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North Florida Shipyards, Inc. v. M/V Atlantis II

United States District Court, M.D. Florida, Jacksonville Division

May 21, 2018

NORTH FLORIDA SHIPYARDS, INC. Plaintiff,
v.
M/V ATLANTIS II, her engines, tackle, apparel, etc., in rem, Defendant.

          The Honorable Marcia Morales Howard United States District Judge.

          REPORT AND RECOMMENDATION [1]

          MONTE C. RICHARDSON UNITED STATES MAGISTRATE JUDGE.

THIS CAUSE is before the Court on Plaintiff's Motion for Default Judgment (Doc. 19) and Plaintiff's Motion for Interlocutory Judicial Sale of Vessel, or, In the Alternative, Motion for Judicial Sale of Vessel (“Motion for Sale”) (Doc. 27). The owner of the Defendant Vessel has not appeared in this matter and has not responded to the Motion for Default Judgment. The motions are therefore deemed to be unopposed by the Defendant Vessel. In addition, although Intervening Plaintiff David Allen has not filed his own motion for default judgment, Mr. Allen agrees that default judgment should be awarded in favor of Plaintiff. (Doc. 24 at 2.) Both Plaintiff and Mr. Allen agree that a default judgment rendered in favor of Plaintiff would not preclude Mr. Allen from claiming any amount of the res after a sale of the vessel. (Id.)

         Plaintiff initiated this action on November 14, 2017 by filing a Verified Complaint in Rem against the Defendant Vessel alleging that the Vessel's owner failed to compensate Plaintiff for certain marine and berthing services which were necessary to maintain the Defendant Vessel in proper condition for navigation. (Doc. 1.) According to the Verified Complaint, the Defendant Vessel, through its agents, contracted for such services at Plaintiff's facility and entered into a Service Agreement. (Doc. 1-2.) Article I of the Service Agreement authorizes Plaintiff to perform services described in one or more service orders. (Id. at 1.) Article II of the Service Agreement provides, in relevant part, an interest rate of one and one-half percent per month for any invoice not paid within thirty (30) days after the invoice date. (Id.) Article III of the Service Agreement provides a berthing fee for dockage at a rate of $20.00 per foot, per day plus utilities and sales tax. (Id.) The Service Agreement also provides a maritime lien and security interest in the Defendant Vessel for any unpaid sums due to Plaintiff for services performed by Plaintiff or for use of Plaintiff's facilities. (Id. at 4.) The agreement further entitles Plaintiff to attorney's fees and expenses in the event that Plaintiff employs counsel to collect any service amounts due under the agreement. (Id.) The agreement is dated September 8, 2011, and remains in effect until terminated upon written notice. (Id. at 3.)

         Plaintiff rendered invoices to the Owner of the Defendant Vessel for services performed from September 2017 through November 2017. (Doc. 1-1.) Plaintiff has not been paid on the invoices to date. (Doc. 1 at 2.) The total amount due and owing to Plaintiff at the time the Complaint was filed is $122, 929.05. (Id.) Plaintiff claims a maritime lien against the Defendant Vessel for the unpaid services performed and also seeks attorney's fees and costs. (Id.)

         On January 31, 2018, upon the Court granting Plaintiff leave to file, Mr. Allen filed a Verified Seaman's Intervening Complaint. (Doc. 22.) Mr. Allen claims an interest in the res for seaman's wages owed to him in the amount of $243, 750.00. (Id. at 2.) The Court entered an Order directing the issuance of a warrant of arrest for the Defendant Vessel. (Doc. 6). The Court also appointed Plaintiff as Substitute Custodian for the Defendant Vessel. (Doc. 5.) The warrant was served on the Vessel by the U.S. Marshal on November 22, 2017. (Doc. 11.)

         Plaintiff filed a notice on December 7, 2017 indicating that it had mailed to the known owner of the Defendant Vessel, via certified mail, a copy of the Complaint, Order directing the issuance of a warrant of arrest, and the returns of service from the U.S. Marshal. (Docs. 12, 14-1.) Plaintiff also filed proof of publication showing it had published in the Florida Times-Union a “Notice of Action In Rem and Arrest of Vessel.” (Doc. 13.)

         No person or entity has filed a claim as to the Defendant Vessel or otherwise appeared in this action (other than Intervening Plaintiff), despite being given adequate time to do so. See Local Admiralty Rule 7.03(f). Accordingly, on January 24, 2018, upon motion of Plaintiff, the Clerk entered default against the Defendant Vessel. (Doc. 15.)

