PORTLAND PILOTS INC, et al. v. NOVA STAR M/V, et al.

Filing 296

MEMORANDUM DECISION AND ORDER ON CROSS-MOTIONS REGARDING TAXATION OF CUSTODIAL CHARGES TO CLAIMANT - denying 145 Cross Motion Regarding Taxation; granting 165 Motion To Tax or Otherwise Allocate Custodial Charges to Century Resorts. By MAGISTRATE JUDGE JOHN H. RICH III. (mnw)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE

CENTURY RESORTS
INTERNATIONAL LTD.,
Claimant
v.
M/V NOVA STAR, in rem,
Defendant

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No. 2:15-cv-00442-DBH

MEMORANDUM DECISION AND ORDER ON CROSS-MOTIONS
REGARDING TAXATION OF CUSTODIAL CHARGES TO CLAIMANT
On October 30, 2015, at the request of now-terminated plaintiff Portland Pilots, Inc.
(“Portland Pilots”), the court issued a warrant for the arrest of defendant vessel M/V Nova Star
(“the vessel”) and placed her in the care of substitute custodian National Maritime Services
(“NMS”). See ECF Nos. 10, 12. The vessel remained under arrest, in the care of NMS, until
November 30, 2015, when the court issued an order, without objection, vacating all warrants for
her arrest and discharging the substitute custodian effective at midnight that day. See ECF No.
149.
Presently before the court is the motion of the vessel’s owners, Singapore Technologies
Marine Ltd. (“Owners”), to tax all custodial charges for the period after November 25, 2015, to
claimant Century Resorts International LTD. (“Century”) on the basis that the vessel was detained
after that time solely for Century’s convenience. See Motion To Tax or Otherwise Allocate
Custodial Charges to Century Resorts (“Owners’ Motion”) (ECF No. 165).1 Century objects,

On the first page of their motion, the Owners state that they seek taxation of custodial charges to Century “from and
after November 25, 2015.” Owners’ Motion at 1 (emphasis added). They clarify in their conclusion that they seek to
tax Century with such charges for “the period after Wednesday, November 25, 2015.” Id. at 4 (emphasis added).
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arguing that the court should deny the Owners’ Motion or assess at most nominal custodial charges.
See [Motion To Dismiss] (“Century’s Motion”) (ECF No. 145) (incorporated within Century
Resorts International LTD.’s Status Update (“Status Update”) (ECF No. 137)); Response to
Singapore Technologies Ltd.’s Motion To Tax Costs (“Century’s Response”) (ECF No. 279) at 12, 8.2
For the reasons that follow, I grant the Owners’ cross-motion and deny that of Century,
taxing 100 percent of all custodial charges for the five-day period from November 26-30, 2015, to
Century.
I.

Applicable Legal Standard

“It is well established that admiralty courts may award storage charges on equitable
grounds.” Mullane v. Chambers, 438 F.3d 132, 138 (1st Cir. 2006) (citations omitted). “The
district court has wide discretion in determining whether equitable relief in admiralty cases is
appropriate.” Id. (citations omitted).
II.

Factual Background

On November 11, 2015, Century filed a combined statement of right or interest in seized
property and motion to remove seized property. See Verified Statement of Right or Interest in
Seized Property and Motion To Remove Seized Property (ECF No. 41) at 1. It explained that it
sought to retrieve from the vessel property that it had supplied pursuant to a contract with vessel
operator Nova Star Cruises Ltd., including casino gaming equipment, a surveillance system, and
office furniture. See id. ¶¶ 2, 6-10. Two days later, the Owners filed their verified statement of
Regardless, I would not tax such charges for November 25, 2015: even absent Century’s objection to the vessel’s
release, she would not have been released prior to midnight that day.
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In its November 30, 2015, status update, Century stated that it requested to be dismissed from this action, noting in
relevant part that, although it understood that the Owners contended that it should bear certain custodial costs, it
strenuously disagreed. See generally Status Update. The Clerk’s Office understandably styled this as a Motion To
Dismiss. See ECF No. 145. However, in substance, it is a motion for protection from taxation of custodial charges,
and I treat it as such.

