Constructive Hands, Inc. v. Baker

• Citation: 446 F.Supp.2d 88
• Decision Date: 08 August 2006
• Docket Number: No. 1:04-CV-0939 (LEK/RFT).,1:04-CV-0939 (LEK/RFT).
• Parties: CONSTRUCTIVE HANDS, INC. f/k/a David Sior d/b/a Constructive Hands, Plaintiff, v. Tim B. BAKER and Unnamed 40' Ketch, her sails, engine, appurtenances, etc., in rem, Defendants.
• Court: U.S. District Court — Northern District of New York

446 F.Supp.2d 88

CONSTRUCTIVE HANDS, INC. f/k/a David Sior d/b/a Constructive Hands, Plaintiff, v. Tim B. BAKER and Unnamed 40' Ketch, her sails, engine, appurtenances, etc., in rem, Defendants.

No. 1:04-CV-0939 (LEK/RFT).

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

August 8, 2006.

Kevin J. Keelan, Office of Kevin J. Keelan, Mamaroneck, NY, for Plaintiff.

James A. Resila, Carter, Conboy Law Firm, Albany, NY, for Defendants.

MEMORANDUM-DECISION AND ORDER¹

KAHN, District Judge.

I. JURISDICTION

Federal Courts have original jurisdiction of claims arising under admiralty and maritime jurisdiction.

In its most pertinent part, 28 U.S.C. § 1333 provides that "[t]he district courts shall have original jurisdiction, exclusive of the courts of the States, of: ... [a]ny civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled." . . . Admiralty jurisdiction, in a breach of contract action, arises only when the "subject-matter of the contract is `purely' or `wholly' maritime in nature."

SAT Ina Corp. v. Great White Fleet (US) Ltd., No. 03 Civ. 7481(KNF), 2006 WL 661042, at *4 (S.D.N.Y. Mar.16, 2006) (citations

omitted). Furthermore, it should be noted that 28 U.S.C. § 1331 does not provide this Court with a second source of jurisdiction, as admiralty cases do not arise under "federal question" jurisdiction. Id. at *5.

Article III of the United States Constitution extends "judicial power" to three classes of cases: (i) "cases in law and equity, arising under this constitution, the laws of the United States, and treaties," (ii) "cases affecting ambassadors, or other public ministers and consuls," and (iii) "cases of admiralty and maritime jurisdiction." ... "The constitution certainly contemplates these as three distinct classes of cases"; and if they are distinct, the grant of jurisdiction over one of them, does not confer jurisdiction over the other two. The discrimination made between them, in the constitution, is . . . conclusive against their identity." . . . An admiralty case does not "arise" under the Constitution or the laws of the United States .... Rather, admiralty provides an independent source of subject matter jurisdiction for admiralty actions."

In re Millenium Seacarriers, Inc., 419 F.3d 83, 101 (2d Cir.2005) (citing and quoting, inter alia, U.S. CONST., art. III; Am. Ins. Co. v. 356 Bales of Cotton, 26 U.S. (1 Pet.) 511, 545-46, 7 L.Ed. 242 (1828); Paduano v. Yamashita, 221 F.2d 615 (2d Cir.1955)).

All maritime contracts are within admiralty jurisdiction. Netherlands Am. Steam Navigation Co. v. Gallagher, 282 F. 171, 176 (2d Cir.1922). And, in considering the nature of a disputed contract, "[t]he question whether a contract is maritime or not depends in this country simply on the subject-matter of the contract, and not on the place where the contract is made....If a contract relates to a ship or to commerce on navigable waters, it is subject to the maritime law, and is within the admiralty and maritime jurisdiction, whether the contract is to be performed on land or water." Id. at 175.

Furthermore, in rem jurisdiction in the admiralty context only exists for the enforcement of a maritime lien. See Rainbow Line, Inc. v. M/V Tequila, 480 F.2d 1024, 1027-28 (2d Cir.1973) (citing, inter alia, The Resolute, 168 U.S. 437, 440, 18 S.Ct. 112, 42 L.Ed. 533 (1897); The Rock Island Bridge, 6 Wall. 213, 73 U.S. 213, 215, 18 L.Ed. 753 (1867)). Maritime liens fall within admiralty jurisdiction. 2 AM. JUR. 2D Admiralty §§ 50, 125 (2005) (Section 50 comments, in part: "Admiralty jurisdiction embraces petitory as well as possessory suits. It extends to maritime liens, various maritime service claims, .. . and sundry other matters . . . . Generally, the maritime nature of the subject matter is the criterion of admiralty jurisdiction.") (footnotes omitted; emphasis added). Claims for a maritime lien may be maintained both in rem against the vessel, and in personam against the owner. See, generally, American Oil Trading, Inc. v. M/V SAVA, 47 F.Supp.2d 348 (E.D.N.Y. 1999); O'Hara Corp. v. F/V North Star, 212 B.R. 1 (D.Me.1997); Cent. Hudson Gas & Elec. Corp. v. Empresa Naviera Santa, SA, Nos. 90 Civ. 6396(VLB), 91 Civ. 1539(VLB), 1994 WL 130007, at *2 (S.D.N.Y. Apr. 7, 1994) ("Except as otherwise provided by law a party who may proceed in rem may also, or in the alternative, proceed in personam against any person who may be liable.") (citing Belcher Co. v. M/V Maratha Mariner, 724 F.2d 1161, 1163 (5th Cir.1984)). See also THOMAS J. SCHOENBAUM, 1 ADMIRALTY & MARITIME LAW § 3-2, at 61 (2d ed.1994).² Federal courts have exclusive admiralty jurisdiction in matters concerning in rem actions for the enforcement of maritime liens. See SCHOENBAUM, supra, § 3-2, at 60-61.

