Opinion
CIV. NO. 99-1637 C/W, 99-1674 C/W, 00-0250.
April 3, 2000
MEMORANDUM AND ORDER
On May 25, 1999, International Marine Terminals Partnership ("IMT") and its underwriter National Terminals Insurance Company of Pittsburgh, PA ("National") commenced this maritime action against the M/V ELLIE, in rem, and her owner, Hillmore Maritime, Inc. ("Hillmore") and its operational manager, Byzantine Maritime Corp. ("BMC"), in personam, seeking unspecified damages for the M/V ELLIE's May 25, 1999 allision with IMT's bulk loading terminal at Mile 83 AHP on the Mississippi River near Myrtle Grove, Louisiana. On May 28, 1999, Hillmore timely filed a complaint for limitation of liability. Neither BMC nor its United States agent, Colonial Navigation Company, Inc. ("Colonial"), were included as petitioners in Hillmore's or any other limitation proceeding.
Rule F of the Supplemental Admiralty Rules of the Federal Rules of civil Procedure provides in pertinent part:
1. Time for Filing complaint; Security. Not later than six months after receipt of a claim in writing, any vessel owner may file a complain in the appropriate district, as provided in subdivision (9) of this rule, for limitation of liability pursuant to statute.
On June 2, 1999, I issued an order, approving Hillmore's certification of value, directing the issuance of notice to claimants, and restraining prosecution of claims. That order provides in pertinent part:
IT IS FURTHER ORDERED that the commencement and/or further prosecution of any action or proceeding against Petitioner [Hillmore], or any of its property, or any of [P]etitioner's underwriters, with respect to any claim for which Petitioner seeks exoneration from or limitation of liability, including any claim arising out of or connected in any way with any loss, damage, injury or destruction resulting from the casualty described in the Petition in Limitation be and the same is hereby stayed and restrained until the hearing [and] determination of this proceeding.
On December 21, 1999, IMT and National moved for leave to file third party claims against BMC and Colonial in the limitation proceeding. On January 19, 2000, Magistrate Africk denied that motion, stating that "[i]t would be inappropriate to file such a demand within the limitation proceeding pending before the United States District Court."
On January 26, 2000, IMT and National commenced a separate action against BMC and Colonial, seeking damages for the May 25, 1999 allision. All cases have been consolidated.
MOTION
Hillmore moves for this Court to modify its June 2, 1999 order and restrain the-prosecution of IMT and National's claims against BMC and Colonial. Hillmore proposes the following modification:
IT IS FURTHER ORDERED that the commencement and/or further prosecution of any action or proceeding against petitioner, or any of its property, or any of petitioner's underwriters, or Byzantine Maritime Corporation, or Colonial Navigation Co., Inc., with respect to any claim for which Petitioner seeks exoneration from or limitation of liability, including any claim arising out of or connected in any way with any loss, damage, injury or destruction resulting from the casualty described in the Petition for Limitation be and the same is hereby stayed and restrained until the hearing and determination of this proceeding.
IMT and National oppose Hillmore's motion, arguing that neither BMC nor Colonial are parties entitled to a stay pursuant to the Limitation of Liability Act.
DISCUSSION
Although the Limitation of Liability Act, 46 U.S.C. § 181, et seq., is designed "to achieve a complete and just disposition of a many-cornered controversy,'" the Limitation of Liability Act is very specific about applying only to ship owners. The court-created exceptions are extremely narrow and have been created for situations directly affecting the ship owner.
In re Shell, 780 F. Supp. 1086, 1091 (5th Cir. 1991) (quotingHartford Accident Indemnity Co. v. Southern Pacific Co., 273 U.S.C. § 207, 216, 47 S.Ct. 357, 359, 71 L.Ed. 612 (1927)).
