In Re: Marquette Transportation Company, LLC
Filing
26
ORDER & REASONS granting 7 Motion to Dismiss. Signed by Judge Martin L.C. Feldman on 10/24/2012. (caa, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
IN THE MATTER OF
MARQUETTE TRANSPORTATION COMPANY, LLC,
AS OWNER AND OPERATOR OF THE TOWING VESSEL
MISS KATIE, PETITIONING FOR EXONERATION
FROM OR LIMITATION OF LIABILITY
*
CIVIL ACTION
*
NO. 12-1448
*
SECTION "F"
ORDER AND REASONS
Before the Court is Claimant Great Lakes Dredge & Dock
Company, LLC’s Rule 12(b)(1) motion to dismiss the limitation
complaint.
For the reasons that follow, the motion is GRANTED.
Background
The events giving rise to this Limitation of Liability Act
proceeding,
which
was
instituted
by
Marquette
Transportation
Company, LLC, as owner and operator of the towing vessel, MISS
KATIE, are as follows:
On January 20, 2011 Great Lakes Dredge & Dock Co., LLC’s
dredge TEXAS ran aground in the Brownsville Ship Channel while
under the tow of Marquette’s tug MISS KATIE.
For 17 days, from
January 31 to February 16, the TEXAS was out of commission while it
was being repaired at Bollinger Shipyard.
On February 18, 2011
Marquette’s Claims Manager, Ronnie Dupuy, emailed GLDD Claims
Manager, Rick Lietz, asking: “Do you have an invoice from Bollinger
[Shipyard] or an estimated repair costs? Also, any estimate of
1
other costs unrelated to repairs?”
Thereafter, on February 24,
2011 Lietz wrote1 to Dupuy:
Re:
Dredge TEXAS
Grounding incident at Brownsville, Texas
Dear Mr. Dupuy:
Great Lakes Dredge & Dock Company is the owner and
operator of the DREDGE TEXAS. On January 16, 2011 the
Dredge sustained substantial damages as a result of
running aground while being towed by Marquette’s Tug, the
M/V MISS KATIE. The grounding and resulting damages to
the TEXAS were caused by the negligence of the crew of
the MISS KATIE.
Accordingly, [GLDD] confirms its
intention to hold Marquette Transportation responsible
for not only the physical damages sustained by the TEXAS,
but also the consequential damages sustained by [GLDD] as
a result of the accident.
As a result of the necessary drydocking of the
DREDGE TEXAS, Bollinger Shipyard has invoiced GLDD
$648,420.06, of which 636,970.06 is for permanent repairs
directly related to the casualty (see copy of invoice
attached). The repairs were necessary to regain class
certification and return the Dredge to service as quickly
as reasonably possible in order to mitigate consequential
losses. This casualty has placed an enormous financial
burden on GLDD, and one that Marquette Transportation
would eventually have to compensate GLDD for, should the
matter proceed to litigation. In an effort to avoid time
delays and associated costs and to streamline the
resolution of GLDD’s claim, GLDD requests that Marquette
pay the above referenced repair costs now, on a withoutprejudice basis. Marquette’s payment would go a long way
towards reducing GLDD’s losses and maintaining the trust
and confidence GLDD has placed in Marquette over many
years of doing business together.
GLDD’s request is based on our view of a clear case
of Marquette’s responsibility for the incident. To put
the request in perspective, we summarize only a few of
the pertinent facts.
1
Lietz emailed Dupuy a letter, a copy
Shipyards invoice, and a draft Partial Release.
2
of
Bollinger
The TEXAS left Morgan City under tow of
Marquette’s tug MISS KATIE on January 16,
2011. On January 20, 2011, when the tow was a
few miles North of the entrance to the
Brownsville Ship Channel, Marquette’s assist
tug, the CONNOR, left the inlet to go meet the
tow.
Seas were rough, a cold front was
blowing in, and Captain Bouvier’s subsequent
statement to the Coast Guard suggests the wind
speed was 50-60 mph.
