In World Wide Supply OU v. Quail Cruises Ship Management, Case No. 14-14838 (11th Cir. Sept. 30, 2015), the Eleventh Circuit Court of Appeals affirmed the district court’s order vacating an attachment of legal settlement funds. At issue in this appeal was an attachment of property made pursuant to Supplemental Admiralty Rule B. This appeal had a complicated background, involving multiple lawsuits in federal district courts, Florida state court, and a Spanish bankruptcy court.
The common denominator of these suits was Quail Cruises Ship Management, from which multiple parties, including participants in the appeal, tried to collect money that they believed Quail owed them. This is not surprising, as there have been numerous cases against Quail due to a failed cruise venture they operated.
The money at issue arose from the legal settlement of a dispute over the purchase of a cruise ship featured on ABC Television Network’s long-running series, The Love Boat. The plaintiff-appellant advanced a novel interpretation of Rule B. The district court was unpersuaded, as was the Eleventh Circuit Court of Appeals.
The novel interpretation of Rule B focused on the language in Federal Rule of Civil Procedure B(3)(a) which states in pertinent part:
"If the garnishee admits any debts, credits, or effects, they shall be held in the garnishee's hands or paid into the registry of the court, and shall be held in either case subject to the further order of the court." (emphasis added by the court).
The plaintiff's argument was that its attachment against settlement funds was improperly vacated as a result of the language of the last sentence of Rule B(3)(a). The plaintiff argued that this sentence in Rule B opened a window for its own Rule B attachment against settlement funds, as they were neither deposited into the district court's registry nor held by the garnishee of the previous Rule B action. The appellate court noted that the plaintiff cited no authority in support of its position that a Rule B attachment "lapses" or a party may assert a new Rule B attachment. The court pointed out that the parties of the previous settlement agreement were following the tenets of Rule B(3)(a) in obtaining a court order to distribute the settlement funds.
It is of note that the appellate court found fault with the plaintiff's factual characterization of the case that the settlement funds were to remain the debtor's property throughout the process.
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