Villa Del Mar Properties, Ltd., LP v. MV Christina Michelle
Filing
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ORDER GRANTING MOTION FOR ENTRY OF DEFAULT JUDGMENT 45 AND APPLICATION FOR ORDER DIRECTING DISBURSEMENT 43 by Judge Otis D. Wright, II: The Court enters default judgment under Rule 55(b) against the Vessel. The Court AWARDS Plaintiff $32,161.79 and ORDERS disbursement of the sale proceeds and any remaining deposit funds to Plaintiff. The Court shall issue Judgment. (lc)
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United States District Court
Central District of California
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VILLA DEL MAR PROPERTIES, LTD.,
L.P., a California Limited Partnership,
Plaintiff,
v.
M/V CHRISTINA MICHELLE, a 34-Foot
1988 SEA RAY POWER BOAT U.S.C.G.
OFFICIAL NO. 952468, AND ALL OF
HER ENGINES, TACKLE,
ACCESSORIES, EQUIPMENT,
FURNISHINGS AND
APPURTENANCES, in rem,
Defendant.
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I.
Case № 2:19-CV-08690-ODW
(MRWx)
ORDER GRANTING MOTION
FOR ENTRY OF DEFAULT
JUDGMENT [45] AND
APPLICATION FOR ORDER
DIRECTING DISBURSEMENT [43]
INTRODUCTION
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Plaintiff Villa Del Mar Properties, LTD., L.P. initiated this in rem vessel arrest
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action against Defendant M/V Christina Michelle (the “Vessel”), seeking to foreclose
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on a maritime lien against the Vessel for wharfage services. (See Compl. ¶¶ 5–10,
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ECF No. 1.) Currently, Plaintiff requests an order directing disbursement of vessel
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sale proceeds (“Application” or “Appl.,” ECF No. 43) and moves for entry of default
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judgment against the Vessel (“Motion” or “Mot.,” ECF No. 45). As explained below,
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the Court GRANTS Plaintiff’s Application and Motion.1
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Having carefully considered the papers filed in connection with the Motion and Application, the
Court deemed the matters appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D.
Cal. L.R. 7-15.
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II.
BACKGROUND
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In February 2005, the Vessel’s owner, John Merino, executed a Berth Rental
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Agreement (the “Agreement”) with Plaintiff to berth the Vessel at a monthly rate of
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$406.00, which rate increased to $579.25 in March 2019. (Compl. ¶¶ 5–8, Ex. A.)
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Since entering into the Agreement, Plaintiff provided wharfage services, constituting
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“necessaries” under the Commercial Instruments and Maritime Lien Act, 46 U.S.C.
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§ 31301, for the benefit of the Vessel. (Id. ¶¶ 6, 13, 14.) Merino paid the monthly
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rental from February 2005 to July 2019, after which time payments ceased. (Id.
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¶¶ 9–10.) On August 12, 2019, Plaintiff served Merino with a thirty-day notice to pay
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or quit; when Merino did neither, the Agreement terminated by its terms, effective
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September 20, 2019. (Id. ¶¶ 12, 20.) As of the date of the Complaint, the outstanding
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balance for the Vessel’s berthage was $2,475.25. (Compl. ¶ 11.)
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On October 9, 2019, Plaintiff filed this in rem action against the Vessel to
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recover the overdue debts, asserting a maritime lien against the Vessel, its engines,
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tackle, accessories, equipment, furnishings, and appurtenances pursuant to 46 U.S.C.
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§ 31342.
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applications for the Vessel’s arrest and appointment of a Substitute Custodian during
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the action’s pendency. (See ECF Nos. 10–13.) Plaintiff published a Notice of Vessel
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Arrest in the Los Angeles Daily Journal and delivered the summons, complaint,
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warrant, and other court documents to the U.S. Marshal, who served and arrested the
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Vessel on October 17, 2019. (Mot. 3–4.) Plaintiff also served Merino, the only
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person known to have an interest in the Vessel, by substitute service on October 28,
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2019. (Id. at 4.) No appearances have been made in this action on behalf of the
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Vessel or Merino, nor have any responsive pleadings been filed. The Clerk of Court
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entered default against the Vessel on November 21, 2019. (Default, ECF No. 26.)
(See id. ¶¶ 4–18; Mot. 2.)
The Court granted Plaintiff’s ex parte
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The Court subsequently granted Plaintiff’s motion for interlocutory sale.
