District court erred in dismissing salvage company’s in rem admiralty action seeking arrest of vessel that sank in Lake Michigan for failure to give specific details about shipwreck location without first assuring continuance of federal jurisdiction over claim in light of Michigan’s claim under Abandoned Shipwreck Act, 43 U.S.C.S. § 2101 et seq.
GREAT LAKES EXPLORATION GROUP, LLC, Plaintiff-Appellant, v. UNIDENTIFIED WRECKED AND (FOR SALVAGE-RIGHT PURPOSES), ABANDONED SAILING VESSEL, etc., Defendant, MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY, MICHIGAN DEPARTMENT OF HISTORY, ARTS AND LIBRARIES, Intervenors-Appellees.
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
08a0161p.06; 2008 U.S. App. LEXIS 8654; 2008 FED App. 0161P (6th Cir.)
April 22, 2008, Filed
PROCEDURAL POSTURE:
Plaintiff, a private underwater exploration and salvage company, sought review of an order from the United States District Court for the Western District of Michigan at Grand Rapids, which dismissed its in rem admiralty action seeking an arrest for defendant, an ancient vessel that sank in Lake Michigan, after intervenor, the State of Michigan, claimed title to the vessel pursuant to the Abandoned Shipwreck Act (ASA), 43 U.S.C.S. §§ 2101-2106. OVERVIEW: After the State intervened, the district court ordered the company to disclose the vessel’s precise location to allow the State to investigate whether the shipwreck was “embedded” within the meaning of ASA. The company refused, arguing that without additional protections to safeguard federal jurisdiction, such as an arrest of the shipwreck, the State would be free to claim Eleventh Amendment immunity and divest the district court of jurisdiction. The district court refused to arrest the vessel, and it dismissed the complaint without prejudice for failure to comply with its order. The court held that the district court did not err in requiring specific details about the location of the shipwreck at the pleading stage pursuant to Supp. R. Certain Adm. & Mar. Cl. C(2)(b), C(3)(a)(i), and E(2)(a). However, it erred in its enforcement of the requirement before assuring the continuance of federal jurisdiction over the company’s claim. The general information provided by the company was sufficient for purposes of allowing the district court to arrest the vessel in order to perfect federal jurisdiction and then require disclosure of the vessel’s precise location.
OUTCOME:
The court reversed the district court’s dismissal of the company’s claim, and it remanded the case for further proceedings consistent with the opinion.
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In a dispute over the payment of a seaman’s medical bills, a hospital did not have standing to enforce a guarantee executed under 8 U.S.C.S. § 1283 because it was not an intended third-party beneficiary of such. Neither the hospital or any other medical provider was named in the guarantee.
DAY CRUISES MARITIME, L.L.C, AND CORPUS CHRISTI DAY CRUISE, L.L.C., Appellants, v. CHRISTUS SPOHN HEALTH SYSTEM D/B/A CHRISTUS SPOHN HOSPITAL MEMORIAL, Appellee.
COURT OF APPEALS OF TEXAS, THIRTEENTH DISTRICT, CORPUS CHRISTI – EDINBURG
2008 Tex. App. LEXIS 2763
April 17, 2008, Opinion Filed
PROCEDURAL POSTURE:
Appellant employers challenged a decision from the 117th District Court of Nueces County, Texas, which granted summary judgment in favor of appellee hospital on a counterclaim and on a plea in intervention in a dispute over a seaman’s medical bills. OVERVIEW: A seaman became ill while on a vessel. A negligence claim was filed against the hospital where she was treated. The employers tried to intervene in the lawsuit, and a counterclaim was filed by the hospital to recover the seaman’s medical bills. Judgment was eventually entered for the hospital, and this appeal followed. In partially affirming, the appellate court held that summary judgment was improperly granted for the hospital on its counterclaim. Although the medical bills at issue could have been recovered in a suit on a sworn account and the employers’ sworn denial was ineffective, the employers’ request to file a fourth amended answer to the counterclaim was improperly denied. Next, the hospital did not have standing to enforce the guarantee under 8 U.S.C.S. § 1283 because it was not a third-party beneficiary of such. The employers raised material issues of fact with respect to the extent of their liability under the doctrine of maintenance and cure. However, the employers did not establish that they were entitled to be equitably subrogated to the rights of the seaman’s family under a settlement agreement. Finally, the employers’ due process rights were not violated.
OUTCOME:
The portion of the judgment denying the employers’ motion for summary judgment on a plea in intervention was affirmed. The portion of the decision granting the hospital’s motion for summary judgment on its counterclaim and on the plea in intervention was reversed. The case was remanded for further proceedings.
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Parties to voyage charter unambiguously structured relationship such that vessel owner was not party to voyage charter, and vessel owner was not bound by New York arbitration clause incorporated into bill of lading, given terms of New York arbitration clause. Court could not force vessel owner into arbitration agreement that it did not sign.
