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Americanwest Bank, A Washington State Chartered Bank v. P/V Indian

March 1, 2013

AMERICANWEST BANK, A WASHINGTON STATE CHARTERED BANK,
PLAINTIFF,
v.
P/V INDIAN, OFFICIAL NO. 526530, AND ALL OF HER ENGINES, TACKLE, ACCESSORIES, EQUIPMENT, FURNISHINGS AND APPURTENANCES, IN REM, AND INDIAN SPORT FISHING, INC., A CALIFORNIA CORPORATION, IN PERSONAM, DEFENDANTS.



The opinion of the court was delivered by: Hon. Anthony J. BattagliaU.S. District Judge

IN ADMIRALTY ORDER GRANTING PLAINTIFF'S MOTION FOR INTERLOCUTORY VESSEL SALE; AUTHORIZING USE OF VESSEL BROKER; AND AUTHORIZING PLAINTIFF TO CREDIT BID AT THE SALE

(Doc. No. 14) F.R.C.P. Supplemental Admiralty ) Rules C and E. ) 46 U.S.C. Sections 30101-31343 _____________________________________

Presently before the Court is Plaintiff AmericanWest Bank's ("Plaintiff") Motion for Interlocutory Sale of the Defendant Vessel P/V INDIAN, Official No. 526530 (the "DEFENDANT VESSEL"), and all of her engines, tackle, accessories, equipment, furnishings and appurtenances. (Doc. No. 14.) Should the Court grant Plaintiff's Motion for Interlocutory Sale, Plaintiff also requests permission to market the vessel in advance of the U.S. Marshal sale and authorization for Plaintiff to credit bid at the sale. (Id.) For the reasons discussed below, the Court GRANTS the Plaintiff's Motion.

BACKGROUND

Defendant Indian Sport Fishing, Inc. ("Indian Sport Fishing") purchased the DEFENDANT VESSEL on or about February 22, 2006. (Doc. No. 14, Ex. B.) Indian Sport Fishing, through Christopher M. Randel ("Mr. Randel"*fn1 ), President of Indian Sport Fishing, delivered a promissory note and business loan agreement in the amount of $296,000 to Point Loma Community Bank on or about January 9, 2009. (Doc. No. 1, Ex. A--Business Loan Agreement, Ex. B--Promissory Note.) Plaintiff AmericanWest Bank is the successor in merger to Point Loma Community Bank.*fn2

(Doc. No. 1.)

The promissory note was secured by a preferred ship mortgage on the DEFENDANT VESSEL. (Doc. No. 1, Ex. E--Preferred Ship Mortgage.) The business loan agreement and promissory note provide that, upon default, the lender has the right to demand that the borrower immediately pay any remaining principal and all accrued interest. (Doc. No. 1, Ex. A--Business Loan Agreement, Ex. B--Promissory Note.) If Plaintiff was forced to sue to enforce the terms of the promissory note, the note required that Indian Sport Fishing pay Plaintiff's attorneys' fees and costs. (Id.) Mr. Randel personally guaranteed the full and punctual payment of the promissory note should Indian Sport Fishing default on its payments. (Compl. ¶ 7.*fn3

Plaintiff alleges that Indian Sport Fishing breached the Promissory Note and Preferred Ship Mortgage by failing to pay the amount owed to Plaintiff. (Compl. ¶ 12.) Although Plaintiff has not provided the specific date when Indian Sport Fishing stopped making its payments, Plaintiff states that, as of July 11, 2012, Indian Sport Fishing owed $274,453.07 on the note. (Compl. ¶ 13.) On July 16, 2012, Plaintiff filed the Verified Complaint ("Complaint") alleging Indian Sport Fishing breached the promissory note and requesting that DEFENDANT VESSEL be sold to satisfy Indian Sport Fishing's debt. (Doc. No. 1.) On July 23, 2012, the Court issued a warrant for the arrest of the DEFENDANT VESSEL. (Doc. No. 6.) Plaintiff states that the date of arrest was July 31, 2012. (Doc. No. 14, 5:21-22.) The Court received notice of the arrest on August 1, 2012. (Doc. No. 8.)

Indian Sport Fishing never filed an answer to Plaintiff's Complaint. On December 6, 2012, the Clerk of Court filed an Entry of Default as to Defendants. (Doc. No. 13.) On December 6, 2012, Plaintiff filed the instant Motion for Interlocutory Sale of Defendant Vessel ("Motion") pursuant to Supplemental Admiralty Rule E(9)(a)(i) of the Federal Rules of Civil Procedure ("Rule E(9)(a)(i)").*fn4 Indian Sport Fishing has not opposed Plaintiff's Motion and has not made any attempt to secure the DEFENDANT VESSEL.

DISCUSSION

Plaintiff makes three requests in the instant motion:(1) request for interlocutory sale of DEFENDANT VESSEL; (2) request to hire a vessel broker to market the vessel in advance of the sale; and (3) request for authorization to credit bid at the sale.(Doc. No. 14.) The second and third requests are contingent upon the Court granting Plaintiff's request for interlocutory sale. Accordingly, the Court addresses first the request for interlocutory sale, and will then consider Plaintiff's additional requests in turn.

I. Plaintiff's Request for Interlocutory Sale

Plaintiff argues that the Court should order the DEFENDANT VESSEL be sold based on all three criteria of Rule E(9)(a)(i).

Rule E(9)(a)(i) provides that [o]n application of a party ... the court may order all or part of the property sold-with the sale proceeds, or as much of them as will satisfy the judgment, paid into court to await further orders of the court-if: (A) the attached or arrested property is perishable, or liable to deterioration, decay, or injury by being detained in custody pending the action; (B) the expense of keeping the property is ...


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