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(Order for Interlocutory Sale, ECF No. 34.) Accordingly, the U.S. Marshal sold the
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Vessel at public auction to the highest bidder, not Plaintiff, for $1,600, and deposited
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the proceeds into the registry of the Court. (Fin. Entry, ECF No. 36; Appl. 2–3.) The
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sale is confirmed and no longer subject to challenge. See C.D. Cal. LAR E.15(f);
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(Order for Interlocutory Sale ¶ 9). At the time it was released, the Vessel had been in
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the Substitute Custodian’s custody for 135 days. (Mot. 4–5.)
Plaintiff now requests default judgment against the Vessel and disbursement of
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the registry funds.2
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litigation costs, and in custodia legis expenses, as follows: (1) $2,475.25 necessaries
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lien (pre-arrest wharfage services); (2) $400 fee to file Verified Complaint;
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(3) $3,666.54 U.S. Marshal fees; (4) $200 Substitute Custodian fees to prepare vessel
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inventory; (5) $18,900 Substitute Custodian fees—post-arrest wharfage services
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[$140.00 per day x 135 days]; (6) $6,885 Substitute Custodian fees—custodian
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services [$51.00 per day x 135 days]; and (7) $1,235 Substitute Custodian fees—
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weekly inspections [$65 per week x 19 weeks]. (Mot. 5; Decl. of Kelly King (“King
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Decl.”) ¶¶ 11–13, Ex. B, ECF No. 45-1; see also Order Appointing Substitute
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Custodian ¶ 4, ECF No. 10 (establishing approved rates).) The sale proceeds are to be
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applied to the damages, reducing the total damages award to $32,161.79.
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Plaintiff seeks $33,761.793 in damages,
(See Mot.; Appl.)
III.
LEGAL STANDARD
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Local Admiralty Rule C.5 provides: “After the time for filing an answer has
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expired, the plaintiff may apply for entry of default under [Federal Rule of Civil
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Procedure] 55(a). Default will be entered upon showing that:”
(a) Notice has been given as required by Local Admiralty Rule C.4(a);
and
(b) Notice has been attempted as required by Local Admiralty
Rule C.4(b), where appropriate; and
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Plaintiff deposited $5,000 with the U.S. Marshal at the outset of this action. (See Decl. of
Alexander T. Gruft ISO Appl. (“Gruft Decl.”) ¶ 5, Ex. A, ECF No. 43-1.) In addition to
disbursement of the sales proceeds, $1,600, Plaintiff also seeks disbursement of the sums remaining
from Plaintiff’s deposit, $1,333.46. (Appl. 3–4; see Gruft Decl. Ex. A.) As discussed below, the
Court grants Plaintiff’s Application in full.
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Plaintiff calculates this total as $33,561.79, but the sum of the listed figures equals $33,761.79.
(See Mot.) The Court bases subsequent calculations on the correct sum, which is $33,761.79.
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(c) The time for answer has expired; and
(d) No one has appeared to claim the property.
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C.D. Cal. LAR C.5. Local Admiralty Rule C.4(a) requires that notice of the action
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and vessel arrest be (1) published, (2) served on the custodian of the property, and
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(3) mailed to anyone who has not appeared but is known to have an interest in the
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property.
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requirements for persons with recorded interests.
Local Admiralty Rule C.4(b) specifies certain additional notice
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Rule 55(b) provides that the Court may, in its discretion, order default judgment
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following the entry of default. Fed. R. Civ. P. 55(b); C.D. Cal. LAR C.5 (“Judgment
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may be entered under [Rule] 55(b) at any time after default has been entered.”). Upon
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entry of default, the well-pleaded allegations of the complaint are taken as true, with
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the exception the amount of damages. See, e.g., Geddes v. United Fin. Grp., 559 F.2d
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557, 560 (9th Cir. 1977). “However, necessary facts not contained in the pleadings,
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and claims which are legally insufficient, are not established by default.” Cripps v.
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Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992). In cases such as the
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present action, a court may enter default judgment under Rule 55(b) upon application
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by the Plaintiff, provided the court has subject matter jurisdiction over the case and in
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rem jurisdiction over the defendant.
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No. 18-cv-03884-DMR, 2019 WL 343423, at *2 (N.D. Cal. Jan. 28, 2019).
IV.
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A.
See Cove Invs., LLC v. Vessel - Cordelie,
DISCUSSION
Jurisdiction
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The Court finds it has subject matter jurisdiction over this action pursuant to
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28 U.S.C. § 1333, which vests district courts with original jurisdiction over “[a]ny
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civil case of admiralty or maritime jurisdiction.” The Court also has subject matter
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jurisdiction pursuant to the Federal Maritime Lien Act, 46 U.S.C. § 31342, “which
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provides for maritime suits [in rem against the vessel] for failure to pay for
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necessaries . . . provided to a vessel.”
