IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

FUN CHARTERS, INC., )

 )

Plaintiff, )

)

v. ) CIVIL ACTION 14-0263-WS-M

 )

The Vessel SHADY LADY, )

Official No. 681969, her engines, etc., )

in rem, )

 )

Defendant. )

ORDER

This matter comes before the Court on plaintiff’s Motion for Default Judgment (doc. 34). 

After receiving notice of the Motion (see doc. 35), potential claimants Adrenaline Charters, LLC 

and Edward Sims have elected to remain silent. The Motion, as to which no opposition has been 

filed, is now ripe.

I. Procedural History.

Plaintiff, Fun Charters, Inc., filed its Complaint (doc. 1) against the Vessel SHADY 

LADY, U.S. Official Number 681969, her engines, etc., in rem (the “Vessel”), on June 9, 2014. 

Well-pleaded factual allegations of the Complaint reflect that the Vessel’s owner, nonparty 

Adrenaline Charters, LLC, became indebted to Fun Charters in December 2012 pursuant to a 

Promissory Note secured by a First Preferred Ship Mortgage on the Vessel. The Complaint 

further alleged that Adrenaline defaulted on its indebtedness to Fun Charters, and that it also 

breached its obligations as to the Vessel pursuant to the Preferred Ship Mortgage. On the

strength of these allegations, Fun Charters requested that the Vessel be condemned and sold in 

these proceedings to pay off the Note’s unpaid balance (which totaled $129,195.20 in principal 

and interest as of the filing of the Complaint); plus an additional $25,762.66 in expenditures

incurred by Fun Charters upon Adrenaline’s failure to fulfill Vessel-related obligations under the 

Preferred Ship Mortgage; plus interest accruing at a per diem rate of $21.23; plus expenses and 

attorney’s fees.

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The Clerk’s Office issued a Warrant for Arrest in Rem (doc. 7), after which the U.S. 

Marshals Service arrested the Vessel on June 12, 2014 and placed it in possession of a substitute 

custodian. (See doc. 11.) Actual notice of this action was given to Adrenaline and all lien 

claimants who had filed notices of lien; moreover, public notice was published in The PressRegister. (See doc. 16.) Neither Adrenaline nor any other claimant filed a verified statement of

claim pursuant to Supplemental Rule C(6)(A), or otherwise took meaningful action to defend 

against Fun Charters’ in rem claims against the Vessel. On September 16, 2014, the Court 

entered a Decree Ordering Sale of Vessel (doc. 24) providing for the sale of the Vessel at public 

auction by the U.S. Marshals Service. Such auction took place on October 22, 2014, with Fun 

Charters submitting the highest (and only) bid in the sum of $70,000. (See doc. 28.) Pursuant to 

the Order of Sale, Fun Charters was authorized to credit bid for the Vessel, up to a maximum 

amount of $184,631.50, without being required to deliver cash or earnest money to the Marshal.

On December 19, 2014, the undersigned entered an Order (doc. 31) granting plaintiff’s 

Motion for Default and directing the Clerk of Court to enter a Clerk’s Entry of Default against 

the Vessel pursuant to Rule 55(a), Fed.R.Civ.P., for failure to appear or otherwise defend. A 

copy of the December 19 Order was served on Adrenaline Charters, LLC; however, despite a full 

and fair opportunity, that entity has not come forward to oppose or object to these default 

proceedings against the Vessel. Accordingly, on January 30, 2015, Fun Charters filed its Motion 

for Default Judgment (doc. 34), seeking entry of default judgment against the Vessel in the 

amount of $188,954.48. Fun Charters furnished notice of its Motion to Adrenaline Charters, but 

that entity has neither appeared nor contested entry of default judgment against the Vessel in the 

specified amount.