The alleged lien in this matter arises out of a contract that relates directly to necessaries, repair and construction work performed on a boat.

The district courts have subject matter jurisdiction in such cases under Article III of the Constitution, implemented by 28 U.S.C. § 1333 and by 46 U.S.C. § 31342, which provides for maritime suits for failure to pay for necessaries to be provided to a vessel.... The Supreme Court has recently made it clear that admiralty jurisdiction embraces all matters relating to use, support or maintenance of navigable vessels.

Robert E. Derecktor, Inc. v. Norkin, 820 F.Supp. 791, 792-93 (S.D.N.Y.1993) (Broderick, D.J.) (emphasis added) (Court held that it had subject matter jurisdiction over case arising out of claim for failure to pay for repairs to vessel, and counterclaim for overcharges) (citing, inter alia, N. Pac. S.S. Co. v. Hall Bros., 249 U.S. 119, 39 S.Ct. 221, 63 L.Ed. 510 (1919); McDermott Int'l v. Wilander, 498 U.S. 337, 111 S.Ct. 807, 112 L.Ed.2d 866 (1991); Exxon Corp. v. Cent. Gulf Lines, 500 U.S. 603, 111 S.Ct. 2071, 114 L.Ed.2d 649 (1991)). See also Compania Argentina De Navegacion Dodero v. Atlas Maritime Corp., 144 F.Supp. 13, 14 (S.D.N.Y.1956) ("... contracts providing for the repair of a particular ship or for supplies for a particular ship have been held to be within the maritime jurisdiction of the Federal Courts.") (citing cases); 2 C.J.S. Admiralty § 48 (2005) ("A contract for furnishing supplies or making repairs to a vessel is within admiralty jurisdiction, even though the vessel, ready for service, has not entered service, is not in active service, or is afloat, in dry dock or hauled up upon land. Thus, a contract to make repairs to a vessel is governed by maritime law rather than by local law.") (footnotes omitted).

Rule C(1) of the Supplemental Rules for Admiralty and Maritime Claims of the Federal Rules of Civil Procedure provides, in relevant part: "[a]n action in rem may be brought: (a) To enforce any maritime lien; [or] (b) Whenever a statute of the United States provides for a maritime action in rem or a proceeding analogous thereto." FED.R.CIV. P., SUPP. R. C(1) FOR ADMIRALTY & MARITIME CLAIMS. As this Court has previously discussed, and still holds to be true, if the plaintiff does not contend that a lien exists under federal statute, then "they must establish the existence of a maritime lien to support in rem jurisdiction." Garcia v. M/V Kubbar, 4 F.Supp.2d 99, 103 (N.D.N.Y.1998) (Kahn, D.J.). In doing so, the Court would have to resort to an extensive evaluation under substantive law. Id. However, in the present matter, Plaintiff alleges—albeit without citing the federal statute in the Complaint—all of the elements necessary for a finding of a maritime lien under federal statute. See Verified Complaint (Dkt. No. 1). Plaintiff alleges that it furnished supplies and repairs to Defendant vessel upon the orders of the owner of the vessel, Defendant Baker, for which Defendant Baker did not pay in full, and that Federal jurisdiction exists pursuant to 28 U.S.C. § 1333.³ Id. Federal law provides that:

(a) ... a person providing necessaries to a vessel on the order of the owner or a person authorized by the owner—

(1) has a maritime lien on the vessel;

(2) may bring a civil action in rem to enforce the lien; and

(3) is not required to allege or prove in the action that credit was given to the vessel.

46 U.S.C. § 31342. See also Norkin, 820 F.Supp. at 791; M/V SAVA, 47 F.Supp.2d at 351 ("There is no dispute that [plaintiff] has satisfied the requirements of the Liens Act by furnishing necessaries, ... to the [defendant vessel] upon the order of the time charterer of the Vessel.").

This Court, therefore, has jurisdiction pursuant to 28 U.S.C. § 1333 and Rule 9(h) of the Federal Rules of Civil Procedure, as this case concerns claims arising from a maritime contract and maritime lien under maritime and admiralty law. See 28 U.S.C. § 1333(1); FED.R.CIV.P. 9(h); Verified Complaint (Dkt. No. 1) at ¶ 1.

II. STANDARD OF LAW

This action involves claims arising from an alleged contract for services to a boat. Plaintiff is claiming to possess a lien. Therefore,

[i]n order to prove a maritime lien under the statute, [Plaintiff] must show (1) that it furnished repairs, supplies or other necessaries, (2) to the vessel, (3) upon the order of the owner of the vessel or a person authorized by the owner under 46 U.S.C. § 31341.... The term "necessaries" includes "repairs, supplies, towage, and the use of a dry dock or marine railway." 46 U.S.C. § 31301(4). Courts have interpreted "necessaries" to include "any goods and services `reasonably needed' in a ship's business for a vessel's continued operation."

GMD Shipyard Corp. v. M/V ANTHEA Y, No. 03 Civ.2748 RWS, 2004 WL 2251670, at *6 (S.D.N.Y. Oct.6, 2004) (Sweet, D.J.) (citations omitted). See also Newport News Shipbuilding and Dry Dock Co. v. S.S. Independence, 872 F.Supp. 262, 266 (E.D.Va.1994) ("[t]o enforce its maritime lien ... plaintiff must show: (1) that plaintiff performed services on the vessel; (2) that charges for those services were reasonable; (3) that...