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In re Complaint of Dammers & Vanderheide & Scheepvaart Maats Christina B.V.

decided: January 6, 1988.

IN THE MATTER OF THE COMPLAINT OF DAMMERS & VANDERHEIDE & SCHEEPVAART MAATS CHRISTINA B.V., PLTFFS, AS OWNERS OF THE M/V CHRISTINA FOR EXONERATION FROM OR LIMITATION OF LIABILITY; DAMMERS & VANDERHEIDE & SCHEEPVAART MAATS CHRISTINA B.V., PLAINTIFFS-APPELLANTS,
v.
FRAN CORONA AND ANA CORONA, CLAIMANTS-APPELLEES



Appeal from an order entered in the United States District Court for the Southern District of New York, Ward, J., vacating portions of an earlier order of that court that had enjoined respondents-appellees from pursuing a state court tort action against petitioners-appellants. District court had entered its earlier order pursuant to the Limitation of Shipowners' Liability Act, 46 U.S.C. § 181 et seq. After appellees filed certain stipulations, district court lifted its stay on their state court action against appellant shipowners. Affirmed. Judge Van Graafeiland concurs in the result.

Van Graafeiland, Meskill and Newman, Circuit Judges.

Author: Meskill

MESKILL, Circuit Judge :

In this appeal, petitioners-appellants Dammers & Vanderheide and Scheepvaart Maats Christina B.V., two Dutch corporations, challenge an order of the United States District Court for the Southern District of New York, Ward, J., that vacated portions of its earlier stay and allowed respondents-appellees Fran and Ana Corona to proceed with a state court tort action against the appellants. The tort action was instituted after Fran Corona was injured while working as a longshoreman aboard the M.V. CHRISTINA, a vessel owned and operated by the appellants.*fn1 The appellants thereafter petitioned the district court for exoneration from or limitation of liability pursuant to the Limitation of Shipowners' Liability Act (Act), 46 U.S.C. § 181 et seq. (1982). In accordance with the provisions of the Act, the district court enjoined the Coronas from pursuing their state court action. However, after the Coronas filed a stipulation conceding certain rights of the appellants and recognizing certain aspects of the district court's jurisdiction over the matter, the district court vacated that portion of its earlier order that had restrained the appellees' state litigation. See In re Dammers & Vanderheide, 660 F. Supp. 153 (S.D.N.Y. 1987). It is from this decision that appellants now appeal to this Court. We affirm.

BACKGROUND

On June 18, 1984, Fran Corona was working as a stevedore aboard the CHRISTINA while the vessel was being unloaded at a pier in New York City's East River. During the unloading operation, a wire rope on one of the CHRISTINA's deck cranes snapped and a hatch cover fell on top of Corona. He suffered injuries that ultimately resulted in the amputation of an arm and a leg.

Fran Corona and his wife, Ana, subsequently initiated a lawsuit against the appellants in the New York Supreme Court for New York County. Fran Corona sought $25 million for his injuries and his wife sought $10 million for loss of consortium. Appellants then instituted this action in the United States District Court for the Southern District of New YOrk seeking exoneration from or limitation of liability pursuant to the terms of the Act. The Act provides that the liability of a shipowner incurred as a result of a maritime accident "without the privity or knowledge of such owner . . . shall not . . . exceed the amount or value of the interest of such owner in such vessel, and her freight then pending." 46 U.S.C. § 183(a). To secure the protection of the Act, a shipowner must file with the district court security equal to the value of its interest in the ship and its cargo. See 46 U.S.C. § 185; Fed. R. Civ. P. Supplemental Rule F(1)-(2). The appellants complied with this requirement and the district court approved appellants' offer of security and their stipulation of approximately $7.6 million as the value of the CHRISTINA and her cargo.*fn2 Then, pursuant to 46 U.S.C. § 185 and Fed. R. Civ. P. Supplemental Rule F(3), Judge Ward enjoined the prosecution of any pending or future suits arising out of this accident against the shipowners in other forums, pending the resolution of the limitation of liability proceeding.

In the meantime, the Coronas had instituted other state court actions against the CHRISTINA's builder, charterer and architect, and against the companies that manufactured and inspected the vessel's deck cranes.*fn3 The appellees also initiated efforts to have the district court vacate its order restraining their suit against the appellants. After two unsuccessful attempts, the Coronas filed with the court a third amended stipulation. Relevant portions of that stipulation provide as follows:

(4) laimant, Fran Corona, and Ana Corona, his wife, hereby agree and concede that Plaintiffs Dammers & Vanderheide and Scheepvaat Maats Christina B.V., are entitled to and have the right to litigate all issues relating to limitation of liability pursuant to the provisions of 46 U.S.C. § 183(a) in this Court.

5) Claimant, Fran Corona and Ana Corona, his wife, will not seek in the action pending in the Supreme Court, State of New York in which a jury trial has been demanded, any judgment or ruling on the issue of plaintiffs' right to Limitation of Liability; and hereby consents [sic] to waive any claim of res judicata relevant to the issue of Limitation of Liability based on any judgment which may be recovered in said State Court Action.

6) Claimant Fran Corona, and Ana Corona, his wife, hereby stipulate that in the event there is a judgment or recovery in the State Court action in excess of SEVEN MILLION SIX HUNDRED SEVENTY-ONE THOUSAND ($7,671,000.00) DOLLARS whether against the plaintiffs, or any other liable parties who may cross-claim or claim over against the plaintiffs, in no event will claimant Fran Corona, and Ana Corona, his wife seek to enforce said excess judgment or recovery insofar as same may expose plaintiffs to liability in excess of SEVEN MILLION SIX HUNDRED SEVENTY-ONE THOUSAND ($7,671,000.00) DOLLARS pending the adjudication of Limitation of Liability in this Court.

7) Claimant's wife, Ana Corona, hereby stipulates and agrees that the claim of Fran Corona will have irrevocable priority to her per quod claim.

8) The claimant, Fran Corona, and his wife, Ana Corona, stipulate and agree that if the plaintiffs, Dammers & Vanderheide and Scheepvaat Maats Christina B.V., are held to be responsible for attorneys['] fees and costs which may be assessed against them by a co-liable defendant or party seeking indeminification [sic] for attorney fees and costs then ...


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