Court Opinion

ID: 36991
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:47:30+00
Date Added: 2024-06-11T14:56:28.614885
License: Public Domain

United States Court of Appeals
                                                                                   Fifth Circuit
                                                                                F I L E D
                     IN THE UNITED STATES COURT OF APPEALS
                                                                               November 10, 2004
                              FOR THE FIFTH CIRCUIT
                                                                            Charles R. Fulbruge III
                                                                                    Clerk
                                          No. 04-30050

In Re: In the Matter of the Complaint of TRACE MARINE INC.,
as owner of the MV Miss Lori, Petitioning for Exoneration from
or Limitation of Liability.
----------------------------------------------

TRACE MARINE, INC.,
as owner of the MV Miss Lori,

                                                                         Petitioner-Appellee,

                                              versus

WILLIAM FASONE; ET AL.,

Claimants,

                                              versus

CAROLYN KOINE, Curator for and
acting on behalf of plaintiff, Cheri Poche;
EDWARD H. LUNSFORD; JOSHUA JUAREZ
Biological children of deceased plaintiff, Edward Foss,

                                                                         Movants-Appellants.

                          Appeal from the United States District Court
                             for the Eastern District of Louisiana
                                       (No. 03-CV-93)

Before JONES, SMITH, and STEWART, Circuit Judges.
PER CURIAM:*

       Cheri Poche and three other passengers aboard a shipping vessel were injured in an accident

after a tugboat hit and sank the vessel they were aboard. Edward H. Lunsford and Joshua Juarez are

surviving minor children of Edward Foss, one of the other parties injured while aboard the shrimping

vessel. The appellant, Carolyn Koine (“Koine”), is the appointed curator acting on behalf of Poche,1

Lunsford, and Juarez ( collectively the “claimants”), and now appeals from the order and final

judgment of the district court denying the claimants’ motions for leave to file a late claim under the

Limitation of Liability Act, 46 U.S.C. §§ 181 et seq., and Rule F(4) of the Supplemental Rules for

Certain Admiralty and Maritime Claims. Because the district court did not abuse its discretion, the

order and final judgment denying the claimants’ motions for leave to file a late claim is AFFIRMED.

                      FACTUAL AND PROCEDURAL BACKGROUND

       On June 29, 2002, the MV Lori, a tug, collided with the F/V Heckle and Jeckle, a shrimping

vessel, in a Louisiana waterway. Four occupants aboard the vessel were injured: William Fasone,

Edward Foss, Janet Foss, and Cheri Poche (collectively “the plaintiffs”). The plaintiffs subsequently

filed suit against Trace Marine, L.L.C. (“Trace Marine”), the owner of the MV Lori, in the Civil

District Court for the Parish of Orleans. On January 10, 2003, the case was transferred to the United

States District Court for the Eastern District of Louisiana, after Trace Marine filed a federal cause

of action pursuant to 46 U.S.C. § 181 and Rule F of the Supplemental Rules for Certain Admiralty

       *
        Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
       1
          Carolyn Koine is also the biological mother of Cheri Poche. Poche was of the age of
majority at the time of the accident; however, during the course of the proceedings, she was
interdicted by her mother after she suffered a decline in her mental health.

                                                  2
and Maritime Claims. Trace Marine filed the federal action essent ially to limit its liability. In

accordance with Rule F, the district court set a deadline and issued a notice advising all claimants to

file all claims against Trace Marine by February 24, 2003. Janet Foss and William Fasone filed timely,

but the remaining claimants, Edward Foss and Cheri Poche, did not. Edward Foss unexpectedly died

during the proceedings.2 Poche’s claims were engaged by Koine, after Poche suffered a decline in

her mental state. The claims of Foss’ children, claimants Lunsford and Juarez, also proceeded under

the care of Koine due to their status as minors. Aft er Koine was appointed as curator for the

claimants, none of the claimants filed timely claims against Trace Marine as the district court ordered.

