Baltimore Line Handling Co. v. Brophy

771 F.Supp.2d 531

2011 A.M.C. 975

BALTIMORE LINE HANDLING CO., Plaintiff,

v.Shannon BROPHY, et al., Defendants.

Civil Action No. ELH–09–03018.

United States District Court, D. Maryland.

Feb. 2, 2011.

J. Stephen Simms, Marios John Monopolis, W. Charles Bailey, Jr., Simms Showers LLP, Baltimore, MD, for Plaintiff.

MEMORANDUM OPINION

ELLEN LIPTON HOLLANDER, District Judge.

This case involves a breach of contract claim arising under the Court's admiralty jurisdiction. Baltimore Line Handling Company (“Baltimore Line”), plaintiff, has sued Shannon Brophy, defendant, seeking $119,475 allegedly due and owing for “line handling services” provided by Baltimore Line to Ms. Brophy at the Piney Point marine terminal from 2006 to 2009. See Complaint (ECF 1). ¹ Ms. Brophy was personally served on February 19, 2010 (ECF 6, Ex. 1), but did not file an answer or otherwise participate in the litigation. Accordingly, the Clerk entered a default against her on March 15, 2010 (ECF 8).

Now pending before this Court is Baltimore Line's Motion for Entry of Default Judgment (“Default Motion”) (ECF 11). By Order entered March 17, 2010 (ECF 10), the Court (Quarles, J.) ² referred the Default Motion to Magistrate Judge Susan K. Gauvey. She issued her Report and Recommendations (“Report”) on October 4, 2010 (ECF 17), recommending the denial of Baltimore Line's Default Motion. On October 15, 2010, Baltimore Line timely filed its “Objection/Response” to the Report. (ECF 19).

In addition, Baltimore Line has filed a “Motion for Sanctions and Order Compelling Discovery” (“Sanctions Motion”) (ECF 21). It concerns a deposition of Ms. Brophy on December 20, 2010, at which she appeared without counsel and refused to answer any questions.

Both the Default Motion and the Sanctions Motion are ripe for decision, and no hearing is necessary. See Local Rule 105.6. For the reasons that follow, the Court overrules Baltimore Line's Objection/Response; adopts Judge Gauvey's Report; denies the Default Motion, without prejudice; and, as to the Sanctions Motion, grants it in part and denies it in part.

Standard of Review of a Magistrate Judge's Report and Recommendation

Under the Magistrate Judges Act, 28 U.S.C. § 636, a district judge may designate a magistrate judge to conduct hearings (if necessary) and report proposed findings of fact and recommendations for action on a dispositive motion. See 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P. 72(b); see also Local Rule 301.5.b. A motion for default judgment is a dispositive motion for purposes of the Magistrate Judges Act. See Callier v. Gray, 167 F.3d 977, 980–82 (6th Cir.1999).

A party who is aggrieved by a magistrate judge's report and recommendation as to a dispositive motion must file “specific written objections to the proposed findings and recommendations” within fourteen days. Fed.R.Civ.P. 72(b)(2). The district judge must then “determine de novo any part of the magistrate judge's disposition that has been properly objected to.” Fed.R.Civ.P. 72(b)(3). But, the Court “need only conduct a de novo review of those portions of the Magistrate Judge's Report and Recommendation to which objection is made.” Chavis v. Smith, 834 F.Supp. 153, 154 (D.Md.1993). As to those portions of the report for which there is no objection, the district court “must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.’ ” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310, 315–16 (4th Cir.2005) (quoting Fed.R.Civ.P. 72 advisory committee note), cert. denied, 546 U.S. 1091, 126 S.Ct. 1033, 163 L.Ed.2d 855 (2006). ³

Factual and Procedural Summary

Baltimore Line is located in Baltimore County, Maryland. It “provides marine line handling services,” by which it supplies “trained linehandlers” who “assist with the berthing and un-berthing of the vessels” by “manag[ing] the lines to and from the vessels.” Complaint ¶¶ 2, 5. According to the Complaint, Ms. Brophy and her late father, Kevin Brophy, “conducted and managed terminal operations at Piney Point, Maryland, including the berthing, loading, and unloading of vessels, doing business as ‘Patriot Line and Security Line LLC.’ ” Id. ¶ 4.

Baltimore Line alleged that from 2006 to 2009, the Brophys “contracted with Baltimore Line[ ] to manage the lines to and from the vessels, arriving and departing” at the Piney Point terminal. Id. ¶ 5. According to plaintiff, the Brophys would invoice the owners or operators of the vessels for the line handling services provided by Baltimore Line, and Baltimore Line in turn “would regularly invoice Shannon Brophy and/or Kevin Brophy d/b/a ‘Patriiot [sic] Lines,’ ” for its services. Id. ¶¶ 5–6. However, Baltimore Line claimed that the Brophys did not remit payment to Baltimore Line for invoiced services performed from 2006 to 2009, totaling $119,475. Baltimore Line seeks a money judgment against Ms. Brophy, individually, for $119,475, plus prejudgment interest and costs. Id. ¶¶ 6–9.

