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Swordfish Partners v. The S.S. North Carolina

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

April 23, 2019

SWORDFISH PARTNERS, a Florida Joint Venture, Plaintiff,
v.
The S. S. NORTH CAROLINA, her hull, cargo, tackle, boilers, machinery and appurtenances, which lies within one nautical mile of a point with coordinates 33 degrees 24'00" North Latitude and 78 degrees 40'00" West Longitude, Defendant In Rem.

          REPORT AND RECOMMENDATION

          SEAN P. FLYNN, UNITED STATES MAGISTRATE JUDGE.

         This cause comes before the Court on Plaintiff Swordfish Partners' Renewed Motion for Default Judgment (Doc. 42). Plaintiff seeks, pursuant to Rule 55(b) of the Federal Rules of Civil Procedure, default judgment granting Plaintiff the ownership of the S.S. North Carolina and default judgment against potential claimants. For the reasons set forth below, it is recommended that the motion be denied in part and granted in part.

         I. BACKGROUND

         Plaintiff is engaged in the business of deep ocean exploration and recovery of shipwrecks and their cargo, tackle, boilers, machinery and her appurtenance (Doc. 1 at ¶ 1). Plaintiff filed this in rem action on July 24, 2018, against Defendant the S.S. North Carolina, her hull, cargo, tackle, boilers, machinery and her appurtenances, which sank July 26, 1840 (Doc. 1 at ¶ 2). The shipwreck is located outside the territorial seas of the United States approximately 18 nautical miles east of Myrtle Beach, South Carolina, and the salvage area lies within one nautical mile of a point with coordinates 33º 24'00” North Latitude and 78º 40'00” West Longitude (Doc. 1 at ¶ 2 and p. 10 ¶ 7). To secure its rights over the salvage, Plaintiff filed a two-count Complaint in this Court asserting a salvage award claim (Count I) and a possessory and ownership claim (Count II) under the Supplemental Rules to the Federal Rules of Civil Procedure as well as Local Admiralty Rule 7.03, M.D. Fla. (Doc. 1).

         The Court granted Plaintiff's motion for warrant of arrest of the Defendant vessel (Doc. 2)[1] and ordered the Clerk to issue a warrant of arrest in rem (Doc. 7). The Court also ordered that Plaintiff be appointed Substitute Custodian of the vessel and any objects recovered therefrom (Doc. 16). Plaintiff published notice of the arrest in The Post & Courier in Charleston, South Carolina (Affidavit of Publication, Doc. 17) and The Star-News of Wilmington, North Carolina (Affidavit of Publication, Doc. 18) on August 15, 2018. Plaintiff also published notice of the arrest in The Tampa Bay Times in Tampa, Florida on January 9, 2019 (Affidavit of Publication, Doc. 36). Upon Plaintiff's motion for entry of Clerk's default (Doc. 40) and there being no claims filed within the time period set forth in Supplemental Rule C(6) and Local Admiralty Rule 7.03(f), the Clerk entered default on March 6, 2019 (Doc. 41).[2]

         As for the salvaging of the S.S. North Carolina artifacts, Plaintiff asserts that it has been surveying the ship wreck site for items that were not recovered by Marex.[3] (Doc. 21 at 2). Prior to extensive recovery of the artifacts, which are scattered over dozens of acres, Plaintiff plans to continue to survey the site with devices such as side-scan sonar, magnometer and other devices in order to make recovery systematic and economical. (Id.). “Plaintiff believes that it will need 2019 and 2020 to complete the survey and recover the most valuable and interesting artifacts from the site.” (Id. at 3). Plaintiff reports that the 2018 salver season[4] was interrupted by Hurricane Florence, which made landfall at Wilmington, North Carolina on September 14th. (Id.).

