Northrim Bank v. Pearl Bay Seafoods LLC
2:23-cv-01042
W.D. Wash.Mar 6, 2024Background
- Northrim Bank made a $600,000 loan to the defendants, secured by a preferred ship mortgage on the vessel Glacier Bay, recorded on June 8, 2020.
- Defendants defaulted on the loan agreement as of November 30, 2022.
- Northrim Bank filed suit to enforce the mortgage, seeking foreclosure and judicial sale of the vessel.
- The vessel Glacier Bay was arrested under court order and placed in custody.
- Port of Seattle filed a maritime lien against the vessel on December 19, 2022 for unpaid moorage and utilities, and intervened seeking its lien be considered priority.
- The central legal dispute was the priority between Northrim Bank's mortgage and Port of Seattle's maritime lien.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Northrim Bank entitled to foreclose the mortgage? | Bank is entitled to foreclosure due to default and recorded lien | (Defendants did not timely oppose) | Yes; summary judgment granted for foreclosure |
| Priority of Northrim Bank’s mortgage vs. Port’s lien | Bank’s mortgage is a superior preferred mortgage under federal law | Port's lien for necessaries should take priority over mortgage | Northrim Bank’s mortgage has priority under 46 U.S.C. § 31326 |
| Entitlement to attorney fees/costs as part of the lien | Attorney fees and costs stipulated in loan and mortgage documents | — | Attorney fees and costs included in bank’s enforceable lien |
| Disposition of sale proceeds | Proceeds should satisfy costs, then mortgage, then port’s lien | — | Proceeds to Bank (first for custodia legis/fees), then to Port |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (summary judgment standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (burden for summary judgment)
- Crane v. Conoco, Inc., 41 F.3d 547 (9th Cir. 1994) (role of court in summary judgment)
- Transamerica Commercial Finance Corporation v. F/V SMILELEE, 944 F.2d 186 (4th Cir. 1991) (attorneys’ fees and interest have same priority as mortgage)
- Bradford Marine, Inc. v. M/V SEA FALCON, 64 F.3d 585 (11th Cir. 1995) (attorneys’ fees/costs recoverable under mortgage contract)