MONTE C. RICHARDSON, Magistrate Judge.
On March 28, 2016, Plaintiff filed a non-verified Complaint against Northcliffe Ocean Shipping & Trading Co., Inc. ("NOSAT"), in personam, and the Motor Tug RIO BRAVO and the Barge BIG MAX, in rem, pursuant to 28 U.S.C. § 1333 and Fed.R.Civ.P. 9(h), asserting maritime and admiralty jurisdiction.
On August 17, 2016, the Court denied without prejudice Plaintiff's first motion for issuance of arrest warrants for the Tug RIO BRAVO and the Barge BIG MAX, because the Second Amended Complaint was not verified as required by the Local Admiralty Rules. (Doc. 27.) On August 22, 2016, Plaintiff filed a Verified Second Amended Complaint (Doc. 29) and a second motion for issuance of arrest warrants, which the Court granted on August 23, 2016 (Docs. 31, 32, 34). On August 26, 2016, Plaintiff Cargotec, Defendants RIO BRAVO and BIG MAX, and their owner Mobro, filed a Stipulation for release of the arrest warrants. (Doc. 36.) The Stipulation indicated that Plaintiff agreed to accept a bond in the sum of $698,740.00 to forego the arrest of the vessels. (Id.) The Stipulation provided in relevant part:
(Id. at ¶ 5-8.) Although the proposed order releasing the arrest warrants was attached to the Stipulation, it was noted that the order should not be entered until a notice was filed that the original bond had been received by Plaintiff. (Doc. 36-2 at 2.)
On August 29, 2016, Plaintiff filed a motion to release the arrest warrants and notified the Court that Plaintiff had received an original bond from Mobro in the sum of $698,740.00. (Doc. 38.) Plaintiff stated that having substituted the bond in place of the vessels, the arrest warrants should be released and "this case it [sic] due to proceed against the vessels as if they had been seized and taken into the possession of the Court." (Id. at 3.) On August 30, 2016, the Court granted the motion for release of arrest warrants to the extent the execution of the warrants was stayed. (Doc. 39.)
On September 6, 2016, NOSAT filed an Answer and Affirmative Defenses to the Verified Second Amended Complaint and an Amended Third-Party Complaint against Kalmar Global, Inc. and Kalmar, USA, Inc. (Doc. 40.) On September 15, 2016, Mobro filed a Claim of Owner as to RIO BRAVO and BIG MAX, entering a special appearance as a Claimant and demanding restitution of the vessels and right to defend this action. (Doc. 41.) On October 5, 2016, the vessels RIO BRAVO and BIG MAX filed an Answer and Affirmative Defenses to the Verified Second Amended Complaint and a Cross-Claim against NOSAT. (Doc. 42.)
On October 7, 2016, Mobro filed the present Motion for Order to Show Cause. (Doc. 44.) On October 11, 2016, the Court took Mobro's Motion for Order to Show Cause under advisement in part and granted it to the extent it scheduled a hearing on same. (Doc. 45.) On October 12, 2016, Plaintiff filed an Objection to Mobro's Motion and a Motion to Deny Without a Hearing Mobro's Motion for Order to Show Cause. (Doc. 47.) At the motion hearing held on October 18, 2016, the Court heard arguments from counsel for Mobro, NOSAT, and Plaintiff pertaining to the alleged procedural deficiencies of Mobro's Motion for Order to Show Cause. (Doc. 54.) This Order will address these alleged deficiencies.
In its Motion for Order to Show Cause filed pursuant to Fed.R.Civ.P. Supplemental Admiralty Rule E(4)(f)
Without addressing the merits of Mobro's Motion for Order to Show Cause, Plaintiff argues that the Motion is procedurally defective and should be denied without a hearing because (1) there are no warrants of arrest to be vacated and there are no vessels in the custody or possession of the U.S. Marshal, (2) the Motion is untimely, (3) the relief requested has been waived, and (4) there has been inadequate time for discovery. The Court will address each of Plaintiff's contentions.
