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Hearn v. Oriole Shipping, LLC

United States District Court, E.D. Pennsylvania

March 27, 2018

Kevin Hearn, et al., Plaintiffs,
v.
Oriole Shipping, LLC, Defendant/Third-Party Plaintiff
v.
McAllister Towing and Transportation, Inc., Third-Party Defendant

          MEMORANDUM RE: MOTION TO STRIKE THIRD-PARTY COMPLAINT AND STAY CONTRIBUTION OR INDEMNITY CLAIM PENDING ARBITRATION

          Baylson, J.

         I. Introduction

         Plaintiffs Kevin and Tina Hearn seek to recover for injuries Kevin Hearn sustained while climbing from the deck of a ship he was undocking, the M/V Oriole, onto the deck of a tugboat, the Teresa McAllister, waiting nearby in the waters of the Delaware River. The Hearns sued the owner of the M/V Oriole, Defendant/Third-Party Plaintiff Oriole Shipping, LLC, which in turn filed a third-party complaint against the owner of the Teresa McAllister pursuant to Fed.R.Civ.P. 14(c). The owners of the Teresa McAllister, Third-Party Defendants McAllister Towing and Transportation, Inc. and its wholly owned subsidiary, McAllister Towing of Philadelphia, Inc., now seek to strike the Rule 14(c) third-party complaint, and to stay any contribution or indemnity action pending arbitration.

         As rule 14(c) is limited to “Admiralty or Maritime Claims” this Motion presents a seldom-decided issue as to whether this is a “Admiralty or Maritime Claim.”

         The Court GRANTS the motion to strike the Rule 14(c) third-party complaint without prejudice and DENIES the motion to stay pending arbitration.

         II. Background

         On August 2, 2016, Plaintiff Kevin Hearn, a docking pilot, injured himself while jumping off an “accommodation ladder” from a vessel he was undocking, the M/V Oriole, onto the deck of an awaiting tug, the Theresa McAllister, in the waters of the Delaware River off Fairless Hills, Pennsylvania. (Hearn Compl. ¶¶ 6-16, ECF 1.) The M/V Oriole was owned by Defendant/Third-Party Plaintiff Oriole Shipping, LLC; the Theresa McAllister was owned by Third-Party Defendants McAllister Towing and Transportation, Inc. and/or its wholly owned subsidiary, McAllister Towing of Philadelphia, Inc. (Oriole Compl. ¶¶ 7-11, ECF 16.) Kevin Hearn was employed by McAllister Towing and Transportation, Inc. or McAllister Towing of Philadelphia, Inc. at the time of the accident. (Id. ¶ 17.)

         In 2012, McAllister Towing and Transportation, Inc. entered a “Tugboat Assistance Agreement” with Eagle Shipping International (USA), LLC, a corporate parent of Oriole. (Tugboat Assistance Agr., Ex. 1 to Moore Aff., ECF 19-1.) The Tugboat Assistance Agreement contained an arbitration clause, which stated in relevant part:

17. LAW AND ARBITRATION. Should any dispute arise out of this Agreement, the matter in dispute shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall by final, and judgment may be entered on any award by any court having jurisdiction.

(Id. ¶ 17.) The Tugboat Agreement also contained an indemnity provision. (Id. ¶ 9.) The Tugboat Agreement specifically provides, “This Agreement will be effective from January 1, 2012 to December 31, 2012.” (Id. ¶ 2.)

         In an affidavit attached to the instant motion to strike, Laura Moore, risk manager of McAllister Towing and Transportation, asserted that “[t]his arrangement…remains in effect today.” (Moore Aff. ¶ 9, Ex. A. to Mot. to Strike, ECF 19-1.) An ownership structure diagram attached to Moore's affidavit lists Oriole Shipping, LLC under Eagle Shipping International (USA) LLC. (Ownership Diagram, Ex. 3 to Moore Aff., ECF 19-1.)

         Nothing in the record indicates whether any agreement containing an arbitration clause was in effect on the date of the accident on August 2, 2016.

         III. Procedural History

         Plaintiff Kevin Hearn and his wife, Plaintiff Tina Hearn, filed a three-count Complaint against Oriole, which contained a jury demand, in this Court on June 20, 2017. The Hearns asserted diversity jurisdiction pursuant to 28 U.S. § 1332 based on their Delaware citizenship and Oriole's status as a corporation organized under the laws of the Marshall Islands, with an agent for service of process in Connecticut. (Hearn Compl. ¶¶ 1-3, ECF 1.)

         Count I asserted a “Claim of Kevin Hearn as a Seaman Against Defendant Under the General Maritime Law.” (Id. ¶¶ 8-18.)

         Count II was styled as an “Alternative Claim of Kevin Hearn as a Business Visitor Against Defendant Oriole Shipping, LLC under the General Maritime Law.” (Id. ¶¶ 19-22.)

         Count III asserted a “Claim of Tina Hearn Against Defendant Oriole Shipping, LLC” for loss of consortium. (Id. ¶¶ 23-24.)

         The Hearns' Complaint did not assert admiralty jurisdiction, or mention Rule 9(h) of the Federal Rules of Civil Procedure.

         On August 2, 2017 Defendant Oriole Shipping, LLC (“Oriole”) filed an answer denying the allegations of the Complaint, and containing some twenty-three separate affirmative defenses. (Answer, ECF 7.)

         Oriole then moved for joinder or leave to file a third-party complaint, against McAllister Towing and Transportation Company, Inc., and McAllister Towing of Philadelphia, Inc. (collectively, “McAllister”) on October 31, 2017. (ECF 14.) This motion was unopposed. (Id.) This Court granted the motion on November 27, 2017. (Order Granting Mot. for Joinder or to File Third-Party Compl., ECF 15.)

         In its Third-Party Complaint, filed on November 29, 2017, Oriole asserted that the Court had admiralty jurisdiction, and that its third-party complaint asserted maritime claims to which special rules were applicable:

This Honorable Court has subject matter jurisdiction over this Third-Party Complaint as this is a case of admiralty jurisdiction under 28 U.S.C. § 1333. Moreover, this Honorable Court has subject matter jurisdiction over this Third-Party Complaint pursuant to pendent, ancillary and supplemental (28 U.S.C. § 1367) jurisdiction because it arises out of the same transaction or occurrence that is the subject of the Plaintiff's Complaint, and Third-Party Defendants are or may be liable to Third-Party Plaintiff for all or part of the claims asserted by Plaintiffs in the original action…
This Third-Party Complaint is an admiralty and maritime claim brought pursuant to Federal Rules of Civil Procedure 9(h) and 14(c) such that the Third-Party Defendants are tendered directly to Plaintiffs and Third-Party Defendants must file an Answer to the Plaintiffs' Complaint.

         (Third-Party Compl. ¶¶ 3-4, ECF 16.)

         As noted above, Fed.R.Civ.P. 14(c) is limited to ...


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