Betty K Agencies, Ltd. v. M/V/ Monada

Citation432 F.3d 1333
Decision Date16 December 2005
Docket NumberNo. 04-14208.,04-14208.
PartiesBETTY K AGENCIES, LTD., Plaintiff-Appellant, Counter-Defendant, v. M/V MONADA, her engines, tackle, appurtenances, etc., on rem, Tidal Wave, Ltd., in personam, Defendants-Appellees, Counter-Claimants.
CourtU.S. Court of Appeals — Eleventh Circuit

Stephen C. Irick, Jr., Hayden & Milliken, P.A., Miami, FL, for Appellant.

Arthur Joel Levine, Law Office of Arthur Joel Levine, Miami, FL, for Appellees.

Appeal from the United States District Court for the Southern District of Florida.

Before HULL, MARCUS and HILL, Circuit Judges.

MARCUS, Circuit Judge:

Appellant, Betty K Agencies, LTD. ("Betty K"), challenges the district court's sua sponte order dismissing with prejudice its maritime claims against Appellees Tidal Wave Limited ("Tidal Wave") and M/V MONADA ("MONADA"). Because the district court dismissed the case with prejudice as a sanction for failure to answer a counterclaim and perfect service of process, without finding that Betty K acted with willful or contumacious disregard for court rules, and without finding that lesser sanctions were somehow inadequate, we vacate the district court's Dismissal Order and remand for further proceedings consistent with this opinion.


Betty K is in the business of transporting marine cargo between Miami and Nassau, Bahamas. In 2003, Betty K entered into an agreement with Tidal Wave to charter the defendant M/V MONADA, a cargo vessel. Soon thereafter, and with twenty-seven days remaining in the charter period, the vessel's engine failed, rendering the vessel inoperable for the remainder of the charter period. Betty K requested from Tidal Wave $52,650 in unearned charter hire and $6,051 in advances made to the vessel while in service. Tidal Wave refused to return the requested funds, whereupon Betty K commenced suit in the United States District Court for the Southern District of Florida.

Betty K sued the M/V MONADA, in rem, and Tidal Wave, in personam, on April 7, 2004, and moved for an order directing issuance of a warrant of arrest. The next day, the district court issued a Warrant of Arrest for the vessel, but before the marshal could arrest the vessel, Tidal Wave filed an Emergency Motion stating that "this vessel is voluntarily submitting to the Court's jurisdiction, and the disruption caused by an arrest is not necessary." At an emergency hearing before the district court, Tidal Wave agreed on behalf of the vessel to post an adequate security bond in lieu of arrest in the amount of $65,956.58. On April 29, 2004, the marshal, not surprisingly, returned the arrest warrant unexecuted, explaining: "Defendant posted bond. Court advised not to arrest. Return unexecuted."

On April 14, 2004, Tidal Wave filed and served on Betty K its Answer, Affirmative Defenses, and Counterclaims. It is undisputed that Betty K did not file its Answer to the counterclaim with the clerk of court; the parties dispute whether Betty K served its Answer on Tidal Wave. Betty K claims to have served counsel by hand with an answer to the counterclaim in court at the emergency hearing; counsel for Tidal Wave denies this. No hearing was conducted nor were findings made by the district court as to whether an answer was served on Tidal Wave.

The parties continued to litigate their claims before the district court even after the date on which Betty K's Answer was due, and no motion to compel an answer or dismiss was ever filed by any party. Indeed, nothing in the record suggests that, during that time, the court or the litigants were aware of Betty K's failure to respond to Tidal Wave's counterclaim. Nevertheless, on July 30, 2004, the district court, sua sponte, entered its terse Dismissal Order stating:

Plaintiff failed to respond as required by S.D. Fla. L.R. 7.1.C and Fed.R.Civ.P. 12(a)(2). In addition, the Court notes that service was never perfected as to Defendant M/V MOVADA [sic]. After reviewing the record and being otherwise advised of the premises, it is hereby ORDERED AND ADJUDGED that this action is DISMISED WITH PREJUDICE.

No further explanation was offered.

Soon thereafter, on August 5, 2004, Betty K, pursuant to Rule 60(b), timely filed a Motion to Vacate arguing that: (1) the district court mistakenly concluded, based on the docket entry reflecting incomplete service on the MONADA, that the vessel was not properly before the court, even though posting the bond established the district court's in rem jurisdiction; and, (2) Betty K committed excusable neglect by failing to file its Answer with the court. Betty K said that, in any event, the draconian remedy of dismissing with prejudice the entire complaint was the wrong remedy. The District Court denied Betty K's Motion to Vacate, citing as its sole reason Betty K's failure to answer Tidal Wave's counterclaim. In its entirety, the order read as follows:

THIS CAUSE came before the Court upon Plaintiff Betty K Agencies, Ltd.'s Motion to Vacate or, Alternatively, to Alter and Amend "Final Order of Dismissal and Denying All Pending Motions as Moot," (D.E.30), filed August 5, 2004. The Court having carefully considered the case file and being duly advised, Plaintiff's Motion is DENIED.

