United States District Court, W.D. Washington, Seattle
ORDER DENYING DEFENDANT’S MOTION FOR JUDGMENT
ON THE PLEADINGS
A. TSUCHIDA, CHIEF UNITED STATES MAGISTRATE JUDGE
the Court is the motion for judgment on the pleadings of
Defendant Harley Marine Financing, LLC (“HMF”).
Dkt. 19. HMF contends Plaintiff Tug Construction, LLC
(“Tug Construction”) is barred by res judicata
from reasserting claims in this lawsuit that were settled in
a prior lawsuit. In this lawsuit, Tug Construction asserts
claims for damages pursuant to the Bareboat Charters for five
vessels, including the M/V LELA FRANCO, for unpaid rentals
and repair expenses (the “Hire and Expenses
Litigation”). In the prior lawsuit, Tug Construction
sued for return and possession of the LELA FRANCO after Tug
Construction terminated the Bareboat Charter on the LELA
FRANCO (the “Possessory Litigation”).
Court denies the motion. HMF also filed a motion for
protective order, noted for consideration on October 4, 2019,
requesting a stay of discovery pending resolution of the
motion for judgment on the pleadings. Dkt. 23. The motion for
protective order is now moot and therefore, is also denied.
Motion for Judgment on the Pleadings
the pleadings are closed-but early enough not to delay
trial-a party may move for judgment on the pleadings.”
Fed.R.Civ.P. 12(c). Judgment on the pleadings is proper where
“taking all the allegations in the pleadings as true,
the moving party is entitled to judgment as a matter of
law.” Milne ex rel. Coyne v. Stephen Slesinger,
Inc., 430 F.3d 1036, 1042 (9th Cir. 2005) (quoting
Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d
708, 713 (9th Cir. 2001)).
on the pleadings is improper when the district court goes
beyond the pleadings to resolve an issue; such a proceeding
must properly be treated as a motion for summary judgment.
Fed.R.Civ.P. 12(c); cf. Bonilla v. Oakland Scavenger
Co., 697 F.2d 1297, 1301 (9th Cir.1982) (discussing
Fed.R.Civ.P. 12(b)(6)), cert. denied, 467 U.S. 1251,
104 S.Ct. 3533, 82 L.Ed.2d 838 (1984). The Court may however,
take into consideration such facts as are available from
judicial notice such as court filings and other matters of
public record. Reyn’s Pasta Bella, LLC v. Visa USA,
Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006).
the doctrine of claim preclusion, also known as res judicata,
“a final judgment on the merits bars further claims by
parties or their privies based on the same cause of
action.” Montana v. United States, 440 U.S.
147, 153 (1979). Res judicata “bar(s) all grounds for
recovery which could have been asserted, whether they were or
not, in a prior suit between the same parties . . . on the
same cause of action[.]” Ross v. IBEW, 634
F.2d 453, 457 (9th Cir. 1980). “Res judicata is
applicable whenever there is (1) an identity of claims, (2) a
final judgment on the merits, and (3) privity between
parties.” Stratosphere Litig. L.L.C. v. Grand
Casinos, Inc., 298 F.3d 1137, 1143 n.3 (9th Cir. 2002).
reasonable doubt exists as to what was decided in the first
action, the doctrine of res judicata should not be
applied.” Matter of Braniff Airways, Inc., 783
F.2d 1283, 1289 (5th Cir. 1986); see also Harris v.
Jacobs, 621 F.2d 341, 343 (9th Cir. 1980) (refusing to
preclude the plaintiff from pursuing its claim when that
claim “was not distinctly alleged” in the prior
litigation and the court made no findings pertaining to the
claim). “Because res judicata may govern grounds and
defenses not previously litigated, however, it blockades
unexplored paths that may lead to truth . . . It therefore is
to be invoked only after careful inquiry.” Brown v.
