Key West Jetski, Inc. v. Unknown Claimant(s)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 4:25-CV-10067-LEIBOWITZ/AUGUSTIN-BIRCH
REPORT AND RECOMMENDATION ON CLAIMANT’S MOTION TO STAY
LIMITATION ACTION AND LIFT INJUNCTION AGAINST STATE COURT ACTION
AND PETITIONER’S MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS
This cause comes before the Court on Claimant Megan Sayre-Scibona’s Motion to Stay
Limitation Action and Lift Injunction Against State Court Action and Petitioner Key West Jetski,
Inc.’s Motion to Compel Arbitration and Stay Proceedings. DE 22; DE 24. The Honorable David
S. Leibowitz, United States District Judge, referred both Motions to the undersigned United States
Magistrate Judge for a report and recommendation. DE 28. Petitioner responded to Claimant’s
Motion, DE 23, and Claimant filed a reply. DE 25. Claimant responded to Petitioner’s Motion, DE
26, and Petitioner filed a reply. DE 27. Having carefully considered the record and the briefing
and being otherwise fully advised, the Court RECOMMENDS GRANTING Claimant’s Motion
[DE 22] and DENYING Petitioner’s Motion [DE 24].
I. Background
On August 29, 2025, Petitioner filed a Petition for Exoneration from or Limitation of
Liability pursuant to the Vessel Owner’s Limitation of Liability Act, 49 U.S.C. §§ 30501, et seq.
DE 1. That act “limits the liability of vessel owners who were not in some sense responsible for
the specific negligent acts or conditions of unseaworthiness that caused” an accident involving the
KEY WEST JETSKI, INC.,
Petitioner,
v.
MEGAN SAYRE-SCIBONA, et al.,
Claimants.
____________________________________/
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vessel. Skanska USA Civ. Se. Inc. v. Bagelheads, Inc., 75 F.4th 1290, 1304 (11th Cir. 2023). In its
Petition, Petitioner avers that it is the owner of a 11’18” Yamaha Waterjet Powercraft, HIN No.
YAMA1040G425 and Appurtenances (the “Vessel”), which was involved in an accident. DE 1 ¶¶
3–4, 6. According to Petitioner, on May 9, 2025, Claimant solely operated the Vessel as part of a
jet ski tour, and, during that tour, Claimant purportedly lost control of the Vessel and impacted an
anchored vessel. Id. ¶ 6.
After filing its Petition, Petitioner moved for, and obtained, an Order requiring all persons
asserting a claim relating to the May 9, 2025 accident to file their respective claims by October 30,
2025, and enjoining all commencements or further prosecution of any claims relating to the May
9, 2025 accident. DE 3; DE 5. Claimant was the only individual to file a claim by the October 30,
2025 deadline, DE 15, and Petitioner answered Claimant’s claim and asserted affirmative defenses.
DE 20. Following the expiration of the October 30, 2025 deadline, Petitioner moved for, and
obtained, a Clerk’s entry of default against all other potential claimants. DE 21; DE 29.
Subsequently, Plaintiff moved for, and obtained, final default judgment against all other potential
claimants. DE 30; DE 32.
II. Analysis
Both Petitioner and Claimant have filed a motion in this matter. Claimant moves to have
the injunction in this case dissolved so that she can pursue a state court action, DE 22, and
Petitioner moves to compel Claimant to arbitrate her claims. DE 24. Because Petitioner primarily
opposes Claimant’s Motion based on its contentions in its own Motion, the Court will evaluate
Petitioner’s Motion first. After concluding that Petitioner waived its right to arbitration, the Court
analyzes Claimant’s Motion.
