Marina Management Services, Inc. v. Vessel My Girls

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 2, 1999 Decided February 11, 2000
No. 99-7017
Marina Management Services, Inc.,
and Lisa Petti Ellis,
Appellants/Cross-Appellees
v.
Vessel My Girls, and
John N. Singleton,
Appellees/Cross-Appellants
Consolidated with
No. 99-7018
Appeals from the United States District Court
for the District of Columbia
(No. 97cv00423)
Lisa P. Ellis argued the cause and filed the briefs for
appellants/cross-appellees.
Thomas J. Whalen argued the cause and was on the briefs
for appellees/cross-appellants.
Before: Edwards, Chief Judge, Rogers and Tatel, Circuit
Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge: In this appeal and cross appeal
from the grant of summary judgment to Marina Management
Services, Inc., and the dismissal of John N. Singleton's coun-
terclaims, we confront a long-pending dispute arising from
efforts to collect money due by Singleton for the lease of a
boat slip in the James Creek Marina in the Southwest
quadrant of the District of Columbia. Regrettably, various
settlement efforts did not succeed, and our review results in a
remand of the case to the district court. The district court
previously addressed Singleton's contention that the original
plaintiff, James Creek Marina, was not the real party in
interest under Fed. R. Civ. P. 17(a). James Creek Marina v.
Vessel My Girls, 964 F. Supp. 20, 21 (D.D.C. 1997). Notwith-
standing the filing of an amended complaint with a new
plaintiff, Rule 17(a) concerns remain because the record does
not indicate that the new plaintiff--"Marina Management
Services, Inc., as agent for MIF Realty, LP"--is the real
party in interest or authorized to sue on behalf of the real
party in interest; hence the district court erred in dismissing
Singleton's motion to dismiss the amended complaint under
Rule 17(a). In addition, the district court's finding of a bad
faith misrepresentation by Marina Management is unsupport-
ed by evidence sufficient for imposition of a sanction of a
$20,000.00 reduction in the attorneys' fee award. According-
ly, although the district court did not err in finding that
Singleton's contract extended beyond June 1996, or abuse its
discretion in dismissing Singleton's counterclaims, we affirm
in part and reverse in part.
I.
John N. Singleton entered into an Annual Boat Storage
License Agreement ("License Agreement") to lease a slip for
his boat at the James Creek Marina. The License Agree-
ment, which was signed by Singleton and the manager of the
James Creek Marina, was for the period April 1, 1994 to
March 31, 1995, and was extended by the parties. Under the
License Agreement, Singleton, the Licensee, agreed to make
monthly payments of $181.50 for the boat slip, and by the
terms of s 19, upon 15 days' delinquency of a monthly
installment, he would become, at the Licensor's option, "sub-
ject to a day-to-day license at the Transient (Daily) Rate
posted in the Marina's offices, with such changes to take
effect automatically and without further notice to Licensee."
The transient rate charges were substantially higher than the
monthly payment.1 It is undisputed that Singleton became
delinquent in paying his slip fees as early as 1995.2
On March 3, 1997, the James Creek Marina filed a verified
complaint under 46 U.S.C. s 31342(a)3 for a lien against
Singleton's boat and a money judgment of $26,015.67, plus
future daily lease charges, marina fees, legal fees, and costs.
Exhibit C to the complaint reflected as of February 28, 1997,
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1 The transient rate is $0.75 per foot per day; because Single-
ton's boat is 34 feet long, his transient rate was $25.50 per day.
2 Marina Management received payments from Singleton of
$181.50 on April 16, 1994, and $800.00 on August 22, 1995. Howev-
er, Marina Management asserts that when the latter payment was
made, Singleton was already in arrears of $3,989.17, and because his
one-year prepayment was put on an invalid MasterCard account, he
was "effectively in default from the first day of the [License]
Agreement," thus making transient rates applicable as of April 1,
1994.
3 Section 31342(a) provides, in relevant part:
(a) ... a person providing necessaries to a vessel on the order
of the owner or a person authorized by the owner--
(1) has a maritime lien on the vessel;
(2) may bring a civil action in rem to enforce the lien; and
(3) is not required to allege or prove in the action that credit
was given to the vessel.
46 U.S.C. s 31342(a) (1999).
both past due monthly slip fees and transient rate charges.