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right or interest for purposes of defending the instant action and seeking release of the vessel. See
ECF No. 52. A number of other entities and individuals either intervened as plaintiffs or filed
claims seeking to recover monies assertedly owed in connection with the vessel’s operation. See,
e.g., ECF Nos. 18, 20, 33, 35-36, 64-66, 68, 81, 99, 120.
On November 17, 2015, the Owners filed a motion to extend their deadlines to answer the
plaintiff’s complaint and to respond to or answer all other pending motions and lien claims,
explaining that they intended to post a special bond to secure release of the vessel and negotiate
the settlement of some or all lien claims. See ECF No. 67. On the same day, Edward MacColl, an
attorney for the Owners, emailed Evelyn Levine, an attorney for Century, stating:
The ship owners would like to discuss with your client the possibility of leasing the
equipment on an ongoing basis. We are hoping to bond off all claims and secure
the release of the vessel within the next week. With whom should the vessel owners
speak concerning a potential lease for the equipment?
Exh. A (ECF No. 280-1) to Owners’ Response. Attorney Levine replied:
We have spoken with our client. They do not want to enter into a lease agreement.
They want their property back immediately.
Id.
Further negotiations ensued. On November 19, 2015, David Bischoff, an attorney for
Century, emailed John Bass, an attorney for the Owners:
This follows our recent telephone conversations relating to a method pursuant to
which Century Resorts may offload its property located onboard the Nova Star. As
we have discussed, Century Resorts is unable to commence such an offload until
November 29th; they expect the offload to require one to two days to complete.
While I understand that your client is not willing to commit to hold the vessel
through the November 29th to December 1st timeline that Century Resorts will
require to offload its property, I appreciate and would like to continue our
discussions about possible solutions to the problem. For example, I would like to
discuss terms of an agreement whereby your client would ensure that my client was
afforded access to the vessel to remove its property even if the vessel is released
prior to November 29th. Similarly, I would like to discuss your client’s intentions
with respect to obtaining a replacement charter, its route, etc. so that we may be
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able to enter into an agreement whereby Century Resorts may offload its property
in a port on the vessel’s new route. I look forward to continuing these discussions
about the aforementioned and any other possible solutions to this problem.
Exh. B (ECF No. 280-2) to Owners’ Response.
The following day, November 20, 2015, Century filed a motion for a prompt hearing on its
verified statement of interest/motion to remove property, stating that it understood that the
Owners’ posting of a special bond for any unresolved plaintiff liens and the release of the vessel
from custody was imminent, yet it had not been able to offload its property. See ECF No. 82 at 34. It explained that its casino property was “highly regulated and delicate” and could only be
removed by its authorized personnel, not a local moving company. Id. at 3.
Century stated that it had obtained the agreement of all plaintiffs and the Owners to offload
its property and had lined up authorized personnel to travel across the country to Maine to
commence offloading on November 29, 2015, but that the Owners would not agree to that time
frame, given their efforts to secure the vessel’s release by then. See id. at 3-4. Century represented
that it had made an effort that day (November 20) to compromise by reaching out to its European
personnel and requesting that they travel and supervise the unloading of the property commencing
early the following week (the week of November 23, 2015), but that, while the Owners “seemed
agreeable to an earlier date to unload the property,” they had “informed Century at this eleventh
hour of negotiations that the Vessel will no longer be physically available at the port for offloading
due to a separate conflict [they had] not resolved with the City of Portland, as a result of which the
City of Portland is no longer allowing the Vessel to tie up at the City’s pier.” Id. at 4.
Century stated that it understood that the vessel was being set to anchor in Portland’s inner
harbor, preventing Century from accessing its property despite everyone’s agreement. See id. It
added, “If the City were to allow the Vessel to tie up briefly at its pier while Century’s personnel

