement that she was not aware of any
problem with the Vessel); Id. at ¶20 (Walker statement that there was no problem
with the Vessel the day of the accident).
C. Procedural History
1. Clinton Sailing Club
On August 1, 2017, Clinton Sailing Club filed its complaint for exoneration
from or limitation of liability pursuant to 46 U.S.C. § 30501 et seq. [Dkt. 1, 17-cv1286, member case]. Clinton Sailing Club received a letter from counsel for Julia
Farnoli dated February 13, 2017 advising that Farnoli had legal representation for
injuries she sustained on August 17, 2016. [Dkt. 1, 17-cv-1286, at ¶ 4.]
On
September 11, 2017, the Court (Eginton, J.) entered an order restraining suits,
approving Clinton Sailing Cub’s security and directing issue of notice and the filing
of claims on or before November 11, 2017. [Dkt. 6, 17-cv-1286].
As parent and next friend of Julia Farnoli Laura Farnoli, (“Ms. Farnoli”) filed
a claim on November 9, 2017, alleging injuries caused by the negligence of Clinton
Sailing Club and by the un-seaworthiness of the Vessel, and further alleging that
7
Clinton Sailing Club that both were within the privity and knowledge of Clinton
Sailing Club. [Dkt. 11, 17-cv-1286].
On May 29, 2019, Theresa Tine filed a claim for indemnity and contribution
for all costs and liability if any, assessed against her in Connecticut state court in
an action brought by Laura Farnoli as parent and next friend of Julia Farnoli. [Dkt.
28, 17-cv-1286].
On October 1, 2018, Clinton Sailing Club moved for In re Clinton Sailing Club,
17-cv-1286, to be consolidated with In re Felgate, 18-cv-910. The Court (Eginton, J.)
granted the order the next day, and upon reconsideration on October 30, 2018.
[Dkts. 22, 26, 17-cv-1286].
2. Felgate and Walker
On April 3, 2018, Felgate and Walker were served with a lawsuit by Julia
Farnoli concerning the August 17, 2016 incident. [Dkt. 1, 18-cv-910]. On May 31,
2018, Alan Felgate and John Allen Walker filed their complaint for exoneration from
or limitation of liability pursuant to 46 U.S.C. § 30501 et seq. [Dkt. 1, 18-cv-910].
Discovery was due August 1, 2019, and dispositive motions were due
September 2, 2019. [Dkts. 26 (26(f) Report), 27 (Order Approving 26(f) Report)].
On October 9, 2019, the case was transferred to this Court, and on November
12, 2019, the case was consolidated with In re Clinton Sailing Club, 17-cv-1286.
3. Pending Motions
8
On August 29, 2019, Petitioners moved for summary judgment [Dkts. 42
(Felgate and Walker Mot. Summ. J.), 60 (Clinton Sailing Club Mot. Summ. J.)]. On
September 10, 2019, Claimant moved to dismiss for lack of jurisdiction as to Walker
and Felgate. [Dkt. 46 (Claimant Mot. Dismiss as to Walker and Felgate)]. On
September 24, 2019, Claimant moved to dismiss for lack of jurisdiction as to Clinton
Sailing Club. [Dkt. 61 (Claimant Mot Dismiss as to Clinton Sailing Club)]. Claimant
moved for and received extensions of her deadline to respond to Petitioners’
motion for summary judgment totaling three months, and ultimately filed her
memorandum in opposition on January 10, 2020. [Dkt. 74].
II.
Legal Standards
The Court treats both motions to dismiss as motions for summary judgment.
Though the motions are styled as “motions to dismiss for lack of subject matter
jurisdiction,” the issues they address—ownership, knowledge, and privity—do not
go to subject-matter jurisdiction, but instead to the substance of the limitation
action. 3 Both parties submitted evidence outside of the pleadings. See, e.g., [Dkts.
51 (Felgate and Walker Opp. to Mot. To Dismiss), 55 (Exs. Supporting Farnoli
Reply)]. Further, the Court notified the parties on December 5, 2019 and again on
March 25 that it would consider the motions to dismiss with the motions for
summary judgment. See [Dkt. 69], [Dkt. 79]. Therefore, the Court finds that the
parties have been given “reasonable opportunity to present all the evidence that is
pertinent,” and that it is appropriate to treat them as motions for summary
3
Subject matter jurisdiction is addressed in sections III.A “Admiralty Jurisdiction”
and III.B “Save-to-Suitors” Clause.”