II. Propriety of Entry of Default Judgment.

In this Circuit, “there is a strong policy of determining cases on their merits and we 

therefore view defaults with disfavor.” In re Worldwide Web Systems, Inc., 328 F.3d 1291, 1295 

(11th Cir. 2003); see also Varnes v. Local 91, Glass Bottle Blowers Ass’n of U.S. and Canada, 

674 F.2d 1365, 1369 (11th Cir. 1982) (“Since this case involves a default judgment there must be 

strict compliance with the legal prerequisites establishing the court’s power to render the 

judgment.”). Nonetheless, it is well established that a “district court has the authority to enter 

default judgment for failure ... to comply with its orders or rules of procedure.” Wahl v. McIver, 

773 F.2d 1169, 1174 (11th Cir. 1985).

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Where, as here, defendant and putative claimants have failed to appear or otherwise 

respond to a pending lawsuit for more than eight months, entry of default judgment is 

appropriate. Indeed, Rule 55 itself provides for entry of default and default judgment where a 

defendant “has failed to plead or otherwise defend.” Rule 55(a), Fed.R.Civ.P. In a variety of 

contexts, courts have entered default judgments against defendants who have failed to appear and 

defend in a timely manner following proper service of process.

1 In short, “[w]hile modern courts 

do not favor default judgments, they are certainly appropriate when the adversary process has 

been halted because of an essentially unresponsive party.” Flynn v. Angelucci Bros. & Sons, 

Inc., 448 F. Supp.2d 193, 195 (D.D.C. 2006) (citation omitted). That is precisely what has 

happened here. Despite service of process on the Vessel (and notice to all known claimants, 

including Adrenaline Charters) in June 2014, no claims were made and no entity or person 

stepped forward to defend against this action.

That said, a defendant’s failure to appear and a Clerk’s Entry of Default do not 

automatically entitle a plaintiff to a default judgment in the requested (or any) amount. After all,

a default is not “an absolute confession by the defendant of his liability and of the plaintiff’s 

right to recover,” but is instead merely “an admission of the facts cited in the Complaint, which 

by themselves may or may not be sufficient to establish a defendant’s liability.” Pitts ex rel. 

Pitts v. Seneca Sports, Inc., 321 F. Supp.2d 1353, 1357 (S.D. Ga. 2004); see also Nishimatsu 

Const. Co. v. Houston Nat’l Bank, 515 F.2d 1200, 1204 (5th Cir. 1975) (similar); Cotton States 

Mut. Ins. Co. v. Sellars, 2008 WL 4601015, *5 (M.D. Ala. Oct. 15, 2008) (“the failure to defend 

does not automatically entitle a plaintiff to recover”); Descent v. Kolitsidas, 396 F. Supp.2d 

 1 See, e.g., In re Knight, 833 F.2d 1515, 1516 (11th Cir. 1987) (“Where a party 

offers no good reason for the late filing of its answer, entry of default judgment against that party 

is appropriate.”); Matter of Dierschke, 975 F.2d 181, 184 (5th Cir. 1992) (“when the court finds 

an intentional failure of responsive pleadings there need be no other finding” to justify default 

judgment); PNCEF, LLC v. Hendricks Bldg. Supply LLC, 740 F. Supp.2d 1287, 1290 (S.D. Ala. 

2010) (“Where, as here, a defendant has failed to appear or otherwise acknowledge the pendency 

of a lawsuit for more than three months after being served, entry of default judgment is 

appropriate.”); Kidd v. Andrews, 340 F. Supp.2d 333, 338 (W.D.N.Y. 2004) (entering default 

judgment against defendant who failed to answer or move against complaint for nearly three 

months); Viveros v. Nationwide Janitorial Ass'n, Inc., 200 F.R.D. 681, 684 (N.D. Ga. 2000) 

(entering default judgment against counterclaim defendant who had failed to answer or otherwise 

respond within time provided by Rule 12(a)(2)).

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1315, 1316 (M.D. Fla. 2005) (“the defendants’ default notwithstanding, the plaintiff is entitled to 

a default judgment only if the complaint states a claim for relief”). Stated differently, “a default 

judgment cannot stand on a complaint that fails to state a claim.” Chudasama v. Mazda Motor 

Corp., 123 F.3d 1353, 1370 n.41 (11th Cir. 1997); see also Eagle Hosp. Physicians, LLC v. SRG 

Consulting, Inc., 561 F.3d 1298, 1307 (11th Cir. 2009) (“A default defendant may, on appeal, 

challenge the sufficiency of the complaint, even if he may not challenge the sufficiency of the 

proof.”).