First, Plaintiff argues that Supplemental Rule E(4)(f) applies only when property has been arrested or attached without notice and not when it has been arrested with notice or not arrested at all.
Plaintiff's argument misses the point. The fact that Mobro posted a bond as substitute security in lieu of an arrest makes no difference. The parties here stipulated that the bond "shall stand with the same force and effect as if the Tug `Rio Bravo' and [the] Barge `Big Max' had been seized under warrant of arrest and brought into the possession of the Court[,] . . . that the rights of all parties in this litigation proceeding shall stand and be in all respects as if the vessels had been seized under the warrants of arrest[,] . . . [and that] [t]he bond shall be treated in the same fashion as an undertaking in accordance with Local Admiralty Rule 7.03(e)."
Having agreed to such terms and having made such representations, Plaintiff cannot seriously argue that the parties' rights in light of the bond are any different from what they would have been if the warrants had been actually executed. The Court has accepted the parties' Stipulation and, pursuant to its terms, will treat the bond as an undertaking. See Cont'l Grain Co. v. Fed. Barge Lines, Inc., 268 F.2d 240, 243 (5th Cir. 1959) ("The parties are at one that fair application of the letter undertaking and particularly the Non-Waiver of Rights Clause requires that we treat it as though, upon the libel being filed, the vessel had actually been seized, a Claim filed, a stipulation to abide decree with sureties executed and filed by Claimant, and the vessel formally released. Any other course would imperil the desirable avoidance of needless cost, time, and inconvenience to litigants, counsel, ships, Clerks, Marshals, Keepers and court personnel through the ready acceptance of such letter undertakings."). The legal effect of the stipulation for value "is the same as the presence of the res in the court's custody." Cont'l Grain, 268 F.2d at 244 n.6 ("The stipulation for value is a complete substitute for the res, and the stipulation for value alone is sufficient to give jurisdiction to a court because its legal effect is the same as the presence of the res in the court's custody.").
Therefore, Plaintiff's argument that a vessel owner does not have a right to a post-arrest hearing when a vessel is arrested with notice or not arrested at all, is rejected.
Plaintiff further argues that the relief requested in the Motion for Order to Show Cause has been waived for two reasons. First, by entering into a Stipulation where Mobro agreed to post a bond, it is argued that Mobro waived any right to a hearing. However, as shown above, the Stipulation expressly provides that the bond would stand with the same force and effect as if the vessels had been arrested. Secondly, Plaintiff argues that even if the right to a hearing was not waived by entering into the Stipulation, it was waived by failing to raise the issue in a timely manner because the Motion for Order to Show Cause was not filed by September 10, 2016, i.e., within 14 days after the Stipulation was filed. Plaintiff argues that because the issue was not raised by September 10, 2016, or on September 15, 2016 when Mobro filed its Claim of Owner, or on October 5, 2016 when Mobro filed an Answer and Affirmative Defenses on behalf of the vessels and a Crossclaim, Mobro has waived the relief requested in the Motion for Order to Show Cause. Mobro responds that Plaintiff has misinterpreted the Local Admiralty Rules, which require the claim to be filed within 14 days after process has been executed, but not necessarily the Motion coincident with the filing of the claim.
Here, pursuant to Local Admiralty Rule 7.03(f) and the parties' Stipulation, Mobro filed its Claim of Owner on September 15, 2016, or within 20 days from the date of the Stipulation, as agreed. (See Doc. 36.) Mobro filed its Motion for Order to Show Cause on October 7, 2016. (Doc. 44.) The Court does not read Local Admiralty Rule 7.03(g) as requiring Mobro to file its Motion coincident with the filing of its Claim of Owner, but rather as allowing Mobro to do so. (See M.D. Fla. Admiralty & Maritime R. 7.03(g) ("Coincident with the filing of a claim pursuant to Supplemental Rule (E)(4)(f), and Local Admiralty Rule 7.03(f)(1), the claimant may also file a motion and proposed order directing plaintiff to show cause why the arrest should not be vacated.").) Furthermore, the only case that Plaintiff cites to support its argument that Mobro's Motion was untimely—Servicio Marina Superior, LLC v. Matrix International Ltd.—is distinguishable because in that case, the defendant filed its motion to vacate only after the trial, and it did not request a Rule E(4)(f) hearing or file a motion for a hearing at any time during the pendency of the proceedings. Servicio Marina, Case No.: 07-0770-KD-C, 2009 WL 734114, *6 (S.D. Ala. Mar. 17, 2009).
