In re: Complaint of A.P. Franz, Jr., Trustee, as owner, for Exoneration from or Limitation of Liability of Barge B-52

By: Stephen V. Bush

United States District Court, N.D., New York, No. 1:13-cv-411 2014 U.S. Dist. Lexis 34587 (N.D., N.Y., March 17, 2014, C.J. Sharpe)

Does notice of a claim for compensation trigger the time period to file a complaint for exoneration or limitation of liability?

Issue:

The issue before the court was whether notice to the employer/vessel owner of a claim for worker’scompensation benefits triggered the 6 month limitation period for the vessel owner to file a complain for exoneration from or limitation of liability as required by 46 U.S.C. Sec. 30511(a). This provision requires the vessel owner to file an action for exoneration or limitation “within six months after a claimant gives the owner written notice of a claim.”

Sequence of Events:

The employee filed a claim for state workers’ compensation benefits under the New York state worker’s compensation act on May 20, 2011. In addition, the employer then filed the employers first report of injury (LS-202) with the Longshore Division of the U.S. Department of Labor on July 28, 2011 pursuant to the provision of the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. Sec. 901 et seq. The employee then filed suit in New York state court for general damages against the vessel owner on October 16, 2012. On the cusp of the expiration of the six month period (46 U.S.C. Sec. 30511(a)), the employer/vessel owner then filed its Complaint for Exoneration from or Limitation of Liability in the federal court. The magistrate gave the employee claimant permission to file a Motion to Dismiss on the basis the vessel owner’s complaint was untimely.

Argument:

The claimant employee maintained that the vessel owner had more than sufficient and adequate notice in May and July, 2011 to file its complaint for exoneration or limitation as it had notice of the employee’s claim for state

workers’ compensation benefits

and even filed its own notice with the Longshore Division of the U.S. Department of Labor pursuant to the federal Longshore Act. The employee’s attorney asserted that this put the “bull’s eye” on the vessel owner and that it knew it probably would be sued thus triggering the limitation period which expired long before the complaint was filed.

Holding:

The district judge, Chief Judge Sharpe, however, disagreed and denied the Motion to Dismiss the complaint. A claim for workers’ compensation benefits is not the type of claim which is subject to limitation in the first place. Mere notice of facts is insufficient, in itself, to place a vessel owner on notice of a claim which must be one for which the vessel owner can seek either exoneration from liability or limitation of liability. The vessel owner in this case has no legal basis to seek such relief for a claim for any workers’ compensation benefits. The judge held that the time period for filing the complaint here began when the plaintiff filed the state court suit for damages. Thus, the Complaint for Exoneration from or Limitation of Liability was timely filed.