Farwest Steel Corp. v. Barge Sea-Span 241

• Decision Date: 23 August 1985
• Docket Number: SEA-SPAN,Nos. 84-3754,84-3755,s. 84-3754
• Parties: FARWEST STEEL CORPORATION, a corporation, Plaintiff, and Robert A. Barnes, Inc., et al., Plaintiffs-Intervenors, and Shuman Equipment, Inc., Plaintiff-Intervenor-Appellant, v. BARGE241, aka Barge Ceres, her tackle, gear and furnishings, in rem; Lakeview Charters; S.A. DeSantis, Defendants-Appellees. FARWEST STEEL CORPORATION, a corporation, Plaintiff-Appellant, and Robert A. Barnes, Inc., a corporation, et al., Plaintiffs-Intervenors, v. BARGE241, aka Barge Ceres, her tackle, gear and furnishings, in rem; Lakeview Charters; S.A. DeSantis; and West Coast Charters, Inc., a corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 620

769 F.2d 620

1987 A.M.C. 926

FARWEST STEEL CORPORATION, a corporation, Plaintiff,

and

Robert A. Barnes, Inc., et al., Plaintiffs-Intervenors, and Shuman Equipment, Inc., Plaintiff-Intervenor-Appellant, v. BARGE SEA-SPAN 241, aka Barge Ceres, her tackle, gear and furnishings, in rem; Lakeview Charters; S.A.

DeSantis, Defendants-Appellees.

FARWEST STEEL CORPORATION, a corporation, Plaintiff-Appellant, and Robert A. Barnes, Inc., a corporation, et al., Plaintiffs-Intervenors, v. BARGE SEA-SPAN 241, aka Barge Ceres, her tackle, gear and furnishings, in rem; Lakeview Charters; S.A.

DeSantis; and West Coast Charters,

Inc., a corporation,

Defendants-Appellees.

Nos. 84-3754, 84-3755.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Nov. 9, 1984.

Reargued July 22, 1985.

Decided Aug. 23, 1985.

Lloyd W. Weisensee, Williams, Fredrickson, Stark, Hiefield, Norville & Weisensee, P.C., Portland, Or., for plaintiff-appellant.

C. Kent Roberts, Alex L. Parks, Parks, Montague, Allen & Greif, Portland, Or., for defendants-appellees.

Appeal from the United States District Court for the District of Oregon.

Before FARRIS, ALARCON, and BEEZER, Circuit Judges.

FARRIS, Circuit Judge:

Farwest Steel and intervenor corporations appeal the judgment of the U.S. District Court for the District of Oregon, Frye J., which refused to grant Farwest a maritime lien on the Barge SEA-SPAN 241. Farwest contends that because it furnished steel to the Barge at the request of a repair contractor hired by the Barge's owner, West Coast Charters, Farwest is entitled to a lien under either the federal Maritime Lien Act, 46 U.S.C. Secs. 971-975, or the Washington vessel lien law, RCW 60.36.010 et seq.

Farwest commenced an action in rem against the Barge in the district court. Farwest also brought an action in personam against West Coast, the Barge's owner; S.A. DeSantis, principal of West Coast; Lakeview Charters, the predecessor owner of the Barge; and Nichols, the repair contractor. West Coast made a general appearance and counterclaimed against Farwest for wrongful arrest of the Barge. In preliminary rulings, the district court quashed the arrest of the Barge, and dismissed the claims against DeSantis and Lakeview.

In the remaining actions against Nichols and West Coast, the district court held that it had admiralty jurisdiction based on the existence of a maritime contract. 28 U.S.C. Sec. 1333. The court also held that it continued to have in rem jurisdiction to decide Farwest's lien claim, despite the quashing of the arrest and the subsequent sale of the Barge by West Coast to a nonparty, The Carnation Company. The court then ruled that Farwest and intervenor corporations did not have a lien under either the Maritime Lien Act, 46 U.S.C. Secs. 971-975, or the Washington vessel lien law. RCW 60.36.010. It dismissed the claims against the Barge and West Coast's counterclaim for wrongful arrest. Farwest timely appeals.

Farwest also brought suit in the Superior Court of Clark County, Washington, to enforce state chattel and vessel liens against West Coast. That court, upheld by the Washington Supreme Court, see Farwest Steel Corp. v. DeSantis, 102 Wash.2d 487, 687 P.2d 207 (1984), cert. denied, --- U.S. ----, 105 S.Ct. 2024, 85 L.Ed.2d 305 (1985), dismissed Farwest's claim because federal maritime law had preempted the state liens.

I. Subject matter jurisdiction.

The district court had admiralty jurisdiction if it was adjudicating either a maritime lien, see Alyeska Pipeline Service Co. v. Vessel Bay Ridge, 703 F.2d 381, 384 (9th Cir.1983), cert. dismissed, --- U.S. ----, 104 S.Ct. 3526, 82 L.Ed.2d 852 (1984), or a contract relating to the repair of an already constructed vessel. Owens-Illinois, Inc. v. United States District Court, 698 F.2d 967, 970 (9th Cir.1983); 28 U.S.C. Sec. 1333. Thus, even if we find that Farwest did not have a maritime lien on the Barge, the underlying contractual claim will support the district court's admiralty jurisdiction. See Aktieselskabet Fido v. Lloyd Braziliero, 283 Fed. 62, 73-74 (2d Cir.), cert. denied, 260 U.S. 737-38, 43 S.Ct. 97, 67 L.Ed. 489 (1922); Reichert Towing Line, Inc. v. Long Island Machine & Marine Constr. Co., 287 Fed. 269 (E.D.N.Y.1922) (subcontractor providing supplies directly to vessel would "no doubt" have a maritime contract); 1 Benedict on Admiralty Sec. 106, at 7-17, 18 (1983) (admiralty jurisdiction can arise from either a claim to enforce a maritime lien or "any claim in respect of the furnishing of repairs, supplies ... or other necessaries to a vessel."). We therefore have jurisdiction over the timely filed appeal from the district court. 28 U.S.C. Sec. 1291.

