In the Matter of Majestic Blue Fisheries, LLC, No. 1:2011cv00032 - Document 207 (D. Guam 2014)
Court Description: Order denying 178 Motion to Compel Arbitration or in the Alternative Motion for Summary Judgment. Signed by Magistrate Judge Joaquin V.E. Manibusan, Jr. on 6/11/2014. (fad, )
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In the Matter of Majestic Blue Fisheries, LLC Doc. 207 1 2 3 4 5 DISTRICT COURT OF GUAM 6 TERRITORY OF GUAM 7 8 9 10 11 ) ) ) ) ) ) Petitioner. ) _______________________________________) IN THE MATTER OF MAJESTIC BLUE FISHERIES, LLC, AS OWNER OF THE F/V MAJESTIC BLUE PETITIONING FOR EXONERATION FROM OR LIMITATION OF LIABILITY, CIVIL CASE NO. 11-00032 ORDER 12 13 The court heard Petitioner’s Motion to Compel Arbitration of this action against 14 Claimant Esther Yang or in the alternative for Summary Judgment on May 28, 2014. At the 15 conclusion of the hearing, the court took the matter under advisement. Having read the moving 16 papers, the memoranda in opposition, the reply and having further heard from counsel of both 17 parties, the court hereby enters its decision and order with regard to the said motion. 18 BACKGROUND 19 On December 9, 2010, Petitioner, the owner of the fishing vessel Majestic Blue, filed a 20 complaint1 for exoneration and limitation of liability in this court. Therein, Petitioner sought to 21 limit its liability under 46 U.S.C.A. § 30505, for all damages occasioned by the sinking of its 22 vessel the Majestic Blue on June 10, 2010. Two of the vessel’s crew members, Captain David 23 Hill and Chief Engineer Chang Yang, lost their lives when the vessel sank. 24 On February 24, 2012, the Clerk of Court gave Notice to all parties of the action brought 25 by Petitioner for exoneration from or limitation of its liability. The Notice directed all claimants 26 desiring to contest the right to exoneration or limitation of liability to file an answer to the 27 petition by March 30, 2012. Claimant Amy Hill filed an answer to the petition on March 30 and 28 1 See Civil Case No. 10-032. Dockets.Justia.com 1 claimed her right to entitlement to the limitation fund. Claimant Esther Yang filed an answer to 2 the petition on June 14, 2013 and also claimed her right to entitlement to the limitation fund. On October 1, 2013, the parties stipulated to allow the late claim2 filed by Esther Yang. 3 4 In the stipulation, the parties agreed that Petitioner’s consent to allow a late claim was not a 5 waiver of any of its defenses to the claim or “any argument made or yet to be made in support of 6 Petitioner’s motion to continue trial.” 7 On October 30, 2013, the parties agreed to submit this matter for trial on documents and 8 exhibits which the parties agreed to in lieu of the presentation of live testimony. The stipulation 9 also required the court not to consider any other matter not previously agreed to by the parties. 10 The court thereafter approved the stipulation. 11 12 The trial was therefore to move forward with the court based upon the agreed-to written submissions alone, and no others. 13 The trial occurred herein on November 18, 2013 and concluded on the same date. 14 On February 12, 2014, Petitioner filed its Motion to Compel Arbitration or in the 15 alternative for Summary Judgment against Claimant Esther Yang. On February 26, Claimant 16 Yang moved to strike the motion. On March 10, Petitioner opposed the motion to strike. 17 On April 1, 2014, the court denied the motion to strike and ordered Yang to file an 18 opposition to the motion. By agreement of the parties, Yang filed her opposition3 on April 22. 19 Petitioner requested the court additional time to respond to the opposition and thus it filed its 20 reply on May 21, 2014. The court heard oral arguments on May 28, 2014. 21 DISCUSSION 22 23 Petitioner’s motion to compel Yang to arbitrate this matter and alternatively for Summary Judgment are based upon the following facts: 24 2 At a prior hearing, the court had observed that Yang had filed a late claim and did not allow her to participate in that proceeding. The court noted that Claimant Yang needed to file a 26 motion to allow the filing of a late claim or in the alternative to obtain a stipulation from Petitioner. 