Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_14-cv-01215/USCOURTS-casd-3_14-cv-01215-0/pdf.json

Nature of Suit Code: 120
Nature of Suit: Marine Contract Actions
Cause of Action: 46:1101 Violation of Maritime Regulations

---

– 1 – 14-cv-1215 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

CALIFORNIA YACHT MARINA – 

CHULA VISTA, LLC, 

 Plaintiff, 

Case No. 14-cv-01215-BAS(BGS)

ORDER GRANTING 

PLAINTIFF’S MOTION FOR 

INTERLOCUTORY VESSEL 

SALE AND AUTHORIZATION 

TO CREDIT BID 

(ECF No. 16) 

 v. 

S/V OPILY, A 40-FOOT 1975 

KIENNER SAILING VESSEL, CF 

NO. CF6116KW, AND ALL OF HER 

ENGINES, TACKLE, 

ACCESSORIES, EQUIPMENT, 

FURNISHINGS AND 

APPURTENANCES, in rem, 

 Defendant. 

 On May 14, 2014, Plaintiff California Yacht Marina – Chula Vista, LLC 

(“Plaintiff”) commenced this action in admiralty against Defendant S/V Opily, a 40-

foot 1975 Kienner sailing vessel, bearing California CF No. CF6116KW, and all of 

her engines, tackle, accessories, equipment, furnishings and appurtenances, in rem

(“Defendant Vessel”), by filing a verified complaint for vessel arrest, interlocutory 

sale, and for money damages for trespass, breach of maritime contract and quantum 

meruit. (ECF No. 1) 

Case 3:14-cv-01215-BAS-BGS Document 18 Filed 03/16/15 Page 1 of 10
 – 2 – 14-cv-1215 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 On May 28, 2014, the Court issued Orders appointing a substitute custodian 

and authorizing the movement and arrest of the Defendant Vessel. (ECF Nos. 6, 7.) 

The arrest warrant was thereafter executed on June 20, 2014. (ECF No. 10.) On 

July 29, 2014, the Clerk entered default against the Defendant Vessel. (ECF No. 

14.) Presently before the Court is a motion filed by Plaintiff for interlocutory sale of 

the Defendant Vessel and for authorization to credit bid at the sale. (ECF No. 16.) 

No appearance has been made in this action on behalf of the Defendant Vessel and 

no opposition has been filed to the present motion. 

 The Court finds this motion suitable for determination on the papers submitted 

and without oral argument. See Civ. L.R. 7.1(d)(1). For the following reasons, the 

Court GRANTS Plaintiff’s motion (ECF No. 16). 

I. BACKGROUND 

 Plaintiff operates a marina in Chula Vista, California. On or about May 21, 

2006, John Mallen, who is believed to be the sole owner of the Defendant Vessel, 

executed a License Agreement (“Agreement”) with Plaintiff. (Compl. at Ex. A.) 

Pursuant to the Agreement, Plaintiff provided wharfage services for the benefit of 

the Defendant Vessel commencing on June 1, 2006. (Id. at ¶ V.) The monthly slip 

fee is listed as $540, with an additional $100 live aboard fee. (Id. at ¶¶ VI, IX.) 

 The Agreement provides that the license continues on a “month to month 

basis until default under the provisions of th[e] license or until terminated by either 

party by prior written notice of the intent to terminate given not less than thirty (30) 

days before the effective days thereof.” (Id. at p. ¶ 3.) The Agreement further states 

that Plaintiff “shall have all liens provided for in the California Harbors and 

Navigation Code and such other liens, rights and remedies, including the right to sell 

the Vessel at public auction, and under California or Federal Law, as each may be 

applicable.” (Id. at ¶9.) 

 Over the course of many months, Plaintiff alleges the account for the 

Defendant Vessel fell progressively further behind, standing in arrears at the time of 

Case 3:14-cv-01215-BAS-BGS Document 18 Filed 03/16/15 Page 2 of 10
 – 3 – 14-cv-1215 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the filing of the Verified Complaint in an amount of not less than $10,949.81. 

(Compl. at ¶ 5.) Plaintiff alleges it tendered monthly invoices demanding payment 

and otherwise made demands that the account be brought current. (Id.) 

