Gutierrez v. F. Miller Construction, LLC et al
Filing
66
OPINION AND ORDER denying 52 Motion to Lift Stay; denying 52 Motion to Remand.(Signed by Judge Melinda Harmon) Parties notified.(htippen, )
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
MARIA GUTIERREZ, Individually
and as Representative of the
Estate of AGUSTIN GUTIERREZ,
Deceased and as Next Friend of
L.G.
§
§
§
§
§
§
Plaintiff,
§
§
VS.
§
§
F. MILLER CONSTRUCTION, LLC,
§
ORION MARINE GROUP, INC., and
§
JOHNSON BROS. LLC,
§
§
Defendants.
§
IN RE THE COMPLAINT OF ORION
§
CONSTRUCTION, L.P., AND F.
§
MILLER CONSTRUCTION, LLC, as
§
OWNER(S) AND/OR OWNER(S) PRO HAC§
VICE OF THE BARGE STAR 303
§
(OFFICIAL NO. 1220316) AND ORION§
MARINE GROUP, INC. SEEKING
§
EXONERATION FROM OR LIMITATION §
OF LIABILITY
§
CIVIL ACTION H-11-1996
consolidated with
CIVIL ACTION H-11-2042
OPINION AND ORDER
The above referenced wrongful death action (now H-11-1996) was
removed from state court on diversity grounds and subsequently
consolidated with the limitation of liability action (H-11-2042),
both arising out of the death of Agustin Gutierrez while he was
working on construction of a bridge between Grand Isle, Louisiana
and mainland Louisiana across Caminada Pass.
Pending before the
Court is a motion to lift the limitation stay and remand the
underlying negligence case back to state court (instrument #52),
filed
by
Plaintiff/Claimant
Maria
-1-
Gutierrez
(“Plaintiff”),
Individually
and
as
Representative
of
the
Estate
of
Agustin
Gutierrez, on the grounds that diversity jurisdiction has been
destroyed by the addition of Defendants Orion Construction and
Pileco, Inc.1 in the filing of Plaintiff’s First Amended Complaint
(#28) on October 18, 2011.
Plaintiff’s Motion to Lift Stay and Remand Negligence Case
Conceding
that
Orion
Construction
is
entitled
to
seek
limitation of damages in this Court, Plaintiff asserts her right
under the “saving to suitors” clause to have her negligence claims
adjudicated in her chosen forum, the 11th Judicial District Court
of Harris County, Texas.
Insisting that she is the only claimant
to the limitation fund, she argues that under the “single claimant”
rule2 and Supplemental Admiralty Rule F of the Federal Rules of
1
The Amended Complaint states that Orion Construction was
one of the owners of the barge on which the Decedent worked,
while Pileco, Inc. was the designer and manufacturer of the pile
driving leads that were knocked loose from the crane and fatally
struck the Decedent.
According to the complaint in the limitation action, #1 in
H-2042, F. Miller was the Decedent’s employer and the operator of
the barge involved. It was also an owner pro hac vice of the
Barge STAR 303, as was Defendant Orion Marine, which bareboat
chartered it to F. Miller. Orion Marine is also the sole member
of F. Miller (LLC); the Notice of Removal states that “Miller is
a wholly owned subsidiary of Orion.”
2
The Limitation of Shipowners’ Liability Act (“Limitation
Act”) permits vessel owners to cap their liability at “the value
of the vessel and pending freight” by filing limitation actions
in federal court. 46 U.S.C. § 30505(a). “When a shipowner files
a federal limitation action, the limitation court stays all
related claims against the shipowner pending in any forum and
requires all claimants to timely assert their claims in the
limitation court.” Magnolia Marine Transport Co., Inc. v.
-2-
Civil Procedure, she is entitled to relief from the stay order
arising from the limitation of liability proceeding because she has
filed an appropriate stipulation (#53).
Texaco, Inc. v. Williams,
47 F.3d 765, 768 (5th Cir. 1995)(“The case law is clear that if all
claimants
stipulate
that
the
federal
court
has
exclusive
jurisdiction over the limitations issues and the claimants will not
seek to enforce a greater damage award than the limitation fund,
the claimants may proceed outside of the limitation action.”),
Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992).
