Chad Barnes v. Sea Hawaii Rafting, LLC ( 2021 )

NOT FOR PUBLICATION FILED
SEP 22 2021
UNITED STATES COURT OF APPEALS
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHAD BARRY BARNES, No. 18-17154
Plaintiff-Appellant,
D.C. No.
v. 1:13-cv-00002-ACK-RLP
SEA HAWAII RAFTING, LLC; et al.,
MEMORANDUM*
Defendants-Appellees.
CHAD BARRY BARNES, No. 19-15646
Plaintiff-Appellant,
D.C. No.
v. 1:13-cv-00002-ACK-RLP
SEA HAWAII RAFTING, LLC; et al.,
Defendants-Appellees.
CHAD BARRY BARNES, No. 19-16484
Plaintiff-Appellant, D.C. No.
1:13-cv-00002-ACK-WRP
v.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
ALOHA OCEAN EXCURSIONS LLC,
Defendant-Appellee,
and
SEA HAWAII RAFTING, LLC; et al.,
Defendants.
CHAD BARRY BARNES, No. 19-16910
Plaintiff-Appellee, D.C. No.
1:13-cv-00002-ACK-WRP
v.
ALOHA OCEAN EXCURSIONS LLC,
Defendant-Appellant,
and
SEA HAWAII RAFTING, LLC; et al.,
Defendants.
Appeal from the United States District Court
for the District of Hawaii
Alan C. Kay, District Judge, Presiding
CHAD BARRY BARNES, No. 19-17613
Appellant, D.C. No.
1:16-cv-00588-JAO-WRP
2
v.
KRISTIN KIMO HENRY; NIMA
GHAZVINI, Trustee,1
Appellees.
Appeal from the United States District Court
for the District of Hawaii
Jill Otake, District Judge, Presiding
CHAD BARRY BARNES, No. 19-17614
Appellant, D.C. Nos.
1:19-cv-00212-DKW-RT
v. 1:19-cv-00213-DKW-RT
1:19-cv-00215-DKW-RT
KRISTIN KIMO HENRY; et al.,
Appellees.
Appeal from the United States District Court
for the District of Hawaii
Derrick Kahala Watson, District Judge, Presiding
Argued and Submitted February 2, 2021
Honolulu, Hawaii
Before: CLIFTON, R. NELSON, and COLLINS, Circuit Judges.
1
The pending motions to substitute party/notices of substitution of party will be
addressed in a separate order.
3
Chad Barnes, a seaman, was injured when there was an explosion on the
vessel on which he was working. He brought various claims in admiralty against
Sea Hawaii Rafting, LLC (“SHR”) (his employer and the vessel owner), individual
Kristin Henry (SHR’s sole member and owner), and the Tehani (the vessel in rem).
SHR and Henry declared bankruptcy. The district court and bankruptcy court
proceedings progressed concurrently.
These consolidated interlocutory appeals arise from a bench trial in Barnes’s
favor, the denial of various motions relating to Barnes’s attempts to recover awards
from that trial, the district court’s vacatur of a bankruptcy court order, and the
district court’s affirmance of a bankruptcy court discharge. Henry’s new company,
Aloha Ocean Excursions, LLC (“AOE”), cross-appeals one order.
Although we are sympathetic to Barnes’s recovery efforts, we cannot
provide him the relief he seeks. We affirm in part and dismiss in part for lack of
jurisdiction.
18-17154:
We have jurisdiction over Barnes’s appeal of the maintenance and cure
bench trial. The trial determined the “rights and liabilities” of the parties: the
district court determined the extent of liability against SHR and the Tehani in favor
4
of Barnes on his maintenance and cure claims.2 28 U.S.C. § 1292(a)(3); Barnes v.
Sea Hawaii Rafting, LLC, 889 F.3d 517, 528 (9th Cir. 2018) (stating that exercise
of jurisdiction under § 1292(a)(3) is only appropriate when the order below is
“substantive in nature” and involves the “merits” of the claims, as opposed to
orders that make “adjective, tactical, or procedural” determinations).
We do not have jurisdiction over the issues raised that fall outside of the
scope of the district court’s maintenance and cure decision.3 See Swint v.
Chambers Cnty. Comm’n, 514 U.S. 35, 50 (1995) (holding that the scope of
interlocutory jurisdiction is generally limited to the “precise decision
independently subject to appeal”).
At oral argument, Barnes expressly abandoned his argument that the district
court’s maintenance and cure decision against SHR and the Tehani should be
2
We do not have jurisdiction under 28 U.S.C. § 1291 because, although the district
court entered a partial amended judgment under Federal Rules of Civil Procedure
54(b) and 59(e), the district court did not certify that judgment for immediate
appeal. See Frank Briscoe Co. v. Morrison-Knudsen Co., 776 F.2d 1414, 1416
(9th Cir. 1985) (holding that a district court’s express determination that there was
no just reason for delay is a jurisdictional requirement under Rule 54(b)).
