Steele v. Sailing Vessel "Polaris"

Decision Date21 December 2020
Docket NumberCase No.: GJH-19-3314
Citation508 F.Supp.3d 1
Parties Jessica R. STEELE, Plaintiff, v. SAILING VESSEL "POLARIS", Official Number 631121, IMO#RSL44017M8, laying in her slip at 900 Swan Creek Road, Ft. Washington, MD 20744, and her engines, tackle, equipment, furniture, and all other necessaries thereunto appertaining and belonging, in rem Mark William Steele, et al., Defendants.
CourtU.S. District Court — District of Maryland

Jessica R. Steele, Washington, DC, pro se.

James T. Bacon, Allred Bacon Halfhill and Young PC, Fairfax, VA, for Defendants.

MEMORANDUM OPINION

GEORGE J. HAZEL, United States District Judge

Plaintiff Jessica R. Steele, proceeding pro se , has brought this action against Defendant Sailing Vessel "Polaris," Defendant Mark William Steele ("Defendant Steele"), and Defendant Alyssa Tantallon, LLC ("Defendant Tantallon"), pursuant to 28 U.S.C. § 1333, Supplemental Rule D for Admiralty and Maritime Claims, and Rule 9(h) of the Federal Rules of Civil Procedure. ECF No. 9 ¶ 4.1 At Plaintiff's request, this Court issued an Order of Issuance of Process in Rem (Warrant) for the Arrest of the Sailing Vessel "Polaris," authorizing the United States Marshals Service to seize the vessel located in Ft. Washington, Maryland. ECF No. 14. Via separate Order Appointing Substitute Custodian, this Court appointed Coan River Marina, LLC, as substitute custodian of the property. ECF No. 13. Currently pending before this Court is Defendant Tantallon's Emergency Motion for Release from Arrest of Sailing Vessel "Polaris."

ECF No. 16.2 This Court conducted a virtual hearing via Zoom.gov on the pending Motion on November 19, 2020. For the reasons stated herein, the Emergency Motion is granted, and the vessel shall be released.

I. BACKGROUND3

On May 17, 2016, Plaintiff Jessica Steele and Defendant Mark Steele bought the Sailing Vessel "Polaris" as joint tenants with survivorship when they were a married couple. ECF No. 9 ¶ 11. On October 18, 2018, the Steeles were divorced by order of the District of Columbia Superior Court. Id. ¶ 13. The parties’ settlement agreement, which was later included in the Judgment, stated that:

The parties are the joint owners of an S/V Polaris boat. The boat shall be sold in an arm's length transaction. The proceeds from the sale shall be used to pay the purchase loan for the boat, held by Discover Financial Service, Inc. Any remaining proceeds after payment of the loan, shall be divided by the parties equally (50%-50%).

ECF No. 9-7 at 4.

On December 28, 2018, Defendant Steele unilaterally sold the vessel to Defendant Alyssa Tantallon, LLC, for $14,000. ECF No. 9 ¶¶ 19–20; ECF No. 9-5 at 2. He signed the bill of sale "on behalf of sellers." ECF No. 9-4 at 2. Plaintiff did not sign the bill of sale and asserts that she did not authorize Defendant Steele or any other person to convey her interests in the vessel or to sign a bill of sale of the vessel on her behalf. ECF No. 9 ¶ 22.

On March 4, 2019, Plaintiff filed a Motion for Expedited Hearing and Enter Final Judgment of Absolute Divorce in the District of Columbia Superior Court. ECF No. 16-6 at 1. The Motion stated that Plaintiff's "financial condition requires that our marital asset boat be sold as soon as possible as per the [settlement] agreement." Id. Plaintiff alleged that Defendant Steele had impeded the sale of the boat and, questioning the legitimacy of the sale to Defendant Tantallon, attempted to sell the boat without her knowledge, telling the potential buyer that the boat could be sold without her signature, drafting a contract of sale, and receiving a deposit on the jointly titled boat. Id. Plaintiff requested access to the boat and power of attorney giving her authority to sell the jointly titled boat on Defendant Steele's behalf. Id. at 7.

After the Court issued the Judgment of Absolute Divorce on May 2, 2019, which included the terms of the parties’ settlement agreement but did not separately address the issues raised in Plaintiff's motion related to Defendant Steele's alleged unilateral sale, ECF No. 16-7 at 7–10, Plaintiff filed an Expedited Motion to Enforce the Order of May 2, 2019 to Prevent Impending Foreclosure, on May 31, 2019, ECF No. 16-7 at 1–2. The second motion reiterated her prior request that the court compel Defendant Steele to make the boat available for sale and asked the court to impose sanctions on Defendant Steele. Id. at 1.

On July 11, 2019, Defendant Tantallon sent an Application for Exchange of Certificate of Documentation, U.S. Coast Guard Form CF-1285 to the National Vessel Documentation Center ("NVDC"). ECF No. 9 ¶ 18; ECF No. 9-3. In response, the NVDC sent a Deficiency Letter dated October 4, 2019, stating that the Bill of Sale submitted was not "eligible for recording because the instruments were not signed by Jessica R. Steele for her interest in the vessel," and Defendant Steele's signature "on behalf of sellers" was "not sufficient." ECF No. 9-6 at 2. Thus, the issuance of the Certificate of Documentation would remain pending. Id.

