In Re: Massman, Traylor, Alberici, a Joint-Venture, and its Joint-Venturers Massman Construction Co., Inc., Traylor Bros., Inc., and Alberici Constructors, Inc., No. 4:2014cv01204 - Document 23 (E.D. Mo. 2015)

Court Description: MEMORANDUM AND ORDER:IT IS HEREBY ORDERED that claimants motion to dismiss [Doc. # 12 ] is denied without prejudice. IT IS FURTHER ORDERED that claimants motion to dissolve stay and injunction [Doc. # 16 ] is granted. IT IS FURTHER ORDERED that the stay and injunction entered on July 17, 2014 is dissolved to permit claimant to proceed with the action styled Jennifer Seyler v. M.T.C. Construction, Inc. d/b/a Kay Bates Steel Company, Cause No. 1322-CC01321, filed in the Twenty-Second Judicial Cir cuit Court of Missouri (City of St. Louis). IT IS FURTHER ORDERED that a stay of entry of judgment and enforcement of recovery in any proceeding pending final judgment in this limitation proceeding is entered. IT IS FURTHER ORDERED that claimants m otion to lift stay and injunction [Doc. # 15 ] is moot.IT IS FURTHER ORDERED t hat claimants motion to increase the limitation fund [Doc. # 13 ] is denied without prejudice. IT IS FURTHER ORDERED that petitioners shall have until April 24, 2015, to file with the Clerk of Court an approved corporate surety bond or other security guaranteeing, without reservation, the satisfaction of a judgment up to the maximum amount of $275,000 that may be entered in favor of claimant and against petitio ners in the action styled Jennifer Seyler v. M.T.C. Construction, Inc. d/b/a Kay Bates Steel Company, Cause No. 1322-CC01321, filed in the Twenty-Second Judicial Circuit Court of Missouri (City of St. Louis). Failure to comply with this order will result in lifting of the stay of entry of judgment and dismissal of this action. ( Response to Court due by 4/24/2015.) Signed by District Judge Carol E. Jackson on 3/23/15. (JAB)
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In Re: Massman, Traylor, Alberici, a Joint-Venture, and its ...Inc., and Alberici Constructors, Inc. Doc. 23 UNI TED STATES DI STRI CT COURT EASTERN DI STRI CT OF MI SSOURI EASTERN DI VI SI ON I N THE MATTER OF: MASSMAN, TRAYLOR, ALBERI CI , A JOI NT VENTURE, AND I TS JOI NT VENTURERS MASSMAN CONSTRUCTI ON CO., TRAYLOR BROS., I NC., AND ALBERI CI CONSTRUCTORS, I NC., for Exonerat ion from or Lim it at ion of Liabilit y. ) ) ) ) ) ) ) ) ) ) Case No. 4: 14- CV- 1204- CEJ M EM ORAN D UM AN D ORD ER This m at t er is before t he court on claim ant ’s m ot ion t o dism iss t he com plaint and t o lift t he st ay of proceedings ent ered on July 17, 2014. Also before t he court is claim ant ’s m ot ion t o increase t he lim it at ion fund. The issues are fully briefed. I. Ba ck gr ou n d Pet it ioners bring t his act ion for exonerat ion from or lim it at ion of liabilit y pursuant t o 46 U.S.C. §§ 30501–12. The pet it ioners are j oint vent ure Massm an, Traylor, Alberici and it s m em bers ( collect ively referred t o as “ MTA” ) , who were involved in const ruct ing a bridge over t he Mississippi River near St . Louis, Missouri. At all relevant t im es, MTA was t he owner of Barge MCC 467. Claim ant Jennifer Seyler was em ployed by a cont ract or t o work on MTA’s bridge const ruct ion proj ect . On March 19, 2012, Seyler was w orking on t he barge when she fell from a ladder and was inj ured. Seyler brought suit against MTA in t he Circuit Court of t he Cit y of St . Louis, alleging t hat MTA knew t he barge was unsafe and unseaw ort hy. I n t he st at e court act ion, Seyler assert s a negligence claim and a claim