U.S. v. Ex-Uss Cabot/Dedalo

• Decision Date: 14 September 2000
• Docket Number: Civ.A. No. B-99-072.
• Citation: 179 F.Supp.2d 697
• Parties: UNITED STATES of America, et al., v. EX-USS CABOT/DEDALO, its engines, tackle, apparel, appurtenances, etc., in rem.
• Court: U.S. District Court — Southern District of Texas

179 F.Supp.2d 697

UNITED STATES of America, et al.,

v.

EX-USS CABOT/DEDALO, its engines, tackle, apparel, appurtenances, etc., in rem.

Civ.A. No. B-99-072.

United States District Court, S.D. Texas, Brownsville Division.

September 14, 2000.

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COPYRIGHT MATERIAL OMITTED

Peter Glenn Myer, U.S. Dept. of Justice, Civil Division, Washington, D.C., Nancy Lynn Masso, Office of U.S. Attorney, Brownsville, TX, for U.S.

James F. Buchanan, Office of U.S. Attorney, Corpus Christi, TX, for Educational Council for Space Age Technology.

Brian Gary Janis, Sanchez Whittington, Brownsville TX, for Port Isabel San Benito Navigation District.

James H. Hunter, Jr., Royston, Rayzor, Vickery and Williams, Brownsville, TX, for Kanti Bhakta, Arun Bhakta, Vinod Bhakta, Mukeshbhai Patel and Jay Rama.

Joseph P. Tynan, Montgomery, Barnett, Brown, Read, Hammond & Mintz, New Orleans, LA, for Board of Commissioners of the Port of New Orleans.

Dennis M. Sanchez, Sanchez Whittington, T. Mark Blakemore, Rentfro Faulk, Brownsville, TX, for Ex-USS Cabot/Dedalo, its Engines, Tackle, Apparel, Appurtenances, etc., in rem., Bedoli Group, Inc., Global Maritime Group, LLC, and Marine Salvage & Services Inc.

FINAL JUDGMENT DISTRIBUTING THE PROCEEDS OF THE COURT-ORDERED SALE OF THE EX-USS CABOT/DEDALO

TAGLE, District Judge.

BE IT REMEMBERED, that on September 13, 2000, the Court held that Marine Salvage & Services, Inc. has a salvage lien for $20,908.00 and the United States of America has a salvage lien for $70,342.68. Both Marine Salvage & Services, Inc. and the United States of America are also entitled to a pro rata share of the interest accrued on their liens while the funds were deposited in the Court Registry. There are insufficient funds in the Court Registry to satisfy any of the other maritime liens asserted in this case.

I. Summary of the procedural history and facts of the lawsuits filed against the Ex-USS Cabot/Dedalo

The Ex-USS Cabot/Dedalo ("the Cabot") is a decommissioned navy aircraft carrier that has had a long history in Louisiana and Texas' federal courts. To this Court's knowledge, the Cabot has been the subject of in rem lawsuits on four different occasions.¹ The Board of Commissioners of the Port of New Orleans first filed suit against the vessel on March 21, 1994 in the United States District Court for the Eastern District of Louisiana. After the Cabot was moved to Port Isabel and then to Brownsville, Texas, this Court arrested and released the Cabot twice before finally seizing the vessel in the present case and ordering a judicial sale.

The Cabot was owned by the U.S.S. Cabot Dedalo Museum Foundation, Inc. and docked at the Press Street Wharf in the Port of New Orleans from about February 4, 1993 to October 13, 1997. On May 3, 1997, the M/V Tomis Future collided with the Cabot and damaged both the vessel and the Press Street Wharf. The owner of the M/V Tomis Future hired Crescent Towing to position a tugboat alongside the Cabot from May 3rd to May 7th. The tugboat was necessary to prevent the Cabot from breaking away from the wharf. When the owner of the M/V Tomis Future took Crescent Towing off hire on May 7th, the U.S.S. Cabot Dedalo Museum Foundation, Inc. refused to take action to protect its ship. The United States Coast Guard was therefore forced to take over. The Coast Guard performed repairs to the wharf and hired companies to provide tug assistance to protect the Cabot from breaking away and colliding with another vessel or facility. On October 12, 1997, the Coast Guard paid for the Cabot to be taken to a safer docking facility in Violet, Louisiana. The Coast Guard spent at least $500,868.94 on wharf repairs, tug assistance, and towing the Cabot.²

The Parties in this case disagree on whether the Cabot was in real danger of breaking away from her moorings after the allision, and whether the Coast Guard's actions in protecting the vessel were reasonable. Daniel Whiting, the On Scene Coordinator's Technical Representative under the Coast Guard's National Contingency Plan, personally observed the vessel and its moorings both before and within 24 hours after the accident. He stated that the allision caused a 99 to 100 percent failure of the ship's moorings, that the Cabot was in imminent danger of breaking free on a fast-running river, and that tug assistance was essential to keep the Cabot in place. At the Court's bench trial, Johnny Cefalu, the Board of Commissioners' Marine Terminal Superintendent, challenged Mr. Whiting's conclusions, and William E. Kennon, Jr. of Marine Salvage, stated that he believed it was unreasonable to have held the Cabot in place with tugs instead of completing additional repairs to the wharf. However, on cross-examination both witnesses admitted that they either did not have the technical expertise to judge the Coast Guard's decisions or did not know whether the Coast Guard could have reasonably taken an alternative course of action.

