Opinion ID: 2757407
Heading Depth: 3
Heading Rank: 2

Heading: “Reasonable Possibility” of Potential Claim

Text: We have not previously addressed the issue of what a writing must contain to give a vessel owner notice of a potential claim. Both RLB and the Butlers analogized to district court cases (primarily from courts outside this circuit) and emerge with two different methodologies for analyzing the facts at hand. RLB starts with an idea of what proper notice of a claim would look like and searches through Daniel’s emails for statements matching that standard. 46 U.S.C. § 30511(a) (2013). 23 See Complaint of Beesley’s, 956 F. Supp. at 541; Matter of Oceanic Fleet, Inc., 807 F. 24 Supp. 1261, 1263 (E.D. La. 1992). 10 Case: 14-40326 Document: 00512856802 Page: 11 Date Filed: 12/03/2014 No. 14-40326 RLB states that notice must “refer to the cause of [claimants’] injuries or the types of injuries sustained . . . and clearly assert blame on the petitioner.” RLB also tries to disqualify Daniel’s emails for “provid[ing] no details regarding the claims, injuries, or causes of injuries” and for not mentioning any “demand of a right, specific blame for damage, or call upon something due.” RLB asserts that, even though Daniel’s emails might have obliquely referred to a potential lawsuit, absent the magic words it sought, RLB “was never put on notice that [the Butlers] would be seeking a claim based on RLB’s alleged negligence in connection with the vessel.” RLB also claims that it had serious doubts as to the viability of the potential claim because of Butler’s alleged contributory negligence. The Butlers point out that RLB cannot simultaneously disclaim knowledge of a pending claim and assert knowledge of a potential defense to that claim. Furthermore, the issue here is the “reasonable possibility” that a claim exists, not probability of success on the merits. 25 In contrast, the Butlers’ approach is to start with the letters themselves, then consider whether together those letters reveal the reasonable possibility of a pending claim. Daniel’s first letter instructed RLB “to preserve evidence as if a suit had been initiated”; his email of August 19, 2011, mentioned the evidence he had already gathered and requested mediation “before any lawsuit”; his email on May 30 of the following year discussed state and federal venues for the suit and again requested mediation; finally, his emails of June 8 and 14, 2012, explicitly bring up filing the lawsuit and service of process. According to the Butlers, these statements, when taken together, paint a picture of a pending claim. 25Cf. In re Hawaiian Watersports, LLC, No. 07-00617, 2008 WL 3065381, at  (D. Haw. Feb. 29, 2008) (“Plaintiff would not be excused from being on notice if it believed it had some other compelling defense to the claim, such as no negligence on its part.” (citations omitted)). 11 Case: 14-40326 Document: 00512856802 Page: 12 Date Filed: 12/03/2014 No. 14-40326 The Butlers’ approach is more compatible with the reasonable-possibility test’s fact-intensive nature, as it starts with the actual facts rather than a predefined factual pattern. This finds support from the Second Circuit, which does not require “exacting specificity in a notice of claim to a vessel owner.” 26 Rather, that court uses “a broad and flexible standard of review—reading letters of notice in their entirety and considering their ‘whole tenor’—when determining if sufficient notice was given.” 27 In its favor, RLB’s position does invoke the benefits of a bright-line rule: A clear list of required statements and demands would provide guidance to future claimants and vessel owners alike. In addition to being less factfocused, however, there are two additional problems with this approach. First, regarding damages, we have held that the risk of uncertainty lies with the vessel owner. It would be inconsistent to reverse that risk when it comes to notice of a potential claim. Second, mandating that written notice contain “magic words” or specific elements might well impose a requirement not found in the statutory text. As the Butlers’ analytical approach appears to be more compatible with our precedent, and as it is factually inconceivable that RLB had no notice of a claim after almost a year of emails discussing the case—culminating in the June 14 missive informing RLB that Butler had actually filed suit—we hold that by June 14, 2012, at the latest, RLB had notice of the Butlers’ claim. This is obviously more than six months prior to the December 28, 2012, filing date of RLB’s limitation action. 26 Doxsee Sea Clam Co. v. Brown, 13 F.3d 550, 554 (2d Cir. 1994). 27 Id. 12 Case: 14-40326 Document: 00512856802 Page: 13 Date Filed: 12/03/2014 No. 14-40326 3. “Reasonable Possibility” of Damages in Excess of Vessel’s Value To the same extent that RLB had notice of the Butlers’ potential wrongful death suit, it had notice that there was a reasonable possibility of damages in excess of $750,000, even though Daniel’s emails never gave a specific number. Our recent decision in In re Eckstein Marine Service L.L.C. addressed almost precisely this same issue. 28 In that case, the state court plaintiff alleged permanent and disabling injuries, but did not provide a specific damages figure. We rejected the vessel owner’s contention that, without a dollar amount or certainty as to the extent and permanence of the plaintiff’s injuries, the period for filing a limitation action could not start. 29 We concluded that, in light of the severity of the injuries, a vessel owner should have realized the potential for damages in excess of its vessel’s value (coincidentally, also $750,000), and that any uncertainty was the owner’s burden to resolve. 30 That is the reason for a six-month grace period. The analogy to this case is clear. 31 The $3 million figure and dispute surrounding it are red herrings. RLB attacks the district court’s conclusion that RLB “certainly knew” of the $3 million value of the claim, and seeks to rely on the fact that this settlement offer never appeared in Daniel’s letters, only in Schulz’s rejection. However, RLB has no reply to the district court’s primary reasoning: RLB should have 28 672 F.3d 310 (5th Cir. 2012). 29 Id. at 317. 30 Id. at 317–18; see also Paradise Divers, Inc. v. Upmal, 402 F.3d 1087, 1091 (11th Cir. 2005); Doxsee, 13 F.3d at 554–55. 31 We note further that in In re Eckstein, the vessel owner had actually done some legal research to find that juries typically awarded about $335,000 for injuries similar to those suffered by the state court plaintiff, demonstrably less than the boat’s value of $750,000. We still did not excuse the untimely filing of the limitation action, however, stating that “[w]hile this finding might have made it less probable that [the state court plaintiff’s] claim would exceed $750,000, in light of the other evidence available to [the vessel owner] it did not make the possibility of such an award unreasonable.” In re Eckstein, 672 F.3d at 318 (emphases added). 13 Case: 14-40326 Document: 00512856802 Page: 14 Date Filed: 12/03/2014 No. 14-40326 realized that an action involving the death of a child would easily exceed $750,000 in potential damages. We are satisfied that more than six months prior to filing its limitation action, RLB had notice of a potential claim the value of which had the reasonable possibility of exceeding the value of its vessel.