under t he Jones Act , 46 U.S.C. § 30104. MTA denies liabilit y and cont ends t hat t he Jones Act is inapplicable because Seyler was not MTA’s em ployee. Dockets.Justia.com Aft er t he st at e court lawsuit was filed, MTA brought t his act ion t o lim it any liabilit y t o Seyler t o t he value of t he barge, which t hey claim is $275,000. Pursuant t o 46 U.S.C. § 30511( b) and Fed. R. Civ. P. Supp. R. F( 1) , MTA filed a Let t er of Undert aking in which MTA’s insurer st at es t hat it agrees t o pay up t o $275,000 plus int erest if Seyler succeeds on her claim s, but “ st rict ly subj ect t o t he t erm s, condit ions, and lim it s of [ MTA’s] insurance policy.” [ Doc. # 6- 1, at 2] On July 17, 2014, t he court ent ered an order approving t he barge valuat ion of $275,000 and st aying t he st at e court case pending final disposit ion of t he inst ant act ion. [ Doc. # 9] Seyler has filed a st ipulat ion conceding t hat all issues relat ed t o lim it at ion of liabilit y are t o be det erm ined by t he dist rict court and consent ing t o waive any claim of res j udicat a relevant t o t he issue of lim it at ion of liabilit y. She also agrees t hat she will not seek t o enforce against MTA any j udgm ent t hat m ay be ent ered in her favor or in favor or any ot her part y in excess of t he lim it at ion fund as det erm ined by t he dist rict court . Seyler cont ends, however, t hat t he value of t he barge is m ore t han $275,000 and she asks t he court t o order an independent appraisal. She also seeks t o increase MTA’s pot ent ial liabilit y up t o t he value of all t he vessels t hat were involved in t he bridge const ruct ion proj ect on t he day of t he accident . Moreover, Seyler disput es t hat MTA’s let t er of undert aking sat isfies 46 U.S.C. § 30511( b) and Fed. R. Civ. P. Supp. R. F( 1) because ( 1) MTA did not provide securit y unt il t welve days aft er it filed t he com plaint and ( 2) t he insurer reserved t he right t o refuse paym ent based on t he t erm s and condit ions of MTA’s insurance policy. II. D iscu ssion 2 A. St a y of st a t e cou r t pr oce e din gs “ While 28 U.S.C. § 1333( 1) does grant t o t he federal dist rict court s exclusive j urisdict ion over suit s brought pursuant t o t he Lim it at ion Act . . . t he sam e st at ut e also ‘sav[ es] t o suit ors in all cases all ot her rem edies t o which t hey are ent it led.’” Riverway Harbor Serv., St . Louis, I nc. v. Bridge & Crane I nspect ion, I nc., 263 F.3d 786, 791 ( 8t h Cir. 2001) ( quot ing 28 U.S.C. § 1333( 1) ) . Hence, “ t wo j urisdict ional possibilit ies” are present ed: “ shipowners desire exclusive federal j urisdict ion t o lim it t heir liabilit y and avoid encount ering a j ury t rial, and claim ant s seek ‘ot her rem edies’ such as j ury t rials in st at e court .” I d. ( cit ing cases) . The Eight h Circuit has recognized t hat “ [ i] n t wo kinds of lim it at ion cases, t he federal court s have perm it t ed claim ant s t o pursue t heir rem edies in a forum of t heir own choosing.” Universal Towing v. Barrale, 595 F.2d 414, 418 ( 8t h Cir. 1979) . The first t ype of case is one in which t he lim it at ion fund exceeds t he t ot al of all claim s. I d. ( cit ing cases) . The second t ype of case is one in which “ t here is only one claim which exceeds t he value of t he fund.” I d. ( cit ing cases) . I n t hat sit uat ion, “ a claim ant m ay pursue his com m on- law rem edies in st at e court provided he files a st ipulat ion in t he dist rict court which concedes t hat all quest ions of lim it at ion of liabilit y are