Local Rule Civil L.R. 104: Rule E – Actions In Rem and Quasi In Rem: General Provisions

Civil L.R. 104. Rule E – Actions In Rem and Quasi In Rem: General Provisions

(a) Itemized Demand for Judgment. The demand for judgment in every complaint filed under Rule B or Rule C shall allege the dollar amount of the debt or damages for which the action was commenced. The demand for judgment shall also allege the nature of other items of damage. The amount of the special bond posted under Rule E(5)(a) may be based upon these allegations.

(b) Salvage Action Complaints. In an action for a salvage reward, the complaint shall allege the dollar value of the vessel, cargo, freight, and other property salved, and the dollar amount of the reward claimed.

(c) Verification of Pleadings. Every complaint in Rule B, C, and D actions shall be verified upon oath or solemn affirmation, or in the form provided by 28 U.S.C. § 1746, by a party or by an authorized officer of a corporate party. If no party or authorized corporate officer is present within the District, verification of a complaint may be made by an agent, attorney in fact, or attorney of record, who shall state the sources of the knowledge, information, and belief contained in the complaint; declare that the document verified is true to the best of his or her knowledge, information, and belief; state why verification is not made by the party or an authorized corporate officer; and state that the affiant is authorized so to verify. A verification not made by a party or authorized corporate officer will be deemed to have been made by the party as if verified personally. If the verification was not made by a party or authorized corporate officer, any interested party may move, with or without requesting a stay, for the personal oath of a party or an authorized corporate officer, which shall be procured by commission or as otherwise ordered.

(d) Review by Judicial Officer. Unless otherwise required by the Judicial Officer, the review of complaints and papers called for by Rules B(1) and C(3) does not require the affiant party or attorney to be present. The applicant for review shall include a form of order to the Clerk which, upon signature by the Judicial Officer, will direct the arrest, attachment, or garnishment sought by the applicant. In exigent circumstances, the certification of the Plaintiff, or his/her attorney, under Rules B and C shall consist of an affidavit or a declaration pursuant to 28 U.S.C. § 1746 describing in detail the facts that establish the exigent circumstances.

(e) Return of Service. The party who requests a warrant of arrest or process of attachment or garnishment shall provide instructions to the Marshal. A person specially appointed by the Court under Rule B or C, who has served process of maritime attachment and garnishment or a warrant of arrest that seized property, shall promptly file a verified return showing the name of the individual on whom the process or warrant was served, the identity of the person or entity on whom service was made, the documents served, the manner in which service was completed (e.g., personal delivery), and the address, date, and time of service.

(f) Property in Possession of United States Officer. When the property to be attached or arrested is in the custody of an employee or officer of the United States, the Marshal shall deliver a copy of the complaint and warrant of arrest or summons and process of attachment or garnishment to that officer or employee, if present, and, otherwise, to the custodian of the property. The Marshal will instruct the officer or employee or custodian to retain custody of the property until ordered to do otherwise by a Judicial Officer.

(g) Security for Costs. In an action under the Supplemental Rules, a party may move, upon notice to all parties, for an order to compel an adverse party to post security for costs with the Clerk pursuant to Rule E(2)(b). Unless otherwise ordered, the amount of security shall be $500.00. The party so ordered shall post the security within seven (7) days after the order is entered. A party who fails to post security when due may not participate further in the proceedings except by order of Court. A party may move for an order increasing the amount of security for costs.

(h) Adversary Hearing. The adversary hearing following arrest or attachment or garnishment that is called for in Rule E(4)(f) shall be conducted by a Judicial Officer promptly. The person(s) requesting the hearing shall notify all persons known to have an interest in the property of the time and place of the hearing.

(i) Appraisal. An order for appraisal of property so that security may be given or altered may be entered upon motion. If the parties do not agree in writing upon an appraiser, a Judicial Officer will appoint the appraiser. The appraiser shall be sworn to the faithful and impartial discharge of the appraiser's duties before any federal or state officer authorized by law to administer oaths. The appraiser shall give one (1) business day's notice of the time and place of making the appraisal to counsel of record. The appraiser shall promptly file the appraisal with the Clerk and serve it upon counsel of record. The moving party normally will pay the appraiser's fee, but it is a taxable cost of the action.

