Kansas Gooden recently prevailed in an admiralty appeal in the United States Court of Appeal for the Eleventh Circuit. The case involved a two-boat accident and competing Petitions for Exoneration from or Limitation of Liability actions filed by the boat owners. One case settled and a settlement release was executed. The District Court dismissed the competing action finding that the executed release barred the case and also held it was a “cause of action” contemplated by the release. On appeal, Kansas focused on the text of the release and argued that the District Court violated the whole text cannon of contract interpretation. She contended that the District Court focused on isolated phrases and terms without giving meaning to all of the provisions.
The Eleventh Circuit agreed and held that the settlement did not preclude the competing Limitation Action. When all of the terms of the settlement release were considered, it was clear it only resolved the first Limitation Action. In addition, Kansas argued that a Limitation Action is not a “cause of action” contemplated by the release as it is purely defensive in nature and the instituting party is not seeking monetary damages. The Eleventh Circuit also agreed on this ground. Accordingly, the Court reversed and remanded to allow the competing Limitation Action to proceed.
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