The threshold question, then, is whether the Complaint states a viable claim for relief. 

The Court readily concludes that it does. After all, the well-pleaded factual allegations of the 

Complaint (which are deemed admitted pursuant to Rule 55) identify in extensive detail the 

subject Promissory Note, Adrenaline’s default of same, plaintiff’s security interest in the Vessel 

pursuant to the First Preferred Ship Mortgage, Adrenaline’s breach of its obligations under said 

Preferred Ship Mortgage, and plaintiff’s contractual right to recover against the Vessel, in rem, 

pursuant to the express terms of the Promissory Note and the Preferred Ship Mortgage.

Because the Complaint is sufficient to state a claim against the Vessel, the Court finds 

that entry of default judgment is appropriate pursuant to Rule 55, given the failure to appear after 

service of process and the sufficiency of the well-pleaded factual allegations of the Complaint 

(which are now deemed admitted) to establish liability of the defendant Vessel to plaintiff.

III. Amount of Damages.

Notwithstanding the propriety of default judgment, it remains incumbent on Fun Charters 

to prove damages. “While well-pleaded facts in the complaint are deemed admitted, plaintiffs’ 

allegations relating to the amount of damages are not admitted by virtue of default; rather, the 

court must determine both the amount and character of damages.” Virgin Records America, Inc. 

v. Lacey, 510 F. Supp.2d 588, 593 n.5 (S.D. Ala. 2007); see also Eastern Elec. Corp. of New 

Jersey v. Shoemaker Const. Co., 652 F. Supp.2d 599, 605 (E.D. Pa. 2009) (“A party’s default 

does not suggest that the party has admitted the amount of damages that the moving party 

seeks.”). Even in the default judgment context, “[a] court has an obligation to assure that there is 

a legitimate basis for any damage award it enters.” Anheuser Busch, Inc. v. Philpot, 317 F.3d 

1264, 1266 (11th Cir. 2003); see also Adolph Coors Co. v. Movement Against Racism and the 

Klan, 777 F.2d 1538, 1544 (11th Cir. 1985) (explaining that damages may be awarded on default 

judgment only if the record adequately reflects the basis for award); Everyday Learning Corp. v. 

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Larson, 242 F.3d 815, 818 (8th Cir. 2001) (affirming lower court’s decision not to award 

damages on default judgment, where requested damages were “speculative and not proven by a 

fair preponderance of the evidence”); Natures Way Marine, LLC v. North America Materials, 

Inc., 2008 WL 1776946, *1 (S.D. Ala. Apr. 16, 2008) (in default judgment setting, district court 

has obligation “not to award damages that are uncertain or speculative”).2 

Fun Charters requests that the default judgment entered against the Vessel include the 

following elements of damages: (i) court costs and expenses of $3,953.80; (ii) unpaid principal 

debt and 5% interest on the note through August 10, 2014, totaling $130,787.45; (iii) plaintiff’s 

advances for Vessel insurance, repairs, and the like, pursuant to the Preferred Ship Mortgage, in 

the amount of $25,762.26; and (iv) legal fees and costs through August 10, 2014, in the amount 

of $28,450.97. Analysis of these claimed components of damages requires both examination of 

whether the subject agreements imposed a contractual obligation on Adrenaline (secured by the 

Preferred Ship Mortgage and hence recoverable against the Vessel) to pay same, and scrutiny of 

Fun Charters’ proof that such damages were actually incurred.

 2 In that regard, the Eleventh Circuit has explained that “[f]ederal law similarly 

requires a judicial determination of damages absent a factual basis in the record,” even where the 

defendant is in default. Anheuser Busch, 317 F.3d at 1266. Ordinarily, unless a plaintiff’s claim 

against a defaulting defendant is for a sum certain, the law “requires the district court to hold an 

evidentiary hearing” to fix the amount of damages. S.E.C. v. Smyth, 420 F.3d 1225, 1231 (11th

Cir. 2005). However, no hearing is needed “when the district court already has a wealth of 

evidence from the party requesting the hearing, such that any additional evidence would be truly 

unnecessary to a fully informed determination of damages.” Id. at 1232 n.13; see also Flynn v. 

