In re Bald Head Island Transp., Inc.

124 F.Supp.3d 658

In the Matter of BALD HEAD ISLAND TRANSPORTATION, INC. ("Owner"), Bald Head Island Limited LLC ("Manager") and M/V Adventure, Official No. 916323, together with her Engines, Tackle and Apparel.

No. 7:14–CV–00077–F.

United States District Court, E.D. North Carolina, Southern Division, In Admiralty.

Signed Aug. 18, 2015.

Geoffrey A. Losee, George Rountree, III, Rountree Losee LLP, Wilmington, NC, for In the Matter of Bald Head Island Transportation, Inc. ("Owner"), Bald Head Island Limited LLC ("Manager") and m/v Adventure, Official No. 916323, together with her Engines, Tackle and Apparel.

ORDER

JAMES C. FOX, Senior District Judge.

This matter is before the court on the following motions: Claimant Tammy Strickland's Motion for Summary Judgment [DE–65]; Plaintiffs' Motion to Dismiss Claimant Bonnie Cockrell's Claim for Punitive Damages [DE–69]; Plaintiffs' Motion for Partial Summary Judgment on Claimants' Punitive Damages Claims [DE–71]; Claimants Bonnie Cockrell, Mary Beth Springmeier, and Steven Donecker's Motion for Summary Judgment [DE–72]; and Claimants Tammy Strickland, Bonnie Cockrell, Steven Donecker and Mary Beth Springmeier's Motion to Strike [DE–82]. The motions have been fully briefed and are ripe for disposition. For the reasons stated below, Claimants Tammy Strickland, Bonnie Cockrell, Steven Donecker and Mary Beth Springmeier's Motion to Strike is ALLOWED; Claimant Tammy Strickland's Motion for Summary Judgment is ALLOWED; Plaintiffs' Motion to Dismiss Claimant Bonnie Cockrell's Claim for Punitive Damages is DISMISSED without prejudice; Plaintiffs' Motion for Partial Summary Judgment on Claimants' Punitive Damages Claims is DISMISSED without prejudice; and Claimants Bonnie Cockrell, Mary Beth Springmeier, and Steven Donecker's Motion for Summary Judgment is ALLOWED.

I. FACTUAL AND PROCEDURAL BACKGROUND

The basic facts in this case are largely undisputed. Plaintiff Bald Head Island Transportation, Inc. ("BHIT") is a North Carolina corporation that was the Owner of the M/V ADVENTURE (the "Vessel"). Compl. [DE–1] ¶ 2. Plaintiff Bald Head Island Limited LLC ("BHIL") is a Texas limited liability company that was the Manager and owner pro hac vice of the Vessel. Id. ¶ 4.

There is no means to access Bald Head Island, North Carolina by land. Charles A. Paul Deposition [DE–68–7] at 59; Claude McKernan Deposition [DE–68–3] at 5. The Vessel is one of passenger ferries that Plaintiffs used to transport passengers between Southport, North Carolina and Bald Head Island, North Carolina. Charles A. Paul Deposition [DE–68–7] at 59.

On December 17, 2013, Captain Rodney Melton was in command during the 9:00 a.m. ferry run, and there were fifty-three passengers aboard the Vessel. Claude McKernan Deposition [DE–68–3] at 30. The Vessel was headed from Deep Point Marina in Southport to the Village of Bald Head Island. Compl. [DE–1] ¶ 5. At a speed of between 17–19 knots, the Vessel proceeded down the channel. ESI Expert Report [DE–71–15] at 3. Captain Melton piloted the Vessel past red buoy "18" on the starboard side. Id. After passing Buoy "18," Captain Melton initiated a port turn around the western end of Battery Island. Id. Captain Melton steadied on a course of about 140 degrees about the time that the Vessel passed red Buoy "16" to starboard. Id. The Vessel went 520 yards over about a minute before it experienced rapid deceleration because it had run aground at position 33.9025 North and 78.01315 West. Id. at 3–4. The Vessel ran aground on a sandbar in the Cape Fear River just southeast of marker 16 and Battery Island. Compl. [DE–1] ¶ 5. As a result of the grounding, everyone was thrown forward. ESI Expert Report [DE–71–15] at 4.

Certain passengers and a crew member aboard the Vessel have alleged injuries and damages. Compl. [DE–1] ¶ 8. The crew member is Bonnie Cockrell and the passengers are Steven Donecker, Tom Griffin, Bernie Loerzel, Victor Magana, Richard Scearce, David Simmons, Mary Beth Springmeier, Tammy Strickland and Robert Weisser. Id. Plaintiffs received their first notice of claim arising from the December 17, 2013 grounding on January 6, 2014. Id. ¶ 7.

