LYMAN MORSE BOATBUILDING CO INC v. LEE
Filing
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MEMORANDUM DECISION ON PLAINTIFF'S MOTION FOR ATTACHMENT re:denying 18 Motion for Attachment & Trustee Process By MAGISTRATE JUDGE JOHN H. RICH III. (mjlt)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
LYMAN MORSE BOATBUILDING CO., )
INC.,
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)
Plaintiff
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v.
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)
RICHARD B. LEE,
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)
Defendant
)
No. 2:10-cv-337-DBH
MEMORANDUM DECISION ON PLAINTIFF’S MOTION FOR ATTACHMENT
The plaintiff seeks an attachment and attachment on trustee process in the amount of
$690,933.73 against the defendant in this action arising out of a contract to build a Deerfoot 70’
yacht. The defendant opposes the motion. I deny the motion on the present showing.
I. Applicable Legal Standard
A party may move for attachment in this court “in accordance with state law and
procedure as would be applicable had the action been maintained in the courts of the State of
Maine[.]” Local Rule 64. “An attachment of property shall be sought by filing with the
complaint a motion for approval of the attachment. The motion shall be supported by affidavit .
. . meeting the requirements set forth in subdivision (i) of this rule.” Me. R. Civ. P. 4A(c).
Subdivision (i) requires the affidavit to “set forth specific facts sufficient to warrant the required
findings[.]” Id. (i).
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Under Maine law, attachment and attachment on trustee process are available only for a
specified amount, as approved by order of court, and only upon a finding that it is more likely
than not that the plaintiff will recover judgment, including interest and costs, in an amount equal
to or greater than the aggregate sum of the attachment and any liability insurance, bond, or other
security and attached property or credits shown by the defendant to be available to satisfy the
judgment. Id. (c); Maine R. Civ. P. 4B(c). The plaintiff admits that it holds a $100,000 deposit
made by the defendant. Affidavit of Bruce C. Hopkins (“Hopkins Aff.”) (Docket No. 18-1) ¶ 12.
II. Factual Background
The following facts are established by affidavit, as required under Maine R. Civ. P. 4A(i).
In October 2008, the plaintiff and the defendant entered into a “fixed profit” contract
under which the plaintiff agreed to construct a 70’ Deerfoot yacht for the defendant, and the
defendant agreed to pay the plaintiff the contract price by making progress payments in
accordance with the terms of the contract. Id. ¶¶ 3-4.
The defendant initially paid the
defendant’s invoices but fell behind and, by February 1, 2010, he owed the plaintiff
$1,100,682.28. Id. ¶ 5.
On June 10, 2010, the defendant informed the plaintiff that he was unable to pay the
outstanding invoices or fund the completion of the yacht. Id. ¶ 7. On June 16, 2010, the plaintiff
notified the defendant that it was terminating the contract pursuant to its terms. Id. ¶ 8. Under
the contract, the plaintiff is now entitled to sell the yacht and apply the proceeds to the amount
owed. Id. ¶ 9.
The plaintiff was forced to winterize the yacht and move it to another location for
storage. Id. ¶ 10. This process cost the plaintiff in excess of $23,082. Id. As of April 6, 2011,
the defendant owed the plaintiff $790,933.73 in unpaid fees, materials, and expenses. Id. ¶ 11.
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The plaintiff continues to incur monthly expenses of approximately $2,000 to insure the yacht
and $1,000 to store it.
Id. ¶ 13.
Interest is accruing on the unpaid debt at the rate of
approximately $7,000 per month. Id.
The plaintiff was initially told that building the yacht would require about 34,000 work
hours. Affidavit of Richard D. Lee (“Lee Affidavit”) (Docket No. 26) ¶ 2. After the building
began, the necessary work hours rose to over 57,000. Id. ¶ 3. The cost increase was over
$1,000,000. Id. The plaintiff “appears to have raised the labor hours without a reasonable basis
for doing so.” Id. ¶ 4.
The defendant was aware as early as January 2008 that the expected number of labor
hours had risen to 45,000. Affidavit of Bruce C. Hopkins in Support of Plaintiff Lyman Morse’s
Reply to Defendant Richard Lee’s Opposition to Plaintiff’s Motion for Attachment and
Attachment on Trustee Process (Docket No. 28-1) ¶ 4. Shortly after the contract was signed, the
defendant began to make changes to the specifications for the yacht. Id. ¶ 10. The contract
required the defendant to raise any objection to the plaintiff’s invoices within 14 days of receipt;
he never objected to any invoice within this time period. Id. ¶ 15.
The plaintiff kept the defendant informed of cost increases related to the changes he made
in the specifications. Id. ¶ 16.
A major increase in labor hours resulted from the defendant’s
decision to have the plaintiff build the deck and hull molds, which originally were to be built by
others and shipped to the plaintiff. Id. ¶ 25. This change alone added 5,100 labor hours. Id.
The defendant and/or his naval architect consented to all of the changes and the resulting
increases in the cost of the project. Id. ¶ 28.
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III. Discussion
The plaintiff appears to have met its burden to establish the amount owed by the
defendant and the fact that it is more likely than not to recover some amount of damages from
the defendant. Were the motion to be granted, I would subtract (as the plaintiff concedes) the
$100,000 deposit from the amount shown to be due and add costs, but not interest, that have
accrued since the motion was filed. However, the plaintiff has not met its burden as the moving
party to show that it is more likely than not to recover an amount equal to or greater than the
requested attachment amount plus any other security available to satisfy some part of the amount
sought. The plaintiff holds the yacht and now has the ability to sell it. Hopkins Aff. ¶ 9. Indeed,
it asserts that it is entitled to sell the yacht and apply the proceeds to the amount owed. Id.
But, the plaintiff does not provide the following necessary information: the amount
already paid by the defendant, the market value of the yacht in its current state of completion or
incompletion, and what it would be required to do in order to sell the yacht in its current state or
to make it saleable, if anything. In the absence of this information, the court cannot tell whether
there is value in the unfinished yacht which the plaintiff holds that should reduce or even
eliminate the amount of attachment to be authorized. While the language of Rule 4A appears to
place the burden on the defendant of showing the availability of sources other than attachment to
satisfy some or all of the judgment likely to be recovered, in this case the plaintiff has made it
clear that the yacht is in its possession and that it has the right to sell it. The court cannot ignore
these facts. The overall burden is on the plaintiff to establish its entitlement to the attachment
sought. On the showing made, it has not done so. See Citizens Bank New Hampshire v. Acadia
Group Inc., 2001 ME 41, ¶12, 766 A.2d 1021, 1024; Trans Coastal Corp. v. Curtis, 622 A.2d
1186, 1189 (Me. 1993).
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IV. Conclusion
For the foregoing reasons, the plaintiff’s motion for pre-judgment attachment is DENIED
on the present showing.
Dated this 29th day of July, 2011.
/s/ John H. Rich III
John H. Rich III
United States Magistrate Judge
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