## Facts

- A.B.K. Enterprises, Inc. (ABK) owned the *Island Lady*, a small passenger vessel used as a water taxi.
- Under a charter agreement, Tropical Breeze Casino Cruz, LLC (TBCC) operated the *Island Lady* as owner pro hac vice and also operated the offshore casino vessel *Tropical Breeze I*.
- The *Island Lady* transported passengers and employees from Port Richey, Florida, to the *Tropical Breeze I*, located about nine miles offshore.
- In January 2018, while the *Island Lady* was transporting 37 passengers to the *Tropical Breeze I*, a fire occurred aboard the *Island Lady*.
- Several passengers were injured, one passenger died, and the *Island Lady* was lost.
- On the day of the fire, some passengers paid for tickets on the *Island Lady* (including 15 passengers who paid $5.00 each), others paid discounted fares, and others traveled for free.
- ABK and TBCC filed a federal Limitation of Liability Act proceeding seeking exoneration from or limitation of liability and posted security based on the asserted value of the *Island Lady* (about $23,700) as the death-and-injury limitation fund.
- Multiple passengers filed claims alleging negligent failure to maintain and operate the *Island Lady* in a reasonably safe manner; the passengers did not assert breach-of-contract claims.
- Several passengers moved to increase the limitation fund under the flotilla doctrine by adding the value of the *Tropical Breeze I* (reported as insured for about $750,000).

## Issues

1. Whether, in a Limitation of Liability Act proceeding, the limitation fund must be increased under the flotilla doctrine to include the value of a related casino vessel when the casualty occurred on a shuttle vessel.
2. Whether the pure-tort exception applies when passenger claimants plead negligence only and do not pursue contract-based claims, limiting the fund to the value of the vessel that caused the injury.

## Decision

- The court denied the passengers’ request to increase the limitation fund to include the value of the *Tropical Breeze I*.
- The court treated the passengers’ claims as tort claims rather than claims based on a contract between the passengers and the vessel interests.
- Applying the pure-tort exception, the court limited the fund to the value of the *Island Lady* and any pending freight, rather than aggregating the value of other vessels used in the casino operation.

## Legal Principles

- Under the Limitation of Liability Act, a vessel owner (and an owner pro hac vice, where applicable) may seek to limit liability to the value of the vessel and pending freight, if the statutory requirements are met.
- In some situations, the flotilla doctrine can require a limitation fund that reflects the owner’s interest in multiple vessels working together in a single venture, rather than only the casualty vessel.
- Courts distinguish between liability tied to a contract with the claimant and liability based solely on tort: when the claim is purely tort-based, the pure-tort exception generally limits the fund to the value of the vessel that was actively responsible for the injury.
- When claimants plead negligence only and do not assert contract theories, that pleading posture can support treating the case as a pure-tort matter for flotilla-doctrine purposes.

## Conclusion

Because the passengers pursued negligence claims arising from the fire aboard the *Island Lady* and did not assert breach-of-contract claims, the court applied the pure-tort exception and declined to add the *Tropical Breeze I* to the limitation fund, leaving the fund tied to the *Island Lady*’s value (and pending freight).


In the Matter of the Complaint of A.B.K. Enterprises, Inc., 2019 WL 3068786 (2019)