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A. Petitioner’s Motion to Compel Arbitration
Pursuant to a Bare Boat Lease Rental Contract and a Release of Liability, Assumption of
Risk, Waiver of Claims, Indemnification & Binding Arbitration Agreement Claimant signed,
Petitioner moves to compel Claimant to arbitrate her claims. DE 24; see also DE 24-1 at 4–9 (rental
contract and arbitration agreement). When deciding a motion to compel arbitration, a court is
guided by three factors: “(1) whether a valid written agreement to arbitrate exists, (2) whether an
arbitrable issue exists, and (3) whether the right to arbitrate was waived.”1 Blue Line Investigative
Sols. LLC v. Bank of Am., N.A., No. 0:25-CV-61110, 2025 WL 3772001, at *3 (S.D. Fla. Nov. 17,
2025). Here, Claimant does not dispute that a valid written agreement to arbitrate exists, nor does
she contend that no arbitrable issue exists. Instead, Claimant raises two arguments in opposition
to arbitration: (1) Petitioner waived its right to arbitrate, and (2) the prohibitive cost of arbitration
precludes her from effectively vindicating her rights. DE 26 at 6. Because Petitioner has waived
its right to arbitrate, the Court need not reach Claimant’s second argument.
To determine whether a party has waived its right to arbitrate, courts examine whether that
party “acted inconsistently with its contractual right to arbitration” under a “totality of the
circumstances test.” Amargos v. Verified Nutrition, 653 F. Supp. 3d 1269, 1275 (S.D. Fla. 2023).
In doing so, “the court considers whether [the party seeking arbitration] substantially participated
in the litigation as one factor in a holistic analysis of whether [that party], through participation in
th[e] case or by any other action or inaction, waived its right to arbitrate.” Id.; see also Blue Line
Investigative Sols. LLC, 2025 WL 3772001, at *6 (“[Determining waiver] is made by evaluating
1 In its Motion, Petitioner incorrectly claims that there are only two considerations for the Court. See DE 24 at 4
(“There are two elements for courts to consider in ruling on a motion to compel arbitration of a given dispute: (1)
whether a valid written agreement to arbitrate exists; and (2) whether an arbitrable issue exists.” (citing Seifert v. U.S.
Home Corp, 750 So. 2d 633, 636 (Fla. 1999))). This statement of the law is particularly disingenuous given that Seifert
clearly explains, in the same sentence no less, that there are three elements. See Seifert, 750 So. 2d at 636 (“Under
both federal statutory provisions and Florida’s arbitration code, there are three elements for courts to consider in ruling
on a motion to compel arbitration of a given dispute: (1) whether a valid written agreement to arbitrate exists; (2)
whether an arbitrable issue exists; and (3) whether the right to arbitration was waived.” (emphasis added)).
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the totality of the circumstances, and the question of whether there has been waiver in the
arbitration agreement context should be analyzed in much the same way as in any other contractual
context.” (quotation marks omitted)).
Claimant contends Petitioner has waived its right to arbitrate by (1) initiating the present
limitation action, which seeks exoneration from liability as well as an injunction, without invoking
its right to arbitration; (2) filing a substantive objection to Claimant’s claim without invoking the
right to arbitration; (3) failing to plead its right to arbitration in its answer and affirmative defenses;
and (4) waiting over three months before invoking the right to arbitration. DE 26 at 7–12. In their
briefing, the parties cite several cases addressing the question of whether initiating and
participating in a limitation proceeding, such as the one here, waives the right to arbitrate. Some
cases answer that question in the affirmative; others do not. After careful consideration of the cited
cases, the Court concludes that, given the totality of Petitioner’s actions, Petitioner has waived its
right to arbitrate.
The Court starts with the case it finds most analogous to the one at hand: Mirro v. Freedom
Boat Club, LLC, 328 So. 3d 1108 (Fla. 2d DCA 2021). There, the vessel owner initiated a
limitation action regarding its liability for personal injuries the claimant suffered and filed a
substantive objection to the claimant’s claim in the limitation action, all without ever asserting its
right to arbitrate. Id. at 1111. Based on these actions, the Mirro court concluded that the vessel
owner “affirmatively pursued a course of action inconsistent with an intent to arbitrate” and thus
waived its right to compel arbitration. Id. Similarly, Petitioner initiated the present limitation
proceeding, seeking either to exonerate itself from any liability for damages arising from the May
9, 2025 accident or to at least limit its liability, DE 1, and answered Claimant’s claim, DE 20, all
without ever invoking or mentioning its right to arbitrate.
