Lead Opinion
COLE, J., dеlivered the opinion of the court, in which DAUGHTREY, J., joined. CONTIE, J. (pp. 419-420), delivered a separate opinion concurring in part and dissenting in part.
This case involves a petition by a vessel owner for a limitation of liability under the Limitation of Liability Act (“LOLA”), a federal statute intended to limit the liability of vessel owners who are not negligent and have no privity to or knowledge of the negligent cause of a maritime accident. The petition was filed in federal court in response to a wrongful death action which was asserted under gеneral maritime law, and alternatively under the Death on the High Seas Act (“DOHSA”), in Michigan state court. The appeal raises several issues: (1) whether the district court erred by not granting the claimant-appellant summary judgment on the entire LOLA action; (2) whether the district court erred in granting the petitionerappellee partial summary judgment on the appellant’s general maritime claim; (3) whether the district court erred in not setting aside its order granting partial summary judgment on the maritime claims; (4) whether the district court erred in reаching a DOHSA question in the context of this LOLA action; and (5) whether the district court erred in deciding that DOHSA is an exclusive remedy and precludes any award of damages for pre-death pain and suffering.
For the following reasons, we affirm the district court in part and reverse and remand in part.
This ease arises from a wrongful death action which was initiated following the accidental sinking of a pleasure boat in a storm off the Florida coast on March 13, 1993. On the boat when it sank were four individuals: Charles Muer, his wife Betty Muer and George аnd Lynne Drummey (“the Drum-meys”). Charles Muer was the founder and principal stockholder of C.A. Muer Corporation, a restaurant enterprise with locations in Florida and Michigan. The boat was owned by Charles Muer until just before the final voyage at which time it was transferred to the C.A. Muer Corporation. Charles Muer was the captain of the vessel on its voyage.
Robert A. Karbel (“Karbel,” “claimant” or “appellant”), personal representative of the Drummeys’ estate, filed a wrongful death action under general maritime law, and alternatively under DOHSA, in Michigan state court in December 1994.
The defendants in the state case, the Estate of Charles A. Muer (“Muer estate,” “ap-pellee” or “petitioner”) and C.A. Muer Corporation, filed a complaint in federal court in Michigan in April 1995 seeking exoneration or limitation of liability under the Limitation of Liability Act (“LOLA”), 46 U.S.C.App. § 181 et seq. The district court permitted Karbel to intervene in the federal action and stayed the state court proceedings in August 1995. In October 1995, Karbel filed an answer to the Muer estate’s petitiоn together with a claim that was identical to the state court complaint.
In November 1995, the Muer estate moved for partial summary judgment on the basis that the claimant had not come forward with sufficient evidence to establish that the accident happened within one marine league of shore, a required element of the claimant’s general maritime claim, and therefore the claim could not survive summary judgment. In the same motion, the Muer estate contended that DOHSA applied to the case because of the location of the accident, and that the district court should grant the estate partial summary judgment as to the wrongful death damages under DOHSA because the claimant had already asserted that there were no economic losses. The Muer estate explicitly did not seek summary judgment with respect to the claims for the decedents’ pain and suffering.
In December 1995, Karbel moved for summary judgment dismissing the complaint for limitation, claiming that limitation of liability was only intended to protect vicarious defеndants and that his allegations involved active negligence by the defendants. Karbel also submitted a motion to stay the federal court proceedings and to lift the stay of the state court proceedings so he could proceed in the state court action. Accompanying Karbel’s motion was an “Offer to Stipulate to Jurisdiction and other Matters in Connection with Stay of Proceedings.”
In a March 14, 1996 order, the district court ruled that (1) the claimant did not produce evidence sufficient to support a factual finding that the boat accident occurred inside of one marine league (three miles) of shore-and thus the petitioner was deserving of summary judgment on the general maritime claims because DOHSA necessarily governed the case if the accident did not occur within one marine league of the Florida shore; (2) DOHSA barred noneconomic damages (but specifically reserved the issue of conscious pain and suffering damages as a supplement to remedies under DOHSA); (3) Karbel’s allegations of active negligence did not bar the LOLA action; and (4) lifting the stay of the state court proceedings, pursuant to Karbel’s stipulation that the district court retained continuing jurisdiction to decide the limitation of liability questions raised in the Muer estate’s federal complaint.
