Limitation of liability petition dismissed as untimely when vessel owner sued in state court as a fictitious defendant more than six months before petition filed
June, 2006
By
Marilyn Raia
P.G. Charter Boats, Inc. v. Soles
2006 A.M.C. 410 (11th cir 2006)
On March 14, 2002, Soles, an employee of Quality Inspection Services [QIS] was injured aboard a spud barge, the NAVI, owned by P.G. Charter Boats, Inc. [P.G.] P.G.'s president and sole shareholder was Gazzier. Soles filed suit in Alabama state court against QIS, Gazzier and Gazzier Shipyard. The state court complaint also named three fictitious corporations as defendants. The complaint alleged causes of action for Jones Act negligence, general maritime negligence, unseaworthiness and maintenance and cure. Soles also alleged that he was injured aboard the NAVI and that the NAVI was owned, operated and/or controlled by the defendants.
Soles served the state court complaint on Gazzier on April 7, 2004. During discovery Soles learned that P.G. was the actual owner of the NAVI. On December 7, 2004, Soles moved to amend his complaint to name P.G. as a defendant. On May 7, 2005 P.G. filed a limitation of liability petition in the District Court for the District of Alabama naming Soles and QIS as defendants. Soles moved to dismiss the petition on timeliness grounds. The District Court granted the motion. P.G. appealed. The Eleventh Circuit affirmed.
The Limitation of Liability Act, 46 U.S.C. app. 183 (a) allows a vessel owner to limit its liability for a maritime accident to the value of the vessel and her pending freight. A petition for limitation of liability must be filed within six months of receipt of a written notice of claim. The issue on appeal was whether P.G. received written notice of a claim such as to trigger the six month period for filing a limitation of liability petition. That is, if the required written notice of claim was received when Soles served his state court complaint on Gazzier, then P.G.'s petition for limitation of liability was untimely. If, however, the required notice of claim occurred when the Soles amended his complaint to add P.G. as a defendant., then the petition for limitation of liability was timely.
The Limitation of Liability Act does not define what "written notice of claim" is. Most of the reported decisions address what information is required in the notice. Two tests have been developed to determine the sufficiency of the notice. Under one test, the notice is sufficient if it informs a vessel owner of an actual or potential claim which may exceed the value of the vessel and is subject to limitation. Under the second test, the notice is sufficient if the writing 1) demands a right or supposed right; 2) blames the vessel owner for the damage or loss and 3) calls on the vessel owner for anything due to the claimant.
P.G. did not argue that the state court complaint failed to provide sufficient information under either of the two tests. P.G. also did not argue that Gazzier was not authorized to receive the written notice on behalf of P.G. Instead, P.G. argued that it did not have notice that Soles was asserting a claim against P.G. because it was not a named defendant in the state court complaint until December 2004. Further, it argued that state court complaint named Gazzier and Gazzier Shipyards as the owners of the NAVI and therefore Soles sued the wrong party.
The District Court and the Eleventh Circuit found that the complaint was clear that Soles was suing the vessel owner and referred to all of the defendants as the vessel owner, operator and/or controller. They also found that the complaint was served on Grazzier who was the sole shareholder and president of the vessel owner, P.G. P.G. relied on two cases which the courts distinguished. The first case, In Re Complaint of Lady Jane, Inc. 818 F. Supp. 1470 (M.D. Fl 1992) was distinguished on the grounds that the claimant did not give notice that the pending claim was against the vessel owner. The second case, Billiot v. Dolphin Services, Inc. 225 F.3d 515 (5th cir 2000) was distinguished on the ground that the vessel involved in the injury was not properly identified in the claimant's complaint. Soles, on the other hand, did not misidentify the vessel on which he was injured and there was no dispute that he was asserting a claim against the vessel owner.