Usually when a shipowner invokes the Limitation Act, 46 U.S.C. §
30501, et seq., all the claims arising out of the incident in
dispute will be adjudicated by the federal district court. In re
Eckstein Marine Service, LLC, Civ. A. No. H-10-0156, 2010 WL
518245, *1 (S.D. Tex. Feb. 3, 2010), citing Texaco, Inc. v.
Williams, 47 F.3d 765, 767 (5th Cir. 1995). Moreover under
Section 185 of the Limitation Act, once the shipowner satisfies
the requirements for filing a petition and depositing security in
the amount of the value of the vessel and its freight, “all
claims and proceedings against the owner with respect to the
matter in question shall cease.” See also Rule F (3)(“On
application of the plaintiff, the court shall enjoin the further
prosecution of any action or proceeding against the plaintiff or
the plaintiff’s property with respect to any claim subject to
limitation in the action.”). Under one of the exceptions to this
rule, the “single claimant exception,” if just a single claim has
been filed and there is no suggestion of the possibility of
another claim, the district court must dissolve its injunction to
permit the single claimant to pursue a separate action and a jury
trial in state court. Id., citing In re Complaint of Ross Island
Sand & Gravel, 226 F.3d 1015, 1017 (5th Cir. 2000), quoting
Newton v. Shipman, 718 F.2d 959, 962 (9th Cir. 1983). The other
exception is where the total claims of all claimants do not
exceed the value of the limitation fund (i.e., the value of the
vessel and the pending freight). Lake Tankers Corp. v. Henn, 354
U.S. 147 (1957); Linton v. Great Lakes Dredge & Dock Co., 964
F.2d 1480 (5th Cir. 1992). If either exception applies, the
state court action may proceed provided that the absolute right
of the shipowner to limit its liability is protected by
stipulation by the claimant(s). Odeco, 74 F.3d at 674.
-3-
cert. denied, 516 U.S. 907 (1995); Complaint of Port Arthur Towing
Co. on Behalf of M/V Miss Carolyn, 42 F.3d 312, 316 (1995); Odeco
Oil & Gas Co. v. Bonnette, 4 F.3d 401, 404 (5th Cir. 1993)(holding
that the federal limitation court “must accede” to claimants’
choice
of
Plaintiff
forum
if
maintains
they
that
file
her
an
appropriate
stipulation
therefore the stay must be lifted.
is
stipulation).
undisputed
and
See Lewis v. Lewis & Clark
Marine, Inc., 531 U.S. 438, 454 (2001)(where a district court
“satisfies itself that a vessel owner’s right to seek limitation
will be protected, the decision to dissolve the injunction is well
within the court’s discretion.”).
Moreover, argues Plaintiff, since the Court no longer has
diversity
jurisdiction
under
28
U.S.C.
§
1332(a),
remand
is
mandatory under 28 U.S.C. § 1447(c).3
Plaintiff observes that admiralty and maritime claims do not
arise under federal law (the Constitution, treaties or laws of the
United
States)
for
purposes
of
federal
question
removal
jurisdiction. Tennessee Gas Pipeline v. Houston Cas. Inc., 87 F.3d
150, 153 (5th Cir. 1996)(citing Romero v. Int’l Term. Oper. Co., 358
3
Section 1447(c) states in relevant part,
A motion to remand on the basis of any defect other
than lack of subject matter jurisdiction must be made
within 30 days after the filing of the notice of
removal under section 1446(a). If at any time before
final judgment it appears that the district court lacks
subject matter jurisdiction, the case shall be
remanded.
-4-
U.S. 354 (1959)).4
Therefore admiralty claims are removable only
where original jurisdiction is based upon something other than
admiralty, e.g., diversity of citizenship, as here, and removal can
only be perfected by non-forum defendants.