9
judgment. Fed. R. Civ. P. 12(d) (governing presenting matters outside of the
pleadings); see Cuccolo v. Lipsky, Goodkin & Co., 826 F. Supp. 763, 767 (S.D.N.Y.
1993) (converting motion to dismiss to motion for summary judgment where
plaintiff attached affidavit to opposition and defendant attached affidavits to reply).
A court “shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed R. Civ. P. 56(a). ). An issue is genuine if “the evidence is such
that a reasonable jury could return a verdict for the nonmoving party.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is “material” if it “might affect
the outcome of the suit under the governing law.” Ibid.
The movant may satisfy her burden by presenting affirmative evidence that
negates an element of the non-movants claim or by demonstrating “an absence of
evidence to support the non-moving party’s case.” Celotex v. Catrett, 477 U.S. 317,
325 (1986). Where a movant presents admissible evidence tending to show there is
no genuine issue of material fact for a jury to decide and she is entitled to judgment
as a matter of law, a non-movant must produce admissible evidence raising a
genuine issue of material fact to defeat summary judgment. Fed. R. Civ. P. 56(c).
Rule 56(c) “mandates the entry of summary judgment… against a party who fails
to make a showing sufficient to establish the existence of an element essential to
a party’s case, and on which that party will bear the burden of proof at trial.” Bedor
v. Friendly’s Ice Cream Corp., 392 F. Supp. 2d 367, 373 (D. Conn. 2005) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)).
10
“In determining whether that burden [of showing the absence of any genuine
issue of fact] has been met, the court is required to resolve all ambiguities and
credit all factual inferences that could be drawn in favor of the party against whom
summary judgment is sought.” Vivenzio v. City of Syracuse, 611 F.3d 98, 106 (2d
Cir. 2010) (citing Anderson, 477 U.S. at 255); see also Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). But “[m]ere speculation or
conjecture is insufficient; there must be evidence on which a jury could reasonably
find for the nonmovant.” Anderson, 477 U.S. at 252; see Fed. R. Civ. P. 56(c). “The
nonmoving party cannot simply rest on the allegations in its pleadings since the
essence of summary judgment is to go beyond the pleadings to determine if a
genuine issue of material fact exists.” Bedor, 392 F. Supp. 2d at 373 (2005) (quoting
Celotex, 477 U.S. at 322 (1986)).
III. Analysis
The Court’s analysis proceeds in three steps: the Court first finds that it has
admiralty tort jurisdiction. It then finds that factual issues remain as to whether
Petitioners are owners in the sense meant by the Limitation Act. Finally, after
considering the substantive issues of negligence, privity, and knowledge, the
Court finds that factual issues remain in dispute and summary judgment is not
warranted.
A. Admiralty Jurisdiction
11
Federal courts are courts of limited jurisdiction. U.S. Const. art. III, § 2. If the
Court determines at any time that it lacks subject matter jurisdiction the Court must
dismiss the action. Fed. R. Civ. P. 12(h)(3); 28 U.S.C. § 1447(c).
The Constitution provides that “[t]he judicial Power [of federal courts] shall
extend... to all Cases of admiralty and maritime Jurisdiction.” U.S. Const. art. III, §
2. 28 U.S.C. § 1333(1) codifies this constitutional grant of authority: “the district
courts shall have original jurisdiction, exclusive of the courts of the States, of…
[a]ny civil case of admiralty or maritime jurisdiction, saving to suitors in all cases
all other remedies to which they are entitled.” “[T]he party asserting jurisdiction
bears the burden of proving that the case is properly in federal court and that party
may not be relieved of its burden by any formal procedure.” United Food &
Commercial Workers Union, Local 919, AFL-CIO v. CenterMark Properties Meriden
Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994).
