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Pierside Boatworks Inc. v. Owens

United States District Court, D. South Carolina, Charleston Division

November 17, 2017

Pierside Boatworks, Inc., Plaintiff,
Judith A. Owens, Addison W. Closson, III, M/V Frolic LLC, Sailing Vessel Frolic, and Mickle LLC, Defendants.


          Bristow Marchant United States Magistrate Judge

         This action has been filed by the Plaintiff seeking storage fees and collection costs (including legal fees and costs) relating to the storage of a boat, the Sailing Vessel Frolic (“Frolic”), at Plaintiff's place of businesses. Plaintiff contends that the Defendants Owens and Closson, along with certain entities[1], are responsible for payment of these fees and costs pursuant to a contract signed with the Plaintiff to haul the Frolic out of the water and to provide storage. Plaintiff's claims are for enforcement of a maritime lien (First Cause of Action), breach of contract (Second Cause of Action), for quantum meruit (Third Cause of Action), for unjust enrichment (Fourth Cause of Action), and for fraudulent conveyance (Fifth Cause of Action). See Plaintiff's Third Amended Complaint.

         On May 4, 2017, Defendant Owens filed a second renewed motion for summary judgment pursuant to Rule 56, Fed.R.Civ.P.[2] Although Closson is also a Defendant, since he is proceeding pro se, a Roseboro Order[3] was entered by Court on May 5, 2017, advising Closson of the importance of a dispositive motion and of the need for him to file an adequate response. Closson was specifically advised that if he failed to respond adequately, Owens' motion (which only seeks the dismissal of Owens as a party Defendant) may be granted.

         Closson did not thereafter file a response; however, Plaintiff filed a response in opposition to Owens' motion on May 18, 2017, following which Owens filed a reply memorandum on May 25, 2017. The Defendant Owens' motion for summary judgment (as to her) is now before the Court for disposition.[4]

         (Background and Evidence)[5]

         Closson and Owens are husband and wife, having been married in 2007. In November 2010, they purchased the Frolic with both marital funds and joint insurance proceeds from the sinking of their previous boat. Owens Deposition, pp. 24-25; Closson Deposition, p. 32. The Frolic was moored in Charleston, and the plan was to fix her up and put the Frolic into service as a commercial passenger vessel in Rhode Island. Closson Deposition, p. 10. Owens testified that she and Closson traveled to South Carolina to see the Frolic prior to purchasing the vessel. Owens Deposition, pp. 39-40; see also Closson Deposition, p. 33. The Frolic was thereafter registered with the United States Coast Guard in November 2010 in both parties' names as owners, with Closson listed as the “managing” Owner. Owens Deposition, p. 55; Court Docket No. 208-2, pp. 3-12.[6]

         In November 2010, Closson signed a charter agreement between the Frolic and Aquidneck Ferry & Charter, Inc. (“Aquidneck”), a company created by Closson.[7] Closson Deposition, Exhibit 5. Aquidneck ran a ferry service in Rhode Island. Closson Deposition, pp. 13-14. Closson signed the agreement as the Owner of the Frolic and as the President of Aquidneck. See Court Docket No. 208-32, p. 2. The charter agreement stated that while Aquidneck was chartering the Frolic from its owners, the Frolic Owners remained liable and responsible for vessel storage, insurance, the crew, and other items. See Court Docket No. 208-32.

         In August 2011, Captain O. Bryan Harris was hired by Closson for a “hurricane haul”, removing the Frolic, which was still in South Carolina, from the water to protect it from a hurricane. See Court Docket No. 208-34 (Harris Affidavit). The Hurricane Haul Agreement with the Plaintiff was executed by Harris as agent for the owners. The Frolic was then navigated to Pierside by Harris, and the parties do not dispute that the Frolic has been and continues to be located at Pierside since August 2011. See Court Docket No. 108-3, pp. 31-34; No. 198-1, p. 2. In October 2011, Closson apparently signed a work order for Pierside to perform some repairs and maintenance work on the Frolic. See Court Docket No. 208-3. For her part, Owens testified that she has never been to Pierside Boatworks and does not believe that she ever signed any documents at Pierside.[8] Owens Deposition, p. 68. However, John Brophy, the Plaintiff's President, testified that Owens did come to Pierside, his boatyard, in early 2012. Brophy Deposition, pp. 11, 25, 28-30.

