United States District Court, D. New Jersey
IN THE MATTER OF THE COMPLAINT OF MISS BELMAR II FISHING INC., AS OWNER OF THE P/V ROYAL MISS BELMAR, FOR EXONERATION FROM OR LIMITATION OF LIABILITY
OPINION AND ORDER DENYING PROPOSED CLAIMANTS' MOTION TO SET ASIDE DEFAULT AND PERMIT THE FILING OF ANSWERS AND CLAIMS
LOIS H. GOODMAN, Magistrate Judge.
This matter comes before the Court by way of a motion filed by Proposed Claimants Garrick Mathurin, Tanna Mathurin, Ronaldo Mathurin, and Selah Mathurin (collectively "Proposed Claimants") to Set Aside Default and Permit the Late Filing of Answers and Claims. [Docket Entry No. 142]. This Motion is opposed by Plaintiffs in Limitation Miss Belmar II Fishing Inc. ("the Belmar Plaintiff") [Docket Entry No. 147], and Aquatic Management LLC (d/b/a V.I. Seatrans) ("the Aquatic Plaintiff") [Docket Entry No. 146] (collectively "Plaintiffs" or "Plaintiffs in Limitation"). The Court has considered the moving and responding papers without oral argument pursuant to Local Civil Rule 78.1. For the reasons set forth below, Proposed Claimants' Motion to Set Aside Default and Permit the Late Filing of Answers and Claims is DENIED.
This admiralty action arises out of the grounding of a ferry that occurred in the Virgin Islands in July of 2011. After the grounding, two companies, Plaintiffs in Limitation, filed two separate limitation of liability proceedings. These actions were consolidated by the Order of the Honorable Mary L. Cooper, U.S.D.J., on October 17, 2011. [Docket Entry No. 3]. On October 25, 2011, the Court issued a Monition and Order requiring that notice be given and that any claims against Plaintiffs be filed by December 9, 2011. [Docket Entry Nos. 5, 6]. In accordance with these Orders and Supplemental Admiralty Rule F(4), notice of this proceeding and the deadline by which potential claimants needed to file claims were published for four consecutive weeks in the Virgin Islands Daily News. Petitioner Miss Belmar II Fishing Inc.'s Memorandum of Law in Opposition to Proposed Claimaints' Motion to Set Aside Default and Permit the Filing of Answers and Claims ("Belmar Opp.") at 2 [Docket Entry No. 147]; Declaration of Alton Evans, Esq., in Opposition to Proposed Claimants' Motion to Set Aside Default and Permit the Filing of Answers and Claims ("Evans Decl.") ¶ ¶ 3-4 and Exs. A and B thereto [Docket Entry No. 147-1]. During this same period, notice was also electronically published on the online news source, V.I. Daily Source. Belmar Opp. at 2; Evans Decl. ¶ 5 and Ex. B. Additionally, as a result of the notice, the Virgin Island Daily News published an article discussing the lawsuit and further informing potential claimants of the filing deadline. Belmar Opp. at 2; Evans Decl. ¶ 6 and Ex. C.
On August 2, 2012, Plaintiffs in Limitation filed a motion to preclude any new claimants from entering the suit. [Docket Entry No. 38]. This motion was opposed by Jorden N. Pedersen, Esq., counsel for Proposed Claimants here, who also filed a cross motion for leave to file a late claim on behalf of Ira Galloway. [Docket Entry No. 40, 42]. These motions were ultimately resolved on September 17, 2012, by way of a consent order permitting Galloway to file his claim and precluding the filing of additional, untimely claims. [Docket Entry No. 44]. The Consent Order also listed the 61 claimants (the "Claimants") who had timely filed, and further ordered the default of any persons who had not yet filed a claim, thereby barring any such claims. [Docket Entry No. 44].
The Initial Pretrial Scheduling Order provided for the exchange of Initial Disclosures and limited any further discovery to that agreed upon to facilitate settlement, in light of the parties' stated intention to mediate the claims. [Docket Entry No. 23]. The Initial Disclosures were served in February and March 2012, and included authorizations for the release of medical records for Claimants, as well as damages information. Evans Decl. ¶ 10. Those medical records were then reviewed and analyzed by Plaintiffs in Limitation. Evans Decl. ¶ 11.
A large scale mediation was conducted on July 9-10, 2012, pursuant to which numerous claims were settled. Belmar Opp. at 3, 5; Evans Decl. ¶ 9; Pedersen Decl. ¶ 5.