“Although the Limitation of Liability Act provides a federal cause of action
for a vessel owner seeking exoneration or limitation, it ‘does not provide an
independent foundation for federal admiralty jurisdiction.’ ” 752 F.3d at 244,
Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 244 (2d Cir. 2014)
(quoting MLC Fishing, Inc. v. Velez, 667 F.3d 140, 143 (2d Cir. 2011) (per curiam)). In
other words,
that a vessel owner may file a petition for limitation does not mean the
district court necessarily has jurisdiction to hear it. Instead, the
district court will only have admiralty jurisdiction to hear a petition for
limitation if it already has admiralty jurisdiction over the underlying
claims that the petition seeks to limit.
12
Id. ; see 46 U.S.C. § 30511 (providing for cause of action by owner for limitation,
without providing jurisdiction).
“Ordinarily,” “every tort involving a vessel on navigable waters falls within
the scope of admiralty jurisdiction.” In re Petition of Germain, 824 F.3d 258, 261 (2d
Cir. 2016) (quoting Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513
U.S. 527, 543. (1995). Admiralty jurisdiction applies when the underlying incident
satisfies a two-part test. First, under the location test, the court “must determine
whether the tort occurred on navigable water or . . . [the] injury suffered on land
was caused by a vessel on navigable water.” Jerome B. Grubart, Inc. v. Great Lakes
Dredge & Dock Co., 513 U.S. 527, 534 (1995). Second, under the connection test,
the court must “assess the general features of the type of incident involved to
determine whether the incident has a potentially disruptive impact on maritime
commerce” and “must determine whether the general character of the activity
giving rise to the incident shows a substantial relationship to traditional maritime
activity.” Grubart, 512 U.S. at 534 (internal quotations omitted; internal citations
omitted).
Here, the location test is met because the underlying incident took place in
navigable waters, in Clinton Harbor. The incident involved injuries to a sailing
student on a vessel on navigable waters, a maritime emergency, thereby having a
potentially disruptive impact on maritime commerce. See In re Petition of Germain,
824 F.3d 258, 274 (2d Cir. 2016) (finding injury to a pleasure-boat passenger who
jumped from a vessel on open navigable waters met connection test because of
the potentially disruptive effect of a maritime emergency response to sustain
13
admiralty jurisdiction). Additionally, sailboat racing has been held to bear a
significant relationship to traditional maritime activity. Evans v. Nantucket Cmty.
Sailing, Inc., 582 F. Supp. 2d 121, 136 (D. Mass. 2008), amended, No. CV 05-10088MBB, 2009 WL 10728978 (D. Mass. Feb. 5, 2009). The Court finds it has admiralty
jurisdiction.
B. Save-to-Suitors Clause
“Some tension exists between the saving to suitors clause and the
Limitation Act. One statute gives suitors the right to a choice of remedies, and the
other statute gives vessel owners the right to seek limitation of liability in federal
court.” Lewis, 531 U.S. at 448. To resolve this tension, “the Courts of Appeals have
generally permitted claimants to proceed with their claims in state court where
there is only a single claimant ... or where the total claims do not exceed the value
of the limitation fund.” The Second Circuit treats an injured party’s claim and a
third party’s indemnity claim as separate claims for the purpose of determining
whether a limitation petitioners’ rights will be protected. Id. at 451. Complaint of
Dammers & Vanderheide & Scheepvaart Maats Christina B.V., 836 F.2d 750, 757 (2d
Cir. 1988) (“the reasonable prospect of claims for indemnification should constitute
a multiple claimant situation necessitating a concursus”). But,
[t]he district courts have jurisdiction over actions arising under the
Limitation Act, and they have discretion to stay or dismiss Limitation
Act proceedings to allow a suitor to pursue his claims in state court.
If the district court concludes that the vessel owner's right to limitation
will not be adequately protected—where for example a group of
claimants cannot agree on appropriate stipulations or there is
uncertainty concerning the adequacy of the fund or the number of
claims—the court may proceed to adjudicate the merits, deciding the
issues of liability and limitation. But where ... the District Court
14
satisfies itself that a vessel owner's right to seek limitation will be
protected, the decision to dissolve the injunction [staying the state
court proceeding] is well within the court's discretion.
