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Alter Barge Line, Inc. v. Consolidated Grain & Barge Co., Appeal Of: Randy W. Pherigo, Claimant-Appellant
Citations: 272 F.3d 396; 2002 A.M.C. 472; 2001 U.S. App. LEXIS 24065; 2001 WL 1382676Docket: 00-3022
Court: Court of Appeals for the Seventh Circuit; November 8, 2001; Federal Appellate Court
Randy Pherigo sustained severe injuries during an incident involving equipment malfunction while unloading a barge owned by Alter Barge Line, Inc., leading him to file a personal injury lawsuit against Alter and other defendants. Alter sought to limit its liability under the Vessel Owner's Limitation of Liability Act, asserting that its liability should not exceed the value of the barge and cargo, totaling $45,350. The district court issued an order staying all suits against Alter and mandated that all claims be filed by March 17, 2000. Pherigo missed this deadline, and Alter subsequently moved to default all unfiled claims. Pherigo filed a motion to submit a late claim, but the district court denied this and entered a default order without addressing Pherigo's motion. On appeal, the court noted that late claimants in admiralty cases are not required to show "good cause" for their delays. Previous cases indicated that a minimal explanation for the delay suffices. Pherigo's explanation of attorney error was deemed adequate to meet this minimal standard, challenging the district court's conclusion that he had not demonstrated good cause for the delay in filing his claim. When a claimant demonstrates cause, courts are required to "freely grant" permission for late claim filings, provided the limitation proceeding is ongoing and that allowing the late claim does not prejudice other parties, as established in Amer. Comm. Lines, Inc. v. United States. In this instance, the circumstances favor Pherigo, and the equitable nature of admiralty proceedings supports his right to file his claim. The court refrains from labeling the district court's earlier denial as an abuse of discretion but acknowledges the appellate court's authority to ensure justice within admiralty proceedings. It references Texas Gulf Sulphur Co. v. Blue Stack Towing Co. to illustrate that while a district court's refusal to allow a late claim was not an abuse of discretion, appellate courts can modify such orders to permit late claims subordinate to timely ones. Additionally, a similar case, In re Two "R" Drilling Co., supports the position that late claims should be permitted under comparable circumstances. Consequently, the district court's June 12, 2000 order closing the limitation proceeding and defaulting unfiled claims is vacated, and the case is remanded with instructions to allow Pherigo to file his claim.