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KATHLEEN, 305 F.3d 913, 919 (9th Cir. 2002) (quoting Robert E. Derecktor, Inc. v.
Ventura Packers, Inc. v. F/V JEANINE
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Norkin, 820 F. Supp. 791, 792 (S.D.N.Y. 1993)). Accepting Plaintiff’s allegations as
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true, it has demonstrated that it provided necessaries to the Vessel on order of the
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owner, thus establishing the maritime lien it seeks to enforce and the Court’s
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jurisdiction. 46 U.S.C. § 31342(a) (“[A] person providing necessaries to a vessel on
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the order of the owner or a person authorized by the owner . . . has a maritime lien on
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the vessel . . . [and] may bring a civil action in rem to enforce the lien.”).
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Additionally, the Court has in rem jurisdiction over the Vessel because it was
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located and arrested pursuant to maritime process in the Central District of California.
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See Fed. R. Civ. P. C(2)–(3); Ventura Packers, Inc. v. F/V JEANINE KATHLEEN, 424
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F.3d 852, 858 (9th Cir. 2005) (“In the usual course, in rem jurisdiction is obtained by
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serving a warrant of arrest pursuant to Supplemental Rule C(3).” (brackets omitted));
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Bruce v. Murray, 123 F. 366, 371 (9th Cir. 1903) (“To give jurisdiction in rem the
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subject proceeded against must be within the jurisdiction of the court, and there must
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be an actual seizure and control of the res by the marshal; otherwise, the admiralty
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court has no jurisdiction.”).
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B.
Notice Requirements
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Next, Plaintiff has established that it satisfied the notice requirements of the
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Supplemental Rules for Admiralty or Maritime Claims, as well as Local Admiralty
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Rules C.4 and C.5. Plaintiff filed proof that notice of the action and arrest of the
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Vessel, including deadlines to file a claim and to answer, was published in the Los
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Angeles Daily Journal. (Notice of Proof of Publ’n, ECF No. 24); see C.D. Cal. LAR.
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C.4(a)(1). Plaintiff served copies of the Summons, Verified Complaint, and other
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associated case documents on Merino by substitute service and first-class mail. (Proof
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of Service, ECF No. 18); see C.D. Cal. LAR C.4(a)(3), (b). Plaintiff also delivered
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the required documents to the U.S. Marshal for service, whose return service
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demonstrates that the Vessel was served and arrested on October 17, 2019. (Process
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Receipts, ECF Nos. 16–17); see Fed. R. Civ. P. C(3)(b)(i). The time to file any claims
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of right or interest, or to answer, has expired. (See Notice of Proof of Publ’n 4).
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No appearances have been made on behalf of anyone other than Plaintiff, and
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the Clerk entered default against the Vessel on November 21, 2019. (See Default.)
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Accordingly, the Court may enter default judgment. See C.D. Cal. LAR C.5; Econ.
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Dev. Collaborative-Ventura Cnty v. F/V Albartro, Off. No. 656254, No. 2:19-cv-
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01936-R-JEM, 2019 WL 7940699, at *1–2 (C.D. Cal. Nov. 20, 2019) (Klausner, J.)
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(granting default judgment where plaintiff met these requirements); Rutherford Boat
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Shop, Inc. v. VESSEL MOONSHADOW, No. C-12-35-DMR, 2012 WL 1933318, at *3
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(N.D. Cal. May 29, 2012) (same).
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C.
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Eitel Factors
Entry of default judgment is also appropriate under the seven factors
enumerated in Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986):
(1) the possibility of prejudice to the plaintiff[;] (2) the merits of
plaintiff’s substantive claim[;] (3) the sufficiency of the complaint[;]
(4) the sum of money at stake in the action; (5) the possibility of a
dispute concerning material facts; (6) whether the default was due to
excusable neglect; and (7) the strong policy underlying the [Rules]
favoring decisions on the merits.
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First, absent entry of default judgment, Plaintiff will suffer prejudice as it will
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be denied the right to a judicial resolution on its maritime lien. See St Liberty, LLC v.
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That Certain 38 Fountain Power Boat, 2008 Express Cruiser Model, Off.
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No. 1229074, at One Time Named Greyson, No. SA CV 18-0096-DOC (JDEx),
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2019 WL 8195555, at *2 (C.D. Cal. Oct. 10, 2019).
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sufficiently states a claim for relief because, as discussed above in Section IV.A., it
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has established a maritime lien for necessaries provided to the Vessel. See Cove Invs.,
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2019 WL 343423, at *4 (finding plaintiff sufficiently pleaded the existence of a
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maritime lien where plaintiff alleged it provided berthing to the defendant vessel
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pursuant to an agreement but the vessel owners stopped paying the monthly fees).