Id.; In re Dutile, 935
F.2d 61, 63 (5th Cir. 1991); Morris v. TE Marine Corp., 344 F.3d
439, 444 (5th Cir. 2003); Hufnagel v. Omega Serv. Indus., Inc., 182
F.3d 340, 348 n.4 (5th Cir. 1999).5
4
After the removal, Plaintiff conceded that her claims had
to be brought under the Longshore and Harbor Workers’
Compensation Act. If she had asserted her claims against her
husband’s employer under that statute in state court, the Court
would point out that as a matter of law the Longshore and Harbor
Workers’ Compensation Act does not create federal subject matter
jurisdiction supporting removal. Riley v. F.A. Richard &
Associates, Inc., 46 Fed. Appx. 732, No. 01-60337, 1001 WL
1973771 *3 (5th Cir. Aug. 1, 2002), citing Aaron v. Nat’l Fire
Ins. Co. of Pittsburgh, 876 F.2d 1157, 1161, 1164-66 (5th Cir.
1989), and Garcia v. Amfels, Inc., 254 F.3d 585, 588 (5th Cir.
2001).
5
Plaintiff contends that the federal district court’s
original jurisdiction does not change this rule because under 28
U.S.C. § 1333(1), the saving to suitors clause, a plaintiff may
elect to bring admiralty and maritime claims in state rather than
federal courts. § 1333(1)(“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 otherwise entitled.” Under the saving to suitors clause,
admiralty and maritime plaintiffs have the right to sue in state
court and the right to a jury trial and common law remedies.
Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 443-45 (2001);
Odeco Oil & Gas Co. v. Bonnette, 74 F.3d 671, 674 (5th Cir.
1996), cert. denied, 519 U.S. 822 (1996).
There is a recognized inherent tension between the saving to
suitors clause and the Limitation Act, which provides that a
shipowner to limit its liability for injury or damage done
“without the privity or knowledge of owner” to the “value of the
vessel and pending freight.” 46 U.S.C. § 3503(a), (b). Under
the Limitation Act, 46 U.S.C. § 30511(c), “When an action has
-5-
Plaintiff chose to file her claims in state court, and
therefore, she insists, this Court’s admiralty jurisdiction, by
itself,
could
not
provide
this
Court
with
jurisdiction over any part of this litigation.
removal
was
destroyed.
claim
under
diversity
jurisdiction,6
which
subject
matter
The only basis for
has
since
been
Only Orion Marine Group, Inc.’s (“Orion Marine’s”)
the
Limitation
Act
(what
was
consolidation) is properly before this Court.
H-11-2042
before
Thus this Court
been brought under this section” and the shipowner has created a
limitation fund in the amount equal to the value of the
shipowner’s interest in the vessel and pending freight, “all
claims and proceedings against the owner related to the matter in
question shall cease” while the federal court determines whether
the shipowner has a right to limited liability. A claimant has
no right to a jury trial in a limitation of liability action.
Lewis, 531 U.S. at 448. Only when one of the two exceptions to
an exclusive federal forum under the Limitation Act applies and a
claimant asks the federal court to lift the stay and allow it to
proceed in state court, with a jury trial, under the saving to
suitors clause may the federal district court permit the state
court action to go forward. As noted, there are two
circumstances in which a limitation of liability action may be
stayed to allow a claimant his right to pursue a common law
remedies under the saving to suitors clause: (1) the claims
total less that the value of the vessel or (2) if the claimants
stipulate that the federal court has exclusive jurisdiction over
the limitation of liability proceeding and that they will not
seek to enforce a greater damage award until the limitation
action has been heard by the federal court. Lake Tankers v.
Henn, 354 U.S. 147, 151-53 (1957); Magnolia Marine Transport Co.
v. Laplace Towing Corp., 964 F.2d 1571, 1575-76 (5th Cir. 1992);
Odeco Oil and Gas Co., Drilling Div. v. Bonnette, 4 F.3d 401, 404
(5th Cir. 1993).
6
The Notice of Removal does not mention federal question
jurisdiction, which, as noted, the Longshore harbor and Workers’
Compensation Act does not create.
-6-
should
lift
the
limitation
stay
and
remand
her
underlying
negligence case back to state court for trial on the merits.
F. Miller Construction, LLC, Orion Marine Group, Inc., and Orion
Construction, L.P.’s Memorandum in Opposition (#55)
Defendants/Complainants
F.
