Gulf Marine v. Golden Prince M/V
| Decision Date | 01 November 2000 |
| Docket Number | 5,9930909 |
| Parties | GULF MARINE AND INDUSTRIAL SUPPLIES, INC; ET AL Plaintiffs, v. GOLDEN PRINCE M/V, ETC; ET AL, Defendants, MURPHY, ROGERS & SLOSS, APLC, Plaintiff-Appellant, v. GOLDEN PRINCE M/V, HER ENGINES, TACKLE, APPAREL, AND APPURTENANCES, IN REM; PRINCE NAVIGATION, INC., Defendants-Appellees, ROYAL BANK OF SCOTLAND, Appellee GULF MARINE AND INDUSTRIAL SUPPLIES, INC; ET AL, Plaintiffs, v. GOLDEN PRINCE M/V, ETC; ET AL, Defendants, MURPHY, ROGERS & SLOSS, APLC, Plaintiff-Appellant, v. GOLDEN PRINCE M/V, HER ENGINES, TACKLE, APPAREL, AND APPURTENANCES, IN REM; PRINCE NAVIGATION, INC., Defendants-Appellees,Cons/wUNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT |
| Court | U.S. Court of Appeals — Fifth Circuit |
Appeals from the United States District Court for the Eastern District of Louisiana
Before JONES and BENAVIDES, Circuit Judges, and COBB,1 District Judge.
The law firm of Murphy, Rogers & Sloss, APLC ("MRS") filed suit to establish a maritime lien on the sale proceeds of the vessel M/V GOLDEN PRINCE ("GOLDEN PRINCE"). MRS argued that legal services it provided on behalf of the GOLDEN PRINCE were "necessaries" under the Federal Maritime Law Act (FMLA), 46 U.S.C. § 31342 (2000), and that the firm therefore held a maritime lien for its attorney fees senior to a mortgage on the vessel. The district court rejected this claim, and MRS appeals. We affirm because under the FMLA, legal services furnished to the vessel are not "necessaries."
The parties in interest in this case are MRS and the Royal Bank of Scotland ("Bank"). MRS is a professional law corporation based in New Orleans, Louisiana. Bank is a foreign secured creditor of the GOLDEN PRINCE.
The managers of the three vessels related to this action retained MRS in March 1998 to represent them and the owners of the vessels in a wage dispute. Current and former crewmembers, seeking wages and penalties, alleged that the owners had breached an agreement governing their pay. The claims against the vessels were substantively identical. The crewmembers seized two of the vessels, including the GOLDEN PRINCE, to enforce their claims. MRS provided legal services to settle the wage claims against all three vessels and obtained the release of the seized vessels. MRS earned approximately $136,000 in legal fees and disbursements between March 1998 and January 1999, all of which remains unpaid.
In January 1999, creditors of the GOLDEN PRINCE seized the vessel. The district court consolidated creditor suits into this action, including in rem claims by MRS and Bank. The vessel was sold at a public auction for $3.51 million. Bank holds a $60 million foreign first preferred ship's mortgage on the GOLDEN PRINCE and other vessels. If MRS does not have a maritime lien on its legal fees, its claim will be inferior to Bank's mortgage and the firm will receive none of the sale proceeds.
MRS and Bank filed motions for summary judgment to establish their relative priorities. The district court granted summary judgment against MRS. The court rejected MRS's argument that the firm's legal services were "necessaries" within the meaning of 46 U.S.C. § 31342 (2000). It also ruled that MRS did not "earmark" legal services specifically to GOLDEN PRINCE to establish its claim for necessaries, and it found that MRS did not rely on the credit of the GOLDEN PRINCE to secure its fees. MRS appeals.
This Court reviews issues of law and denials of summary judgment de novo, applying the same standards as the district court. See Benningfield v. City of Houston, 157 F.3d 369, 374 (5th Cir. 1998); Associated Metals and Minerals Corp. v. Alexander's Unity MV, 41 F.3d 1007, 1010 (5th Cir. 1995).
The terms of the FMLA lend little support to MRS's claim that a maritime lien secures its attorney fees. Section 31342 provides that "a person providing necessaries to a vessel . . . has a maritime lien on the vessel." 46 U.S.C. § 31342 (2000). Section 31301 states that "'necessaries' includes repairs, supplies, towage, and the use of a dry dock or marine railway." MRS thus holds a maritime lien only if its legal services were necessaries. While the enumerated examples in § 31301 are far from exhaustive, legal services do not fit naturally into this list of traditional shore-to-ship goods and services.
MRS cites no cases classifying legal services as necessaries because there are none. The absence of precedent signifies the weakness of MRS's position, since admiralty enjoys an unusually rich legal tradition and, more than nearly any other contemporary area of federal law, relies on venerable precedents where they exist. In fact, this Court has held that maritime liens do not secure attorney fees in cases predating the FMLA. See United States v. Knauth, 183 F.2d 874, 878 (5th Cir. 1950) (); Gray v. Hopkins-Carter Hardware Co., 32 F.2d 876, 879 (5th Cir. 1929) (). Since Congress enacted the FMLA, courts have consistently held that legal services are not necessaries. See Bradford Marine, Inc. v. M/V SEA FALCON, 64 F.3d 585, 589 (11th Cir. 1995) (); American Oil Trading, Inc. v. M/V SAVA, 47 F. Supp. 2d 348, 353 (E.D.N.Y. 1999) (same); James Creek Marina v. Vessel MY GIRLS, 964 F. Supp. 20, 23 (D.D.C. 1997) (same).
MRS urges this Court to define necessaries expansively. It points to the decision in Equilease Corp. v. M/V SAMPSON, which defined necessaries to include "most goods or services that are useful to the vessel, keep her out of danger, and enable her to perform her particular function." 793 F.2d 598, 603 (5th Cir. 1986) (en banc). In holding that insurance was a necessary, this Court stated that "[n]ecessaries are things that a prudent owner would provide to enable a ship to perform well the functions for which she has been engaged." Id.
MRS's reliance on Equilease has some merit. Equilease establishes that claimants can get a maritime lien for "providing" intangible services.2 Id. This Court declared that the definition of "necessaries" is particular to the vessel. "It is the present, apparent want of the vessel, not the character of the thing supplied, which makes it a necessary." Id. (citing 2 Benedict on Admiralty § 34 (7th ed. 1984)). Unlike Bradford Marine, American Oil, and James Creek Marina, the legal services in this case did not enforce a maritime lien against the vessel but released the GOLDEN PRINCE from seizure. It is arguable that the legal services that released the GOLDEN PRINCE and prevented rearrest enabled her to perform her function and were useful to her.
Equilease, however, focused on the utility of the claimed necessary to vessel operations. This Court held that because insurance is "essential to keep a vessel in commerce," it is a necessary. Id. at 604. Here, the legal services were not something the GOLDEN PRINCE needed "just to carry on its normal business." Id. These legal fees...
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