United States District Court, W.D. Tennessee, Eastern Division
ORDER GRANTING INTERVENING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT FOR RETURN OF VESSEL
S. THOMAS ANDERSON, District Judge.
Before the Court is Intervening Plaintiff RSK Contracting, Inc.'s ("RSK") Motion for Partial Summary Judgment, filed May 13, 2014 (ECF No. 199). Intervening Defendant Randy Martin filed a Response in Opposition to RSK's Motion on July 11, 2014 (ECF No. 213), to which RSK filed a Reply (ECF No. 214). For the reasons stated below, RSK's Motion for Partial Summary Judgment for Return of Vessel is GRANTED.
Randy Martin brought the original action in this matter on July 11, 2011, against Defendants Performance Boat Brokerage.com, LLC ("Performance") and Matthew Smith for damages and injunctive relief. (Pl.'s Compl. ¶ 1-2, ECF No. 1). Martin alleged that Performance fraudulently failed to inform him of a lien on a boat he purchased, failed to satisfy that lien from the proceeds of the sale, and failed to provide him with good title. ( Id. ). On July 14, 2011, the Court granted a preliminary injunction prohibiting the Defendants from selling the business known as Performance Boat Brokerage.com, LLC, or from selling assets of the business except in the normal and ordinary course of business, without permission of the Court. On November 29, 2011, the Court granted Martin's petition for a prejudgment writ of attachment for all funds owed to Defendants Performance Boat Brokerage.com, LLC and/or Matthew Smith by Mark Waddington and/or Performance, LLC under an asset purchase agreement entered into on August, 2, 2011. (Order on Petition for Issuance of Writ of Attachment 2-3, ECF No. 46).
Martin sought a second writ of attachment on February 28, 2012, for a 2004 Outer Limits Boat, Hull Identification Number OPL47014B404, Official Number 1188527 (the "Outerlimits Boat"),  supposedly owned by Defendant Performance Boat Brokerage.com, LLC. (Ex Parte Pet. for Issuance of Second Writ of Attachment 1, ECF No. 59). Martin advised the Court that the boat and its trailer were located in the showroom of "Performance, LLC" in Camendon, Missouri ( Id. at 4), and the United States Marshals executed the writ on February 29, 2012. ( See Process Return & Receipt, ECF No. 62).
RSK filed an intervenor complaint on April 30, 2012. (Intervening Complaint, ECF No. 76). In the complaint, as amended, RSK, whose sole owner is Mr. Rick Brown, alleged that on October 31, 2009, it purchased the Outerlimits Boat and its trailer from Performance Boat Brokerage.com, LLC for $250, 000. (Amended Intervening Compl. ¶ 6, ECF No. 110). This sale was not recorded with the National Vessel Documentation Center ("NVDC"), an office of the United States Coast Guard. As evidence of the purchase, however, RSK presents a cancelled check for the purchase, a bill of sale for the purchase, the invoice for the purchase, and proof of Mr. Brown's insurance on the Outerlimits Boat from May 21, 2010, to the present. (RSK's Statement of Undisputed Facts ¶¶ 7-10, ECF No. 199-13). Martin does not dispute the contents of the documents, but does dispute that the check, bill of sale, and invoice prove RSK's ownership. (Response to RSK's Statement of Undisputed Facts ¶¶ 7-10, ECF No. 213-1). RSK has also attached to its Motion a new piece of evidence: a document from the NVDC purporting to show that the Outerlimits Boat has not been a "documented vessel" with the NVDC since January 2, 2009. (Exhibit K to RSK's Mem. in Supp. of Mot. for Partial Summ. J., ECF No. 199-11). This "Evidence of Deletion" letter, RSK argues, shows that the federal priority law under 46 U.S.C. § 31321 does not apply.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 56(a) provides that a party is entitled to summary judgment if the moving party "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." In reviewing a motion for summary judgment, the court views the evidence in the light most favorable to the nonmoving party,  and it "may not make credibility determinations or weigh the evidence." When the motion is supported by documentary proof such as depositions and affidavits, the nonmoving party may not rest on his pleadings but, rather, must present some "specific facts showing that there is a genuine issue for trial." It is not sufficient "simply [to] show that there is some metaphysical doubt as to the material facts." These facts must be more than a scintilla of evidence and must meet the standard of whether a reasonable juror could find by a preponderance of the evidence that the nonmoving party is entitled to a verdict. When determining if summary judgment is appropriate, the Court should ask "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." In this Circuit, the nonmoving party must "put up or shut up" as to the critical issues of the claim. The Court must enter summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."
On September 23, 2013, the Court denied Martin's Motion for Summary Judgment on RSK's claims. In the order, Chief United States District Judge Daniel Breen addressed the issue of "whether the unrecorded sale to RSK of a federally documented vessel is valid against Martin, a judgment creditor." Since that order, RSK has obtained a document styled "Evidence of Deletion from United States Documentation" ("Evidence of Deletion") from the NVDC, discussed below.
Now, RSK asks the Court to grant partial summary judgment for return of the Outerlimits Boat and on Martin's alleged liability for damages. The Motion, at its core, is about who owns the Outerlimits Boat. RSK's stance is founded on two assertions: (1) federal priority law governing "documented vessels" does not apply to the Outerlimits Boat; and (2) RSK has owned the boat since October 31, 2009, when it paid $250, 000 to Performance. On the other hand, Martin claims that (1) based on federal priority law governing "documented vessels, " Martin's writ of attachment on the Outerlimits Boat-which he received to satisfy a judgment against Performance-takes priority over RSK's legally invalid purchase of the Outerlimits Boat; and (2) RSK has never actually owned the boat.
I. The Ship Mortgage Act and Documentation
A. The Act
Congress enacted the Ship Mortgage Act, upon which Martin relies, to create a new commercial instrument called the "preferred ship mortgage, " which would have priority over all maritime liens. The Act sought to "make investment in ship mortgages more attractive." Although neither party claims it has a "preferred ship mortgage" in this case,  other courts have applied the recording provisions of 46 ...