On April 26, 1996, the Muer estate filed another summary judgment motion seeking a ruling on the remaining issue, the conscious pain and suffering claims. On April 29,1996, this court issued a decision in Bickel v. Korean Air Lines Co., Ltd.,
On May 2,1996, Karbel mоved for dismissal of the Muer estate’s summary judgment motion on the basis that the district court had lifted the stay of the state court proceedings and that the only proper place to litigate
The district court entered an order on July 31, 1996, concluding that the evidence was speculative whether the boat had reached a marine league from shore prior to sinking and dismissed Karbel’s motion after concluding that there were still no genuine issues of material fact and that the Muer estate was deserving of judgment as a matter of law. It thereby ruled that DOHSA should continue to govern the case.
In that same order, the district court ruled on other remaining pending motions. It held that (1) deference to the state court on the issues presented by .the petitioner’s pain and suffering summary judgment motion was not necessary; (2) pursuant to this court’s decision in Bickel, DOHSA barred the conscious pain and suffering claims; and (8) because there were no other damage claims, the ap-pellee was entitled to final judgment. Karbel subsequently filed this appeal.
On August 29, 1996, the Bickel panel substituted a new opinion, vacating the portion which had held that conscious pain and suffering damages are non-recoverable under DOHSA. See Bickel v. Korean Air Lines Co., Ltd.,
DISCUSSION
A. An Overview of LOLA
The Limitation of Liability Act (“LOLA”), originally enacted in 1851, permits a vessel owner to limit its liability to the value of the vessel and its then pending freight, provided that the loss or damage is incurred without the “privity or knowledge” of the owner. The Aсt was passed “to encourage ship building and to induce capitalists to invest money in this branch of industry.” Norwich & N.Y. Transp. Co. v. Wright,
After the vessel owner deposits with the district court an amount representing the value of the vessel and its freight (“limitation fund”), the district court stays all related claims against the vessel owner pending in any other forum and directs all potential claimants to file their claims with the district court within a specified time. 46 U.S.C.App. § 185; Supp. R. for Certain Admiralty and Maritime Claims F(3), F(4); see also In re Dammers & Vanderheide & Scheepvaart Moats Christina B.V.,
B. Denial of Summary Judgment on LOLA action
The claimant-appellant contends that the district court erred in denying its motion
The appellee urges us to rely instead on the decisions cited by the district court in which courts have held that an owner’s presеnce on a vessel is not necessarily dispositive of a LOLA action because such treatment would circumvent the two-step inquiry required in LOLA cases and would shift the burden of proof on the negligence issue.
The question presented boils down to whether or not the district court’s limitation of liability inquiry is a two-step inquiry. Where issues of fact are not in dispute, we review de novo a district court’s denial of summary judgment based on the resolution of a legal issue. Teichman v. Espy,
Many courts, including the Sixth Circuit, have held that a limitation action requires the district сourt to make a two-step inquiry: (1) negligence or unseaworthiness, and (2) the owner’s privity or knowledge of the negligence. The claimant-appellant argues in essence that since it is conceded that Charles Muer was on the vessel at-the time of its sinking, the district court should have dismissed the LOLA action as a matter of law. We disagree. Such a dismissal would obviate the claimant’s burden to demonstrate negligence or unseaworthiness.
This court, and others, have already clearly established that LOLA involves two inquiries. See In re Cleveland Tankers, Inc.,
Under the Limitation Act, a ship owner is entitled to exoneration if he, his vessel, and crew are found to be completely free of fault. Even if not completely free of fault, the ship owner is entitled to limitation of liability if the ship owner had no knowledge or privity to the ship’s negligence or unseaworthiness. The burden of proving negligence lies on the person claiming to be injured, but once negligence is estаblished, the vessel’s owner must prove lack of knowledge or privity to the negligence.
In re Cleveland Tankers, Inc.,
For authority, the appellant relies upon language in Fecht v. Makowski,
[WJhen an owner is in control of and operating his pleasure craft he has privity or • knowledge with respect to the operation, therefore he is not entitled to limitation for accidents arising from his negligence.