 Plaintiff further alleges that on January 27, 2014, its attorney mailed a letter 

via Certified and First Class U.S. Mail to Mr. Mallen, listed as the registered and 

legal owner of the Defendant Vessel on the Agreement, demanding payment of the 

arrearages in full or alternatively an acceptable payment plan. (Id. at ¶ 6.) The letter 

also provided notice that “the License Agreement will be terminated in 34 days, that 

is, on March 4, 2014,” and that if the Defendant Vessel was not removed from 

Plaintiff’s marina by that date she would “be regarded as a trespasser for all 

purposes.” (Id.) Plaintiff’s letter further notified Mr. Mallen of its position that “as 

a result of the failure to pay wharfage fees, a maritime ‘necessities’ lien encumbers 

the Defendant Vessel and as a result Plaintiff ‘is entitled to foreclose on [the 

maritime lien] by obtaining Orders from the U.S. District Court requiring the U.S. 

Marshal to seize the offending vessel and subsequently sell her at public auction.’” 

(Id.) Neither Plaintiff nor its counsel received a response to the letter. (Id.) 

 Plaintiff alleges that in spite of this admonition and the multiple demands that 

the Defendant Vessel’s account be brought current, the account was not brought 

current and the Defendant Vessel failed and refused to vacate Plaintiff’s marina 

following termination of the Agreement. (Id. at ¶¶ 8, 12.) Plaintiff has accordingly 

alleged that, in addition to its maritime lien based on the provision of wharfage 

services (a “necessaries” lien under 46 U.S.C. sections 31301 et seq)., an additional 

maritime lien arose and subsists against the Defendant Vessel on account of her 

trespass at Plaintiff’s marina. (Id. at ¶¶ 11-14.) 

 As a consequence of the Defendant Vessel’s owner’s failure to vacate her 

from Plaintiff’s marina following termination of the Agreement and his failure to 

pay all or any part of the wharfage fee arrearages, Plaintiff filed a Verified 

Complaint commencing this action on May 14, 2014. On May 28, 2014, the Court 

Case 3:14-cv-01215-BAS-BGS Document 18 Filed 03/16/15 Page 3 of 10
 – 4 – 14-cv-1215 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

issued Orders appointing a substitute custodian and authorizing the movement and 

arrest of the Defendant Vessel. (ECF Nos. 6, 7.) The arrest warrant was thereafter 

executed on June 20, 2014. (ECF No. 10.) On July 29, 2014, the Clerk entered 

default against the Defendant Vessel. (ECF No. 14.) No representative of the 

Defendant Vessel has appeared or otherwise contacted the Court. 

 Plaintiff now seeks entry of an Order requiring the United States Marshal to 

sell the Defendant Vessel as soon as possible at public auction, so the proceeds (if 

any) can be used to satisfy in whole or part Plaintiff’s maritime liens. Plaintiff 

contends the relief sought is proper because the Defendant Vessel is deteriorating 

while in custody, because there has been no effort to secure her release, and because 

the expenses of keeping her are excessive or disproportionate to her value.

II. DISCUSSION 

 A. Interlocutory Sale of Defendant Vessel 

 “The interlocutory sale of a vessel is not a deprivation of property but rather a 

necessary substitution of the proceeds of the sale, with all of the constitutional 

safeguards necessitated by the in rem process.” Ferrous Fin. Servs. Co. v. O/S 

Arctic Producer, 567 F.Supp. 400, 401 (W.D. Wash. 1983). Supplemental Rule for 

Certain Admiralty and Maritime Claims E(9)(a)(i) of the Federal Rules of Civil 

Procedure provides: 

On application of a party . . . the court may order all or part of the 

property sold—with the sale proceeds, or as much of them as will 

satisfy the judgment, paid into court to await further orders of the 

court—if: (A) the attached or arrested property is perishable, or liable 

to deterioration, decay, or injury by being detained in custody pending 

the action; (B) the expense of keeping the property is excessive or 

disproportionate; or (C) there is an unreasonable delay in securing the 

release of the property. 

