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Arbitration Not Time Barred by Statute of Limitations Unless Contract Says So

In the case ofRAYMOND JAMES FINANCIAL SERVICES, INC. v. PHILLIPS, 36 Fla. L. Weekly D2479a (Fla. 2d DCANov. 16, 2011), the Second District Court of Appeals held that arbitration claims are not civil actions or proceedings for purposes of section 95.011, Florida Statutes (2005), and that as a result, Florida statutes of limitations are not applicable to arbitration where the arbitration agreement does not expressly provide for their application.
Facts of Case
Account Holders executed client agreements with Raymond James for investment purposes. Pursuant to the provisions of the client agreements, the Account Holders were required to submit any disputes with Raymond James to the National Association of Securities Dealers, Inc. ("NASD"), for arbitration. Section 10304, the applicable NASD Code of Arbitration Procedure, provides a time limit upon submissions for arbitration. It states in pertinent part:
"(a) No dispute, claim, or controversy shall be eligible for submission t…

Does Judge Lenard Do an About Face on Arbitrability? Not So Fast...

Last week, I blogged on the decision of Pavon v. Carnival Corporation, 23 Fla. L. Weekly Fed. D96a (S.D. Fla. Jan. 20, 2010), wherein Judge Lenard granted Plaintiff's Motion to Remand and Attorneys Fees, after the plaintiff requested the Court to remand the case back down to state court and award attorney's fees and costs for Carnival improperly removing the case to federal court.

This decision, of course, spurred lots of debate. Many in the defense bar quickly argued that Pavon was necessarily overruled by Lindo v. NCL (Bahamas), Ltd., 652 F.3d 1257 (11th Cir. 2011), wherein the Eleventh Circuit Court of Appeals found that the seaman's single count claim for Jones Act negligence had to be arbitrated "at the initial arbitration-enforcement stage." Thus, it would appear that at first blush, Lindo arguably overturned Pavon.

However, it is interesting to note that Pavon involved a claim for failure to pay wages under the Seaman's Wage Act, among other claims. Ju…

Miami River Hosts Mega Yachts

At least once every four to five years, yachts must find a boatyard with sufficient lifting capacity and quality workmanship to tweak the running gear, repaint the hull, and add the latest in electronics and navigation equipment. As reported in the Caribbean Magazine in their October-December 2011 edition, this may also include adding a few meters in length to such a vessel to accommodate some new interior design concepts.

Golden Odyssey, a 264 foot/80.50 meter vessel was built at the Blohm & Voss yard in Hamburg, Germany and delivered in 1990. In 1995, Golden Odyssey had a refit at the Campbell shipyard. There her hull was lengthened from 76m to 80.5m after a modification of her stern. She also got a fully repaint. From time to time she underwent several small refits at different (undisclosed) yards.

Golden Odyssey is the flagship of the Golden Fleet and is sailing seas all over the world with her support yacht Golden Shadow (219 ft/66.75m) and the sport fishermen Golden Osprey (9…

Seaman's Removed Action Remanded by Southern District of Florida

In PAVON v. CARNIVAL CORPORATION, 23 Fla. L. Weekly Fed. D96a (S.D. Fla.Jan. 20, 2010), District Judge Joan A. Lenard granted Plaintiff's Motion for Remand and Attorneys Fees,  requesting the Court remand the case back to state court and award attorney's fees and costs after Carnival removed the case to federal court.
The Plaintiff, a seaman injured during his employment aboard the M/V Carnival Celebration, brought a lawsuit in state court in Miami-Dade County, Florida, alleging: (1) negligence under the Jones Act, 46 U.S.C. § 30104; (2) unseaworthiness; (3); failure to provide maintenance and cure; and (4) failure to pay wages under the Seaman's Wage Act, 46 U.S.C. § 10313. The cruise line subsequently removed the action to federal court, arguing that the Plaintiff's claims were governed by an arbitration provision in his employment agreement, which allegedly called for Panamanian law to apply.
In his Motion for Remand, the Plaintiff argued that his case must be remand…

Cruise Crewmember Gets $1 Million for Surgery

A Miami state court jury has awarded $1 million to a seafaring pastry chef who lived with a disabling pacemaker for a year only to discover he never needed it. Shalesh Butto, an otherwise healthy, 31-year old second-degree black belt jiu-jitsu fighter, blamed his employer for the mistake. Celebrity Cruise Lines sent the crewmember from Europe to the Dominican Republic in 2009 to see less expensive doctors after he complained of headaches and facial pain in 2009.

