Dresdner Bank Ag v. M/V Olympia Voyager, No. 05-10863.

• Decision Date: 06 September 2006
• Docket Number: No. 05-10863.
• Citation: 463 F.3d 1210
• Parties: DRESDNER BANK AG, Dresdner Bank AG in Hamburg, Norddeutsche Landesbank-Girozentrale Kreditanstalt Fur, Plaintiffs-Cross-Defendants-Appellants, Blohm and Voss Gmbh, et al., Intervenor-Plaintiffs, Zernavi Servisi Marittimi SRL, Intervenor-Plaintiff Appellee, Monaco Telecom International, Intervenor-Plaintiff-Cross-Claimant, v. M/V OLYMPIA VOYAGER, a 157.90 meter Blohm Voss GmbH motor vessel, Hull No. 961, Greek official number 10750, her engines, tackle equipment, rigging, dinghies, furniture, appurtenances, etc., in rem, and Olympic World Cruises Inc. her owner, in personam, Defendant.
• Court: U.S. Court of Appeals — Eleventh Circuit

463 F.3d 1210

DRESDNER BANK AG, Dresdner Bank AG in Hamburg, Norddeutsche Landesbank-Girozentrale Kreditanstalt Fur, Plaintiffs-Cross-Defendants-Appellants, Blohm and Voss Gmbh, et al., Intervenor-Plaintiffs, Zernavi Servisi Marittimi SRL, Intervenor-Plaintiff Appellee, Monaco Telecom International, Intervenor-Plaintiff-Cross-Claimant, v. M/V OLYMPIA VOYAGER, a 157.90 meter Blohm Voss GmbH motor vessel, Hull No. 961, Greek official number 10750, her engines, tackle equipment, rigging, dinghies, furniture, appurtenances, etc., in rem, and Olympic World Cruises Inc. her owner, in personam, Defendant.

No. 05-10863.

United States Court of Appeals, Eleventh Circuit.

September 6, 2006.

Scott Andrew Wagner, Michael T. Moore, Moore & Company, P.A., Coral Gables, FL, for Plaintiffs-Cross-Defendants-Appellants.

Lindsey C. Brock, III, Rumrell & Johnson, P.A., Jacksonville, FL, for Intervenor-Plaintiff-Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before DUBINA, MARCUS and COX, Circuit Judges.

DUBINA, Circuit Judge:

In this admiralty appeal, we consider whether the district court properly applied United States law to enforce a maritime lien, claimed by an Italian ship catering company, for providing necessaries to a Greek-flagged cruise vessel while the vessel was in a United States port. We conclude that the district court correctly applied United States law. Accordingly, we affirm the district court's judgment.

I. Introduction

This case is properly introduced by another opinion of this court, Dresdner Bank AG v. M/V Olympia Voyager, 446 F.3d 1377 (11th Cir.2006), which involved the same overall foreclosure proceedings against the cruise vessel at issue in this appeal, but concerned the claim of a separate intervenor, Aktina Travel, S.A.:

This appeal arises out of an action filed by Dresdner Bank AG in Hamburg, Kreditandstalt Fur Wiederaufbau, and Norddeutsche Landesbank-Girozentrale (collectivley, "the Banks") to foreclose a preferred ship mortgage on a foreign vessel. The Banks filed a complaint in the Southern District of Florida in rem against the M/V OLYMPIA VOYAGER ("the Vessel"), a Greek-flagged passenger cruise vessel, and in personam against Olympic World Cruises ("OWC"), the owner of the Vessel.

The district court entered a default judgment of foreclosure against the Vessel and ordered it sold. Subsequently, numerous parties filed claims or motions to intervene to assert claims against the Vessel or the proceeds of its sale. In response to these claims and motions, the district court entered an order requiring the Banks to provide security for any claims found to be superior in priority to the preferred ship mortgage, and allowing the Banks to stand in the shoes of the Vessel to defend against all claimants asserting such priority.

Id. at 1379. On January 13, 2005, after a bench trial, the district court entered a final judgment in favor of intervenor Zernavi Servisi Marittimi SRL ("Zernavi") on its claim against the Vessel. The Banks appeal.

II. Background

In October 2003, representatives of Zernavi, an Italian ship catering company, met with representatives of Royal Olympic Lines, Inc. and/or Royal Olympia Cruises (collectively, "ROC"), the operator of the Vessel, in Greece to begin negotiations for Zernavi to provide victuals and food and beverage management to the Vessel. The parties reached agreement on the services Zernavi would provide and the prices to be charged, with the details of the agreement to be finalized in continuing negotiations. The negotiations continued into November 2003, when the Vessel made its positioning voyage from Greece to Florida, where it would operate for the winter months from the "home port" of Port Everglades in Fort Lauderdale, Florida. Before the Vessel left on the positioning voyage, Zernavi assumed control of the victualing and food and beverage management. Accordingly, Zernavi purchased $243,616.56 worth of existing food and beverage items already onboard the Vessel and in a shore-side warehouse in Greece that were owned by OWC and ROC, and loaded the warehouse items onto the vessel before it left the Mediterranean Sea.

