Jan C. Uiterwyk Co., Inc. v. MV Mare Arabico
| Decision Date | 07 November 1978 |
| Docket Number | Civ. No. H-76-517,H-76-1115. |
| Citation | 459 F. Supp. 1325 |
| Parties | JAN C. UITERWYK CO., INC., Uiterwyk Terminal Corporation and Ryan-Walsh Stevedoring Company, Inc., Plaintiffs, v. MV MARE ARABICO, her engines, tackle, etc. and United Brands Company, Defendants. JAN C. UITERWYK CO., INC., Uiterwyk Terminal Corporation and Ryan-Walsh Stevedoring Company, Inc., Plaintiffs, v. MV MARE AUSTRALE, her engines, tackle, etc. and United Brands Company, Defendants. |
| Court | U.S. District Court — District of Maryland |
Barrett W. Freedlander and Niles, Barton & Wilmer, Baltimore, Md., for plaintiffs.
Donald C. Greenman and Ober, Grimes & Shriver, Baltimore, Md., for defendants.
These two cases present questions arising under the Federal Maritime Lien Act, 46 U.S.C. §§ 971-975, as amended. The ultimate issue to be determined is whether a loss occasioned by the default of a space charterer who made the initial arrangements for the supplying of necessaries for certain vessels should be borne by the plaintiffs who supplied the necessaries or by the owner and the time charterer of the vessels. These two cases have been heard together, since the parties are the same and the same issue has been raised in both cases.
Plaintiffs are ship's agents, stevedores and warehouse operators. They have brought these in rem admiralty actions asserting maritime liens against two vessels for services and other necessaries which they have provided. The vessels were seized here in Baltimore and the owner of the vessels has filed answers and defended the claims asserted. Subsequently, an amended complaint was filed, joining the time charterer of the vessel as a party defendant. Plaintiffs allege that they possess enforceable maritime liens against the MV MARE ARABICO for services performed in New Orleans, Louisiana in connection with two separate voyages of that vessel in July 1974 and February 1975. They assert a similar lien against the MV MARE AUSTRALE for services performed in March and April 1975, also in New Orleans. At all relevant times, these two vessels were owned by Oriens, S.p.A. (hereinafter "Oriens"), the claimant, and were time chartered to United Brands Corporation (hereinafter "United Brands").1
Presently pending before the Court are cross-motions for summary judgment. In support of these motions, the parties have filed numerous memoranda, affidavits, exhibits and excerpts from a deposition. Oral argument has been heard in open court. For the reasons hereinafter set forth, plaintiffs' motions for summary judgment will be granted, and Oriens' motion for summary judgment will be denied.
The facts
As disclosed by the discovery,2 the following facts are undisputed. Plaintiff, Ryan-Walsh Stevedoring Company, Inc. (hereinafter "Ryan"), is an Alabama corporation, which claims that it has not been paid $17,727.23 for stevedoring services rendered to the MARE ARABICO in February 1975 and $22,607.53 for stevedoring services rendered to the MARE AUSTRALE in March and April of 1975. Jan C. Uiterwyk Co., Inc. (hereinafter "JCU"), another plaintiff, is a Florida corporation, which claims that it has not been paid in full for agency and terminal services rendered to the MARE ARABICO in July 1974 and February 1975, in the amount of $3,625.42. JCU also claims that it has not been paid $2,304.45 for agency services rendered to the MARE AUSTRALE in March and April of 1975. Uiterwyk Terminal Corporation (hereinafter "UTC"), the third plaintiff, is also a Florida corporation, which claims that it has not been paid $10,881.04 for terminal services rendered to the MARE ARABICO in July 1974 and February 1975 and $4,764.35 for terminal services rendered to the MARE AUSTRALE in March and April of 1975. Thus, the amounts claimed by the plaintiffs, which aggregate $61,910.12, break down as follows:
MV MARE MV MARE
Plaintiff ARABICO AUSTRALE
Ryan $17,727.23 $22,607.53
JCU $ 3,625.42 $ 2,304.45
UTC $10,881.04 $ 4,764.35
In the fall of 1973, a Mr. Gil Heller entered into negotiations with a representative of JCU concerning services to be rendered by JCU and its affiliates to Mr. Heller and the companies he represented. Mr. Heller was in the business of shipping frozen meat from the United States to various destinations in South America. Following these negotiations, a formal Agreement was entered into on October 12, 1973 concerning the services to be provided by JCU and its affiliates at the port of New Orleans. The corporation which Mr. Heller initially designated as the contracting party was Beef and Produce Export Corporation (hereinafter "Beef and Produce"), although from time to time during the course of the dealings he designated other corporations.
