GB Capital Holdings, LLC v. S/V GLORI B

Filing 25

ORDER: Jeffrey G. Heston's Motion to Dismiss (ECF No. 21 ) is denied. Signed by Judge William Q. Hayes on 11/29/2018. (ajs)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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GB CAPITAL HOLDINGS, LLC,
a California Limited Liability
Company,

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v.
S/V GLORI B, a 1977 Sailing
Vessel of Approximately 27-Feet
in Length, U.S.C.G. Official No.
598405 and All of Her Engines,
Tackle Accessories, Furnishings
and Appurtenances, in rem,
Defendant.
HAYES, Judge:
The matter before the Court is the motion to dismiss filed by Jeffrey G. Heston.

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ORDER

Plaintiff,

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Case No.: 18cv312-WQH-AGS

(ECF No. 21).
I.

PROCEDURAL BACKGROUND

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On February 2, 2018, Plaintiff GB Capital Holdings, LLC, as the agent of San Diego

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Mooring Company, initiated this action by filing a verified Complaint. (ECF No. 1).

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Jeffrey G. Heston, proceeding pro se, filed a Statement of Interested Parties stating “I,

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Jeffrey G. Heston, am the sole owner of the Sailing Vessel ‘Glori B’, document number

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598405 and herein-named Defendant in this matter before this Court.” (ECF No. 16).

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On April 10, 2018, an arrest warrant for the Defendant sailboat was issued, and Pier
32 Marina was appointed as substitute custodian. (ECF No. 6).

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On May 24, 2018, Heston filed a motion to dismiss pursuant to Fed. R. Civ. P.
12(b)(1). (ECF No. 21). On June 15, 2018, GB Capital filed a response. (ECF No. 24).
II.

ALLEGATIONS OF THE COMPLAINT

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GB Capital seeks in rem relief against the vessel for breach of maritime contract,

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trespass, and quantum meruit. GB Capital alleges this Court has jurisdiction pursuant to

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28 U.S.C. § 1331(1), and the Commercial Instruments and Maritime Lien Act at 46 U.S.C.

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§§ 31301 et seq. (ECF No. 1 at 1–2, 9–10). GB Capital alleges that San Diego Mooring

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Company (SDMC) supplied the Defendant sailboat a berth in San Diego Bay. Id. at 2. GB

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Capital alleges that under the moorage contract, the vessel must undergo an annual safety

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inspection. Id. at 2–3. GB Capital alleges that the owner of the boat, Heston, declined the

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inspection. Id. at 3–4. GB Capital alleges that SDMC ordered Heston to remove the boat,

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and that Heston refused. Id.

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GB Capital alleges that the boat was towed to an impound location on March 25,

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2016 and has not been retrieved. Id. at 4, 8. GB Capital alleges that Heston “has repeated

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and consistently refused to submit his claims for resolution in binding arbitration,” as

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ordered in the prior litigation. Id. at 7–8. GB Capital alleges that Heston has declined GB

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Capital’s repeated offers to waive its claims against Heston and the vessel if Heston

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“simply retrieves and relocates his vessel.” Id. GB Capital alleges damages of $55,728.51

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in accrued wharfage fees and other costs as of February 7, 2018. Id. at 9.

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III.

THE PRIOR ACTION

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On April 15, 2016, Heston sued GB Capital under admiralty and maritime

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jurisdiction to recover possession of the vessel and damages. Heston v. GB Capital

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Holdings, LLC, Civ. No. 16cv912.

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On July 1, 2016, GB Capital filed a motion to compel arbitration. Heston did not

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file a response. On August 23, 2016, the Court ordered arbitration as to the moorage

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contract.

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On September 13, 2016, Heston filed a motion for relief from the Court’s August

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23, 2016 Order, pursuant to Federal Rule of Civil Procedure 60(b)(1)–(3). On December

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15, 2016, the Court denied Heston’s motion for relief from judgment.

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On October 23, 2017, Heston filed a second motion for relief from the Court’s

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August 23, 2016 Order, on various grounds, including that the “Maritime Contract for

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Private Wharfage” is not cognizable in admiralty. On January 5, 2018, the Court denied

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Heston’s motion for relief.

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On January 26, 2018, Heston filed a notice of appeal. On August 21, 2018, the Court

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of Appeals for the Ninth Circuit concluded this Court did not abuse discretion by denying

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relief from the August 23, 2016 Order. On September 4, 2018, Heston filed a petition for

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panel rehearing and petition for rehearing en banc with the Court of Appeals.

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IV.

APPLICABLE STANDARD

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Rule 12(b)(1) of the Federal Rules of Civil Procedure allows a defendant to move

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for dismissal for lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Plaintiffs

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have the burden to establish that the court has subject matter jurisdiction over an action.

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Assoc. of Med. Colls. v. United States, 217 F.3d 770, 778–79 (9th Cir. 2000). Federal

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courts have limited jurisdiction, and “possess only that power authorized by Constitution

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and statute, which is not to be expanded by judicial decree. It is to be presumed that a cause

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lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon

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the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375,

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377 (1994) (citations omitted).

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A jurisdictional attack pursuant to Rule 12(b)(1) may be facial or factual. White v.