Lewis, 531 U.S. at 454. “In sum, [the] Court's case law makes clear that state courts,
with all of their remedies, may adjudicate claims ... against vessel owners so long
as the vessel owner's right to seek limitation of liability is protected.” Id. at 455; see
also 3 Benedict
on
Admiralty §
13
(7th
ed.
rev.
2015);
2
Thomas
J.
Schoenbaum, Admiralty and Maritime Law § 15–5 (5th ed. 2011); 13 Charles A.
Wright et al., Federal Practice and Procedure § 3527 (3d ed. 2008).
Here, there are two claimants, Farnoli and Tine; Petitioners anticipatde that
the claims asserted against them would be greater than the amount of their interest
in the Vessel; and no stipulation was filed regarding the Limitation Act. [Compl. at
¶6]. Since the filing of the complaint, there has been no stipulation that Farnoli’s
claim was less than the limitation fund and no waiver of res judicata with respect
to limitation of liability. Therefore, the Court finds it may proceed to adjudicate the
merits, deciding the issues of ownership, liability and limitation.
C. Ownership
In her motion to dismiss, Claimant argues that Walker and Felgate are not
owners of the Vessel, and therefore are not entitled to limitation of liability. [Dkt. 46
at 9-11]. 4
“The term ‘owner,’ as used in limitation of liability statutes, is an ‘untechnical
word’ which should be interpreted in a “’liberal way.’” Dick v. United States, 671
4
Claimant acknowledges that Clinton Sailing Club did own the Vessel. [Dkt. 46 at
9].
15
F.2d 724, 727 (2d Cir. 1982) (quoting Flink v. Paladini, 279 U.S. 59, 63 (1929)). “As a
general rule, one who is subjected to a ship-owner's liability because of his
exercise of dominion over a vessel should be able to limit his liability to that of an
owner.” Ibid. “Some measure of dominion or control over the vessel at the time of
the accident” is usually required, however. Marine Recreational Opportunities, Inc.
v. Berman, 15 F.3d 270, 271 (2d Cir. 1994) (holding that a boat’s previous owner
was not entitled to limitation of liability under the act).
In Flink, 279 U.S. 59, the Supreme Court held that “state law-created liability
of stockholders in a corporation owning a vessel was subject to of liability under
the federal Limitation of Liability Act.” In re Complaint of Chesapeake Shipping,
Inc., 778 F. Supp. 153, 157 (S.D.N.Y. 1991) (summarizing Flink, 279 U.S. 59). “For
this purpose no rational distinction can be taken between several persons owning
shares in a vessel directly and making the same division by putting the title in a
corporation and distributing the corporate stock.” Flink v. Paladini, 279 U.S. at 62.
(1929). A final implication of Flink is that a boat may have multiple owners, and the
liability of each may be limited.
Further, “the term ‘owner’ includes a charterer that mans, supplies, and
navigates a vessel at the charterer's own expense or by the charterer's own
procurement.” 46 U.S.C. § 30501. To determine ownership status, courts in this
Circuit look to the degree of autonomy that a non-title owner exercises over a
vessel. A vessel manager is entitled to owner pro hac vice status when it had
“virtually the responsibility of the record owner,” including “manning the vessels;
victualing the vessels; providing for navigation, which involved procuring and
16
providing deck, engine and cabin stores; maintenance and repairs for hull and
machinery; providing spare parts, maintenance and repairs for communication and
navigation equipment….” In re Complaint of Chesapeake Shipping, Inc., 803 F.
Supp. 872, 873–74 (S.D.N.Y. 1992). A non-title party claiming ownership may
withstand a motion to dismiss on this issue by providing evidence that it undertook
some of these responsibilities. In re Tourtellotte, 2010 U.S. Dist. LEXIS 130209 at
*8-9 (D. N.J. 2010) (non-title-owner of recreational vessel withstood motion to
dismiss where he alleged that he operated the vessel, ensured it was victualed, and
communicated with its owners and the marina); Rogers v. Lilly, 2006 U.S. Dist.
LEXIS 83905 at *17 (N.D. OH, November 17, 2006) (non-title owner withstood motion
to dismiss where he alleged that he was jointly responsibility for operation,
maintenance and caretaking of vessel).