Extreme Granite, Inc., 671 F. Supp.2d 157, 160 (D.D.C. 2009) (district court is not required to 

hold hearing to fix damages in default judgment context as long as it ensures there is a basis for 

damages specified); Eastern Elec. Corp., 652 F. Supp.2d at 605 (“In considering the amount of 

damages ..., the Court may make its determination by conducting a hearing or by receiving 

detailed affidavits from the claimant.”); Virgin Records, 510 F. Supp.2d at 593-94 (“Where the 

amount of damages sought is a sum certain, or where an adequate record has been made via 

affidavits and documentary evidence to show ... damages, no evidentiary hearing is required.”); 

Natures Way Marine, LLC v. North American Materials, Inc., 2008 WL 801702, *3 (S.D. Ala. 

Mar. 24, 2008) (“Although the trial court must make determinations as to the amount and 

character of damages, it is not necessary to conduct an evidentiary hearing to fix damages if the 

amounts sought by plaintiff are adequately supported by supporting affidavits and other 

documentation.”). Because the requisite “wealth of evidence” has been presented here, no 

damages hearing need be convened.

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As an initial matter, the Preferred Ship Mortgage provides that “[a]ny advances and 

expenditures which Lender, in Lender’s discretion, may make for repairs, insurance, payment of 

liens or other claims, defense of suit or for any purposes whatsoever related hereto, shall be 

repaid by Mortgagor on demand, with interest at the rate provided for in the note that this 

mortgage secures, and until so paid, shall be a debt due from Mortgagor to Lender secured by the 

lien hereof.” (Doc. 1, Exh. B, at 8.) Plaintiff has adequately shown that it advanced the total 

sum of $25,762.26 for insurance, repairs and other owner-related obligations relating to the 

Vessel. (Fitzsimmons Aff. (doc. 17, Exh. A), ¶ 6.) Because these advances are recoverable 

against the Vessel under the applicable contract language, and because the record shows that 

such expenditures were actually made by Fun Charters, the default judgment properly should 

include the sum of $25,762.26, for Vessel-related advances for insurance, repairs and the like, all 

secured by the Preferred Ship Mortgage. That figure will also be subject to interest accrual at the 

rate specified in the Promissory Note.

Next, the Court finds that the principal and accrued interest charges claimed by Fun 

Charters are properly included as part of the default judgment award. Indeed, the First Extended 

and Amended Promissory Note and the First Supplement to First Preferred Ship Mortgage work 

hand in hand to establish an indebtedness (later assumed by Adrenaline) to Fun Charters for a 

principal amount of $142,792.09, as of December 3, 2012, plus “[i]nterest on the unpaid 

principal balance from time to time outstanding, at the rate of five percent (5%) per annum.” 

(Doc. 1, Exh. C, at 1.) The First Supplement to First Preferred Ship Mortgage provided that the 

Vessel would secure this indebtedness, and reiterated both the principal amount owed and the 

5% interest clause. (Doc. 1, Exh. D, at 2.) Plaintiff’s evidence is that the unpaid principal and 

interest owed on the Amended Promissory Note (as well as the interest on the above-specified 

advances), calculated at 5% per annum through August 10, 2014, equals $130,787.45. 

(Fitzsimmons Aff., ¶ 6; doc. 34, ¶ 7.)3 That sum will be included in the default judgment award.

Plaintiff also seeks recovery of certain expenses incurred in connection with the arrest 

and sale of the Vessel. As discussed infra, both the Mortgage and the Assumption Agreement 

 3 The Fitzsimmons Affidavit includes interest calculations only through June 6, 

2014, but accurately reflects a per diem accrual of $21.23 (which is 5% per annum on the 

$154,957.86 in total unpaid sums due under the Note and advances secured by the Mortgage).

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provided that all costs of collection and enforcement were recoverable by Fun Charters. The 

collection costs claimed by Fun Charters include the $400 federal court filing fee, U.S. Marshals 

Service expenses and sale commission totaling $2,452.84, and newspaper advertising/publication 

fees of $1,100.96. Payment of the civil filing fee is a matter of record. (See doc. 1.) Likewise, 

the Marshals Service expenses are appropriately documented. (Doc. 34, Exh. A.) However, 

plaintiff has presented no information, evidence or exhibits to document the newspaper 

advertising fees; therefore, those expenses are disallowed for want of adequate substantiation. 