II. The in rem jurisdiction of the district court.

Before considering the merits of Farwest's lien claim, we must determine whether the district court retained jurisdiction over the Barge even after it quashed the vessel's arrest and permitted the Barge to be removed from the court's territorial waters.

Under the prevailing rule, the release or removal of the res from the control of the court will terminate jurisdiction, unless the res is released accidentally, fraudulently, or improperly. United States v. $57,480.05 United States Currency and Other Coins, 722 F.2d 1457, 1458 (9th Cir.1984)- ; United States v. Vertol H21C Reg. No. N8540, 545 F.2d 648, 650 (9th Cir.1976). Because the Barge began plying the waters between Washington and Hawaii shortly after it was sold to The Carnation Company on April 23, 1982, and there is no allegation that it was released improperly, under this rule the district court would have been deprived of jurisdiction midway through its proceedings. The court's ensuing judgment that Farwest was not entitled to a lien would therefore be without a jurisdictional base, and we would only have appellate jurisdiction to review the dismissal of Farwest's in personam claim. See Alyeska Pipeline, 703 F.2d at 384; American Bank of Wage Claims v. Registry of District Court of Guam, 431 F.2d 1215, 1218 & n. 3 (9th Cir.1970).

The rule that the vessel be present in order to preserve in rem jurisdiction is founded on "a long-standing admiralty fiction that a vessel may be assumed to be a person for the purpose of filing a lawsuit and enforcing a judgment." See Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 22-23, 80 S.Ct. 1470, 1473, 4 L.Ed.2d 1540 (1960). This fiction, however, has been referred to as "archaic", "an animistic survival from remote times," "irrational", and "atavistic", 364 U.S. at 23, 80 S.Ct. at 1473; and in several cases where vessels have been removed from their territorial reach, courts have "refused to myopically apply this fiction" of in rem jurisdiction. Treasure Salvors v. Unidentified Wrecked and Abandoned Sailing Vessel, 569 F.2d 330, 334 (5th Cir.1978); see Continental Grain, 364 U.S. 19, 80 S.Ct. 1470, 4 L.Ed.2d 1540 (permitting transfer of a claim on an in rem admiralty action to a district in which the res was not present); Inland Credit Corp. v. M/T Bow Egret, 552 F.2d 1148, 1152, reh'g denied, 556 F.2d 756 (5th Cir.1977); Reed v. Steamship Yaka, 307 F.2d 203 (3d Cir.1962), rev'd on other grounds, 373 U.S. 410, 83 S.Ct. 1349, 10 L.Ed.2d 448 (1963).

These courts have derived jurisdiction to review an in rem decision from the existence of either consent or in personam jurisdiction over a shipowner whose other contacts with the forum satisfied "traditional notions of fair play and substantial justice," International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). When a claimant has consented to, or is otherwise subject to the court's in personam jurisdiction, these courts have suggested that due process is not violated by also finding in rem jurisdiction. Continental Grain, 364 U.S. at 22-23, 80 S.Ct. at 1472-73; Reed, 307 F.2d at 204-05; The Willamette, 70 Fed. 874 (9th Cir.1895).

In all these cases, of course, the res, while beyond the court's territorial jurisdiction, was owned by a party actually before the court, over whom the court already held in personam jurisdiction. In this case, both Farwest and West Coast would have us appropriate a res not only from a location beyond the court's territorial realm, but from a nonparty over whom the district court never had personal jurisdiction. We need not resolve this question since counsel at oral argument indicated that he had authority to speak for Carnation Company, the nonparty owner, and that Carnation had actual knowledge of the lien claim and had consented to in rem jurisdiction over the Barge. Alex L. Parks is an attorney at law. Parks approved and endorsed a pretrial order which says, in part:

On or about April 23, 1982 West Coast Charters sold the barge CERES to The Carnation Company. There will be no claim that the sale to The Carnation Company was a sale to a purchaser without notice. The Carnation Company took the barge CERES subject to the claims of liens, if any, asserted herein and West Coast Charters has agreed to indemnify and hold The Carnation Company harmless from all claims of liens, if any. This case will be tried as if the barge had not been sold to The Carnation Company. If the Court enters a judgment in rem against the barge CERES in favor of the plaintiff and plaintiff-intervenors and the judgment is not paid, the Court may enter an order for seizure of the barge CERES and foreclosures of the liens.

(Emphasis added). Parks endorsed the pretrial order on behalf of defendants, Barge Sea Span 241, aka Barge CERES, her tackle, gear and furnishings, in rem; West Coast Charters, Inc.; and Nichols Boat & Barge Builders, Inc.

The consent to in rem jurisdiction troubled us because Carnation was not a party to the proceedings. When combined with the fact that during oral argument Parks acknowledged actual notice of the lien--thus removing any due process concerns about notice--we find from the record that Carnation consented to in rem...