Crescent Towing & Salvage Co., Inc. v. M/V Anax
| Citation | 40 F.3d 741 |
| Decision Date | 13 December 1994 |
| Docket Number | No. 93-3725,93-3725 |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
| Parties | CRESCENT TOWING & SALVAGE CO., INC., Plaintiff-Appellant, v. M/V ANAX (formerly known as M/V Komin), her engines, tackle, apparel, furniture, etc., in rem, Defendant, Anax Navigation Co., S.A., Claimant-Appellee. |
Page 741
v.
M/V ANAX (formerly known as M/V Komin), her engines, tackle,
apparel, furniture, etc., in rem, Defendant,
Anax Navigation Co., S.A., Claimant-Appellee.
Fifth Circuit.
Page 742
Phillip S. Brooks, Richard L. Seelman, Terrence C. Forstall, Courtenay, Forstall, Guilbault, Hunter & Fontana, New Orleans, LA, for appellant.
Eric J. Simonson, Robert B. Deane, Chaffe, McCall, Phillips, Toler & Sarpy, New Orleans, LA, for appellee.
Appeal from the United States District Court for the Eastern District of Louisiana.
Page 743
Before REAVLEY, DeMOSS and STEWART, Circuit Judges.
DeMOSS, Circuit Judge:
Crescent Towing & Salvage Company filed this libel in rem against the M/V ANAX (formerly the M/V KOMIN) seeking to enforce a maritime lien for tug services furnished to the vessel. Anax Navigation Co., S.A. ("Anax") claims that Crescent's maritime lien, if any, was extinguished by a judicial sale, which was ordered and conducted in Greece pursuant to a valid in rem proceeding in that country. The district court granted summary judgment in favor of Anax, holding that the judicial sale in Greece wiped out all pre-existing liens. Because we find that Anax failed to meet its burden of proof on summary judgment, we reverse.
The question to be answered in this appeal is: What type of evidence must be presented to a district court sitting in admiralty before that court can recognize and give effect, as a matter of law, to a judicial sale conducted in a foreign country such that the sale extinguishes all pre-existing maritime liens?
In June 1992 Crescent Towing furnished tug services to the M/V KOMIN in the amount of $10,676.00. Despite repeated demands upon the vessel owner, Secretariat Shipping, the bill remained unpaid. In February 1993 the vessel returned to U.S. waters and Crescent Towing threatened arrest of the vessel to obtain payment. In lieu of arrest, the vessel interests and Crescent Towing entered into a private security agreement which established a fund adequate to cover any final judgment against the vessel for the towing services. Crescent then filed this suit to enforce the lien.
In May 1993, Anax filed a claim of ownership, praying to defend the action, and a motion for summary judgment. Anax's motion for summary judgment alleged that the M/V KOMIN had been seized and sold at auction in Piraeus, Greece pursuant to a judicial order by a Greek court foreclosing a first preferred ship mortgage held by Norges Hypotekinstitutt A/S. Norges, the mortgage holder, was apparently the successful bidder at auction and was allowed to offset the sale price by the amount of its claim against the mortgagor, Secretariat Shipping. Anax produced a bill of sale showing that the M/V KOMIN was sold by Norges to Anax the following day for ten dollars. Anax subsequently renamed the vessel the M/V ANAX.
In its motion for summary judgment Anax argued that the judicial sale in Greece was conducted pursuant to a valid in rem proceeding and therefore extinguished all pre-existing maritime liens, including Crescent Towing's lien for towing services. Crescent responded that there were genuine issues of fact as to whether the Greek proceeding was in fact a valid in rem proceeding and whether the sale had the effect, under Greek law, of extinguishing pre-existing maritime liens. In July 1993, the district court granted summary judgment in favor of Anax. Thereafter Crescent filed a motion for reconsideration or in the alternative for Rule 56(f) relief. 1 After hearing oral argument on the motion, the district court denied Crescent's motion, entered judgment in Anax's favor, and dismissed Crescent's claims. This appeal followed.
We review the district court's grant of summary judgment de novo, using the same standards as the district court. Lavespere v. Niagara Machine & Tool Works, 910 F.2d 167, 177 (5th Cir.1990), cert. denied, --- U.S. ----, 114 S.Ct. 171, 126 L.Ed.2d 131 (1993). Summary judgment is appropriate only if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id. at 177-78. To determine whether there are genuine fact issues, we first consult the applicable law to ascertain what issues are material. Id. at 178. Next, we review the evidence on those issues, viewing the facts and inferences in the light most favorable to the nonmoving party. Id.
Page 744
In this case Anax is asserting the judicial sale in Greece as a bar to Crescent's pre-existing maritime lien. This is an affirmative defense for which Anax would have the burden of proof at trial. Therefore, Anax had the burden on summary judgment to establish each element of that defense as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Thorsteinsson v. M/V Drangur, 891 F.2d 1547, 1550-51 (11th Cir.1990).
The Applicable Law
Relying on the doctrine of comity, this Circuit has held that judicial sale of a vessel pursuant to a valid in rem proceeding by a court of competent jurisdiction extinguishes all pre-existing maritime liens. Belcher Co. v. M/V Maratha Mariner, 724 F.2d 1161, 1165 (5th Cir.1984) (citing Zimmern Coal Co. v. Coal Trading Assoc., 30 F.2d 933 (5th Cir.1929) and The Trenton, 4 F. 657 (E.D.Mich.1880)). In the Fourth Circuit this doctrine has been extended to provide that judicial sale by way of attachment, rather than in rem, will also extinguish pre-existing maritime liens if the court's proceedings are "sufficiently similar to an in rem proceeding to make its decree recognizable by and binding on the American courts." 2 The district court in this case relied on the Fourth Circuit's interpretation in Gulf & Southern Terminal Corp. v. S.S. President Roxas, 701 F.2d 1110, 1112 (4th Cir.), cert. denied, 462 U.S. 1133, 103 S.Ct. 3115, 77 L.Ed.2d 1369 (1983). Our own Circuit, however, has been much more reluctant to give such an effect to a foreign judicial sale unless the in rem character of the proceeding has been clearly established and the evidence demonstrates that the sale was made free and clear of all liens. Perez & Compania...
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