(j) Security Deposit for Seizure of Vessels. The first party who seeks arrest or attachment of a vessel or property aboard a vessel shall deposit with the Marshal such sums as may be required by the Marshal to cover the expenses of the Marshal including, but not limited to, dockage, keepers, maintenance, and insurance. The Marshal is not required to execute process until the deposit is made. The party shall advance additional sums from time to time, at the Marshal's request, to cover estimated expenses. A party who fails to advance such additional sums may not participate further in the proceedings except by order of the Court. The Marshal may, upon notice to all parties, petition the Court for an order to release the vessel if additional sums are not advanced within seven (7) days after the request.

(k) Intervenors' Claims.

(1) Presentation of Claim. When a vessel or other property has been arrested, attached, or garnished, and is in the hands of the Marshal or substitute custodian, anyone having a claim against the vessel or property is required to present the claim by filing an intervening complaint and obtain a warrant of arrest, and not by filing an original complaint, unless otherwise ordered by a Judicial Officer. No formal motion is required. The intervening party shall serve a copy of the intervening complaint and warrant of arrest upon all parties to the action and shall forthwith deliver a conformed copy of the complaint and warrant of arrest to the Marshal, who shall deliver the copies to the vessel or custodian of the property. Intervenors shall thereafter be subject to the rights and obligations of parties, and the vessel or property shall stand arrested, attached, or garnished by the intervenor. An intervenor shall not be required to advance a security deposit to the Marshal for seizure of a vessel as required by Local Admiralty Rule 104(j).

(2) Sharing Marshal's Fees and Expenses. An intervenor shall owe a debt to any party who has previously advanced funds to cover the expenses of the Marshal, enforceable on motion, consisting of the intervenor's share of the Marshal's fees and expenses in the proportion that the intervenor's claim bears to the sum of all the claims. If a party Plaintiff permits the vacation of an arrest, attachment, or garnishment, the remaining Plaintiffs will share the responsibility to the Marshal for fees and expenses in proportion to the remaining claims and for the duration of the Marshal's custody because of each claim.

(l) Custody of Property.

(1) Safekeeping of Property. When a vessel or other property is brought into the Marshal's custody by arrest or attachment, the Marshal shall arrange for adequate safekeeping, which may include the placing of keepers on or near the vessel. A substitute custodian, in place of the Marshal, may be appointed by order of the Court. Any application for appointment of a substitute custodian must show the name of the proposed custodian, the location of the vessel during the period of custody, and the proposed insurance coverage. Notice of the application to appoint a substitute custodian, if made concurrent with the application for arrest or attachment, need only be given to the Marshal.

(2) Insurance. The Marshal may procure insurance to protect the Marshal, keepers, and substitute custodians from liabilities assumed in arresting and holding the vessel, cargo, or other property, in performing protective services, and in maintaining the Court's custody. The party who applies for arrest or attachment shall reimburse the Marshal for premiums paid for the insurance and shall be an added insured on the policy. The party who applies for removal of the vessel, cargo, or other property to another location, for designation of a substitute custodian, or for other relief that will require an additional premium, shall reimburse the Marshal therefor. The premiums charged for the liability insurance are taxable as administrative costs while the vessel, cargo, or other property is in the custody of the Court.

(3) Cargo Handling, Repairs, and Movement of the Vessel.

(A) Following arrest or attachment of a vessel, cargo handling shall be permitted to commence or continue unless otherwise ordered by the Court. No repairs to or movement of the vessel shall take place without order of the Court. The applicant for an order shall give notice to the Marshal and to all parties of record.

(B) If an applicant shows adequate insurance to indemnify the Marshal for liability, the Court may order the Marshal to permit repairs or movement of the vessel, cargo, or other property. The costs and expenses of such activities shall be borne as ordered by the Court. Any party of record may move for an order to dispense with keepers or to remove or place the vessel, cargo, or other property at a specified facility, to designate a substitute custodian, or for similar relief. Notice of the motion shall be given to the Marshal, keeper, or substitute custodian, and to all parties of record. The Judicial Officer will require that adequate insurance on the property will be maintained by the successor to the Marshal, before issuing the order to change arrangements.