The Court finds that Felgate and Walker provide sufficient facts to raise a
material question as to whether they are owners for the purposes of the Limitation
Act, although neither were title owners.
In the context of the Limitation Act, the key criteria for ownership is
“dominion or control.”” Dick v. United States, 671 F.2d 724, 727 (2d Cir. 1982)
(quoting Flink v. Paladini, 279 U.S. 59, 63 (1929)); see Marine Recreational
Opportunities, Inc., 15 F.3d at 271. Board members generally have as much or
greater control over a corporation’s assets than do stockholders. Therefore, if
stockholders in a corporation owning a boat are owners for the purposes of the
Limitation Act, Flink, 279 U.S. at 59, it is a justiciable issue whether board members
are also owners. A legal entity, in this case a not-for-profit, is embodied by and acts
17
through its members. Its board members, most particularly its president, act on
its behalf. Here, Felgate met with the town of Clinton to obtain use of their beach
space, the board chose and hired sailing instructors, and the board authorized the
procurement of Clinton Sailing Club’s FJ boats from the University of Rochester,
all actions of pro hac vice owners. [Dkt. 52-3 at 25:8-15], 43:3-44:10, 35:25]. Walker,
also a founding member of the board, was present and rigged the Vessel for the
Petitioner on the date of the accident. [Dkt. 42-1, ¶¶3, 20].
Further, applying Flink to the title owner’s board members is especially apt
where, as in this case, the title owner is a non-profit corporation, as a purpose of
the Limitation Act is to encourage investment. Lewis, 531 U.S. at 446. A non-profit
corporation has no owners in the sense that no party receives its residual earnings.
However, a non-profit corporation still has “investors,” or individuals who invest
their time and money into its organization and operations, and these investors are
often its board members. For instance, Felgate raised funds for Clinton Sailing
Club. [Dkt. 52-3 at 21:3-4]. Treating non-profit board members as owners furthers
the purposes of the Limitation Act.
Respondents cite Rao v. Hillman Barge Construction Co., 467 F.2d 1276,
1277 (3rd Cir. 1972), Eskine v. United Barge Co., 484 F.2d 1194, 1196 (5th Cir. 1973),
and Bossard v. Port Allen Marine Serv., Inc., 624 F.2d 671, 672 (5th Cir. 1980) for
the proposition that pro hac vice ownership is a very limited status and requires a
high degree of control. The Court finds these cases unpersuasive as none are from
the Second Circuit, and none involve the Limitation Act. See Rao, 467 F.2d at 1277
(suing for unseaworthiness); Bossard, 624 F.2d at 672 (employee suing vessel
18
owner for negligence under the Longshoremen’s and Harbor Workers’
Compensation Act); Eskine, 484 U.S. at 1196 (suing for unseaworthiness under
Longshoremen's and Harbor Workers' Compensation Act).
For these reasons, the Court finds that there is a genuine issue of material
fact as to whether Felgate and Walker were owners and DENIES Farnoli’s motion
to dismiss the Limitations Act petition as to them.
D. Merits: Negligence & Privity or Knowledge
The Limitation Act provides:
(a) In general.--… [T]he liability of the owner of a vessel for any claim,
debt, or liability described in subsection (b) shall not exceed the value
of the vessel and pending freight. If the vessel has more than one
owner, the proportionate share of the liability of any one owner shall
not exceed that owner's proportionate interest in the vessel and
pending freight.
(b) Claims subject to limitation.--Unless otherwise excluded by law,
claims, debts, and liabilities subject to limitation under subsection (a)
are those arising from any embezzlement, loss, or destruction of any
property, goods, or merchandise shipped or put on board the vessel,
any loss, damage, or injury by collision, or any act, matter, or thing,
loss, damage, or forfeiture, done, occasioned, or incurred, without the
privity or knowledge of the owner.
46 U.S.C. § 30505. “Instead of being vicariously liable for the full extent of any
injuries caused by the negligence of the captain or crew employed to operate the
ship, the owner's liability is limited to the value of the ship unless the owner himself
had “privity or knowledge” of the negligent acts.” In re City of New York, 522 F.3d
279, 283 (2d Cir. 2008).
