In Re: Texas Petroleum Investment Co

Filing 51

MEMORANDUM ORDER Adopting 34 Report and Recommendation of the Magistrate Judge, Denying 24 Motion to Enter Stipulation and Lift Injunction and Stay of Proceedings. Signed by Judge Robert G James on 5/10/2018. (crt,Crawford, A)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAKE CHARLES DIVISION
IN THE MATTER OF THE
COMPLAINT OF TEXAS
PETROLEUM INVESTMENT
COMPANY, as owner and operator of
M/V MICHELLE, for EXONERATION
FROM OR LIMITATION OF
LIABILITY

* CIVIL ACTION NO. 2:17-CV-263
*
*
* UNASSIGNED DISTRICT JUDGE
*
*
* MAG. JUDGE KATHLEEN KAY
*
*
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MEMORANDUM ORDER
Pending before the Court is a Motion to Enter Stipulation and to Lift Injunction and Stay
of Proceedings, filed by Defendant/Claimant Gentry Hebert (“Hebert”). [Doc. No. 24]. The motion
is opposed by Plaintiff Texas Petroleum Investment Co. (“Texas Petroleum”), [Doc. No. 26];
Defendants/Claimants Gray Insurance Co. (“Gray Insurance”) and Prosper Operators Inc.
(“Prosper”), [Doc. No. 27]; Defendant/Claimant Phoenix Forge Group LLC (“Phoenix”), [Doc.
No. 28]; and Defendant/Claimant JIREH Oilfield Services (“JIREH”), [Doc. No. 29]. Magistrate
Judge Kathleen Kay issued a Report and Recommendation, in which she recommends that the
motion be denied because Hebert’s proffered stipulations were not joined by the other
defendants/claimants and are, therefore, not sufficient to protect Texas Petroleum’s right to limit
its liability. [Doc. No. 34]. Hebert filed objections. [Doc. No. 37]. Texas Petroleum and Phoenix
filed responses to Hebert’s objections. [Doc. Nos. 39 & 40]. Having conducted a de novo review
of the record, including the objections and responses, the Court finds that Magistrate Judge Kay
correctly stated and applied the law and ADOPTS her Report and Recommendation. The Court
issues this Ruling to address Hebert’s objections. Objections to a magistrate judge’s report and
recommendation on dispositive matters are reviewed de novo. 28 U.S.C. § 636(b)(1)(C); Fed. R.
Civ. P. 72(b)(3).
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Hebert claims that Magistrate Judge Kay erred by not determining whether the proposed
stipulations “adequately protect[] the vessel owner from excess liability, regardless of whether all
claimants entered into, signed, or crafted their own stipulations.” [Doc. No. 37, p. 2]. Hebert claims
that his stipulations adequately protect Texas Petroleum’s rights to limit liability because they
include, inter alia, that he will:
1) not enforce a judgment against any of the defendants until after
the limitation proceedings is concluded; and 2) that any
reimbursement claim for medical and indemnity benefits paid by
[Prosper] and [Gray Insurance] to [Hebert], whether the payments
represent medical and/or indemnity benefits under the Louisiana
Workers’ Compensation Act or maintenance and cure benefits paid
to or on behalf of [Hebert], shall be given preference and priority
ranking over the claims of [Hebert] subject to the limitation fund
and will not be enforced by [Hebert] against [Texas Petroleum] itself
or by enforcement against any third parties, including [Prosper],
[Gray Insurance], [JIREH], [XYZ Corporation], and [Phoenix].
[Doc. No. 37, pp. 3–4]. Hebert claims that these stipulations “eliminate[] the possibility that
competing claims would exhaust the limitation fund before the admiralty court has the opportunity
to determine whether to grant limited liability to the vessel owners.” Id. at p. 4. Hebert cites In re
Self, 172 F. Supp. 2d 813 (W.D. La. 2001), In re Two “R” Drilling Co., Inc., 943 F.2d 576 (5th
Cir. 1991), and Kattelman v. Otis Eng’g Corp., 696 F. Supp. 1111, 1116 (E.D. La. 1988), as
purported examples of courts holding or implying “that a damage claimant’s stipulation does not
require the consent of third party claimants seeking indemnity and contribution if the damage
claimant’s stipulation adequately protects the vessel owner from excess liability.” [Doc. No. 37,
p. 3].
However, Hebert’s stipulations appear to acknowledge that Prosper and Gray Insurance
have claims in this limitation action that are not derivative of Hebert’s petition for damages in his

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state court lawsuit. 1 Even assuming that Hebert’s stipulations would suffice to protect Texas
Petroleum from excess liability against the indemnity and contribution claims in this limitation
action, Hebert’s stipulations are not sufficient on the whole because Prosper2 and Gray Insurance,
who have independent claims against Texas Petroleum for reimbursement, have not “stipulate[d]
that the admiralty court reserves exclusive jurisdiction to determine all issues related to the
shipowner’s right to limit liability, and that no judgment against the shipowner will be asserted to
the extent it exceeds the value of the limitation fund.” Magnolia Marine Transport Co., Inc. v.
Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992); see also Odeco Oil and Gas Co.,
Drilling Div. v. Bonnette, 74 F.3d 671, 674 (5th Cir. 1996). In the Fifth Circuit, these stipulations
are required of all claimants when the limitation fund is inadequate to satisfy all claims. Odeco, 74
F.3d at 674. Thus, in agreement with the Magistrate Judge, this Court is not satisfied that Hebert’s
unilateral stipulations are sufficient to protect Texas Petroleum’s right to limit its liability, and,
therefore, do not provide an adequate basis for lifting the stay and allowing Hebert’s state court
action to proceed. See [Doc. No. 34, p. 5]. Accordingly,
IT IS ORDERED, ADJUDGED AND DECREED that Hebert’s Motion to Enter
Stipulation and Lift Injunction and Stay of Proceedings, [Doc. No. 24], is DENIED.
Monroe, Louisiana, this 10th day of May, 2018.

____________________________________
ROBERT G. JAMES
UNITED STATES DISTRICT JUDGE

Prosper and Gray Insurance claim to have already paid more than $220,000 “to or on behalf of Gentry Hebert in
workers’ compensation medical and indemnity benefits under the Louisiana Workers’ Compensation Act, and
maintenance and cure” and seek reimbursement for these payments from Texas Petroleum. [Doc. No. 7, pp. 7–8].
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2

Prosper is a co-defendant with Texas Petroleum in Hebert’s state court lawsuit. See [Doc. No. 24-3].

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