Meanwhile, the MISS KATIE’s Captain advised
that conditions were “a little choppy”, but he
was going to enter the channel as long as he
had light. In fact, it was more than a little
choppy the tide was coming in, seas were
heavy, and according to MISS KATIE’s Captian’s
own statement to the Coast Guard, winds were
blowing 45-50 mph.
Entry into the channel
should have never been attempted under those
conditions without a clear plan to include the
proper
direction
of
approach
and
the
coordination of the available assist tugs.
As it neared the Brownsville channel, the MISS
KATIE shortened the towline, but it was still
several hundred feet in length, which was too
long for anything but a straight-on approach
to the channel under the existing conditions.
After the MISS KATIE made its turn into the
channel, the TEXAS continued to drift to the
south, causing her to allide with the tip of
the granite-rock jetties that define the
inlet. Assist tugs were needed to pull the
dredge from her grounded position.
During the final leg of the trip, there was
inadequate communication between the Captain
of the MISS KATIE and Marquette’s other tug,
the CONNOR.
But at a minimum, the MISS
KATIE’s Captain should have notified the
CONNOR of the approach he intended to take
into the channel and ordered the CONNOR to
shadow the Dredge in an appropriate position
in the event of a problem. The MISS KATIE’s
Captain failed to take appropriate actions
under
the
circumstances
to
avoid
the
subsequent grounding of the TEXAS, including
3
his improper choice of approach and tow line
length, as well as inadequate co-ordination
with his assist Tug. Because the MISS KATIE
and CONNOR were not in position to prevent or
stop the chain of events, and because the MISS
KATIE failed to take appropriate steps under
the circumstances, the Dredge came into
contact with the jetty, thereby sustaining
extensive damages to the hull.
The above is meant to be a summary only and is set
forth for the purpose of facilitating the ultimate
compromise and settlement of claims which may be asserted
by GLDD against Marquette. As the initial part of that
process, GLDD requests that Marquette pay the damage
repair related portion of the Bollinger Shipyard invoice
without prejudice to any rights and defenses Marquette
may assert as the claim process moves forward. Paying
the repair invoice now will significantly mitigate GLDD’s
damages, eliminate any future claim for interest, and
hopefully enable the parties to eventually resolve the
remainder of the claim without the need for costly and
time consuming litigation.
As you can see, I’ve taken the liberty of enclosing
a draft Partial Release document for your review and
consideration....
When he received the letter, invoice, and partial release, Dupuy
reviewed
these
items,
raised
some
questions,
negotiated
with
Bollinger, and then sent Bollinger a check on April 5, 2011 for
$626,970.06.
Later, GLDD sent Marquette a package of additional invoices
for related costs, including survey fees and transportation costs
associated with repair, totaling $155,083.16.
On June 22, 2011,
Dupuy of Marquette wrote to Lietz of GLDD:
Sorry for the late response.
Took a while for our
surveyor to get back to me.
The items marked “no
invoice” did not have supports. Could you check on this
and forward. Also, there is an invoice from Gulf Towing
4
$85,310.71 that doesn’t match up.
There is also an
invoice from Marquette for $4,371.43 for (Medical)??
Please clarify. We look forward to resolving this claim
as soon as possible.
Will there be any more expenses? Matt Yacavone expressed
his interest in settling the remaining claim rather than
piece meal.
Is that possible?
Look forward to your
reply.
And again on June 27, 2011, after Marquette had completed its
review of the supplemental invoices, Dupuy wrote to Lietz:
We have completed review of the supplemental invoices and
find them in order. However, we would like to settle
this matter in final and was wondering whether you were
in a position to submit a final claim? Please let me
know if this is possible?
Dupuy received no response. Almost two months later, on August 25,
2011 Marquette met GLDD at its office in Chicago, at which time
GLDD discussed its losses arising from the January 20 grounding; in
particular, GLDD explained the impact that the grounding had on its
dredging operations: GLDD explained to Marquette that the TEXAS was
contractually committed to work at the time of the grounding, and
in order to meet this commitment, GLDD had to deploy other assets
while the TEXAS was being repaired.
As a result, GLDD advised
Marquette, GLDD anticipated its losses, excluding the amounts that
Marquette had already paid, were at least $2.3 million.