THE RICE COMPANY (SUISSE), S.A., Plaintiff-Appellant v. PRECIOUS FLOWERS LIMITED; IBN AGROTRADING GMBH; M/V NALINEE NAREE, her engines, boilers and tackle, Defendants-Appellees
UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
2008 U.S. App. LEXIS 6918
April 2, 2008, Filed
PROCEDURAL POSTURE:
Plaintiff shipper appealed from the United States District Court for the Southern District of Texas in the shipper’s action against a vessel owner, the disponent owner, and the vessel, seeking damages and making a motion to compel arbitration in New York and to stay the proceedings pending arbitration. OVERVIEW: The shipper bought rice to ship to Togo. It voyage chartered the vessel from the disponent owner to ship the rice, but the vessel allegedly had unseaworthy hatch covers and the rice was damaged. The voyage charter required arbitration in New York, and the bill of lading that would have issued, had the vessel not sailed early and the cargo not been damaged due to a storm, incorporated the terms of the voyage charter. The district court concluded that the New York arbitration clause of the voyage charter did not bind the vessel’s owner but rather the disponent owner, and that there was no contract binding the vessel owner to New York arbitration. Nor did the in rem fiction of the vessel as defendant bind the vessel owner. The instant court concluded that the parties to the voyage charter unambiguously structured their relationship such that the vessel owner was not a party to the voyage charter. Further, the vessel owner was not bound by the New York arbitration clause incorporated into the bill of lading, given the terms of the New York arbitration clause. Finally, the court could not force the vessel owner into an arbitration agreement that the vessel owner did not sign.
OVERVIEW:
OUTCOME:
The judgment was affirmed.
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Plaintiffs’ action against the owner of a ship was properly dismissed because the Fifth Amendment barred the exercise of personal jurisdiction; the ship owner could not be subjected to personal jurisdiction with respect to an unrelated suit merely because the ship had repeatedly visited the forum’s ports at the sole direction of its charterers.
VICTORIJA PORINA, as personal representative of Arnis Porins, deceased, LUBOVA BOILOVICA, as personal representative of Victor Boilovic, deceased, JEKARETINA JEMELIGANOVA, as personal representative of Vladimir Lisenko, deceased, KARLIS PUKITIS, as personal representative Ignus Pukitis, deceased, MARTIN ZAKALOVSKIS, as personal representative of Janis Zakalovskis, deceased, TAMARA NAZAROVA, as personal representative of Igors Nazarovs, deceased and SIA “BUTE”, Plaintiffs-Appellants, v. MARWARD SHIPPING CO., LTD., Defendant-Appellee.
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
2008 U.S. App. LEXIS 6903
April 1, 2008, Decided
PROCEDURAL POSTURE:
Plaintiffs, the owner of a fishing vessel and representatives of the fishermen who died when the vessel sank, sued defendant, the owner of a cargo ship, alleging that the cargo ship struck the fishing vessel, and that the collision resulted from the negligence of those operating the cargo ship. The United States District Court for the Southern District of New York dismissed the complaint for lack of personal jurisdiction. Plaintiffs appealed. OVERVIEW: Plaintiffs’ suit relied on general maritime law; their claim, therefore, was one that arose under federal law for the purposes of Fed. R. Civ. P. 4(k)(2). However, the Fifth Amendment’s due process clause barred the exercise of personal jurisdiction. In asserting that the ship owner had continuous and systematic contacts with the United States, plaintiffs relied primarily on the cargo ship’s repeated visits to various ports in the United States. The difficulty with plaintiffs’ assertion was that none of the visits were made at the ship owner’s direction. The decision to bring the cargo ship to the United States was made, in each case, by the ship’s charterers, who were free under the charters to take the ship to any safe port in the world. The ship owner was entitled to receive the same financial benefit regardless of where the charterers directed the vessel. The ship owner could not constitutionally be subjected to personal jurisdiction with respect to an unrelated suit merely because, as the owner may have expected, the ship had repeatedly visited the forum’s ports at the sole direction of its charterers.
OUTCOME:
The judgment of the district court was affirmed.
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When, during Limitation of Vessel Owner’s Liability Act, 46 U.S.C.S. § 30501 et seq., proceeding, boat renter’s primary insurer became insolvent, trial court wrongly agreed with guaranty association that leisure boat service’s insurer became liable as, because primary coverage existed on accident date, insurer was not liable per an escape clause.
In re: ARAMARK LEISURE SERVICES, as owner of a certain 1997 19′ Mirage Runabout for exoneration from or limitation of liability, Plaintiff, v. CHARLES F. KENDRICK, Claimant/Third Party Plaintiff – Appellee, v. ALBANY INSURANCE COMPANY, Third Party Defendant – Appellant, TRACI A. SEVY, Claimant – Amicus Curiae.
UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT
2008 U.S. App. LEXIS 8638
April 21, 2008, Filed
PROCEDURAL POSTURE:
Third party defendant insurer appealed from the U.S. District Court for the District of Utah, which held that it had to provide primary coverage to third party plaintiff renter. The renter, in plaintiff leisure boat service’s special proceeding under the Limitation of Vessel Owner’s Liability Act, 46 U.S.C.S. § 30501 et seq., filed a claim against the service and third party defendant insurer; subsequently, his primary insurer became insolvent. OVERVIEW: The renter was involved in a boating accident. The service filed the proceeding, as part of which the renter waged claims against it and its insurer. The insurer argued that the renter’s personal liability insurance provided primary coverage and that, pursuant to an escape clause, the insurer was not liable. While the litigation was ongoing, the primary insurer became insolvent, and the Utah Property and Casualty Insurance Guaranty Association (UPCIGA) became potentially responsible. The UPCIGA stated that, under the exhaustion provision in Utah Code Ann. § 31A-28-213(1)(A), the insurer was required to provide primary coverage. The federal district court agreed; the federal court of appeals reversed. The insurer’s policy contained a valid escape clause. The existence of the primary policy on the accident date triggered the clause, and, at that point, the renter no longer had a claim against the insurer that he could exhaust. The insurer, therefore, was not required to provide primary coverage to the renter. Rather, the UPCIGA was primarily responsible under Utah Code Ann. § 31A-28-207(1)(f)(ii), and it could not, as a primary insurer, prevail against the insurer’s escape clause.
OUTCOME:
The court of appeals reversed and remanded.