As a result, the district court entered a default judgment on March 10, 2003, against Poche, Lunsford,

and Juarez, and issued an order barring any subsequent claims. Trace Marine subsequently settled

with Janet Foss and William Fasone on July 31, 2003 and October 31, 2003, respectively. After an

unsuccessful settlement negotiation between Trace Marine and Koine, Koine filed joint motions for

leave to file a late claim in the district court on September 26, 2003, seven months after the court’s

February 24, 2003 deadline. One motion was on behalf of claimant Poche, the other motion was on

behalf of claimants Lunsford and Juarez. Both motions were denied and the claimants’ actions were

dismissed. This appeal by Koine ensued.

        The sole issue on appeal is whether the district court erred in denying the claimants’ motions

for leave to file a late claim under FED. R. CIV. P. SUPP. Rule F(4). Despite this single issue, Koine

asserts several arguments in support of her claim that the district court committed error: Koune

argues that the district court (1) abused its discretion pursuant to FED. R. CIV. P. SUPP. Rule F(4) in

        2
          The record indicates that Foss died from a drug overdose on November 9, 2002, five days
after claimants’ counsel filed a motion to withdraw.

                                                   3
not allowing Koine to file late claims, for cause shown, on behalf of the claimants; (2) was incorrect

in holding that Janet Foss could have preserved Edward Foss’ claim because she and Edward Foss

were not married at the time of the accident; and (3) should not have considered the potential affects

to the parties of a trial continuance, nor the prejudicial affect that a continuance of the trial would

have had on either the claimants, claimant Fasone, or on Trace Marine.

                                        DISCUSSION

        A. Standard of Review

        The Supplemental Admiralty Rules, Rule F(4) allows a district court to permit a claimant in

a limitation of liability proceeding to file a claim, nunc pro tunc, for good cause shown. Golnoy

Barge Co. v. M/T Shinoussa, 980 F.2d 349, 351 (5th Cir. 1993) (citing Texas Gulf Sulphur Co. v.

Blue Stack Towing Co., 313 F.2d 359 (5th Cir. 1963)). We review a district court’s ruling on a

motion to file a late claim for an abuse of discretion. Ibid. Notwithstanding the abuse of discretion

standard, “the district court’s decision must be ‘sound,’ and not ‘arbitrary.’ ” Ibid. (citation omitted).

        B. Supplemental Rule F(4)

        In Texas Gulf, this court established an analytical framework to guide district courts in their

evaluation of decisions to allow or refuse requests of late claimants to file untimely claims under the

Limitation of Liability Act. 313 F.2d at 362-63. We stated that “district court[s] ruling on a motion

to file a lat e claim[] should consider (1) whether the proceeding is pending and undetermined, (2)

whether granting the motion will adversely affect the rights of the parties, and (3) the claimant’s

reasons for filing late (emphasis supplied).” Id. at 363 (citations omitted). We emphasized in Texas

Gulf “that ‘relief from a tardy claim is not a matter of right[,]’” but a remedy requiring “an equitable

showing.” Golnoy Barge Co; 980 F.2d at 351.

                                                    4
        The district court in the instant case considered the three factors from Texas Gulf. Finding

that the claimants’ reasons for filing late did not justify seven months tardiness, the court denied the

claimants’ motion. In addition, the court found that the claimants’ reasons given for their tardiness

did not outweigh the prejudice that would be caused to the other parties were it to grant the motion.

The court thereby concluded that the claimants had not met their burden of establishing good cause.

        As to the first factor considered under Texas Gulf, whether the proceeding was pending or

undetermined, the court found that the case had been partially determined since, at the time of the

claimants’ motion, Trace Marine had already settled with Janet Foss and was in the middle of

settlement negotiations with William Fasone.