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Petitioner contends that Mirro is distinguishable since “Claimant has not yet brought a
separate action in Florida state court,” see DE 27 at 3, like the claimant in Mirro did before the
vessel owner sought to compel arbitration. See Mirro, 328 So. 3d at 1111 (“[The vessel owner]
waited until [the claimant] brought suit in state court to assert its right to arbitration for the first
time.”). This attempt at distinguishing fails because the Mirro court noted that the right to
arbitration had already been waived when the vessel owner attempted to compel the claimant to
arbitrate See id. (“But at that point, the right had already been waived . . . .”); see also id.
(explaining that the vessel owner’s waiver was the result of it initiating the limitation action and
raising substantive objections to the claimant’s claim in the limitation action without ever invoking
its right to arbitrate). Furthermore, Petitioner only moved to compel arbitration after Claimant had
already moved to pursue her claims in state court. See DE 22; DE 24. Mirro is persuasive and
instructive on this matter.
Complaint of Ballard Shipping Co., 752 F. Supp. 546 (D.R.I. 1990), is likewise persuasive
and instructive. There, the court found that a vessel owner’s initiation of, and participation in, a
limitation proceeding constituted activity inconsistent with the right to arbitrate. See id. at 550 (“In
addition to the nature of this suit, the particular proceedings in this case suggest [the vessel owner]
has waived its right to compel arbitration.”). Specifically, the court noted that the vessel owner
requested, and obtained, a court order that directed all claimants to file their claims in the limitation
proceeding and that required the vessel owner to provide direct notification of the limitation
proceeding to all known claimants, which included the claimant the vessel owner later sought to
compel to arbitrate. Id. Based on these actions, the court concluded that the vessel owner’s
“initiation of and participation in this suit constitute activity inconsistent with its right to now
compel arbitration.” Id.; see also id. (“[The vessel owner] has failed to initiate arbitration
proceedings and has never attempted to exempt [the claimant the vessel owner sought to later
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compel to arbitrate] in some manner from complying with the limitation proceeding.”). Here too,
Petitioner sought, and obtained, a Court Order that required all claimants to file their claim in the
present limitation proceeding and that required Petitioner to provide direct notification to all
known claimants. See DE 5. Petitioner was surely aware of its arbitration agreement with Claimant
and the fact that Claimant may have claims against it, but Petitioner did nothing to timely preserve
its right to arbitrate any claims Claimant might have when initiating and participating in this
limitation proceeding. Complaint of Ballard Shipping Co. is persuasive.
As for the cases on which Petitioner relies that have held the initiation of a limitation
proceeding is not inconsistent with the right to arbitrate, those cases are distinguishable. To start,
a New York district court concluded that a “ship owner’s institution of [a] limitation proceeding
by filing a complaint is not itself inconsistent with an intent to arbitrate.” In re Bartin Deniz
Nakliyati, No. 87 CV 455 (JMM), 1989 WL 128581, at *12 (E.D.N.Y. July 10, 1989). However,
in that case, when the vessel owner sought to compel arbitration, the claimant had not yet filed a
claim in the limitation proceeding, nor had the vessel owner filed an objection, answer, or
affirmative defenses to that claim. See id. (“[The claimant] has not yet interposed a claim or answer
in the proceeding, but only a petition for permission to file its pleading.”). Additionally, the New
York court found that one of the most important factors counseling against a finding of waiver was
that the claimant had suffered no prejudice. Id. (“Most importantly, [the claimant] has failed to
establish any prejudice stemming from the ship owner’s conduct.”). But following the Supreme
Court’s decision in Morgan v. Sundance, Inc., 596 U.S. 411 (2022), prejudice to the party opposing
arbitration is no longer a valid consideration when deciding whether to compel arbitration. See id.
at 419 (“[P]rejudice is not a condition of finding that a party, by litigating too long, waived its right
to stay litigation or compel arbitration under the FAA.”). For these reasons, In re Bartin Deniz
Nakliyati is unpersuasive.