By ex parte order, the district court directed the arrest of
Singleton's boat. After a hearing, the court set the bond at
$20,542.67 (plus 12% for interest and court costs), "based only
upon the unpaid monthly fees and subsequent unpaid tran-
sient fees." When the district court became aware that
Exhibit C did not reflect the invoices that the marina had
actually sent to Singleton before the lawsuit was filed, the
court reduced the bond to $6,728.17 (plus 12% for interest and
court costs) and reduced the attorneys' fee award under the
License Agreement by $20,000.00 as a sanction against Mari-
na Management for having mislead the court. In the mean-
time, Singleton filed five counterclaims, which the district
court dismissed as harassing and designed to delay resolution
of the litigation.
We address in Part II, the real party in interest claim and
the contract issues, in Part III, the sanction for misleading
the court, and in Part IV, the dismissal of Singleton's counter-
claims.
II.
Following the district court's ruling that the James Creek
Marina was not the real party in interest under Fed. R. Civ.
P. 17(a),4 see James Creek Marina, 964 F. Supp. at 22, an
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4 Rule 17(a) provides that:
Every action shall be prosecuted in the name of the real
party in interest. An executor, administrator, guardian, bailee,
trustee of an express trust, a party with whom or in whose
name a contract has been made for the benefit of another, or a
party authorized by statute may sue in that person's own name
without joining the party for whose benefit the action is
brought; and when a statute of the United States so provides,
an action for the use or benefit of another shall be brought in
the name of the United States. No action shall be dismissed
on the ground that it is not prosecuted in the name of the real
party in interest until a reasonable time has been allowed after
objection for ratification of commencement of the action by, or
amended verified complaint was filed in which the plaintiff
was identified as "Marina Management Services, Inc., as
agent for MIF Realty, L.P., d/b/a James Creek Marina."
Singleton renewed his motion to dismiss the complaint on
several grounds. The district court denied the motion by
summary order. On cross appeal, Singleton contends that
the district court erred in denying his motion and in granting
summary judgment to Marina Management on the debt be-
cause an agent cannot sue for a disclosed principal, and there
is no evidence that MIF Realty, LP had acquired the contract
rights between Singleton and the James Creek Marina for
any preexisting debt, or that there was an outstanding con-
tract after June 1996.
A.
Rule 17(a) protects a defendant against a subsequent claim
for the same debt underlying a previously entered judgment.
See, e.g., United Fed'n of Postal Clerks, AFL-CIO v. Watson,
409 F.2d 462, 470-71 (D.C. Cir. 1969). That understanding
was reflected in the district court's opinion addressing Single-
ton's motion to dismiss the original complaint under Rule
17(a). See James Creek Marina, 964 F. Supp. at 22. Al-
though there is a lack of consensus in the case law regarding
whether an "agent" authorized to sue based solely on a power
of attorney is a real party in interest under Rule 17(a),5 the
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joinder or substitution of, the real party in interest; and such
ratification, joinder, or substitution shall have the same effect
as if the action had been commenced in the name of the real
party in interest.
Fed. R. Civ. P. 17(a).
5 Compare Advanced Magnetics, Inc. v. Bayfront Partners,
Inc., 106 F.3d 11, 17-18 (2d Cir. 1997); Airlines Reporting Corp. v.
S and N Travel, Inc., 857 F. Supp. 1043, 1046-47 (E.D.N.Y. 1994)
(Weinstein, J.) (citing Titus v. Wallick, 306 U.S. 282 (1939)); Corpo-
ration of the President of the Church of Jesus Christ of Latter Day
Saints v. Envtl. Protection Comm'n of Hillsborough County, 837
F. Supp. 413, 415 (M.D. Fla. 1993); Mitsui & Co. (USA), Inc. v.
Puerto Rico Water Resources Auth., 528 F. Supp. 768, 776 (D.P.R.
1981).
operative question is whether the plaintiff "possesses the
right to be enforced." Best v. Kelly, 39 F.3d 328, 329 (D.C.
Cir. 1994) (quoting Charles A. Wright, Law of Federal Courts
490 (1954)); see also Joyner v. F & B Enterprises, Inc., 448
F.2d 1185, 1186 (D.C. Cir. 1971); 6A Wright, Miller, and
Kane, Fed. Prac. and Proc. Civ.2d ss 1545, 1553.
