Malikalalou, Inc.

Opinion

1 2 3 4 5 6 7 8

12 UNITED STATES DISTRICT COURT 13 SOUTHERN DISTRICT OF CALIFORNIA 14

15 In the Matter of: Case No.: 3:20-cv-01693-H-MSB 16 17 MALIKALALOU, INC., owner of a 2008 ORDER GRANTING MOTION FOR Privilege 45’ catamaran sailing vessel DEFAULT JUDGMENT 18 named “Malikalalou”, HIN # 19 JMA90C10K708, her engine, tackle, [Doc. No. 12.] apparel, appurtenances, etc., for 20 Exoneration from or Limitation of 21 Liability. 22 23 On August 31, 2020, Malikalalou, Inc. (“Limitation Plaintiff”), as the owner of a 24 2008 Privilege 45’ catamaran sailing vessel named “Malikalalou,” HIN# JMA90C10K708, 25 (the “Vessel”) filed a complaint pursuant to the Limitation of Liability Act, 46 U.S.C. 26 § 30501 et seq., claiming the right to exoneration from, or limitation of, liability for all 27 claims arising out of an incident that occurred on May 30, 2020. (Doc. No. 1.) On 28 1 possible claimants who have not yet filed and served claims in this proceeding. (Doc. No. 2 12.) The Court submitted the motion on the papers. (Doc. No. 17.) For the reasons that 3 follow, the Court grants the motion. 4 Background 5 Limitation Plaintiff alleges that the Vessel was involved in a fire on May 30, 2020, 6 while it was docked at the Kona Kai Resort & Spa in San Diego, California. (Doc. No. 1 7 ¶ 7.) Adjacent to the Vessel was a 2002 38 ft. Tiara power boat named “Otoro,” which 8 was owned by either Scott French or Bluefin Charters, LLC, or both, and insured by Ace 9 American Insurance Company (collectively, the “Otoro Parties”). (Doc. No. 7.) The fire 10 rendered both vessels total losses. (Doc. No. 1 ¶¶ 5-7.) The fire also allegedly caused 11 damage to several neighboring vessels, as well as the dock onto which both the Vessel and 12 the Otoro were moored. (Id.) 13 On August 31, 2020, Limitation Plaintiff filed the instant action under the Limitation 14 of Liability Act. (Doc. No. 1.) On September 22, 2020, the Court ordered the Clerk to 15 issue a monition to all persons and entities asserting any claim with respect to the incident, 16 admonishing them to file their respective claims on or before November 13, 2020. (Doc. 17 No. 4 at 3.) The Court also ordered Limitation Plaintiff to give public notice of the 18 monition and this action through publication in a newspaper of general circulation printed 19 and published in San Diego County, California, once in each week for four successive 20 weeks prior to November 13, 2020. (Id. at 4.) Finally, the Court ordered Limitation 21 Plaintiff to mail a copy of the monition to any possible claimant who Limitation Plaintiff 22 believed may intend to assert any claim against it in this action. (Id.) 23 On September 25, 2020, Limitation Plaintiff filed a proof of service explaining that 24 it served notice on all parties it believed may intend to assert a claim against it in this action 25 pursuant to the Court’s order. (Doc. No. 5.) On October 19, 2020, Limitation Plaintiff 26 filed a notice that they had completed service by publication by October 16, 2020, also in 27 compliance with the Court’s order. (Doc. No. 6.) 28 The Otoro Parties filed a timely answer to the complaint and asserted claims against 1 Limitation Plaintiff. (Doc. No. 7.) No other potential claimant filed an answer or claim on 2 or before November 13, 2020, nor did any claimant seek an extension of that deadline. 3 Accordingly, Limitation Plaintiff requested the entry of default against all non-appearing 4 claimants in this action, (Doc. No. 9), which the Clerk entered on November 27, 2020, 5 (Doc. No. 10). On December 21, 2020, Limitation Plaintiff filed the instant motion 6 requesting the Court to order the entry of default judgment against all potential claimants 7 who have not yet appeared in this action. 8 Discussion 9 The Supplemental Rules for Admiralty or Maritime Claims govern the procedures 10 in an action to exonerate or limit liability from claims arising out of maritime accidents. 