In order to prevail, the moving party need only show one of these three criteria is 

met. Merchants Nat. Bank of Mobile v. Dredge Gen. G.L. Gillespie, 663 F.2d 1338, 

1341 (8th Cir. 1981). Plaintiff argues that the Court should order the Defendant 

Case 3:14-cv-01215-BAS-BGS Document 18 Filed 03/16/15 Page 4 of 10
 – 5 – 14-cv-1215 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Vessel to be sold based on all three provisions of Rule E(9)(a)(i). For the reasons set 

forth below, the Court agrees that interlocutory sale of the Defendant Vessel is 

justified under Rule E(9)(a)(i) under all three criteria.

1. Defendant Vessel is Liable to Deterioration 

 Plaintiff argues that because the Defendant Vessel is currently being 

maintained in a limited way to preserve against accident and is primarily sitting idle, 

its machinery, equipment and general condition will begin to deteriorate. (Mot at p. 

5.) Plaintiff further argues that the value of the Defendant Vessel will deteriorate 

commensurately with its condition. (Id.) As provided in this Court’s Order 

Appointing Substitute Custodian and Authorizing Movement of Defendant Vessel, 

Plaintiff, as substitute custodian, is in charge of providing general custodial services, 

including periodic inspections of the exterior and interior of the boat for evidence of 

water leaks, ensuring safe mooring, and providing such services that “are deemed 

reasonably prudent and necessary to preserve and protect the Defendant Vessel.” 

(ECF No. 6 at ¶ 4.) However, the Defendant Vessel’s engines and other machinery 

are only to be operated as directed by the Court, which it has not done to date. (Id.) 

 Plaintiff’s expert, Ray Jones, states that, while he has not personally inspected 

the Defendant Vessel, based on his experience he believes that if the Defendant 

Vessel “is permitted to lay idle without routine maintenance and without proper layup preparations, the vessel’s engine might (even if now operational) rust and freeze 

up, necessitating costly overhaul.” (ECF No. 16-3 at ¶ 3.) He further believes that 

“electric and electronic equipment aboard the Defendant Vessel is susceptible to 

inevitable corrosion, rust and general deterioration.” (Id.) Given the arrested, and 

therefore “distressed,” nature of the Defendant Vessel, Mr. Jones believes the fair 

market value of the Defendant Vessel at public United States Marshal auction will 

likely not exceed $12,000. (Id. at ¶ 4.) He further opines that it is “unavoidable” 

that the Defendant Vessel will “deteriorate in condition and value as she sits idle in 

salt water, and that the longer the vessel remains under arrest and therefore idle the 

Case 3:14-cv-01215-BAS-BGS Document 18 Filed 03/16/15 Page 5 of 10
 – 6 – 14-cv-1215 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

greater the deterioration will be.” (Id. at ¶ 5.) 

 While the Court has not been presented with any evidence the Defendant 

Vessel has in fact deteriorated, the Court finds that the Defendant Vessel is liable to 

deterioration or injury if it remains arrested during the pendency of this action. See

Merchants Nat’l Bank of Mobile, 663 F.2d at 1342 (finding district court’s 

assessment the subject vessels were liable to deterioration or injury by being 

detained in custody was not clearly erroneous upon being presented with expert 

evidence suggesting vessels without routine maintenance might rust and freeze 

necessitating costly overhaul, and the electric equipment is susceptible to corrosion, 

rust, and general deterioration). 

 2. Unreasonable Delay in Securing Release 

 Plaintiff argues there has been unreasonable delay in securing the release of 

the Defendant Vessel. The Court agrees. As Plaintiff discusses, the Supplemental 

Rules for Admiralty or Maritime Claims of the Federal Rules of Civil Procedure 

provide procedures for the release of an arrested vessel and for a speedy hearing on 

behalf of any interested person who wants the arrested vessel released, but “no 

person or entity has answered or otherwise responded to the Verified Complaint, 

posted or sought to post security for the release of the vessel, or requested a prompt 

hearing under Supplemental Admiralty Rule E(4)(f).” (Mot at pp. 6-7.) 

