Santiago v. Evans et al

Filing 60

ORDER adopting 39 REPORT AND RECOMMENDATION denying 26 MOTION to Dismiss Action and Vacate Arrest. Claimants' Objections (Doc. No. 46 ) are DENIED as moot. Signed by Chief Judge Anne C. Conway on 8/3/2012. (SR)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
BENITO SANTIAGO,
Plaintiff,
v.

Case No: 6:12-cv-577-Orl-22DAB

GEORGE M. EVANS and BENNYBETH
& J JRS EXPRESS,
Defendants.

ORDER
This cause is before the Court on Joint Motion to Dismiss Action and Vacate Arrest
(Doc. No. 26) filed on June 4, 2012. The United States Magistrate Judge has submitted a report
recommending that the Motion be DENIED.1
After an independent de novo review of the record in this matter, including the objections
filed by the Claimants George M. Evans and HH & DD Holdings of Florida LLC (“Claimants”),
the Court agrees entirely with the Report and Recommendation’s findings of fact and its ultimate
legal finding that this Court has subject matter jurisdiction over this action.2
The Court need not address Claimants’ objections because the Court finds that it retains
subject matter jurisdiction on a ground separate from that determined by the Magistrate Judge, to
which Claimants filed their objection. Thus, Claimants’ objections are moot. See also supra note
1.

1

Claimants contend that the Report and Recommendation does not address their claims
regarding the issues of verification and publication/notice as well as the deposit for custodial
expenses. The Magistrate Judge has stated that he will address by separate order these remaining
issues. (See Doc. No. 39 at p. 2 n.3).
2
The Court adopts and incorporates as if fully set forth herein the Report and Recommendation’s
“Procedural History and Facts Related to Subject Matter Jurisdiction” (Doc. No. 39 at pp. 2-4).

Plaintiff Benito Santiago (“Plaintiff”) brought this in rem action to secure the possession
of the vessel, BennyBeth & J Jr.’s Express (a 62.5’ Sea Ray), her boats, engines, tackle,
equipment, apparel, furnishings, freights and appurtenances. (Doc. No. 42). In conjunction with
28 U.S.C. § 1333(1) and Federal Rule of Civil Procedure 9(h), Rule D of the Supplemental
Rules for Admiralty or Maritime Claims provides for admiralty jurisdiction for “all actions for
possession, partition, and to try title maintainable according to the course of the admiralty
practice with respect to a vessel.” (Doc. No. 39 at p. 3 (citations omitted)). Courts have defined
a possessory action as one “where a party entitled to possession of a vessel seeks to recover that
vessel.” Silver v. Sloop Silver Cloud, 259 F. Supp. 187, 191 (S.D.N.Y. 1966). In other words, a
possessory action is one “to reinstate an owner of a vessel who alleges wrongful deprivation of
property.” Id. (citation omitted). In the present case, Claimants seek to dismiss the action for
lack of subject matter jurisdiction, asserting that Plaintiff sold the vessel to Evans and thus is not
the owner of a vessel entitled to possession, eliminating the basis for this Court’s admiralty
jurisdiction.
The Eleventh Circuit has clarified that a motion to dismiss for lack of subject matter
jurisdiction may be a facial attack or a factual attack on the complaint. Williamson v. Tucker,
645 F.2d 404, 412 (5th Cir. May 1981).3 When a defendant challenges a plaintiff’s complaint
facially, the Court must consider the allegations in the plaintiff’s complaint as true. Id. (citations
omitted). In contrast, a factual attack does not involve the same safeguards; instead, the Court
proceeds as it never could under Federal Rule of Civil Procedure 12(b)(6) or 56 because it “is
free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Id.
at 412-13 (citation omitted).

Therefore, with a factual attack, no presumptive truthfulness

attaches to the complaint and “the existence of disputed material facts will not preclude the trial
3

See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc) (adopting as
binding precedent all decisions of the former Fifth Circuit prior to the close of business on
September 20, 1981).
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court from evaluating for itself the merits of jurisdictional claims.” Id. at 413 (citation omitted).
As well, a plaintiff has the burden of proving that jurisdiction exists. Eaton v. Dorchester Dev.,
Inc., 692 F.2d 727, 732 n.9 (11th Cir. 1982).4
Notwithstanding the foregoing, there are limitations on a Court’s power with respect to a
factual attack. In Bell v. Hood, the Supreme Court established a “strict standard” for dismissal
based on a lack of subject matter jurisdiction “when the basis of jurisdiction is also an element in
the plaintiff’s federal cause of action.” Williamson, 645 F.2d at 415 (discussing Bell, 327 U.S.
678 (1945)); Eaton, 692 F.2d at 733 (“Where the jurisdictional issues are intertwined with the
substantive merits, ‘the jurisdictional issues should be referred to the merits, for it is impossible
to decide one without the other.’” (citations omitted)); see also id. (noting that “the argument
against premature dismissal on 12(b)(1) grounds is particularly strong when the basis of
jurisdiction is also an element of plaintiffs’ cause of action on the merits.”). The Eleventh
Circuit has explained that the Bell rule applies to a court’s admiralty jurisdiction. See Marine
Coatings of Ala. v. United States, 792 F.2d 1565, 1567 (11th Cir. 1986) (“We are persuaded,
however, that the rationale enunciated in Bell is applicable to admiralty cases.”).
At bar, Claimants challenge this Court’s jurisdiction on the basis that a contract for sale
existed between Evans and Plaintiff and that Plaintiff sold Evans the vessel, preventing Plaintiff
from being an owner of the vessel and thus precluding Plaintiff from asserting admiralty
jurisdiction.