27 3 Yang was granted leave to file up to 45 pages in her response brief from the 20-page 28 memoranda limit set forth in Local Rule 7.1(g). 25 Page -2- 1 1. Chang Yang entered into an employment contract with Majestic Blue on March 23, 2 2010 to work on board the vessel as its Chief Engineer. The employment contract had an 3 arbitration agreement. Yang died during the course of his employment when the Majestic Blue 4 sank in the Pacific Ocean on June 10, 2010. 5 6 2. On July 23, 2010, Claimant Esther Yang entered into a Settlement Agreement with Majestic Blue in which she received 230,846,227 Korean Won for the death of her husband. 7 3. The Settlement Agreement included a provision that the family will not file any civil 8 or criminal suit as a result of the accident. The family also agreed not to disclose any details of 9 the agreement. 10 11 4. On June 14,2013, Esther Yang filed a claim in this action for the death of her husband. 12 It is Petitioner’s contention that Yang’s claims herein are subject to resolution by 13 arbitration. This is premised upon Paragraph 8 of its employment agreement with Yang which 14 contained a mandatory binding arbitration clause. All claims that conceivably could be 15 arbitrated including claims for death were included in Paragraph 8. 16 As an alternative, Petitioner requests the court to dismiss Yang’s claim for entitlement 17 with respect to the Limitation Fund based upon her execution of a Settlement Agreement with 18 Petitioner in which she received 230,846,227 Korean Won. 19 In her opposition, Yang asserts that Petitioner waived its right to arbitration by availing 20 itself of the special limitation of liability proceeding and by its failure to give notice to Yang 21 that she and her children might have certain rights, including arbitration, against Petitioner and 22 by its failure to provide her with notice of this limitation action as required by Supp. R. F (4). 23 Yang also challenges the validity of the employment contract her husband executed and asserts 24 that the arbitration provision is void as a matter of public policy. 25 With regard to the Settlement Agreement, Yang argues that Petitioner failed to meet its 26 heavy burden in showing that the Settlement Agreement was executed freely, without deception 27 and coercion, and with a full understanding of her rights. 28 When asked by the court whether its motion was timely made, Petitioner responded that Page -3- 1 it had not waived any defenses it had against Yang by its agreement to allow her late filing. It 2 appears to the court that Petitioner did reserve its right to file upcoming dispositive motions in 3 which it could raise its defenses against Yang since the deadline previously set by the court for 4 filing dispositive motions had already passed. Thus, Petitioner was not bound or held to any 5 deadline for filing motions in relation to its defenses to Yang’s claim other than those set forth 6 in the Federal Rules of Civil Procedure. 7 In determining whether Petitioner’s motion was timely filed, the court takes notice of the 8 provisions of Rule 12(h) of the Federal Rules of Civil Procedure. Under Rule 12 (h)(2), a party 9 must raise a failure to state a claim upon which relief can be granted or any legal defense to a 10 claim no later than at trial. In Arbaugh v. Y & H Corp., 546 U.S. 500, 126 S. Ct. 1235 (2006), 11 the U.S. Supreme Court stated that an objection that a complaint fails to state a claim for relief 12 may not be asserted post-trial. Such an objection endured only up to trial on the merits of the 13 case and not beyond. “A defense of failure to state a claim upon which relief can be 14 granted...may be made in any pleading...or by motion for judgment on the pleadings, or at trial 15 on the merits. Cf. Kontrick, 540 U.S., at 459, 124 S. Ct. 906.” 16 Plaintiff Jenifer Arbaugh filed claims of sex discrimination against Defendant Y & H 17 Corporation under Title VII of the Civil Rights Act of 1964 and Louisiana law in the Eastern 18 District of Louisiana on November 18, 2001. The matter was tried before a jury on October 28 19 and 29, 2002. The jury rendered a verdict for Arbaugh and judgment was entered accordingly. 