LOBSTER 207 LLC v. PETTEGROW et al

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
LOBSTER 207, LLC,
Plaintiff,
v.
WARREN B. PETTEGROW, ANTHONY
D. PETTEGROW, JOSETTE G.
PETTEGROW, STEPHEN M.
PEABODY, POSEIDON CHARTERS
INC., and TRENTON BRIDGE
LOBSTER POUND, INC.,
Defendants.
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1:19-CV-00552-LEW
MEMORANDUM OF DECISION ON PLAINTIFF’S
MOTION FOR ORDER PRESERVING PROPERTY; PETTEGROW
DEFENDANTS’ MOTION TO DISSOLVE AND MOTION FOR
RECONSIDERATION ON MOTION FOR ATTACHMENT
The matter is before the Court on Plaintiff Lobster 207’s Motion for Order
Preserving Property (ECF No. 76), the Pettegrow Defendants’ Motion to Dissolve or
Vacate Attachment and Attachment by Trustee Process (ECF No. 80), and the Pettegrow
Defendants’ Motion for Reconsideration of the Memorandum of Decision on Plaintiff’s
Motion for Attachment and Trustee Process (ECF No. 85).
On June 3, 2020, I issued a Memorandum of Decision on Plaintiff’s Motion for
Attachment and Attachment on Trustee Process (ECF No. 75), in which I granted an order
of attachment and trustee process in the amount of $1,438,181,23. 	Plaintiff asks that I
supplement this relief with a further order that monthly sums paid by Plaintiff to Trenton
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Bridge Lobster Pound, pursuant to the Asset Purchase Agreement, be deposited in an
escrow account to ensure the funds are preserved to satisfy any money damage award.1
Defendants argue I should set aside the grant of an attachment because I denied them a fair
hearing, or at least stay the entry of an attachment until such time as they get around to
demonstrating the existence of insurance or another suitable security. 	Defendants also
argue that an award of an escrow would be improper because Plaintiff has not made an
adequate showing to warrant preliminary injunctive relief.
A. 	Defendants’ Motion to Dissolve or Vacate
Rule 64 of the Federal Rules of Civil Procedure provides that provisional remedies
like attachment are available in a federal court to the extent they would be available in a
state court within the District. In order to grant a motion for attachment and trustee process,
the court must find that it is
more likely than not that the plaintiff will recover judgment, including
interest and costs, in an amount equal to or greater than the aggregate
sum of the attachment and any liability insurance, bond, or other
security, and any property or credits attached by other writ of
attachment or by trustee process shown by the defendant to be
available to satisfy the judgment.
Me. R. Civ. P. 4A(c), 4B(c) (emphasis added); Lund v. Smith, 787 F. Supp. 2d 82, 83 (D.
Me. 2011).
Defendants assert I erred because they suggested there may be insurance available
that would undermine Plaintiff’s request for attachment, and because Plaintiff never
1 Defendants state that Plaintiff signed a note on March 24, 2017, promising to pay $1,000,000 with interest,
in 36 monthly installments of $30,195.90. As of June 30, 2020, the remaining balance is $603,237.22.
Defendants’ Opposition at 1 (ECF No. 95).
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averred the absence of insurance coverage. 	Defendants note that they requested, at the
hearing on the motion, to be heard further if the ruling went against them. They also argue
“it is customary” for a plaintiff seeking attachment to submit an affidavit concerning the
defendant’s insurance coverage. Motion to Dissolve or Vacate at 3.
Defendants’ motion is perplexing. 	Defendants are proceeding on these matters as
if they were a series of one act plays. 	Maine Rules 4A and 4B clearly state that the
expectation on attachment proceedings is that the defendant will make a showing when
insurance or some other security is available to reduce or obviate the need for attachment.
Yet, Defendants did not make a showing to satisfy their burden in opposition to Plaintiff’s
request, despite the passage of many, many months in which they might have rehearsed
their lines. Even now, they are at it again, asking that I conclude that insurance coverage
exists based exclusively on their presentation of declarations pages from assorted policies,
without any proffer concerning the actual coverage terms and, evidently, without producing
the policies for Plaintiff to consider. In the event I am not convinced by this second act,
Defendants ask that I remain seated for Act 3, in which they will reveal some other suitable
asset they think might be a good substitute for attachment on trustee process. Motion at 4
(“request[ing] in the alternative that this Court set a hearing or allow additional submission
such that it may exercise its discretion to select particular assts or credits to be attached in
satisfaction of the attachment”).