(4) Claims by Suppliers for Payment of Charges. A person who has furnished supplies or services to a vessel, cargo, or other property while in custody of the Court, who has not been paid, and who claims the right to payment as an expense of administration, shall submit an invoice to the Clerk in the form of a verified claim at any time before the vessel, cargo, or other property is released or sold. The supplier must serve copies of the claim on the Marshal, substitute custodian if one has been appointed, and all parties of record. The Court may consider the claims individually or schedule a single hearing for all claims.

(m) Sale of Property.

(1) Notice. Unless otherwise ordered, upon good cause shown, or as provided by law, notice of sale of property in an action in rem shall be published in a newspaper of general circulation in the District one (1) time a week for two (2) consecutive weeks with the last date of publication not less than seven (7) days immediately preceding the sale. The Marshal shall file with the Clerk a copy of the notice as it was published. The notice of sale shall state the last date on which claims can be filed against the vessel or property or proceeds of sale of same, as provided in Local Admiralty Rule 104(k)(1).

(2) Payment of Bid. These provisions apply unless otherwise ordered in the order of sale:

(A) The person whose bid is accepted shall immediately pay the Clerk the full purchase price if the bid is $1,000.00 or less;

(B) If the bid exceeds $1,000.00, the bidder shall immediately pay the Clerk a deposit of at least $1,000.00 or ten percent (10%) of the bid, whichever is greater, and shall pay the balance within three (3) business days;

(C) If an objection to the sale is filed within the period set forth in Local Admiralty Rule 104(m)(6), the bidder is excused from paying the balance of the purchase price until five (5) days after the sale is confirmed; and

(D) Payment shall be made in cash, by certified check, cashier's check, or wire transfer.

(3) Late Payment. If the successful bidder does not pay the balance of the purchase price within the time allowed, the bidder shall pay the Marshal the cost of keeping the property from the due date of the bid amount until the balance is paid, and the Marshal may refuse to release the property until this charge is paid.

(4) Default. If the successful bidder does not pay the balance of the purchase price within the time allowed, the bidder shall be in default, upon order of the Court entered in response to an appropriate motion, and the Judicial Officer may accept the second highest bid or may arrange a new sale. The defaulting bidder's deposit shall be forfeited and applied to any additional costs incurred by the Marshal because of the default, and the balance shall be retained in the registry of the Court awaiting an order.

(5) Report of Sale by Marshal. At the conclusion of the sale, the Marshal shall forthwith file a written report with the Court setting forth the notice given; the fact of the sale; the date of the sale; the names, addresses, and bid amounts of the bidders; the price obtained; and any other pertinent information.

(6) Time and Procedure for Objection to Sale. An interested person may object to the sale by filing a written objection with the Clerk within three (3) business days following the sale, serving the objection on all parties of record, the successful bidder, and the Marshal, and depositing a sum with the Marshal that is sufficient to pay the expense of keeping the property for at least seven (7) days. Payment to the Marshal of such sum shall be by certified check or cashier's check. The Court shall hold a hearing on the confirmation of the sale.

(7) Confirmation of Sale. If no objection to the sale has been timely filed, the sale shall be confirmed by order of the Court no sooner than five (5) days after the sale and no later than seven (7) days after the sale. The Marshal shall transfer title to the purchaser upon the order of the Court.

(8) Disposition of Deposits.

(A) If the objection is sustained, sums deposited by the successful bidder will be returned to the bidder forthwith. The sum deposited by the objector will be applied to pay the fees and expenses incurred by the Marshal in keeping the property until it is resold, and any balance remaining shall be returned to the objector. The objector will be reimbursed for the expense of keeping the property from the proceeds of a subsequent sale.

(B) If the objection is overruled, the sum deposited by the objector will be applied to pay the expense of keeping the property from the day the objection was filed until the day the sale is confirmed, and any balance remaining will be returned to the objector forthwith.