Limitation of Liability Claim Dismissed as Time Barred

The Limitation Act allows a vessel owner to limit liability for damage or injury to the value of the vessel or the owner’s interest in the vessel. To invoke the protections of the Act, the vessel owner must bring an action in district court within six months after a claimant gives the owner written notice of a claim.

At the heart of the dispute in In re The Complaint of RLB, was whether a series of letters exchanged between the vessel owner’s lawyers and the lawyers of the injured party were sufficient. The district court dismissed the vessel owner’s Limitation Action as time barred, and the vessel owner appealed.

The Fifth Circuit addressed the issue of: (1) whether a series of letters, none of which constitutes notice on its own, may be considered together to find notice in the aggregate, (2) whether plaintiff’s letters convey a “reasonable possibility” of a potential claim, and (3) whether those letters establish a “reasonable possibility” that the amount of the claim might exceed the value of the Vessel.

The Court ruled that a written communication may serve as notice under the act in lieu of a filed complaint, and stated that it makes sense to consider a body of correspondence. The Court considered the entire series of letters to analyze the requirements of the Act.

The Court had not previously addressed the issue of what a writing must contain to find a vessel owner had notice of a potential claim, and settled upon the plaintiff’s fact intensive approach. It examined each letter and identified two that explicitly referenced filing a lawsuit dated more than six months prior to the filing of the Limitation Actions.  The two letters conveyed a “reasonable possibility” of a potential claim to the vessel owner.

In determining whether the vessel owner had notice that there was a reasonable possibility of damages in excess of the vessel’s value, the Court relied upon precedent that the vessel owner should have realized the potential for damages in excess of its vessel’s value in light of the severity of the injures.  The vessel owner was aware of the injured party’s potential wrongful death suit.

For these reasons, the Court found that the vessel owner had written notice more than six months prior to filing its Limitation Action, and affirmed the district court’s dismissal.

In re The Complaint of RLB Contracting, Inc., as Owner of the Dredge Jonathan King Boyd its Engine, Tackle, Gear for Exoneration or Limitation of Liab.