American Oil Trading, Inc. v. M/V Sava

• Decision Date: 07 April 1999
• Docket Number: No. 97 CV 4204(NG).,97 CV 4204(NG).
• Citation: 47 F.Supp.2d 348
• Parties: AMERICAN OIL TRADING, INC., Plaintiff, v. M/V SAVA, her engines, boilers, tackle, apparel, equipment, etc., in rem, and Croatia Line, Malta Cross Shipping Co., Ltd., Palm Star Shipping, Ltd., and Queensgate Shipping, in personam, Defendants.
• Court: U.S. District Court — Eastern District of New York

47 F.Supp.2d 348

AMERICAN OIL TRADING, INC., Plaintiff, v. M/V SAVA, her engines, boilers, tackle, apparel, equipment, etc., in rem, and Croatia Line, Malta Cross Shipping Co., Ltd., Palm Star Shipping, Ltd., and Queensgate Shipping, in personam, Defendants.

No. 97 CV 4204(NG).

United States District Court, E.D. New York.

April 7, 1999.

Alexander F. Vitale, Freehill, Hogan & Mahar, New York City, for plaintiff.

Mark C. Flavin, Carter, Ledyard & Milburn, New York City, for defendant.

MEMORANDUM AND ORDER

GERSHON, District Judge.

Plaintiff American Oil Trading Inc. ("AOT") asserts a claim for a maritime lien against the M/V SAVA ("the Vessel") in rem, as well as in personam claims against the Vessel's owner Croatia Line, its operator Malta Cross Shipping Co., and its charterer, Palm Star Shipping Ltd. ("Palm Star"), which is the agent for an undisclosed principal, Queensgate Shipping ("Queensgate"). Plaintiff moves for summary judgment to enforce a maritime lien against the Vessel in rem for the value of unpaid fuel oil ("bunkers") supplied to the Vessel in New Orleans in April 1997 and in Panama in June 1997. Plaintiff also seeks prejudgment interest and reasonable attorneys' fees.

FACTS

The following facts are undisputed: In April 1997, defendant Palm Star requested plaintiff AOT to supply bunkers to M/V SAVA in New Orleans, Louisiana. On April 28, 1997, AOT arranged for the supply of 200 metric tons of intermediate fuel oil ("IF") and 79.95 metric tons of marine diesel fuel ("MDO") to the Vessel in New Orleans and subsequently issued its invoice No. AMT 923/97 dated May 8, 1997 in the amount of $37,770.83. Pursuant to the terms of this invoice, payment was due no later than May 28, 1997, thirty days after the April 28 delivery. In mid-June 1997, Palm Star requested AOT to supply bunkers to the Vessel in Panama on or about June 20, 1997. AOT accepted this request, but also requested Palm Star to pay $20,000 by June 23, 1997, "on account" of the $37,770.83 that was still due on the prior delivery. By a telefax dated June 18, 1997, Thames Petroleum Services AS, on behalf of Palm Star, confirmed to AOT that Palm Star would be paying AOT $20,000 by June 23, 1997, and that AOT could use $8,673.71 to satisfy an outstanding interest invoice for Palm Star's previous late payments and apply the balance of $11,328.29 to Invoice No. AMT 923/97 for the previous New Orleans fuel delivery. On or about June 21, 1997, AOT arranged for the provision of 100.47 metric tons of IF and 50.50 tons of MDO to the Vessel in Panama. AOT subsequently issued an invoice in the amount of $27,921.15 for this delivery. On June 24, 1997, AOT received the $20,000 payment "on account" and applied $8,673.71 to cover outstanding interest that Palm Star owed for prior late payments and applied the balance of $11,328.29 to Invoice No. AMT 923/97 for the previous New Orleans fuel delivery, in accordance with Thames Petroleum's telefax of June 18, 1997. After this payment, a balance of $26,444.54 remained due on Invoice No. AMT 923/97.

It is undisputed that on two prior occasions, in June and July of 1996, when AOT supplied the Vessel with bunkers, vessel personnel stamped the bunker receipts with the following "Important Notice":

The goods and services being hereby acknowledged by, receipted for and/or ordered are being accepted and/or ordered solely for the account of charterers of M/V SAVA and not for the account of said vessel or her owners. Accordingly, no lien or other claim against said vessel or her Owners can arise therefor.

Malta Cross Shipping, Owners of the Bulk M/V SAVA.