As such, the default judgment award will include the sum of $2,852.84 for court filing fee and 

U.S. Marshals’ expenses incurred by Fun Charters in enforcing its rights under the Preferred 

Ship Mortgage vis a vis the Vessel.

Finally, plaintiff asks that the default judgment award include damages for legal fees and 

costs of enforcing the Mortgage. There is ample contractual support for that argument. After all,

the Preferred Ship Mortgage expressly provided that “Mortgagor agrees to pay all costs of 

collecting, or attempting to collect, the indebtedness secured by this mortgage, including a 

reasonable attorney’s fee.” (Doc. 1, Exh. B, at 7.) Likewise, in an Assumption Agreement 

entered into between Adrenaline and Fun Charters in December 2012, Adrenaline assumed 

responsibility for the Promissory Note and the Preferred Ship Mortgage, both as amended and 

supplemented, and agreed that all such terms and provisions were binding on it. As part and 

parcel of that Assumption Agreement, Adrenaline expressly agreed that “if this Agreement is 

placed in the hands of an attorney for the purpose of enforcing the same,” then Adrenaline would 

“pay all costs of collecting or enforcing this Agreement, including a reasonable attorney’s fee.” 

(Doc. 1, Exh. E, at 3.) It is thus appropriate to make allowance for reasonable attorney’s fees 

and costs in the default judgment. 

Billing summaries filed by plaintiff reflect that Fun Charters was billed $27,197.50 in 

legal fees and $1,253.47 in unspecified “expense advances.” (Fitzsimmons Aff., at Exh. A.) 

Although it would have been vastly preferable (and is typically required) for plaintiff to submit 

itemized invoices to prove up those fees, the Court is satisfied on this record of the 

reasonableness of the attorney’s fees incurred by Fun Charters in enforcing the Preferred Ship 

Mortgage in this case, as well as related bankruptcy proceedings in which Adrenaline’s owner, 

Eddie Sims, unsuccessfully attempted to bring the Vessel within the ambit of Chapter 13 

protection. (See Sharp Aff. (doc. 17, Exh. B).) The default judgment award will, therefore, 

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include $27,197.50 in attorney’s fees. The request for expenses advanced by counsel in the 

amount of $1,253.47 is disallowed. The record contains no information as to what those costs 

and expenses might be, much less whether they were reasonably incurred. More importantly, the 

Court cannot discern on the facts and exhibits provided whether the legal costs figure touted by 

Fun Charters double-counts expenses already awarded for filing fee and U.S. Marshals’ expenses 

(i.e., the $2,852.84 sum referenced supra). Plaintiff has not satisfied its burden as to this element 

of damages.

In short, then, plaintiff is entitled to a damages award against defendant in the total 

amount of $186,600.05, consisting of $25,762.26 for advances for Vessel-related insurance, 

repairs and so on; $130,787.45 in due and owing principal and interest under the promissory note 

secured by the Mortgage; $2,852.84 for court-related costs and expenses; and $27,197.50 for 

reasonable attorney’s fees incurred by Fun Charters in enforcing the Note and Preferred Ship 

Mortgage.

IV. Conclusion.

For all of the foregoing reasons, it is ordered as follows:

1. Plaintiff’s Motion for Default Judgment (doc. 34) is granted in part, and denied 

in part;

2. A default judgment will be entered in favor of plaintiff, Fun Charters, Inc., and 

against defendant, the Vessel SHADY LADY, Official No. 681969, her engines, 

etc., in rem, upon plaintiff’s claim on the First Preferred Ship Mortgage held by 

plaintiff on the Vessel in the amount of $186,600.05, all being secured by said 

Mortgage; and

3. Inasmuch as this Order and the accompanying Default Judgment fully and finally 

adjudicate all claims and issues joined in this action, the Clerk of Court is directed 

to close this civil case file for statistical and administrative purposes.

DONE and ORDERED this 25th day of February, 2015.

s/ WILLIAM H. STEELE 

CHIEF UNITED STATES DISTRICT JUDGE

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