Plaintiff also argues that the relief sought by Mobro is moot because Mobro has invoked the Court's jurisdiction by filing a Crossclaim against NOSAT (Doc. 42), submitting to the personal jurisdiction of the Court and asserting that the Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1333 and Rule 9(h). As such, Plaintiff argues, Mobro cannot assert that the Court lacks personal jurisdiction over it, after posting a bond through which the Court acquired personal jurisdiction. Mobro responds that its Crossclaim is a pleading in the alternative, i.e., in the event that the Court finds that Plaintiff has met its burden and there is in rem jurisdiction over the vessels, the Crossclaim would proceed, but if the Court finds there is no in rem jurisdiction over the vessels, the Crossclaim would dissolve. Mobro explains that it is not Mobro's Motion against Plaintiff that could become moot, but rather Mobro's Crossclaim against NOSAT. The Court agrees with Mobro and, therefore, rejects Plaintiff's assertion of mootness.
The Court also rejects Plaintiff's assertion that a hearing is unnecessary as the Court has already decided, based on the verified Second Amended Complaint, that there was probable cause for issuing the arrest warrants. Plaintiff states that Mobro's Motion, which is unsupported by affidavits or other sworn testimony, does nothing to assist the Court in making a determination of whether or not that initial determination establishes a prima facie case. However, it is Plaintiff's burden to show that the arrest warrants should not be vacated, and while the post-arrest hearing is not intended to resolve definitively the parties' dispute, but only to make a preliminary determination whether there were reasonable grounds for issuing the warrants, Plaintiff must show that reasonable grounds exist for issuing the warrants and retaining the bond. See, e.g., Maersk, Inc., 443 F. Supp. 2d at 527 ("[I]t is the plaintiff's burden to show that the attachment should not be vacated. . . . Supplemental Rule E does not restrict review to the adequacy of the allegations in the complaint. . . . A court also may consider any allegations or evidence offered in the parties' papers or at the post-attachment hearing."); Ullises Shipping Corp. v. FAL Shipping Co. Ltd., 415 F.Supp.2d 318, 322-23 & n.37 (S.D.N.Y. 2006)
In addition, Plaintiff argues that Mobro is seeking relief other than vacating the warrants. According to Plaintiff, Mobro appears to be seeking dismissal of the Verified Second Amended Complaint pursuant to Rule 12(b)(6), an order for judgment on the pleadings under Rule 12(c), or an order for summary judgment under Rule 56. Plaintiff argues that it would be a denial of its due process rights to consider such a claim for relief until there has been a full and fair opportunity to conduct discovery. However, as shown earlier, Rule E(4)(f) provides for a "prompt hearing" and is concerned with protecting the claimant's, rather than Plaintiff's, due process rights. Although Plaintiff argues that under Rule 12(d), Fed.R.Civ.P., if matters outside the pleadings are presented, the motion must be treated as one for summary judgment and the parties must be given an opportunity to present all pertinent materials, Rule 12(d) is not implicated here because Mobro has not filed a motion under Rule 12(b)(6) or 12(c). As shown earlier, it is proper to consider matters outside the pleadings at a Rule E(4)(f) hearing.
Based on the foregoing, the Court rejects Plaintiff's arguments that Mobro's Motion for Order to Show Cause is procedurally deficient and the Court will proceed with the evidentiary hearing scheduled for November 3, 2016.
Accordingly, it is
Plaintiff's Motion to Deny Without a Hearing Mobro's Motion for Order to Show Cause (
