In the Matter of the Complaint of William Martz et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
In the Matter of the COMPLAINT of
William Martz and Jane Martz, as
owners of a Nautique vessel, for
Limitation of Liability.
Case No. 3:20-cv-00152-SLG
ORDER RE MOTION TO DISSOLVE THE INJUNCTION
Before the Court at Docket 119 is claimant Andrew Horazdovsky’s Motion
to Dissolve the Injunction Dated June 30, 2020 and Stay this Limitation Action.
Limitation Plaintiffs William Martz and Jane Martz (collectively, “the Martzes”)
responded in opposition at Docket 120, to which Mr. Horazdovsky replied at
Docket 122. The Court heard argument on the motion on May 17, 2023.
BACKGROUND
The factual allegations and procedural history of this case are set forth in
detail in the Court’s order at Docket 124. The Court assumes familiarity here. As
relevant to this motion, on June 30, 2020, the Court enjoined all state court claims
against the Martzes and their property that were subject to limitation, upon finding
that the Martzes had complied with 46 U.S.C. § 30529.1 	On November 3, 2020,
1 Docket 17. 46 U.S.C. § 30529 was formerly numbered as 46 U.S.C. § 30511.
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the Court granted Mr. Horazdovsky’s motion for summary judgment, dismissed the
action, and vacated the June 30, 2020, injunction.2
The Martzes initiated an appeal and the Ninth Circuit granted the Martzes’
motion for an injunction pending appeal, holding that “[t]he district court’s June 30,
2020 injunction is reinstated and shall remain in force pending resolution of this
appeal.” 3 The Ninth Circuit did not provide much by way of explanation, although
it did state that it did “not reach appellants’ contention that they are entitled to an
injunction pending appeal as a matter of law under 46 U.S.C. § 30511(c).”4 Later,
the Ninth Circuit reversed and remanded the Court’s dismissal.5 	The mandate
issued on June 1, 2022, and the case was reopened in this Court.6 	On July 11,
2022, the Court reinstated the June 30, 2020, injunction at the trial court level.7
Mr. Horazdovsky filed the instant motion seeking to dissolve the injunction and stay
this limitation action pursuant to the “saving to suitors” clause of the Judiciary Act
of 1789, 28 U.S.C. § 1333.
Along with his motion to dissolve the injunction, Mr. Horazdovsky filed a
stipulation in which he stipulates that (1) if the Court dissolves the injunction, he
2 Docket 39.
3 Docket 54 at 1.
4 Docket 54 at 1.
5 Docket 57.
6 Docket 57.
7 Docket 60.
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will proceed in Alaska Superior Court Case No. 3AN-20-6488CI; (2) if the Court
dissolves 	the 	injunction, 	the 	Court 	will 	retain 	exclusive 	jurisdiction 	over 	all
questions concerning the right to limitation including the claimants’ right to limit
liability and the proper value of the limitation fund; and further that any decision in
the state court action on these questions would not be res judicata with respect to
these questions; and (3) if Mr. Horazdovsky obtains a verdict or judgment in excess
of the value of the Nautique in state court, he will not execute against Limitation
Plaintiffs on the verdict or judgment in excess of the Nautique’s value pending the
Court’s determination of the right to limitation.8
DISCUSSION
There is an inherent tension between the Martzes’ right to seek limitation of
liability in federal court under the Limitation of Liability Act, 46 U.S.C. § 30501 et
seq. (“Limitation Act”), and Mr. Horazdovsky’s right to seek a jury trial in state court
pursuant to the “saving to suitors” exception to federal admiralty jurisdiction, 28
U.S.C. § 1333(1).9 	Where, as here, a shipowner invokes the protections of the
Limitation Act by following the procedural requirements of 46 U.S.C. § 30529, the
district court is empowered to enter an injunction staying all proceedings against
the shipowner arising out of the incident.10 Section 1333(1), however, accords the