Doctors first inserted a pacemaker and then performed sinus surgery for an infection the following week. Butto's symptoms disappeared. But for the next year, pain surged through Butto's chest and he ultimately had to use a walker to walk. After obtaining a visa, he saw Miami cardiologists who removed the pacemaker and after doing so, Butto recovered.

Butto sued for medical negligence under the U.S. Jones Act and won the award after a one-week jury trial before Miami-Dade Circuit Judge Ronald Dresnick. Celebrity is repo…

Cruising in Cuba

American citizens are allowed to visit Cuba, but U.S. law prohibits us form spending money there and the U.S. embargo prohibits cruise ships that visit Cuba to enter the United States for six months afterwards. In 2005, cruise shipping came to a near halt in 2005 when Fidel Castro said he no longer wanted cruise ships in Cuba. He cited the cost of day-visit tourists tramping through Havana outweighing the benefits. Fidel criticized cruising for being floating hotels, floating restaurants, floating theaters and floating diversions that try to leave their trash, their empty cans and papers for a few miserable cents. Fidel then cancelled an Italian firm's contract to run Cuba's cruise terminals, with the final nail in the "proverbial coffin" when a Spanish ship, the PULLMANTUR, bypassed the island after being bought by an American firm that was subject to the U.S. embargo.

As a result, only a few cruise ships visited Cuba from 2005 to 2010. However, the Caribbean Marit…

In-House Attorneys Feel Targeted by Hyper Regulation

The Daily Business Report has an excellent article, wherein they report that key players, including corporate counsel, are increasingly finding themselves under intense regulatory scrutiny. As a result, in-house lawyer liability for corporate misconduct is edging up.

It is reported that between six and nine criminal or civil and administrative cases are brought against  companies' top attorney every year. However panelists at the Association of Corporate Counsel annual meeting in Denver were unable to agree on the severity of the problem. Some have suggested that the job of general counsel is not safe. Others counter than the SEC is not on a witch-hunt for inside lawyers. Nevertheless, regulatory and economic pressures on in-house lawyers are underlying themes across many of the annual meeting's 80-plus panels and other events.

Corporate counsel were generally considered exempt from scrutiny, as they were considered a corporation's legal advisers. However, corporate counse…

Major Expansion of Cuba's Mariel Port

The Caribbean Maritime magazine has published in their "Grapevine" section for October-December 2011 that the Cuban Port of Mariel is undergoing a major expansion. Mariel, 28 miles west of Havana, is the largest port on the north coast of Cuba, second only to Havana. The first stage of the port development reportedly involves the construction of 765 yards of berthing space. This is expected to be completed by 2014. When completed, the terminal will have an annual capacity of about 850,000 teu, compared with Havana's 350,000 teu.

It is reported that all industrial port facilities of the Port of Havana will be moved to Mariel so as to free Havana harbor to handle cruise ships and recreational boating activity. Once this is accomplished, the industrial land area near the Port of Havana will be redeveloped for tourist and eco-friendly uses.

Mariel is tapped to be the location for logistics facilities for offshore oil exploration and will have a container terminal, cargo stor…

Man Thrown from Boat Recovers Little for Injuries

The Daily Business Review reports today that in the case of Trivision v. Chabrier, a jury awarded only $403 to a passenger who was thrown from a boat. In 2005, Richard Trivision, 45 years old at the time of the accident, allowed his friend Linda Chabrier, to operate his boat. Trivision claimed Chabrier was not paying proper attention, failed to avoid a large wake and that Chabrier should not have got behind the helm if she could not properly operate the vessel. Trivision claimed a herniated cervical disc, a lumbar disc protrusion and a torn labrum in each shoulder resulting from the accident.

