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In re Complaint of ABK Enterprises, Inc.

United States District Court, M.D. Florida, Tampa Division

June 18, 2019

IN THE MATTER OF THE COMPLAINT OF A.B.K. ENTERPRISES, INC. AS OWNER AND TROPICAL BREEZE CASINO CRUZ, LLC, AS OWNER PRO HAC VICE OF THE ISLAND LADY U.S. ON 1020747, IN A CAUSE OF EXONERATION FROM OR LIMITATION OF LIABILITY, Petitioners.

          REPORT AND RECOMMENDATION

          THOMAS G. WILSON, UNITED STATES MAGISTRATE JUDGE

         In this limitation of liability action, claimant Christopher Rivera has filed a Motion to Increase the Security (Doc. 195). He and other claimants argue that, pursuant to the flotilla doctrine, the security must be increased to include the value of all the vessels and appurtenances involved in the "Tropical Breeze Casino Cruz" business. The petitioners argue, meritoriously, that the flotilla doctrine does not apply in this case. Therefore, I recommend that the motion be denied.

         I.

         On January 22, 2018, the petitioners, A.B.K. Enterprises, Inc., and Tropical Breeze Casino Cruz, LLC, filed a complaint pursuant to Supplemental Rule F of the Federal Rules of Civil Procedure for exoneration and limitation of liability regarding the vessel, Island Lady (Doc. 1). A.B.K. owned the Island Lady, a 72-foot long small passenger vessel. The Island Lady operated as a water taxi, transporting passengers and employees between a shore side facility in Port Richey, Florida, and the company's casino boat, the Tropical Breeze I, located approximately 9 nautical miles off of the coast of Pasco County, Florida, in the Gulf of Mexico. The vessel, by law, must be offshore nine miles in order to operate a casino. The vessels were operated, under a charter agreement, by Tropical Breeze Casino Cruz, LLC.

         On January 14, 2018, the Island Lady was transporting passengers and crew members to the Tropical Breeze when an "[i]ncident involv[ing] a fire" occurred on the vessel, resulting in passenger injuries, one death, and the "total loss of the [v]essel" (Doc. 1, p. 2, ¶¶ 9, 10). There were 37 passengers aboard the vessel. Fifteen of those passengers paid a boarding fee of $5.00, nine paid a discounted rate and 13 passengers received complimentary boarding (Doc. 222, p. 3, ¶8). The petitioners allege that they were not under any contractual obligations with any of the passengers at the time of the incident (id., ¶6).

         The petitioners initiated this limitation action pursuant to the Limitation of Liability Act, 46 U.S.C. 30501, et seq. They allege that they are entitled to a limitation of liability because the "[i]ncident and any ensuing property loss, damages, personal injury and/or casualty were not caused by [petitioners' fault, or any person for whose actions [p]etitioners are responsible" (Doc. 1, ¶12). The petitioners also filed an Ad Interim Stipulation for Costs and Value, assessing the value of the Island Lady at $27, 300 (Doc. 2).[1] Accordingly, the petitioners created a death and personal injury limitation fund of $27, 300.

         More than 20 passengers filed answers to the complaint and asserted claims of negligence against the petitioners (see, e.g.. Docs. 16, 19, 22, 34). The claimants alleged that the petitioners breached their duty of reasonable care, and failed to maintain the vessel in a reasonably safe manner, which constituted the proximate cause of their injuries (see, e.g.. Doc. 21, pp. 9-11; Doc. 30, pp. 3-5; Doc. 19, pp. 9-11; Doc. 33, pp. 9-11).

         Subsequently, claimant Christopher Rivera filed a Motion to Increase Security (Doc. 195), contending that the death and personal injury limitation fund is insufficient. Many claimants joined this motion. The petitioners filed a memorandum in opposition to the motion (Doc. 222). The parties, with leave of court, filed a reply and surreply (Docs. 243, 255).

         Since the filing of the motion, several claimants have settled, including claimant Rivera, who filed the motion, and claimant Deborah Jero, whose counsel filed the reply (Docs. 285, 286). Therefore, neither attorney who drafted the memoranda in support of the motion appeared at the hearing. Consequently, attorney Justin Pimenta spoke on the claimants' behalf; however, that discussion was not particularly helpful because he had not drafted the memoranda, and he was placed on the spot to answer my questions.

         II.

         The petitioners initiated this limitation action pursuant to the Limitation of Liability Act, which provides that "the liability of the owner of vessel for any claim, debt or liability described in subsection (b)[2] shall not exceed the value of the vessel and pending freight." 46 U.S.C. 30505(a). The Act requires a shipowner to post security equal to the amount of the vessel's value. See 46 U.S.C. 30506(b). As indicated, the petitioners filed an Ad Interim Stipulation for Costs and Value in the amount of $27, 300 (Doc. 2).

         The claimants challenge the amount of the fund pursuant to Rule F(7) of the Federal Rules of Civil Procedure Supplementary Admiralty and Maritime Rules, which states that "[a]ny claimant may by motion demand that the funds deposited in court or the security given by the plaintiff be increased on the ground that they are less than the value of the plaintiffs interest in the vessel and pending freight." Inherent in this Rule is a requirement that the claimant make some showing as to why the valuation of the vessel is inadequate. Crosby Marine Transp., LLC v. Triton Diving Servs., LLC, No. CV. 13-2399, 2014 WL 5026070 at *2 (W.D. La. Oct. 8, 2014).

         III.

         The claimants argue that the limitation fund of $27, 300 is grossly insufficient. ...


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