Ferromet Resources, Inc. v. Chemoil Corp.

Citation5 F.3d 902
Decision Date29 October 1993
Docket NumberNo. 92-3748,92-3748
PartiesFERROMET RESOURCES, INC., Plaintiff-Appellee, Cross-Appellant, v. CHEMOIL CORPORATION and Hollywood Marine, Inc., Defendants-Appellants, Cross-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Thomas J. Wagner, Wagner & Bagot, New Orleans, LA, for Chemoil and Hollywood Marine.

Robert B. Deane, Daphne P. McNutt, Chaffe, McCall, Phillips, Toler & Sarpy, New Orleans, LA, for Ferromet Resources.

Appeals from the United States District Court For the Eastern District of Louisiana.

Before GARWOOD, DAVIS, and SMITH, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Chemoil Corporation (Chemoil) and Hollywood Marine, Inc. (Hollywood) appeal the judgment of the district court granting Ferromet's motion for summary judgment in an action to recover damages for detention of a vessel. We vacate and remand.

I.

Ferromet was the time charterer of the M/V PANTAZIS L (PANTAZIS). The time charter specifically prohibited Ferromet from incurring any liens on the ship. Ferromet, through its chartering agent, Jansen Chartering, contracted with Associated Bunkeroil Contractors (ABC) to furnish bunkers for the vessel. This contract was subject to ABC's standard clauses, including a provision that the sale of bunkers is "made on the credit of the receiving vessel" and is subject to all security rights.

Chemoil was contacted to provide bunkers to the PANTAZIS for the account of ABC. Chemoil agreed to bunker the vessel subject to its standard sales agreement which also includes a provision securing the sale of bunkers on the credit of the vessel and subjecting the vessel to a maritime lien for bunkering charges.

Chemoil directed Hollywood, its barge contractor, to deliver the bunkers to the PANTAZIS. On the evening of November 2 and morning of November 3, the BARGE HOLLYWOOD 212, in tow of a tug, moored alongside the PANTAZIS and transferred the bunkers to the ship. According to Ferromet's summary judgment evidence, the PANTAZIS crew notified the HOLLYWOOD crew of its status as a time charterer and its inability to bind the vessel in rem before fuel delivery began. Chemoil denied that Ferromet gave such notice to HOLLYWOOD until after fuel delivery was complete at around 4:30 a.m. on Sunday, November 3, 1992. It is undisputed that when HOLLYWOOD completed delivery of the fuel, the captain of the PANTAZIS returned the fuel receipt to the HOLLYWOOD crew with a stamp that read:

These services and/or supplies were ordered by time charterers for their sole purpose and expense vessel/owners [sic] do not guarantee payment.

Hollywood immediately notified Chemoil of the receipt. Chemoil was concerned that acceptance of the stamped receipt might destroy its right to a maritime lien. Chemoil's representative instructed HOLLYWOOD to remain attached to the ship until either 1) the above-mentioned clause was deleted from the bunker receipt, 2) other arrangements for prompt payment were made, or 3) the fuel was returned to the barge.

Negotiations continued between Ferromet, Chemoil and Hollywood representatives for two and a half days until Ferromet agreed to pay the entire purchase price of the bunkers and provide security for Chemoil's claim for bunker barge demurrage during the negotiations. The barge then released the ship, two and a half days after fueling was complete.

Ferromet filed suit against both Chemoil and Hollywood alleging that defendants had committed a maritime tort as well as intentionally interfered with Ferromet's contractual rights. Ferromet sought to recover the charterhire it paid during the two and a half days the ship was detained as well as other expenses incurred as a result of the delay. Both sides filed motions for summary judgment.

The district court granted summary judgment in favor of Ferromet, holding that no set of facts could justify Chemoil and Hollywood's self-help actions in detaining the PANTAZIS. Chemoil and Hollywood filed a timely appeal, and Ferromet filed a cross appeal seeking an increase in damages.

II.

We review a summary judgment de novo, applying the same criteria as would a district court. Hanks v. Transcontinental Gas Pipe Line Corp., 953 F.2d 996, 997 (5th Cir.1992). Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

Under the Federal Maritime Lien Act, 46 U.S.C.App. Sec. 971 et seq., any person furnishing necessaries such as fuel to a vessel shall have a maritime lien on the vessel. The ship's master or other person, such as a charterer, to whom the vessel is entrusted is presumed to have authority to purchase necessaries to the credit of the vessel. The materialman who furnishes necessaries in response to a request from a master, charterer or other person in custody of the vessel has no duty to inquire about that person's authority to bind the vessel. (Sec. 973). But the supplier's lien is defeated if he has actual knowledge that the person ordering the necessaries has no authority to bind the vessel. Gulf Oil Trading Co. v. M/V CARIBE MAR, 757 F.2d...

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    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
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    ...affixed to the delivery notice. The out-of-circuit case it relies on for this assertion is not binding on us. See Ferromet Res. v. Chemoil Corp., 5 F.3d 902, 903 (5th Cir.1993). More importantly, the FMLA's provisions were not at issue before that court, and it did not discuss the presumpti......
  • Lake Charles Stevedores v. Prof Vladimir Popov
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    • December 23, 1999
    ...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 is presumed to have auth......
  • Valero Mktg. & Supply Co. v. Sun, CIVIL ACTION NO. 14-2712
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    • U.S. District Court — Eastern District of Louisiana
    • February 8, 2016
    ...9 (citing Atl. & Gulf Stevedores, Inc. v. M/V Grand Loyalty , 608 F.2d 197, 202 (5th Cir.1979) ).57 Id. (citing Ferromet Res., Inc. v. Chemoil Corp. , 5 F.3d 902 (5th Cir.1993) ).58 Id. (citing Atl. & Gulf Stevedores , 608 F.2d at 202 ; Jan C. Uiterwyk Co. v. MV Mare Arabico , 459 F.Supp. 1......
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    • U.S. District Court — Eastern District of Louisiana
    • February 8, 2016
    ...9 (citing Atl. & Gulf Stevedores, Inc. v. M/V Grand Loyalty, 608 F.2d 197, 202 (5th Cir. 1979)). 57. Id. (citing Ferromet Res., Inc. v. Chemoil Corp., 5 F.3d 902 (5th Cir. 1993)). 58. Id. (citing Atl. & Gulf Stevedores, 608 F.2d at 202; Jan C. Uiterwyk Co. v. M/V Mare Arabico, 459 F. Supp. ......
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