As the caption of the amended complaint and the record
appears to show, the stakeholder vis-a-vis Singleton's boat
slip debt is MIF Realty, LP.6 Marina Management purports
only to be acting as an agent for MIF Realty, LP, which as
principal allegedly "possesses the right to be enforced."
Best, 39 F.3d at 329. Assuming MIF Realty, LP is the
stakeholder for Singleton's debt, there is nothing in the
record to show that Marina Management is authorized to
prosecute the instant lawsuit. Under the terms of a 1997
operating agreement, MIF Realty, LP authorized Marina
Management to enforce license obligations of James Creek
Marina tenants and "at the direction of Owner take such
actions as may be necessary to effectuate Owner's rights
under any such license agreement." The operating agree-
ment further provides that "[o]perator acknowledges that,
except as otherwise expressly provided for herein, the initi-
ation and prosecution of lawsuits shall require the prior
__________
6 Exhibit D to Marina Management's opposition to the motion
to dismiss states the following: in 1988, the National Park Service,
which owns the James Creek Marina, and Marine Management,
Inc., entered into a concession agreement that was later assigned to
Washington, D.C. Associates ("WDCA"). Following a number of
assignments of interest in the concession agreement, and due to the
later bankruptcy of WDCA, MIF Realty, LP acquired the conces-
sion rights to the James Creek Marina in September 1996. See
infra n.7. MIF Realty, LP engaged Westrec Marina Management
to operate the marina. In February 1997, MIF Realty, LP termi-
nated Westrec and hired Marina Management Services, Inc. to
operate the marina.
written consent of Owner...." Id. p 2.5. The record pro-
vides no evidence of written consent by MIF Realty, LP for
Marina Management to sue Singleton for his boat slip debts.
Neither is there an affidavit from MIF Realty, LP indicating
consent or ratification of this lawsuit. See, e.g., Associated
Ins. Mgmt. Corp. v. Arkansas Gen. Agency, Inc., 149 F.3d
794, 797 (8th Cir. 1998) (citing Fed. R. Civ. P. 17(a)). Nor is
there a statement in the judgment of the district court that
would protect Singleton against a subsequent claim by MIF
Realty, LP for the debt that Marina Management seeks to
recover. Cf. Watson, 409 F.2d at 470-71.
Accordingly, we reverse the denial of Singleton's motion to
dismiss the amended complaint for noncompliance with Rule
17(a), and remand the case to allow Marina Management to
supplement the record or file a second amended complaint.
B.
Singleton also contends that the district court erred in
granting summary judgment to Marina Management on the
debt because there is no evidence that MIF Realty, LP had
acquired the contract rights for any preexisting indebtedness
for the boat slip and no evidence of an outstanding contract
between Singleton and the real party in interest after the
License Agreement expired in June 1996. Marina Manage-
ment, in turn, contends that the district court erred in
denying its claim for transient rate charges. Our review of
the grant of summary judgment is de novo, viewing the
record in the light most favorable to the nonmoving party to
determine whether there is a genuine issue of material fact as
would make summary judgment inappropriate. See Aka v.
Washington Hosp. Ctr., 156 F.3d 1284, 1288 (D.C. Cir. 1998)
(en banc).
As to the past due slip fees, Singleton maintains that there
is no evidence that either Marina Management or MIF
Realty, LP was the party to whom he is indebted for the slip
fees, or that MIF Realty, LP had acquired the past debts of
the James Creek Marina. In his motion to dismiss the
amended complaint, Singleton argued that there was no evi-
dence that MIF Realty purchased debts owed Washington,
D.C. Associates or that Washington D.C. Associates assigned
MIF Realty, LP the rights in its contracts with Singleton. In
opposing the motion, Marina Management submitted Exhibit
D purporting to list the owners and managers of James
Creek Marina since September 1988.7 Further, Marina Man-
agement recited its efforts to provide Singleton's attorney
with direct access to documents and persons who could
review the chain of ownership. Singleton, in his response,
demanded proof that MIF Realty, LP "has the legal right to
any past obligations and current obligations" of Singleton.
