United States District Court, D. Maryland
IN THE MATTER OF THE COMPLAINT OF ROBERT S. PENNYPACKER AS OWNER OF THE 1993 SILVERTON 37' MOTORYACHT HIN STST0003G293 FOR EXONERATION FROM LIMITATION OF LIABILITY
Frederick Motz United States District Judge
to the Exoneration and Limitation of Liability Act, 46 U.S.C.
§ 30501 et seq., Robert S. Pennypacker filed a
complaint for exoneration or limitation of liability from
claims arising from a fire that occurred on his yacht. (ECF
No. 1). Several entities subsequently filed tort claims
against him. Pending are claimant Roger's Marine Service,
LLC's ("Roger's Marine") motion to dismiss
for lack of maritime jurisdiction (ECF No. 9),
Pennypacker's motion for default judgment (ECF No. 22), a
motion to intervene by National Liability and Fire Insurance
Company ("National Liability") (ECF No. 26), and
Pennypacker's motion to amend or correct his Limitation
Act complaint. (ECF No. 39). The motions are fully briefed,
and no oral argument is necessary. See Local Rule
105.6. For the reasons set forth below, Roger's
Marine's motion to dismiss and National Liability's
motion to intervene are granted, and Pennypacker's
motions for default judgment and to amend or correct his
Limitation Act complaint are denied as moot.
case arises from a fire on Pennypacker's 1993 Silverton
37' Motoryacht, Burned Out Again, at
Bowley's Marina ("Bowley's") in Baltimore.
(ECF No. 1 ¶¶ 2, 5). Pennypacker had owned the
yacht since 2011. (Id. ¶ 11). Every year during
the boating season, he would keep the yacht in a wet slip at
Bowley's; at the end of the season, he would engage
Roger's Marine to shrink-wrap the vessel for protection
from the elements while it was withdrawn from the water for
the winter. (Id.) At the time the fire occurred on
November 9, 2015, Burned Out Again had been removed
from its wet slip for the off-season. (Id. ¶
on the day of the fire, the yacht was resting on stands in
the dry wharfage area of Bowley's Marina. Roger's
Marine employees installed plastic shrink wrap over the
yacht, a technique which involved using a heat gun with an
open flame. (Id. ¶ 12). The workers left
sometime around 4:15 p.m. to 4:30 p.m., after it began to
rain. (Id. ¶ 12). About an hour later, marina
employees discovered the fire, but by the time the
firefighters arrived, it had spread to nearby boats in the
dry wharfage area and to a nearby marina building.
(Id. ¶ 9). As a result of the fire,
Pennypacker's yacht was rendered a constructive total
loss, and had no remaining salvage or other value.
(Id. ¶ 8). Nearby boats and the marina building
also sustained damages. A subsequent investigation determined
that the fire had begun after the torches used by Roger's
Marine workers ignited flammable material on the yacht, which
smoldered undetected before breaking out into a fire.
(Id. ¶ 13).
3, 2016, Pennypacker filed a petition in this court for
exoneration from or limitation of liability from claims
arising from the fire. (ECF No. 1). Pursuant to a court
order, notice of the petition was published four times, and
potential claimants were sent copies of the notice giving
them until June 22, 2016 to file their respective claims and
answers. (ECF No. 22, pp. 1-2). Claims were timely filed by
Roger's Marine, for indemnity and contribution if it is
found at fault for starting the fire (ECF No. 11); by
Bowley's Marina and Bowley's Marina to the use and
benefit of ACE American Insurance Company
("Bowley's"), for damages to the marina
building and grounds (ECF No. 10); and by Foremost Insurance
Company as Subrogee of Michael Home ("Foremost"),
for damages to his boat from the fire. (ECF No. 12). At the
time it submitted its claim, Roger's Marine also filed a
motion to dismiss for lack of subject matter jurisdiction.
(ECF No. 9). Two weeks after the deadline for filing claims
against him had passed, Pennypacker filed a motion to hold
all parties who failed to file timely claims in default. (ECF
No. 22). National Liability, a subrogated insurance company
that paid for damages to two boats also damaged by the fire,
filed a motion to intervene a week and a half later. (ECF No.
