Colonna's Shipyard, Inc. v. City of Key West
| Decision Date | 01 July 2011 |
| Docket Number | ACTION NO. 2:10cv63 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | COLONNA'S SHIPYARD, INC., Plaintiff, v. THE CITY OF KEY WEST, FLORIDA, Defendant. |
This matter is before the Court on the Plaintiff's Objections to Report and Recommendation. (Docket No. 51) . The Court has carefully conducted a de novo review of this matter, including the thorough Report and Recommendation of the Magistrate Judge. (Docket No. 50).
The Court and parties are quite familiar with the facts of this case, which could easily be referred to as the Vandenberg saga, and there is no need for an extensive factual review here. Colonna's Shipyard. Inc. v. U.S.A.F. Gen. Hovt S. Vandenberg. 584 F. Supp.2d 862 (E.D.Va. 2008), Colonna's Shipyard, Inc. v. City of Kev West. 735 F. Supp.2d 414 (E.D.Va. 2010). Therefore, the Court will focus on the salient facts only.
All of the money that is claimed by Colonna's Shipyard, Inc. ("Colonna's") in this action resulted from work completed by Colonna's prior to filing the in rem action. (Civil Action No.2:08cvl60). After the filing of that suit, Colonna's worked with the various entities involved in an effort to have its bill paid, in whole or part, and to facilitate the goal of having the Vandenberg serve as an artificial reef in Florida. These parties appear to have worked in good faith toward that goal so that the in rem litigation could be resolved.
It is also apparent that during the course of these efforts, Commissioner William Verge, of the City of Key West, Florida ("Key West") made statements to Colonna's reflecting his commitment to try to make all the parties whole. This was no doubt done in order to resolve the in rem litigation, and to successfully bring to conclusion a project on which he had worked for some years. Unfortunately, no resolution took place and on June 11, 2008, Colonna's requested that the Court sell the Vandenberg. (Civil Action No. 2:08cvl60, Docket No. 19). in the supporting brief, Colonna's requested that the Court "order an interlocutory sale in order to satisfy the maritime lien asserted in Plaintiff's Verified Complaint. . . ." (Civil Action No. 2:08cvl60, Docket No. 20). That maritime lien included the funds that Colonna's seeks to recover in this action, though such recovery here is sought on a different basis. Nevertheless, it is obvious that Colonna's felt it could wait no longer and that the best business decision at that point in the in rem litigationwas to go forward with the sale of the vessel. No one, even in hindsight, can question the wisdom of that decision in light of the obvious inability to bring all the moving parts of a settlement together.
After the Vandenberg was sold, reached its Florida destination, and successfully became an artificial reef, various of the creditors involved in the venture were paid much of what was owed. However, Colonna's was not paid and understandably felt overlooked. Colonna's later filed this suit, seeking recovery of $1,095,848, plus interest (Docket No. 1).
Colonna's understandably has not objected to that portion of the well-reasoned Report and Recommendation dealing with the breach of oral contract claim, but does object to the finding that it is not entitled to relief on a quantum meruit theory. In addressing that claim, the Magistrate Judge found that Key West did not request the repairs that are the subject of the present claim. The Magistrate Judge also found that Colonna's fully and successfully pursued its maritime lien against the vessel. (Docket No. 50, pg. 21). For these reasons, the Magistrate Judge recommended that this Court find that Colonna's is entitled to no relief in this suit.
The Court is not without sympathy for the position in which Colonna's finds itself. It sought in good faith to work with allparties to reach a resolution of the in rem suit and facilitate the Vandenberg's new life as an artificial reef. However, such good faith efforts do not always result in entitlement to a legal recovery. Such is the case here.
In rem sales such as this result in extinguishment of all liens, an obvious and well-settled proposition. But Colonna's argues, among other arguments, that it had a completely separate mutual understanding with Key West that Key West would pay the balance of the Colonna's bill that was owed when Colonna's filed the in rem suit. While it is clear that Colonna's sought to resolve issues involved in the in rem suit before requesting an interlocutory sale of the vessel, it is equally clear that such efforts were unsuccessful and that the parties moved forward with sale of the vessel and all the attendant unknowns that accompany such a sale. Because the resulting fund was insufficient to substantially satisfy Colonna's bill, it now seeks recovery under the equitable remedy of quantum meruit based on a quasi-contract theory. See Nossen v. Hov, 750 F. Supp. 740, 744-45 (E.D.Va. 1990)(case relied upon by Colonna's).
While courts may formulate the elements of quantum meruit in various ways, "[t]he crux of a quantum meruit cause of action lies in the unjust enrichment of one party. M.P. Leasing Corp. v. Colonna's Shipyard. Civ. Action No. 2:07cv273, 2009 AMC 1462,1469 (E.D.Va. 2009). See Raymond. Colestar. Glaspy & Huss, PC v. Allied Capital Corp., 961 F.2d 489, 491 (4th Cir. 1992), W.F. Maqann Corp. v. Diamond Manufacturing Company. Inc., 775 F.2d 1202, 1207-08 (4th Cir. 1985).
Among other things, Colonna's argues that it had an agreement with Key West that Colonna's would "complete any unfinished work and . . . would deliver the vessel" . . . "[a]nd dismiss the arrest and release the ship" if Key West would "pay the bill in full." . However, the testimony of the parties reflects that these events never took place. Colonna's never completed the work and Key West never paid Colonna's. . Having lost any hope that Key West would make payment, Colonna's decided to pursue the in rem sale of the vessel and asked the Court to proceed with such sale - a decision for which Colonna's cannot be faulted, particularly in light of the economic...
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