The district court made no express finding that MIF
Realty, LP had acquired the marina's outstanding debts and
there are no documents in the record to substantiate the
assertions in Exhibit D. While mere allegations may be
sufficient to defeat a motion to dismiss, see Hanson v. Hoff-
mann, 628 F.2d 42, 43 (D.C. Cir. 1980); see also Maljack
Prods., Inc., 52 F.3d 373, 375 (D.C. Cir. 1995), summary
judgment was inappropriate in the absence of proof that MIF
Realty, LP has the right to recover debts incurred by Single-
ton prior to September 1996 when MIF Realty, LP obtained
the concession contract. See Crawford v. Signet Bank, 179
F.3d 926, 928 (D.C. Cir. 1999).
Singleton's contention that a second material issue of dis-
puted fact involves whether the License Agreement was
extended beyond June 1996 fails, however. In the district
__________
7 Exhibit D states the following: Home Savings Association of
Kansas City, F.A. ("HSA"), which formerly held an interest in
WDCA's concession contract with the National Park Service as
security for a note it held on WDCA, was taken into receivership by
the Resolution Trust Corporation ("RTC"). On April 16, 1993, all of
HSA's "rights in the James Creek Marina interest" in the conces-
sion contract were assigned by the RTC to MIF Realty, LP. When
WDCA filed for bankruptcy in June 1996, MIF Realty filed a Proof
of Claim, and "[p]ursuant to a Joint Plan of Reorganization pro-
posed by [WDCA] and MIF Realty, LP, MIF Realty [was] given
ownership ... of inter alia, the James Creek Marina interest" in
the concession contract on September 2, 1996.
court, Singleton's attorney advised the court that the parties
had extended their agreement in June 1996. In granting
summary judgment of $7,663.21 for Marina Management, the
district court apparently relied on Singleton's attorney's oral
representation regarding the continuing viability of the Li-
censing Agreement after June 1996, using Singleton's state-
ment of February 26, 1997, listing the amount of his debt.
Singleton's attorney informed this court at oral argument that
he was mistaken in representing to the district court that the
parties' agreement had been extended in June 1996. His
change of position comes too late: having conceded the fact of
extension in the district court, he cannot alter the record now.
See, e.g., United States ex rel. Yesudian v. Howard Universi-
ty, 153 F.3d 731, 748 (D.C. Cir. 1998) (citing Keller v. United
States, 58 F.3d 1194, 1198 n.8 (7th Cir. 1995)); United States
v. Ins. Co. of North America, 83 F.3d 1507, 1510 n.6 (D.C.
Cir. 1996); McNamara v. Miller, 269 F.2d 511, 515 (D.C. Cir.
1959).
Nevertheless, because the record does not reflect a basis on
which to conclude that MIF Realty, LP is entitled to recover
past-due amounts from Singleton for use of the James Marina
Creek boat slip, we are constrained to reverse the grant of
summary judgment. In addition, in response to Marina
Management's contention that it was entitled to recover
transient rate charges, the district court shall consider on
remand whether the plain language of the License Agreement
entitles recovery for the transient rate charges reflected in
Exhibit C. Although the district court ruled that Marina
Management had failed to exercise its option under s 19 of
the License Agreement because it had not previously billed
Singleton at the transient rate, our disposition of the sanction
based on Exhibit C to the complaint in Part III warrants that
the district court consider anew the claim for transient rate
charges based on the plain language of s 19 and the unrefut-
ed evidence that Singleton received oral notice.
III.
At the heart of Marina Management's appeal is its conten-
tion that the district court clearly erred in viewing Exhibit C
to the complaint--the February 28, 1997, invoice--as a mis-
representation, and thus abused its discretion by imposing a
sanction of $20,000.8 Although our review under an abuse of
discretion standard is highly deferential, see In re Holloway,
995 F.2d 1080, 1086 (D.C. Cir. 1993); Founding Church of
Scientology of Washington, D.C., Inc. v. Webster, 802 F.2d
1448, 1457 (D.C. Cir. 1986), if the district court's action is
based on a clearly erroneous finding of fact, that action is an
abuse of discretion. See Cooter & Gell v. Hartmarx Corp.,
496 U.S. 384, 405 (1990); F.J. Vollmer Co., Inc. v. Magaw,
102 F.3d 591, 596 (D.C. Cir. 1996).
The verified complaint stated that under 46 U.S.C.
