Hadel v. Morris

Case: 23-40475 Document: 59-1 Page: 1 Date Filed: 03/04/2024

United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit

____________ FILED
March 4, 2024
No. 23-40475 Lyle W. Cayce
____________ Clerk

Thomas Hadel,

Plaintiff—Appellee,

versus

Olivia Morris; David Morris,

Defendants—Appellants.
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Appeal from the United States District Court
for the Southern District of Texas
USDC No. 3:23-CV-115
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Before Jones, Dennis, and Douglas, Circuit Judges.
Per Curiam: *
Defendants Olivia and David Morris appeal from the district court’s
denial of their motion to dismiss. Plaintiff Thomas Hadel seeks damages for
the loss of value his yacht sustained when it collided with the Morrises’ yacht.
Defendants claim the doctrine of restitutio in integrum bars recovery of the

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*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited circumstances set
forth in 5th Circuit Rule 47.5.4.
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No. 23-40475

damages Hadel seeks. 1 Because we lack jurisdiction to hear this appeal, we
DISMISS.
Hadel sued Defendants in Texas state court, alleging Defendants’
negligence caused their yacht to collide with Hadel’s yacht. 2 After removing
the case to federal court, Defendants moved to dismiss Hadel’s complaint
pursuant to Federal Rule of Civil Procedure 12(b)(6). Defendants argued
dismissal was proper because diminution-in-value damages are not
recoverable under the doctrine of restitutio in integrum. The district court
denied Defendants’ motion without explanation. Defendants appealed.
“Ordinarily, this court does not have jurisdiction over the denial of a
Rule 12(b)(6) motion to dismiss for no cause of action, because such an order
is interlocutory in nature.” Morin v. Caire, 77 F.3d 116, 119 (5th Cir. 1996).
Nevertheless, the parties contend we have jurisdiction to hear this appeal
under 28 U.S.C. § 1292(a)(3). 3 The parties argue that, in denying

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1
This doctrine “is the leading maxim applied by admiralty courts to ascertain
damages resulting from a collision.” City of Milwaukee v. Cement Div., Nat. Gypsum Co.,
515 U.S. 189, 196, 115 S. Ct. 2091, 2096 (1995) (citation and quotations omitted).
“[S]trictly construed,” it “limit[s] damages to the difference in the value of the vessel
before and after the collision.” Nerco Oil & Gas, Inc. v. Otto Candies, Inc., 74 F.3d 667, 669
(5th Cir. 1996).
2
Prior to bringing this lawsuit, Hadel’s insurer brought a subrogation action in
Texas state court for the amount it paid to repair Hadel’s yacht. But that action did not
include a claim for diminution-in-value damages. Hadel’s insurer and Defendants
eventually settled the subrogation suit.
3
Section 1292(a)(3) “may be used only if the federal court’s admiralty jurisdiction
has been invoked . . . .” See Alleman v. Bunge Corp., 756 F.2d 344, 346 (5th Cir. 1984). In
removing the case to federal court, Defendants invoked the district court’s diversity
jurisdiction, but they also indicated that “alternatively, Plaintiff requests a declaratory
judgment on a Marine Insurance Policy that is governed by United States federal admiralty
law and maritime law and concerns a boating collision that occurred on navigable waters.”
We need not decide whether the district court’s admiralty jurisdiction has been invoked

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No. 23-40475

Defendants’ motion to dismiss, the district court, in effect, held Defendants
could be liable for diminution-in-value damages.
Under § 1292(a)(3), this court has jurisdiction to hear appeals from
“[i]nterlocutory decrees . . . determining the rights and liabilities of the
parties to admiralty cases in which appeals from final decrees are allowed.”
§ 1292(a)(3). Construed “narrowly,” § 1292(a)(3) “permit[s] appeals from
orders finally determining one party’s liability to another and referring the
action for a computation of damages.” SCF Waxler Marine, L.L.C. v. ARIS
T M/V, 902 F.3d 461, 464 (5th Cir. 2018), as revised (Oct. 30, 2018); see also
Petroleos Mexicanos Refinacion v. M/T King A (Ex-Tbilisi), 377 F.3d 329, 337
(3d Cir. 2004) (“A prototypical application of § 1292(a)(3) is the appeal of a
ruling on liability prior to a trial on damages.”).
In denying Defendants’ motion to dismiss, the district court did not
determine Defendants’ liability. At most, the district court’s order affects
the sum of damages Defendants might owe if they are later found liable. But
the district court’s order was unreasoned and therefore opaque as to its
meaning; without more, we cannot infer that the court ruled that there is a
valid legal basis for plaintiffs’ claims. Even if that was the intent, merely
denying a motion to dismiss does not prevent the district court from changing
its mind. In sum, we lack jurisdiction to review this order. See, e.g., Bucher-
Guyer AG v. M/V Incotrans Spirit, 868 F.2d 734, 735 (5th Cir. 1989) (per
curiam) (“[W]e do not have jurisdiction under [§] 1292(a)(3). The decision
whether the $500 . . . limitation on damages applies in this case is not a
decision determining the rights and liabilities of the parties. In fact, if we
were to hold that the $500 limit applies, we would still have to remand this

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because a separate basis for subject matter jurisdiction exists (i.e., diversity jurisdiction)
and we conclude § 1292(a)(3) is unavailable for other reasons.

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No. 23-40475

case for a decision on whether the defendants were liable.”); Hollywood
Marine, Inc. v. M/V Artie James, 755 F.2d 414, 416 (5th Cir. 1985)
(dismissing appeal where “the district court’s order refusing to dismiss the
insurer [did] not conclusively determine its ‘rights and liabilities’ as to the
claim asserted,” and “[t]he liability of its insured and consequently its own
liability remain to be litigated”); see also Perforaciones Exploracion y Produccion
v. Grupo TMM SA, 207 F. App’x 458, 460 (5th Cir. 2006) (dismissing
appeal where “[t]he district court’s denial of Appellants’ motion to dismiss
did not determine Appellants’ substantive rights or liabilities”).
Accordingly, the appeal is DISMISSED.

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