On November 18, 2019, Plaintiff filed a Complaint in this Court, ECF No. 1, amended on May 26, 2020, ECF No. 9, alleging that Defendant Steele had unlawfully sold the vessel to Defendant Tantallon below its fair market price in a "sham ‘arm-in-arm’ transaction" without her authorization as joint owner, id. ¶¶ 20–27. Plaintiff further asked the Court to confirm Plaintiff's title to the vessel as a fifty-percent co-owner, id. ¶¶ 29–33, and order that she shall have access to and right of possession of the vessel, id. ¶¶ 34–36. Plaintiff also requested compensatory and punitive damages. Id. ¶¶ 37–42.

The following day, November 19, 2019, Plaintiff participated in a hearing in the District of Columbia Superior Court before Judge Erik Christian concerning her Expedited Motion to Enforce the Order of May 2, 2019 to Prevent Impending Foreclosure, ECF No. 16-7 at 1–2. See ECF No. 16-8 at 1; see also Hearing Transcript Volume I, Steele v. Steele , No. 2018 DRB 000545 (D.C. Super. Ct. Nov. 19, 2019) ("Nov. 19 Hearing Tr. Vol. I"); Hearing Transcript Volume II, Steele v. Steele , No. 2018 DRB 000545 (D.C. Super. Ct. Nov. 19, 2019) ("Nov. 19 Hearing Tr. Vol. II"); Hearing Transcript, Steele v. Steele , No. 2018 DRB 000545 (D.C. Super. Ct. Nov. 20, 2019) ("Nov. 20 Hearing Tr."). During the two-day hearing on the motion, Plaintiff argued that Defendant Steele had sold the vessel in an arm-in-arm transaction without her signature on the bill of sale in violation of their separation agreement. See ECF No. 16-8 at 2. According to Plaintiff, Defendant Steele had unilaterally sold the boat for well below its market price to a straw buyer from whom he intended to repurchase the boat later. See id. Both parties spent substantial time during the hearing arguing about and calling witnesses regarding the fair market value of the boat and the relationship between Defendant Steele and Defendant Tantallon, issues relevant to determining whether there had been a valid arm's length transaction. Plaintiff also repeatedly raised the issue of Defendant Steele's sale of the boat without her signature, arguing "there's no language in the court order that gives my husband the right to take away my rights as a co-owner. So he's not authorized to sign for me and sell the boat without my agreement"; "[n]obody can sell a jointly-owned property that I own without my signature"; and "[h]e signed on behalf of the sellers." Nov. 20 Hearing Tr. at 31, 174, 185.

The court issued its Order on January 10, 2020, finding against Plaintiff and stating, "[t]here is insufficient evidence in the record to find that [Defendant Steele] violated the parties[’] separation agreement by selling the boat to Mr. Todd [owner of Defendant Tantallon] for $14,000." ECF No. 16-8 at 6–7. The court found that Plaintiff had failed to show that Defendant Steele sold the boat to an interested or affiliated party or that he sold the boat below fair market value. Id. at 5. Although the Order does not explicitly address issues beyond whether there was an arms-length transaction, during the hearing, the judge stated that the ownership dispute between Plaintiff Steele and the buyer was "what I have to determine. That's what this hearing is about," Nov. 19 Hearing Tr. Vol. I at 61, and emphasized that he had authority to "order the boat be sold" and "vest title in personal property, such as this boat," Nov. 20 Hearing Tr. at 179. Plaintiff did not appeal the court's Order.

On May 26, 2020, Plaintiff filed a Motion for the Issuance of Process in rem (Warrant) against the Polaris, ECF No. 11, and a Motion for Order Appointing Substitute Custodian, ECF No. 10, in this Court. The Court granted both motions on October 20, 2020. ECF No. 13; ECF No. 14. On November 13, 2020, Defendant Tantallon filed an Emergency Motion for Release from Arrest of Sailing Vessel "Polaris." ECF No. 16. On November 16, 2020, Defendant Steele filed a Response in Support of the Motion as well as a Request for Dismissal and Sanctions. ECF No. 17. A hearing was held on November 19, 2020, pursuant to Supplemental Rule E(4)(f).

II. STANDARD OF REVIEW

After a ship arrest, a defendant may appear and move to vacate the arrest pursuant to Supplemental Admiralty Rule E(4)(f), which provides, in relevant part:

Whenever property is arrested or attached, any person claiming an interest in it shall be entitled to a prompt hearing at which the plaintiff shall be required to show why the arrest or attachment should not be vacated or other relief granted consistent with these rules.

Fed. R. Civ. P. Adm. Supp. R. E(4)(f). "The function of the expedited postarrest hearing is to afford due process to the shipowner whose vessel has been arrested without a prearrest hearing." Mujahid v. M/V/Hector , 948 F.2d 1282 (Table), 1991 WL 254121, at *1 (4th Cir. 1991) (unpublished) (citing Amstar Corp. v. S/S Alexandros T. , 664 F.2d 904, 910–12 (4th Cir. 1981) ). Consequently, "the...

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