8 Docket 119-2 at 2.
9 See Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 450–51 (2001).
10 See In re Complaint of Paradise Holdings, Inc., 795 F.2d 756, 761 (9th Cir. 1986); Docket 17.
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district courts original and exclusive jurisdiction of admiralty or maritime claims, but
“sav[es] to suitors in all cases all other remedies to which they are otherwise
entitled,” including the right to a jury trial for common law and statutory claims.11
To reconcile the functions of the admiralty court in limiting liability under the
Limitation Act and the claimant’s right to a trial by jury, the district courts generally
have broad discretion under the Limitation of Liability Act to decide whether to
dissolve an injunction restraining the prosecution of the state court proceedings.12
Ordinarily, when there are multiple claimants whose aggregate claims exceed the
value of the fund, “the concourse of all claimants in the limitation proceeding is a
necessary technique” that “prevents claimants from securing judgments in various
courts that, in the aggregate, exceed the fund and, thus, assures the owner that
he will not be required to pay damages in excess of the statutory limits.”13 In these
circumstances, “the need for the limitation proceeding outweighs the claimant’s
interests under the ‘saving to suitors’ clause.”14
Where, however, there is only a single claimant whose claim exceeds the
value of the fund, “‘the court’s discretion is narrowly circumscribed’ and the
11 28 U.S.C. § 1333(1); see also Lewis, 531 U.S. at 443–44.
12 See Newton v. Shipman, 718 F.2d 959, 961 (9th Cir. 1983) (first citing Universal Towing Co. v.
Barrale, 595 F.2d 414, 420 (8th Cir. 1979); and then citing Helena Marine Serv. v. Sioux City,
564 F.2d 15, 17 (8th Cir. 1977), cert. denied sub nom. Sioux City & New Orleans Barge Lines,
Inc. v. Helena Marine Serv., Inc., 435 U.S. 1006 (1978)); see also In re Complaint of Ross Island
Sand & Gravel, 226 F.3d 1015, 1017 (9th Cir. 2000) (citing Newton, 718 F.2d at 961).
13 Universal Towing Co., 595 F.2d at 418.
14 Id.
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injunction must be dissolved ‘unless the owner can demonstrate that his right to
limit liability will be prejudiced.’”15 	In this instance, “it is unnecessary to utilize a
concourse since the limitation fund is not being apportioned among competing
claimants.”16 	Indeed, as the Supreme Court has explained, “[t]o retain the
[limitation] cause would be to preserve the right of the shipowner, but to destroy
the right of the suitor in the state court to a commonlaw remedy; to remit the cause
to the state court would be to preserve the rights of both parties.”17 The Supreme
Court added that “[t]he mere statement of these diverse results is sufficient to
demonstrate the justice of the latter course.”18
Mr. Horazdovsky, the claimant in this case, filed the underlying suit in state
court in three capacities: individually, as next of friend to his minor son, and as
personal representative of the Estate of Jennifer Horazdovsky.19 Nonetheless, this
case is governed by the single claimant exception.20 	Although the Ninth Circuit
15 Newton, 718 F.2d at 961 (quoting Universal Towing Co., 595 F.2d at 420); see also Langnes
v. Green, 282 U.S. 531, 541–42 (1931);The Helen L. Red Bluff Bay Fisheries, Inc., v. Jurjev, 109
F.2d 884, 886 (9th Cir. 1940) (“[O]ne claimant appeared in response to the monition and it is not
contended that there may be others . . . . Under these circumstances a refusal of the admiralty
court to permit the claimant to pursue his common law remedy in the state tribunal would have
been a clear abuse of discretion.” (citations omitted)).