reserved for t he adm iralt y court .” I d. at 419 ( cit ing cases) . Here, Seyler is t he only claim ant , so t he single claim except ion applies. When one of t he t wo except ions applies, “ it is an abuse of t he court ’s discret ion t o fail t o dissolve t he inj unct ion against ot her legal proceedings, and t hus deprive a claim ant of his choice of forum .” Valley Line Co. v. Ryan, 771 F.2d 366, 373 ( 8t h Cir. 1985) . Thus, if Seyler’s st ipulat ion is adequat e, t he court m ust lift t he st ay. 3 A claim ant ’s st ipulat ion is adequat e if it includes ( 1) an acknow ledgm ent t hat t he dist rict court has exclusive j urisdict ion t o det erm ine all issues relat ing t o t he shipowner’s right t o lim it it s liabilit y, including det erm inat ion of t he value of t he lim it at ion fund and ( 2) a waiver of any right t o claim res j udicat a based on a j udgm ent from anot her forum . See Magnolia Marine Transp. Co. v. LaPlace Towing Corp., 964 F.2d 1571, 1575 ( 5t h Cir. 1992) ( cit ing cases) ; Valley Line, 771 F.2d at 373 & n.3 ( cit ing cases) ; see also Riverway Harbor Serv., 263 F.3d at 792. MTA argues t hat Seyler’s st ipulat ion is inadequat e because she does not agree t o forego collect ing from put at ive co- defendant s or t hird part ies who, in t urn, m ight seek cont ribut ion from MTA in excess of t he liabilit y fund. But Seyler has st ipulat ed t hat she will not enforce any j udgm ent against MTA in excess of t he liabilit y fund, even if t hat j udgm ent is rendered against a t hird part y and owed t o her from MTA on t he t hird part y’s behalf. Seyler, of course, cannot bind t hird part ies wit h her st ipulat ions, and neit her 46 U.S.C. § 30511( b) or Fed. R. Civ. P. Supp. R. F( 1) require her t o do so. MTA next argues t hat t he st ipulat ion is inadequat e because Seyler disput es t he value of t he barge and whet her t he value of ot her vessels should be t aken int o account in det erm ining t he am ount of t he lim it at ion fund. MTA’s argum ent is unpersuasive, as Seyler has st ipulat ed t hat t he dist rict court has sole aut horit y t o det erm ine whet her MTA qualifies for lim it ed liabilit y and, if so, in what am ount . Seyler need not concede t hat MTA’s proposed lim it of $275,000 is correct in order for her t o proceed in st at e court on t he quest ion of whet her MTA is liable at all. Furt her, t he court w ill ent er an order enj oining Seyler from collect ing on any st at e 4 court j udgm ent unt il t his case is concluded and t hereby address MTA’s apprehension t hat Seyler could collect m ore t han t he am ount in t he lim it at ion fund. I n t he st ipulat ion, Seyler agrees not t o seek any j udgm ent or ruling as t o MTA’s right t o lim it at ion of liabilit y “ in any st at e court or federal court in which a j ury t rial has been dem anded.” ( em phasis added) . [ Doc. # 15, ¶ 2] MTA argues t hat because t his waiver is lim it ed t o proceedings in which a j ury t rial has been dem anded, t he st ipulat ion is inadequat e. However, elsewhere in t he st ipulat ion Seyler concedes t hat MTA has “ t he right t o lit igat e all issues relat ing t o lim it at ion of liabilit y” in t he dist rict court . [ Doc. # 15, ¶ 1] That right cannot dim inished by Seyler’s elect ion of a j ury t rial or a bench t rial in t he st at e court proceeding. See I n re Walsh Const . Co., 4: 13- CV- 2526- HEA, 2014 WL 2956557, at * 4 ( E.D. Mo. Aug. 13, 2014) ( addressing t he sam e concern and deciding t hat t he st ipulat ion was adequat e) ; I n re Massm an, 4: 12- CV- 01665- JCH, 