199 F.3d 220 (5th Cir. 1999), 98-30983, Lake Charles Stevedores v Prof Vladimir Popov
|Citation:||199 F.3d 220|
|Party Name:||LAKE CHARLES STEVEDORES, INC., Plaintiff-Appellant v. PROFESSOR VLADIMIR POPOV MV, in rem, Defendant-Appellee|
|Case Date:||December 23, 1999|
|Court:||United States Courts of Appeals, Court of Appeals for the Fifth Circuit|
REVISED, JANUARY 24,2000
Appeal from the United States District Court for the Eastern District of Louisiana
Before KING, Chief Judge, and SMITH and STEWART, Circuit Judges.
KING, Chief Judge:
Plaintiff-Appellant Lake Charles Stevedores, Inc. appeals the district court's dismissal of its in rem proceeding against Defendant-Appellee, the Professor Vladimir Popov M/V, arguing that the court erred in determining that the stevedores had no maritime lien. We affirm.
I. FACTS AND PROCEDURAL BACKGROUND
As is often the situation in transactions involving the shipping of goods, a number of different parties were at least indirectly involved in the transaction at the heart of
this case. Terms of the initially contemplated transaction were defined in January, 1997, when ED&F Man Sugar, Inc. ("Man Sugar"), a subsidiary of ED&F Man, Inc., agreed to purchase from Broussard Rice Mill, Inc. ("Broussard") 5000 metric tons of rice at $18.40 c.w.t. (price F.O.B. mill), for delivery some time between the last half of February and the first half of March. The purchase agreement indicates that the final contract price would include the cost of the bags to contain the rice, of freight from the mill to the dock, of unloading the trucks, and of stowing and trimming (i.e., stevedoring services). Adding the cost of these items to the base price for the rice alone ($18.40 c.w.t.) yields an anticipated final price of $20.05 c.w.t. The sale of 5000 tons of rice, under the same terms, was confirmed in a document Broussard sent to Man Sugar on February 3, 1997.
In part because Man Sugar could not secure a vessel by mid- February, delivery could not occur when originally expected. The contract was amended on March 24, 1997 to provide for 4600 (rather than 5000) tons of rice at $20.05 c.w.t., delivery F.O.B. vessel sometime in early April. The contract price again included stevedoring, with no change in the $.90 c.w.t. cost. Man Sugar also agreed to make progress payments of $19.15 c.w.t. when loads of 1500 tons reached the dock in order to prevent Broussard from having to carry the costs associated with delay in delivery. The balance ($.90 c.w.t.) was due when full and complete shipping documents were presented.
Man Sugar was able to gain access to the Professor Vladimir Popov M/V (the "Vessel") in March 1997. Savannah Chartering Ltd., the disponent owner of the Vessel, had time chartered the Vessel to Marine Trading, Ltd. ("Marine Trading") in June 1996. The charter party between Savannah Chartering and Marine Trading provided that
[t]he Captain (although appointed by the Owners), shall be under the orders and direction of the Charterers as regards employment and agency; and Charterers are to load, stow and trim, and secure the cargo at their expense under the supervision of the Captain, who is to sign bills of lading for the cargo as presented, in conformity with the mate's or talley clerk's receipts.1
In a document dated March 20, 1997, Marine Trading voyage chartered the Vessel to Sugar Chartering, Inc., another subsidiary of ED&F Man. The charter party provided that stevedores were to be employed by Sugar Chartering. Sugar Chartering subchartered the Vessel to Man Sugar.
On April 24, 1997, freight forwarder Mary Reid of Reid & Company ("Reid"), acting on behalf of Broussard, asked Lake Charles Stevedores, Inc. ("LCS") to submit a bid for loading the rice. At the time Reid contacted LCS, it was told it would be working for Broussard. Reid also obtained an "all inclusive" bid from another stevedoring concern in the area. In order to assist in comparing the bids, Reid asked LCS to submit an all-inclusive bid. Although the first bid LCS submitted to Reid was copied to Broussard, the second bid was not. LCS' second bid noted that the vessel's gear would be used unless it was slow, in which case LCS' shore gear would be used at LCS' expense. Broussard awarded the contract to load the Vessel to LCS. Reid relayed this information to LCS. LCS had often worked for Broussard in the past, generally unloading its trucks at the docks, but also loading ships under prior F.O.B. contracts.
During April, Broussard delivered the rice to the docks. After receiving confirmation that loads of rice had been delivered, Man Sugar made payments as per the parties' agreement. Lake City Steamship Agency ("LCSA"), a division within
LCS, was hired by Marine Chartering, an agent of Marine Trading, to act as vessel agent. In this capacity, LCSA was responsible for coordinating the Vessel's movement in and out of port and meeting its requirements while in port. LCSA prepared the Notice of Readiness, indicating that the Vessel was in port and ready to be loaded, and transmitted it to Reid, who was also the local agent for Man Sugar, on April 30, 1997.