Miller
Construction,
LLC
(“F.
Miller”) and Orion Marine and Orion Construction (collectively,
“Orion”) argue that remand is not available because none of the
claims presently before the Court was ever filed in the state court
action brought by Plaintiff.7
Instead that state court suit
contained only state law claims of gross negligence against F.
Miller and Orion Marine, specifically claims for damages under
Article 16, Section 16 of the Texas Constitution and Section
408.001 of the Texas Labor Code and Section 41.001 of the Texas
Civil Practices and Remedies Code; she asserted ordinary negligence
against Johnson Brothers, LLC (“Johnson”).
The Original Petition
(#1-3) stated only that the Decedent was working as part of a
construction crew on Caminada Bay Bridge Project near Grand Isle,
Louisiana, as part of a joint venture involving Orion, F. Miller,
and Johnson, when a support device hanging from a crane fell and
fatally struck Agustin Gutierrez on the head.
7
All currently pending claims, including the maritime
claims, were filed by Plaintiff for the first time in federal
court, after the removal, when Plaintiff initially invoked
federal maritime jurisdiction, Defendants maintain.
-7-
Defendants maintain that Plaintiff joined invalid, wrongful,
and inappropriate state-law claims against F. Miller and Orion
Maritime in order to invoke a remedy similar to that allowed in
Garcia v. Total Oilfield Services, Inc., 703 S.W. 2d 411 (Tex.
App.--Amarillo 1986)(Texas wrongful death statute allowed survivors
to bring action in Texas under Texas law when deceased’s death
occurred in foreign state [in that case, Oklahoma] regardless of
the law of that foreign state; holding Texas defendants responsible
for punitive damages under Texas law even though the claim should
have been subject to Oklahoma employer immunity). Joined by Orion,
Johnson then properly removed the suit, pursuant to diversity
jurisdiction, on the grounds that the asserted state-law claims
were barred by the Longshore and Harbor Workers’ Compensation Act,
which eliminated any state-law remedy for construction workers
killed while building bridges on navigable waters.
Anaya v.
Traylor Bros., Inc, 478 F.3d 251 (5th Cir. 2007)(holding that claims
for benefits made by the estate of a construction worker who, while
constructing a bridge, died from injuries sustained on a barge in
navigable waters, where he regularly worked, are covered by the
Longshore and Harbor Workers’ Compensation Act, which prohibits
gross negligence claims for exemplary damages8), cert. denied, 552
8
In contrast to the Longshore and Harbor Workers’
Compensation Act, which prohibits recovery of exemplary damages,
under the Texas Workers’ Compensation Act, Texas Labor Code Ann.
§ 408.001(b), an injured worker’s beneficiaries may file for
exemplary damages. Anaya, 478 F.3d at 253-54. Nevertheless the
-8-
U.S. 814 (2007); 33 U.S.C. § 904, et seq.
Furthermore there is
currently no dispute that removal on diversity grounds was proper
at the time the Notice of Removal was filed.9
Because under 28
U.S.C. § 1447(c), “a motion to remand the case on the basis of any
defect other than lack of subject matter jurisdiction must be made
within thirty days after the filing of the notice of removal under
§ 1446(a), Plaintiff had until June 24, 2011 to file a motion to
Texas statute does not apply to “a person covered by a method of
compensation established under federal law.” Tex. Labor Code
Ann. § 406.091(a)(2). Thus Defendants argue that because the
Decedent was covered by the Longshore and Harbor Workers’
Compensation Act, he could not bring suit under the Texas Act.
The Court notes that 33 U.S.C. §§ 904 and 905(a) of the
Longshore and Harbor Workers’ Compensation Act provide maritime
workers with an exclusive no-fault remedy against their employers
for work-related injuries, and under § 905(b), with an exclusive
cause of action against a vessel and its owner for injuries
caused by their negligence. Section 905(b) specifically grants
workers covered under it an in rem claim for negligence of a
vessel under 33 U.S.C. § 905(b). “The term “vessel” . . .
includes the vessel’s owner, owner pro hac vice, agent, operator,
charterer, master, officer or crew member. Randall v, Chevron
U.S.A., Inc., 13 F.3d 888, 895 (5th Cir. 1994)(citing Scindia
Steam Navigation Co.. v. De Loss Santos, 451 U.S. 156, 165
(1981)), overruled on other grounds, Bienvenu v. Texaco, Inc.,
164 F.3d 901 (5th Cir. 1999); Davila v. Erickson & Jensen Seafood
Packers, Misc. No. C-12-357, 2012 WL 4514666, *4 (S.D. Tex. Sept.
