United States District Court, D. New Jersey, Camden Vicinage
IN THE MATTER OF THE COMPLAINT OF B&C SEAFOOD, LLC, AS OWNER OF THE F/V TOOTS II, A 52' STEEL-HULLED FISHING VESSEL, FOR EXONERATION FROM, OR LIMITATION OF LIABILITY.
MEMORANDUM OPINION AND ORDER
SCHNEIDER, UNITED STATES MAGISTRATE JUDGE
matter is before the Court on the “Motion for an Order
Increasing Security for the F/V Toots II”
(“motion”) [Doc. No. 65] filed by Sargasso Sea
Inc. and Fairfield Maxwell Services, Ltd, as owners and
operators of the M/V Oleander, (collectively
“Claimants”). The Court received the opposition
filed by B&C Seafood LLC (“Petitioner”) [Doc.
No. 75] and claimants' reply [Doc. No. 80]. The Court
also received petitioner's sur-reply brief [Doc. No. 81]
and the parties' letters addressing the admissibility of
the sur-reply brief [Doc. Nos. 82, 83, 84]. The Court
recently held oral argument. For the reasons to be set forth
in this Memorandum Opinion and Order, claimants' motion
action arises out of a collision that occurred on or about
October 6, 2017 between the F/V TOOTS II (“Toots
II”) and the M/V OLEANDER (“Oleander”)
while the Toots II was fishing in waters off the coast of New
Jersey. See Compl. [Doc. No. 1]. The collision occurred when
the bow of the Toots II struck the rear starboard side of the
Oleander. See Dep. Tr. of Jesse Sullivan, 154-55. Petitioner
purchased the Toots II and the fishing permit in question on
September 5, 2011 for $950, 000.00. Mot. at 2.
the collision, the Toots II was taken to Yanks Marine
Shipyard in New Jersey. Opp'n at 4. Petitioner, through
North Star Insurance Services LLC (“NSIS”), gave
notice of claim to underwriters, and the marine surveying
firm of Martin Ottaway Van Hemmen & Dolan
(“MOVHD”) was appointed to represent the
underwriters' interest. Id. MOVHD's Kyle
Antonini attended two surveys: one on October 10, 2017 and
another on October 12, 2017. Id. On October 30,
2017, Mr. Antonini sent an email to NSIS's Casey Sylvaria
and approved $188, 330 for repair costs on the Toots II.
Id. Further surveys were conducted on November 16
and 17 and MOVHD issued a November 18, 2017 “Second
Supplemental Advice” where Mr. Antonini reported
further damages to the Toots II and concluded that the fair
and reasonable cost of repairs total $450,
259.10. Id. at 5. The pre-casualty value
of the Toots II was approximately $300, 000. Opp'n at 3.
Because the cost of the repairs exceeded the value of the
vessel, petitioner abandoned the vessel to its underwriters
who then sold it for $40, 000 scrap value. Id. Two
months after the collision, B & C Seafood sold the Toots
II's fishing permit for $1, 475, 000.00 to a third party.
Mot. at 3. Claimants allege, upon information and belief,
that petitioner earned $20, 717.85 on the voyage from fishing
scallops. Id. As such, petitioner moved, and the
Court granted, its motion to accept security for a value of
the Toots II of $60, 967.85. See Doc. No. 5.
commenced this action on February 5, 2018. See Compl. at 1.
In the complaint, petitioner seeks exoneration or Limitation
of Liability pursuant to 46 U.S.C. §§ 30505 and
30511 (“The Limitation Act” or “the
Act”). In their answers to the complaint, claimants
allege, among other things, that the security posted is
inadequate, and the Court should order appropriate security
to be filed. See Doc. Nos. 8, 13, 14, 15, 16, 17, 18, 19, 20,
25, 26. Claimants allege the fair market value of the Toots
II after the collision was between $100, 000 and $125, 000.
See Decl. of Michael L. Collyer ¶ 6. Claimants further
allege the fair market value of the Toots II for purposes of
the Limitation Act should include the fair market value of
the fishing permits assigned to the Toots II at the time of
the incident, valued at $1, 370, 000.00. Id. at
¶ 12. Claimants argue the fair market value of the Toots
II for purposes of the Act should be $1, 495, 000.00 while
petitioner argues the vessel had a value of $60, 967.85. Mot.
at 1. Alternatively, if the fishing permit is not included in
the valuation, claimants argue the fair market value of the
Toots II should be $125, 000. Id. at 5. Last,
petitioner filed a sur-reply brief [Doc. No. 81] without
leave of court and claimants argue the Court should decline
to consider the arguments presented therein. See Doc. Nos. 82,
Limitation of Liability Act protects the right of vessel
owners to limit their liability to the value of the vessel,
provided that the events or circumstances giving rise to the
damage occurred without the vessel owner's privity or
knowledge. Under the Act, the owner of a vessel may limit its
liability to the value of the vessel and any pending freight.
