Michael Vitale, Executor of the Estate of Alexandra Vitale v. Longshore Sailing School, Inc. et al. (2011)

MEMORANDUM OF DECISION RE MOTION IN OPPOSITION TO AND TO STAY HEARING FOR PREJUDGMENT REMEDY

BACKGROUND

The plaintiff, Michael Vitale as the executor of the estate of Alexandra Vitale (hereinafter “Vitale”) filed an application for prejudgment remedy against the defendant Longshore Sailing School, Inc. (“LSS”) dated December 14, 2010 and filed on December 16, 2010.   The plaintiff in this action is the executor for the estate of Alexandra Vitale who died on August 26, 2008 when the sailing vessel (a Hobie Cat Getaway catamaran) she was on capsized causing her to be thrown into the water.   Alexandra floated on the current and died as a result of drowning.   Alexandra Vitale was three years old.   She was one of three children on the sailboat taking a sailing lesson/ride from the defendant Katherine Durie who was an employee, servant and/or agent of defendant LSS. The owner of the vessel is the defendant Longshore Sailing School.   On June 30, 2009, the plaintiff filed a complaint in this court.   The defendant filed a petition to remove the case to district court for the district of Connecticut on July 20, 2009.   The defendant contended the action was based upon issues related to federal maritime law and on July 24, 2009, filed a complaint with the federal district court for “exoneration from or limitation of liability” pursuant to 46 U.S.C. § 30501 et seq. and Supplemental Rule F for Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure.   The statute provides that under certain circumstances the owner of a vessel is entitled to limit the liability for damage or injury occurring on the vessel to the value of the vessel.  46 U.S.C. § 30505.   In the instant action, the parties engaged in argument concerning the applicability of the statute and the continuation of the action in the federal and/or state court.   The federal district court entered a ruling on a Motion to Stay, Motion to Lift Injunction, Motion to Remand and Motion for Security For Costs dated January 19, 2010.   The decision of the federal court incorporated Stipulations entered into by the parties for the purpose of dissolving the injunction against the Vitale Action and allowing remand of the claim to state court as well as staying Longshore's Limitation action pending the outcome of the Vitale Action.   The court found that the “stipulations adequately protect Longshore's right to seek limitation of liability.”   The federal district court granted the motion to dissolve the restraining order against the Vitale Action and to Stay the Limitation Action and remand the action to state court on March 5, 2010.   The decision of the federal court addressed with particularity the Savings to Suitors Clause which provides that:  “district courts shall have original jurisdiction, exclusive of the courts of the States, of ․ [a]ny civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.”  28 U.S.C. § 1333(1).   The court also granted the motion for security for costs to be deposited with the Court.   The defendant LSS deposited $6,000 with the court.

Upon return of the action to the state court the parties engaged in pleading and discovery.   On April 20, 2010 the defendant filed an application to transfer to the Complex Litigation Docket which was granted on April 28, 2010.

On December 16, 2010, the plaintiff filed an application for prejudgment remedy against the defendant Longshore Sailing School requesting an order from the court “directing that the following prejudgment remedy be granted to secure the sum of $3,000,000.00 (Three Million Dollars and Zero Cents).”   The plaintiff alleges that the reason for the application is “that plaintiff has information from the defendant's attorney that defendant's insurance companies, RLI Insurance Company and Indemnity Insurance Company of North America, having reserved their rights with respect to any duty to indemnify the defendant, thereby creating a situation in which insurance coverage for any potential judgment or settlement may not be available, and plaintiff may therefore have to seek satisfaction of any potential judgment from the defendant's assets.”

On February 15, 2011, the defendant submitted a memorandum in opposition to the scheduling and hearing of the application for a Prejudgment Remedy.   The defendant also filed a claim for a hearing to contest the Prejudgment Remedy Application.   On January 10, 2011, prior to the objections in the state court, the defendant filed a Motion to Enforce or Amend Stay Order in Limitation of Liability Action in the federal district court seeking the court to issue orders to enjoin the plaintiff from proceeding with the state court Prejudgment Remedy Application.   The plaintiff filed an objection and memorandum of law addressed to the Motion to Enforce or Amend Stay Order.   The plaintiff argues in its objection to the federal court motions that the rule enunciated in Lewis v. Lewis & Clarke Marine, Inc., 531 U.S. 438, 445–46, 121 S.Ct. 993 (2001), permits such an application because it found that “state courts with all of their remedies may adjudicate claims against vessel owners so long as the vessel owner's right to seek limitation of liability (in federal court) is protected.   On April 8, 2011, the federal district court entered an order denying the Motion to Enforce or Amend the Stay Order.¹  The plaintiff contends that he has a right to have this court decide this prejudgment remedy in the instant action because he contends the statutory language of the limitation of liability clearly permits all other remedies and thus there is no legal basis to deny a hearing or finding of a prejudgment remedy.   The plaintiff further argues that the issuance of a prejudgment remedy will have no adverse impact upon the defendant.   The defendant contends that the only right for monetary assurance or security has been addressed in the federal court pursuant to the limitation of liability act which in the instant action permits the security of the value of the vessel and the freight.

The defendant submitted an objection to the prejudgment hearing with memorandum of law dated February 15, 2011.   The plaintiff submitted a reply memorandum dated March 23, 2011.