20 On November 9, 2002, Y & H Corporation filed a motion to dismiss the action contending that 21 it did not qualify as an employer under the Act since it did not employ fifteen or more 22 employees in either 2000 or 2001. The trial court granted Y & H’s motion concluding it had no 23 subject-matter jurisdiction. The Court of Appeals for the Fifth Circuit affirmed. The U.S. 24 Supreme Court reversed and held that the employee-numerosity requirement for establishing the 25 employer’s status was an element of Arbaugh’s claim for relief, whose satisfaction was 26 conceded when Y & H Corporation did not challenge it prior to the trial on the merits. 27 /// 28 /// Page -4- The motion4 brought by Petitioner is one that does not challenges the subject-matter 1 2 jurisdiction of this court. The motion relates to the ability of Claimant Yang to obtain the relief 3 which she seeks in her claim, i.e., the ability to contest the petition for exoneration and 4 limitation of liability and her right to participate in the limitation fund. Issues that encompass 5 the arbitration agreement signed by her deceased husband and the Settlement Agreement which 6 she executed relate to her ability to seek the relief which she claims herein. Under Arbaugh, 7 supra, those defenses must be raised by Petitioner at trial and not afterwards. 8 9 10 The court finds that Petitioner did not raise these issues at trial. The trial concluded on November 18, 2013 and Petitioner did not file the present motion until February 12, 2014, almost three months after its conclusion. 11 Petitioner, however, did file on November 13, 2013, a Notice of Intent to file a Summary 12 Judgment motion or alternatively to compel Claimant Yang to arbitrate her claims herein. 13 Pursuant to Rule 12(h)(2), the motion had to be filed on or before November 18, 2013 because 14 the defenses raised therein relate to the ability of Claimant Yang to obtain the relief which she 15 seeks herein. 16 As the court has noted above, Petitioner’s motion is one that does not seek a dismissal of 17 this action because the court lacks subject-matter jurisdiction. Defenses that relate to subject- 18 matter jurisdiction may be raised at any time. It may be raised for the first time through a post- 19 trial motion or on appeal. 20 Clearly, this court has subject-matter jurisdiction of this action under the Limitation of 21 Shipowners’ Liability Act (46 U.S.C. § 30505). The action was brought in this court by 22 Petitioner to limit its liability with regard to the loss of its vessel, the Majestic Blue. In filing 23 the action, Petitioner recognized that this court had subject-matter jurisdiction. 24 /// 25 26 4 Petitioner’s Motion to Compel Arbitration and alternative Motion for Summary Judgment also requires the court to look at submissions not agreed to by the parties for use by the 27 court for the purpose of making its decision herein. Consideration by the court of the said 28 submission would be in violation of the stipulation entered into between the parties. Page -5- 1 CONCLUSION 2 The court finds that Petitioner’s Motion to Compel Arbitration or alternatively for 3 Summary Judgment is one that does not relate to its subject-matter jurisdiction. It relates to the 4 ability of Claimant Yang to pursue the relief which she seeks in her claim filed herein. Under 5 Federal Rule of Civil Procedure 12(h)(2), defenses that relate to a failure to state a claim upon 6 which relief can be granted must be raised at trial. Petitioner did not bring its Motion to Compel 7 Arbitration and alternatively for Summary Judgment at trial or prior to the November 18, 2013 8 trial date. Petitioner filed its motion on February 12, 2014. As a result, the court finds that 9 Petitioner has waived its defenses against Claimant Esther Yang with regard to the limitation of 10 11 12 13 14 liability action herein. The court, thus, finds it unnecessary to address the other arguments made by Claimant Yang in her opposition to above motion. Petitioner’s Motion to Compel Arbitration and alternatively for Summary Judgment is hereby denied. 15 /s/ Joaquin V.E. Manibusan, Jr. U.S. Magistrate Judge Dated: Jun 11, 2014 16 17 18 19 20 21 22 23 24 25 26 27 28 Page -6-
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