11, 2012).
9
The Notice of Removal (#1 in H-11-1996) identified Maria
Gutierrez as a resident and citizen of Texas; F. Miller as a
resident and citizen of Texas and Louisiana; Orion Marine as a
resident and citizen of Texas and Delaware; and Johnson as a
resident and citizen of Minnesota and Florida. Thus Plaintiff
and F. Miller and Orion Marine are all citizens of Texas and not
diverse. On removing the suit Johnson argued that Orion and F.
Miller were improperly joined because the state-law gross
negligence claims against them were barred by the Longshore and
Harbor Workers’ Compensation Act, which provided Plaintiff’s
exclusive remedy, as interpreted by Anaya.
-9-
remand on the grounds that Orion was not improperly joined, but she
failed to do so.
Subsequently on September 23, 2011, after discovery, Plaintiff
stipulated that there was no valid basis for the claims against
Orion and F. Miller under state law, consented to dismissal of
those claims (#19, 49), and with leave of Court on October 18, 2011
filed an amended complaint (#28) asserting her negligence claims
under federal maritime law and 28 U.S.C. 1333(1). That election of
a federal forum and maritime law was made more than six months
before she filed her motion to remand and, as discussed below,
after her original claim in limitation was filed in federal court
in the amended complaint.
Under the doctrine of judicial estoppel, where a party takes
a
certain
position
in
a
legal
proceeding
and
succeeds
in
maintaining that position, she may not assume a contrary position
because her interests have changed, especially if doing so would
prejudice the other party who acquiesced in the position she
formerly took.
New Hampshire v. Maine, 532 U.S. 742, 749 (2001),
citing Davis v. Wakelee, 156 U.S. 680. 689 (1895); Baris v.
Sulpicio Lines, Inc., 932 F.2d 1540, 1543 (5th Cir. 1991)(where a
plaintiff designated its claim was in admiralty under 9(h) and
plaintiff’s motion to remand was untimely, i.e., not filed within
thirty days as required by section 1447(c), plaintiff waived the
opportunity to challenge removal even when it was improper because
-10-
defendant lacked authority to remove a maritime case, a procedural
defect).
Here, insist Defendants, Plaintiff’s motion to remand is
untimely, and only after the case was removed to federal court did
she amend and assert the claims against Orion, Pilco and Johnson
under maritime law, providing the Court with original jurisdiction
over these claims.
See also In re Digicon Marine, Inc., 966 F.2d
158, 159 (5th Cir. 1992), in which the plaintiffs brought suit under
the Jones Act and general maritime common law in a Texas state
court.
Defendant removed it, and plaintiffs filed an untimely
motion to remand on the grounds that their claims arose under
maritime law, which does not authorize removal jurisdiction. After
the district court denied the motion to remand and a motion for
reconsideration based on the untimeliness of the motion to remand,
the Fifth Circuit held that “because the plaintiffs’ motion for
remand was untimely, the district court had no discretion to remand
on the basis of improper removal.”
966 F.2d at 160, quoting In re
Shell Oil II, 932 F.2d 1323, 1528 (5th Cir. 1991).
The Court observes that in Williams v. AC Spark Plugs Div. of
Gen. Motors Corp., 985 F.2d 783 (5th Cir. 1993), the appellate court
concluded
that
the
30-day
restriction
in
section
1447(c)
is
absolute, even when the plaintiff argues that the cause of action
was not removable.
