United States District Court, D. New Jersey
IN THE MATTER OF COMPLAINT Of MARK TANGAS AND ANTHONY APPIO, AS OWNERS OR OWNERS PRO HAC VICE OF A 2007 34 FOOT HUSTKER VESSEL "PROFIT TAKER" FOR EXONERATION FROM OR LIMITATION OF LIABILITY, Petitioners.
MEMORANDUM AND ORDER
G. SHERIDAN, U.S.D.J.
matter comes before the Court on Claimant's Motion to
Vacate Petitioners' Motion for default judgment.
(See ECF No. 17). On February 8, 2018,
Petitioners' filed a complaint for exoneration from or
limitation of liability, pursuant to 46 U.S.C. §§
30501, et seq., involving admiralty and maritime claims. (ECF
No. 1). On April 12, 2018, the Court ordered that Notice to
all persons asserting claims or suits with respect to the
Complaint be issued, admonishing potential claimants to file
their respective claims with the Clerk of this Court, in
writing, and to serve on the attorneys for the petitioners a
copy on or before the 12th day of May, 2018. (ECF No. 7). On
June 25, 2018, counsel for petitioners informed the Court
that an attorney, who advised he was retained to represent
claimant Erica Kaplan, had contacted them and indicated he
was going to file a motion to permit late filing of a claim,
however, no motions or claims were filed. (ECF No. 9). On
August 8, 2018, this Court heard argument for the motion for
petitioners' motion for default judgment, where counsel
for claimant failed to appear or oppose the motion, and the
motion was taken under advisement.
September 5, 2018, the Court was informed that claimant Erica
Kaplan had retained new counsel. The Court was also informed
that claimant's previous counsel had failed to appear at
the August 8, 2018 motion hearing because "they were not
licensed in New Jersey and therefore did not appear."
(ECF No. 13). On September 10, 2018, this Court ordered
claimant's new counsel to reply to the pending motion for
default. (ECF No. 15). Counsel for claimant thereafter filed
the present motion to vacate the default of claimant, and
allow claimant to serve a verified answer with affirmative
defenses and counterclaims (ECF No. 17).
to the Limitation Act of 1851, "the owner of a vessel
may bring a civil action in a district court of the United
States for limitation of liability under this chapter"
46 U.S.C.S. § 30511. The procedure for bringing a
limitation action is found in Supplemental Admiralty and
Maritime Claims Rule F of the Federal Rules of Civil
Procedure. See Lewis v. Lewis & Clark Marine,
Inc., 531 U.S. 438, 448 (2001). The Rule states,
"[f]or cause shown, the court may enlarge the time
within which claims may be filed." See Trace Marine,
Inc. v. Fasone (In re Trace Marine, Inc.), 114 Fed.Appx.
124, 126-27 (5th Cir. 2004) ("the Supplemental Admiralty
Rules, 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."). Thus,
it is within the Court's discretion to permit the filing
of an untimely complaint.
generally 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 filing the late claim." In re
Complaint of White, No. 16-cv-174, 2016 U.S. Dist. LEXIS
121161, at *8-9 (D.N.J. Sep. 7, 2016). Further, "[t]he
reason underlying the late filing must outweigh the potential
prejudice to the existing parties, which is a fact specific
inquiry." In re Seastreak, LLC, Civil Action
No. 13-315, 2014 U.S. Dist. LEXIS 92113, at *7 (D.N.J. July
8, 2014) (citing Texas Gulf Sulphur Co. v. Blue Stack
Towing Co., 313 F.2d 359, 363 (5th Cir. 1969)). Finally,
"'courts have held that late claimants in admiralty
proceedings need not show good cause.
[T]hus, when a claimant shows cause, courts must freely grant
permission to file late claims so long as the limitation
proceeding is ongoing and the late claim will not prejudice
other parties.'" Id. (quoting In re Deray,
2006 U.S. Dist. LEXIS 28146, 2006 WL 1307673 (D.N.J. May 10,
2006)). Instead of "good cause," some courts apply
a "minimal cause standard." Id. at *8.
Accordingly, New Jersey courts have applied "a standard
lower than 'good cause."" In re Complaint
of White, No. 16-cv-174, 2016 U.S. Dist. LEXIS 121161,
at *9 (D.N.J. Sep. 7, 2016). Thus, "[s]o long as the
limitation proceeding is pending and undetermined, and the
rights of the parties are not adversely effected, the court
will freely grant permission to file late claims, upon an
affidavit reciting the reasons for failure to file within the
time limited." Id. (quoting In re Bartin
Deniz Nakliyat, 1989 U.S. Dist. LEXIS 13195, 1989 WL
128581, at *5 (E.D.N.Y. July 10, 1989)).
default has not yet been entered, as the Court reserved
decision on that motion. Further, the proceeding is still
pending and undetermined, as the Court has not ruled on any
substantive issues involving petitioners and claimant.
Additionally, granting the motion will not prejudice any
party, as petitioners are aware of claimant Erica Kaplan and
her potential claim, and they had been in contact with her
previous counsel who informed petitioners of their intent to
file a late notice of claim. Claimant Erica Kaplan has also
shown cause for this Court to grant permission to file a late
action. As explained by her current counsel, claimant's
previous counsel had failed to appear at the August 8, 2018
motion hearing because "they were not licensed in New
Jersey and therefore did not appear." (ECF No. 13). An
affidavit submitted by the claimant also supports that
claimant had "retained attorneys who were supposed to be
representing [her] interest in this case. However, said
attorneys failed to appeal on this matter and/or failed to
seek outside counsel licensed in New Jersey to assist them on
this matter." (ECF 17-2). "[C]ourts have held the
negligence of the claimant or his [or her] attorney" to
be a sufficient reason for the late filing of a claim."
In re Complaint of White, 2016 U.S. Dist. LEXIS
121161, at *13. Thus, for the reasons stated above, the Court
finds that claimant Erica Kaplan may file an untimely claim.
that, pursuant to this Order, claimant Erica Kaplan may file
an untimely claim; and it is further ORDERED
that Petitioners' ...