Limitation proceedings require a two-step analysis: “First, the court must
determine what acts of negligence caused the accident. Second, the court must
19
determine whether the ship owner had knowledge or privity of those same acts of
negligence.” Otal, 673 F.3d at 115 (alterations and internal quotation marks
omitted) (quoting In re Moran Towing Corp. (“Moran I”), 166 F.Supp.2d 773, 775
(E.D.N.Y. 2001)). . The claimant “bears the initial burden of proving negligence,”
after which the burden shifts to the ship owner to “prove lack of knowledge or
privity.” Id. (quoting Moran I, 166 F.Supp.2d at 775).
1. Threshold Procedural Issues
i.
Requirement of Answer
Claimant first argues that, since Petitioners did not respond to their answer
and claim, Petitioners have admitted negligence. [Dkt. 74 at 14-15] (citing Fed. R.
Civ. P. 8(b)(6)).
Per Federal Rule 8(b)(6),
An allegation—other than one relating to the amount of
damages—is admitted if a responsive pleading is required and the
allegation is not denied. If a responsive pleading is not required, an
allegation is considered denied or avoided.
This is an admiralty matter governed by Supplemental Rule F. Supplemental
Rule F(2) requires that, not later than six months after receiving a claim, the
petitioner file a limitation of liability complaint in which “the right to limit liability is
asserted and all facts necessary to enable the court to determine the amount to
which the owner's liability shall be limited. F. The complaint may demand
exoneration from as well as limitation of liability.” Fed. R. Civ. P. Supp. R. F.
Supplemental Rule F(5) requires claimants to file and serve a claim and answer to
the complaint. Ibid. But, as Petitioners point out, Supplemental Rule F does not
20
require petitioners to file an answer. Therefore, per Rule 8(b)(6), Claimants’
allegations are considered “denied or avoided.”
ii.
Affirmative Defense
Claimant next argues that, since Petitioners did not file affirmative defenses
of either waiver of liability or for comparative negligence, the affirmative defenses
are forfeited. [Dkt. 74 at 16]
Ordinarily, an affirmative defense is forfeited “if not raised in a defendant’s
answer or in an amendment thereto.” Wood v. Milyard, 566 U.S. 463, 470 & n. 4
(2012); see Fed. Rules Civ. P. 8(c), 12(b), and 15(a). An affirmative defense is
defined as “[a] defendant's assertion raising new facts and arguments that, if true,
will defeat the plaintiff's or prosecution's claim, even if all allegations in the
complaint are true.” Saks v. Franklin Covey Co., 316 F.3d 337, 350 (2d Cir. 2003)
(quoting Black's Law Dictionary 430 (7th ed.1999)).
Where a claim does not require a responsive pleading, “an opposing party
may assert at trial any defense to that claim.” Fed. R. Civ. P. 12 (b) (emphasis
added); see Fed. R. Civ. P. 8(c)(1) (“in responding to a pleading, a party must
affirmatively state any avoidance or affirmative defense” (emphasis added)). Again,
as Petitioners point out, Supplemental Rule F does not require petitioners file an
answer to the claims and answers. Therefore, Petitioners did not forfeit their
affirmative defenses.
2. Negligence
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“In admiralty and maritime cases, “‘determination of negligence involves
first the formulation and then the application of a standard of conduct to
evidentiary facts found to be established.” In re Nagler, 246 F. Supp. 3d 648, 657
(E.D.N.Y. 2017) (citing Mamiye Bros. v. Barber S. S. Lines, Inc., 360 F.2d 774, 776
(2d Cir. 1966)). Common law negligence principles apply to a maritime negligence
claim. In re Treanor, 144 F.Supp.3d 381, 388 (E.D.N.Y. 2015) (citing Cornfield v.
Cornfield, 156 Fed. App’x. 343, 344 (2d Cir. 2005) (Summary Order)). “Thus, a
claimant must establish a legal duty, a breach of that duty, causation, and
damages.” In re Nagler, 246 F. Supp. 3d at 357 (citing Treanor, 144 F.Supp.3d at
389)).