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are on site to offload Century’s property, matters would be resolved to Century’s satisfaction, and
apparently in a way that is acceptable to all other parties.” Id.
Century appended a declaration of Margaret Stapleton, its executive vice-president of
finance, averring, “Century was prepared to have its personnel present to conduct offloading
activities during the week of November 23, 2015, provided they were advised today that they had
access to the Vessel, which would have allowed them to make travel plans.” Verifying Declaration
(ECF No. 83) ¶ 8.
On November 23, 2015, Portland Pilots filed a motion to release the vessel and approve
custodial fees and to expedite the deadline for any objections. See ECF No. 87. On November
24, 2015, Century objected, for the reasons stated in its motion for a prompt hearing. See ECF No.
105. On the same day, the Owners joined in Portland Pilots’ request, contending that Century’s
objection was without merit. See ECF No. 107. They stated that Century had mistakenly asserted
that the vessel had been moved as a result of a dispute between the City of Portland and the Owners;
that they (the Owners) were aware of no such dispute; and that the substitute custodian, not the
Owners, was in control of berthing arrangements. See id. at 1-2. They maintained that Century
had had ample opportunity to remove its property, all parties having consented to the removal – a
significant concession, in the Owners’ view, because Century’s property was affixed to the vessel
and, hence, possibly subject to the maritime liens asserted in this action. See id. at 2.
On November 25, 2015, the day before Thanksgiving, the Owners filed a motion to
substitute a bond for the vessel and for an emergency hearing on the motion. See ECF No. 108.
The court ordered that responses to all pending motions, including ECF No. 108, be filed by 2:00
p.m. that day. See notations on ECF Docket dated November 25, 2015. Century alone objected
to the vessel’s release, arguing that, although Century remained “in active discussions with the

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Owners about a possible negotiated resolution that may obviate the need for offloading the
Property altogether[,]” the Owners had “not provided any assured access to the vessel and
Century’s property upon release of the vessel.” ECF No. 115 at 2. Century again represented that
its efforts to offload its property as early as November 23 “had to be abandoned because the vessel
would be forced to anchorage due to a dispute between the City of Portland and the vessel
owners[.]” Id. at 1-2. The court that day issued an order granting Century’s and the Owners’
motions for an emergency hearing “[i]n view of the objection filed by [Century] to the [Owners’
motion] to substitute a bond for the vessel[.]” ECF No. 117. It set a hearing on all pending motions
for November 30, 2015, the Monday after Thanksgiving. See id.
On November 27, 2015, the day after Thanksgiving, the Owners filed an emergency motion
to authorize NMS, the substitute custodian, to permit Century to remove its equipment. See ECF
No. 121. Century joined in that motion, see ECF No. 123, which the court promptly granted that
day, see ECF No. 124.
On November 29, 2015, a Sunday, the Owners filed a reply in support of their motion to
substitute a bond for the vessel, again denying that the vessel was unavailable during the week of
November 23 due to a dispute between themselves and the City of Portland. See ECF No. 131 at
2-3.
On November 30, 2015, Century filed its status report, stating that, during the period from
November 27 through November 29, it had successfully removed its property from the vessel and
no longer objected to her release. Status Update at 2. However, it noted that it “strenuously
oppose[d]” the Owners’ expected bid to tax any custodial costs to it. Id. at 1-2.
During the November 30, 2015, hearing, the Owners withdrew one pending motion without
prejudice, ECF No. 102, a motion to set conditions for bonds by the claimants, and the court ruled

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on the remaining five, granting ECF No. 67, the Owners’ motion to extend time, ECF No. 85, the
joint motion of the Owners and World Fuel Services, Inc. (“WFS”) to dismiss WFS’s complaint
with prejudice, ECF No. 87, Portland Pilots’ motion to approve the release of the vessel and
custodial fees, and ECF No. 108, the Owners’ motion to substitute a bond for the vessel, and
declaring moot ECF No. 113, an emergency joint motion by the City of Portland and the Portland
Development Corporation (“PDC”) to appoint NMS as substitute custodian. See ECF Nos. 14750.3
On December 11, 2015, the Owners filed their motion to tax costs to Century. See Owners’
Motion. I granted a series of motions by the parties to enlarge their response and reply deadlines
to enable them to engage in settlement discussions. See ECF No. 278. On August 12, 2016, I
granted a similar such motion only in part, noting that, while I had extended briefing deadlines on
the cross-motions multiple times to facilitate the parties’ ongoing settlement negotiations, the
motions needed to be decided absent the successful conclusion of those negotiations. See id. I
reset briefing deadlines, see id., and the matter is now fully briefed.
III.

