Baltimore Line Handling Co. v. Brophy
771 F. Supp. 2d 531
D. Maryland2011Background
- Baltimore Line Handling Company sues Shannon Brophy for $119,475 for line handling services at Piney Point (2006–2009) under admiralty jurisdiction.
- Ms. Brophy was served but did not answer; default was entered against her on March 15, 2010.
- Magistrate Judge Gauvey recommended denying default judgment; Baltimore Line objected, and a sanctions motion regarding a deposition was filed.
- Baltimore Line argued the contracts were oral, with Brophy or related entities as parties to the agreements; invoices were addressed to the entities.
- Baltimore Line sought to hold Brophy personally liable or pierce the corporate veil to reach the individuals’ assets.
- Court ultimately denied the default judgment, upheld the report denying liability against Ms. Brophy personally, and sanctioned Brophy regarding discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction in admiralty | Baltimore Line contends admiralty jurisdiction applies to maritime line-handling contracts. | Brophy did not appear; no challenge to jurisdiction pressingly raised by Brophy in responsive pleading. | Court found admiralty jurisdiction exists; Piney Point and navigable waters supply jurisdiction. |
| Personal liability of Brophy for contract | Brophy personally liable under alter ego/agency theories; contracts with Patriot Lines/Vessel Operations bind Brophy individually. | Limited liability shields apply; no personal liability under Maryland law; no well-pled facts of personal contract liability. | Court denied personal liability, finding no well-pleaded basis to hold Brophy personally liable. |
| Piercing the corporate veil to impose personal liability | Alter ego theory and fraud/paramount equity justify piercing the veil to reach Brophy personally. | Maryland law requires fraud or paramount equity; entities were in good standing and not mere alter egos; no clear fraud proven. | Court declined to pierce the veil; no clear error in Gauvey's veil-piercing analysis; veil remains intact. |
| Opportunity for default judgment and damages | Default admitted liability on all well-pleaded facts; damages are a sum certain from invoices ($119,475) plus interest/costs. | No valid basis for default judgment against Brophy personally; no admitted damages amount; factual pleadings insufficient. | Default judgment denied without prejudice; damages not established against Brophy. |
Key Cases Cited
- Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14 (1991) (maritime contract jurisdiction based on connection to maritime commerce)
- Allen v. Dackman, 413 Md. 132 (2010) (MD LLC members may be personally liable in certain circumstances)
- Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200 (5th Cir. 1975) (default judgments cannot ignore a principal–agent contract distinction)
- Arconti & Sons v. Ames-Ennis, 275 Md. 295 (1975) (piercing veil only to prevent fraud or paramount equity)
- Hildreth v. Tidewater Equipment Co., 378 Md. 724 (2003) (strict approach to piercing the corporate veil; fraud absent not pierced)
- Starfish Condominium Ass'n v. Yorkridge Serv. Corp., 295 Md. 693 (1983) ( Maryland limits on piercing the corporate veil; ordinary limited liability expectations)