         Closson emailed Brophy in October 2011 that he wanted the Frolic placed in the water, following which he planned to take the Frolic to the Ashley Marina in Charleston and then to Rhode Island to be placed in commercial service. See Court Docket No. 208-3, pp. 2-3. Closson also sent an email to a local attorney regarding plans to commercially operate the Frolic in Rhode Island. See Court Docket No. 208-3, pp. 3-5. Plaintiff contends that also around this time, Closson created flyers advertising the Frolic for charter under the name Frolic Yacht Charters with a specific website and contact information, although Aquidneck is not mentioned as the charter company on the flyers. See Court Docket No. 208-49. While Owens asserts that she knew nothing of these plans, the evidence submitted shows that she was copied on various of these emails both with the Plaintiff and the lawyer concerning Pierside's work and the plans for the boat. See Court Docket No. 208-3, pp. 3, 5, 7-8.

         On February 9, 2012, Closson signed a storage agreement with the Plaintiff. Closson Deposition, p. 47 & Exhibit 27; Brophy Deposition, Exhibit 4. Closson wanted to do some work on the Frolic himself at that time, and Brophy testified this agreement has to be signed before someone can come onto the premises to themselves do work on a boat stored there (i.e. “Do it yourself” storage). Brophy Deposition, pp. 23-26. At that point, the Frolic had already been stored at Plaintiff's facility for approximately six (6) months with no payments for the boat's storage ever having been made. Brophy Deposition, pp. 24-26. Brophy testified that based upon Closson's representation of himself as the Owner and based on the 2011 Hurricane Haul Agreement signed by Captain Harris, Brophy believed Closson to be the owner and that all bills had been submitted to Closson's email with invoices addressed to Addison Closson. Brophy Deposition, pp 28, 31, 63-65; Exhibits 4-6 (Attached to Defendant Owens' Motion for Summary Judgment).

         When Closson visited the facility over the course of a few days when executing this agreement, Brophy testified that Owens was also present on at least one occasion, although Brophy did not speak to her. Brophy Deposition, pp. 24-25, 28-30.[9] Further, when Closson did make a payment to the Plaintiff on February 10, 2012 for the repair work that had been done on the boat, he used the debit card from Closson and Owens' joint bank account. See Exhibit 1 (Attached to Defendant Owens' Reply Memorandum); see also Court Docket No. 208-40, p. 3. That payment did not include any amount for Plaintiff's continued storage of the Frolic. Brophy Deposition, p. 24. However, in June 2012, Closson emailed Plaintiff stating that he and Owens had received their income tax refund check and would be able to make a payment on a settlement offer for the storage fees with this refund. See Court Docket No. 208-42. This offer was not for the full amount owed, and Brophy responded by demanding that the outstanding balance be paid immediately or he would “hand the account over to an attorney”. It is uncontested that thereafter no payment was ever made. On May 14, 2015, Closson sent Plaintiff another email regarding the outstanding balance, with Owens copied on the email. The email stated that Closson and Owens had discussed the debt owed and that they were willing to transfer title of the boat to a “qualified new owner who has the ability to restore her to her original condition”, but did not offer to pay the outstanding bill owed for storage of the boat. It was signed “Addison Closson and Judith Owens.” See Court Docket No. 208-43. On May 21, 2015 another email was sent to the Plaintiff stating that although Closson and Owens wanted to resolve the debt issue, they were also prepared to litigate the matter, which would be “quite time consuming and expensive”. The email was again signed as being from both Closson and Owens, and Owens was copied on the email. See Court Docket No. 208-44.