        Addressing the second factor to be considered, the potential adverse affect to the rights of the

parties if the motion to file late was granted, the court duly noted that Trace Marine had relied on the

fact that there were only two remaining claimants in the action when it began settlement negotiations

with Janet Foss. The implication is that Trace Marine relied on the other claimants being excluded

when it made its decision to settle with Fasone and Janet Foss. The court also concluded that were

it to allow the motion, the addition of the new claimants would likely require a continuance of the

previously scheduled November 10, 2003 trial date, and suggested that a continuance would be

injurious to Trace Marine and to the claimants. Trace Marine agrees that a continuance would have

been injurious to it because it would have incurred further costs in conducting discovery. However,

the court expressly stated that it was concerned that the claimants would not have sufficient time to

conduct discovery because the scheduled trial date of September 26, 2000, was less than two months

from the date of their request to file late. Trace Marine, in support of the court’s finding of an

adverse impact to the parties, also points out that on the day that the claimants filed their request to

                                                   5
file late, the claimants would have had only three days to conduct discovery because the claimants’

filing date was three days from the district court’s scheduled discovery cut-off date. We can safely

presume that the trial judge knew of this fact as the court considered the possibility of ordering a

continuance. Finally, addressing the third factor to be considered under Texas Gulf, i.e., the

claimants’ reasons for filing late, the court stated that the claimants did not provide an explanation

regarding when they received notice of the limitation action. Thus, it could not determine what

would have been a reasonable filing deadline from the time the claimants received their notice. The

court further stated that because the reasons provided by the claimants for why they filed untimely

did not justify their seven-month delay, equity did not favor allowing their motion to file late. Having

considered all of the claimants’ arguments proffered by Koine on this appeal, and in light of the

governing standard of review herein, we cannot conclude that the district court abused its discretion.

        1. Good Cause Shown

        Koine first avers that the district court abused its discretion by finding that the claimants did

not meet their burden under Supplemental Rule F(4) for good cause. Koine specifically states that

the district court’s consideration of the three factors pronounced in Texas Gulf was “incorrect, too

strictly construed, contained false premises, and was totally out of line with the idea of ‘equitable

liberality’ underlying admiralty law and the ‘good cause shown’ provision.” Koine also contends that

the facts surrounding the claimants’ circumstances are distinguishable from those in Texas Gulf, and

thus alludes to the fact that William Fasone, the only timely co-claimant in this action, did not object

to the claimants’ motion to file late. Koine states that the facts in Texas Gulf, conversely, reflect a

late claimant who was vigorously opposed by six other co-claimants, and that in the instant case the

only timely co-claimant, Fasone, does not object to claimants’ request to file late. The implication

                                                   6
is that because William Fasone does not object, this court should not be concerned, nor should the

district court have been, with any potential adverse affect to the rights of Trace Marine or to William

Fasone. Koine, however, fails to sufficiently address the question of any potential adverse affects to

Trace Marine had the district court granted the motion. Koine does not address the fact that Trace

Marine objected to the claimants’ motion on the basis that it would suffer additional costs had the

motion been granted, further reasoning to support the district court’s concern of an adverse affect

to the parties in this litigation. Instead, Koine avers that the claimants articulated multiple equitable

grounds sufficient to establish good cause shown: (1) claimants’ counsel withdrew after the claimants

filed their state law causes o f action; (2) Edward Foss’ untimely death made it impossible to file

timely, as to Lunsford and Juarez; and (3) Poche’s failed mental health and subsequent interdiction

caused her untimeliness. These arguments attempt to bolster the claimants’ position regarding the

third factor considered under Texas Gulf, claimants’ reasons for filing late, but do nothing to address

the concerns of the second factor to be consider under Texas Gulf, i.e., whether granting the motion

will adversely affect the rights of the parties. However, the district court wholly rejected the

claimants’ proffered claims in equity.

        With regard to Koine’s argument that the withdrawal of the claimants’ counsel caused their

untimeliness, the district court reasoned that because the same counsel that represented Janet Foss

and William Fasone, both of whom filed their claims timely, had also represented the claimants, the

withdrawal argument could not prevail. We agree.