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Likewise, because the court’s finding of no waiver was also premised on a lack of
prejudice, Yang v. Majestic Blue Fisheries, LLC is unpersuasive. See No. CV 13-00015, 2015 WL
5003606, at *9 (D. Guam Aug. 24, 2015) (“Assuming that Majestic Blue’s conduct in the
Limitation Action towards Plaintiffs is inconsistent with a right to compel arbitration, Plaintiffs
have not established prejudice resulting from said inconsistent acts.”). For the foregoing reasons,
the Court RECOMMENDS DENYING Petitioner’s Motion to Compel Arbitration [DE 24].
B. Claimant’s Motion to Stay Limitation Action and Lift Injunction
As the Eleventh Circuit has acknowledged, “a certain tension between the exclusive
jurisdiction vested in admiralty courts to determine the vessel owner’s right to limited liability and
the saving to suitors clause has developed.” Beiswenger Enters. Corp. v. Carletta, 86 F.3d 1032,
1037 (11th Cir. 1996). On the one hand, “[f]ederal courts have exclusive admiralty jurisdiction to
determine whether the vessel owner is entitled to limited liability.” Id. at 1036. And, in “limitation
proceedings, as in all admiralty cases, there is no right to a jury trial.” Id. at 1037. But, on the other
hand, “the same statute that grants the federal courts exclusive admiralty and maritime jurisdiction
saves to suitors ‘all other remedies to which they are otherwise entitled.’” Id. (quoting 28 U.S.C.
§ 1333(1)). And the “‘saving to suitors’ clause of § 1333 embodies a presumption in favor of jury
trials and common law remedies in the forum of the claimant’s choice.” Id. To resolve this tension,
“[c]ourts have attempted to give effect to both the Limitation Act and the saving to suitors clause
whenever possible, by identifying two sets of circumstances under which the damage claimants
must be allowed to try liability and damages issues in a forum of their own choosing.” Id.
The relevant set of circumstances here is the second set: “where there is only one claimant.”
Id. When there is only one claimant in a limitation proceeding, “the single claimant may try
liability and damages issues in another forum by filing stipulations that protect the shipowner’s
right to have the admiralty court ultimately adjudicate its claim to limited liability.” Id.
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“Specifically, the claimant must waive any claim of res judicata relevant to the issue of limited
liability based on any judgment obtained in the state court, and concede the shipowner’s right to
litigate all issues relating to limitation in the federal limitation proceeding.” Id. (quotation marks
omitted). “If the state court (or the law side of a federal court) holds the vessel owner liable for the
accident and assesses damages exceeding the limitation fund, the parties must return to the
admiralty court for a determination of the privity or knowledge issues.” Id.
Here, Claimant is the only claimant in this limitation proceeding. Judge Leibowitz required
all potential claimants to file their claims on or before October 30, 2025, “or be defaulted.” DE 5
at 2. Claimant was the only claimant to file a claim before the October 30, 2025 deadline, DE 15,
and Petitioner has since obtained final default judgment against all other potential claimants. DE
32. Accordingly, this is a single claimant limitation proceeding.
Given that this is a single claimant limitation proceeding, Claimant stipulates to the
following in her Motion to protect Petitioner’s right to have the Court ultimately adjudicate
Petitioner’s claim to limited liability:
Petitioner has the right to litigate, in this United States District Court, the issues of
entitlement to exoneration from and limitation of liability, per 46 U.S.C. § 30501,
et. seq.. This Court has exclusive jurisdiction over those issues.
Claimant will not raise the issues of exoneration from and limitation of liability in
the state court proceedings.
Claimant waives any and all claims of issue preclusion or res judicata related to the
issues of exoneration from or limitation of liability, including but not limited to
privity and knowledge, based on any rulings or judgments obtained in the state
court case, or in any other forum, with respect to all matters reserved exclusively
for determination by this Court.
Petitioner has the right to have this Court determine the value of and Petitioner's
interest 	in 	the 	2025 	11’8” 	Yamaha 	Waterjet 	Powercraft, 	HIN 	No.
YAMA1040G425, and this Court has exclusive jurisdiction to determine those
issues.
