Briem et al v. Holiday Water Sports Ft Myers Beach, Inc. et al
Filing
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ORDER FILED IN THIS ACTION FOR INFORMATION PURPOSES ONLY. See Order for details as it relates to the stay in this action. Signed by Magistrate Judge Nicholas P. Mizell on 2/12/2021. (brh)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
Case No. 2:18-cv-663-JLB-NPM
IN ADMIRALTY
HOLIDAY WATER SPORTS FT.
MYERS BEACH, INC.
as the owner of a fleet of Yamaha
Wave Runners, its engine, tackle,
appurtenances, etc.
Petitioner.
ORDER
Before the Court are Claimants’ Second Motion to Lift Stay (Doc. 49),
Response (Doc. 53), and with leave of Court, Reply (Doc. 56). Petitioner Holiday
Water Sports Ft Myers Beach, Inc. (“Holiday”) brought this admiralty action under
the Limitation of Vessel Owner’s Liability Act, 46 U.S.C. § 30501 et seq. (the
“Limitation Act”). For the following reasons, the Court grants the motion.
This action relates to a personal-injury action also filed in this Court. See
Briem v. Holiday Water Sports Ft Myers Breach, Inc. et al., No. 2:18-cv-301-JLBNPM. In the related action filed on April 27, 2018, Claimants allege they booked a
dolphin tour through Holiday on Wave Runners. (Doc. 8, ¶¶ 12-13). They also
booked a tour guide, later identified as Jack Graddy. (Id., ¶ 13). Claimants further
allege that due to Holiday’s and Graddy’s negligence, Claimant Maria Briem was
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knocked off the Wave Runner by a huge wave and sustained serious injuries from
this accident. (Doc. 8). On October 9, 2018, Holiday filed this exoneration from or
limitation of liability action relating to this incident. (Doc. 1). Holiday estimated the
value of the vessel was $7,601.00. (Doc. 4). Claimants allege their damages far
exceed this estimated value.
At issue is the Order approving the Ad Interim Stipulation, Notice of Monition
and Injunction (Doc. 7) entered on October 11, 2018. In this Order, the Court set a
deadline of November 28, 2018 for any person or entity to assert and file a claim
against Holiday related to the occurrence. (Doc. 7, p. 3). The Court also ordered—
among other things—“[t]he commencement or further prosecution of any action or
proceeding against Petitioner, the Vessels or any other property of Petitioner with
respect to any claim arising out of, or connected with the casualty set forth in the
Complaint, is STAYED, ENJOINED AND RESTRAINED until the final
determination of these proceedings.” (Id., p. 4). As a result, the underlying action,
Briem v. Holiday Water Sports Ft Myers Breach, Inc. et al., 2:18-cv-301-JLB-NPM
was stayed until the Court resolved the instant exoneration from or limitation of
liability action. (Doc. 40, p. 5).
In the Second Motion to Lift Stay, Claimants seek to have the stay lifted in
the person-injury action and instead stay this action until the personal-injury action
is resolved. (Doc. 49, p. 1).
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“Article III, § 2 of the United States Constitution vests federal courts with
jurisdiction over all cases of admiralty and maritime jurisdiction.” Lewis v. Lewis &
Clark Marine, Inc., 531 U.S. 438, 443 (2001). As codified in 28 U.S.C. § 1333, the
grant of exclusive original jurisdiction to federal courts of admiralty and maritime
jurisdiction, also contains a “saving to suitors in all cases all other remedies to which
they are otherwise entitled.” 28 U.S.C. § 1333(a). “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. While in limitation
proceedings—as in all admiralty actions—there is no right to a jury trial, under the
saving to suitors clause there is a presumption in favor of presenting common law
remedies in the claimant’s forum of choice to a jury. See Offshore of the Palm
Beaches, Inc. v. Lynch, 741 F.3d 1251, 1258 (11th Cir. 2014) (citing Beiswenger
Enterprises Corp. v. Carletta, 86 F.3d 1032, 1037 (11th Cir. 1996)). The overarching
concern in limitation actions is to protect the vessel owner’s “‘absolute right to claim
the Act’s liability cap, and to reserve the adjudication of that right in the federal
forum.’” Beiswenger, 86 F.3d at 1037 (quoting Magnolia Marine Transp. Co., Inc.
v. Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992)).
To give effect to both the Limitation Act and the saving to suitors clause,
courts have identified two circumstances in which the damage claimants must be
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allowed to try liability and damage issues in the forum of their choosing. Id. First, if
the limitation fund exceeds the aggregate amount of all possible claims against the
vessel owner, then the claimants may proceed with their other action. Id. Second,
when there is only one claimant, then that claimant may pursue her action with some
stipulations. Id.