In re Waterman Steamship Corp., 1993 A.M.C. 1501 (E.D.La. 1992) (citing Guillot v. Cenac Towing Co., 366 F.2d 898 (5th cir. 1966) (extending protections to certain officers) and Maryland Cas. Co. v. Cushing, 347 U.S. 409, 74 S.Ct. 608, 98 L.Ed. 806 (1954) (extending protections to include vessel insurers)).
As I explained in In re Waterman Steamship Corp.,
The stay provisions of the Limitation of Liability Act apply explicitly to stays against ship owners only. The Fifth Circuit, in Zapata Haynie Corp. v. Arthur, held that "[t]hese benefits of the Act, however, are by their plain terms, conferred on ship owners only. . . . The Act provides for stays of ligation against ship owners not masters; . . . Supplemental Rules for Certain Admiralty and Maritime Claims, Rule F also permits enjoining proceedings against the owner, and makes no reference to enjoining proceedings against any other parties."
1993 A.M.C. 1501 (E.D.La. 1992).
Id. (citing 46 U.S.C. § 185 and quoting Zapata Haynie Corp. v. Arthur, 926 F.2d 484 (5th cir. 1991).
Here, Hillmore has made no showing that a vessel owner's disclosed agent is entitled to the benefits of the Limitation of Liability Act. Indeed, Hillmore could not. The Limitation of Liability Act explicitly applies only to ship owners. Absent some showing that BMC or Colonial fit within the parameters of one of the few court-created exceptions where the ship owner's interest is directly affected by prosecution of claims against the non-ship owner entities, I will not stray from the explicit language of the Act. BMC and Colonial are separate and distinct corporations from Hillmore and as such have independent liability for their own negligence, even if they were acting as managers or agents on Hillmore's behalf.
Neither BMC nor Colonial fit within one of the narrow court-created exceptions to the Act. The cases proffered by Hillmore in support of its motion simply do not apply to the facts of this case. In In re Complaint Shell Oil Co., 780 F. Supp. 1086 (E.D.La. 1991), I granted the ship owner's motion to expand a stay and enjoined prosecution of claims against shareholders of the ship owner. As I explained in that case, the shareholders of the ship owner are "`likely targets' by virtue of their relationship to the vessel as shareholders of its `owners'." Hillmore makes no argument that BMC or Colonial have any interest in the vessel at issue here. Indeed, in an affidavit attached to Hillmore's petition for exoneration from or limitation of liability, director of Hillmore, Francis Stafilopatis, averred that "[BMC] has no ownership interest, bareboat chartering interest, or any other interest in the M/V ELLIE except to serve as managers of said vessel."
In re Shell Oil Co., 780 F. Supp. 1086, 1092 (E.D.La. 1991).
Similarly, Hillmore's reliance on M/V MANDAN, 1991 A.M.C. 1340 (E.D.La. 1991) is misplaced. In that case, movants sought, prior to the expiration of the six month period for seeking limitation of liability, expansion of a stay to enjoin prosecution of claims against a managing agent with a contractual right to indemnification from the ship owner. In deciding to stay prosecution of claims against the managing agent and permit the managing agent to become a plaintiff in limitation prior to the expiration of the filing period, Judge Schwartz found that prosecution of claims against the managing agent would have a direct effect on the ship owner because the monies available could be threatened prior to the resolution of the limitation proceeding due to the indemnification agreement. Here, Hillmore fails to explain to the Court how the prosecution of claims against BMC and Colonial would directly affect Hillmore's interests. Hillmore makes no claim that any funds available would be threatened due to any contractual obligation between Hillmore and BMC or Colonial.
See M/V MANDAN, 1991 A.M.C. 1340.
Absent some showing of entitlement, I will not afford to BMC or Colonial the benefits provided by the Limitation of Liability Act to plaintiffs in limitation. Nor will I allow EMC, Colonial or Hillmore to circumvent the prescribed six month period for seeking limitation of liability.
Accordingly,
IT IS ORDERED that Hillmore's motion to modify the June 2, 1999 order restraining prosecution of claims is DENIED.
New Orleans, Louisiana, this 31st day of March, 2000.