United States District Court, D. Maryland
REPORT AND RECOMMENDATION
BETH P. GESNER, Magistrate Judge.
The above-referenced case was referred to the undersigned for review of plaintiff's motion for default judgment and to make recommendations concerning damages, pursuant to 28 U.S.C. § 301 and Local Rule 301.6. (ECF No. 18.) Plaintiff brings this suit in rem under the Federal Maritime Lien Act ("FMLA"), 46 U.S.C. § 31301, et seq. to enforce a maritime lien by foreclosure. Plaintiff asks the court to enter default judgment on its claim for a maritime lien in the amount of $29, 469.91 for the provision of "necessaries" to the defendant vessel for the period from February 1, 2011 until November 15, 2013, when the vessel was arrested. Plaintiff also seeks $7, 480.00 in attorney's fees. Plaintiff separately requests a lien for custodia legis expenses in the amount of $3, 494.41 incurred by plaintiff after he was appointed substitute custodian on November 15, 2013, following the vessel's arrest. Plaintiff further asks this court to order a judicial sale of the vessel in order to allow him to recover those costs. This court has admiralty jurisdiction pursuant to 28 U.S.C. § 1333, and may enter default judgment in rem pursuant to Local Admiralty Rule (c)(4). This court may order the sale of the vessel pursuant to the FMLA.
Currently pending is plaintiff's Motion for Entry of Default Judgment and Judicial Sale of Vessel ("Motion"). (ECF No. 17.) No response was filed. No hearing is deemed necessary. See Fed.R.Civ.P. 55(b)(2); Loc. R. 105.6. For the reasons discussed herein, I respectfully recommend that plaintiff's Motion (ECF No. 17) be GRANTED IN PART AND DENIED IN PART and that relief be awarded as set forth herein.
I. DEFAULT JUDGMENT
A. Standard for Entry of Default Judgment
In reviewing a motion for default judgment, the court accepts as true the well-pleaded factual allegations in the complaint as to liability. Ryan v. Homecomings Fin. Network , 253 F.3d 778, 780-81 (4th Cir. 2001). It remains for the court, however, to determine whether these unchallenged factual allegations constitute a legitimate cause of action. Id . In order to grant default judgment in in rem admiralty proceedings, the court must also find that the notice requirements of the Local Admiralty Rules have been complied with. (LAR (c)(3).) If the court determines that liability is established, the court must then determine the appropriate amount of damages. Id . The court does not accept factual allegations regarding damages as true, but rather must make an independent determination regarding such allegations. See, e.g., Credit Lyonnais Secs. (USA), Inc. v. Alcantara , 183 F.3d 151, 154 (2d Cir. 1999). The court may make a determination of damages without a hearing, so long as there is adequate evidence in the record, such as detailed affidavits or documentary evidence, for the award. See, e.g., Adkins v. Teseo , 180 F.Supp.2d 15, 17 (D.D.C. 2001).
B. Defendant's Liability
I have reviewed plaintiff's First Amended Verified Complaint in Rem to Foreclose a Maritime Lien ("First Amended Complaint") (ECF No. 5), and find that plaintiff has stated a cause of action under the FMLA based on his provision of "necessaries" from February 1, 2011 until November 15, 2013, when the defendant vessel was arrested. Further, I find that plaintiff has complied with the procedural requirements of the Local Admiralty Rule (c)(3) for the entry of default judgment.
On November 14, 2013, plaintiff filed his First Amended Complaint to enforce a maritime lien against the vessel in rem. (ECF No. 5.) According to the First Amended Complaint, on or about December 2010, Tom Vanhuben made an oral agreement with plaintiff for the storage of defendant sailing vessel "Smithereens, " HIN# HUN45248E001 ("vessel") at plaintiff's marina located at 721 Chester Ave., Annapolis, MD 21403 for a rate of $475.00 per month. (ECF No. 5, at ¶ 8.) The vessel is a 44.5' 2000 Hunter sailboat. (ECF No. 5.) The title owner of the vessel is Lyn A. Vanhuben, Mr. Vanhuben's wife. (ECF Nos. 5, at ¶ 7, 14-2.) Plaintiff also orally agreed to store a 13' Boston Whaler, the vessel's tender, for $125.00 per month. ( Id., at ¶ 8.) Plaintiff later reduced the oral agreement to writing in a "Slip Lease Agreement" and delivered it to Mr. Vanhuben. ( Id., at ¶ 9.) The Slip Lease Agreement contained additional terms, including late fees, interest, court costs, and attorney's fees in the event of nonpayment and enforcement of the contract. (ECF No. 1-1.) Plaintiff began to store the vessel at his marina on or about February 1, 2011. (ECF No. 5, at ¶ 11.) In March 2011, before he signed the Slip Lease Agreement, Mr. Vanhuben passed away. (ECF No. 5, at ¶ 9.) Since February 2011, plaintiff has provided storage for the vessel and expended labor and materials to maintain the vessel while it remained at plaintiff's marina. ( Id., at ¶ 13.) Plaintiff has made unsuccessful efforts to settle the debt for his services with Mrs. Vanhuben, who is currently not responding to Mr. Sears' phone calls or registered mail. ( Id., at ¶ 12.)