         In June 2015, Plaintiff filed a lawsuit in state Magistrate Court to sell the Frolic. However, Closson and Owens then transferred ownership of the Frolic to a company called Mickle, LLC, on July 2, 2015. Addison Closson was listed on the incorporation documents as the “agent” for Mickle, LLC. See Court Docket No. 44, p. 2, ¶ 2 of the Fact Section; Court Docket No. 44-1, p. 1. Both Owens and Closson signed the Bill of Sale transferring ownership of the boat to Mickle, LLC. See Court Docket No. 208-4; see Court Docket No. 44, p. 2, ¶ 3 of the Fact Section; Court Docket No. 44-1, p. 4. Plaintiff contends that Closson and Owens also filed a Schedule C on their 2016 tax return for this company.[10] On July 31, 2015, Closson and Owens hired an attorney to file a special Motion to Dismiss the Magistrate Court's action. See Court Docket No. 208-48. Plaintiff thereafter voluntarily dismissed that action, and noticed Defendants' counsel that a case would be filed in federal court. This case was then filed on September 15, 2015.

         In November 2015, the M/V Frolic, LLC was formed. Closson and Owens are listed as the managing members of this company on the incorporation document. See Court Docket No. 208-9.[11] Thereafter, on December 8, 2015, ownership of the Frolic was transferred to M/V Frolic, LLC. See Court Docket No. 208-12. Again, both Closson and Owens signed the Bill of Sale. See Court Docket No. 208-13. On December 10, 2015, Closson and Owens filed paperwork with the U.S. Coast Guard requesting that the Frolic's ownership be transferred to M/V Frolic, LLC. See Court Docket No. 208-14. That same month, Closson and Owens' counsel filed two Answers and Amended Answers on behalf of Closson and Owens, asserting ownership of the Frolic by M/V Frolic, LLC. See Court Docket Nos. 208-16 & 208-17.

         On April 1, 2016, Owens and Closson sent a letter to the Coast Guard asking the Coast Guard to disregard the application of Mickle, LLC to list the Frolic as its property, and to instead list it as the property of M/V Frolic, LLC. See Court Docket No. 208-18, p. 1. On April 12, 2016, Closson sent the vessel documentation service an email asking that they place the transfer to M/V Frolic, LLC on hold until some issues can be sorted out. See Court Docket No. 208-19, p. 1. In May 2016, Closson and Owens stated in federal court documents that a “clerical error” occurred when the sale to M/V Frolic, LLC listed Owens and Closson as the Frolic's owners and their counsel was wrong when he filed the Answers and Amended Answers. See Court Docket No. 44, p. 3, ¶ 11.


         Summary judgment shall be rendered forthwith if the pleadings, depositions, documentary evidence, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Rule 56, Fed.R.Civ.P.[12] The moving party has the burden of proving that judgment on the pleadings is appropriate. Temkin v. Frederick County Comm'rs, 945 F.2d 716, 718 (4th Cir. 1991). Once the moving party makes this showing, however, the opposing party must respond to the motion with specific facts showing there is a genuine issue for trial. Baber v. Hosp. Corp. of Am., 977 F.2d 872, 874-75 (4th Cir. 1992).

         Here, after careful review and consideration of the arguments and evidence presented, the undersigned finds and concludes that the Defendant Owens' motion should be granted, in part, and denied, in part, as is set forth below.


         (Maritime Lien)

         Plaintiff's First Cause of Action is for a maritime lien to be placed on the Frolic, which remains at the Plaintiff's shipyard. A maritime lien is “a special property right in the vessel, arising in favor of the creditor by operation of law as security for a debt or claim.” State Bank & Tr. Co. v. LIL AL M/V, No. 16-5053, 2017 WL 3265870, at *2 (E.D. La. Aug. 1, 2017). Plaintiff asserts that it is entitled to enforce a maritime lien in order to have the Frolic “arrested” and sold.

         Owens has not moved for summary judgment on Plaintiff's first cause of action, nor has she moved on behalf of any other Defendant. Rather, she has only moved for summary judgment on the remaining causes of action as to her individually. ...

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