AOT also supplied bunkers to the Vessel on two other, later occasions, in 1996, when it received bunker receipts that were signed by the Vessel's chief engineer, but did not have the no lien clause stamped on them; on August 30, 1996, and September 12, 1996, AOT arranged for the supply of bunkers to the Vessel in Houston and Panama, respectively, and on each occasion, the Vessel accepted the bunkers without stamping the bunker receipt with a no lien clause.

AOT acknowledges that it received copies of the bunker receipts stamped a no lien clause after it supplied bunkers to the Vessel in New Orleans in April 1997 and Panama in June 1997. AOT denies actual notice of a no lien clause in any charter party prior to that time, and the President of AOT, Adrian Little, states that "[i]f AOT had been advised by the vessel, its owners or its charterers that Palm Star, Queensgate or Thames Petroleum did not have authority to also bind the vessel in rem, for joint liability for the bunkers, AOT would not have delivered bunkers to the vessel."

AOT has not been paid for its supplies of bunkers to the Vessel in April and June 1997. Accordingly, it commenced the instant action by filing a verified complaint on July 23, 1997, a date on which the Vessel was within the District. After security was provided, the Vessel was released from arrest on July 28, 1997 pursuant to a stipulation.

DISCUSSION

A motion for summary judgment is granted if there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. See Lipton v. Nature Co., 71 F.3d 464, 469 (2d Cir.1995). The moving party must demonstrate the absence of any material factual issue genuinely in dispute. See id. The court must view the inferences to be drawn from the facts in the light most favorable to the party opposing the motion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). However, the non-moving party may not "rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir.1986). Rather, it must produce specific facts sufficient to establish that there is genuine factual issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Maritime Lien

AOT moves for summary judgment to enforce a maritime lien against the Vessel in rem pursuant to both the Maritime Commercial Instruments and Liens Act of 1988 ("Liens Act"), 46 U.S.C. §§ 31341-31342, and the terms of its sales contract for the value of unpaid bunkers supplied to the Vessel in New Orleans in April 1997 and in Panama in June 1997. There is no dispute that AOT has satisfied the requirements of the Liens Act by furnishing necessaries, namely, bunkers of oil, to the M/V SAVA upon the order of the time charterer of the Vessel. Defendant argues, however, that AOT improvidently extended credit to Palm Star when it provided additional bunkers in Balboa, Panama on June 21, 1997. Defendant also argues that AOT is not entitled to a maritime lien for the two deliveries at issue because the no lien stamp on certain bunker receipts placed AOT on notice that the Vessel would not be responsible in rem for the cost of bunkers.

Defendant's argument that AOT improvidently extended credit to Palm Star by delivering the second supply of bunkers in Panama at a time when Palm Star and Queensgate were in default of payment with respect to AOT's earlier New Orleans delivery is without merit. It is true that AOT extended additional credit on the first delivery, and that it then did not demand that the $20,000 it sought "on account" for that delivery be paid until June 23, 1997, after the Panama delivery on June 21. However, Palm Star's agent, Thames Petroleum Services AS, assured AOT that Palm Star would pay AOT $20,000 by June 23, 1997 (and AOT in fact did receive the $20,000 payment "on account" on June 24, 1997). These facts are insufficient to establish that AOT's limited extension of additional credit was improvident. There is no evidence in the record that AOT knew Palm Star would be unable to live up to its obligations. Most importantly, there is no evidence that AOT intended to waive its lien on the Vessel. See Memorandum and Order of April 5, 1999 in the related action, Barwil ASCA, et al v. M/V SAVA et al., 97-CV-4105, at 5-6.

After Palm Star failed to pay AOT the June 21 delivery in Panama, AOT filed a complaint in this action on July 23, 1997, two days after the payment for this delivery became due. Thus, there can be no laches defense because AOT took reasonable steps to recover payment for its two deliveries of bunkers and did not wait an unreasonable amount of time after Palm Star's debt had accrued to seek enforcement of a maritime lien against the Vessel. Id. at 6-7.

The facts of this case stand in sharp contrast to those of the cases relied on by defendant in support of its argument. Thus, in In re SeaEscape Cruises Ltd., 191 B.R. 944, 947 (S.D.Fl.1995), a claimant was barred from asserting a maritime lien where the customary time for the payment of invoices was thirty days, and the lienor had allowed debt to accrue for between six to nine months. In Gulf...