Marquette
does not dispute that these discussions were had on August 25;
however, Marquette suggests that “Great Lakes indicated an economic
claim would be coming, but nothing was received until December 7,
2011.”
5
On December 7, 2011 GLDD, through its President of Dredging
Operations, wrote Marquette, transmitting GLDD’s “economic impact
claim”; GLDD proposed that Marquette pay certain delay costs,
towing costs, depreciation, fixed maintenance, marine insurance,
overhead costs, and profits, which altogether total $4,725,080.2
Six
months
after
receipt
of
the
December
7
letter
and
supporting materials, on June 6, 2012, Marquette filed its verified
complaint
for
exoneration
from
or
limitation
of
liability;
thereafter, Marquette posted a bond for the limitation fund in the
amount of $2,100,000 (the alleged value of the MISS KATIE and her
pending freight), and the Court granted its request to issue an
order directing the issuance of notice to claimants and restraining
prosecution of claims.
GLDD
now
requests
dismissal
of
Marquette’s
limitation
proceeding as untimely, thus challenging this Court’s subject
matter jurisdiction.
I.
Motions filed under Rule 12(b)(1) of the Federal Rules of
Civil Procedure allow a party to challenge the Court’s subject
matter jurisdiction.
Fed.R.Civ.P. 12(b)(1).
The burden of proof for a Rule 12(b)(1) motion to dismiss is
2
GLDD’s economic impact claim was transmitted by letter
and accompanied by a confidentiality agreement and 40-pages of
“impact cost analysis and supporting documentation” that was
stamped “CONFIDENTIAL AND PROPRIETARY”.
6
on the party asserting jurisdiction.
Budget Prepary, Inc. v. AT&T
Corp., 605 F.3d 273, 278 (5th Cir. 2010)(citing Ramming v. United
States, 281 F.3d 158, 161 (5th Cir. 2001)).
The Court may find a
plausible set of facts to support subject matter jurisdiction by
considering any of the following: “(1) the complaint alone; (2) the
complaint supplemented by undisputed facts evidenced in the record;
or (3) the complaint supplemented by undisputed facts plus the
court's resolution of disputed facts.”
Barrera-Montenegro v.
United States, 74 F.3d 657, 659 (5th Cir. 1996).
The standard of review applicable to motions to dismiss under
Rule 12(b)(1) is similar to that applicable to motions to dismiss
under Rule 12(b)(6).
See Williams v. Wynne, 533 F.3d 360, 364-65
n.2 (5th Cir. 2008)(observing that the Rule 12(b)(1) and Rule
12(b)(6) standards are similar, but noting that applying the Rule
12(b)(1) standard permits the Court to consider a broader range of
materials in resolving the motion).3
Rule 12(b)(6) allows a party to move for dismissal of a
complaint when the plaintiff has failed to state a claim upon which
3
In deciding a Rule 12(b)(6) motion to dismiss, the Court
may consider documents that are essentially “part of the pleadings”
-- that is, any documents attached to or incorporated in the
plaintiffs’ complaint that are central to the plaintiffs’ claim for
relief. Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285,
288 (5th Cir. 2004) (citing Collins v. Morgan Stanley Dean Witter,
224 F.3d 496, 498-99 (5th Cir. 2000)). Also, the Court is permitted
to consider matters of public record and other matters subject to
judicial notice without converting the motion into one for summary
judgment. See United States ex rel. Willard v. Humana Health Plan
of Texas Inc., 336 F.3d 375, 379 (5th Cir. 2003).
7
relief can be granted. Such a motion “‘is viewed with disfavor and
is rarely granted.’”
See Lowrey v. Tex. A & M Univ. Sys., 117 F.3d
242, 247 (5th Cir. 1997) (quoting Kaiser Aluminum & Chem. Sales,
Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir.
1982)).
“‘To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.’”
Gonzalez v. Kay, 577 F.3d
600, 603 (5th Cir. 2009) (quoting Ashcroft v. Iqbal, 129 S. Ct.
1937, 1949 (2009)) (internal quotation marks omitted).
“A claim
has facial plausibility when the pleaded factual content allows the
court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.”
