Opinion
CIVIL ACTION NO: 00-1602 SECTION: "N" (4)
May 17, 2002
ORDER AND REASONS
On March 11, 2002, the plaintiff, Steven Durgin, filed a Motion to File Second Amended Seaman's Complaint (doc. #215) requesting that this Court grant him leave to amend his Complaint to add General Reinsurance Corporation ("General Reinsurance") as a defendant. He also requests leave to amend his Complaint to request a trial by jury. The defendants, Crescent Towing Salvage, Inc. ("Crescent") and West of England Ship Owners Mutual Insurance Association ("West"), oppose the motion.
The defendants contend that the plaintiff is not entitled to a jury trial as his request is untimely and fails to raise any new issues. The defendants also contend that the claim against General Reinsurance is barred by the statute of limitations.
I. Factual Background
This suit rises out of a negligence claim filed by the plaintiff for injuries he sustained on June 13, 1997, while performing duties for Crescent. At the time of the incident in question, the plaintiff was a member of the crew of the tug, M/V LOUISIANA, which was assisting the M/V PANTODINAMOS, an oceangoing vessel, in loading grain. While performing his duties, a mooring line from the M/V PANTODINAMOS broke, striking him and placing him in a coma for a few weeks. The plaintiff claims to have sustained disabling injuries including a punctured liver and severe and disabling brain damage. On June 1, 2000, almost three years after the accident, the plaintiff filed suit for injuries suffered as a result. Included as a defendant in this action is West, the PI insurer of the M/V PANTODINAMOS which was subsequently sold at a judicial sale.
The plaintiff was originally represented by Gary Pendergast of the law firm Pendergast Foret. Pendergast filed suit against the plaintiff's employer pursuant to the Jones Act, 46 U.S.C. § 688 but did not request a trial by jury. The plaintiff's original counsel of record requested that he be removed from this case for fear of committing malpractice because of his repeated failure to meet Court deadlines. District Court Judge Martin L.C. Feldman granted the request on November 7, 2001. On December 11, 2001, the law firm of Braud Gallagher began representing the plaintiff. On December 18, 2001, the case was re-allotted to District Court Judge Kurt D. Engelhardt. A preliminary conference was held on February 7, 2002, and the trial was set again as a non-jury trial to begin on August 26, 2002.
See Rec. Doc. #187.
See Rec. Doc. #189.
The plaintiff contends that the attorneys from Braud Gallagher have reviewed the record and determined that an additional insurer, General Reinsurance, can be held liable for the plaintiff's damages. The plaintiff contends that General Reinsurance, the only insurer identified by Crescent, insured Crescent and the M/V LOUISIANA, the vessel to which the plaintiff was assigned at the time of the accident. Thus, the plaintiff requests leave to amend his Complaint to add General Reinsurance Corporation as a defendant even though there is allegedly no direct action available against the company.
The plaintiff also requests leave to amend his Complaint to request a trial by jury. He contends that the Jones Act has always provided for a trial by jury. The plaintiff further contends that his present counsel only recently enrolled and did not have the opportunity to request a trial by jury. The plaintiff also contends that his former counsel was incompetent as is evidenced by his removal for failing to meet Court deadlines. The plaintiff contends that allowing a jury trial will not prejudice the defendants as the trial is not set to begin until August 26, 2002.
The defendants contend that because the plaintiffs claim against General Reinsurance does not relate back under Rule 15(c) of the Federal Rules of Civil Procedure they are time barred and futile. The defendants further contend that the plaintiff should not be allowed to request a trial by jury under Rule 38 since the request is untimely and the Second Amended Complaint fails to raise any new issues. The defendants, however, do not challenge the plaintiffs request for a jury trial filed pursuant to Rule 39. They generally contend that allowing a jury trial at this late date would be prejudicial although they provide no guidance to the Court regarding how permitting the plaintiff a trial by a jury of his peers would be prejudicial to them.
II. Analysis
Rule 15(a) of the Federal Rules of Civil Procedure governs the amendment of pleadings. It provides that leave to amend pleadings "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). Rule 15(a) evinces a liberal amendment policy and a motion to amend should not be denied absent a substantial reason to do so. See Jacobsen v. Osborne, 133 F.3d 315, 318 (5th Cir. 1998).
However, leave to amend is by no means automatic. Addington v. Farmer's Elevator Mut. Ins. Co., 650 F.2d 663, 666 (5th Cir. 1981). The decision to grant or deny a motion for leave to amend lies within the sound discretion of the trial court. Id. In exercising its discretion, the trial court may consider such factors as "undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, and futility of the amendment." Gregory v. Mitchell, 634 F.2d 199, 203 (5th Cir. 1981). If the proposed amendment is legally insufficient on its face the Court should deny leave to amend without consideration of the other factors. Truchart v. Blandon, 684 F. Supp. 1368, 1371 n. 2 (E.D.La. 1988), rev'd on other grounds, 884 F.2d 223 (5th Cir. 1989).
