GB Capital Holdings, LLC v. S/V GLORI B
3:18-cv-00312
S.D. Cal.Aug 2, 2019Background
- GB Capital (as agent for San Diego Mooring Co.) filed an in rem admiralty action against the 1977 sailing vessel S/V Glori B for unpaid moorage/wharfage, breach of contract, trespass, and quantum meruit, alleging $55,728.51 in maritime liens.
- Owner Jeffrey G. Heston appeared pro se, contested jurisdiction and liability, asserted res judicata and sought vessel release in related filings; prior litigation had resulted in an order compelling arbitration of the moorage contract.
- The vessel was arrested, Pier 32 Marina appointed substitute custodian, and an interlocutory sale by U.S. Marshal occurred on February 27, 2019; GB Capital purchased the vessel on a $6,000 credit bid.
- No written objections to the marshal’s sale report were filed within the local-rule period, so the sale stood confirmed and Heston’s ownership interest terminated upon confirmation.
- GB Capital moved to dismiss the in rem action with prejudice under Federal Rule of Civil Procedure 41(a)(2), arguing the sale and substitution of proceeds rendered continuation pointless; Heston opposed, arguing the vessel (and interested parties) retained trial rights and counterclaims.
- The court found no plain legal prejudice to the defendant from dismissal, noted GB Capital sought no further relief against Heston personally, and granted dismissal with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff may voluntarily dismiss the in rem action under Fed. R. Civ. P. 41(a)(2) after interlocutory sale | Dismissal appropriate because vessel was sold and pursuing judgment against the vessel serves no purpose | Opposed: sale does not eliminate vessel’s/owner’s rights; parties and vessel entitled to trial and may have counterclaims | Granted: court exercised discretion to dismiss with prejudice under Rule 41(a)(2) |
| Whether interlocutory sale was properly confirmed and terminated owner’s interest | Sale stood confirmed (no timely written objections) and buyer substituted for property; owner’s title terminated | Heston argued procedural unfairness and loss of property rights | Confirmed: sale confirmed per local admiralty rule; ownership terminated on confirmation |
| Whether dismissal would cause “plain legal prejudice” to defendant | No: dismissal does not prejudice any legal interest; GB Capital seeks no personal relief against Heston | Yes: Heston alleged deprivation of trial rights and asserted counterclaims | Court found no plain legal prejudice and dismissal with prejudice appropriate |
Key Cases Cited
- Hamilton v. Firestone Tire & Rubber Co., 679 F.2d 143 (9th Cir. 1982) (discretionary standard for Rule 41(a)(2) voluntary dismissal)
- Smith v. Lenches, 263 F.3d 972 (9th Cir. 2001) (plaintiff’s voluntary dismissal should be granted unless defendant shows plain legal prejudice)
- Ferrous Financial Services Co. v. O/S Arctic Producer, 567 F. Supp. 400 (W.D. Wash. 1983) (interlocutory sale substitutes proceeds for vessel without depriving property interests)
- Belcher Co. of Ala. v. M/V Maratha Mariner, 724 F.2d 1161 (5th Cir. 1984) (owner bears no personal liability where vessel sold to satisfy lien; proceeds substitution limits owner’s liability)