Bay Marine Boatworks, Inc. v. S/Y Pursuit

Background

Bay Marine Boatworks, Inc., doing business as Svendsen’s Bay Marine, owned the boatyard where the 82-foot racing sloop S/Y Pursuit remained. Christopher Wollen owned the vessel. The vessel was placed in the boatyard for work in May 2019, and the parties disputed whether Bay Marine properly performed the work and whether Wollen failed to pay.

Bay Marine filed the admiralty case in August 2020, and the court issued a warrant to arrest the vessel. The parties reached a settlement in February 2021. The court conditionally dismissed the case but retained jurisdiction for a limited period to enforce the settlement. The parties repeatedly extended that period because the vessel was not removed. They later agreed in court that removal would occur by January 12, 2022, but that deadline also passed.

Motion to Amend the Settlement

The settlement agreement required Wollen to pay Bay Marine a $100-per-day “lay day penalty.” Bay Marine argued that it expected the vessel to be removed within two weeks after agreed repairs were completed in July 2021. Because the vessel remained in the yard, Bay Marine asked the court to substitute the initial contract fee for the $100 daily penalty, retroactive to August 1, 2021.

Bay Marine brought the request under Federal Rule of Civil Procedure 60(b)(6), which allows a court to provide relief from a final judgment or order for another reason that justifies relief. The court explained that this provision generally requires extraordinary circumstances and that a substantial violation of an order incorporating settlement terms can give a court discretion to modify those terms. The court concluded that it had authority to consider the requested relief because its conditional-dismissal order incorporated the settlement and retained jurisdiction to enforce it.

Court’s Analysis

The court agreed that Wollen’s delay was unreasonable. The settlement contemplated removal within two weeks after completion of repairs, and Wollen had not presented evidence explaining the long delay before recently taking steps such as signing a contract with a transportation provider.

The court nevertheless declined to increase the penalty. The parties had expressly negotiated the $100 fee as a penalty for the precise possibility of delay. Bay Marine had freely agreed to that term, so this was not a situation where the parties had failed to anticipate delay. The court also reasoned that increasing the fee would primarily provide retrospective compensation for past delay rather than encourage future removal, and the proposed past compensation would greatly exceed any future compensation.

The court further noted that Bay Marine had not used the usual remedy for the alleged noncompliance: a motion to enforce the settlement. Such a motion could seek compliance by a specific date or coercive sanctions and would allow the court to develop a record about the steps Wollen had taken to comply.

Disposition

The court DENIED the motion to amend the settlement agreement. It stated that if the vessel was not swiftly removed after the order, Bay Marine should file a motion to enforce the settlement, which the court would hear on an expedited timeline. The order did not decide such a future enforcement motion.