Coastal Marine Management, v. M/V SEA HUNTER (O.N. 598425), et al

Filing 109

Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER: For the foregoing reasons, the motion of plaintiff for entry of judgment in its favor (Docket No. 107 ) is ALLOWED. Funds plus interest shall be paid to: Hollbrook & Murphy as attorneys for Costal Marine Management, LLC d/b/a Boston Harbor Shipyard and Marina.So ordered. (Vieira, Leonardo)

Case 1:16-cv-11616-NMG Document 109 Filed 11/06/19 Page 1 of 5

United States District Court
District of Massachusetts
)
Coastal Marine Management, LLC
)
d/b/a Boston Harbor Shipyard and )
Marina,
)
)
Plaintiff,
)
)
v.
)
)
Additional Return, LLC,
)
)
Intervenor.

Civil Action No.
16-11616-NMG

MEMORANDUM & ORDER
GORTON, J.
This case arises out of a dispute over custodia legis
expenses that Boston Harbor Shipyard and Marina (“the Shipyard”
or “plaintiff”) has incurred as the Court-appointed custodian of
an abandoned vessel under foreclosure.

Pending before the Court

is the motion of plaintiff for entry of judgment against
intervenor Additional Return, LLC (“Additional Return” or
“defendant”) for its pro rata share of expenses amounting to
$64,865.64 plus interest.
The facts of this case are outlined in detail in a prior
order of this Court allowing plaintiff’s motion for the
disbursement of sale proceeds and apportionment of custodia
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Case 1:16-cv-11616-NMG Document 109 Filed 11/06/19 Page 2 of 5

legis expenses (Docket No. 106) (“the February 20, 2019 Order”).
In that Order, the Court held that “Additional Return, as an
intervenor, is subject to this Court’s initial order concerning
the pro rata sharing of custodia legis expenses” (Docket No.
106).
Plaintiff now seeks entry of judgment in its favor in the
amount of $64,865.64, plus interest, due to it from Additional
Return for unpaid custodia legis expenses pursuant to the
February 20, 2019 Order.

Additional Return objects, reciting

verbatim arguments previously rejected by this Court.

So as not

to re-bake the cake, the Court will address only the single new
argument proffered by Additional Return: that a mortgagee which
was effectively required to intervene did not benefit on a pro
rata basis, or at all for that matter, by the arrest and forced
sale of the mortgaged vessel and should not be liable for
custodia legis expenses.
Additional Return’s argument is unavailing.

The logic of

pro rata apportionment among intervenors for custodia legis
expenses is that the first party to arrest a vessel and arrange
for a substitute custodian should not be burdened by expenses
intended to benefit all interested parties. Donald D. Forsht
Associates, Inc. v. Transamerica ICS, Inc., 821 F.2d 1556, 1561
(11th Cir. 1987).

Pro rata apportionment is not, as Additional

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Case 1:16-cv-11616-NMG Document 109 Filed 11/06/19 Page 3 of 5

Return suggests, dependent upon whether an intervenor is
entitled to a pro rata share of the sale proceeds.

Indeed, a

Court has broad discretion in apportioning the payment of
custodia legis expenses and may choose to require intervenors to
pay a per capita share rather than a pro rata share. See, e.g.,
Mullane v. Chambers, 438 F.3d 132, 138 (1st Cir. 2006)
(explaining that admiralty courts have “flexible and equitable”
authority to award custodial expenses); see also Beauregard,
Inc. v. Sword Services, LLC, 107 F.3d 351, 353-54 (5th Cir.
1997) (“[T]he district court enjoys broad equitable authority
over the administration of maritime seizures.”); Gulf Copper &
Manufacturing Corporation v. M/V Lewek Express, No. 19-cv-00034,
2019 WL 2435848, *3 (S.D. Tex. June 11, 2019) (explaining that,
where reasonable, a court may order per capita apportionment of
custodia legis expenses).
Although Additional Return argues to the contrary, the
Shipyard provided a benefit to all claimants by arresting the
vessel and moving to appoint a substitute custodian to provide
for safekeeping at a cost lower than that charged by the United
States Marshall’s office.

See id.

The Shipyard’s actions

served to protect the value of the vessel and, thereby, was a
benefit to all interested parties, including Additional Return.

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Case 1:16-cv-11616-NMG Document 109 Filed 11/06/19 Page 4 of 5

With respect to Additional Return’s contention that it was
forced to intervene and, therefore, should not be required to
pay a pro rata share of expenses, it was “forced” to intervene
only to the extent it sought to recover proceeds from the sale
of the vessel.

It was no more required to intervene than any

other interested creditor.

In any event, Additional Return

failed to object to its status as an intervenor after this Court
granted its motion to intervene provisionally and after the sale
was finalized.
This Court has twice found that Additional Return is
responsible for its pro rata share of custodia legis expenses.
Additional Return has repeatedly claimed that such a ruling is
unfair.

The possibility of recovery on its promissory note from

the sale proceeds was, however, a sufficient incentive to cause
Additional Return to file a claim in this action and,
subsequently, to intervene rather than to allow its claim to be
dismissed.

Along with the possibility of recovery comes an

“attendant responsibility to preserve the property,” because
recovery is only possible if the property is preserved. See
Donald D. Forsht Associates, Inc., 821 F.2d at 1562 n. 8.
Accordingly, plaintiff’s motion for entry of judgment will be
allowed.

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Case 1:16-cv-11616-NMG Document 109 Filed 11/06/19 Page 5 of 5

Plaintiff seeks prejudgment interest on its claim for
expenses.

Prejudgment interest in admiralty claims may be

awarded as compensation for the use of funds to which the
plaintiff was entitled but of which the defendant had the use
prior to judgment. Borges v. Our Lady of the Sea Corp., 935 F.2d
436, 444 (1st Cir. 1991).

No “exceptional circumstances” exist

here justifying a refusal of prejudgment interest. Nevor v.
Moneypenny Holdings, LLC, 842 F.3d 113, 124 (1st Cir. 2016).
The Court will therefore award prejudgment interest from
December 4, 2017, the date on which the Shipyard first requested
payment for custodia legis expenses from Additional Return,
compounded quarterly at the prevailing Treasury bill rate.
ORDER
For the foregoing reasons, the motion of plaintiff for
entry of judgment in its favor (Docket No. 107) is ALLOWED.
Funds plus interest shall be paid to: Hollbrook & Murphy as
attorneys for Costal Marine Management, LLC d/b/a Boston Harbor
Shipyard and Marina.
So ordered.

/s/ Nathaniel M. Gorton_____
Nathaniel M. Gorton
United States District Judge
Dated November 6, 2019
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