3
Specifically, we do not have jurisdiction over the issues of whether: (1) the
district court erred in refusing to arrest the Tehani before the judgment; (2) the
district court erred by not allowing Barnes to pursue a “piercing the corporate veil”
theory at trial; and (3) the bankruptcy court unconstitutionally interfered in
Barnes’s admiralty trial on maintenance and cure.
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vacated. He argues that we should additionally impose liability against Henry.
This we cannot do. As the district court recognized, Henry was not a defendant in
the maintenance and cure trial. Because Henry was not a defendant at that trial, the
district court did not determine his liability. Thus, that issue is not among the
matters “determin[ed]” by the district court over which we may assert jurisdiction
under § 1292(a)(3).
The district court did not abuse its discretion, see Kumho Tire Co. v.
Carmichael, 526 U.S. 137, 152 (1999), in prohibiting two of Barnes’s witnesses
from testifying as expert witnesses at the maintenance and cure trial. Barnes
conceded that he did not timely disclose those witnesses and he did not
substantially justify that untimeliness. See Goodman v. Staples The Office
Superstore, LLC, 644 F.3d 817, 826 (9th Cir. 2011) (holding that, when a party
fails to make disclosures required by Federal Rule of Civil Procedure 26(a), the
party is disallowed from using the witness to supply evidence unless it establishes
that the failure was substantially justified or was harmless).
Barnes also raises a handful of arguments related to how the district court
erred in calculating his maintenance and cure award. None of them are persuasive.
To the extent that Barnes contends that he was prejudiced by his refusal to enter
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into a proposed stipulation concerning maintenance and cure, he has failed to
demonstrate any such prejudice on appeal.
19-15646:
We have jurisdiction over the issue of whether the commercial use permit
was an appurtenance of the Tehani. Like the issue of whether Barnes could assert
in rem claims against the Tehani, that subsidiary question is sufficiently
“substantive in nature” because it involves Barnes’s potential “right” to the permit
in the in rem proceedings. See Barnes, 889 F.3d at 528.
We do not have jurisdiction to consider the district court’s denial of Barnes’s
request to be appointed substitute custodian of the Tehani. That was an “adjective,
tactical, [and] procedural” determination. See id. We do not have jurisdiction over
the issues raised that fall outside of the scope of the district court’s order regarding
the commercial use permit and appointment of substitute custodian.4 See Swint,
514 U.S. at 50.
Reviewing de novo, see Lim v. City of Long Beach, 217 F.3d 1050, 1054
(9th Cir. 2000), we hold that the commercial use permit was not an appurtenance
4
Specifically, we do not have jurisdiction over the issues of whether: (1) the
district court was mistaken in requiring Barnes to prepay the marshal’s arrest costs;
(2) the conflict between 28 U.S.C. § 1916 and 28 U.S.C. § 1921 is a violation of
Barnes’s due process rights and inconsistent with the law of maintenance and cure;
(3) the district court erred in providing Barnes with $10,000 for maintenance and
7
of the Tehani. It is undisputed that the permit was issued to SHR as a corporation
and cannot be automatically transferred with the Tehani. See Haw. Code R. § 13-
231-62(b)(2)(B) (“A commercial use permit . . . shall automatically expire . . . [i]f
the vessel or vessels operated under the commercial use permit . . . are sold or
otherwise transferred . . . .”). That is determinative here because, to qualify as an
appurtenance, the permit would have to be transferable with the Tehani.
19-16484/19-16910:
We have jurisdiction under 28 U.S.C. § 1292(a)(1) to consider the district
court’s refusal to stay the disbursal of the funds. That order had the practical effect
of denying an injunction to stay disbursal of funds. See Gulfstream Aerospace
Corp. v. Mayacamas Corp., 485 U.S. 271, 287–88 (1988) (holding that
§ 1292(a)(1) provides appellate jurisdiction over orders that have the practical
effect of denying an injunction). We have jurisdiction over the district court’s
denial of Barnes’s motion to dismiss AOE’s claim to the funds from the sale of the
Tehani. That decision is “inextricably intertwined” with the decision to not stay
then directing Barnes to use his maintenance payment to pay for the marshal’s
costs related to the arrest; and (4) the district court has jurisdiction over the
contract for the sale of the Tehani by the chapter 7 trustee to AOE and Henry.
8
disbursal of the funds. See Puente Arizona v. Arpaio, 821 F.3d 1098, 1109 (9th
Cir. 2016).
Reviewing de novo, Ventura Packers, Inc. v. F/V Jeanine Kathleen, 305
F.3d 913, 916 (9th Cir. 2002), we hold that the district court had jurisdiction over
the funds and did not err in denying Barnes’s motion to dismiss. The district court
has subject matter jurisdiction over the lawsuit generally because Barnes’s claims
do not arise from the sale of a vessel or a contract but rather from various other
admiralty claims, including unseaworthiness, various theories of negligence, and
intentional infliction of emotional distress. The district court has exclusive in rem
jurisdiction over the Tehani, and the bankruptcy court has no jurisdiction over it.
