Driscoll Mission Bay, LLC v. M/Y New Horizon, U.S.C.G. Official No.1102966

CourtDistrict Court, S.D. California
DecidedJanuary 7, 2025
Docket3:24-cv-01396
StatusUnknown

This text of Driscoll Mission Bay, LLC v. M/Y New Horizon, U.S.C.G. Official No.1102966 (Driscoll Mission Bay, LLC v. M/Y New Horizon, U.S.C.G. Official No.1102966) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Driscoll Mission Bay, LLC v. M/Y New Horizon, U.S.C.G. Official No.1102966, (S.D. Cal. 2025).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DRISCOLL MISSION BAY, LLC, dba Case No.: 3:24-cv-1396-JES-SBC DRISCOLL MISSION BAY, a California 12 Limited Liability Company, IN ADMIRALTY 13 Plaintiff, 14 ORDER DIRECTING VESSEL SALE v. AND AUTHORIZING CREDIT BID 15 M/Y NEW HORIZON, U.S.C.G. Official 16 No. 1102966, a 37.5-Foot Carver Motor [ECF No. 15] Yacht, AND ALL OF HER ENGINES, 17 TACKLE, ACCESSORIES, 18 EQUIPMENT, FURNISHINGS AND APPURTENANCES, in rem, 19 Defendant. 20

