Sausalito Yacht Harbor v. S/V Dreamer

Background

Sausalito Yacht Harbor brought an in rem maritime action—an action against property—to enforce maritime liens related to S/V Dreamer. The vessel is identified as a 1974 Choey Lee OS-40 sailing vessel. The opinion states that J. Loyal Tarbet entered a private-wharfage contract with Sausalito Yacht Harbor in 2014 and later agreed to live aboard the vessel. Sausalito Yacht Harbor alleged that the vessel’s account became overdue, that the agreement was terminated effective July 15, 2025, and that the vessel remained at the marina without payment of the arrearages.

Legal Standard

The court applied Supplemental Rule E(9)(a)(i) of the Federal Rules of Civil Procedure. That rule permits an interlocutory sale of arrested property if it is liable to deterioration, the expense of keeping it is excessive or disproportionate, or there is an unreasonable delay in securing its release. The moving party need establish only one of those criteria. The court also explained that a vessel’s owner generally must have sufficient time—typically at least four months—to post security or otherwise secure release before an interlocutory sale is ordered.

Court’s Analysis

The court found the deterioration criterion satisfied. Sausalito Yacht Harbor submitted a declaration from Ray Jones, whom the opinion identifies as an experienced boater and president of Long Beach Yacht Sales, Inc. Jones opined that vessels deteriorate in condition and value while idle, particularly in salt water, and that the vessel’s limited custodial maintenance did not prevent that deterioration.

The court also found that the cost of keeping the vessel was excessive and disproportionate. Under the custodian order, the charges totaled $98.50 per day for wharfage and custodial services, in addition to inspection charges. The court stated that Sausalito Yacht Harbor’s damages were $40,566.20 through February 18, 2026, and that total damages from the vessel’s arrest through September 10, 2026, were $14,149.00 for the stated custodial and inspection charges. Based on Jones’s assessment that the vessel was in extremely poor condition and had a negative estimated fair-market value, the court found the ongoing costs excessive and disproportionate.

The court further found an unreasonable delay in securing release. No one had posted security, entered a release stipulation, or requested a hearing challenging the arrest. More than four months had passed since the arrest, giving potential claimants a reasonable opportunity to seek release.

Credit Bid and Disposition

The court authorized Sausalito Yacht Harbor to credit bid the amount of its lien and qualifying costs. A credit bid allows a secured claimant to bid its secured debt instead of paying that amount in cash. The authorized amount was $54,715.20, consisting of the $40,566.20 asserted in the verified complaint and $14,149.00 in additional custodian fees, plus other actual and demonstrable costs of suit, excluding attorney fees. Sausalito Yacht Harbor must file and serve an affidavit establishing the total secured indebtedness at least 14 days before the sale.

The court granted the motion for interlocutory sale and authorization to credit bid. It directed the U.S. Marshal to sell S/V Dreamer at public auction as soon as reasonably possible, but not sooner than 30 days after the Marshal’s auction notice. Sausalito Yacht Harbor must file a status report by November 13, 2026, stating whether the sale occurred or, if not, when it expects the sale to occur. The opinion text does not identify the magistrate judge by name.