Written Means Written and Nothing Else
In re Complaint of Brava Cruz, L.L.C., 2020 WL 4287452, 2020 U.S. Dist. LEXIS 132051 (S.D. Tex. July 27, 2020).
By: Dylan Hoke
The United States District Court for the Southern District of Texas, Brownsville Division recently offered some insight to the Shipowner’s Limitation of Liability Act’s notice requirement. Under the Act, the Shipowner has six months from receiving written notice of a claim that will likely exceed the value of the vessel plus pending freight to file for limitation.[1] In denying Claimant’s Motion to Dismiss the limitation action, the court stated that the written notice requirement begins when a writing reveals a reasonable possibility that a claim would exceed the value of the vessel, and a writing’s deficiencies cannot be cured by evidence beyond the scope of that writing.
In November 2018, Claimant injured his finger while working aboard the shrimping vessel BRAVA CRUZ (“BRAVA”), which ultimately required partial removal of a portion of the finger. On December 27, 2018, Claimant’s counsel sent a letter to the registered agent of the BRAVA asserting that he represented the injured person in a claim arising out of the accident. The letter did not disclose the nature of Claimant’s injuries nor any damages. In mid-January 2019, attorneys for both parties spoke via telephone where counsel for BRAVA allegedly acknowledged the severity of the injury and that the claim would likely exceed the value of the vessel. On August 1, 2019, Claimant sent a demand letter detailing the facts, claims involved, medical expenses totaling $220,407.90, and a proposed settlement offer of $1.75 million. The vessel owner subsequently filed the limitation action in January 2020 and sought to limit the liability to $209,312, which equaled the sum of the value of the vessel and its pending freight.
The Claimant moved to dismiss the limitation action, alleging that BRAVA failed to timely file its limitation complaint within the required six months. Claimant argued that written notice should have started on December 27, 2018, and if that notice was deficient, the court should consider outside evidence. This evidence would include photos and hospital records never provided to the BRAVA, the January 2019 phone call, and that the “high cost of medical treatment is common knowledge.”[2]
The court dismissed Claimant’s motion and stated that for a communication to qualify as written notice, the writing must communicate a (1) reasonable possibility of a claim and (2) reasonable possibility of damages in excess of the vessel’s value. While the letter given to BRAVA on December 27, 2018 satisfied as a reasonable possibility of a claim, it failed to reference the nature of the injury sustained nor any medical treatment obtained; therefore, it did not communicate that there is a reasonable possibility of damages in excess of the vessel’s value. Furthermore, the court was unpersuaded by Claimant’s argument to use the outside evidence of photographs, hospital records, and the January phone conversation to show that BRAVA was aware of the extent of the Claimant’s injuries. While the requirement can be satisfied through multiple writings to the vessel owner, the Claimant never provided the pictures or records to BRAVA, and therefore, they could not be considered along with the original letter as providing notice. Additionally, reliance on a phone conversation in which a party allegedly acknowledged that the claim could exceed the vessel’s value to cure deficiencies in a writing would ultimately “negate the benefits of the Act’s written notice requirement.” [3] The January phone call became irrelevant to the matter. Lastly, the court was unpersuaded by Claimant’s common knowledge argument because the December letter failed to reference any alleged injury or treatment. The mere mention of an accident and lawsuit does not automatically put the vessel owners on notice of an accident that caused a type of injury that would exceed the value of the vessel.
Ultimately, the district court’s opinion can be seen as an attempt to establish some concrete guidelines in an area that has recently been the subject of much discussion.
[1] 46 USCS §30505 (2018).
[2] In Re Complaint of Brava Cruz, L.L.C., 2020 U.S. Dist. LEXIS 132051, at *17 (S. D. Tex. July 27, 2020).
[3] Id. at *16.