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Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). “In a facial attack, the challenger asserts that

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the allegations contained in the complaint are insufficient on their face to invoke federal

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jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the
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allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe Air for

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Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In a facial attack on subject

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matter jurisdiction, the court assumes the factual allegations of the complaint to be true and

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draws all reasonable inferences in favor of the plaintiff. Doe v. Holy See, 557 F.3d 1066,

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1073 (9th Cir. 2009).

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In a federal court, subject matter jurisdiction may arise from either “federal question

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jurisdiction” or “diversity jurisdiction.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392

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(1987); see also 28 U.S.C. §§ 1331–32. To invoke federal question jurisdiction, the

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complaint must allege that the “action[ ] aris[es] under the Constitution, laws, or treaties of

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the United States.” 28 U.S.C. § 1331. “The presence or absence of federal-question

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jurisdiction is governed by the well-pleaded complaint rule, which provides that federal

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jurisdiction exists only when a federal question is presented on the face of the plaintiff’s

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properly pleaded complaint.” Wayne v. DHL Worldwide Express, 294 F.3d 1179, 1183

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(9th Cir. 2002) (quotation marks omitted) (quoting Caterpillar, 482 U.S. at 392).

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V.

CONTENTIONS OF THE PARTIES

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Heston contends that the Court lacks jurisdiction in this case because of the appeal

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from the prior case. (ECF No. 21 at 4–5). Heston asserts that the Court of Appeals will

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determine whether the moorage contract is a maritime contract, and that this Court lacks

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jurisdiction to decide a question before the Court of Appeals. Id.

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GB Capital contends that the appeal from the previous case does not prohibit this

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Court from considering the nature of the moorage contract. Id. at 4–5. GB Capital asserts

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that existing legal precedent establishes that contracts for wharfage services are maritime

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contracts, which properly support in rem jurisdiction. Id. at 5–6. GB Capital contends no

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legal authority supports Heston’s theory that the moorage contact is not a maritime

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contract. Id. at 9. GB Capital asserts that Heston’s appeal from the previous case is

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unrelated to whether the moorage contract is a maritime contract. Id. at 7–9. GB Capital

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asserts that Heston failed to file a timely notice of appeal for issues regarding the nature of

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the moorage contract, waiving arguments over the nature of the moorage contract. Id. GB
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Capital asserts that Heston timely appealed this Court’s denial of Heston’s second motion

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for relief under Fed. R. Civ. P. 60(b), and that the only issue before the Court of Appeals

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is whether that denial was an abuse of discretion. Id. at 9.

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VI.

DISCUSSION

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Federal courts exercise admiralty jurisdiction under the Constitution and

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congressional statute. U.S. Const. art. III, §2, cl. 1; 28 U.S.C. § 1333(1); see also Ventura

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Packers, Inc. v. F/V Jeanine Kathleen, 305 F.3d 913, 918 (9th Cir. 2002) (observing “the

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Constitution fixed only the original jurisdiction of the Supreme Court, however, Congress

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remains free to mold the scope of the federal courts’ admiralty jurisdiction as it pleases,

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and it does so from time to time,” as for the Death on the High Seas Act and the Maritime

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Lien Act).

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A maritime contract supports admiralty jurisdiction under § 1331 if the nature and

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character of the contract have “reference to maritime service or maritime transactions.” Ali

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v. Rogers, 780 F.3d 1229, 1235 (9th Cir. 2015) (quoting Norfolk S. Ry. Co. v. Kirby, 543

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U.S. 14, 24 (2004)). Contracts for wharfage are within admiralty jurisdiction under § 1331

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“if wharfage is provided to a specific vessel.” Royal Ins. Co. of America v. Pier 39 Ltd.

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P’ship, 738 F.2d 1035, 1037 (9th Cir. 1984) (citing Ex Parte Easton, 95 U.S. 68 (1877)).

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Federal courts have exclusive jurisdiction over in rem actions in admiralty under § 1331.

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Ventura Packers, 305 F.3d at 916–17 n.1.

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Under the Maritime Lien Act, admiralty jurisdiction is also proper for disputes

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regarding “the provision of necessaries,” which are “defined as ‘repairs, supplies, towage,

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and the use of a dry dock or marine railway.’” Id. at 922–23 (citing 46 U.S.C. § 31301(4))

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(“If a plaintiff demonstrates that he (1) provided necessaries (2) to a vessel (3) on the order

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of the owner or a person authorized by the owner, then he may bring a civil action in rem

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to a federal district court sitting in admiralty.”).

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GB Capital alleges that Heston owns the Defendant vessel, and that Heston entered

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a moorage contract with SDMC. GB Capital alleges that GB Capital incurred costs to

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move and moor the Defendant vessel when Heston did not do so. The Court of Appeals
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has issued no orders related to the nature of the moorage contract at issue in this case. The

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requirements of admiralty jurisdiction are satisfied.

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jurisdiction in this case.

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The Court has subject matter

VII. CONCLUSION
IT IS HEREBY ORDERED that Heston’s Motion to Dismiss (ECF No. 21) is
denied.
Dated: November 29, 2018

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