LCS loaded the Vessel on May 1, May 2, and May 5, 1997. The Vessel's mate or master signed LCS' Activity Sheets2 and Mate's Receipt. A clean bill of lading was signed by LCSA for the Vessel's master. When it received the required shipping documents from Reid, Man Sugar made its final payment, in the amount of $90,761.78, to Broussard. This amount was described as stevedoring expenses in Man Sugar's accounts. LCS sent an invoice to Broussard, but to no other entity, for the stevedoring services rendered. Although Broussard charged Man Sugar $18 per short ton of cargo for stevedoring services (or $.90 c.w.t.), LCS charged Broussard only $14 per short ton, yielding a total bill of $65,395.07. The difference in price was attributed by the district court to Broussard's acceptance of risk of loss due to weather conditions or other contingencies.
LCS had never had difficulty collecting on its accounts with Broussard. However, in this instance, the bill from LCS remained unpaid. On September 30, 1997, after LCS learned that Broussard had been put into receivership, LCS had the Vessel arrested in order to secure payment for the stevedoring services. ED&F Man and Sugar Chartering each filed claim for the Vessel.
The Vessel's claimants and LCS filed motions for summary judgment, each of which was denied. The case was tried without a jury on July 28, 1998. The district court held that LCS was not entitled to a lien because there was no contract between LCS and the charterers, there was no evidence that Broussard was the owner's or a charterer's agent, and the owner's or charterer's knowledge that LCS was apparently the stevedoring concern hired by Broussard to load the rice was insufficient to create a lien. LCS timely appeals.
II. STANDARD OF REVIEW
Because we face an admiralty case tried without a jury, we review the district court's legal conclusions de novo. See Nerco Oil & Gas, Inc. v. Otto Candies, Inc., 74 F.3d 667, 668 (5th Cir. 1996). The district court's factual findings are reviewed under the clearly erroneous standard. See Fed. R. Civ. P. 52(a); Nerco, 74 F.3d at 668. The clearly erroneous standard of review does not apply to factual findings made under an erroneous view of controlling legal principles. See Delta S.S. Lines, Inc. v. Avondale Shipyards, Inc., 747 F.2d 995, 1000 (5th Cir. 1984).
III. DOES LCS HAVE A MARITIME LIEN?
The purpose of maritime liens is "to enable a vessel to obtain supplies or repairs necessary to her continued operation by giving a temporary underlying pledge of the vessel which will hold until payment can be made or more formal security given." Southern Coal & Coke Co. v. F. Grauds Kugniecibas ("The Everosa"), 93 F.2d 732, 735 (1st Cir. 1938); see also Piedmont & George's Creek Coal Co. v. Seaboard Fisheries Co., 254 U.S. 1, 9 (1920) ("Since she is usually absent from the home port, remote from the residence of her owners and without any large amount of money, it is essential that she should be self-reliant - that she should be able to obtain upon her own account needed repairs and supplies.");
A.L. Veverica v. Drill Barge Buccaneer No. 7, 488 F.2d 880, 883 (5th Cir. 1974) ("The very purpose of maritime liens is to encourage necessary services to ships whose owners are unable to make contemporaneous payment.").3 They are largely statutorily created. See In re Admiralty Lines, Ltd., 280 F.Supp. 601, 604-05 (E.D. La. 1968) ("[A]dmiralty law has long ago ceased to create new liens. The only liens recognized today are those created by statute and those historically recognized in maritime law."). Thus, in order to resolve the issues raised in this case, we must look to the Maritime Commercial Instruments and Liens Act ("MCILA"), 46 U.S.C. § 31301 et seq., which defines the circumstances under which a party is entitled to a maritime lien.
In brief, the MCILA states that a person providing necessaries to a vessel on the order of the owner or a person authorized by the owner has a maritime lien on the vessel, see § 31342(a),4 unless the provider of the necessaries has waived its right to the lien. See § 31305. Section 31341(a) lists entities presumed to have authority to procure necessaries: (1) the owner; (2) the master; (3) a person entrusted with the management of the vessel at the port of supply; or (4) an officer or agent appointed by the owner, a charterer, an owner pro hac vice, or an agreed buyer in possession of the vessel. An element common to these entities is that they may be presumed to have authority to procure necessaries on the vessel's account. Cf. Ferromet Resources v. Chemoil Corp., 5 F.3d 902, 904 (5th Cir. 1993) ("The ship's master or other person, such as a charterer, to whom the vessel is entrusted...
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