Discussion

The Owners seek to tax all custodial costs for the period from November 26-30, 2015, to
Century on the basis that, as of November 25, 2015, only Century resisted the Owners’ efforts to
post a bond and secure the vessel’s release, and it did so for its own convenience in circumstances
in which it could have resolved the issue of its seized property by that date. See Owners’ Motion
at 1-2.

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In their emergency joint motion, filed on November 25, 2015, the City of Portland and the PDC explained that they
had filed the motion as a precaution because the original arresting plaintiff, Portland Pilots, had settled its claim against
the vessel and had filed a motion seeking her release; however, they preferred that the court approve the bond proposed
by the Owners, obviating the need to keep the vessel under arrest. See ECF No. 113 at [2]-[4].

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The Owners note that, (i) on November 17, 2015, Century spurned their offer to lease the
equipment, instead demanding its immediate return, (ii) on November 19, 2015, Century informed
them that it was unable to commence an offload of its property until November 29, 2015,
suggesting that if the arrest did not last that long, alternative arrangements could be made for the
removal of the equipment in another port, (iii) in the meantime, all parties consented to the removal
of Century’s property, (iv) Century mistakenly asserted that it was unable to arrange for an offload
during the week of November 23, 2015, because of a dispute between the City of Portland and the
Owners, although there was no such dispute and the vessel’s movements were controlled by NMS,
the substitute custodian, and, (v) although counsel for the Owners suggested that Century could
make arrangements at its expense to bring the vessel into a suitable facility in Portland Harbor to
offload its property, Century made no such arrangements. See id. at 2-3; Reply of Owners in
Support of Motion To Tax or Otherwise Allocate Custodial Charges to Century Resorts (“Owners’
Reply”) (ECF No. 290) at 1.
The Owners argue that, because Century never contended that it was itself entitled to arrest
the vessel but used the arrest process to prolong the detention of the vessel for its convenience, it
should be taxed as an equitable matter with all resulting custodial charges. See Owners’ Motion
at 4; Owners’ Reply at 2-3.
Century rejoins that, promptly after filing its statement of verified interest and incorporated
motion on November 11, 2015, it worked diligently to secure the consent of all parties to offload
its property and was forced to abandon its prearranged travel plans for retrieval of the property
when counsel for the Owners advised that the vessel was expected to depart Portland Harbor upon
her release, and her destination thereafter was unknown. See Century’s Response at 2-4. Century
notes that, when it learned on November 26, 2015, that the vessel would be brought to port, it made

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extraordinary efforts to assemble and fly a crew to Portland over the post-Thanksgiving weekend,
successfully completing the property offload as of November 29, 2015. See id. at 5-6.
Century argues that its objection to the release of the vessel was not the sole cause of her
continued detention, as the court scheduled several motions for hearing on November 30, 2015.
See id. at 7. It asserts that, considering the totality of the circumstances, it could not have
accomplished the removal of its property any sooner, and the retrieval was hardly at its
“convenience.” Id. at 8. It contends that the Owners’ request to tax it with the entirety of costs of
custody after November 25, 2015, is unreasonable, that principles of equity require that it be
assessed a nominal fee at most, and that in no event are the Owners entitled to more than their
actual custodial costs. See id.
For the reasons that follow, I conclude that the equities favor the taxation of all custodial
costs for the five-day period between November 26 and 30, 2015, to Century. There is no question
that Century made diligent efforts to remove its property from the vessel in difficult circumstances
that included the need to arrange for its own personnel to effectuate the removal of its specialized
and delicate equipment, the need to obtain consent from multiple parties to the removal of that
equipment, the timing of the Thanksgiving holiday, and the need to arrange for the berthing of a
vessel that, as the Owners assert, was in the control of a substitute custodian, NMS. See ECF No.
10.
Yet, the Owners are correct that the detention of the vessel was prolonged from November
26, 2015, through November 30, 2015, solely because of Century’s objection, as is reflected in the
court’s order setting the November 30 hearing. See ECF No. 117. While the court acted on all
pending motions during that hearing, it did so as a matter of convenience, once Century’s objection
to the vessel’s release necessitated an emergency hearing.