Plaintiff filed the First Amended Complaint on November 14, 2013. (ECF No. 5.) After defendant failed to answer or otherwise defend the First Amended Complaint within twenty-one days, plaintiff properly moved, pursuant to Federal Rule of Civil Procedure 55(a), for an entry of default. (ECF No. 14.) The Clerk of this court entered an Order of Default on March 13, 2014. (ECF No. 15.) On April 15, 2014, plaintiff filed the pending Motion (ECF No. 17), and no response has been filed. Before granting plaintiff's Motion for Default Judgment pursuant to Fed.R.Civ.P. 55(b), the court must find that (1) the plaintiff has stated a legitimate cause of action; and (2) plaintiff has complied with the procedural requirements of Local Admiralty Rule (c)(3).
1. Legitimate Cause of Action
In order to state a legitimate cause of action giving rise to a maritime lien under the FMLA, plaintiff must demonstrate that he has (1) provided "necessaries" to a vessel (2) on the order of the vessel's owner or a person authorized by the owner. 46 U.S.C. § 31342. The statutory definition of "necessaries" includes repairs, supplies, towage, and the use of a dry dock or maritime railway. Id . Courts have further liberally construed the term "necessaries" to include "what is reasonably needed in the ship's business". Board of Comm'rs of the Orleans Levee District v. M/V Belle of Orleans , 535 F.3d 1299, 1314 (11th Cir. 2008). "Necessaries" has been interpreted to include dockage and wharfage costs. Ceres Marine Terminals, Inc. v. M/V Harmen Oldendorf , 913 F.Supp. 919, 927 (D. Md. 1995). As more fully discussed below, the term "necessaries" also includes maintenance, insurance, and prejudgment interest. 46 U.S.C. § 31301(4); Loginter S.A. y Parque Industrial Agua Profunda S.A. UTE v. M/V Nobility, 177 F.Supp.2d 411, 421 (D. Md. 2001); Flagship Grp., Ltd. v. Peninsula Cruise, Inc. , 771 F.Supp. 756, 759 (E.D. Va. 1991). Plaintiff's First Amended Complaint demonstrates that plaintiff has provided necessaries to the defendant vessel on the order of its owner. First, according to plaintiff's First Amended Complaint (ECF No. 5), plaintiff has provided dockage to defendant vessel and its tender since February 1, 2011. (ECF No. 5, ¶ 11.) During this time, plaintiff has expended labor and materials for defendant vessel's upkeep, including installing new batteries and pumping the vessel's bilge. (ECF No. 5, ¶ 13.) The dockage and maintenance services provided to defendant by plaintiff are clearly "necessaries" within the meaning of the FMLA. Ceres, at 927; 46 U.S.C. § 31301(4). The First Amended Complaint also adequately states the second requirement for establishing a legitimate cause of action under the FMLA. (ECF No. 5, ¶ 8.) According to plaintiff's First Amended Complaint, defendant vessel was owned by Lyn A. Vanhuben and Tom Vanhuben, with Ms. Vanhuben as the owner of record. (ECF No. 5, ¶ 7.) Plaintiff entered into an oral contract with Mr. Vanhuben for the dockage of defendant vessel. Therefore, plaintiff provided "necessaries" on the order of Mr. Vanhuben, an owner of the vessel. Accordingly, accepting plaintiff's well-pleaded factual allegations, I find that plaintiff has stated a legitimate cause of action for a maritime lien pursuant to 46 U.S.C. § 31342. Ryan , 253 F.3d at 780-81.
2. Procedural Requirements of the Local Admiralty Rules
Local Admiralty Rule (c)(3)(a)(i) details additional procedural requirements that must be satisfied prior to the entry of default judgment in an action in rem. A party seeking default judgment in rem must satisfy the court that due notice of the action and arrest of the property has been given by (1) publication in accordance with LAR(c)(2); (2) service of the complaint and warrant of arrest upon the Marshal, substitute custodian, master, or other person having custody of the property; and (3) by mailing notice to every person who has not appeared in this action and is known to the party seeking the default judgment to have an ownership interest in the property. Here, as required, plaintiff has published notice of the arrest in the Daily Record in accordance with LAR(c)(2). (ECF No. 14-1.) Plaintiff has served the complaint and warrant of arrest upon the Marshal and the vessel. (ECF No. 13.) Plaintiff has mailed notice to Lyn Vanhuben, the owner of record of the vessel, at all of Mrs. Vanhuben's known addresses (ECF No. 17-1.) Finally, plaintiff has given notice to Onset Bay II, Corp. and Community National Bank, who are shown to have recorded ...