On April 23, 2014, Plaintiffs filed this action for exoneration from or limitation of liability pursuant to the Limitation of Liability Act, 46 U.S.C. § 30501 et seq., Fed.R.Civ.P. 9(h) and Rule F of the Supplemental Rules for Admiralty or Maritime Claims. Plaintiffs contend that they are entitled to exoneration from or limitation of liability because the injuries sustained by known and unknown claimants were sustained without privity or knowledge by either Plaintiff. Id. ¶¶ 5, 9.

On May 1, 2014, the Clerk of Court entered a Notice [DE–11] advising that Plaintiffs had filed a Complaint for exoneration from or limitation of liability of all claims arising out of the December 17, 2013 voyage. The Notice provided that all persons with a claim must file it on or before June 15, 2014, or be defaulted. [DE–11] at 2. The following individuals filed an Answer and Claim: Steven A. Donecker, Mary Beth Springmeier, Richard W. Scearce, III, Tammy Strickland, and Bonnie Cockrell. Old Baldy Foundation, Inc. and Employers Assurance filed a Notice and Claim of Subrogation Lien [DE–30] regarding claimant Mary Beth Springmeier. On August 5, 2014, this court entered an Entry of Default Against Non–Appearing Parties [DE–48].

Plaintiffs and Richard W. Scearce, III entered into a settlement agreement [DE–59–1], which was approved by this court. On December 4, 2014, Scearce was dismissed as a claimant in this action, and all his claims were dismissed with prejudice. [DE–62] at 2.

II. STANDARDS OF REVIEW

A. Summary Judgment

The standard for granting summary judgment is well established. "The Court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a) ; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party bears the burden bears the initial burden of informing the court of the basis for its motion and identifying the matter it believes demonstrates the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The substantive law governing the case will identify those facts that are material and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When the court determines whether summary judgment is appropriate, it must resolve all ambiguities and draw all reasonable inferences in favor of the nonmoving party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587–88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citing United States v. Diebold, Inc. 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962) ).

B. Rule 12(b)(6) Motion to Dismiss

The purpose of a motion to dismiss under Rule 12(b)(6) is to test the legal sufficiency of the complaint, not to resolve conflicts of fact or to decide the merits of the action. Edwards v. City of Goldsboro, 178 F.3d 231, 243–44 (4th Cir.1999). In considering a motion to dismiss, the court assumes the truth of all facts alleged in the complaint and the existence of any fact that can be proved which is consistent with the complaint's allegations. E. Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'shp, 213 F.3d 175, 180 (4th Cir.2000). However, the " ‘[f]actual allegations must be enough to raise a right to relief above the speculative level’ " and the plaintiff must allege " ‘enough facts to state a claim to relief that is plausible on its face.’ " Wahi v. Charleston Area Med. Ctr., Inc., 562 F.3d 599, 615 n. 26 (4th Cir.2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "[A] plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citations omitted); accord Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Moreover, a court "need not accept the legal conclusions drawn from the facts" nor "accept as true unwarranted inferences, unreasonable conclusions, or arguments." E. Shore Mkts., 213 F.3d at 180.

III. DISCUSSION

A. The Limitation of Liability Act

Under the Limitation of Liability Act, "the liability of the owner of a vessel for any claim, debt, or liability ... shall not exceed the value of the vessel and pending freight," 46 U.S.C. § 30505(a), provided that such claims, debts, or liabilities "aris[e] from any embezzlement, loss, or destruction of any property, goods, or merchandise shipped or put on board the vessel, any loss, damage, or injury by collision, or any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred, without privity or knowledge of the owner," except as otherwise excluded by law, id. § 30505(b).

In order to avail itself of the protection of the statute, "[t]he owner of a vessel may bring a civil action in a district court of the United States for limitation of liability ... within 6 months after a claimant gives the owner written notice of a claim." 46 U.S.C. § 30511(a). For purposes of the limitation of liabilities, "the term ‘owner’ includes a charterer that mans, supplies, and navigates a vessel at the charterer's own expense or by the charterer's own procurement." 46 U.S.C. § 30501. After the owner posts the security required by 46 U.S.C. § 30511(b), the court then "issue[s] a notice to all persons asserting claims with respect to which the [petition] seeks limitation." Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions, Fed.R.Civ.P., Supp. R. F(4).

In a limitation proceeding, the...