         Plaintiff now moves this Court for entry of default judgment against the Defendant S.S. North Carolina, her hull, cargo, tackle, boilers, machinery and appurtenances, wherever they may lie; against any claimant who resided in Wilmington, North Carolina or Charleston, South Carolina on August 15, 2018, or resided in the Middle District of Florida on January 9, 2019, [5] when notice of the arrest of the S.S. North Carolina, was respectively published or who otherwise had actual notice; and for the Court to direct the Clerk to (1) enter judgment awarding Plaintiff clear title to the bronze spike being held for the Court by the Plaintiff as Substitute Custodian and the S.S. North Carolina before the Court by virtue of the spike, (2) administratively close this case with leave to reinstate the case to active status upon proper motion if and when Plaintiff requires further affirmative recoveries from the S.S. North CAROLINA's hull, cargo, tackle, boilers, machinery or appurtenances, and (3) to open this case from time to time for other good cause (Doc. 42 at 3).

         II. DISCUSSION

         A. Jurisdiction

         This Court has subject matter jurisdiction over this case pursuant to 28 U.S.C. § 1333. Moreover, this Court has jurisdiction in rem over the artifacts recovered by Plaintiff and brought within this district. Marex Int'l, 952 F.Supp. at 828 (citing Moyer v. The Wrecked & Abandoned Vessel known as The Andrea Doria, 836 F.Supp. 1099, 1104 (D.N.J. 1993)). An in rem action for a salvage award against artifacts recovered from the remains of a shipwreck over a century old states a claim within this Court's admiralty jurisdiction, governed by the judicial law of finds or doctrine of maritime salvage. Cobb Coin Co. v. The Unidentified, Wrecked and Abandoned Sailing Vessel, 525 F.Supp. 186, 203 (S.D. Fla. 1981) (citing Treasure Salvors, Inc. v. The Unidentified Wrecked and Abandoned Sailing Vessel, 569 F.2d 330 (5th Cir. 1978) (Treasure Salvors I)).

         B. Standard

         Local Admiralty Rule 7.03(i) spells out the procedures a plaintiff in an admiralty case must follow when moving for the entry of a default judgment. In particular, “[n]ot sooner than seven (7) days nor later than thirty (30) days following notice of the entry of default, the moving party shall file a motion, and supporting legal documents, for the entry of default judgment pursuant to Rule 55(b)[.]” L.A.R. 7.03(i), M.D. Fla. And when no person has filed a claim or answer - as is the case here - “the motion for default judgment will be considered by the court without oral argument.” Id. at 7.03(i)(1). Under Rule 55(b), a default judgment may be entered “against a defendant who never appears or answers the complaint, for in such circumstances the case has never been placed at issue.” Fifth Third Bank v. Fla. Caring Hands Corp., No. 3:14-cv-212-J-39MCR, 2014 WL 12609868, at *1 (M.D. Fla. July 21, 2014) (quoting Solaroll Shade and Shutter Corp., Inc. v. Bio-Energy Sys., Inc., 803 F.2d 1130, 1134 (11th Cir. 1986)). Before entering a default judgment, a court must confirm that it has jurisdiction over the claims and the absent defendant and that the complaint adequately states a claim. Odyssey Marine Exploration, Inc. v. Unidentified, Wrecked, and Abandoned Sailing Vessel, 727 F.Supp.2d 1341, 1345 (M.D. Fla. 2010) (Odyssey II).

         C. Default Judgment

         In general, the recovery of property lost at sea is controlled by either the law of salvage or the law of finds. “Under the law of salvage, rescuers take possession of, but not title to, the distressed vessel and its contents” and secure a salvage award. Int'l Aircraft Recovery, LLC v. Unidentified, Wrecked and Abandoned Aircraft, 218 F.3d 1255, 1258 (11th Cir. 2000). The law of salvage presumes that property lost at sea is not abandoned (and thus the true owner retains title to the lost property); a salvage award functions as a trust on behalf of the true owner of the property. R.M.S. Titanic, Inc. v. Haver, 171 F.3d 943, 964 (4th Cir. 1999) (Titanic I). The law of finds, on the other hand, is basically “finders keepers, ” i.e., the finder acquires title to property abandoned at sea by “reduc[ing] ...


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