VIC FRANCK'S BOAT CO., INC. v. Yacht Sunchaser III

BEEKS, Senior District Judge.

Plaintiff brought this action in rem and in personam seeking to foreclose a maritime lien and collect the balance due under an oral contract to repair, and remodel defendant’s yacht SUNCHASER III. Defendant denied owing any further sums under the contract and brought an in personam counter-claim for overpayments made on the contract, lost profits for breach of the contract’s due date, and damages resulting from alleged unfair trade practices.

The vessel was arrested and later released following the posting of adequate security on the plaintiff’s claim by defendant, who now, in turn, has moved to require plaintiff to post security on its counterclaim under Rule E(7) of the Supplemental Rules for Certain Admiralty and Maritime Claims.

A built-in discretion exists within Rule E(7) to allow individual case determination of the propriety of security on a counter-claim. Under old Admiralty Rule 50, the forerunner to Rule E(7), it has been held that this discretion also allows a district court to determine the amount of the bond as long as it is just and reasonable.

Spriggs v. Hoffstot, 240 F.2d 76, 80 (4th Cir. 1957). The purpose of Rule E(7) is to place the parties on a basis of equality as regards security.

Seaboard & Caribbean Transport Corp. v. Hafen-Dampfschiffahrt A.G. Hapag-Hadac Seebaderdienst, 329 F.2d 538 (5th Cir. 1964).

In the exercise of my discretion, I find on the facts before me that no security is necessary to equalize the positions of the parties and that good cause exists to deny defendant’s motion for security.

IT IS SO ORDERED.