16 Universal Towing Co., 595 F.2d at 418.
17 Langes, 282 U.S. at 541.
18 Id.
19 Docket 1-1 at 1.
20 Mr. Horazdovsky does not contend that the single claimant exception applies in this case,
instead relying on Lake Tankers Corp. v. Henn, 354 U.S. 147 (1957), to support his motion to
dissolve the injunction. Docket 119 at 3–5. The Martzes correctly point out, however, that Lake
Tankers involves “an inapplicable exception that applies only where the vessel is worth more
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has not yet decided this question, several circuits have held that it is “clear that
where a single claimant brings a tort action in several capacities, for example,
individually and as the administrator of the estate of a decedent killed in the
maritime accident, only a single claimant situation is presented.”21
For example, the Fifth Circuit determined that there was a single claimant
for the purpose of dissolving an injunction when a “widow brought suit in Louisiana
court for herself and her children and the estate of the deceased” after her husband
drowned while working on a barge.22 Similarly, in In re Complaint of Kaya C, LLC,
the District Court for the Central District of California concluded that the single
claimant exception applied where a plaintiff filed a complaint in state court
than the claims.” Docket 120 at 10. Indeed, the amount of the claims filed in this proceeding
exceed the value of the Nautique because Mr. Horazdovsky seeks damages “in excess of
$100,000” and the Nautique’s value is approximately $15,000. Compare Docket 1-1 at 3, ¶ 12,
with Docket 1 at 4, ¶ 13.
21 Gorman v. Cerasia, 2 F.3d 519, 525 (3d Cir. 1993) (first citing In re Two “R” Drilling Co., 943
F.2d 576, 577 (5th Cir. 1991); then citing In re Midland Enters., Inc., 886 F.2d 812, 815–16 (6th
Cir. 1989); and then citing In re Zapata Gulf Marine Corp., 787 F. Supp. 612, 614 (E.D. La.
1992) (explaining Two “R” Drilling)); see also Beiswenger Enters. Corp. v. Carletta, 86 F.3d
1032, 1041 (11th Cir. 1996) (“There is only a single claim arising from Myers’ death, and it
belongs to the personal representative of his estate. The beneficiaries of the estate, including
the minor children, are not authorized to bring independent suits for their individual damages;
rather, they must share in the single judgment, if any, obtained by the personal representative.”).
22 See Two “R” Drilling, 943 F.2d at 577; see also Zapata Gulf Marine Corp., 787 F. Supp. at 614
(“Furthermore, an examination of the district court record in Two “R” reveals that there was only
one claimant in that case, who sued in several capacities and on behalf of several other
persons,” including herself individually, “as administratrix of the estate of her deceased
husband,” and “as natural tutrix of the six minor children of herself and the decedent,” asserting
“three distinct claims for compensatory damages,” including “(1) the decedent’s own pain and
suffering; (2) the claimant’s own loss of consortium; and (3) the six children’s loss of inheritance,
love and affection, parental guidance, etc.” “[T]he Fifth Circuit’s Two “R” opinion stands for the
proposition that the single claimant exception applies even when that single claimant represents
others.”).
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“plead[ing] wrongful death and survivor claims under federal maritime law” as “the
personal representative of an estate” and “represent[ing] multiple family members
of the decedent.”23 And as the Sixth Circuit explained when considering a wrongful
death action brought by the personal representative of the deceased, “[t]here can
only be one judgment rendered” and while “[i]t is true that this judgment may have
to be split among beneficiaries . . . this does not turn the claim into multiple
claims.”24
Moreover, when the Court issued the June 30, 2020, injunction, the “order
serve[d] as notice to all persons that may claim damage sustained or occasioned
or incurred by or resulting from the June 9, 2018 collision of the Nautique on Flat
Lake” and “admonishe[d] them to file their respective claims with the Clerk of Court
for the District of Alaska and to serve on or mail to counsel for Limitation Plaintiffs
a copy thereof, or be defaulted, on or before August 31, 2020.”25 August 31, 2020,
has since passed and the Court is not aware of, nor have the parties identified,
any other claimants. 	Accordingly, Mr. Horazdovsky is the sole claimant and
“nothing appears to suggest the possibility of any other claim.”26
23 Case No. CV 12-09357 MMM (CWx), 2013 WL 12116375, at *2, *4 (C.D. Cal. June 10, 2013).
24 Midland, 886 F.2d at 816 (first citing Futch v. Midland Enters., Inc., 471 F.2d 1195 (5th Cir.
1973); then citing In re Mucho K, Inc., 578 F.2d 1156 (5th Cir. 1978); and then citing Baltimore
Sports & Recreation, Inc. v. Riley, 1987 A.M.C. 1099, 1986 WL 15672 (D. Md. 1986)).