The defense claimed the wake came out of nowhere and could not be avoided. Chabrier also claimed Trivision was negligent for allowing her to operate his boat, since he had more experience that her. The defense also argued that Trivision's injuries were caused by his age and excessive weight and also pointed out gaps in his medical treatment. Trivision was found 10% liable for the accident, r…

Family of Man Who Died on Cruise Settles for $250k

The Daily Business Review reports on November 10, 2011 that in the case of Estate of Racoma v. Ocean Development LLC in Palm Beach Circuit Court, a family recovered a $250,000 settlement for a man who died while on a cruise. In 2008, Phil Racoma, 78, suffered a cardiac arrest and died. His family claimed that the vessel owner Platinum Real Estate, vessel operator Ocean Development and its officers failed to timely treat the man. The family claimed that there was no automated external defibrillator on board the ship, which was alleged to be standard on most cruise ships, and the ship never radioed the US Coast Guard for help.

The defense claimed that Racoma failed to take his medication before going on the ship and would have died regardless of any resuscitation efforts because of his advanced age and heart conditions. The parties settled after the defendants filed for bankruptcy.

If you are interested in receiving the small clip on the article from the Daily Business Review or wish to…

Marine Insurance Policy Found to Be Void Ab Initio

In the case of State National Insurance Company v. Anzhela Explorer, L.L.C., 2011 WL 3703223 (S.D. Fla. Aug. 23, 2011), the trial court found that based on an insured's material non-disclosure concerning the Coast Guard’s assessed deficiencies in the water tight bulkhead systems of a 70' catamaran, there was a breach of duty of good faith or Uberrimae Fidei such that the policy was void ab initio. The court also held that the unsatisfactory condition of the water tight bulkhead system rendered the vessel unseaworthy at the time coverage was bound, therefore violating the absolute warranty of seaworthiness at the time of policy inception. Because the court found the policy void ab initio,  it held that such a finding provides a complete affirmative defense to the insured’s breach of contract counterclaim.

Plaintiff, State National Insurance Company (“State National”) filed an eleven (11) count complaint for a declaratory judgment against Defendants, Anzhela Explorer L.L.C., Jeff…

Royal Caribbean's 3Q Net Income Rises 14%

On October 28, 2011, the Daily Business Review reports that Royal Caribbean Cruises' third-quarter net income climbed 14 percent, buoyed by stronger demand for Caribbean and Alaskan itineraries and people spending more onboard its ships. The cruise operator lowered its full-year earnings guidance to a level below analysts' expectations, citing the strengthening dollar and a fuel-related charge. But the Miami company says 2012 demand is solid so far, with pricing higher than it was this time a year ago.

Royal Caribbean reportedly earned $399 million, or $1.82 per share, for the period ending September 30th. This is better than its earnings of $350.2 million, or $1.61 million per share a year ago. Thus, third-quarter net yields, which measures the amount a cruise company makes from its passengers after removing expenses, climbed 5.3 percent.

If you are interested in receiving a copy of the Daily Business Review article or wish to reach me, you may contact me at miamipandi@comcas…

Non-US Citizen Crew May Be Unable to Sue for Injury If Bill Becomes Law

On October 28, 2011, Lloyd's List reports that a draftprovision in upcoming US legislation would bar non-US citizen crew on foreign-flag passenger vessels from seeking damages for injury or death in US courts. Of course, this legislation has sparked outrage among seafarer rights advocates, while others note that the provision — whose main effect will be on cruise line employees — sets a different standard for this category of mariners as compared with crewmembers on cargoships or containerships, or any other merchant vessel.
The House of Representatives’ version of the new US Coast Guard Authorization Act contains a section that stipulates that a seafarer who is not a US national or permanent resident, and who suffers injury or death outside US territorial waters, be barred from bringing a damages lawsuit before a US court, so long as the mariner has a right to seek compensation under the laws of his homeland or in the ship’s flag state. The Bill, introduced by Republican Congressm…

Overlawyered Insurance Dispute Sheds Light on Attorney's Fee Issue

On October 18, 2011, the Miami-Dade Daily Business Review reports on the case of DeLeon v. Great American Assurance Co., where the Third District Court of Appeals held that a truck driver is entitled to attorney's fees after an attorney for his insurance carrier improperly questioned him during an examination under oath, thereby making judicial intervention necessary to resolve the claim.