Plaintiff avers in its Emergency Motion that the response to the Defendants' counterclaim was hand delivered at an emergency hearing held on April 16, 2004. Plaintiff's Motion at ¶ 4. Pursuant to Fed.R.Civ.P. 12(a)(2), a party must serve a reply to a counterclaim within twenty (20) days after service of the answer. All papers after the complaint required to be answered "shall be filed with the clerk where the assigned Judge is chambered either before service or within three business days, thereafter." S.D. Fla. L.R. 5.1.B. Plaintiff failed to provide any demonstrable evidence that it has complied with the Fed.R.Civ.P. or the S.D. Fla. L.R. Moreover, the docket does not provide any evidence that the Plaintiff filed and served its response to Defendants' counterclaim, as required.

It is therefore: ORDERED AND ADJUDGED that Plaintiff's Request for Emergency Motion to Stay enforcement of Order is hereby DENIED.

Betty K has timely appealed both the Dismissal Order and the Order Denying Plaintiff's Motion to Vacate.


We review for abuse of discretion a district court's dismissal for failure to comply with the rules of court. Goforth v. Owens, 766 F.2d 1533, 1535 (11th Cir.1985). Discretion means the district court has a "range of choice, and that its decision will not be disturbed as long as it stays within that range and is not influenced by any mistake of law." Guideone Elite Ins. Co. v. Old Cutler Presbyterian Church, Inc., 420 F.3d 1317, 1324 (11th Cir.2005) (internal quotation marks omitted).

Although the district court nowhere specified the authority upon which it relied to sua sponte dismiss Betty K's case, in these circumstances a court may dismiss a case with prejudice based on two possible sources of authority: Rule 41(b), or the court's inherent power to manage its docket. Rule 41(b) provides: "For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against him." Fed.R.Civ.P. 41(b). The Supreme Court also has held that "[t]he authority of a court to dismiss sua sponte for lack of prosecution has generally been considered an `inherent power,' governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs...." Link v. Wabash R.R. Co., 370 U.S. 626, 630, 82 S.Ct. 1386, 1389, 8 L.Ed.2d 734 (1962).

Although the plain language of Rule 41(b) suggests that a court may act pursuant to that Rule only when dismissing upon the motion of the defendant, and acts only on its inherent authority when dismissing sua sponte, many of our decisions elide this neat distinction. For example, in Hildebrand v. Honeywell, Inc., 622 F.2d 179, 181 (5th Cir.1980),1 the former Fifth Circuit reviewed a dismissal upon motion, but stated that "a court may sua sponte dismiss a case with prejudice under Rule 41(b) of the Federal Rules of Civil Procedure." Accord World Thrust Films, Inc. v. Int'l Family Entm't, Inc., 41 F.3d 1454, 1456 (11th Cir.1995) (reversing sua sponte dismissal for failure to comply with court rules, and citing Rule 41(b) as the source of the district court's authority); Lopez v. Aransas County Indep. Sch. Dist., 570 F.2d 541, 544 (5th Cir.1978) (affirming sua sponte dismissal and stating that "[u]nder Rule 41(b) of the Federal Rules of Civil Procedure a case may be dismissed with prejudice. . . . [And] [a]lthough the rule is phrased in terms of dismissal on the motion of the defendant, it is clear that the power is inherent in the court and may be exercised sua sponte ....."). At least one decision, however, has drawn a clear distinction between the two sources of authority: "[Rule] 41(b) allows a defendant to seek the dismissal of an action.... In addition to the authority granted by Rule 41(b), a federal district court possesses the inherent authority to dismiss an action for want of prosecution ...." Gonzalez v. Firestone Tire & Rubber Co., 610 F.2d 241, 247 (5th Cir.1980).

This much, however, is clear: a dismissal with prejudice, whether on motion or sua sponte, is an extreme sanction that may be properly imposed only when: "(1) a party engages in a clear pattern of delay or willful contempt (contumacious conduct); and (2) the district court specifically finds that lesser sanctions would not suffice." World Thrust Films, 41 F.3d at 1456; accord Gratton v. Great Am. Commc'ns., 178 F.3d 1373, 1374 (11th Cir.1999); Mingo v. Sugar Cane Growers Co-op. of Fla., 864 F.2d 101, 102 (11th Cir.1989); Cohen v. Carnival Cruise Lines, Inc., 782 F.2d 923, 924-25 (11th Cir.1986); Goforth, 766 F.2d at 1535; Jones v. Graham, 709 F.2d 1457, 1458 (11th Cir.1983); Gonzalez, 610 F.2d at 247; Hildebrand, 622 F.2d at 181; Boazman v....

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