21 ORDER DIRECTING VESSEL SALE AND AUTHORIZING CREDIT BID 22 Pending before the Court is Plaintiff DRISCOLL MISSION BAY, LLC’s Motion 23 for Interlocutory Vessel Sale and Authorization to Credit Bid ("Motion for Vessel Sale"). 24 For the reasons stated below, the Court GRANTS the unopposed Motion and VACATES 25 the hearing set for January 15, 2025. 26 / / / 27 / / / 28 1 I. BACKGROUND 2 A. Factual Background 3 On February 13, 2018, Michael J. Rauch executed a Maritime Contract for Private 4 Wharfage (the “Wharfage Contract”). Verified Complaint (“VC”) at ¶ 5. On February 23, 5 2018, a representative of Plaintiff also executed the Wharfage Contract, pursuant to which 6 Michael J. Rauch berthed the Defendant Vessel in a slip at Plaintiff’s marina. Id. 7 Pursuant to Paragraph 6 of the Wharfage Contract, the charges and fees specified 8 therein were due and payable each month on the first day. VC at ¶ 6. 9 Plaintiff received a payment due under the Wharfage Contract on or about July 5, 10 2023. All payments thereafter ceased, and the account for the Defendant Vessel fell 11 progressively into arrears. No part of such arrearages has been paid to date. VC at ¶ 7. 12 Plaintiff is informed and believes that Michael J. Rauch passed away. VC at ¶ 8. On 13 October 16, 2023, Austin Rauch, who Plaintiff understands is Michael J. Rauch’s son, 14 advised Plaintiff’s Marina Manager in an email that: “I wanted to let you know we [Austin 15 Rauch and his brother Patrick Rauch] are comfortable letting the boat go through the lean 16 [sic] process,” and he thanked the Marina Manager “for your help navigating through this 17 process [and] everything you have done for us thus far.” Id. 18 On March 15, 2024, in a final attempt to avoid bringing this vessel arrest action, 19 Plaintiff’s attorney sent the Estate of Michael J. Rauch a letter advising that due to a failure 20 to pay wharfage fees the Defendant Vessel was subject to arrest pursuant to the 21 Commercial Instruments and Maritime Liens Act and Supplemental Admiralty Rules C 22 and E, and offering an opportunity to pay the arrearages and take possession of the 23 Defendant Vessel. VC at ¶ 9. Austin Rauch subsequently called Plaintiff’s attorney and 24 reiterated that the Estate was not interested in paying the arrearages and taking possession 25 of the Defendant Vessel. Id. The above-described letter was also sent to Ms. Audra Rivera, 26 who Plaintiff understands was a friend of Michael J. Rauch, and who might claim an 27 interest in the Defendant Vessel. Id. She did not respond to counsel’s letter. Id. 28 1 Wharfage fees that are due pursuant to the Wharfage Contract and which remained 2 unpaid, calculated through August 4, 2024, total a sum of not less than $58,761.50. VC at 3 ¶ 10. 4 Plaintiff avers in its Verified Complaint that it provided wharfage services in a 5 workmanlike manner, consistent with the requirements of the Wharfage Contract and the 6 prevailing industry standards in San Diego, and it has otherwise fully satisfied all 7 contractual obligations required of it as a maritime services provider. VC at ¶ 11. 8 Notwithstanding Plaintiff’s demands for payment of monies due and owing for 9 services provided for the benefit of the Defendant Vessel, the Defendant Vessel and her 10 owner failed to bring the account current and satisfy Plaintiff’s maritime "necessaries" lien. 11 VC at ¶ 12. 12 The statutory maritime law confers a maritime lien in favor of those who provide 13 necessaries for the benefit of a vessel. See, 46 U.S.C. § 31342(a), which provides that, apart 14 from public vessels, "a person providing necessaries to a vessel on the order of the owner 15 or a person authorized by the owner - (1) has a maritime lien on the vessel; and (2) may 16 bring a civil action in rem to enforce the lien." Pursuant to the General Maritime Law of 17 the United States the provision of vessel wharfage services gives rise to a maritime lien 18 against the vessel to which such services are provided. See, e.g., Ex Parte Easton, 95 U.S. 19 68, 75-77 (1877) ("contract for wharfage is a maritime contract [and a] maritime lien arises 20 against the ship or vessel in favor of the proprietor of the wharf"). Thus, a maritime 21 necessaries lien subsists and encumbers the Defendant Vessel in favor of Plaintiff in an 22 amount of not less than the sum specified in the Verified Complaint, no part of which has 23 been paid by the Defendant Vessel or her owner. VC at ¶ 14. 24 Plaintiff alleges that as a result of the foregoing, it has been damaged in an amount 25 of not less than $58,761.50, plus interest and the costs of suit. VC at ¶ 15. 26 B. Procedural Background 27 On August 6, 2024, Plaintiff filed its Verified Complaint against the Defendant 28 Vessel and all of her engines, tackle, accessories, equipment, furnishings, dinghies and 1 appurtenances, in rem for vessel arrest, interlocutory sale, and money damages for breach 2 of maritime contract, trespass, and quantum meruit. ECF No. 1. On August 13, 2024, this 3 Court issued Orders authorizing the arrest of the Defendant Vessel and appointing Plaintiff 4 as Substitute Custodian. ECF Nos. 6, 7. The default of Defendant Vessel was entered on 5 November 29, 2024. ECF No. 14. Plaintiff filed the instant Motion for Interlocutory Vessel 6 Sale and Authorization to Credit Bid on December 16, 2024. ECF No. 15. 7 II. DISCUSSION 8 A. Interlocutory Sale 9 "The interlocutory sale of a vessel is not a deprivation of property but rather a 10 necessary substitution of the proceeds of the sale, with all of the constitutional safeguards 11 necessitated by the in rem process." Ferrous Fin. Servs. Co. v. O/S Arctic Producer, 567 12 F. Supp. 400, 401 (W.D. Wash. 1983). The Federal Rules of Civil Procedure Supplemental 13 Rules for Admiralty or Maritime Claims provide that upon application of a party having 14 custody of the subject property, the Court may order the property sold if the property is 15 "liable to deterioration" while in custody pending the action, "there is an unreasonable 16 delay in securing the release of the property," or if "the expense of keeping the property is 17 excessive or disproportionate." Fed. R. Civ. P. Supp. R. E(9)(a).1. The applicant is required 18 to satisfy only one of the three listed criteria to justify an interlocutory sale. California 19 Yacht Marina-Chula Vista, LLC v. S/V OPILY, No. 14-cv-01215-BAS(BGS), 2015 WL 20 1197540, at *2 (S.D. Cal. Mar. 16, 2015) (citing Merchants Nat'l Bank of Mobile v. Dredge 21 Gen. G. L. Gillespie, 663 F.2d 1338, 1341 (5th Cir. 1981)). Plaintiff moves for 22 interlocutory sale on all three grounds. See Motion for Vessel sale at 6-13. 23 Plaintiff first argues that as the Defendant Vessel's machinery, equipment and 24 general condition deteriorate while in custody, her value is commensurately decreasing. 25 Motion for Vessel sale at 7.

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Cite This Page — Counsel Stack

Bluebook (online)
Driscoll Mission Bay, LLC v. M/Y New Horizon, U.S.C.G. Official No.1102966, Counsel Stack Legal Research, https://law.counselstack.com/opinion/driscoll-mission-bay-llc-v-my-new-horizon-uscg-official-no1102966-casd-2025.