Claimant will not seek to enforce any judgment rendered in any state court or any
other forum, whether against Petitioner or another person or entity that would be
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entitled to seek indemnity or contribution from Petitioner, by way of cross-claim or
otherwise that would expose the Petitioner to liability in excess of the to be
determined limitation fund, until such time as this Court has adjudicated Petitioner's
right to limit that liability. If this Court grants Petitioner’s limitation, then Claimant
will not seek enforcement of any judgment against Petitioner that would require
Petitioner to pay damages in excess of the limitation fund. Claimant further
stipulates that in the event this Court grants Petitioner’s complaint for exoneration
from liability, and such exoneration is upheld on all permitted appeals, there will
be no recovery from the Petitioner in excess of the limitation fund.
DE 22 at 3–4. These stipulations satisfy that Claimant has waived “any claim of res judicata
relevant to the issue of limited liability based on any judgment obtained in the state court” and
conceded Petitioner’s “right to litigate all issues relating to limitation in the federal limitation
proceeding.” See Beiswenger Enters. Corp., 86 F.3d at 1037; see also In re Key W. Jetski, Inc.,
619 F. Supp. 3d 1216, 1219 (S.D. Fla. 2022) (determining that these exact stipulations comply
“with the requirements for the single claimant exception of the ‘Savings to Suitors’ Clause”). As
such, Claimant has satisfied the requirements to pursue her action in state court. Petitioner’s
arguments to contrary are not persuasive.
First, Petitioner maintains that Claimant must arbitrate her claims. DE 23 at 1–6. As
explained above, Petitioner has waived its right to compel arbitration. Next, Petitioner argues that
there is no certainty that this is truly a single claimant limitation proceeding. Id. at 6. But since the
October 30, 2025 deadline has expired, and no other claims have been filed besides Claimant’s
claim, this is a single claimant limitation proceeding. See In re Key W. Jetski, Inc., 619 F. Supp.
3d at 1219 (“The August 1, 2022, deadline has now passed, and no additional claims have been
filed. Therefore, the Court agrees that the single claimant exception applies to this case.”).
Moreover, the grant of final default judgment against all other potential claimants provides
certainty that this is a single claimant limitation proceeding.2 Lastly, Petitioner asserts that the
2 The Court acknowledges that Petitioner made this argument prior to entry of final default judgment against all other
potential claimants.
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Court should deny Claimant’s Motion and rule on the enforceability of her release and waiver of
claims after allowing the parties to brief the matter. DE 23 at 6–7. However, Petitioner does not
provide any authority requiring the Court to do so, and the Court sees no reason why any potential
waiver or release of claims cannot be evaluated by the state court or this Court in due course. See
Hopkins v. The Boat Club, Inc., 866 So. 2d 108, 111 (Fla. 1st DCA 2004) (applying federal
maritime law to release and waiver contained within watercraft rental agreement). For the
foregoing reasons, the Court RECOMMENDS GRANTING Claimant’s Motion [DE 22], lifting
the injunction, permitting Claimant to proceed with a state action against Petitioner that adheres to
the conditions of her stipulations, and staying this limitation proceeding.
III. Recommendation
The Court RECOMMENDS DENYING Petitioner’s Motion to Compel Arbitration [DE
24] and GRANTING Claimant’s Motion to Stay Limitation Action and Lift Injunction [DE 22].
Within fourteen days after being served with a copy of this Report and Recommendation,
any party may serve and file written objections to any of the above findings and recommendations.
28 U.S.C. § 636(b)(1); S.D. Fla. Mag. R. 4(a). The parties are hereby notified that a failure to
timely object waives the right to challenge on appeal the District Court’s order based on
unobjected-to factual and legal conclusions contained in this Report and Recommendation.
11th Cir. R. 3-1 (2014).
DONE AND SUBMITTED in Chambers at Fort Lauderdale, Florida, this 17th day of
February, 2026.
_______________________________ 	_
PANAYOTTA AUGUSTIN-BIRCH
UNITED STATES MAGISTRATE JUDGE
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