Notably, Baltimore Line sued the Brophys in their individual capacities, but did not sue the Brophys' businesses, “Patriot Line and Security Line LLC,” (“Patriot Lines”) or Vessel Operations, Inc. (“Vessel Operations”).⁴ Baltimore Line averred in its Complaint that Patriot Lines was merely “a ‘doing business as' name of these defendants, and not a Maryland corporation in good standing.” Id. ¶ 4.

As an exhibit to its Default Motion, Baltimore Line submitted an affidavit of its President, Shawn Ciociola (“First Affidavit” or “1st Aff.”) (ECF 11, Ex. 2). In relevant part, Ms. Ciociola averred that “Shannon Brophy and her late father, Kevin Brophy, through their marine businesses ‘Patriot Lines' and/or ‘Vessel Operations' contracted with Baltimore Line to manage lines to and from vessels arriving and departing Piney Point.” 1st Aff. ¶ 3 (emphasis added). Ms. Ciociola posited: “Upon information and belief, ‘Patriot Lines' and ‘Vessel Operations' are merely alter egos of the Brophys.” Id. ¶ 8. According to Ms. Ciociola, “Baltimore Line regularly sent invoices to the Brophys d/b/a ‘Patriot Lines and/or ‘Vessel Operations,’ ” and the Brophys, “d/b/a ‘Patriot Lines' and/or ‘Vessel Operations,’ ” passed those charges along to the vessels being serviced and “collected charges for Baltimore Line's services on behalf of and as fiduciaries for Baltimore Line.” However, the affiant averred that the Brophys failed to remit the monies due and owing to Baltimore Line. Id. ¶¶ 4–7.

As an attachment to the First Affidavit, plaintiff provided a summary of 96 unpaid invoices, ranging in amount from $1,000 to $2,350, for a total of $119,475. (ECF 11, Ex. 3). The earliest invoice was dated September 13, 2006, and the latest was dated August 9, 2009. Id. Each invoice was “due” thirty days after the invoice date. Id. The summary did not state to whom the invoices were addressed.

By Letter Order entered May 18, 2010 (ECF 12), Judge Gauvey directed plaintiff to provide “the contract to which [Baltimore Line] refer[s] in paragraph 3 of the [First] Ciociola affidavit and paragraphs 1 and 8 of the complaint,” as well as eight individually identified invoices. Judge Gauvey also stated:

[Y]our complaint, at paragraph 4 states that defendants Shannon Brophy and Kevin Brophy were doing business as “Patriot Line and Security Line LLC” and that that was not a Maryland corporation in good standing. [The First] Ciociola affidavit, however, states only that “[u]pon information and belief, ‘Patriot Lines' and ‘Vessel Operations' are merely alter egos of the Brophys.” That statement, in my view is [an] insufficient basis to enter a default judgment against the Brophys.

In response, Baltimore Line submitted the requested invoices (ECF 13, Ex. 2), as well as another affidavit of Ms. Ciociola (“Second Affidavit” or “2d Aff.”) (ECF 13, Ex. 1). The Second Affidavit explained that the agreements at issue were oral, as is “common and standard in this industry,” and that “there were no written contracts.” 2d Aff. ¶ 14. “The terms of the oral agreements,” according to Ms. Ciociola, “were that Baltimore Line would provide line handling services to vessels at Piney Point when asked to do so by the Brophys, and then submit its invoices to the Brophys, d/b/a ‘Vessel Operations' and/or ‘Patriot Lines' for payment.” Id. ¶ 15.⁵

Further, Ms. Ciociola averred, id. ¶¶ 3–6:

Defendants Shannon Brophy and her late father, Kevin Brophy, operated two marine businesses at Piney Point: “Vessel Operations” and “Patriot Lines” (also known as “Patriot Line and Security Line LLC” and/or “Patriot Lines and Security, LLC”).

Vessel Operations, Inc. is a corporation in good standing in Maryland. It is not organized as a limited liability company.

Neither “Patriot Lines” nor “Patriot Line and Security Line LLC” are registered corporations in Maryland. “Patriot Lines and Security, LLC” was registered in 2007, but its status was forfeited in October, 2009.⁶

Baltimore Line always dealt with one of the Brophys personally whenever its services at Piney Point were needed and requested. Baltimore Line always understood—as confirmed by the Brophys['] conduct and the invoicing to the Brophys—that both “Vessel Operations” and “Patriot Lines” were merely “doing business as” names for the Brophys.

According to Ms. Ciociola, Baltimore Line began its business relationship with the Brophys, “d/b/a ‘Vessel Operations,’ ” in September 2006. Id. ¶ 8. In October 2007, “the Brophys began doing business as ‘Patriot Lines' and/or ‘Patriot Line and Security Line LLC,’ ” but the same business relationship between the Brophys and Baltimore Line continued. Id. ¶ 12. Ms. Ciociola alleged that the Brophys, “d/b/a ‘Vessel Operations' and/or ‘Patriot Lines,’ ” acted as “agents” for the vessels arriving and departing at Piney Point, and in that capacity secured Baltimore Line's services for the vessels. Id. ¶ 7.

After filing the supplemental information requested by Judge Gauvey, Baltimore Line filed...