2013 WL 718885 ( E.D. Mo. Feb. 27, 2013) ( subst ant ially sim ilar st ipulat ion found t o be adequat e) . Finally, MTA disput es t he sufficiency of t he st ipulat ion because Seyler does not consent t o waive a present claim of res j udicat a but only a fut ure claim . That is a dist inct ion wit hout a difference. Here, t he st at e court proceeding has not concluded, so Seyler’s consent t o waive any res j udicat a effect of t hat proceeding operat es as a com plet e, present waiver. The court finds t hat MTA is adequat ely prot ect ed by Seyler’s consent t o waive any res j udicat a claim s relevant t o t he issue of lim it at ion of liabilit y. For t he reasons set out above, t he court finds t hat Seyler’s st ipulat ion is adequat e. Consequent ly, t he court w ill lift t he st ay enj oining t he st at e court proceedings. 5 B. Th e Lim it a t ion Fun d Pursuant t o Fed. R. Civ. P. Supp. R. F( 7) , Seyler seeks an independent appraisal of t he barge, which she claim s has been undervalued by MTA. She also cont ends t hat t he lim it at ion fund should be increased, based on t he “ flot illa doct rine,” t o include t he com bined value of all vessels engaged in t he bridge const ruct ion proj ect . See generally Sacram ent o Navigat ion Co. v. Salz, 273 U.S. 326 ( 1927) ; Liverpool, Brazil, & River Plat e St eam Navigat ion Co. v. Brooklyn E. Dist . Term inal, 251 U.S. 48 ( 1919) ; St andard Dredging Co. v. Krist iansen, 67 F.2d 548, 551 ( 2d Cir. 1933) ( cases est ablishing t he flot illa doct rine) . “ The bet t er procedure as t o [ an] increase in t he lim it at ion fund is t o wait on t he conclusion of t he lim it at ion act ion, and t o increase t he securit y if t he owner is found ent it led t o lim it at ion and t he lim it at ion fund is inadequat e.” World Tanker Carriers Corp. v. M/ V Ya Mawlaya, 94- 4190, 95- 0396, 95- 0511, 95- 1151, 95- 3295, 1996 WL 20874, at * 3 ( E.D. La. Jan. 18, 1996) , rev’d on ot her grounds, 99 F.3d 717 ( 5t h Cir. 1996) ( cit at ions om it t ed) ; see also I n re Massm an, 2013 WL 718885. Because Seyler’s apprehensions about t he size of t he lim it at ion fund m ay be rendered m oot if she loses her st at e court suit or wins a j udgm ent of less t han $275,000, it would be prem at ure t o address t he m erit s of her argum ent s t o increase t he fund. Accordingly, t he Court denies wit hout prej udice Seyler’s m ot ion for an appraisal of t he barge and t o increase t he lim it at ion fund. C. Th e Le t t e r of Un de r t a k in g Seyler cont ends t hat t he Let t er of Undert aking from MTA’s insurer is not adequat e securit y under 46 U.S.C. § 30511( b) and Fed. R. Civ. P. Supp. R. F( 1) . The st at ut e gives t he owner of a vessel seeking t o lim it it s liabilit y t he opt ion t o 6 eit her: ( 1) deposit w it h t he court “ an am ount equal t o t he value of t he owner’s int erest in t he vessel and pending freight , or approved securit y; and [ ] an am ount , or approved securit y, t hat t he court m ay fix from t im e t o t im e as necessary” ; or ( 2) t ransfer t o a court - appoint ed t rust ee “ t he owner’s int erest in t he vessel and pending freight ; and [ ] an am ount , or approved securit y, t hat t he court m ay fix from t im e t o t im e as necessary . . . .” 