Opinion ID: 6925
Heading Depth: 3
Heading Rank: 2

Heading: Adequacy of the Stipulation

Text: 15 The district court denied Jarreau's motion to lift the order staying his state court action, finding that the claimants had not entered into a stipulation sufficient to protect PATCO's interests. Jarreau argues that this was error, insisting that both he and Verdin, the only other crew member remaining in the suit at that time, had proposed an adequate stipulation. 16 But the record is clear that the stipulation proposed by Jarreau and Verdin was inadequate to protect PATCO's right to limit its liabilities: That agreement would not have bound all necessary parties. Even though they eventually agreed between themselves to the terms of a proposed stipulation, Jarreau and Verdin never convinced JWT to enter into it. Yet JWT was a codefendant with a cross claim against PATCO seeking damages, attorneys' fees and costs. Indeed, the fact that Jarreau, Verdin, and JWT were unable to arrive at an acceptable stipulation among themselves was confirmed when they informed the district court that they had abandoned all efforts to obtain a mutually agreeable stipulation, after which Jarreau and Verdin proceeded to try their cases before that court. 17 On this point the law is clear: When the aggregate of the damages being sought by all claimants exceeds the value of the concursus, actions in state court cannot proceed unless all claimants enter into a stipulation that adequately protects the shipowner which has filed a complaint in federal court seeking to limit its liability. 14 We recently stated that a claimant in this context includes a codefendant who is asserting a cross claim for indemnification, costs, and attorneys' fees. 15 As none dispute that JWT was doing precisely that, or that JWT refused to enter into a stipulation with Jarreau and Verdin, PATCO would have been exposed to a multiple claimant/inadequate fund situation had Jarreau been permitted to pursue his action in state court. 16 Clearly, then, the trial court would have abused its discretion had it lifted its earlier order staying Jarreau's state court proceeding. 17 In sum, not only was the district court's decision to deny Jarreau's motion to lift the stay entirely proper, it was required by law.