 While a motion for interlocutory sale generally should not be granted unless 

the court has permitted defendants sufficient time to provide a bond to secure the 

vessel’s release, the Court finds that sufficient time has passed. See Vineyard Bank 

v. M/Y Elizabeth I, U.S.C.G. Official No. 1130283, No. 08cv2044, 2009 WL 799304, 

at *2 (S.D. Cal. Mar. 23, 2009); see also Bank of Rio Vista v. Vessel Captain Pete, 

No. C 04-2736CW, 2004 WL 2330704, at *2 (N.D. Cal. Oct.14, 2004) (“As a 

general rule, defendants are given at least four months to bond a vessel absent some 

other considerations.” (quoting United States v. F/V Fortune, 1987 WL 27274, at *1 

(D. Alaska April 14, 1987)); Ferrous Fin. Servs. Co., 567 F. Supp. at 401 (finding in 

Case 3:14-cv-01215-BAS-BGS Document 18 Filed 03/16/15 Page 6 of 10
 – 7 – 14-cv-1215 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

case, where defendants appeared in the action, that no attempt to secure release of 

vessel within four months since arrest was unreasonable delay); Merchants Nat’l 

Bank of Mobile, 663 F.2d at 1341-42 (failure to secure the release of the vessel eight 

months after arrest constitutes unreasonable delay). Here, the Defendant Vessel was 

arrested on June 20, 2014, nearly nine months ago. Default has been entered and no 

person claiming an interest in the vessel has come forward or attempted to secure its 

release. Accordingly, the Court finds there has been an unreasonable delay in 

securing the release of the Defendant Vessel. 

 3. Excessive or Disproportionate Maintenance Expense 

 Maintenance expenses of several thousand dollars per month, particularly 

where a defendant has made no attempt to answer the complaint or secure the 

vessel’s release, are excessive and disproportionate. Vineyard Bank, 2009 WL 

799304 at *2; see also Merchants Nat. Bank of Mobile, 663 F.2d at 1342 

(interlocutory sale warranted where vessel accrued $17,000 per month in 

maintenance and insurance fees and claimants delayed eight months after seizure in 

attempting to secure release); see also Ferrous Fin. Servs. Co., 567 F.Supp. at 401 

(W.D. Wash. 1983) (finding expense excessive and delay unreasonable where cost 

of maintaining the vessel was $166,000 per year and defendant made no attempt to 

secure its release for four months). 

 Mr. Jones estimates the fair market value of the Defendant Vessel at public 

United States Marshal auction will likely not exceed $12,000. (ECF No. 16-3 at ¶ 

4.) As of October 2014, substitute custodian fees totaled more than $6,000, and they 

have continued to grow. (Mot. at p. 8.) Accordingly, the Court finds that the 

expense of keeping the Defendant Vessel is disproportionate to its value. 

 Taking into account the disproportionate cost of maintaining the Defendant 

Vessel, the unreasonable delay in securing its release, and the likelihood of 

deterioration, the Court finds interlocutory sale warranted under Rule E(9)(a)(i) and 

GRANTS Plaintiff’s motion for interlocutory sale of the Defendant Vessel. 

Case 3:14-cv-01215-BAS-BGS Document 18 Filed 03/16/15 Page 7 of 10
 – 8 – 14-cv-1215 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 B. Credit Bid 

 Plaintiff further requests that the Court authorize Plaintiff to credit bid at the 

auction of the Defendant Vessel. (Mot at p. 10.) Local Admiralty Rule E.1(e)(2) 

provides: 

When the court determines on the merits that a plaintiff or plaintiff in 

intervention has a valid claim senior in priority to all other parties, 

that plaintiff in intervention foreclosing a properly recorded and 

endorsed preferred mortgage on, or other valid security interest in the 

vessel may bid, without payment of cash, certified check or cashier’s 

check, up to the total amount of the secured indebtedness as 

established by affidavit filed and served on all other parties no later 

than seven (7) days prior to the date of sale. 

Civ. L.R. E.1(e)(2). Plaintiff argues that no party apart from Plaintiff has asserted 

any maritime lien claim against the Defendant Vessel; therefore, “as the only

maritime lien claimant, Plaintiff’s claim is, by definition, senior to all other claims in 

this action.” (Mot at p. 10.) 