Felsen, 442 U.S. 127, 132, 99 S.Ct. 2205, 60 L.Ed.2d 767
AND PROCEDURAL BACKGROUND
Construction is a Washington limited liability company based
in Seattle, Washington. Tug Construction is the owner of five
towing vessels: the DR HANK KAPLAN (Official No.1266463); the
EARL W REDD (Official No. 1273621); the LELA FRANCO (Official
No. 1258229); the MICHELLE SLOAN (Official No. 1258228); and
the RICH PADDEN (Official No. 1266462) (collectively, the
“Tugs”). Dkt. 1 (Complaint for Breach of Bareboat
Charter Contracts (the Hire and Expenses Litigation)),
Introduction, ¶ 1.
a Delaware limited liability company based in Seattle,
Washington. Id., ¶ 2. HMF chartered the Tugs
under five separate Bareboat Charters. Dkt. 1.1–1.5,
states that the Hire and Expenses Litigation is just one of
“several recent cases between related parties.”
Dkt. 23, p. 3. One of the two owners of Tug Construction
(Harley Franco or “Franco”) is engaged in a
litigation battle with an investor (Macquarie Capital) over
control of Harley Marine Services, Inc., the group of
companies of which HMF is a part. See, Matthew
Godden and Tobias Bachteler v. Harley Franco, In the
Court of Chancery of the State of Delaware, No.
2018-0504-VCL; and Harley Franco v. Macquarie Capital
(USA) Inc., et al., In the Superior Court in and for the
County of King, No. 18-2-16360-9 SEA. Tug Construction is not
a part of either lawsuit. In addition to the Possessory
Litigation and this lawsuit, Tug Construction was a party to
one other suit as a result of the Macquarie Capital/Franco
dispute: a suit brought by HMS claiming sale or charter of
the five Tugs involved in the present litigation was barred
by a non-competition contract Franco signed. See Harley
Marine Services, Inc. v. Harley Franco & Tug
Construction, LLC, In the Superior Court in and for the
County of King, No. 19-2-08826-5 SEA (the
“Noncompetition Suit”). On August 13, 2019, Judge
Laura Inveen issued a 15-page decision in the Noncompetition
Suit concluding HMS was not so prohibited. Dkt. 28, Webster
Decl., Ex. AA (hereinafter “Inveen Decision, Ex.
The Possessory Litigation – (First Action)
March 21, 2019, Tug Construction filed a Verified Complaint
for the Arrest of Vessel against the LELA FRANCO, in
rem, and against HMF, in personam, in the U.S.
District Court for the Central District of California, for
return of the LELA FRANCO. Tug Construction, LLC v. M/V
LELA FRANCO, O.N. 1258229, No. 2:19-cv-02134 (C.D. Cal.)
(Possessory Litigation). See Dkt. 28, Declaration of
Jess G. Webster, Ex. F (Verified Complaint). Pursuant to FRCP
SUP AMC Rule C(2)(c); E(3)(a), a complaint for the
repossession of a vessel must be filed where the vessel is
located at that time. The facts preceding this filing are
contained in the Verified Complaint and are summarized
February 12, 2019 Tug Construction notified HMF that Tug
Construction was terminating HMF’s charters on three
Tugs, including the LELA FRANCO, “effective February
28, 2019, the last date through which hire for the vessels
had been paid.” Dkt. 28, Ex. F at ¶ 12 and Exhibit
E thereto. At the time it was notified of the
termination, HMF was operating the LELA FRANCO in the
vicinity of Los Angeles, California. Id. HMF agreed
to return the LELA FRANCO to Tug Construction by March 8,
2019 in the vicinity of Los Angeles, California. Id.
at ¶ 14 and Exhibit G thereto. HMF failed to do so and
asserted it would return the vessel to Tug Construction by
March 15, 2019. Id. at ¶ 15.
March 12, 2019, Tug Construction notified HMF that HMF was in
breach of its obligation to return the vessel and demanded
the LELA FRANCO be returned no later than March 15, 2019.
Id. at ¶ 16 and Exhibit H attached thereto.
Subsequent emails exchanged between the parties confirmed
that HMF would not be returning the LELA FRANCO by March 15,
2019. Id. ¶ 17 and Exhibit I attached thereto.
HMF failed to ...