Id. at 722. In rejecting the very same argument for a рreclusion of the limitation of liability, the Eleventh Circuit offered apt commentary. In an opinion authored by Judge Godbold 18 years after he authored Fecht, the Eleventh Circuit took Fechtto mean what Gilmore and Black suggested in The Law of Admiralty, § 10-23: “Owners careless enough to operate (or to be on board) their own boats when an accident occurs need not hope for much sympathy,” In re M/V Sunshine, II,
The district court correctly followed the framework outlined in In re Cleveland Tankers. Because it committed no legal error in denying the appellant summary judg
C. Going Beyond the LOLA Action
The appellant argues that the district court erred in reaching matters beyond those of the LOLA action. We review for an abuse of discretion the failure of a district court adjudicating a LOLA petition to remit issues beyond the petition to the state court. Ex parte Green,
The backdrop of the appellant’s assertion is a long-standing tension between a vessel owner’s right to have the liability limitation determined in federal court, where there is no right to a jury trial, see Waring v. Clarke,
Federal courts have exclusive admiralty jurisdiction to detеrmine whether a vessel owner is entitled to limited liability. Green,
To accommodate the competing interests of a shipowner’s right to limit liability and a claimant’s right to a trial by jury, the Supreme Court has established two situations in which a claimant must be allоwed to pursue a claim before a jury. See Langnes,
In this second situation, a district court is obliged to dissolve its injunction against all other legal proceedings when only
The appellee argues that principles of judicial economy supported the district court’s decision to rule on issues outside of the LOLA action. In addition, the appellee cites the Supreme Court’s decision in Hartford Accident & Indemnity Co. of Hartford v. So. Pacific Co.,
Hartford Accident was brought to the Supreme Court by the insurance company who disputed the lower court’s jurisdiction to adjudicate the claimants’ claims. Hartford Accident does contain language suggestive of a district court’s wide-reaching power in a LOLA action, but for several reasons that decision does not support the district court’s decision in this case to entertain questions outside of the LOLA action. First, Hartford Accident concerns, a multi-claimant situation where a concursus is needed, the very purpose of a LOLA action.
Second, as stated above, it is clearly established that where there is a single claimant, the district court must allow that claimant to use the state courts. See, e.g., In re S & E Shipping Corp.,
Third, the Supreme Court has explained that the federal courts do not have exclusive jurisdiction of either DOHSA or in personam maritime claims and that state courts are equally competent to adjudicate such claims. See Offshore Logistics, Inc. v. Tallentire,
The district court overstepped its bounds by reaching issues ancillary to the LOLA action when the claimant-appellant stipulated to the distinct court’s jurisdiction of the LOLA action.
D.
Beсause the district court should not have reached any matters beyond those of the LOLA action, we need not address any of the appellant’s remaining points on appeal.
CONCLUSION
Although the district court did not err in denying the appellant summary judgment on the LOLA action, the district court abused its discretion in reaching issues beyond those presented by the LOLA action. Accordingly, we AFFIRM in part and REVERSE and REMAND in part for further proceedings in accordance with this opinion.
Notes
. Fecht v. Makowski,
. The strength of Fecht's authority is also undermined by the fact that the Fifth Circuit based its decision inFecht on the fact that the limitation of the owner’s liability would not have been possible under any circumstances because the vessel owner had stipulated prior to trial that the complaint, insofar as it sought a limitation of liability, was withdrawn and that the vessel owner was seeking only exoneration. See Fecht,
. The appellant also seems to make an argument that exoneration is not available to the petitioner-appellee in its LOLA action. This argument, is meritless. Under Rule F of the Supplemental Rules for Certain Admiralty and Maritime Claims, a shipowner-petitioner "may demand exoneration from as well as limitation of liability” and “shipowners routinely seek exoneration and limitation of liability in the alternative.” Texaco, Inc. v. Williams,
. There is no contention that Karbel is not a single claimant. See In re Two R Drilling Co., Inc.,
. No objections have been made to the adequacy of the stipulations.
Concurrence in Part
concurring in part and dissenting in part.
Though I agree with my colleagues’ conclusion that the district court properly refused to dismiss the Limitation of Liability Act (“LOLA”) claim on summary judgment, I do not agree with the majority’s decision to reverse and remand the non-LOLA issues.
The district court initially lifted the stay in state court, thereby allowing the state court to determine the decedents’ damages for pre-death pain and suffering under the Death on the High Seas Act (“DOHSA”). The district court later decided that it need not defer to the state court on the issues presented by Karbel’s pre-death pain and suffering claim. The district court subsequently held, as a matter of law, that DOHSA barred Kаrbel’s pre-death pain and suffering claim.
Though my colleagues believe that the district court erred by deciding the DOHSA claim, the district court clearly had jurisdiction to decide Karbel’s general maritime and DOHSA claims. See S & E Shipping Corp. v. Chesapeake & Ohio Railway Co.,
Because the district court had the authority to determine whether damages for pre-death pain and suffering may be recovered in a DOHSA action, I respectfully dissent from the majority’s decision to reverse and remand the non-LOLA matters.
