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Maritime Update: Untimely Claim Denied in a Limitation Action

Bill Schwartz -  Posted on by Baldwin, Haspel, Burke & Mayer

A recent decision on November 5, 2021by the United States District Court in Massachusetts reinforces the strict statutory requirements of the Limitation of Liability Act (“Act”). In the case of “In the MATTER OF G&J FISHERIES, INC.”, the Court ordered that by November 18, 2020 all persons having such injuries, losses or damages file claims. This is the “monition date” deadline set by the Court under Supplemental Admiralty Rule F(5).

In this instance, a party, Eduino Costa, filed a timely Answer in the Limitation action but did not file a claim. After the monition date, the plaintiff-in-limitation then filed its Motion for Entry of Default. Thereafter, Costa sought to file his claim.

The Court noted case law suggested Rule F set a standard of “excusable neglect” in allowing a late claim. Excusable neglect is a broad category which includes “inadvertence, mistake, or carelessness, as well as intervening circumstances beyond the party’s control.” Courts determine whether excusable neglect has occurred with an equitable analysis that examines the totality of the circumstances. Among other factors, courts consider: (1) the explanation for the delay, (2) whether the non-movant will be prejudiced, and (3) whether the party requesting relief acted in good faith. “At a bare minimum” the party seeking the benefit of this to file a late claim “must offer a convincing explanation as to why the neglect was excusable.”

Here, claimant provided no such explanation. The Court further noted that even assuming, arguendo, Costa’s filing error of the claim was inadvertent, the failure of his counsel to admit to this oversight in either his initial filing or his sur-reply undermined any showing of good faith. “Relief from a tardy claim … depends upon an equitable showing,” a showing that Costa had not made in this case.

As a result, the Court found that the motion of petitioner-in-limitation for entry of default would be allowed denying the claim of Costa.

Click here to review the full case.

If you wish to discuss this, please feel free to contact Dave CarrigeeJill Willhoft or Bill Schwartz.



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