1:24-cv-12702
N.D. Ill.Jun 13, 2025Background
- Tall Ship Adventures of Chicago, Inc. provided a $1.2 million loan to Windy of Chicago, Ltd. (WOC), secured by a Preferred Ship Mortgage on the vessel WINDY, guaranteed personally by Scott and Hope Stawski.
- After WOC defaulted on the loan by not making installment payments, Tall Ship Adventures commenced an admiralty action to foreclose on the mortgage and recover the vessel.
- The court authorized sale of the WINDY; Tall Ship Adventures purchased it at auction via a $300,000 credit bid.
- Despite the vessel sale, $1,200,679.45 remained due on the Note as of June 15, 2025, after accounting for partial payment via the credit bid and accrued penalties/interest.
- Tall Ship Adventures sought a default judgment against the Stawskis (as guarantors), including outstanding principal, legal fees ($160,697.50), custodianship costs ($73,035.48), unpaid crew wages ($22,447.83), administrative expenses ($1,623.30), and legal costs ($19,433.98), totaling $1,477,917.54.
- The Stawskis did not respond, and default had previously been entered against them.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability under Personal Guaranty | Stawskis guaranteed payment of all indebtedness under the Note, are liable for deficiency | No response (defaulted) | Stawskis are liable jointly and severally |
| Enforcement of Ship Mortgage | Plaintiff entitled to foreclose and apply sale proceeds, claim deficiency | No response (defaulted) | Plaintiff entitled to foreclosure and deficiency judgment |
| Recovery of Costs and Legal Fees | Guaranty obligates Stawskis to pay all enforcement costs/fees | No response (defaulted) | Plaintiff entitled to reasonable fees/expenses |
| Priority of Crew Wage Liens | Crew wages must be satisfied before plaintiff’s mortgage | No response (defaulted) | Plaintiff correctly paid crew wage liens first |
Key Cases Cited
- First Bank Se., N.A. v. Predco, Inc., 951 F.2d 842 (7th Cir. 1992) (upheld awarding of attorneys’ fees and expenses where guaranty provides for their recovery)
- Int'l Paint Co. v. M/V Mission Viking, 637 F.2d 382 (5th Cir. 1981) (preferred ship mortgage has priority over claims except for preferred maritime liens, including crew wages)