Iqbal, 129
S. Ct. at 1940.
“Factual
allegations must be enough to raise a right to relief above the
speculative level, on the assumption that all the allegations in
the complaint are true (even if doubtful in fact).”
Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotation marks,
citations, and footnote omitted).
The
United
States
Supreme
Court
suggests
a
“two-pronged
approach” to determine whether a complaint states a plausible claim
for relief.
Iqbal, 129 S. Ct. at 1950.
First, the Court must
identify pleadings that are conclusory and thus not entitled to the
assumption of truth.
supported
by
factual
Id.
A corollary: legal conclusions “must be
allegations.”
8
Id.
Second,
for
those
pleadings that are more than merely conclusory, the Court assumes
the
veracity
of
those
well-pleaded
factual
allegations
and
determines “whether they plausibly give rise to an entitlement to
relief.”
Id.
This facial plausibility standard is met when the plaintiffs
pleads facts that allow the Court to “draw the reasonable inference
that the defendant is liable for the misconduct alleged.”
Id. at
1949. Claims that are merely conceivable will not survive a motion
to dismiss; claims must be plausible.
Twombley, 550 U.S. at 570;
see also Iqbal, 129 S. Ct at 1949 (“The plausibility standard is
not akin to a ‘probability requirement,’ but it asks for more than
a sheer possibility that a defendant has acted unlawfully”).
“Where a complaint pleads facts that are merely consistent with a
defendant’s
liability,
it
stops
short
of
the
line
between
possibility and plausibility of entitlement to relief.”
Iqbal 129
S.
the
Ct.
at
1949
(internal
quotations
omitted).
In
end,
evaluating a motion to dismiss is a “context-specific task that
requires the reviewing court to draw on its judicial experience and
common sense.”
Id. at 1950.
II.
A.
The Limitation of Shipowners’ Liability Act allows a vessel
owner to limit its liability to the value of its vessel (and
pending freight).
46 U.S.C. § 30505.
To secure this statutory
benefit, the Act requires that vessel owners file their petition to
9
limit liability “within 6 months after a claimant gives the owner
written notice of a claim.”
46 U.S.C. § 30511(a)(emphasis added).4
“The purpose of the six-month prescription on the limitation of
liability petition is to require the shipowner to act promptly to
gain the benefit of the statutory right to limit liability.” Exxon
Shipping Co. v. Cailleteau, 869 F.2d 843, 846 (5th Cir. 1989).
The
Act’s six-month filing requirement is a mandatory, jurisdictional
requirement; “[i]f the action is not filed within that six-month
period, it is dismissed as untimely.”
Service,
LLC,
672
F.3d
310,
314-15
In re Eckstein Marine
(5th
Cir.
2012)(citation
omitted); Complaint of Tom-Mac, Inc., 76 F.3d 678, 682 (5th Cir.
1996)(“In their motion to dismiss, Claimants asserted that TomMac’s limitation of liability action was not timely filed, thus
4
46 U.S.C. § 30511(a) provides:
The owner of a vessel may bring a civil action
in a district court of the United States for
limitation of liability under this chapter.
The action must be brought within 6 months
after a claimant gives the owner written
notice of a claim.
Rule F(1) of the Supplemental Rules for Certain Admiralty and
Maritime Claims of the Federal Rules of Civil Procedure reinforces
§ 30511(a):
(1) Time for Filing Complaint; Security. Not
later than six months after receipt of a claim
in writing, any vessel owner may file a
complaint
in
the
appropriate
district
court...for limitation of liability pursuant
to statute ....
Fed.R.Civ.P. Supp. F(1)(emphasis added).
10
challenging the district court’s jurisdiction to hear Tom-Mac’s
petition.”).
“The Limitation Act’s six-month timeline,” the Fifth Circuit
has observed, “is triggered only if and when the written notice
reveals a ‘reasonable probability’ that the claim will exceed the
value of the vessel, and therefore that the vessel owner might
benefit from the Limitation Act’s protection.”
In re Eckstein
Marine Service, LLC, 672 F.3d at 317 (noting that “[t]he Limitation
Act’s six-month timeline does not automatically begin to run when
a vessel owner learns a claimant has filed a lawsuit.”). The Fifth
Circuit has instructed that the “reasonable possibility” standard:
is not toothless [but] it is also not particularly
stringent.