The Cabot departed Violet, Louisiana for Port Isabel, Texas on or about October 13, 1997. The new owner of the vessel, Pankaj I. Patel, contacted William E. Kennon, the President of Marine Salvage, to help him arrange for the Cabot's wharfage upon arrival in Port Isabel.³ Mr. Patel told Mr. Kennon that he wanted to dock the Cabot at Port Isabel for two to three months until a berth was readied in Brownsville, Texas where the vessel was to be scrapped. Mr. Patel maintained little contact with Mr. Kennon after the Cabot arrived in Port Isabel, ostensibly because he owed Mr. Kennon money. During the beginning of March 1998, Mr. Kennon noticed that the Cabot began to list and unsuccessfully tried to contact Mr. Patel. When the list increased markedly over a matter of days, Mr. Kennon feared that the vessel would capsize if the condition was not corrected. He stated at trial that if the Cabot had fallen over it "[p]retty much [would have] destroyed the value [of the vessel] in the sense ... [that] it would have cost a fortune to try and raise that ship up. The economics of it would have been horrendous and there's no telling who would've been able to come up with the money to try and raise it."⁴ Mr. Kennon successfully acted to stabilize the ship from March 14 to March 21, 1998, and submitted a bill that indicates that he spent $20,908.00 on the endeavor.⁵ In addition, Marine Salvage has submitted bills that support a claim for necessaries for $56,872.39.

At trial, the United States attempted to show that Mr. Kennon acted pursuant to an oral agreement with Mr. Patel in correcting the list and that the Cabot was never in danger of capsizing. The evidence shows, however, that Mr. Kennon's actions were beyond the scope of his oral agreement with Mr. Patel, which was limited to arranging for the initial mooring of the vessel. The United States' witness, Mr. Barry Chambers, testified that while a significant list does not necessarily mean that an aircraft carrier will fall over, it all depends on why the vessel is listing and how the vessel is moored. When Mr. Kennon acted it was initially unknown why the vessel was increasingly leaning over to one side and since the vessel was not in a slip, the list could not be stopped by the vessel leaning against the bank. In addition, Mr. Kennon's actions are supported by the concerns expressed by the Marine Safety Office of Port Isabel.

On June 19, 1998, while the Cabot was docked in Port Isabel, Marine Salvage, among others, filed suit against the vessel in rem, and this Court issued an arrest warrant on that same day.⁶ On June 22, 1998, the Court granted the parties' joint motion to move the Cabot to the Port of Brownsville. After the vessel was moved to Brownsville, the Court granted a motion to release the Cabot and dismiss the lawsuit without prejudice on September 16, 1998. Before the Cabot was released from custodia legis, Marine Salvage entered into a settlement agreement with the owner of the vessel through which it was to receive a portion of the proceeds from scrapping the vessel.

On September 15, 1998, — a day before this Court non-suited its first arrest of the Cabot — United States District Judge Eldon E. Fallon of the Eastern District of Louisiana entered judgment in personam against the U.S.S. Cabot Dedalo Museum Foundation, Inc. and in rem against the Cabot.⁷ Subsequently, on September 6, 2000, Judge Fallon entered an order amending his prior judgment. The corrected judgment was entered solely in personam against the U.S.S. Cabot Dedalo Museum Foundation, and not in rem against the vessel.

This Court issued a summons to arrest the Cabot on a second occasion on September 29, 1998 based on a verified complaint filed by the United States.⁸ The Court dismissed the lawsuit without prejudice based on the United States' Notice of Voluntary Dismissal before it held a hearing or made any substantive rulings. The order dismissing the lawsuit was entered on February 25, 1999.

The Court finally arrested the Cabot in the present case on April 27, 1999 [Dkt No. 5], and the vessel was sold at an auction on September 9, 1999. After the sale, the Court held a two-phase bench trial to determine the distribution of the $185,000.00 in sale proceeds. The first phase of the trial was held to determine the custodia legis expenses of the substitute custodian, and the second phase — the subject of this order — was held to determine the priority and amount of the maritime liens asserted by the Parties to this lawsuit.

The first phase of the trial was held on April 19, 2000. On May 12, 2000, the Court ruled that the substitute custodian was entitled to $90,047.06 [Dkt. No. 90]. The expenses incurred by the Marshals Service, in the amount of $3,702.26, have also been deducted from the sale proceeds pursuant to 46 U.S.C. § 31326. Therefore, $91,250.68, and the interest accrued on that amount, remains to be distributed through the Court's rulings based on the second phase of the trial.

The...