s 31342(a) and the License Agreement, there was a valid
maritime lien against Singleton's boat and an in personam
contractual claim against Singleton for the unpaid costs of
"necessaries," totaling $26,015.67, as of February 28, 1997,
plus $25.50 per day for each day thereafter, plus fees, attor-
neys fees, and costs. Attached to the complaint was Exhibit
C, a copy of a February 28, 1997, invoice from the marina for
$22,065.67 that was sent to Singleton. The invoice reflected
eighteen monthly lump-sum charges for slip fees at the daily
transient rate from October 1995 through March 1997. The
district court issued an ex parte order for the arrest of
Singleton's boat on March 5, 1997, and, thereafter, pursuant
to Admiralty Rule E(5)(a), determined that the amount of
__________
8 In light of our disposition of the sanction, we need not address
Singleton's contention that Marina Management's counsel, Lisa
Petti Ellis, who also appeals the sanction, lacks standing to appeal
because the sanction was imposed against the client and not its
attorney. Cf. Ass'n of Am. Physicians and Surgeons v. Clinton,
187 F.3d 655, 660 n.4 (D.C. Cir. 1999).
security that Singleton would be required to post in order to
regain possession of his boat was $20,542.67.9
Singleton moved for reconsideration of the bond amount,
arguing that, contrary to the district court's finding, Singleton
had not been billed in 1995 and thereafter for transient rate
charges, that Exhibit C was prepared for purposes of the
litigation, and that his "account history was altered to reflect
transient rates never charged to the defendant." Because the
monthly invoices sent to Singleton did not reflect transient
fees, Singleton's counsel maintained that Marina Management
"clearly intended and did in fact mislead the Court," and,
consequently, the bond calculated on the transient fees was
not in an amount of Marina Management's claim " 'fairly
stated' " under Rule E(5)(a). In response to the district
court's inquiry whether the inclusion of the transient rate
charges shown in Exhibit C represented double billing, Mari-
na Management's attorney advised that there was no double
billing because under the Licensing Agreement, transient
charges, as reflected in Exhibit C, are over and above the
monthly rate. When Singleton's attorney objected that impo-
sition of the transient rate charge was not in the contract and
was not a "necessary" but "a big penalty," Marina Manage-
ment's attorney interjected that the transient rate was in the
License Agreement.
Agreeing with Singleton's assertions, the district court
reduced the bond to $6,728.17, based largely on a February
26, 1997, statement provided by Singleton showing the out-
standing balance through March 1997 to be $5,936.17, and
__________
9 The district court initially set the bond amount based on the
monthly charge and transient rate charges over and above the
monthly fees dating back to September 1995, and other miscellane-
ous fees. The monthly charge consisted of the $181.50 rate in the
Licensing Agreement, which included a $16.50 credit contingent
upon Singleton's prepaying the entire amount in advance; because
he did not prepay, the monthly charge was $198.
$792.00 in monthly slip fees of $198.00 incurred thereafter.
After issuing an order to show cause "as to why sanctions
should not be levied against plaintiff and its counsel for
having misled the Court," the district court reduced the
amount of attorney's fees to be recovered by Marina Manage-
ment by $20,000. The district court found that:
The Court was misled by [Exhibit C] into believing that
transient fees actually were levied and billed to [Single-
ton] on the dates listed in ... [E]xhibit [C]. In addition,
this was suggested, if not argued, in papers filed with the
Court and during oral argument, and therefore was
relied upon by the Court in calculating the amount of
security.... [Marina Management] now admits that
transient fees were never charged before the start of this
litigation.... The Court was misled by the statement
[that Marina Management] provided with its Verified
Complaint and the arguments presented to it.
On appeal, Marina Management contends that there is no
evidence of intentional misrepresentation or violation of Fed.
R. Civ. P. 11,10 or any rule of professional conduct, inasmuch
as Exhibit C was a good faith interpretation of the parties'
agreement. Maintaining that it read the Licensing Agree-
__________
10 Rule 11(b) provides in pertinent part:
By presenting to the court ... a pleading ... or other paper,
an attorney ... is certifying that to the best of the person's
knowledge, information, and belief, formed after an inquiry
reasonable under the circumstances,--
...
(2) the claims ... are warranted by existing law....;
(3) the allegations and other factual contentions have evidentia-
ry support....