The facts are as follows--the truck driver's tractor-trailer was stolen while parked at an interstate trucking company. When the police found the truck, it was damaged and nine tires were  missing. The trucker filed a claim with his insurer. The insurer required the trucker to submit to an examination under oath ("EUO"), as part of its investigation. Like many insurance policies, the trucker's required him to provide the statement before initiating a lawsuit. However during the EUO, the bulk of the questioning pertained to the trucker's unrelated criminal conviction and who …

S.D. Florida Finds For Vessel Owner Against Necessaries Provider

In DELTA NOVEMBER, LLC. vs. BAKER, 23 Fla. L. Weekly Fed. D44a (S.D. Fla. August 22, 2011), a vessel owner entered into oral repair contract with a repairer and brought the action against the repairer alleging breach of maritime contract/warranty of workmanlike performance and breach of marine bailment, after vessel sank at its berth causing damages to its hull, machinery, appurtenances, and plaintiff's personal property. The repairer moved to dismiss for lack of jurisdiction, improper venue, and failure to state a claim.

The facts of the case are as follows. Plaintiff Delta November, LLC (“Plaintiff”) entered into an oral contract with Defendant Richard Baker (“Defendant”) to repair the starboard engine of Defendant's vessel, the M/Y CJ, a 33-foot Chris-Craft fly bridge sportfish vessel. At the time, the vessel was docked at its home dock, Worldwide Sportsman, and connected to shore-side power. The Defendant began the repairs at Worldwide Sportsman, which is located in Islamo…

Crewmember Claims Not Falling Within Arbitration Clause

In DOE v. PRINCESS CRUISE LINES, LTD., 23 Fla. L. Weekly Fed. C439a (11th Cir. September 23, 2011), the Eleventh Circuit held that the trial court did not err in holding that a crewmember's claims for false imprisonment, intentional infliction of emotional distress, spoliation of evidence, invasion of privacy, and fraudulent misrepresentation do not fall within scope of arbitration provision, where those claims contain allegations that do not arise from, do not relate to, and are not connected with parties' crew agreement or services performed by plaintiff as bar server. The Eleventh Circuit reasoned that such claims are not the immediate, foreseeable result of performance of parties' contractual duties or plaintiff's services as cruise line employee and are not within scope of arbitration clause, where claims involve factual allegations about how cruise line and its officials treated plaintiff after learning that she had been raped, including allegations that she was …

The Key to Arbitration Clause Provisions is Careful Handling

Businesses often insert an arbitration clause in a contract based on the expectations that arbitration is cheaper and faster than a lawsuit. Unfortunately, a poorly drafted arbitration clause can lead to a messy legal dispute that is neither cheaper nor faster. Transaction-oriented lawyers have their strengths, and litigation is generally not one of them. As a result, they may not anticipate all of the ramifications of the provisions they insert in an arbitration clause. Sometimes an attorney borrows from a well-crafted contract that is ill-suited to the needs of the current client. In a sincere but misguided effort to cover all bases, an attorney may insert language that is overly expansive, overly restrictive or just plain impractical. This is particularly true in maritime matters.

In my years as a claims executive ultimately paying for arbitration proceedings, a lawyer appearing before arbitrators and advising clients on contracts that other lawyers have drafted, I have learned to …

Glut of Ships Bad News for Supertanker Owners

Bloomberg News reports that owners of supertankers, losing money for a sixth consecutive quarter, will probably idle the most ships in more than two decades, as they contend with a glut that drove charter rates to the lowest in at least fourteen years. The combination of too many ships and slowing demand growth for oil means that about six percent of the fleet will be anchored in a year, according to Bloomberg's survey of eight brokers and analysts. However that may not be enough to end the slump. This is because it is reported that freight agreements, traded by brokers and used to bet on transportation costs, anticipate rates no higher than $13,819 a day through 2013.

While owners can cut operating costs to as little as $2,000 a day from $12,000 by anchoring ships, it also means no income. This was a statement made by Andreas Sohmen-Pao, CEO of the oil and gas shipping unit of BW Group, which is idling three ships of its own. The global fleet of VLCCs expanded about 9 percent to …