46 U.S.C. § 30505(a). The Act was designed to encourage
investment and protect vessel owners from unlimited exposure
to liability. Lewis v. Lewis & Clark Marine,
Inc., 531 U.S. 438 (2001). A vessel's value for the
purpose of determining the amount of a limitation fund is
assessed at the end of the voyage during which the casualty
occurred. Cody v. Phil's Towing Co., 247
F.Supp.2d 688, 693-94 (W.D.Pa. 2002) (citing In Re
American Milling Co., 125 F.Supp.2d 981, 984-85 (E.D.Mo.
determining the value of the vessel for purposes of the Act,
the Supreme Court has stated:
the custom has been to include all that belongs to the ship,
and may be presumed to be the property of the owner, not
merely the hull, together with the boats, tackle, apparel,
and furniture, but all the appurtenances comprising whatever
is on board for the object of the voyage, belonging to the
owner, whether such object be warfare, the conveyance of
passengers, goods, or the fisheries.
The Main v. Williams, 152 U.S. 122, 131 (1894). The
court in The Main also defined “pending freight”
as the “earnings of the voyage.” Id.
Additionally, Benedict's admiralty treatise notes that
“[a]ppurtenances, e.g., the traveling derrick of a scow
or the outfit of a whaler, essential to the service on which
the vessel was engaged at the time of the happening of the
accident, are a part of the value to be surrendered or
appraised.” In re Waterman S.S. Corp., 794
F.Supp. 601, 605-06 (E.D.La. 1992) (citing 3 Benedict on
Admiralty, § 63, p. 7-22 (7th ed. 1983)). The treatise
also notes that the value of the ship's stores must be
included in the appraisal, but not the value of spare parts
kept on shore. Id. The Supreme Court has also stated
the ultimate measure of the value of a vessel for purposes of
the Act is the fair market value of the vessel. Cody, 247
F.Supp.2d at 693-94 (citing Standard Oil of New Jersey v.
Southern Pacific Co., 268 U.S. 146, 155 (1925)).
argue petitioner's fishing permits should be included in
the “value of the vessel” for purposes of the
Act. Specifically, claimants argue the fair market value of
the Toots II is $1.495 million dollars because the fishing
permits are an appurtenance of the vessel. Mot. at 1.
Claimants rely on case law that states that fishing permits
are an appurtenance to a vessel for purposes of maritime
liens. See Gowen, Inc. v. F/V Quality One, 244 F.3d
64 (1st Cir. 2001); see also Fuller Marine Services,
2015 U.S. Dist. LEXIS 128938 (D.Me. Sept. 24, 2015); PNC Bank
Del. V. F/V Miss Laura, 381 F.3d 183 (3d Cir. 2004).
Petitioner, on the other hand, argues that fishing permits
should not be included in assessing the value of the vessel,
therefore, its liability should be limited to $60, 967.85
(scrap value of $40, 000 plus $20, 967.85 for value of the
scallop catch aboard the Toots II at the time of the
collision). See Pet'r's Opp'n at 5 [Doc. No. 75].
The Court agrees with petitioner and finds that case law
interpreting the Limitation of Liability Act as well as case
law assessing the value of a vessel does not support the
assertion that a fishing permit should be included as an
appurtenance of a vessel for purposes of the Act.
Cody, for example, plaintiff commenced an action under the
Jones Act, 46 U.S.C. § 688 et seq., and General
Admiralty and Maritime Laws of the United States, after his
left foot was crushed between two barges. Cody, 247 F.Supp.2d
at 689. Defendants filed motions pursuing a limitation of
liability defense and the court was tasked with determining
the value of defendant's vessel pursuant to the
Limitation of Liability Act. Id. at 690. The court
concluded it did not have enough facts to determine the value
of the vessel; however, it provided a detailed explanation of
what the court would consider in assessing the value.
Id. at 694. The court stated:
[The fair market value of a vessel] may be established by
evidence of either the actual sale of the vessel or sales of
comparable vessels at the approximate time and within the
relevant market. Only if no market exists for the vessel or
contemporary sales of like vessels are unavailable may other
forms of evidence be used to set the fair market value. In
all events the court is to ascertain the vessel's value
by determining the "sum which, considering all the
circumstances, probably could have been obtained for [the
vessel] on the date of the [casualty]; that is, the sum that
in all probability would result from fair negotiations
between an owner willing to sell and a purchaser desiring to
buy." Standard Oil, 268 U.S. at 155-56. Making this