Rule 11(c) provides for the imposition of sanctions for violation of
subsection (b).
ment to allow retroactive assessment of transient rate
charges, and that, even if it erred in its reading, there was
abundant evidence of its good faith, Marina Management
relies on three facts in particular. First, Singleton was
notified by letter terminating his license effective January 31,
1997, that under District of Columbia law he was at a
minimum a hold-over tenant and the marina could charge the
transient rate for continued use and occupancy of the boat
slip. Second, the affidavit of the marina dock master, Steve
Wiltamuth, stated that Singleton was given "constant verbal
and oral notice that transient fees were going to be assessed
against him if he failed to pay his marina bill." Third, there
was other evidence that the marina had notified Singleton
prior to assessing transient fees that it was going to do so,
and that it notified Singleton's attorney of previous invoices
that did not include transient rate charges. In other words,
Marina Management maintains, the language of the Licensing
Agreement, specifically s 19, authorized retroactive transient
charges; Marina Management had exercised its option to
impose such charges, giving Singleton notice beyond that
required by s 19 itself; and Singleton's attorney could not
reasonably argue that Exhibit C represented anything other
than Marina Management's computation of its full claim in
admiralty under the parties' agreement.
Rule E for admiralty and maritime claims contemplates ex
parte proceedings for the arrest of property based on the
filing of a complaint. See Supp. R. Adm. E(2).11 Rule E(5)(a)
__________
Fed. R. Civ. P. 11 (1999).
11 Rule E(2)(a) provides:
In actions in which this rule is applicable the complaint shall
state the circumstances from which the claim arises with such
particularity that the defendant or claimant will be able, with-
out moving for a more definite statement, to commence an
investigation of the facts and to frame a responsive pleading.
provides that unless a bond amount is agreed to by the
parties, "the court shall fix the principal sum of the bond or
stipulation at an amount sufficient to cover the amount of the
plaintiff's claim fairly stated with accrued interest and costs;
but the principal sum shall in no event exceed (i) twice the
amount of the plaintiff's claim or (ii) the value of the property
on due appraisement, whichever is smaller."12 A person
claiming interest in arrested property is entitled to "a prompt
hearing at which the plaintiff shall be required to show why
the arrest ... should not be vacated or other relief grant-
ed...." Supp. R. Adm. E(4)(f).
The record indicates that the district court's conclusion that
it was misled was distinct from its concern about whether
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12 Rule E(5)(a) on specific bonds provides that arrested proper-
ty may be released upon
the giving of security, to be approved by the court ... or by
stipulation of the parties, conditioned to answer the judgment
of the court or of any appellate court.... In the event of the
inability or refusal of the parties so to stipulate the court shall
fix the principal sum of the bond ... at an amount sufficient to
cover the amount of the plaintiff's claim fairly stated with
accrued interests and costs; but the principal sum shall in no
event exceed (i) twice the amount of the plaintiff's claim or (ii)
the value of the property on due appraisement, whichever is
smaller.
Rule E(5)(b) on general bonds provides that the owner:
may file a general bond or stipulation, with sufficient surety, to
be approved by the court, conditioned to answer the judgment
of such court in all or any actions that may be brought....
The rule further provides that "the execution of all such
process against such vessel shall be stayed so long as the
amount secured by such bond ... is at least double the
aggregate amount claimed by plaintiffs in all actions ... in
which such vessel has been ... arrested."
there was double charging. Rather, that conclusion reflected
the district court's view that it was led to understand that
Exhibit C was a summary of the invoices that had actually
been sent to Singleton while he had used a boat slip at the
James Creek Marina, or as Singleton's attorney asserted,
Exhibit C purported to be the marina's "account history" with
Singleton. Upon determining that Singleton had not been
billed for transient rate charges prior to February 28, 1997
(the date of the Exhibit C invoice), the district court conclud-
ed that Exhibit C not only misstated the amount that Single-
ton owed but was, in effect, intentionally designed to mislead
the court. Even assuming no error in the district court's
ruling that Marina Management misinterpreted its rights
under the License Agreement, it does not necessarily follow
that Marina Management acted in bad faith with respect to
what Exhibit C represented. See Lipsig v. Nat'l Student
Mktg. Corp., 663 F.2d 178, 181 (D.C. Cir. 1980).
Viewed in the context of an admiralty proceeding, it was
incumbent on Marina Management under Rule E to state the
amount of its claim with particularity, indicating the basis for
arriving at that amount, inasmuch as Singleton and the
marina could not agree on the amount of the bond to be
posted to secure release of his boat. See Supp. R. Adm.