The reasoning behind allowing a sole claimant to pursue her claim rests on
the theory that the major purpose of the limitation action, or concursus proceeding,
is to resolve competing claims to the limitation fund. Id. A single claimant may try
other proceedings in the forum of her choice by filing stipulations that protect the
shipowner’s right to have the admiralty court adjudicate the claim as to limited
liability. Id. “‘Specifically, the claimant must waive any claim of res judicata
relevant to the issue of limited liability based on any judgment obtained in the state
court, and concede the shipowner’s right to litigate all issues relating to limitation in
the federal limitation proceeding.’” Id. (quoting Gorman v. Cerasia, 2 F.3d 519, 524
(3d Cir. 1993)).
So if a court holds the vessel owner liable for the accident and assesses
damages exceeding the limitation fund, the parties must return to the admiralty court
to determine if the vessel owner was in privity or had knowledge of the issues. Id. at
1038. If the admiralty court determines the vessel owner is in privity or had
knowledge of the issues, then the claimant may enforce his or her judgment for
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damages, even if it exceeds the limitation fund. Id. This method protects the vessel
owner’s ability to claim limited liability and to reserve the adjudication of this claim
to the admiralty court. Id.
In the instant case, there is more than one claimant. Both Maria Briem and
Torsten Briem are claimants (Doc. 1), Jack Graddy may pursue claims for
contribution or indemnification, and there is the possibility that Maria Briem’s health
care providers may seek to step into her shoes and pursue subrogation claims. Thus,
this case presents a “multiple-claims-inadequate-fund” situation. Beiswenger, 86
F.3d at 1038. As a result neither circumstance of an adequate limitation fund or a
sole claimant applies.
In multiple-claims-inadequate-funds cases, courts generally will not allow the
claimants to try liability and damages in their chosen forum, even if they agree to
return to the admiralty court to litigate the vessel owner’s privity or knowledge. Id.
“This is because, without a concursus in the admiralty court, the claimants could
‘secure judgments in various courts that, in the aggregate, exceed the [limitation]
fund.’” Id. For these reasons, damage claimants must proceed in the admiralty court
first before pursuing their damage and liability claims. Id.
But courts have permitted claimants to transform a multiple-claimsinadequate-fund case into the functional equivalent of a single-claim case through
the use of appropriate stipulations. Id. Only when the stipulations produce the
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functional equivalent of a single claim will the liability and damage action proceed.
Id. at 1040. One stipulation must resolve the priority by which the multiple claims
will be paid from the limitation fund, effectively eliminating any disagreement or
need for a concursus proceeding. Id. 1038. Another stipulation must protect the
vessel owner’s right to litigate its limited liability claim exclusively in federal court.
Id. at 1044. Along with this stipulation, the claimant must stipulate to protecting the
vessel owner from having to pay damages in excess of the limitation fund, unless
the admiralty court denies limited liability. Id. A fourth stipulation must waive all
res judicata and issue preclusion defenses that might impact the limitation issues. Id.
With these principles in mind, the Court turns to Holiday’s concerns regarding
the stipulations in this case.
STIPULATIONS
Holiday claims the stipulations are insufficient to protect it if the stay is lifted.
(Doc. 53, p. 1). The Court addresses Holiday’s arguments as to each stipulation at
issue. 1
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In the Second Motion to Lift Stay, the Claimants delineate each type of stipulation by Roman
numeral. (Doc. 49, pp. 5-7).
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• Priority of Claims; and
• No Enforcement of Any Judgment That Would Lead to a Claim for
Indemnity or Contribution Against Holiday
Holiday asserts that in the “Priority of Claims” stipulation, Claimants failed
to include the potential indemnification or contribution claim of non-party Jake
Graddy.2 Claimants direct the Court to the “No Enforcement of any Judgment that
would lead to a Claim for Indemnity or Contribution against Holiday” stipulation.
This stipulation provides:
That Claimants will not seek to enforce any judgment rendered
in any other court or forum outside of this limitation
proceeding, not only against Holiday Water Sports Ft Myers,
Inc., but against any other person or entity that may be entitled
to later seek indemnity or contribution from Holiday Water
Sports Ft Myers, Inc., including but not limited to Jake Graddy,
by way of cross-claim or otherwise, as that would potentially
expose Petitioner to liability in excess of the limitation fund,
unless and until this Court has denied limitation of liability in
this matter.
