* Circuit Judge of the Second Circuit, sitting by

designation.

1 United States Court of Appeals,

Fifth Circuit.

No. 94-30403.

Patricia Ann GUEY, as owner of the Baron (now known as the

Hustler, C.G. La. 2317-E.J.), seeking exoneration from or

limitation of liability in re, Patricia Guey, Cross-Claim a ntAppellee,

v.

GULF INSURANCE COMPANY, Cross-Defendant-Appellee,

Shirley Perkins, individually and on behalf of Michael Penn,

Claimants-Appellants.

March 2, 1995.

Appeal from t he United States District Court for the Eastern

District of Louisiana.

Before VAN GRAAFEILAND, * JOLLY and WIENER, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

The question presented in this case is whether, under 46

U.S.C.App. § 185, in a limitation of liability proceeding, the

failure to post bond in an amount equal to the owner's interest in

the vessel within six months following notice of a claim is

jurisdictional. We hold that it is not jurisdictional.

I

On July 4, 1992, a boat owned by Patricia Ann Guey, and

operated by Louis Butz collided with another boat operated by Scott

Helmer. Michael Penn, a passenger aboard the vessel operated by

Helmer, was seriously injured. Shirley Perkins, individually and

on beha lf of Penn, brought suit against Guey and Butz in state1 The district court originally dismissed without prejudice

the limitation action for failure to post the proper security,

but later vacated this judgment and ordered Gulf to provide the

appropriate security.

2 court under 28 U.S.C. § 1333, alleging negligent entrustm ent and

owner responsibility. Approximately two months later on January 7,

1993, Guey brought a limitation of liability action u nder 46

U.S.C.App. § 185 in the United States District Court for the

Eastern District of Louisiana. Guey did not post security equal to

her "interest in the vessel" as set out in section 185. Instead,

she contended in her affidavit filed with her complaint that her

"interest in the vessel" following the accident was z ero dollars

because the amount owed on the boat exceeded its value. On April

23, 1993, Guey filed a cross-claim against Gulf Insurance Company

("Gulf"), which provided insuranc e coverage on the boat, arguing

that Gulf must post security for the limitation action. On July 2,

199 3, the district court ordered Gulf to provide security for

Guey's limitation action in the amount of Guey's interest in the

boat, without reduction by the amount of any outstanding liens on

the boat. Gulf provided this security on July 12, 1993. 1 The

d istrict court then stayed all further proceedings pending the

te rmination of the limitation proceeding. On October 28, 1993,

Perkins answered the complaint and filed a claim for damages in

Guey's limitation action. On June 22, 1994, the district court

denied Perkins's motion for summary judgment, which sought

dismissal of Guey's limitation action on grounds that she, through

Gulf, failed to post security within six mo nths of notice of a3

claim, as allegedly required by 46 U.S.C.App. § 185. The district

court denied summary judgment and held that although Guey and Gulf

f ailed to post security within six months from the notice of the

claim, "[s]ecurity was posted in a timely manner following the

[district c]ourt's order" to do so. Perkins appeals.

II

A

We review a denial of a motion for summary judgment de novo,

applying the same standard as that used by the district court.

GATX Aircraft Corp. v. M/V Courtney Leigh, 768 F.2d 711 (5th

Cir.1985). Interlocutory orders concerning the amount of security

are a ppealable. I n re Talbott Big Foot, Inc., 854 F.2d 758, 760

(5th Cir.1988).

B

Perkins contends that Guey' s and Gulf's failure to post the

required security within six months after receiving notice of

Perkins's claim requires the dismissal of this action. She argues

that such a timely posting of security is required under both Rule

F(1) of the Supplemental Federal Rules of Civil Proced ure for

Certain Admiralty and Maritime Claims and 46 U.S.C.App. § 185, and

thus is a jurisdictional prerequisite to this suit.