E(2)(a), supra n.11. Our own experience during oral argu-
ment suggests that neither counsel may have been particular-
ly helpful in assisting the district court in understanding
Exhibit C's limited purpose in support of the claimed lien.
Be that as it may, we still do not find evidence of bad faith,
much less an intentional misrepresentation, see United States
v. Wallace, 964 F.2d 1214, 1218 (D.C. Cir. 1992) (citing
Roadway Express Inc. v. Piper, 447 U.S. 752, 767 (1980)),
about what Exhibit C purported to show.
Exhibit C is clearly labeled and dated, and referenced in
the complaint solely in connection with Marina Management's
statement of its claim under 46 U.S.C. s 31342(a) and the
Licensing Agreement. Exhibit A to the complaint referenced
Singleton's ownership of the boat using the boat slip at the
James Creek Marina, and Exhibit B to the complaint was the
Licensing Agreement dated March 1, 1994. The four page
"Statement" in Exhibit C was addressed to Singleton from
the marina and listed the charges, payments, and balance due
as of each monthly payment date and the end of the month
from March 1994 through February 1997.
Marina Management explained in its opposition to Single-
ton's motion to reconsider the bond amount that although, in
the interests of trying to resolve this matter informally it had
not previously charged Singleton the transient rate, it had not
waived its right to the full amount negotiated in the Licensing
Agreement, which provided, in s 19, that such rates may be
applied "at the Licensor's option" and "without further notice
to Licensee." In Marina Management's view, the transient
rates in the License Agreement became part of the maritime
lien for "necessaries," citing Hudson Harbor 79th Street Boat
Basin, Inc. v. Sea Casa, 469 F. Supp. 987, 1979 A.M.C. 2401 (S.D.N.Y. 1979), inasmuch as s 20 of the License Agreement
provided that the lien for necessaries shall include "all unpaid
charges."
Furthermore, Marina Management's conduct belies an in-
tention to mislead. First, the transcript13 reveals no affirma-
tive misstatement by Marina Management that Exhibit C was
Singleton's account history. The district court was concerned
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13 The only transcript in the record on appeal is for May 22,
1997, where the district court first sought to determine whether the
case could be settled. The court, having previously dismissed the
case on April 30, 1997, and having learned that settlement efforts
were unproductive, then responded to Singleton's request for re-
lease of his boat pursuant to Rule E(5)(a) & (b) and to Singleton's
motion to dismiss for failure to comply with Rule 17(a).
about whether the Exhibit C invoice reflected double
charges--the transient rate charge in addition to the monthly
fee--for the same services. Marina Management's attorney
explained that "if the transient rate is a dollar per foot per
day and the monthly fee is $198, then obviously you subtract
that [$]198 from whatever the dollar per foot per day is."
Thereafter, the district court acknowledged that the amount
of the bond is tied to the amount of Marina Management's
claim and determined "an appropriate bond ... [based on]
what a 'necessary' is." The record on appeal reflects that
Marina Management's attorney was not asked if, and did not
volunteer that, Exhibit C was an account history.
Second, the record does not show that Marina Management
or its attorney implied that Singleton had been billed for
transient rate charges prior to February 1997. The undisput-
ed facts that Marina Management provided Singleton's attor-
ney with copies of the invoices sent to Singleton prior to
February 1997 and the commencement of the instant litiga-
tion, and that those invoices do not reflect transient rate
charges, are inconsistent with an intent to create the impres-
sion that such charges had been part of the regular pre-
litigation billing history.
Third, to the extent that Exhibit C on its face could be
mistaken for an account history, the mere appearance of
Exhibit C did not amount to an affirmative misrepresentation
in view of Marina Management's independent reason for
itemizing the amount it claimed was due and owing under
Supp. R. Adm. E(2)(a), supra n.11. Cf. Wallace, 964 F.2d at
1219-20 (quoting Restatement (Second) Torts s 500 cmt. g
(1964)). While, as a matter of prudent legal practice, Marina
Management might have better clarified precisely what Ex-
hibit C represented, the record does not support a finding of
a bad faith misrepresentation by Marina Management or its
attorney that Singleton had been presented with invoices for
transient rate charges prior to February 28, 1997.
Accordingly, in the absence of a factural basis for the
sanction we remand the case so that the district court may
enter an order vacating the sanction.14
IV.