Once a reasonable possibility has been
raised, it becomes the vessel owner’s responsibility to
initiate a prompt investigation and determine whether to
file a limitation action. The Limitation Act provides
generous statutory protection to the vessel owners who
reap all of its benefits. When there is uncertainty as
to whether a claim will exceed the vessel’s value, the
reasonable possibility standard places the risk and
burdens associated with that risk on the owner. In other
words, if “doubt exists as to the total amount of the
claims or as to whether they will exceed the value of the
ship the owner will not be excused from satisfying the
statutory time bar since he may institute a limitation
proceeding even when the total amount claimed is
uncertain.”
Id. at 317-18 (citations omitted).
To determine whether a written
notice reveals a “reasonable possibility” that a claim will exceed
the value of the vessel, the Court is instructed to “engage in a
fact-intensive inquiry into the circumstances of the case.” Id. at
317 (citation omitted).
11
B.
When did GLDD first provide written notice that revealed a
reasonable possibility that its claim would exceed the value of the
MISS KATIE? If it was December 7, 2011, then the Limitation action
was timely filed.
If, however, it was much earlier (on February
24, 2001), then the Limitation action must be dismissed for lack of
subject matter jurisdiction and the stay order must be dissolved.
To
resolve
which
of
these
writings
revealed
a
reasonable
possibility that GLDD’s claim would exceed the value of the MISS
KATIE,
the
Court’s
fact-intensive
inquiry
is
advanced
by
reiterating these significant facts, in context:
•
•
•
•
•
After the casualty, the dredge TEXAS was out of commission
undergoing repairs for 17 days.
Shortly after the TEXAS was repaired, on February 24, 2011,
GLDD wrote to Marquette, seeking reimbursement for the
invoiced repairs of $636,970.06.
In seeking payment for the invoiced repairs, GLDD suggested in
its February 24 correspondence that it intended to hold
Marquette liable for the physical damages “but also the
consequential damages” resulting from the accident.
GLDD
characterized the casualty as placing “an enormous financial
burden on GLDD” but noted that, if Marquette paid the repair
costs, this “would go a long way towards reducing GLDD’s
losses” and also that paying the repair invoice “will
significantly mitigate GLDD’s damages, eliminate any future
claim for interest, and hopefully enable the parties
to...resolve the remainder of the claim without the need
for...litigation.”
Marquette paid invoiced repair costs to Bollinger, totaling
$626,970.06 on April 5, 2011.
When GLDD asked Marquette to pay additional repair related
costs totaling $155,083.16, Marquette twice asked whether
there would be “any more expenses”, asking GLDD “whether [it
was] in a position to submit a final claim”; Marquette wanted
to “settl[e] the remaining claim rather than piecemeal.” But
GLDD did not respond to Marquette’s requests regarding what
amount would resolve GLDD’s claim in full.
12
•
•
•
•
•
•
Two months after Marquette’s request to settle GLDD’s claim in
full, the parties met at GLDD’s offices, where GLDD told
Marquette that GLDD’s remaining losses exceeded $2.3 million.
More than three months after the meeting at GLDD’s offices, on
December 7, GLDD submitted its written economic impact claim
and supporting documentation in which its remaining damages
were alleged to exceed $4 million.
The MISS KATIE is worth at least $2.1 million; the physical
damage to the TEXAS was less than half the value of the MISS
KATIE.
GLDD seeks to recover for its economic losses (not repair
costs, which have already been paid).
GLDD has not filed a lawsuit against Marquette.
Unlike most of the case literature relevant to the timeliness
of limitation complaints, GLDD has not filed a lawsuit and no
personal injuries are alleged.
Marquette contends that, considering these facts, the first
written notice that revealed a reasonable possibility that GLDD’s
claim would exceed the value of the MISS KATIE was December 7.
