First Nat. Bank of Jefferson Parish v. M/V Lightning Power
| Decision Date | 17 August 1988 |
| Docket Number | No. 87-4329,87-4329 |
| Citation | 851 F.2d 1543 |
| Parties | , 26 Fed. R. Evid. Serv. 690 FIRST NATIONAL BANK OF JEFFERSON PARISH, Plaintiff-Appellant, Cross-Appellee, v. M/V LIGHTNING POWER, in rem, et al., Defendants, v. EAGLE FLEET, INC., Intervenor-Appellee, Cross-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Philip A. Franco, Adams & Reese, New Orleans, La., for plaintiff-appellant, cross-appellee.
Joseph P. Tynan, New Orleans, La., for intervenor-appellee, cross-appellant.
Appeals from the United States District Court for the Western District of Louisiana.
Before CLARK, Chief Judge, GOLDBERG and GARWOOD, Circuit Judges.
This is an appeal from a judgment granting Eagle Fleet, Inc. (Eagle Fleet) a 46 U.S.C.App. Sec. 971 lien on the M/V LIGHTNING POWER for seaman's wages. 1 The basis of this judgment was the district court's fact determination that Eagle Fleet was a special rather than a general agent of the vessel's owner. We affirm the district court.
This case has been before this court on a prior occasion. First Nat'l Bank v. M/V LIGHTNING POWER, 776 F.2d 1258 (5th Cir.1985). In that opinion we vacated a judgment confirming a court-ordered sale of the M/V LIGHTNING POWER. First National Bank of Jefferson Parish ( FNB ) held a $900,000 mortgage on the M/V LIGHTNING POWER, a vessel then worth more than $500,000. During the course of the foreclosure proceedings, FNB successfully bid $5,000 at an interlocutory sale. The district court confirmed the sale over the objection of Eagle Fleet who argued that it had a lien on the vessel for seamen's wages. We set aside confirmation of the sale and remanded for further proceedings on the grounds that, given the gross disparity between the price bid and the value of the vessel, the district court should not have confirmed the sale without determining whether the rights of third persons such as Eagle Fleet would be affected.
On remand, Eagle Fleet argued that it had a section 971 lien for seaman's wages. The parties stipulated that the only issue to be tried was whether Eagle Fleet was a general or a special agent of James T. Strader, the vessel's owner. 2 The uncontroverted facts established that Eagle Fleet, as operator of the vessel, paid seamen's wages. The district court held that Eagle Fleet was a special agent and entitled to a $59,930 lien for wages paid from December 1983 through August 1984. FNB appeals the finding on agency while Eagle Fleet appeals the district court's refusal to increase the lien by the amount of wages allegedly paid for October and November 1983.
While the district court's sale order was on appeal, the M/V LIGHTNING POWER was released to FNB and sold to a third party. FNB attributes this to Eagle Fleet's failure to post a supersedeas bond and to secure a stay. FNB asserts that the district court's jurisdiction to render a judgment enforcing Eagle Fleet's lien was limited to the res, the $5,000 in proceeds from the judicial sale of the vessel deposited in the registry of the court. Eagle Fleet counters that FNB agreed at a January 3, 1986 pretrial conference to be personally liable for any indebtedness adjudged against the vessel if Eagle Fleet would refrain from executing a warrant to bring the vessel within the jurisdiction of the court. No such agreement appeared in the record on appeal. We remanded to the district court to have the record conformed to reflect the truth of the matter. See Fed.R.App.P. 10(e).
After conducting a hearing, the district court found that FNB agreed at the pretrial conference to pay any judgment which might be awarded Eagle Fleet. FNB contends that this finding is clearly erroneous. We disagree. Several witnesses were called because the district judge had no personal recollection of the agreement. Lawrence Krim, the President of Eagle Fleet, and Joe Tynan, Eagle Fleet's attorney, both testified at the hearing that the agreement was made in the presence of the court at the pretrial conference. FNB's attorney, Nel Vezina, testified that he had insisted on Krim leaving the pretrial conference before it began. The district court noted, however, that it had no policy prohibiting clients from attending pretrial conferences and that Krim and Tynan had testified that Krim did not leave the conference until a few minutes before it ended. Vezina also testified that when Tynan mentioned reseizing the vessel, Vezina said that it had already been sold and that seizure could subject Eagle Fleet to substantial liability. Tynan testified that Krim abandoned plans to seize the vessel in reliance on FNB's commitment to pay any judgment rendered in favor of Eagle Fleet, not out of fear that liability might accompany seizure. The district court credited Krim and Tynan's testimony rather than Vezina's.