Paragraph E of the October 12, 1973 Agreement covers the services involved in this litigation. That Paragraph provided that when Beef and Produce was authorized by the owners or charterers to engage a ship's agent in New Orleans, JCU was to be so appointed. All the services at issue here were furnished by or procured by JCU acting pursuant to said Paragraph E.3 It was the understanding of JCU that Mr. Heller or Beef and Produce was the time charterer on those occasions when JCU was appointed ship's agent. However, JCU was never shown a charter party between Mr. Heller or Beef and Produce and the owner of the ships, and Mr. Heller was always somewhat secretive concerning the relationship of his principal to the vessels involved.
As it turned out, neither Mr. Heller nor any of the companies he represented were time charterers of either the MARE ARABICO or the MARE AUSTRALE during any of the relevant times. Rather, Heller's companies were space charterers from United Brands, which was the time charterer from Oriens, the owner of the vessels. Under the time charter agreements between Oriens and United Brands, the masters of the two vessels were to be hired and paid by Oriens. These charters did not contain a "prohibition of lien" or "no lien" clause.
During the course of the Agreement, ten separate voyages were handled by JCU and its affiliates in various ways, three of which are the subject of this litigation. Plaintiffs customarily submitted bills to Beef and Produce and were paid by Beef and Produce. This arrangement continued until the spring and early summer of 1975, when payments from Beef and Produce were delayed and eventually stopped altogether. At some time in the summer of 1975, Beef and Produce went out of business and currently has no assets. After attempts to collect from Beef and Produce proved unsuccessful, plaintiffs brought suit in this Court, claiming maritime liens under 46 U.S.C. §§ 971 et seq.
The existence of a maritime lien
The issue presented here is a question of law and involves the construction and application to these facts of §§ 971, 972 and 973 of Title 46, United States Code. These three Sections (and two others which are not pertinent here) govern the creation of maritime liens asserted by the suppliers of necessaries. In their present form, these Sections provide as follows:
As summarized in Gilmore and Black, The Law of Admiralty, § 9-46a at 685 (2d Ed. 1975) (), these Sections, which are part of the Federal Maritime Lien Act, today have the following effect:
Contract liens may arise when services are furnished to a vessel "upon the order of the owner * * * or of a person authorized by the owner"; (§ 971), and * * * the "managing owner, ship's husband, master or any other person to whom the management of the vessel is intrusted" are presumed to have authority to create liens (§ 972) even though they may have been appointed by a "charterer * * * an owner pro hac vice or * * * an agreed purchaser in possession of the vessel" (§ 973).
Significantly, the Lien Act was amended by Congress in 1971. As originally enacted, the second clause of § 973 greatly restricted the presumption of authority created by § 972 and the first clause of § 973. The second clause of § 973 previously provided as follows:
But nothing in this chapter shall be construed to confer a lien when the furnisher knew, or by exercise of reasonable diligence could have ascertained, that because of the terms of a charter party, agreement for sale of the vessel, or for any other reason, the person ordering the repairs, supplies, or other necessaries was without authority to bind the vessel.
Questions arising under this provision were resolved by the courts against the supplier of necessaries so that "the duty to inquire provision was, in effect, allowed to...
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