Second and third, Plaintiff
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Fourth, the sum of money at stake here is directly related to the harm caused by
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the Vessel as Plaintiff seeks to recover only the wharfage fees owing and reasonable
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expenses incurred enforcing the maritime lien. See id. (finding sum comprised of
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berthing fees and vessel maintenance costs incurred during the litigation’s pendency
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weighed in favor of granting default judgment). Fifth and sixth, despite proper service
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and notice, no interested claimants have appeared or opposed the Motion or
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Application, so nothing before the Court indicates the potential for factual dispute or
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excusable neglect.
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although the strong policy for decision on the merits does not weigh in favor of
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default judgment, it also does not preclude it here because, where no appearances or
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objections have been made, “a decision on the merits [is] impractical, if not
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impossible.” St. Liberty, 2019 WL 8195555, at * 4 (quoting PepsiCo, Inc. v. Cal. Sec.
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Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002)). Taken together, the Eitel factors
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weigh in favor of granting default judgment.
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D.
Id. at *4–5; St. Liberty, 2019 WL 8195555, at *3.
Finally,
Remedy
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Finally, the Court finds the requested remedy appropriate. “A default judgment
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must not differ in kind from, or exceed in amount, what is demanded in the
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pleadings.” Fed. R. Civ. P. 54(c). Once “[i]njury is established[,] . . . plaintiff need
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prove only that the compensation sought relates to the damages that naturally flow
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from the injuries pl[ead]ed.” See Philip Morris USA, Inc. v. Castworld Prods., Inc.,
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219 F.R.D. 494, 498 (C.D. Cal. 2003). In an action to enforce a maritime lien,
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“[s]ervices or property advanced to preserve and maintain an arrested vessel,
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furnished upon authority of the court, are allowable.” Barwil ASCA v. M/V SAVA, 44
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F. Supp. 2d 484, 489 (E.D.N.Y. 1999) (citing N.Y. Dock Co. v. Steamship Poznan, 274
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U.S. 117, 121 (1927)); see Crescent City Harbor Dist. v. M/V Intrepid, No. C-08-1007
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JCS, 2008 WL 5211023, at *5 (N.D. Cal. Dec. 11, 2008) (finding costs of berthage,
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accrued interest, late fees, and services to maintain the vessel recoverable).
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Plaintiff presents evidence that the value of the maritime lien against which it
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wishes to foreclose is $2,475.25. (Compl. ¶ 11; King Decl. ¶ 10, Ex. A.) It also seeks
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to recover filing fees and expenses in custodia legis, incurred to maintain the Vessel
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during the pendency of this action. Specifically, Plaintiff seeks reimbursement of
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$3,666.54 paid to the U.S. Marshal in connection with the arrest of the Vessel, and
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$27,820.00 in expenses to the Substitute Custodian engaged to care for the Vessel
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during the arrest.
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Custodian’s rates, and Plaintiff presents evidence supporting the requested, delineated
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expenses. (See Order Appointing Substitute Custodian ¶ 4; King Decl. ¶¶ 10, 13,
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Exs. A–B.) Having reviewed Plaintiff’s breakdown of the requested amounts, the
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Court finds them supported and reasonable. See St. Liberty, 2019 WL 8195555, at *4
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(finding post-arrest expenses, amount due under agreement, and attorneys’ fees and
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costs recoverable); Rutherford Boat Shop, 2012 WL 1933318, at *4 (awarding storage
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costs and accrued necessaries as supported and reasonable). Accordingly, the Court
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grants Plaintiff’s request for damages in the total amount of $33,761.79.
(See Mot. 5.)
The Court previously approved the Substitute
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The Court also GRANTS Plaintiff’s Application for Disbursement and
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ORDERS (1) the proceeds from the sale of the vessel, $1,600, shall be disbursed to
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Plaintiff, thereby reducing the total outstanding damages award to $32,161.79, and
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(2) the sums remaining from Plaintiff’s deposit shall be disbursed to Plaintiff.
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V.
CONCLUSION
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For the reasons discussed above, the Court GRANTS Plaintiff’s Application
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and Motion. (ECF Nos. 43, 45.) The Court enters default judgment under Rule 55(b)
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against the Vessel.
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disbursement of the sale proceeds and any remaining deposit funds to Plaintiff. The
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Court shall issue Judgment.
The Court AWARDS Plaintiff $32,161.79 and ORDERS
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IT IS SO ORDERED.
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January 8, 2021
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OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE
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