Summing up the rule in Digicon and Baris, and
their progeny, the Fifth Circuit panel opined,
-11-
If a plaintiff initially could have filed his action in
federal court, yet chose to file in state court, even if
a statutory provision prohibits the defendant from
removing the action and the defendant removes despite
such statutory proscription against such removal, the
plaintiff must object to the improper removal within
thirty days after removal, or he waives his objection.
Only in the case of a lack of subject matter
jurisdiction--such as no diversity of citizenship, or the
absence of a federal question if that were the sole
ground for removal--may the plaintiff object to removal
after the thirty-day limit.
Any other objection is
procedural and waived after thirty days.
Id. at 787.
This rule, that under § 1447(c) an untimely motion to
remand must be denied because “a defect in removal procedure
‘includes within its reach the bringing of an action not within the
court’s removal jurisdiction, but that could have been brought
originally
in
that
court,’”10
has
been
frequently
reiterated by courts in the Fifth Circuit.
applied
or
See, e.g., Patin v.
Allied Signal, Inc., 77 F.3d 782, 786 (5th Cir. 1996); Ragas v.
Tennessee Gas Pipeline Co., 136 F.3d 455, 457-58 (5th Cir. 1998);
Kovacs v. Parker Drilling Co., No. Civ. A. 99-2945, 1999 WL
1138504, *1-2 (E.D. La. Dec. 9, 1999)(citing Spark Plugs, where
plaintiff could have initially filed his Jones Act complaint in
federal court but chose state court, the federal court denied
remand of case removed based on fraudulent Jones Act seaman status
because motion to remand was untimely); Moore v. Universal Sodexho
(USA), Inc., Civ. A. No. J-08-3633, 2009 WL 1748888, *1 (S.D. Tex.
June 19, 2009); Crawford v. Charles Schwab & Co., Civ. A. No. 3:0910
Digicon, 966 F.2d at 160, quoting Baris, 932 F.2d at 1545.
-12-
CV-0666-G, 2009 WL 3573658, *3 nn. 3-4 (N.D. Tex. Oct. 30 2009);
Roithner v. Liberty Ins. Corp., No. 4:11CV736, 2012 WL 441195, *2
(E.D. Tex. Jan 20, 2012).
Second, other reasons Defendants claim for denying the motion
to lift stay are that this is a multiple claimant situation (not a
single
complainant
suit
as
Plaintiff
alleges),
Plaintiff’s
stipulation is insufficient to protect the shipowners, and the
total amount of the claims exceeds the amount in the limitation
fund.
On June 1, 2011, Orion filed a complaint for exoneration
from or limitation of liability, H-11-2042. In that pleading Orion
sought protection for all the Orion defendants, but raised the
issue of vessel status and the limitation fund amount.
If BARGE
STAR 303 is a “vessel”, Orion asserts that it had a value of
$1,150,000.00 at the time of the accident.
The parties dispute
whether the crane, which was temporarily aboard the barge and
valued at $1,100,000, and/or the pile driving equipment, valued at
$85,000, should go into the limitation fund.
#1, Ex. 1.
The
amount of the final limitation fund has to be determined under
Supplemental Rule F(7) for admiralty and maritime claims.
Court has approved security in the amount of $2,345,000.11
11
The
#5 in
Under 46 U.S.C. § 30511(b)(1), to obtain the benefits of
the Limitation Act, the shipowner must file with the district
court security in the amount of its interest in the ship, as
approved by the Court. That amount creates the limitation fund
for the benefit of claimants.
-13-
H-11-2042.
H-11-2042 was consolidated with H-11-1996 on July 6,
2011 (#13 in H-11-1996).
As an example of multiple claimants here, in addition to
Plaintiff’s claims against Orion, Johnson (Orion’s co-defendant)
filed a cross-claim for contribution and indemnity (#24) against F.
Miller on September 20, 2011.
Plaintiff’s First Amended Complaint
(#28), filed on October 18, 2011, although including both case
numbers, was presumably filed in the limitation action because it
included claims against Orion. All claims against Orion except the
limitation action had been stayed.
Plaintiff’s First Amended
Complaint does not, in the alternative, seek remand to state court,
request a jury, or object to the Court’s jurisdiction. Furthermore
all the parties answered it, and none contested the federal
maritime
jurisdiction.