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Century’s inability to remove its property, or otherwise negotiate a solution to its problem,
by November 25, 2015, cannot be laid at the feet of the Owners. The Owners offered to lease the
property aboard the vessel, but Century declined. See Exh. A to ECF No. 280. The Owners state,
and Century does not dispute, that they suggested that arrangements could be made (at Century’s
expense) for the vessel to tie up to a suitable facility in Portland Harbor, but nothing came of that.
See Owners’ Motion at 3; see generally Century’s Response.
In its responsive brief, Century no longer claims that it had to scuttle arrangements to
remove its property during the week of November 23, 2015, as a result of a dispute between the
Owners and the City of Portland. See generally Century’s Response. However, even when it did
raise that argument prior to the vessel’s release, it asserted that the City of Portland had blocked
access to the pier. See ECF No. 82 at 4. It is unclear why Century was unable to access the vessel
during the week of November 23, 2015; however, there is no evidence that the Owners did
anything to bring about that unfortunate state of affairs.
Century does note, and the Owners do not dispute, that, following the vessel’s release from
arrest on November 30, 2015, she remained moored at Portland Harbor until December 9, 2015.
See Century’s Response at 6-8; see generally Owners’ Reply. Yet, there is no suggestion that the
Owners or their counsel knew, when they informed Century prior to November 26, 2015, that they
could provide no assurance of access to the vessel following her release, that she would remain in
Portland Harbor.
In the totality of the circumstances, I conclude that the vessel remained under arrest for the
period after November 25, 2015, for Century’s convenience and that, as a matter of equity, Century
should be taxed the costs of her continued custodial detention after that date.

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A further matter remains: In their response to Century’s cross-motion, the Owners state
that they are considering a separate action against Century for damages beyond taxable custodial
costs. See Owners’ Response at 1. Accordingly, they object to Century’s dismissal or, in the
alternative, request that Century be dismissed with costs and without prejudice to the Owners’
right to assert further claims against it. See id. Century takes the position that in no event are the
Owners entitled to more than actual custodial costs. See Century’s Response at 8. I need not
resolve this point: as noted above, I have treated Century’s cross-motion as a motion for protection
from taxation of custodial charges. However, as set forth below, I do direct that the parties meet
and confer concerning it.
IV.

Conclusion

For the foregoing reasons, I GRANT the Owners’ cross-motion and DENY that of
Century, taxing 100 percent of all custodial charges for the five-day period from November 2630, 2015, to Century. Because the Owners have not quantified that sum, I DIRECT the parties to
meet and confer regarding that matter and to file on CM-ECF, no later than October 17, 2016, a
joint report either that they have agreed on a specific sum or that there is a disagreement, in which
event they shall explain the basis for the disagreement. I further DIRECT the parties to meet and
confer regarding the Owners’ request that, if Century is dismissed from the case, its dismissal be
without prejudice to further claims against it by the Owners, following which Century may file a
motion to dismiss itself from this case, with or without the Owners’ consent.

NOTICE
In accordance with Federal Rule of Civil Procedure 72(a), a party may serve and file an
objection to this order within fourteen (14) days after being served with a copy thereof.
Failure to file a timely objection shall constitute a waiver of the right to review by the
district court and to any further appeal of this order.
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Dated this 28th day of September, 2016.
/s/ John H. Rich III
John H. Rich III
United States Magistrate Judge

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