482 F.Supp.3d 527
E.D. La.2020Background
- E.N. Bisso arrested M/V Bouchard Girls and Barge No. 295 on December 27, 2019; multiple parties intervened, including Wells Fargo.
- Wells Fargo intervened April 2020, obtained its own warrant and arrested the vessels in June 2020, and successfully moved to replace the custodian with National Maritime Services, authorized to maintain the vessels.
- Wells Fargo moved for interlocutory sale under Supplemental Admiralty Rule E(9), alleging (1) vessels subject to deterioration, (2) maintenance/custody costs excessive, and (3) unreasonable delay in release; it also sought the right to credit-bid.
- Defendants (Bouchard) opposed, arguing lack of evidence of deterioration, reasonable custodial arrangements and costs, customary time to secure release (≈4 months), and equitable grounds to avoid sale.
- The Court rejected deterioration and excessive-costs arguments but found the roughly eight-month arrest (since December 2019) constituted unreasonable delay; it granted interlocutory sales of both vessels.
- The Court authorized Wells Fargo to credit-bid up to its mortgage amount but conditioned that right on posting surety/bond for custodia legis costs already advanced ($58,350).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Deterioration of vessels | Coast Guard paused maintenance; exposure risks decay | National Maritime Services now custodian; prior 2019 repairs negate deterioration claim | Denied — insufficient evidence of deterioration; substitute custodian authorized to maintain vessels |
| Excessive custodial costs | Custody/dockage fees average ~$3,800–$6,000/day, imposing undue burden | Fees are minor relative to Wells Fargo's claim and vessel value | Denied — costs not excessive/disproportionate compared to claim and vessel value |
| Unreasonable delay in release | Vessels arrested since Dec 2019; lengthy detention justifies sale | Delay should be measured from Wells Fargo's June arrest; owners entitled to ~4 months to post security; equities favor owner | Granted — eight months under arrest exceeds customary allowance; delay is unreasonable under Rule E(9) |
| Credit bidding | Wells Fargo as preferred mortgagee may credit-bid up to mortgage amount | Custodia legis expenses have priority; bonding required | Allowed — credit-bid permitted but Wells Fargo must post bond/surety for custodia costs ($58,350) prior to bid |
Key Cases Cited
- Merchants Nat’l Bank of Mobile v. Dredge General G.L. Gillespie, 663 F.2d 1338 (5th Cir. 1981) (lienors need show only one Rule E(9) ground to support interlocutory sale)
- Jefferson Bank & Trust Co. v. Van Niman, 722 F.2d 251 (5th Cir. 1984) (recognizes mortgagee’s right to credit-bid at sale)
- Wong Shing v. M/V Mardina Trader, 564 F.2d 1183 (5th Cir. 1977) (credit-bid rights may be conditioned on posting bond for custodia costs)