Vessel owners owe the duty to exercise reasonable care under the
circumstances to those lawfully aboard the vessel. Kermarec v. Compaigne
Generale Transatlantique, 358 U.S. 625 (1959); see also Monteleone v. Bahama
Cruise Line, Inc., 838 F.2d 63, 64-65 (2d Cir. 1988). “Under well-established
principles of Second Circuit maritime negligence law, an owner breaches his or her
legal duty of reasonable care by failing to take simple precautions to prevent
foreseeable and serious injury.” In re Treanor, 144 F. Supp. 3d 381, 389 (E.D.N.Y.
2015) (citing United States v. Carroll Towing Co., 159 F.2d 169, 173 (2d Cir.1947)
(Hand, J.) (“Learned Hand Rule”)).
Petitioners make two arguments for summary judgment: first, that Claimant
has provided no evidence to support her claim that they breached their duty to her,
or that their action or inaction caused her injury; and second, that Julia Farnoli and
her parent signed a waiver of liability, which if valid under federal admiralty law.
22
i. Lack of evidence
In response to the first point, Claimant argues that (1) Petitioners failed to
teach the students how to handle the main sail rope (“mainsheet”) between
themselves; (2) Petitioners failed to warn Farnoli of the impending wind and foul
weather; (3) the Vessel was in a dangerous condition in that the boom could swing
without being attended by the skipper or operator of the boat; (4) Petitioners treated
Farnoli and Tine as guinea pigs; (5) Petitioners failed to warn Farnoli that there
were no cleats to tie the mainsail boom ropes down on the boat. [Dkt. 74 at 8, 2021].
The Court finds that Claimant has provided sufficient evidence of the first
two claims to create a genuine dispute of a material fact as to whether Petitioners
provided sufficient safety instructions. Clinton Sailing Club never instructed
Farnoli, as a skipper, to hand the mainsheet to the crew, [Dkt. 44-5 at 49], and
therefore also never instructed the students how to handle the mainsheet between
themselves. Farnoli consistently testifies that the weather was worse than she was
used to, namely, that the waves were bigger and it was windier and yet she was
allowed to skipper the Vessel with only a less experienced student on board. [Dkt.
44-5 at 40:15-23]. Therefore, this element cannot provide a basis for summary
judgment as to the Petitioners.
As to causation, there is a clear dispute of fact. Walker states that only the
skipper steering the boat with the tiller, could tack or jibe, and therefore swing the
boom across the Vessel so failing to instruct the students as to handling the
mainsheet could not have caused the accident. [Dkt. 43 (Walker Affidavit) at ¶ 12].
23
Farnoli states that she did not turn the tiller before the accident, but the wind
caused to Tine lose control of the mainsheet and the boom to swing across the
Vessel and hit Farnoli. [Dkt. 44-5 at 52:20-22]. Thus, this element also cannot
provide a basis for summary judgment as to the Petitioners. The Court denies
summary judgment on the basis of lack of evidence.
ii. Waiver
Petitioners also argue that Farnoli and her father signed an agreement prior
to the accident releasing them from liability, and that the release is valid and
enforceable. Claimant responds that the waiver states that all disputes arising from
the waiver shall be heard in the Courts of Middlesex County, Connecticut, and so
any dispute regarding the wavier should be removed to state court. The Court
agrees with Claimant that any waiver clause is to be adjudicated in state courts.
“A forum selection clause is… mandatory when it confers exclusive
jurisdiction on the designated forum or incorporates obligatory venue language.”
Phillips v. Audio Active Ltd., 494 F.3d 378, 386 (2d Cir. 2007)(citations omitted)
(holding that contract language stating proceedings “are to be brought in England”
is a mandatory forum selection clause). When determining the scope of the forum
selection clause, “to ‘arise out of’ means ‘to originate from a specified source,’ and
generally indicates a causal connection.” Id. at 389 (2d Cir. 2007) (quoting
Webster's Third New International Dictionary 117 (1981)). A claim that arises under
a federal law for jurisdictional purposes may also arise out of an agreement “for
purposes of interpreting a forum selection clause.” Phillips v. Audio Active Ltd.,
494 F.3d 378, 387-392 (2d Cir. 2007). “If the forum clause was communicated to the
24
resisting party, has mandatory force and covers the claims and parties involved in
the dispute, it is presumptively enforceable.” Id. at 383, quoted in Martinez v.