 Accordingly, Plaintiff seeks to bid an amount up to the lien amount attested to 

under oath in the Verified Complaint ($10,949.81), plus its actual and demonstrable 

costs of suit, including United States Marshal, substitute custodian and other 

custodia legis expenses, to be calculated through the date of the vessel sale at the 

rates provided by this Court’s Order Appointing Substitute Custodian and 

Authorizing Movement of Defendant Vessel. (Id.) Provided that Plaintiff complies 

with Local Admiralty Rule E.1(e)(2) by establishing the total amount of the secured 

indebtedness by affidavit filed and served on all other parties no later than seven (7) 

days prior to the date of the sale, the Court GRANTS Plaintiff’s request to credit bid 

at the auction of Defendant Vessel. See Bank of Rio Vista, 2004 WL 2330704, at *2-

3. 

/// 

/// 

/// 

Case 3:14-cv-01215-BAS-BGS Document 18 Filed 03/16/15 Page 8 of 10
 – 9 – 14-cv-1215 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

III. CONCLUSION & ORDER 

For the reasons stated above, Plaintiff’s motion for interlocutory sale and 

authorization to credit bid is GRANTED (ECF No. 16). Accordingly, IT IS 

HEREBY ORDERED that: 

1. The United States Marshal be and is hereby directed and empowered to 

sell the Defendant Vessel, her engines, tackle, accessories, furnishings and 

appurtenances, as is, where is, at public sale at the first available time and date, after 

having caused notice of said sale to be published at least seven (7) days immediately 

before the date of sale, as required by Local Admiralty Rule E.1(e)(1). Such notice 

shall specify the date and time of the auction; 

2. Consistent with Local Admiralty Rule E.1(e)(2), such public notice 

shall specify that the last and highest bidder at the sale will be required to deposit 

with the United States Marshal cash, certified check or a cashier’s check in the 

amount of the full purchase price not to exceed $500, and otherwise $500 or ten 

percent (10%) of the bid, whichever is greater, and that the balance, if any, of the 

purchase price shall be paid by certified check or cashier’s check before 

confirmation of the sale or within three days of dismissal of any opposition which 

may have been filed, exclusive of Saturdays, Sundays and legal holidays; 

3. Any proceeds of said sale shall be held by it or deposited by the United 

States Marshal in the Registry of this Court, pending further Order of this Court; 

4. As Plaintiff is the only party in this action for purposes of Local 

Admiralty Rule C.1(e)(2) and as it has demonstrated the seniority of its lien, 

Plaintiff shall be authorized to credit bid at the public auction of the Defendant 

Vessel without cash in the amount attested on under oath in its Verified Complaint, 

($10,949.81, through February 12, 2014), plus actual and demonstrable costs of suit 

accruing through the date of the auction of the Defendant Vessel, including United 

States Marshal fees, Substitute Custodian fees and other custodia legis expenses, 

costs to insure the Defendant Vessel, prejudgment interest and the fee paid to the 

Case 3:14-cv-01215-BAS-BGS Document 18 Filed 03/16/15 Page 9 of 10
 – 10 – 14-cv-1215 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Clerk of the Court to file the Verified Complaint, but not including attorneys’ fees, 

or such other total established by the affidavit required by Local Admiralty Rule 

E.1(e)(2); 

5. Should Plaintiff elect to credit bid, it shall file and serve all parties with 

its affidavit establishing the total amount of its secured indebtedness no later than 

seven (7) days prior to the date of the sale of the Defendant Vessel, as required by 

Local Admiralty Rule E.1(e)(2); and 

6. Pursuant to Local Supplemental Admiralty Rule E.1(e)(2), that if 

within three days of the auction date, exclusive of Saturdays, Sundays, and legal 

holidays, no written objection to the sale of the Defendant Vessel is filed, the sale 

shall stand confirmed as of course, without the necessity of any affirmative action 

thereon by a judge, except that no sale shall stand confirmed until the buyer has 

complied fully with the terms of the purchase. 

IT IS SO ORDERED. 

DATED: March 16, 2015 

Case 3:14-cv-01215-BAS-BGS Document 18 Filed 03/16/15 Page 10 of 10