By Order dated December 17, 2012, the parties were required to complete any Independent Medical Examinations by March 29, 2013. [Docket Entry 82]. At the expense of their underwriters, Plaintiffs in Limitation then arranged for Independent Medical Examinations of the non-settling claimants. Belmar Opp. at 4; Aquatic Management LLC's Opposition to Motion to Set Aside Default ("Aquatic Opp.") at 2; Declaration of John A. V. Nicoletti, Esq. in Opposition to Proposed Claimants' Motion to Set Aside Default and Permit the Filing of Answer and Claims ("Nicoletti Decl.") ¶ 6 [Docket Entry No. 147-5]. To facilitate these examinations, Plaintiffs first sent two doctors to the Virgin Islands for three days in March 2013; the remaining examinations took place on a single day in April 2013 in Florida. Nicoletti Decl. ¶ 7; Belmar Opp. at 4; Aquatic Opp. at 2. As a result of the mediation and the parties' subsequent efforts, approximately 45 claimants had settled with Plaintiffs in Limitation by the fall of 2013 [ see Docket Entry Nos. 47-79, 83-86, 97, 108-09, 116, 130-33], leaving only approximately 17 claimants remaining.
On October 11, 2013, over a year after the Court entered the order of default precluding the addition of new claimants to this litigation, Proposed Claimants filed the pending Motion. [Docket Entry No. 142]. Plaintiffs in Limitation opposed the Motion. [Docket Entry Nos. 146, 147].
II. THE LEGAL STANDARD
The Limitation of Shipowners' Liability Act ("the Limitation Act"), codified as amended in 46 U.S.C. § 30505, "has been part of the fabric of our law since 1851." Exxon Shipping Co. v. Baker, 554 U.S. 471, 517 (2008). The principle underpinning of the Limitation Act is even older and has been a steady fixture in European admiralty law "from time immemorial." Providence & New York S.S. Co. v. Hill Mfg. Co., 109 U.S. 578, 593-94 (1883). The Limitation Act is designed "to limit the liability of vessel owners to their interests in the adventure and thus to encourage shipbuildig [sic] and to induce capitalists to invest money in this branch of the industry." The British Transp. Comm'n v. United States, 354 U.S. 129, 133 (1957).
The Limitation Act plainly allows a vessel owner to limit its liability to the value of the vessel for any claim arising from a maritime incident that occurred without the privity or knowledge of the owner.' 46 U.S.C. § 30505. An owner may bring a limitation action in federal district court within six months of receiving written notice of a claim. Id. § 30511. The owner must deposit with the district court an amount (or an approved security) equal to the value of the vessel. Id. When the complaint and the deposit are submitted, all claims and proceedings against the owner related to the matter in question shall cease.' Id. The court then is directed to issue notice to all persons asserting claims against the vessel arising from the incident. Fed.R.Civ.P. Supp. R. F(4). The court may subsequently enter a default against any potential claimants who have not submitted timely filings. Those who do assert claims form a concursus that allows the district court to determine the liability of the owner to each individual in a single proceeding, constraining the total liability to the value of the vessel. See, e.g., Beiwswenger [ Enters. Corp. v. Carletta, 86 F.3d 1032] at 1036 [(11th Cir. 1996)].
Offshore of the Palm Beaches, Inc. v. Lynch, 741 F.3d 1251 (11th Cir. 2014)(footnote omitted).
Supplemental Admiralty Rule F(4) provides that, "[f]or cause shown, the court may enlarge the time within which claims may be filed." The Rule grants courts authority to permit the filing of untimely claims- i.e., those filed after a court enters an order of default. See, e.g., In re Trace Marine Inc., 114 F.Appx. 124, 126-27 (5th Cir. 2004) ("Rule F(4) allows a district court to permit a claimant in a limitation of liability proceeding to file a claim, nunc pro tunc, for good cause shown."). Although the Third Circuit has not addressed the issue, it is well established that courts consider three factors in deciding whether to allow late claimants to file untimely claims: (1) whether the proceeding is pending and undetermined; (2) whether granting the motion will adversely affect the rights of any party to the litigation; and (3) the claimant's proffered reason-the cause-for late filing. See id. ; Alter Barge Line, Inc. v. Consolidated Grain & Barge Co., 272 F.3d 396 (7th Cir. 2001); Jappinen v. Canada Steamship Lines, LTD, 417 F.2d 189 (6th Cir. 1969); 8 Edward V. ...