46 U.S.C. § 30511( b) . Supplem ent al Rule F( 1) m irrors § 30511( b) ’s requirem ent s and adds t hat an owner “ shall also give securit y for cost s and, if t he [ owner] elect s t o give securit y, for int erest at t he rat e of 6 percent per annum from t he dat e of t he securit y.” MTA elect ed t o subm it securit y in t he form of t he Let t er of Undert aking. The let t er, however, cont ains t wo lim it at ions on t he insurer’s obligat ion t o pay any j udgm ent obt ained by Seyler. First , t he insurer agrees t o pay up t o $275,000 plus int erest “ in accordance wit h and st rict ly subj ect t o t he t erm s, condit ions, and lim it s of it s insurance policy . . . .” [ Doc. # 6- 1, at 2] Second, t he insurer is not “ responsible for paym ent s in excess of t he available lim it s of it s respect ive insurance policy.” I d. Thus, t he insurer has not guarant eed wit hout reservat ion t hat it w ill sat isfy a j udgm ent against MTA. Rat her, it s obligat ion t o pay any j udgm ent arises from and is lim it ed by t he t erm s and condit ions of an insurance policy t hat is not before t he court . Cont inent al’s let t er is, t herefore, not an unreserved guarant ee of paym ent and is not adequat e securit y. MTA will be required t o subm it adequat e securit y or risk dism issal of t he com plaint . Because t he court finds t he Let t er of Underst anding t o be inadequat e securit y, it is unnecessary t o address Seyler’s alt ernat ive argum ent regarding t he t im eliness of t he let t er. 7 D . M ot ion t o dism iss Seyler m oves t o dism iss t his act ion on t he grounds t hat she has t he right t o a j ury t rial in t he st at e court and t hat her inj ury w as caused by MTA’s negligence and t he unseawort hiness of it s barge. Because t he st ay will be lift ed, Seyler will be allowed t o proceed wit h her negligence claim in t he st at e court . Her assert ion t hat she is ent it led t o prevail is not only unsupport ed by any fact s but is also prem at ure. ***** For t he reasons discussed above, I T I S H EREBY ORD ERED t hat claim ant ’s m ot ion t o dism iss [ Doc. # 12] is de n ie d w it h ou t pr e j u dice . I T I S FURTH ER ORD ERED t hat claim ant ’s m ot ion t o dissolve st ay and inj unct ion [ Doc. # 16] is gr a n t e d. I T I S FURTH ER ORD ERED t hat t he st ay and inj unct ion ent ered on July 17, 2014 is dissolve d t o perm it claim ant t o proceed wit h t he act ion st yled Jennifer Seyler v. M.T.C. Const ruct ion, I nc. d/ b/ a Kay Bat es St eel Com pany, Cause No. 1322- CC01321, filed in t he Twent y- Second Judicial Circuit Court of Missouri ( Cit y of St . Louis) . I T I S FURTH ER ORD ERED t hat a st ay of ent ry of j udgm ent and enforcem ent of recovery in any proceeding pending final j udgm ent in t his lim it at ion proceeding is ent ered. I T I S FURTH ER ORD ERED t hat claim ant ’s m ot ion t o lift st ay and inj unct ion [ Doc. # 15] is m oot . I T I S FURTH ER ORD ERED t hat claim ant ’s m ot ion t o increase t he lim it at ion fund [ Doc. # 13] is de n ie d w it h ou t pr e j u dice . 8 I T I S FURTH ER ORD ERED t hat pet it ioners shall have unt il Apr il 2 4 , 2 0 1 5 , t o file w it h t he Clerk of Court an approved corporat e suret y bond or ot her securit y guarant eeing, wit hout reservat ion, t he sat isfact ion of a j udgm ent up t o t he m axim um am ount of $275,000 t hat m ay be ent ered in favor of claim ant and against pet it ioners in t he act ion st yled Jennifer Seyler v. M.T.C. Const ruct ion, I nc. d/ b/ a Kay Bat es St eel Com pany, Cause No. 1322- CC01321, filed in t he Twent ySecond Judicial Circuit Court of Missouri ( Cit y of St . Louis) . Failure t o com ply wit h t his order will result in lift ing of t he st ay of ent ry of j udgm ent and dism issal of t his act ion. CAROL E. JACKSON UNI TED STATES DI STRI CT JUDGE Dat ed t his 23rd day of March, 2015. 9