Rule F(1) provides that:

Not later than six months after receipt of a claim in writing,

any vesse l owner may file a complaint in the appropriate

district court ... for limitation of liability pursuant to

statute. The owner (a) shall deposit with the court, for the

benefit of claimants, a sum equal to the amount or value of

the owner's interest in the vessel ..., or approved security

therefor, and in addition such sum s, or approved security

therefor, as the court may from time to time fix as necessary4

to carry out the provisions of the statutes as amended ...

S UPP .F ED .R.C IV .P. F(1). This rule incorporates in substance 46

U.S.C.App. § 185, which states:

The v essel owner, within six months after a claimant shall

have given to or filed with suc h owner written notice of a

claim, may petition a d istrict court ... for limitation of

liability within the provisions of this chapter and the owner

(1) shall deposit with the court, f or the benefit of

claimants, a sum equal to the amount or value of the interest

of such owner in the vessel ...

46 U.S.C.App. § 185. Upon motion of the claimant, the court can

increase the amount of security provided by the vessel owner on the

ground that the amount provided is less than the vessel owner's

interest in the vessel. S UPP .F ED .R.C IV .P. F(7).

C

Toge ther with her complaint, Guey filed Affidavits of Value

establishing the value of the boat after the accident as

$15,730.85, and the debt owed on the boat as $19,045.00. Because

the debt owed on the boat exceeded its value, Guey took the

position that her interest in the boat was zero. She, thus, posted

no security in conjunction wi th her limitation of liability suit

until the district court ordered her insurance provider, Gulf, to

post adequate security. This posting of security occurred more

than six months after the notice of the initial claim. She argues

that the district court cannot dismiss her ca se for inaccurately

estimating the value of her interest in the boat. In reliance on

Black Diamond S.S. Corp. v. Robert Stewart and Sons Ltd., 336 U.S.

386, 69 S.Ct. 622, 93 L.Ed. 754 (1949), she argues that posting an

inadequate bond is not a jurisdictional defect, and as such, the5

dis trict court retains jurisdiction even though security is not

properly posted. B lack Diamond, 336 U.S. at 395, 69 S.Ct. at 627,

93 L.Ed. at 762.

D

It is clear that neither Rule F nor section 185 by their

express terms man date simultaneous filing of the complaint and

posting of the security. Instead, the plain language of Rule F and

section 185 requires that only the complaint be filed within the

six months following notice of a claim. The Advisory Committee

Notes following Rule F support this straightforward and unalloyed

reading of the Rule and state that Rule F(1) "make[s] it clear that

the c omplaint may be filed at any time not later than six months

after a claim has been lodged with the owner," but is silent as to

any possible time limitations on the posting of security.

S UPP .F ED .R.C IV .P. F(1) advisory committee's note. Thus, our reading

of the statute indicates that posting the bond within the six

months following notice of a claim is not jurisdictional.

Although Black Diamond's facts are not identical to the facts

of this appeal, we think this case fully supports a conclusion that

the posting of the security within the six-month period is not

jurisdictional. The vessel owner, Black Diamond, filed a petition

and actually posted security, but in an amount that was less than

the value of the vessel. B lack Diamond, 336 U.S. at 391, 69 S.Ct.

at 624, 93 L.Ed. at 761. The district court dismissed the petition

on the ground that Black Diamond had failed to file a bond in the

proper amount, that is, in an amo unt equal to the value of the6

vessel. Id. at 391-93, 69 S.Ct. at 624-26, 93 L.Ed. at 761. The

court of appeals affirmed the dismiss al of the petition on

essentially the same grounds assigned by the district court,

although applying a different rationale. Id. at 392, 69 S.Ct. at

625, 93 L.Ed. at 761. The primary question addressed by the

Supreme Court was whether the limitation of liability statute

permitted a concursus of all the claims against the vessel when the

vessel owner did not concede that the total claims against the

vessel exceeded its value, and, consequently, had posted a bond in

an amount less than the value of the vessel. I d. at 389, 69 S.Ct.