26). Both Bowley's and Foremost subsequently filed
cross-claims against Roger's Marine for negligence. (ECF
Nos. 31, 32). Finally, Pennypacker filed contract and tort
counterclaims against Roger's Marine (ECF No. 35), and a
motion to amend or correct his Limitation Act complaint. (ECF
party asserting jurisdiction, Pennypacker carries the burden
of proving that subject matter jurisdiction exists. See
Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir. 1999).
Because the motion to dismiss is brought under Rule 12(b)(1),
the district court is to "regard the pleadings'
allegations as mere evidence on the issue, and may consider
evidence outside the pleadings without converting the
proceeding to one for summary judgment." Richmond,
Fredericksburg & Potomac R.R. Co. v. United States,
945 F.2d 765, 768 (4th Cir. 1991). The court should grant the
Rule 12(b)(1) motion to dismiss "only if the material
jurisdictional facts are not in dispute and the moving party
is entitled to prevail as a matter of law." Evans v.
B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999).
central dispute on this motion to dismiss is whether
admiralty jurisdiction exists in this case, and if so, over
what claims. The issue is of particular significance because
Pennypacker seeks, among other things, exoneration or
limitation of liability under the Exoneration and Limitation
of Liability Act (the "Limitation Act"), 46 U.S.C
§ 30501 et seq.- protection that is available
only if the tort claims he seeks to limit fall under the
court's admiralty jurisdiction.
Limitation Act provides that a shipowner's liability for
certain claims is limited to the value of the boat and its
pending freight, so long as the facts giving rise to such
claims occurred "without the privity or knowledge of
such owner." 46 U.S.C. § 30505(a)-(b). Congress
enacted the statute in 1851 with the intention of
"induc[ing] the heavy financial commitments the shipping
industry requires by mitigating the threat of a multitude of
suits and the hazards of vast, unlimited liability as the
result of a maritime disaster." Pickle v. Char Lee
Seafood, Inc., 174 F.3d 444, 449 (4th Cir. 1999) (citing
Maryland Casualty Co. v. Cushing, 347 U.S. 409, 414
(1954)) (internal quotation marks omitted)).
the Limitation Act thus provides a federal cause of action
for a shipowner seeking exoneration or limitation of
liability, the statute is not an independent source of
jurisdiction. Rather, "[the Act] is a procedure that may
be invoked when general admiralty and maritime jurisdiction
has been established." David Wright Charter Serv. of
N. Carolina, Inc. v. Wright, 925 F.2d 783, 783 (4th Cir.
1991). In other words, a district court will have
jurisdiction to hear a petition brought under the Limitation
Act only if the court already has admiralty jurisdiction over
the underlying claims that the petition seeks to limit.
Admiralty jurisdiction over actions brought under Limitation
Act may be based on either a maritime tort or a maritime
contract. Jerome B. Grubart, Inc. v. Great Lakes Dredge
& Dock Co., 513 U.S. 527, 534 (1995) (a tort can
provide the basis for an action under the Limitation Act,
provided that the alleged tort satisfies "conditions
both of location and of connection with maritime
activity"); David Wright, 925 F.2d at 784-85 (a
contract can also provide the basis for an action under the
Limitation Act, so long as it is a maritime contract).
does not dispute that the torts alleged against him fail to
meet the location and maritime activity requirements so as to
trigger admiralty jurisdiction under 28 U.S.C. § 1333.
(See ECF Nos. 25, 41). Instead, Pennypacker asserts
that his contract with Roger's Marine provides the
jurisdictional hook for his Limitation Act petition. (ECF No.
25, pp. 3-7). As to the tort claims alleged against him,
Pennypacker contends that they arise from the same set of
facts and therefore fall within the court's supplemental
jurisdiction. (ECF No. 25, p. 7) (citing 28 U.S.C. §
1367). Roger's Marine, for its part, argues that the
contract is not a maritime contract subject to admiralty
jurisdiction, and that even if it were, Pennypacker cannot
seek the protection of the Limitation Act because the torts
he seeks to limit do not fall under the court's admiralty
jurisdiction. (ECF No. 28, pp. 1-2).
reasons that follow, the contract between Pennypacker and
Roger's Marine is subject to admiralty jurisdiction, and
the court can therefore exercise supplemental jurisdiction
over the torts claims arising from the same set of facts. But
because admiralty jurisdiction does not extend to any of the
tort claims against ...