In short, Claimants’ challenge to this Court’s subject matter jurisdiction is

intertwined with Plaintiff’s substantive claim. If the Court finds a contract and sale exist then
Plaintiff cannot state a claim for possession and the Court does not have admiralty jurisdiction.
Therefore, the Court’s determination of whether it has subject matter jurisdiction hinges on
whether there was a contract and sale (i.e., whether Plaintiff is the owner of the boat), resulting
4

Plaintiff carried its burden of showing jurisdiction exists as the Magistrate Judge found that
“[Plaintiff] has sufficiently alleged that he has legal title [and that] Claimant’s evidence to the
contrary is inconclusive.” (Doc. No. 39 at p. 11).
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in the Court, “at the same time, effectively decid[ing] the merits” of Plaintiff’s claim. Eaton, 692
F.2d at 734. Therefore, the Court is bound to follow the rule set forth in Bell.
Based on Bell and its progeny, the Court must deny the motion to dismiss based on
subject matter jurisdiction. The Court is bound to follow the progeny, which states:
Where the defendant’s challenge to the court’s jurisdiction is also a
challenge to the existence of a federal cause of action, the proper
course of action for the district court (assuming that the plaintiff’s
federal claim is not immaterial and made solely for the purpose of
obtaining federal jurisdiction and is not insubstantial and frivolous)
is to find that jurisdiction exists and deal with the objection as a
direct attack on the merits of the Plaintiff’s case.
Williamson, 645 F.2d at 415. In the present case, the Court does not find Plaintiff’s admiralty
claim to be immaterial or made solely for obtaining admiralty jurisdiction nor does the Court
find the claim to be insubstantial or frivolous. See id.; Bell, 327 U.S. at 682-83 (noting that the
two exceptions to the Bell rule are when the claim appears to be immaterial and made solely for
purposes of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous).
Moreover, the Court cannot reach the merits of this claim as there is clearly a disputed issue of
material fact as to whether there was a contract and the vessel was sold. See Jones v. One Fifty
Foot Gulfstar Motor Sailing Yacht, Hull No. 01, 625 F.2d 44, 47 (5th Cir. 1980) (noting the
general rule that “admiralty will not entertain suits where the substantive rights of the parties
flow from a contract to sell or construct a vessel”). The Court reaches to this conclusion after
reviewing the Magistrate Judge’s preliminary finding that:
The circumstances surrounding the signing of the Bill of Sale are
highly suspect. There was no notarization of [Plaintiff’s] signature
at the time the Bill of Sale was completed, and Evans’ paralegal
who provided the attestation did not do so until September 26,
2011 when the notary attestation was demanded by the Coast
Guard for registration. There is no written contract for sale of the
Vessel.
(See Doc. No. 39 at p. 8). Therefore, based on the law of the Eleventh Circuit, Plaintiff’s claim
“should not be dismissed on motion for lack of subject matter jurisdiction when that
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determination is intermeshed with the merits of the claim and when there is a dispute as to a
material fact.” Lawrence v. Dunbar, 919 F.2d 1525, 1530-31 (11th Cir. 1990) (per curiam).
Additionally, Plaintiff’s claim cannot be dismissed for failure to state a claim as the Court
agrees with the Magistrate Judge that “[Plaintiff] has sufficiently alleged that he has legal title
[and that] Claimant’s evidence to the contrary is inconclusive.” (Doc. No. 39 at p. 11); see also
William P. Brooks Constr. Co. v. Guthrie, 614 F.2d 509, 511 (5th Cir. 1980) (per curiam) (“Nor
was the district divested of admiralty jurisdiction by [defendant’s] contractual defense set out in
his cross-action.” (citation omitted)).
Therefore, it is ORDERED as follows:
1.

The Report and Recommendation filed June 21, 2012 (Doc. No. 39), is

ADOPTED and CONFIRMED to the extent detailed in this Order and made a part of this
Order.
2.

Claimants’ Objections (Doc. No. 46) are DENIED as moot.

3.

The Joint Motion to Dismiss Action and Vacate Arrest (Doc. No. 26) is hereby

DENIED.
DONE and ORDERED in Orlando, Florida on August 3, 2012.

Copies furnished to:
Counsel of Record
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Unrepresented Parties
Magistrate Judge

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