25 Docket 17 at 6.
26 Langes, 282 U.S. at 540.
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Because Mr. Horazdovsky is a single claimant who has filed a motion to
dissolve the injunction, “‘the court’s discretion is narrowly circumscribed’ and the
injunction must be dissolved ‘unless the owner can demonstrate that his right to
limit liability will be prejudiced.’”27 	The Martzes’ opposition to Mr. Horazdovsky’s
motion does not address prejudice.28 	Instead, the Martzes argue that the Court
should 	deny 	Mr. 	Horazdovsky’s 	motion 	to 	dissolve 	the 	injunction 	to 	avoid
inefficiency and further delay.29 	Indeed, Mr. Horazdovsky filed this motion nearly
one year after the case was remanded, but he has not provided any justification
for this delay.30
The question before the Court, however, is whether dissolving the injunction
would 	prejudice 	the 	Martzes’ 	ability 	to 	limit 	their 	liability, 	and 	not 	whether
dissolution would cause delay. As the Eighth Circuit explained in Universal Towing
Co. v. Barrale, a shipowner did not show the requisite prejudice even though the
dissolution of the injunction would cause additional expense, require the shipowner
to duplicate their efforts in state court, and cause further delay.31 	The Eighth
27 Newton, 718 F.2d at 961 (quoting Universal Towing Co., 595 F.2d at 420).
28 The Martzes do not use the term “prejudice” at all in their opposition, other than in an
explanatory parenthetical. Docket 120 at 10.
29 Docket 120 at 7–10.
30 Moreover, in the Court’s Order re Motion for Injunction Pending Appeal, decided on November
30, 2020, the Court identified the case law prioritizing Mr. Horazdovsky’s right to pursue his
state court remedies. Docket 53 at 14. Having already been made aware of the relevant case
law, the appropriate time for Mr. Horazdovsky to file a motion to dissolve the injunction would
have been promptly after the Ninth Circuit’s mandate issued in June 2022. Docket 57.
31 595 F.2d at 420.
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Circuit’s decision suggests that the additional expense, delay and inefficiency to a
shipowner case do not establish prejudice for purposes of dissolving an injunction
pursuant to the “saving to suitors” exception to federal admiralty jurisdiction, and
the Martzes do not identify any decision holding otherwise.
The Martzes also contend that the Court should deny Mr. Horazdovsky’s
motion to dissolve the injunction because he has waived his right to seek this
relief.32 	However, the Court has not identified case law at the intersection of the
Limitation of Liability Act and the “saving to suitors” exception to federal admiralty
jurisdiction in which a court denied a motion to dissolve an injunction because the
right to dissolve the injunction was found to have been waived. 	The cases upon
which the Martzes rely to support their waiver argument were not filed pursuant to
the Limitation of Liability Act and do not shed light on this question.33
Before a court may dissolve an injunction pursuant to the single claimant
exception, “a claimant ‘must’ stipulate to the following: (1) that the value of the
limitation fund equals the combined value of the vessel and its cargo; (2) waive the
32 Docket 120 at 5–7.
33 Docket 120 at 5–7 (first citing ECB USA, Inc. v. Chubb Ins. Co., No. 20-cv-20569, 2022 WL
580442, at *2–3 (S.D. Fla. Feb. 25, 2022) (denying motion for reconsideration with respect to
the scope of coverage of an insurance policy because those arguments had been waived); then
citing Bynum v. City of Pittsburg, 622 F. Supp. 196, 197–98 (N.D. Cal. 1985) (denying motion to
dismiss second amended complaint in civil rights case brought pursuant to 42 U.S.C. § 1983
because the court had already heard and rejected the movant’s arguments); then citing Alaska
R.R. Corp. v. Flying Crown, No. 20-cv-232, 2022 WL 2965535, at *1–2 (D. Alaska June 30,
2022) (denying motion for reconsideration in a case about an exclusive-use easement); and
then citing Plymouth Cnty. ex rel. Raymond v. MERSCORP, Inc., 287 F.R.D. 449, 464 (N.D.