Bloomberg LP, 740 F.3d 211, 217 (2d Cir. 2014). A party can overcome this
presumption only by “making a sufficiently strong showing that enforcement
would be unreasonable or unjust, or that the clause was invalid for such reasons
as fraud or overreaching.” Id. at 383–84 (quoting M/S Bremen v. Zapata Off–Shore
Co., 407 U.S. 1, 15 (1972)), quoted by Martinez v. Bloomberg LP, 740 F.3d 211, 217
(2d Cir. 2014).
Here, the release was written by the Clinton Sailing Club and signed by
Farnoli and her parent. . [Dkt. 44-4 (Ex. D: August 15, 2016 Release)]. It states that
“any dispute arising from this Agreement shall be adjudicated in the courts located
in Middlesex County, Connecticut.” Id. The Court takes judicial notice of the fact
that no federal district court is located in Middlesex County, Connecticut. The Court
finds that the phrase “shall be adjudicated in the courts located in Middlesex
County, Connecticut,” is obligatory venue language sufficient to establish
mandatory forum selection. The Court further finds that the issues in contention in
this section of the motion for summary judgment—what law governs the release;
whether Julia Farnoli can void the release; whether the release is against public
policy—all originate from the release agreement. Finally, no party has argued that
enforcement would be unreasonable or unjust. Therefore, the Court dismisses this
defense for improper venue.
See 28 U.S.C. § 1406 (“The district court of
a district in which is filed a case laying venue in the wrong division or district shall
dismiss…); Phillips v. Audio Active Ltd., 494 F.3d 378, 393 (2d Cir. 2007)
25
(dismissing some claims for improper venue while retaining other claims).
Petitioners may bring this argument in the case brought in the proper venue. Since
this Court cannot adjudicate Petitioner’s waiver argument, the Court denies
summary judgment on this ground as well.
3. Privity and Knowledge
In her motion to dismiss against Clinton Sailing Club, Claimant argues that
Clinton Sailing Club had privity and knowledge of the incident, and therefore is not
entitled to limitation of liability. [Dkt. 61-1 (Mem. Supp. Mot. to Dismiss as to Clinton
Sailing Club) at 7-9].
Limitation proceedings require a two-step analysis: “First, the court must
determine what acts of negligence caused the accident. Second, the court must
determine whether the ship owner had knowledge or privity of those same acts of
negligence.” Otal, 673 F.3d at 115 (alterations and internal quotation marks
omitted) (quoting In re Moran Towing Corp. (“Moran I”), 166 F.Supp.2d 773, 775
(E.D.N.Y. 2001)). The claimant “bears the initial burden of proving negligence,” after
which the burden shifts to the ship owner to “prove lack of knowledge or
privity.” Id. (quoting Moran I, 166 F.Supp.2d at 775).
As the Court has just determined that there remains a dispute of fact as to
whether Clinton Sailing Club committed acts of negligence, there must also remain
a dispute of material fact as to whether Clinton Sailing Club had knowledge or
privity of those acts. The Court therefore DENIES Claimant’s motion to dismiss as
to Clinton Sailing Club.
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IV. Conclusion
The Court denies Claimant’s motions to dismiss, and also denies Petitioners’
motions for summary judgment. This case will proceed to a concursus proceeding
in July 2020 in which the Court will determine the issues of ownership, liability, and
limitation. See In re Nagler, 246 F. Supp. 3d at 656. The parties’ joint trial
memorandum is due May 15, 2020.
Should the parties wish to engage in settlement discussions with a
Magistrate Judge, they must jointly request a referral within 10 days of the date of
this decision. Within 7 days of the referral the parties must consult with the
assigned magistrate judge and schedule the settlement conference. No extensions
will be granted to engage in settlement discussions or to fulfill the terms of a
settlement.
It is so ordered.
___________/s/______________
Honorable Vanessa L. Bryant
District of Connecticut
Dated at Hartford, Connecticut: March 30, 2020
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