Moreover
after
discovery,
Plaintiff
voluntarily dismissed her claims against Johnson (#46, 47), but
without prejudice, and Johnson dismissed its indemnity limitation
claim against F. Miller also without prejudice (#48, 50).
Because
the
can
dismissals
were
without
prejudice,
Johnson
not
claims
joined
in
be
“rekindled.”
Furthermore
stipulation.12
Defendants argue that the Court should not lift the
12
has
the
the
This Court agrees with Defendants that all claimants,
including those seeking indemnity, contribution and attorneys’
fees, must sign a stipulation protecting the shipowner’s rights
under the Limitation Act before the federal court may lift the
stay and allow the claimants to proceed in state court. Odeco
Oil & Gas Co. v. Bonnette, 74 F.3d 671, 675 (5th Cir. 1996)
(parties seeking indemnity and contribution are “claimants” under
-14-
stay because of this potential indemnity claim. Plaintiff has also
sued Pileco (#28, ¶¶ 21-24).
Pileco, which has also not joined in
the stipulation, also has a potential cross-claim against F.
Miller/Orion; Pileco disclosed as of April 12, 2012 that it
intended to seek contribution and indemnity damages from F. Miller
and Orion.
for
#55, Ex. A, p. 4 (“At this time Pileco makes no claim
damages,
indemnity
other
from
F.
than
its
entitlement
Miller/Orion.
[emphasis
to
in
contribution
the
and
original].”
Because there are multiple potential claims, the stay should not be
lifted.
“As long as there is a potential set of circumstances in
which a shipowner could be held liable in excess of the limitation
fund, the reasonable prospect of claims for indemnification should
constitute
a
multiple
claimant
situation
necessitating
a
the Limitation Act), cert. denied, 519 U.S. 822 (1996).
“Codefendant cross-claims for indemnity and contribution are
liabilities that must be addressed in order to protect the
shipowner’s rights under the Limitation Act.” Id. at 675, citing
Gorman v. Cerasia, 2 F.3d 519, 526-27 (3d Cir. 1993)(“all courts
have recognized that a multiple claimant situation exists where a
third party seeking indemnity or contribution also requests
attorneys’ fees and costs associated with its claims”). Whether
a stipulation adequately protects a party’s rights under the
Limitation Act is a question of law for the court to determine.
Id. at 674. All claimants must sign the stipulation protecting
the shipowner’s rights under the Limitation Act in order to
proceed in state court. Id. at 675. “The shipowner’s right to
limitation takes precedence over the claimant’s right to proceed
in the forum of their [sic] choice.” Id.
-15-
concursus.” Complaint of Dammers & Vanderheide & Scheepvaart Maats
Christina B.V., 836 F.2d 750, 758 (2d Cir. 1988).13
In sum, the Court cannot properly remand Plaintiff’s claims to
state court because none of them was originally asserted in state
court.
In her Amended Complaint Plaintiff claims that this Court
has subject matter jurisdiction over her claims against Orion and
Pileco in admiralty under 28 U.S.C. § 1333(1).
Kermarec
v.
Compagnie
General
#28, ¶2.
Transatlantique,
358
See also
U.S.
625
(1959)(where death occurred on navigable waters, it is within the
reach of admiralty jurisdiction, and liability for negligence is
based on a ship owner’s failure to use reasonable care in light of
the circumstances to those lawfully on board the vessel), and the
Admiralty Extension Act, 46 U.S.C. § 30101(a)(“The admiralty and
maritime jurisdiction of the United States extends to and includes
cases of injury or damage, to person or property, caused by a
vessel on navigable waters, even though the injury or damage is
13
The Court would point out that other courts have held that
claims for contribution and indemnity create a multiple claimant
case In re Mister Wayne, 729 F. Supp. 1124 (E.D. La. 1989). But
in Dammers & Vanderheide the Court found that the potential for a
multiple claimant situation could be cured by a sufficient
stipulation that protects the shipowner from liability for any
amount larger that the value of the vessel, including a waiver of
any claim of res judicata related to the issue of limited
liability based on any judgment obtained in state court and
agreeing that the shipowner has the right to litigate all issues
relating to the limitation in the limitation proceeding. 836
F.2d at 756, 758. See In re Illinois Marine Towing, 498 F.3d
645, 647 (7th Cir. 2007).