at 624, 93 L. Ed. at 760. The Supreme Court, in reaching its

conclusion that Black Diamond was entitled to a concursus

notwithstanding whether the total claims exceeded the value of the

vessel, held that the inadequate bond was not a jurisdictional

defect under section 185. I d. at 395, 69 S.Ct. at 627, 93 L.Ed. at

763. Although the vortex of the controversy in Black Diamond was

not the six-month limitation period, as it seems to be in the case

before us, and although Black Diamond posted some security within

the six-month period when Guey posted none, the clear legal

inference to be drawn from the Black Diamond opinion is that

Perkins has not raised a jurisdictional question in the case before

us today.

Perkins argues, however, that to hold that the posting of the

bond within the six-month period is not jurisdictiona l conflicts

with the hoary Second Circuit case of Petition of Goulandris, 140

F.2d 780 (2d Cir.1944). Although it is true that the district7

court in that case construed section 185 to require a ship owner to

post adequate security within the six-month prescribed period, the

circuit court's holding was not so precise. P etition of

Goulandris, 140 F.2d at 782. Writing for the court, Judge Swann

observed that the petition for limitation there did not seek the

customary and proper relief contemp lated by section 185. I d.

Instead, by refusing to surrender the vessel or to post adequate

security, the vessel owners sought an indefinite post ponement of

the limitation pr oceeding until "further application by the

petitioners." I d. Thus, the court of appeals fashioned a holding

that was essentially fact specific to the case before it: "All we

decide is that the petition as filed, with nothing further done

within the six months, did not satisfy the statutory requirement."

Id.

To be sure, our court has already determined that Petition of

Goulandris does not stand for the proposition that the posting of

the bond is jurisdictional. In Oil Transport v. Verret, 278 F.2d

464 (5th Cir.1960), judgment vacated as moot, 365 U.S. 768, 81

S.Ct. 911, 6 L.Ed.2d 83 (1961)—a case much like ours today—the

bareboat charterer and owner of a sunken vessel filed a limitation

proceeding within six months, but, stating that the sunken vessel

was worthless, failed to post any security within the six-month

period. O il Tran sport, 278 F.2d at 465. The trial court denied

the petitioners the benefit of the limitation statute because of

their failure to post security within six months of the filing of

a claim against the vessel. I d. at 466. The case presented the8

question of whether the failure to post adequate security within

the six-month period of time was jurisdictional. I d. Judge

Tuttle, writing for the court, held that when the vessel owner

believes in good faith that the vessel is worthless, no bond need

be posted to claim the benefits of the limitation of liability

statute. I d. In reaching his conclusion, Judge Tuttle observed

that Petition of Goulandris did not require as a jurisdictional

prerequisite the posting of a bond in the good faith circumstances

that he found in the facts before him.

Before concluding, we should observe that although Rule F and

section 185 impose no mandatory time limitations on the posting of

a bond, clearly the better practice is to require timely posting of

a bond, so that the litigation may be exp ediently resolved. The

district court is free, and, indeed, is encouraged to exercise its

discretion and require prompt filing of the bond once the complaint

is filed. The district court surely may enforce such orders with

the proper sa nctions, including dismissal of the limitations

proceedings in the appropriate case. We only hold that under

section 185 the simultaneous posting of security with the

petition—or the posting of security within six months—is not a

jurisdictional requirement.

E

We conclude by observing that although Guey initially posted

no amount of security, her boat insurer, Gulf, promptly filed an

adequate bond when ordered to do so by the district court. We

agree with the district court that in this case "security was9

posted in a timely manner following the [district c]ourt's order"

to do so. Because we hold that posting security within the six

months following noti ce of a claim is not a jurisdictional

requisite by the terms of Rule F and section 185 and because the

court did not abuse its discretion in concluding that the security

was otherwis e timely posted, we AFFIRM the district court's

judgment denying Perkins's motion for summary judgment.

III

For the foregoing reasons, the judgment of the district court

is

AFFIRMED.