        Koine’s assertion that Foss’ death prevented the claimants from filing timely also does not

pass muster. The district court reasoned that because Janet Foss was a claimant in the case at bar and

had timely filed her claim, she presumably was aware of the court’s limitation period, and thereby,

                                                   7
could have exercised her deceased husband’s rights. The court, on this basis, concluded it was

possible for Edward Foss’ claims to be timely filed, but that Janet Foss simply failed o do so.
                                                                                       t

        Finally, the district court rejected Koine’s argument regarding Poche’s failed mental health

and subsequent interdiction as the reason for Poche’s untimeliness. The court found that Poche’s

interdiction occurred on June 12, 2003, almost five months after the February 24th deadline.

Notwithstanding the claimants’ failure to meet the original deadline, Koine waited an additional three

and one-half months after the interdiction of Poche before she filed the motion for leave on

September 26, 2003, and provided no further explanation for her additional three and one-half

month’s tardiness.

        Based on our review of this record, we cannot conclude that the district court’s finding that

the claimants failed to satisfy the three factors articulated in Texas Gulf, and its finding that the

claimants failed to establish good cause shown, was an abuse of the court’s discretion.

        2. Marriage To Edward Foss

        Koine also contends that the district court committed error in refusing the claimants’ motion

as to Lunsford and Juarez, because the court’s ruling was based on an incorrect notion that Janet Foss

was married to Edward Foss at the time of the accident. This argument is of no avail. The record

is devoid of any evidence that Janet Foss was not married to Edward Foss at the time of the accident,

aside from the unsupported statement of Koine. The district court did not abuse its discretion.

        3. Continuance of the Trial

        Finally, Koine contends that the district court committed error in considering the possible

impact to the parties of a continuance of the trial date. Koine essentially argues that when the court

in Texas Gulf referred to courts having to consider an adverse effect to the parties in its determination

                                                   8
to allow or refuse a motion to file late, it did not have in mind the issue of whether a trial’s

continuance would affect existing claimants such as Fasone, or late claimants such as the instant

claimants. Koine cites no case law for this proposition. Instead, Koine highlights the fact that, at the

time of claimants’ motion, William Fasone, the lone timely claimant in this case, did not object to

claimants’ requests to file late. Koine misses the mark by failing to consider, as the district court did,

any potential adverse impact to Trace Marine, including any additional discovery costs Trace Marine

might have incurred had the district court granted the motion. Indeed, our reading of Texas Gulf

does not lead us to conclude, as Koine suggests, that when we referred to rights of the parties, we

limited the district courts’ consideration of adverse affects solely to that of the claimants involved in

the litigation, and not the petitioner, here Trace Maarine. Our reading of Texas Gulf is that we were

concerned with adverse effects to all the parties. The district court’s consideration of the potential

adverse affects to Trace Marine was therefore proper, including its consideration of Trace Marine’s

prior settlement agreements and the potential additional discovery costs it might have suffered were

it to grant the claimants’ motion. Indeed, Trace Marine maintains that if the district court would have

allowed t he claimants to file late, the additional claims would have exposed it to greater liability

because the claimants likely would have sought the full value of the limitation fund. Further, Trace

Marine suggests that if it had known it have would have been exposed to additional liability at the

time of its settlement with Fasone, as the claimants seek t o do here, it is highly unlikely that the

settlement with Fasone would have occurred. All of these factors further indicate that the district

court’s decisions were not arbitrary or capricious, but were based on sound reasoning. “In this

delicate area it is not for us to determine what any one or all of us might have done had the problem

been presented to us as trial judges. We may well differ in the assessment of the competing factors.”

                                                    9
Texas Gulf, 313 F.2d at 363. The question is whether the trial court abused its discretion. In the

instant case, we are unpersuaded by Koine’s argument, and therefore, find no error in the district

court’s consideration of adverse affects to all the parties in this litigation.

                                            CONCLUSION

        Koine’s arguments contending the district court abused its discretion by failing to grant

claimants’ motions for leave to file a late claim are to no avail. The district court’s order denying the

claimants’ motions, though resulting in unfortunately harsh consequences, was not arbitrary or

capricious, but was based on sound reasoning. Because Koine has not satisfied the heavy burden of

showing that the district abused its discretion, the order denying claimants’ motions to file late and

the final judgment dismissing claimants’ actions are hereby AFFIRMED.

                                                   10