Essex Crane Rental Corp v. DB CROSSMAR 14
2:16-cv-08146
E.D. La.Mar 21, 2017Background
- Wells Fargo intervened in an in rem action involving a 230-ton crane and the vessel DB CROSSMAR 14 after Essex Crane sued Cross for unpaid crane rental charges and obtained arrest warrants for the vessel and crane.
- Wells Fargo asserted it held an assigned promissory note and a preferred ship mortgage securing Cross Maritime, Inc.’s debt (Cross Holdings, Inc. was a guarantor); Wells Fargo obtained an arrest warrant and later the right to credit-bid at sale.
- The U.S. Marshal sold the vessel to Wells Fargo for $2,497,500 (three-quarters of appraised value); the sale was confirmed and a bill of sale issued, leaving a claimed deficiency.
- Essex settled with Wells Fargo and dismissed its claims, leaving Wells Fargo’s claim for deficiency, costs, and attorneys’ fees against Cross Maritime and Cross Holdings.
- Wells Fargo moved for summary judgment seeking a money judgment for the unpaid balance (including default interest), federal-judicial-rate interest on certain charges, reimbursement of sale-related costs, and attorneys’ fees; Cross did not timely oppose.
- The Court granted summary judgment to Wells Fargo, entering judgment in solido against Cross Maritime and Cross Holdings for specified principal amounts, interest, attorneys’ fees to be set later, and confirmed validity of the Security Agreement.
Issues
| Issue | Plaintiff's Argument (Wells Fargo) | Defendant's Argument (Cross) | Held |
|---|---|---|---|
| Whether Wells Fargo is entitled to a money judgment for the unpaid loan balance after marshal’s sale | Wells Fargo: sale proceeds credited to interest then principal; deficiency remains and is owed by obligor and guarantor | Cross: (did not timely oppose / no substantial rebuttal in record) | Court: Granted; entry of judgment for principal and default interest |
| Whether Cross Holdings is bound as guarantor and jointly liable | Wells Fargo: guaranty is accessory and was assigned with the note; guarantor liable in solido | Cross: (no timely opposition denying guaranty applicability) | Court: Held guaranty valid; Cross Holdings jointly and severally liable |
| Whether Wells Fargo may recover sale-related costs, custodia legis, marshal commission, and attorneys’ fees | Wells Fargo: mortgage and loan documents allow recovery of these costs and attorneys’ fees; entitled to federal-judicial-rate interest on certain charges | Cross: (no timely opposition) | Court: Held these charges recoverable; attorneys’ fees to be liquidated on separate motion |
| Whether the marshal’s sale was adequate and should be confirmed such that credit bid and deficiency calculation stand | Wells Fargo: bid equaled three-quarters of appraised value and was not grossly inadequate | Cross: (no timely challenge to adequacy) | Court: Sale confirmed as not grossly inadequate; sale proceeds applied as Wells Fargo proposed |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard and burdens on movant)
- Anderson v. Liberty Lobby, 477 U.S. 242 (genuine-issue standard for summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmoving party must present evidence to create genuine issue)
- Latvian Shipping Co. v. Baltic Shipping Co., 99 F.3d 690 (5th Cir.) (sale-price adequacy analysis for maritime sales)
- First Nat’l Bank of Jefferson Par. v. M/V Lightning Power, 776 F.2d 1258 (5th Cir.) (example of sale price inadequacy leading to nonconfirmation)
- Lindsey v. Sears Roebuck & Co., 16 F.3d 616 (movant may point to absence of evidence when non-movant bears burden)