1) Addition of General Reinsurance
Crescent and West both contend that the plaintiffs request to add General Reinsurance as a defendant is barred by the statute of limitations. The applicable statute here is 46 U.S.C. § 736 (a) which provides that "unless otherwise specified by law, a suit for recovery of damages for personal injury or death, or both, arising out of a maritime tort, shall not be maintained unless commenced within three years from the date the cause of action accrued."
Here, the plaintiffs accident occurred on June 13, 1997, and he moved to amend his complaint to join General Reinsurance on March 11, 2002, well after the three-year statute of limitations. Thus, the amended complaint was timely filed only if it "related back" to the original complaint pursuant to Rule 15(c) of the Federal Rules of Civil Procedure. Waguespack v. Aetna Life Casually Co., 795 F.2d 523, 527 (5th Cir. 1986).
Rule 15(c) provides that an "amendment changing the party against whom a claim is asserted relates back if . . ., within the period provided by law for commencing the action against him, the party to be brought in by amendment . . . has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him."
The plaintiff does not allege that General Reinsurance received actual notice of the action prior to being joined. However, if General Reinsurance should have known that the action would have been brought against it, Rule 15(c) will be satisfied and the claim will relate back.
The Fifth Circuit has routinely held that notice of an action can be imputed to a new defendant under certain circumstances in which the originally named defendant has an "identity of interest" with the party the plaintiff actually intended to sue. Miller v. Absolute Coatings, Inc., 1997 WL 666111, *3 (E.D.La. 1997). Thus, the issue here is whether General Reinsurance, as the reinsurer of Crescent's insurer has an "identity of interest" with Crescent sufficient to allow the plaintiffs claim to relate back.
None of the parties have identified Crescent's insurer.
Reinsurance is a contract by which one insurance company agrees to indemnify another in whole or in part against loss or liability which the later has incurred under a separate contract as insurer of a third party. Fontenot v. Marquette Casualty Co., 247 So.2d 572, 575 (La. 1971). It is a method by which an insurance company distributes all or part of its potential losses to another insurance company in order to reduce the extent of its possible loss under any policy or policies it has issued. Id.
A federal court exercising its admiralty jurisdiction over a maritime insurance dispute must seek a state rule as to the availability of direct action. Walter v. Marine Office of America, 537 F.2d 89, 94 (5th Cir. 1976). In Louisiana, the Louisiana Direct Action statute provides a right of action against the insurer of a tortfeasor. See La. R.S. 22:655.
Reinsurance is described in Louisiana as an agreement whereby any domestic insurer may cede all or any part of its risks to another insurer authorized to accept such risks. Id. Reinsurance not only affords no privity in contract to the insured, but it is sought by the insurer solely for its own protection, profit, and benefit. Id. The insured is unlikely to even know that its original insurance company has ceded the risk assumed in the original policy. Thus, a contract of reinsurance benefits only the original insurer and does not confer any right upon the original insured. Id. at 576. The insured party has direct access to the reinsurer only if the contract for reinsurance specifically creates such a right or if the reinsurer voluntarily enters into a direct contract with the reinsured. See id.
In the instant case, the plaintiff has not alleged that Crescent had any knowledge of General Reinsurance's agreement with Crescent's insurer. Further, the plaintiff has not provided any evidence that the agreement between General Reinsurance and Crescent's insurance company allowed Crescent direct access to General Reinsurance. Thus, it follows from Fontenot that Crescent and General Reinsurance were not in privity and the plaintiff has failed to establish an identity of interest" sufficient to allow the plaintiffs claim to relate back pursuant to Rule 15(c). Accordingly, the plaintiff's claim against General Reinsurance is time barred pursuant to 46 U.S.C. § 736 (a).
2) Jury Trial
1. Rule 38
The plaintiff also seeks to amend his Complaint to request a trial by jury. Rule 38(b) of the Federal Rules of Civil Procedure entitles a party to a jury trial on any issue triable by a jury if a demand is served "not later than 10 days after the service of the last pleading directed to such issue." Fredieu v. Rowan Companies, Inc., 738 F.2d 651, 653 (5th Cir. 1984). This rule embodies the right conferred by the seventh amendment. Fed.R.Civ.P. 38(a). However, the failure of a party to serve and file a demand as required by this rule constitutes a waiver by the party of trial by jury. Fed.R.Civ.P. 38(d).
Here, there is no dispute as to whether the requirement of Rule 38(a) has been met. The plaintiff filed his complaint on June 1, 2000. In his complaint, the plaintiff did not request a trial by jury. Now, almost two years after filing his complaint, the plaintiff requests a trial by jury. Thus, the plaintiffs request for a jury trial is untimely.