On cross appeal, Singleton contends that the district court
erred in sua sponte dismissing his counterclaims as mostly
frivolous and designed primarily to harass and delay. Our
review is for abuse of discretion, see Rafferty v. NYNEX
Corp., 60 F.3d 844, 851 (D.C. Cir. 1995) (citing Cooter & Gell
v. Hartmax Corp., 496 U.S. 384, 405 (1990)), and we find
none.
In his amended answer, Singleton counterclaimed for prop-
erty damage to the vessel and missing property (Counter-
claim I), defamation (Counterclaim II), intentional interfer-
ence with prospective contractual relations (Counterclaim
III), wrongful seizure of the vessel (Counterclaim IV), and
abuse of process (Counterclaim V). Singleton sought
$200,000.00 in damages, costs, and attorney's fees. The dis-
trict court observed in dismissing the counterclaims that:
[b]oth counsel have engaged in name-calling, personal
attacks and petty arguments and have burdened the
Court with repetitions of arguments already rejected.
Defense counsel has filed counterclaims that appear friv-
olous and designed primarily to harass and delay a final
resolution of this case.
The district court noted that Singleton had withdrawn the
counterclaim for wrongful seizure, and that the counterclaims
__________
14 In view of our remand of the case for a determination of who
is the proper plaintiff under Rule 17(a) and an order vacating the
sanction, we do not address the merits of either Marina Manage-
ment's contention that the district court erred in denying recovery
of certain fees or Singleton's contention that the amount of attor-
neys' fees awarded "was" excessive because a substantial amount
pertained to work associated with the sanction issue. These are
matters to be resolved on remand.
for defamation and abuse of process were "deficient because
of their integral relationship to the legitimate pursuit by
plaintiff of this lawsuit." Viewed in the context of the con-
duct of both counsel, the district court concluded that "all of
the counterclaims should be seen as designed primarily to
harass," and that "all five counterclaims therefore are proper-
ly dismissed under Rule 11 of the Federal Rules of Civil
Procedure."
"[T]he central purpose of Rule 11 is to deter baseless
filings in district court and thus ... streamline the adminis-
tration and procedure of the federal courts." Cooter & Gell,
496 U.S. at 393 (quoting Advisory Committee Note on Rule
11, 28 U.S.C. App. p. 576). Dismissal is a legitimate sanction
under Rule 11, see Carman v. Treat, 7 F.3d 1379, 1382 (8th
Cir. 1993); Rhineheart v. Stauffer, 638 F.2d 1169, 1171 (9th
Cir. 1979), for serious misconduct when lesser sanctions
would be ineffective or are unavailable. See Dodson v. Run-
yon, 86 F.3d 37, 39-40 (2d Cir. 1996); Henry v. Gill Indus.,
Inc., 983 F.2d 943, 948 (9th Cir. 1993). The record supports
the district's court's finding that the counterclaim for abuse of
process was legally deficient because of its close connection
with a good faith action for recovery of a debt. See Scott v.
District of Columbia, 101 F.3d 748, 755 (D.C. Cir. 1996);
Croixland Properties Ltd. Partnership v. Corcoran, 174 F.3d
213, 215 (D.C. Cir. 1999). So too, the district court could
reasonably conclude that Singleton's defamation claim, which
included allegations not necessarily integrally linked to the
legitimacy of the debt recovery action, nonetheless was "de-
signed primarily to harass" in view of "the petty ... conduct
of counsel for both parties....," as were his counterclaims for
property damage and for intentional interference with con-
tractual relations. Marina Management presented multiple
affidavits calling into serious doubt Singleton's property dam-
age claim. Without weighing the merits, this peek at the
evidence, cf., e.g., Massachusetts School of Law at Andover,
Inc. v. United States, 118 F.3d 776, 783 (D.C. Cir. 1997); Air
Line Pilots Ass'n, Int'l v. Eastern Air Lines, Inc., 869 F.2d
1518, 1521 (D.C. Cir. 1989), confirms that given the conten-
tious history of this unduly prolonged litigation, see
McLaughlin v. Bradlee, 803 F.2d 1197, 1205-06 (D.C. Cir.
1986), the district court did not abuse its discretion.
Accordingly, we reverse the grant of summary judgment,
remanding Marina Management's case to the district court,
and affirm the dismissal of the counterclaims.