During the positioning voyage Zernavi had one full-time representative onboard the vessel, Giuseppe Longo ("Longo"), and another representative, Vincenzo Orlandini ("Orlandini"), who was onboard for part of the voyage. Upon arriving in Florida, Zernavi issued invoices totaling $225,920.77 for items consumed and services rendered during the positioning voyage.

Orlandini, along with another Zernavi representative, Massimo Guglielmo ("Guglielmo"), met the Vessel when it arrived in Fort Lauderdale, Florida. From Florida, they organized Zernavi's purchase of food, beverage, and food service items from United States suppliers and had the items loaded onto the Vessel before it conducted cruises from Port Everglades. Together, Longo, Orlandini, and Guglielmo provided food and beverage management services both while the Vessel was in Port Everglades, and while the Vessel conducted cruises from its home port of Port Everglades.

The Vessel made two cruises from Port Everglades: the first was from November 30, 2003, to December 17, 2003, and the second was from December 17, 2003, to January 2, 2004. Zernavi issued invoices to the Vessel totaling $222,485.47 for items consumed and services rendered during the first cruise, and invoices totaling $227,238.88 for items consumed and services rendered during the second cruise. Zernavi also issued invoices related to items consumed and services rendered on both cruises that totaled $40,771.96. All together, Zernavi's invoices for the two cruises from Port Everglades amounted to $490,496.31.

At the end of December 2003, after the second cruise had already departed from Port Everglades, ROC submitted a proposed contract to Zernavi for its approval. However, the proposed contract included several provisions that were either directly opposite Zernavi's proposals or had not yet been negotiated, including an English choice of law provision. Zernavi never signed ROC's proposed contract and explicitly rejected it during a telephone conversation. Ultimately, OWC filed for bankruptcy protection and the Banks filed this action to foreclose on the Vessel.

After the vessel ceased operations, Zernavi sold to the Vessel and her owners the food, beverage, and food service items that remained onboard after the conclusion of the second Port Everglades cruise on January 2, 2004. Zernavi and representatives for the Vessel conducted a full inventory of the remaining items, and Zernavi issued invoices to OWC and ROC totaling $420,646.22.

Zernavi filed a motion to intervene in this action, claiming that it was entitled to a maritime lien under the Commercial Instruments and Maritime Liens Act ("CIMLA"), 46 U.S.C. § 31301 et seq., which grants priority to creditors holding maritime liens for necessaries provided in the United States over those holding preferred mortgages on foreign vessels. See 46 U.S.C. § 31326. The Banks contested Zernavi's claim, arguing that English law should be applied to Zernavi's claim under the choice of law provision in the proposed contract that ROC submitted to Zernavi in December, or, alternatively, that Greek law should apply. The Banks claim that neither English nor Greek law would give Zernavi's claim priority over the Banks' preferred ship mortgage.

The district court found that Zernavi never agreed to the proposed contract, and did not agree to any choice of law provision. The district court ultimately determined that United States law should apply, and that Zernavi was entitled to a maritime lien under CIMLA, which was superior in priority to the Banks' preferred ship mortgage. The district court determined that Zernavi was not entitled to a lien for the invoices totaling $225,920.77 related to bringing the Vessel from Greece, as those items and services were not provided in the United States. This amount was offset by the $243,616.56 credit Zernavi gave the Vessel to purchase the existing inventory on the Vessel when Zernavi began servicing the Vessel in Greece. Accordingly, the district court concluded Zernavi is entitled to a preferred maritime lien for $893,446.74, arriving at that amount by adding the invoices from the two cruises from Port Everglades ($490,496.31) and the items sold to the Vessel after the cruises ($420,646.22), and deducting the remaining credit due the Vessel after the positioning voyage ($17,695.79).

III. Issues

1. Whether United States law properly applies to Zernavi's claim.

2. Whether Zernavi was a supplier of necessaries in the United States and entitled to a superior maritime lien under 46 U.S.C. § 31301, et seq.

3. Whether the district court erred in calculating the amount of the final judgment entered in favor of Zernavi for $893,336.74.

IV. Standards of Review

We review choice of law determinations de novo. Sigalas v. Lido Mar., Inc., 776 F.2d 1512, 1516 (11th Cir.1985). The factual findings underpinning a choice of law determination are reviewed for clear error. Szumlicz v. Norwegian Am. Line, Inc., 698 F.2d 1192, 1196 (11th Cir.1983). We review the factual findings of a district court sitting without a jury in admiralty under the clearly erroneous standard, and its conclusions of law de novo. Venus Lines Agency, Inc. v. CVG Int'l Am., Inc., 234 F.3d 1225, 1228 (11th Cir.2000).

V. Discussion

A. Choice of Law

1. The Proposed Contract

The Banks first argue that the choice of law is determined by the English choice of law provision included in the proposed contract that ROC submitted to Zernavi, which Zernavi explicitly rejected and refused to sign. The district court found that in October 2003 the parties (OWC, ROC, and Zernavi) reached an agreement for Zernavi to provide certain victualing and food and beverage services to the Vessel, and agreed upon the pricing for the goods and services. However, ...