See Barnes, 889 F.3d at 533. Any proceeds the bankruptcy court received when it
improperly retained jurisdiction over the Tehani should have, and would have,
properly fallen within the district court’s jurisdiction. See Barnes, 889 F.3d at 524
(district court never lost its in rem jurisdiction, despite bankruptcy court’s actions);
cf. Ventura Packers, Inc. v. F/V Jeanine Kathleen, 424 F.3d 852, 860–61 (9th Cir.
2005) (in rem jurisdiction remained even though res was erroneously released); see
also Fed. R. Civ. P. Supp. Adm. & Mar. Cl. R. C(3)(c), E(9)(b).
The district court did not abuse its discretion in its calculation of the amount
of funds it chose to disburse based on a determination of a lease amount that was
9
the same as the bankruptcy court. See Teutscher v. Woodson, 835 F.3d 936, 942
(9th Cir. 2016) (district court’s award of equitable relief is reviewed for abuse of
discretion). Barnes had ample opportunity to, and did indeed, argue to the district
court what amount should be disbursed to him. Because the district court
independently concluded that a rent of $500 per month was reasonable, Barnes was
not deprived of any right to have this issue decided by an Article III tribunal.
We have jurisdiction over AOE’s cross-appeal regarding the district court’s
direction to transfer the permit. That order had the practical effect of directing
injunctive relief. See Abbott v. Perez, 138 S. Ct. 2305, 2319 (2018) (stating that
§ 1292(a)(1) provides appellate jurisdiction over orders that have the “practical
effect” of granting injunctive relief). However, the issue is moot. AOE did not
comply with the district court’s directive, and the district court is no longer seeking
to enforce its directive. Therefore, there is no harm to remedy. See Earth Island
Inst. v. United States Forest Serv., 442 F.3d 1147, 1157 (9th Cir. 2006) (internal
quotations omitted), abrogated on other grounds by Winter v. Natural Res. Def.
Council, Inc., 555 U.S. 7 (2008). To the extent AOE challenges the subsequent
imposition of sanctions for its non-compliance with the district court’s order, the
sanctions orders are outside the scope of the order appealed. See Swint, 514 U.S. at
50.
10
We deny AOE’s offhand request that Barnes’s appeals be deemed frivolous.
See In re George, 322 F.3d 586, 591–92 (9th Cir. 2003).
19-17613:
We lack jurisdiction over the district court’s order vacating the bankruptcy
court’s approval of the sale of the Tehani. The district court’s order is not a final
decision within the meaning of 28 U.S.C. § 158(d)(1). Cf. Bank of New York
Mellon v. Watt, 867 F.3d 1155, 1158 (9th Cir. 2017) (holding that a district court’s
order vacating a bankruptcy court order and remanding “[is] rarely [a] final
appealable order[]”).
19-17614:
We have jurisdiction to consider Henry’s discharge because it was a final
judgment of a bankruptcy court. Espinosa v. United Student Aid Funds, Inc., 553
F.3d 1193, 1199 (9th Cir. 2008), aff’d, 559 U.S. 260 (2010). We have jurisdiction
to review the denial of the motion to stay discharge and lift protective order
because a final judgment confers jurisdiction over “all earlier, non-final orders and
rulings which produced the judgment.” Litchfield v. Spielberg, 736 F.2d 1352,
1355 (9th Cir. 1984).
The bankruptcy court did not err in declining to lift the protective order
because the protective order only prevented Barnes from using the bankruptcy
11
court proceedings to obtain discovery relevant to his district court case. Barnes
was free to, and did, request discovery in the district court. Indeed, the district
court has since allowed Barnes to conduct discovery on the exact issues he sought
in the bankruptcy court.
Reviewing the bankruptcy court’s legal conclusions de novo and its factual
findings for clear error, In re Gilman, 887 F.3d 956, 963 (9th Cir. 2018), we hold
that Henry’s discharge was proper.5 The sections of the bankruptcy code that
Barnes relies on in arguing to the contrary only allow for a bankruptcy court to
revoke a discharge, see 11 U.S.C. § 1328(e), or detail types of debts that are not
dischargeable, see 11 U.S.C. § 523(a)(9); 11 U.S.C. § 1328(a)(4) — they do not
require a bankruptcy court to deny discharge if a debtor has debts that fall under
them. Barnes waived or forfeited his other arguments because they are
undeveloped or were not first raised to the bankruptcy court. See In re Cybernetic
Servs., Inc., 252 F.3d 1039, 1045 n.3 (9th Cir. 2001). His further arguments are
not relevant to the bankruptcy court’s discharge of Henry or speak to how the
bankruptcy court erred in discharging Henry.
5
We do not decide and express no opinion on the scope of the debts that Henry
had discharged. We do note, however, that Henry concedes that any post-petition
conduct, including fraudulent conduct, is exempt from the discharge.
12
Costs to be taxed against Barnes.
AFFIRMED IN PART AND DISMISSED IN PART.
13