The district court also reasoned that since the parties had reduced the trial to a single issue, entitlement to a maritime lien, the equally vital issue of who would pay the judgment must have been resolved prior to trial. According to FNB, Eagle Fleet could just as well have been unaware that any recovery would be limited to $5,000. FNB also argues that Eagle Fleet's failure to make the agreement a matter of record undercuts the likelihood that such an agreement was made. Tynan testified that he did not request the agreement to be noted on the minute entry because it had been made in the judge's presence. While this explanation may reflect on Tynan's courtroom procedures, it does not necessarily impugn his credibility.
Finally, FNB contends that if an agreement existed, Eagle Fleet had no reason to contest FNB's Preferred Ship Mortgage. That FNB may construct a version of the evidence to support a finding other than that reached by the district court does not render the court's finding clearly erroneous. The district court considered the credibility of testimony that went directly to the point at issue. The inferences to be drawn from the actions of the parties cannot be separated from the testimony and credibility of these witnesses. Our review of the record does not leave us "with a definite and firm conviction that a mistake has been made." Elevating Boats, Inc. v. Gulf Coast Marine, Inc., 766 F.2d 195, 199 (5th Cir.1985).
A person who furnishes repairs, supplies or other necessaries to a vessel at the behest of the owner or his agent is entitled to a section 971 lien upon the vessel provided he did not look solely to the credit of the owner or the charterer. Seamen may be entitled to such a lien for wages owed and those subrogated to seamen's claims take equivalent status. Bank of New Orleans & Trust Co. v. Oil Screw Tracy Marie, 455 F.Supp. 78, 80 (W.D.La.1978), aff'd, 580 F.2d 808 (5th Cir.1978).
[U]nder section 971, a presumption arises that one furnishing supplies [or other qualifying items or services] to a vessel acquires a maritime lien, and the party attacking this presumption has the burden of establishing that the personal credit of the owner or charterer was solely relied upon. To meet this burden, evidence must be produced that would permit the inference that the supplier purposefully intended to forego the lien. Because of the strong presumption in favor of a maritime lien, it is necessary that a party opposing the lien prove that the creditor ... deliberately intended to look solely to the owner's personal credit and to forego the valuable privilege afforded it by law.
Equilease Corp. v. M/V SAMPSON, 793 F.2d 598, 605-06 (5th Cir.) (en banc) (citations omitted; footnote omitted), cert. denied, --- U.S. ----, 107 S.Ct. 570, 93 L.Ed.2d 575 (1986).
If the party contesting the maritime lien presumption establishes that the creditor was a general agent, a presumption arises that the creditor looked solely to the credit of the owner. Compagnia Maritima La Empresa, S.A. v. Pickard, 320 F.2d 829, 832 (5th Cir.1963). The theory is that a general agent "acts not as a stranger relying on the security of the vessel but as an agent of the owner to whom he looks for payment." Savas v. Maria Trading Corp., 285 F.2d 336, 339 (4th Cir.1960). A creditor may contest the basic facts giving rise to the general agency presumption or rebut the presumed fact by establishing that he nonetheless relied upon the security of the vessel. Continuity of service and scope of authority are particularly relevant to classifying maritime agencies--scope of authority being the more important factor. Ameejee Valleejee & Sons v. M/V VICTORIA U., 661 F.2d 310, 313 (4th Cir.1981). The broader the delegated authority the more likely the agent is a general agent. Id. 3
Pickard concerned a venture involving the purchase and resale of a specific vessel. The owner's agent was to refurbish and sell the vessel so that out of the proceeds he and the owners might be compensated. In that case, the court stated:
The thing which characterizes a general agent as known in the maritime fraternity is a mutual interdependence on the financial credit and stability of each of the parties, agent and owner. The arrangement by its very nature contemplates that the agent must do many things in advance of the arrival or after the departure of the vessel. Reimbursement of his expenditures and the payment of his fees, whether by commissions on freight or otherwise, is not dependent on the profitableness of that immediate venture.
Pickard, 320 F.2d at 832. The agency in Pickard could not be characterized as the type of general agency in which the agent relied solely on the credit of the owner because of the nature of the transaction: "[T]his was a single-shot affair in which none of the parties dealt on the credit of the others." Id. (emphasis in original). Instead, "[a]ll knew that profits, if any, would come solely out of and from the ship herself." Id.
In the case at bar, the...
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