Despite being untimely, an amendment may give rise to a jury trial if it introduces new issues. See Guajardo v. Estelle, 580 F.2d 748, 753 (5th Cir. 1978). The Fifth Circuit has held that an amended or supplemental pleading that merely restates issues previously raised "does not revive the right to demand a jury trial when one had not earlier been demanded." SAS Overseas Consultants and Asia Trading Contracting, Ltd. v. Offshore Consultants, USA, Ltd., 1998 WL 661475 (E.D.La. 1998) (citing Fredieu, 738 F.2d at 653). However, a party may request a jury for any new issues raised in an amended or supplemental pleading. Id. "The "new issues' must relate to new issues of fact and not to new theories of recovery." Id.
Here, the plaintiff does not allege any new issues. In his Second Amended Complaint, he only seeks to add General Reinsurance as a defendant which the Court has also denied. Thus, the plaintiff has failed to meet the new issue exception to Rule 38.
2. Rule 39
Determining that the plaintiff failed to comply with the time requirements of Rule 38 does not end our inquiry. Daniel Int'l Corp. v. Fischbach Moore, Inc., 916 F.2d 1061, 1064 (5th Cir. 1990). Rule 39(b) states:
Issues not demanded for trial by jury as provided in Rule 38 shall be tried by the court; but, notwithstanding the failure of a party to demand a jury in an action in which such a demand might have been made of right, the court in its discretion upon motion may order a trial by a jury of any or all issues.
This rule grants the district court discretion to relieve a party from waiver of a jury trial under Rule 38. Swofford v. B W, Inc., 336 F.2d 406, 408 (5th Cir.), cert. denied, 379 U.S. 962 (1964). This modifies the usual approach to review of abuse of discretion. "When the discretion of the court is invoked under Rule 39(b), the court should grant a jury trial in the absence of strong and compelling reasons to the contrary." Daniel Int'l Corp., 916 F.2d at 1064 (5th Cir. 1990) (citing Swofford, 336 F.2d at 4090).
The Fifth Circuit has stated: "[W]e must be mindful that maintenance of the jury as a fact-finding body is of such importance and occupies so firm a place in our history and jurisprudence that any seeming curtailment of the right to a jury trial should be scrutinized) with the utmost care . . . . Thus, courts should indulge every reasonable presumption against waiver." White v. Pride Offshore, Inc., 1998 WL 849316 (E.D.La. 1998) (citing McDonald v. J. Steward, 132 F.3d 225, 229 (5th Cir. 1998)). A motion for trial by jury under this rule "should be favorably received unless there are persuasive reasons to deny it." Daniel Int'l, 916 F.2d at 1064 (quoting United States v. Union, 658 F.2d 300, 303 (5th Cir. 1981)).
In Daniel, the Fifth Circuit adopted the test originally crafted by the Eleventh Circuit establishing the following five factors that district courts should consider in the .exercise of discretion under Rule 39(b): (1) whether the case involves issues which are best tried to a jury; (2) whether granting the motion would result in a disruption of the court's schedule or that of an adverse party; (3) the degree of prejudice to the adverse party; (4) the length of the delay in having requested a jury trial; and (5) the reason for the movant's tardiness in requesting a jury trial. Daniel Int'l Corp., 916 F.2d at 1064 (citing Parrott v. Wilson, 707 F.2d 1262, 1267 (11th Cir.), cert. denied, 464 U.S. 936, (1983).
Applying these five factors in the instant case compels the conclusion that the plaintiffs late jury demand should be permitted. Although the plaintiff makes his request for a jury trial some two years after the filing of his original complaint, the claims involved in this Jones Act/general maritime law personal injury case are ordinarily and routinely determined by juries in this Court. White v. Pride Offshore, Inc., 1998 WL 849316, *2 (E.D.La. 1998) aff'd 1999 WL 58842 (E.D.La. 1999). Further, the defendants have failed to establish that granting a jury trial at this stage will affect the Court's schedule. They have also failed to indicate exactly how they would suffer any prejudice as they have not explained how their trial preparation or litigation strategy will be affected as a result of the Court granting the plaintiff's request.
Moreover, the plaintiff asserts that former counsel was negligent in his handling of the case and in his decision to agree to a non-jury trial. Former counsel's actions culminated in his withdrawal from the case for fear of committing malpractice as a result of his repeated failure to comply with the Court's deadlines. Thus, the Court finds it proper to exercise its discretion and to grant the plaintiff a jury trial.
Accordingly,
IT IS ORDERED that the Motion to File Second Amended Seaman's Complaint (doc. #215) is GRANTED IN PART and DENIED IN PART as follows:
1) GRANTED as to the Request for a trial by jury.
2) DENIED as to the Request to add General Reinsurance as a defendant.