(Doc. 49, pp. 6-7). This stipulation mirrors a similar stipulation that the Eleventh
Circuit approved as curing the “multiple claims” problem presented by codefendants in the liability and damages action brought in a different forum. See
Beiswenger, 86 F.3d at 1043-1044. 3 By not enforcing their claims until limited
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In the “Priority of Claims” stipulation, Claimants stipulate: “That in the event this Court
determines that the Petitioner, Holiday Water Sports Ft Myers, Inc., is entitled to limit its liability,
Claimants agree and stipulate that following payment of claims for fees or costs, if any, described
in stipulation VI above, the claim of Maria Briem shall be given first priority against the limitation
fund, and Torsten Briem’s claim shall take second priority.” (Doc. 49, p. 7).
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To compare, the stipulation in Beiswenger provided: “That the Respondent/Claimants will not
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liability is determined, Claimants “have eliminated the possibility that competing
claims will exhaust the limitation fund before the admiralty court has the opportunity
to determine whether to grant limited liability to” Holiday. Id. at 1043-1044. The
Court finds this stipulation adequately protects Holiday from multiple claims,
including those of indemnification or contribution from Jake Graddy.
• Attorney Fees and Costs
Similarly, Holiday contests the Attorney Fees and Costs stipulation 4 as not
providing adequate protection from multiple fee-and-cost claims, such as any feeand-cost award the damage claimants may secure in the personal-injury action, and
any fee-and-cost award that might be assessed against Graddy and then incorporated
into any indemnification demand against Holiday. But as stated above, the Court
finds the “No Enforcement of any Judgment” stipulation adequately protects
Holiday from multiple claims, including any potential attorney’s fees and costs
seek to enforce any judgment rendered in any state court, whether against the Petitioner or another
person or entity that would be entitled to seek indemnity or contribution from the Petitioner, by
way of cross-claim or otherwise, that would expose the Petition [sic] to liability in excess of
$40,090.00, until such time as this Court has adjudicated the Petitioner’s right to limit that
liability.” 86 F.3d at 1043.
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“Attorney Fees and Costs” stipulation provides: “That, in the event this Court determines that
the Petitioner, Holiday Water Sports Ft Myers, Inc., is entitled to limit its liability, Claimants agree
that any claim based upon attorney fees and/or costs awarded against Petitioner and in favor of
any other party or claimant in any other court or forum, state or federal, will have first priority
against the available fund.” (Doc. 49, p. 7).
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assessed against a co-liable party who might later seek indemnification from
Holiday.
• Exclusivity of Jurisdiction
Next, Holiday contends that the language in the “Exclusivity of Jurisdiction”
stipulation does not delineate that Claimants will not contest limitation in the
personal-injury proceedings. (Doc. 53, p. 3). The “Exclusivity of Jurisdiction”
stipulation provides:
That Petitioner in this admiralty matter, Holiday Water Sports
Ft Myers, Inc., has the right to litigate the issue of whether it is
entitled [to] exoneration or limitation of its liability under the
provisions of the Limitation of Liability Act, 46 U.S.C. §
30501, et seq. in this Court, and this Court has exclusive
jurisdiction to determine that issue.
(Doc. 49, p. 5 (emphasis added)). In addition, the “Exclusive Right to Determine
Value” 5 stipulation gives Holiday the right to have the admiralty Court determine
the value of the Yamaha Wave Runner jet ski(s) in question. (Id., pp. 5-6). The Court
finds these stipulations adequately protect Holiday’s right to have this Court
determine exoneration from or limitation of liability and, if appropriate, the
limitation fund.
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The “Exclusive Right to Determine Value” stipulation provides: “That Petitioner, Holiday Water
Sports Ft Myers, Inc., has the right to have this Court determine the value of the Yamaha Wave
Runner jet ski(s) in question, that is described in the Affidavit of Value submitted with its Ad
Interim Stipulation, and/or any other Wave Runner vessels determined by this court to be a proper
part of the limitation fund, with such value and interest to be the value and interest in the vessel(s)
as they were immediately following the incident at issue, as provided by the applicable Federal
Rules, and this Court has exclusive jurisdiction to determine such issues.” (Doc. 49, pp. 5-6).
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• Subrogation or Right to Reimbursement for Medical Claims
Holiday seeks additional stipulations to cover any potential subrogation or
right of reimbursement claim that may arise from any medical treatment Claimants
received in the United States or Germany. (Doc. 53, pp. 3-4). While Holiday is not
aware of any claims, it seeks this protection for any potential future claims. (Id.).
Holiday cites language from In re Natures Way Marine, LLC, No. 12-00390-KD-N,
2012 WL 4103879, *3 (S.D. Ala. Sept. 17, 2012) where the claimant agreed to
stipulate “that the subrogation party will take priority over Claimant’s claims against
said recovery from Nature’s Way Marine, LLC.” At bottom, the law is clear that a
claimant may pursue claims against a vessel owner “so long as the vessel owner’s
right to seek limitation of liability is protected.” Lewis v. Lewis & Clark Marine,
Inc., 531 U.S. 438, 455, 121 S. Ct. 993, 1005, 148 L. Ed. 2d 931 (2001).