“As the moving party on the motion to dissolve, … the burden of proof [lies] with
[the Pettegrows] to establish the adequacy of [their] insurance.” 	Beesley v. Landmark
Realty, Inc., 464 A.2d 936, 938 (Me. 1983). In the context of a motion for attachment that
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proceeded to a contested hearing, it was also the Pettegrow’s burden in the first instance.
“[E]ven on an original motion for an attachment heard on notice to a defendant, the
offsetting sources of other security must be ‘shown by the defendant to be available to
secure the judgment.’” Maine Nat. Bank v. Anderschat, 462 A.2d 482, 484 (Me. 1983)
(quoting Me. R. Civ. P. 4B(c)).
The Pettegrow Defendants did not offer anything to support their insurance
contention at the hearing, and the declarations pages they now offer provide no real insight
into the availability of coverage. 	Declaration pages barely declare the existence of an
insurance policy for some loss, at some time, for some insured. They decidedly say even
less about whether insurance coverage obtains in any particular case. 	Were it not so,
insurance law practitioners and the courts would be deprived of the experience of wading
through the reams of provisions relating to grants of coverage and exclusions that constitute
the meat of commercial insurance forms.
B. 	Defendants’ Motion to Reconsider
Defendants’ reconsideration request takes a slightly different tack. They argue that
because Plaintiff’s showing relied on evidence first presented in a reply filing, they should
have been able to stand on their motion to strike the reply submission, without fear that I
might consider the evidence over their objection, even though the issue of whether to strike
reply evidence was in question and there was precedent in which this Court relied in part
on evidence first submitted in a reply filing. 	See Hancock Lumber Co. Inc. v. Carbary,
No. 1:11-CV-317, 2012 WL 315645, at *2 (D. Me. Feb. 1, 2012).
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Frankly, I would expect counsel to anticipate that I might rely on material evidence
submitted in a reply and to move for leave to file a surreply, if there is countervailing
evidence I should consider. 	Such a motion readily would be granted. Counsel cannot
simply file a motion to strike, sit on their hands, and then complain of a lack of decorum
because I did not request the submission of surreply evidence. 	Defendants’ Motion for
Reconsideration is denied.
C. 	Plaintiff’s Motion for Order Preserving Property
Plaintiff requests that its monthly payments to Trenton Bridge be made into an
escrow account. 	In support of its request, Plaintiff relies on the likelihood of success
showing it made in support of its motion for attachment, along with some supplemental
legal briefing.2 Defendant argues the request is unreasonable because Plaintiff did not file
a motion for preliminary injunction, should not receive an “additional attachment,” and the
additional relief would be an unwarranted exercise of the Court’s power to “sanction” a
party for misconduct in litigation. Defendants’ Opposition at 2 (ECF No. 95).
Plaintiff request is not a request for a preliminary injunction. 	“Orders to deposit
money with the court … do not constitute injunctions ….” Whitfield v. Mun. of Fajardo,
564 F.3d 40, 45 (1st Cir. 2009). 	“A court has inherent power to regulate the litigation
before it in order to preserve money likely to be the subject of the final judgment.”
Zebrowski v. Hanna, 973 F.2d 1001, 1004 (1st Cir. 1992). 	See also HMG Prop. Inv'rs,
Inc. v. Parque Indus. Rio Canas, Inc., 847 F.2d 908, 915 (1st Cir. 1988).
2 I denied the request when first presented because it was not briefed.
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I am persuaded by Plaintiff that the likelihood of success showing warrants the
additional relief they propose. 	Accordingly, the motion is granted. 	The Trustee
Disclosures on the docket indicate that Bar Harbor Bank and Trust holds several accounts
owned by the Pettegrow Defendants. Plaintiff is hereby authorized to make payments on
the Note to Bar Harbor Bank and Trust in care of Trenton Bridge Lobster Pound Inc., which
payments will be subject to the trustee process awarded pursuant to the Memorandum of
Decision on Plaintiff’s Motion for Attachment and Trustee Process. This order is entered
without prejudice to the parties’ ability to request an alternative escrow after meeting and
conferring to discuss any such proposal.
CONCLUSION
Plaintiff’s Motion for Order Preserving Property (ECF No. 76) is GRANTED. The
Pettegrow Defendants’ Motion to Dissolve or Vacate Attachment and Attachment by
Trustee Process (ECF No. 80) and Motion for Reconsideration of the Memorandum of
Decision on Plaintiff’s Motion for Attachment and Trustee Process (ECF No. 85) are
DENIED.
SO ORDERED .
Dated this 21st day of July, 2020.
/s/ Lance E. Walker
UNITED STATES DISTRICT JUDGE
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