-16-
done or consummated on land.”); Affidavit of David Kedzierski, #16,
Ex. 1.
Furthermore, Plaintiff’s stipulation, which is not signed by
Pileco
or
Defendants.
Johnson,
The
is
deficient
parties
disagree
appropriate limitation fund.
for
other
about
the
reasons,
amount
argue
of
the
The First Amended Petition seeks
$10,000,0000, which is more than the highest value of the fund
before one adds the indemnity claims of Pileco and Johnson.
Defendants maintain that this is an inadequate, multiple claimant
case.
Plaintiff’s stipulation authorizes her to collect and seize
assets in a state court judgment in the amount of $2,235,000
without the federal court adjudication of the proper amount for the
limitation fund.
The amount of the fund is a federal court
procedural matter which should be determined by the Court either
before or during trial, pursuant to the supplemental rules for
admiralty and maritime cases.
Plaintiff’s Reply (#57)
Reiterating that the single claimant rule applies to the
limitation action because the only claimant remaining is Plaintiff
and because the deadline for filing a claim in the limitation
proceeding was August 15, 2011, insuring there are not more
“potential
claims,”
Plaintiff
insists
that
adequately protects Orion’s limitation rights.
her
stipulation
Plaintiff has
stipulated that if there is a judgment or recovery in state court
-17-
in excess of the amount established as the proper limitation fund,
whether against Orion or any liable parties who make cross claims
or claims over and against Orion, she will not seek to enforce the
excess judgment or recovery.
She has simply reserved her right in
the limitation action to challenge the value of the limitations
fund, if and when necessary.
Court’s Decision
The Court does not have to reach the issue of the adequacy of
the stipulation because Plaintiff fails to address the fact that
Johnson properly removed this action on diversity jurisdiction on
the grounds that Orion and F. Miller were improperly joined.14
Plaintiff’s gross negligence claims seeking exemplary damages for
wrongful death against them were barred by the Longshore and Harbor
Workers’ Compensation Act, her exclusive remedy under for the
alleged wrongful death of her husband.
Anaya, 478 F.3d 251.
Thus
the case was properly removed on diversity jurisdiction. Therefore
the only viable claim that proceeded into federal court was the
simple negligence claim against Johnson under the federal statute.
14
“[U]nder the fraudulent joinder doctrine, federal removal
jurisdiction premised on diversity cannot be defeated by the
presence of an improperly-joined nondiverse and/or in-state
defendant.” Salazar v. Allstate Texas Lloyd’s, Inc., 455 F.3d
571, 5 (5th Cir. 2006), citing Smallwood v. Ill. Cent. R.R., 385
F.3d 568 (5th Cir. 2004)(en banc), cert. denied, 544 U.S. 991
(2005).”’[T]he test for fraudulent joinder is whether the
defendant has demonstrated that there is no possibility of
recovery by the plaintiff against an in-state [or nondiverse]
defendant.’” Id., citing id. at 573.
-18-
Moreover the Court agrees with Defendants that Plaintiff did not
file a timely motion to remand contesting the fraudulent joinder
theory and thus waived her right to do so.
First
Amended
Complaint,
filed
in
federal
Because Plaintiff’s
court,
added
the
nondiverse Orion and Pileco, but also conceded that her state-law
claims for gross negligence seeking exemplary damages were barred
by the Longshore and Harbor Workers’ Compensation Act and asserted
new maritime claims against all Defendants, providing the Court
with original jurisdiction over them. As argued by Defendants, the
Court cannot “remand” these claims because they were never filed in
the state court action.
Thus all pending claims remain in this
Court, which can resolve the issue of the proper amount of the
limitation fund.
Accordingly, the Court
ORDERS that Plaintiff’s motion to lift limitation stay and
remand is DENIED.
SIGNED at Houston, Texas, this
30th
day of October , 2012.
___________________________
MELINDA HARMON
UNITED STATES DISTRICT JUDGE
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