A federal judge denied yesterday the request of M/V Luta custodian National Maritime Services Inc. to direct Japanese investor Takahisa Yamamoto to pay $72,462.33 for custodian services from October to December 2016.
U.S. District Court for the NMI designated Judge Frances Tydingco-Gatewood ruled that under the district’s Admiralty Rules, intervenors are obligated to cover expenses proportional to each plaintiff’s share in the sum of all the claims.
She said under Rule E 10 and E 11 of the district’s Admiralty Rules, all parties are responsible to share in the cost of custodial services, in proportion to the value of their claims, from the time the vessel is arrested.
Yamamoto may have a separate obligation under an agreement with National Maritime Services, the judge said, but “it is not for the court to enforce its terms.”
Tydingco-Gatewood determined that the amount and proportion of each plaintiff’s claims against M/V Luta is as follows: Yamamoto’s claim of $1,982,000 represents 76.3 percent; Brochon et al’s claim of $183,647.77 is 7.1 percent; Long Consulting’s claim of $300,000 is 11.5 percent; and Norton Lilly International’s claim of $131,801.10 is 5.1 percent.
The judge said any party may object in writing to this apportionment of shares.
Tydingco-Gatewood said the parties are ordered to jointly file notice to the court whether they agree to a settlement conference before Magistrate Judge Joaquin Manibusan.
At the hearing on the custodian services issue on Tuesday, some intervenors questioned the reasonableness of NMS’ charges.
The judge said the intervenors knew or should have known that once they arrested M/V Luta, they should be on the hook for their portion of the custodian’s fees and expenses.
She pointed out that NMS’ pricing schedule is part of the agreement between Yamamoto and NMS and was published when Yamamoto filed the motion to appoint NMS as substitute custodian, and so was available to the intervenors at the time they intervened in the lawsuit.
The judge said she is inclined to find that the intervenors have waived any objection to the reasonableness of the pricing schedule by not objecting to it until several weeks’ worth of charges had accrued.
The waiver, Tydingco-Gatewood said, would not extend to questions about the reasonableness of particular line items in the billings, hours spent rendering particular services, etc.
NMS, through counsel Sean E. Frink, originally asked the court to require Yamamoto to pay it $82,462.33 for custodian services from October to December 2016. It requested the court to hold only Yamamoto liable to pay the entire amount due.
At Tuesday’s hearing, NMS acknowledged that it recently received a further payment of $10,000 from Yamamoto and reduced its request to $72,462.33.
Frink, however, stated that this is not to say that Yamamoto cannot subsequently pursue contribution from other parties for the costs of custodian services.
Yamamoto, through counsel George Lloyd Hasselback, argued that he should only have to pay his portion of custodial fees and expenses, in proportion of the value of his claim against M/V Luta.
Yamamoto is suing Lt. Gov. Victor Hocog and the owner/operators of M/V Luta for allegedly refusing to pay back the $3.4 million that he put up for the vessel.
After Yamamoto filed the lawsuit last Oct. 25, the U.S. Marshal Service seized M/V Luta. NMS was subsequently appointed as custodian.