11 Supplemental Rule A(2), however, provides that “[t]he Federal Rules of Civil Procedure 12 also apply to actions for exoneration from or limitation of liability, except to the extent 13 they are inconsistent with the [Supplemental Rules].” Accordingly, Limitation Plaintiff’s 14 motion for default judgment is governed by Federal Rule of Civil Procedure 55 because 15 there is no Supplemental Rule on point. 16 Under Rule 55, the Court may enter default judgment against a party if the clerk has 17 already entered default against that party. “The district court’s decision whether to enter a 18 default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 19 1980). The Ninth Circuit in Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986) 20 outlined several factors “which may be considered by courts in exercising discretion as to 21 the entry of a default judgment.” These factors include “(1) the possibility of prejudice to 22 the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the 23 complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute 24 concerning material facts, (6) whether the default was due to excusable neglect, and (7) the 25 strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the 26 merits.” Id. 27 Here, the Clerk properly entered default against the non-appearing parties in this 28 matter pursuant to Rule 55(a) because only the Otoro Parties timely responded to the 1 complaint in compliance with Supplemental Rule F(5) and the Court’s monition. See Fed. 2 R. Civ. P. 55(a) (providing for the entry of default against a party who “has failed to plead 3 or otherwise defend” against the claims asserted). Accordingly, the Court must generally 4 take Limitation Plaintiff’s factual allegations as true in considering whether the entry of 5 default judgment is warranted. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 6 (9th Cir. 1987). 7 The relevant Eitel factors counsel in favor of the entry of default judgment against 8 the non-appearing claimaints. First, “[t]here is no just reason for delay in entering a 9 judgment against” the non-appearing parties because they have “not yet submitted claims.” 10 In re Duley, No. 816CV00135JLSDFM, 2017 WL 8180609, at *2 (C.D. Cal. July 11, 11 2017); see also In re Campbell, No. SACV1700649CJCDFMX, 2017 WL 8180611, at *2 12 (C.D. Cal. Aug. 23, 2017) (“A denial of default judgment would prejudice Plaintiff-in- 13 Limitation because any delay in resolving this case is unnecessary. No claimants have 14 appeared in this action, and delay would serve no purpose.”). Also, Limitation Plaintiff 15 has demonstrated that it complied with Supplemental Rule F(4) and the Court’s monition 16 by timely giving proper notice by publication and by serving notice directly to known 17 potential claimants. (Compare Doc. No. 4, with Doc. Nos. 5, 6.) Upon a showing of 18 compliance with the Supplemental Rules, “courts regularly grant a default judgment 19 against claimants who do not answer.” Duley, 2017 WL 8180609, at *2. Additionally, 20 Limitation Plaintiff is only seeking declaratory relief against the non-appearing parties. 21 And finally, the Court’s entry of default judgment will serve the interests of justice because 22 it will “facilitate the apportionment of whatever funds are available for the [existing] 23 claimants,” the Otoro Parties. Id. Accordingly, Limitation Plaintiff’s motion for default 24 judgment is granted. 25 Conclusion 26 For the foregoing reasons, the Court grants Limitation Plaintiff’s motion for default 27 judgment against all possible claimants, known or unknown, who have not filed and served 28 claims and answers in this action. The Court directs the Clerk to enter a default judgment 1 || declaring that the period for filing a claim or answer in this limitation proceeding is closed, 2 ||and any new claims or answers against Limitation Plaintiff in this proceeding or any 3 || proceeding related to or arising out of the events described in the complaint, (Doc. No. 1), 4 || are barred. 5 IT IS SO ORDERED. 6 || DATED: January 26, 2021 - g HH haal □□ HUFF, UNITED STATES DISTRICT COURT 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28