         The Court now has before it Plaintiff's Motion. Plaintiff seeks entry of default judgment in favor of Plaintiff and against the Defendant Vessel in the amount of $321, 155.79, representing $132, 736.92 for dockage and services provided to the Vessel through November 22, 2017; $3, 398.39 for interest; $165, 908.26 in substitute custodian expenses through January 31, 2018; $2, 500.00 for U.S. Marshal fee; $15, 560.00 in attorney's fees; and $1, 056.22 for costs. (Doc. 19 at 2.) In support of the Motion, Plaintiff filed the affidavit of Eugene Alley, the individual in charge of Special Projects for Plaintiff. (Doc. 19-2.) Mr. Alley confirms in the affidavit that Plaintiff has due and owing $132, 736.92 for dockage and services provided to the Vessel through November 22, 2017 and interest in the amount of $3, 398.39 through that date. Mr. Alley also confirms that Plaintiff has incurred $165, 908.26 in substitute custodian expenses from November 22, 2017 through January 31, 2018, as well as a $2, 500.00 fee paid to the U.S. Marshal incident to the arrest of the Vessel.[2]Plaintiff also filed the affidavit of its attorney, C. Ryan Eslinger, Esq., as well as a declaration from a local maritime attorney, Howard T. Sutter, Esq. (Docs. 19-1 & 20-1, respectively.) Mr. Eslinger confirms in his affidavit that Plaintiff incurred $15, 560.00 in attorney's fees, as well as $1, 056.22 in costs.[3]

         By virtue of the Defendant Vessel's default, the facts as alleged in the Verified Complaint against the Defendant Vessel are admitted as true. See Buchanan v. Bowman, 820 F.2d 359, 361 (11th Cir. 1987) (citing Nishimatsu Construction Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). The undersigned finds that Plaintiff has complied with the requirements of Rule 55 of the Federal Rules of Civil Procedure and Local Admiralty Rules 7.03(h) and 7.03(i). Additionally, Plaintiff has been incurring substitute custodian expenses since the Vessel was arrested and Plaintiff became the substitute custodian. Pursuant to 28 U.S.C. § 1921 and Local Admiralty Rule 7.05(1)(2), Plaintiff as substitute custodian is entitled to an award of its custodial expenses incurred in connection with the custody of the Vessel. See 28 U.S.C. § 1921(a)(1)(E); Local Admiralty Rule 7.05(1)(2); see also Int'l Ship Repair & Marine Servs. v. Caribe Sun Shipping, No. 8:12-cv-1651-T-33TGW, 2013 WL 24794, at *1 (M.D. Fla. Jan. 2, 2013).

         The undersigned also finds Plaintiff is indeed entitled to recover its reasonable attorney's fees and costs.[4] Plaintiff's claims in this action arose out of a contractual obligation based on services rendered pursuant to a Service Agreement between the parties. (Doc. 1-2.) The Service Agreement contains a provision for recovery of costs and attorney's fees in the event Plaintiff employed counsel to help collect on the outstanding invoices.[5] (Id. at 4.) Accordingly, the undersigned will proceed to consider the reasonableness of the attorney's fees and costs.

         To determine the amount of attorney's fees to be awarded, the Court follows a three-step process. See Dillard v. City of Greensboro, 213 F.3d 1347, 1353 (11th Cir. 2000); see also Suncoast Schools Fed. Credit Union v. M/V Le Papillon, No. 8:09-cv-765-T-17AEP, 2010 WL 882889, at *1 (M.D. Fla. Mar. 2, 2010) (applying Dillard in an admiralty case). “First, [the] [C]ourt asks if the plaintiff has ‘prevailed' in the statutory sense . . . Second the [C]ourt calculates the ‘lodestar,' which is the number of hours (tempered by billing judgment) spent in the legal work on the case, multiplied by a reasonable market rate in the local area . . . Finally, the [C]ourt has the opportunity to adjust the lodestar to account for other considerations that have not yet figured in the computation, the most important being the relation of the results obtained to the work done.” Dillard, 213 F.3d at 1353 (citations omitted). “The party who applies for the attorney's fees is responsible for submitting satisfactory evidence to establish both that the requested rate is in accordance with the prevailing market rate and that the hours are reasonable.” Duckworth v. Whisenant, 97 F.3d 1393, 1396 (11th Cir. 1996) (citing Norman v. Hous. Auth. of Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988)).

         Here, a Clerk's default has been entered against the Defendant Vessel and the undersigned has found that all facts establishing liability have been admitted as true. As such, Plaintiff is a prevailing party. The undersigned must now determine the amount of fees using the “lodestar” approach.

         The Court must next determine whether the hourly rate charged by Plaintiff's attorney in this matter was reasonable. “A reasonable hourly rate is the prevailing market rate in the relevant legal community for similar services by lawyers of reasonably comparable skills, experience, and reputation. The applicant bears the burden of producing satisfactory evidence that the requested rate is in line with prevailing market rates.” Norman, 836 F.2d at 1299 (internal citations omitted). To meet its ...


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