The
February 24 letter, Marquette insists, focused on the physical
damage and repair to the TEXAS and even suggested that, once
Marquette paid those invoiced amounts, this “would go a long way
towards reducing GLDD’s losses” and “will significantly mitigate
GLDD’s damages.”
month
filing
This writing could not have triggered the six-
period
for
its
limitation
complaint,
Marquette
contends, because it failed to reveal a reasonable possibility that
GLDD’s remaining claim for consequential damages during the 17 day
repair period for the TEXAS exceeded $2.1 million value of the MISS
KATIE.
And, Marquette insists, after receipt of the February 24
correspondence, it attempted (to no avail) to pin down GLDD to
reveal a number that would fully resolve its claim against it.
GLDD counters that its February 24 correspondence clearly
13
revealed GLDD’s intent to recover from Marquette its consequential
losses and revealed that the casualty had “placed an enormous
financial burden on GLDD.”
This, and its unmistakable position
that Marquette was liable for its losses, GLDD insists, was
sufficient to trigger the six-month filing deadline for limitation
proceedings, especially considering that the reasonable possibility
standard is construed against the vessel owner.
The Court agrees.
Although the Court acknowledges that the at-times diplomatic
tone of the February 24 letter could be construed as leaving open
the potential amount of consequential damages in relation to
repair-related costs GLDD would seek to recover,5 and Marquette
twice requested that GLDD quantify the non-repair-related damages,
suggesting some attempt at investigation on its part, the Court
finds that the February 24 letter triggered the six-month deadline
for filing a limitation action.
as
to
the
total
amount
of
It is clear that “doubt exist[ed]
the
claim[]”
or
whether
GLDD’s
consequential damages claim would exceed the amount of the MISS
KATIE such that Marquette is “not excused from satisfying the
statutory
time
bar”;
it
could
have
instituted
a
limitation
proceeding even in the face of the uncertainty created by the
February 24 letter.
See Eckstein Marine, 672 F.3d at 317-18.
5
The letter states that the casualty placed an “enormous
financial burden on GLDD” but then states that paying the repair
costs (less than half of the value of the MISS KATIE) would “go a
long way towards reducing GLDD’s losses”.
14
Because there was uncertainty as to whether GLDD’s claim, as
revealed in the February 24 letter, would ultimately exceed $2.1,
the reasonable possibility standard requires that Marquette bear
the burden of that risk.
See id.
The fact that Marquette’s
complaint was filed 16 months after this first written notice
renders
the
complaint
untimely
and
divests
this
Court
of
jurisdiction over the limitation proceeding.6
Accordingly,
GLDD’s
Rule
12(b)(1)
motion
is
GRANTED.
Marquette’s limitation complaint is hereby dismissed, and the Order
directing the issuance of notice to claimants and restraining
6
The
Court
is
not
unsympathetic
to
Marquette’s
frustration, in particular its invocation of dicta in In re Morania
Barge No. 190, 690 F.2d 32, 34 (2d Cir. 1982)(noting “it
is...reasonable to require [the vessel owner] to make the claimant
define his position. If the claimant refuses to do so, it may be
that the period does not begin to run until he does; we need not
decide that, because in the case at bar the owner made no attempt
of any kind to force the claimant to make his position clear....”).
But when a vessel owner is in doubt as to the amount of a claim in
relation to the value of its vessel, the Act, Supplemental Rule
F(1), and the Fifth Circuit demand that Marquette file its
limitation complaint within six months of any writing revealing a
reasonable possibility that a claim exceeds the vessel’s value.
Marquette concedes that neither the Act nor cases interpreting it
require a clear and unmistakable statement of damages exceeding the
value of the vessel to trigger the six month filing period.
However, Marquette suggests that it could not have known from the
February 24 letter that GLDD would “attempt to assert a
[multimillion dollar] far-reaching and unreasonable ‘economic
impact’ claim”, especially when GLDD had not finally quantified its
alleged consequential damages at that time. But knowledge is not
the standard; reasonable possibility is, and it is “not
particularly stringent”.
If GLDD’s $4,725,080 economic impact
claim proves to be as “unreasonable” as Marquette suggests it to
be, then ultimately GLDD will not be permitted to recover the full
amount claimed. But the merits of GLDD’s quantified consequential
damages claim is not before the Court.
15
prosecution of claims is hereby dissolved.
New Orleans, Louisiana, October 24, 2012
______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE
16
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