Here, the “No Enforcement of any Judgment” stipulation provides in part:
“[t]hat Claimants will not seek to enforce any judgment rendered in any other court
or forum outside of this limitation proceeding, not only against Holiday Water Sports
Ft. Myers, Inc., but against any other person or entity that may be entitled to later
seek indemnity or contribution from Holiday Water Sports Ft Myers, Inc., . . . by
way of cross-claim or otherwise, as that would potentially expose Petitioner to
liability in excess of the limitation fund, unless and until this Court has denied
limitation of liability in this matter.” (Doc. 49, p. 6). This provision protects Holiday
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from any contribution or subrogation in connection with Claimants’ treatment and
the Court finds Holiday is adequately protected. 6
In sum, the Court finds the stipulations in the Second Motion (Doc. 49)
sufficient to protect Holiday’s right to litigate its claim to limited liability exclusively
in admiralty court. The Claimants have agreed to waive any res judicata and issue
preclusion defenses that might impact the limitation issues and allow Holiday to
fully assert its right to exoneration from or limitation of liability in this admiralty
court. The Court will therefore lift the stay in the personal-injury action, No. 2:18cv-301-JLB-NPM, and will stay this action with one exception.
Claimants recently filed a Motion for Judgment on the Pleadings for Lack of
Subject Matter Jurisdiction (Doc. 67). Since questions of subject matter jurisdiction
may be raised at any time, Nicklaw v. Citimortgage, Inc., 839 F.3d 998, 1001 (11th
Cir. 2016), this action is not stayed as to the Motion for Judgment on the Pleadings
(Doc. 67). Holiday must therefore respond to the Motion.
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In addition, single claimant cases have not required a separate subrogation stipulation as long as
the vessel owner is protected by stipulations. These stipulations must include: (1) the vessel
owner’s right to litigate its limitations of liability claim exclusively in admiralty court; (2) the
claimant’s agreement to waive any res judicata or issue preclusion effects of another forum’s
decision; (3) the claimant’s agreement not to enforce any other judgment until the admiralty court
has adjudicated the vessel owner’s right to limit liability; and (4) the claimant’s agreement not
seek to enforce any judgment that would require payment of damages in excess of the limitations
fund. See Beiswenger Enterprises Corp. v. Carletta, 86 F.3d 1032, 1044 (11th Cir. 1996); In re
Island Mar. Servs., Inc., No. 8:10-CV-1632-T-33TGW, 2011 WL 3585937, *2-3 (M.D. Fla. Aug.
16, 2011); In Matter of Offshore Marine Towing, Inc., 333 F. Supp. 2d 1286, 1292 (S.D. Fla.
2004).
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Accordingly:
(1)
The Court GRANTS the Second Motion to Lift Stay (Doc. 49).
(2)
The Court adopts and approves Claimants’ stipulations (Doc. 49, pp. 57) and incorporates them in this Order. The Court requires Maria and
Torsten Briem to file the stipulations signed and made under oath
before an appropriate notary or corresponding officer by March 12,
2021.
(3)
Upon the filing of the sworn stipulations, the Court will lift its
Limitation Injunction (Doc. 7) in this case as to Claimants Maria Briem
and Torsten Briem, to the extent that they may proceed in Briem v.
Holiday Water Sports Ft Myers Breach, Inc. et al., 2:18-cv-301-JLBNPM against Holiday, as conditioned by Claimants’ stipulations
discussed herein.
(4)
The Court STAYS and ADMINISTRATIVELY CLOSES this matter
(with the exception of the resolution of the Motion for Judgment on the
Pleadings (Doc. 67)) pending the resolution of Briem v. Holiday Water
Sports Ft Myers Breach, Inc. et al., 2:18-cv-301-JLB-NPM. Due to this
stay, the Court DENIES without prejudice the Joint Motion for
Continuance (Doc. 59), the Joint Amended Motion for Extension of
Time to Complete Mediation (Doc. 61), the Unopposed Motion
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Requesting Status Conference (Doc. 63), and the Joint Motion for
Extension of Time on Deadline Regarding Dispositive and Daubert
Motions (Doc. 64).
(5)
The Court directs the Clerk to file a copy of this Order for information
purposes only in Briem v. Holiday Water Sports Ft Myers Breach, Inc.
et al., 2:18-cv-301-JLB-NPM.
(6)
The parties may return to this Court for further proceedings, if
appropriate.
ORDERED in Fort Myers, Florida on February 12, 2021.
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