Iowa 2012) (denying post-dismissal motion to amend in case involving claims for unjust
enrichment, civil conspiracy, and piercing the corporate veil)).
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right to claim res judicata based on any judgment rendered against the vessel
owner outside of the limitation proceedings; and (3) concede the district court’s
exclusive jurisdiction to determine limitation of liability issues.”34
In 	Newton 	v. 	Shipman, 	the 	Ninth 	Circuit 	held 	that 	a 	claimant 	had
“substantially satisfied the required stipulations” where the claimant “did not object
to the sufficiency of the fund or the method of computing it” and stipulated as
follows: “Claimant acknowledges the Court’s right to try the ‘limitation’ features of
the petition, and waives any claim of res judicata relevant to the issue of limited
liability based upon any judgment obtained in the jury trial.”35
In this case, Mr. Horazdovsky satisfied the first requirement by stipulating
that this Court has exclusive jurisdiction to determine the proper value of the
Limitation Fund and that Mr. Horazdovsky would “not execute against Limitation
Plaintiffs on the verdict or judgment [if it were obtained in state court] in excess of
the Nautique’s value to be decided by this Court pending adjudication of the claims
made in the Complaint of Limitation of Liability.”36 	Mr. Horazdovsky has also
satisfied the other two requirements: he has stipulated that any decision in Alaska
Superior Court Case No. 3AN-20-6488CI would not be res judicata as to the
34 Ross Island Sand & Gravel, 226 F.3d at 1017 (citing Newton, 718 F.2d at 962).
35 Newton, 718 F.2d at 963.
36 Docket 119-2 at 2. See Anderson v. Nadon, 360 F.2d 53, 56, 58 (9th Cir. 1966) (holding that
stipulation providing that “if [claimant] is permitted to sue in the state court respondents will not
seek to enforce and collect any judgment against petitioner therein obtained, except in and
through the limitation proceedings” was adequate).
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limitation issues,37 and he has conceded the district court’s “exclusive jurisdiction”
over all questions concerning the right to limitation, including “(1) Limitation
Plaintiffs’ right to limit liability; (2) the proper value of the Limitation Fund; and (3)
all matters affecting the right of Limitation Plaintiffs to limit liability herein.” 38
CONCLUSION
In light of the foregoing, IT IS ORDERED that the Motion to Dissolve the
Injunction Dated June 30, 2020 and Stay this Limitation Action at Docket 119 is
GRANTED. 	The injunction dated June 30, 2020, and reinstated by this Court on
July 11, 2022, is DISSOLVED. 	This case is STAYED and all deadlines are
VACATED pending the resolution of Alaska Superior Court Case No. 3AN-20-
6488CI. 	The parties are directed to file a joint status report with this Court every
six months, with the first report due on December 31, 2023. The parties are further
directed to file a joint status report with this Court within 14 days after the resolution
of the state case. The Clerk of Court is directed to serve notice of this order on the
Alaska Superior Court in Case No. 3AN-20-6488 CI.
DATED this 23rd day of June 2023, at Anchorage, Alaska.
/s/ Sharon L. Gleason
UNITED STATES DISTRICT JUDGE
37 Docket 119-2 at 2. See Newton, 718 F.2d at 963 (holding that the claimant “substantially
satisfied the required stipulations” by stipulating that the claimant “waive[d] any claim of res
judicata relevant to the issue of limited liability based upon any judgment obtained in the jury
trial”).
38 Docket 119-2 at 2.
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