The parties appeared and argued on April 5, 2011.   The hearing on the application for a prejudgment remedy is presently scheduled for April 26, 2011.

DISCUSSION

“The purpose of a prejudgment remedy of attachment is security for the satisfaction of the plaintiff's judgment, should he obtain one ․ It is primarily designed to forestall any dissipation of assets by the defendant and to bring [those assets] into custody of the law to be held as security for the satisfaction of such judgment as the plaintiff may recover ․ The adjudication made by the court on [an] application for a prejudgment remedy is not part of the proceedings ultimately to decide the validity and merits of the plaintiff's cause of action.   It is independent of and collateral thereto.”  (Internal quotation marks omitted.)  Marlin v. Broadcasting, LLC v. Law Office of Kent Avery, LLC, 101 Conn.App. 638, 646–47, 922 A.2d 1131 (2007).

“[P]rejudgment remedy proceedings are not involved with the adjudication of the merits of the action brought by the plaintiff or with the progress or result of that adjudication.   They are only concerned with whether and to what extent the plaintiff is entitled to have property of the defendant held in the custody of the law, pending the adjudication of the merits of that action.   This limited evidentiary proceeding contrasts sharply, with, for example, the detailed and substantive arguments and conclusions that must be addressed in a motion to strike.”  (Citation omitted;  internal quotation marks omitted.)   Marlin Broadcasting, LLC v. Law Office of Kent Avery, LLC, supra, 101 Conn.App. 646.

The plaintiff contends that he has a legal right to a hearing and decision on this issue.   However, the defendant contends that the federal maritime law clearly restricts such a hearing and that the Stipulations entered into in the federal district court with the application of the Limitation of Liability must be interpreted to prohibit any other monetary security.   The defendant argued that this court should stay a hearing on the prejudgment remedy until the federal court rules on this issue, but this request is moot in light of the ruling by the federal court on April 8, 2011.   Therefore the first issue before this court is no longer applicable.

The sole issue before this court is whether the court should permit a prejudgment hearing although the defendant has pursued and pending a Limitation of Liability Action in the federal district court.   The federal district court ruled:  “Vitale's application for a PJR in the state court does not alter Longshore's rights under the stipulations.   Posting security pursuant to a PJR is distinct from paying a judgment.”   Thus, even though Vitale seeks a PJR in excess of the limitation fund, that does not abrogate Longshore's right to seek a limitation of liability if a judgment in excess of the limitation fund is ultimately rendered.”   Following this decision, the plaintiff in the present motion argued that “if he is successful in obtaining a pre-judgment remedy attaching LSS's property in state court, he could not seek to execute against any property thereby attached unless:  (1) he obtains a state court verdict against LSS that exceeds the value of the vessel and/or any limitation fund that may be established;  and (2) the federal court determines that limitation of liability is inappropriate.”   Such a proclamation follows the law and procedure in an action for limitation of liability because the federal district court has exclusive jurisdiction in relation to the proceedings involving the limitation of liability action that will be heard after the completion of this state court action.   The stipulations entered into by the parties in the federal court protects the defendant's limitation of liability action because the federal court sitting in admiralty will conduct a proceeding known as a concursus before any final distribution of funds.   In the concursus, the federal court will determine whether there was negligence and then if there was negligence whether it was done without the privity and knowledge of the owner.  Complaint of Dammers & Vanderhide & Scheepvaart Maats Christina B.V., 836 F.2d 750, 755 (2d Cir.1988).   Only if there is a finding that the injury was “done, occasioned, or incurred without the privity or knowledge of the owner” will the limitation of liability be enforced.  46 U.S.C. § 30505(b).  However, if the court finds privity or knowledge by the owner, there is no limitation and the defendant may be subjected to liability beyond that limited by the act.   The decision of the federal court denying the motion to enforce or amend the stay recognized this distinction as well as the purpose of the prejudgment remedy to protect from the dissipation of assets pending the adjudication of the action.   Additionally, the federal district court has recognized the ability to “pursue its choice of remedies in state court” as permitting a hearing for a prejudgment remedy.   The federal court recognized that this action is seeking to protect funds in excess of the limitation of liability yet is not contrary to the right to seek a limitation of liability in the federal court.

Therefore, the request for the prejudgment hearing is granted and the objection is overuled.   The prejudgment hearing is scheduled and will proceed on April 26, 2011.

THE COURT

Brazzel–Massaro, J.

FOOTNOTES

FN1. The order of the federal district court was entered after the briefing and argument of counsel on April 8, 2011, In the Matter of the Complaint of Longshore Sailing School, Inc., as owner of one Hobie Cat Getaway Catamaran (H.I.N CCMN 1981 A 505), For Exoneration From Limitation of Liability, 3:09–cv–1176 (CFD)..  FN1. The order of the federal district court was entered after the briefing and argument of counsel on April 8, 2011, In the Matter of the Complaint of Longshore Sailing School, Inc., as owner of one Hobie Cat Getaway Catamaran (H.I.N CCMN 1981 A 505), For Exoneration From Limitation of Liability, 3:09–cv–1176 (CFD).

Brazzel–Massaro, Barbara, J.