Marine Coatings of Alabama, Inc. v. U.S.

• Decision Date: 07 June 1991
• Docket Number: No. 87-7278,87-7278
• Citation: 932 F.2d 1370
• Parties: , 37 Cont.Cas.Fed. (CCH) 76,137 MARINE COATINGS OF ALABAMA, INC., Plaintiff-Appellant, Cross-Appellee, v. UNITED STATES of America, Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1370

932 F.2d 1370

1991 A.M.C. 2487, 37 Cont.Cas.Fed. (CCH) 76,137

MARINE COATINGS OF ALABAMA, INC., Plaintiff-Appellant, Cross-Appellee, v. UNITED STATES of America, Defendant-Appellee, Cross-Appellant.

No. 87-7278.

United States Court of Appeals, Eleventh Circuit.

June 7, 1991.

I. David Cherniak, K.W. Michael Chambers and Thomas S. Rue, Mobile, Ala., for plaintiff-appellant, cross-appellee.

Thomas L. Jones, Torts Branch Civ. Div., Washington, D.C., for defendant-appellee, cross-appellant.

Appeals from the United States District Court for the Southern District of Alabama.

Before FAY and EDMONDSON, Circuit Judges, and GARZA ^*, Senior Circuit Judge.

FAY, Circuit Judge:

Appellant, Marine Coatings of Alabama, Inc. ("MCI"), is an Alabama corporation which engages in various ship repair services. On August 15, 1984, MCI filed suit in federal district court in Alabama against appellee, the United States of America, to recover money allegedly owed to MCI for repair services on three U.S. naval vessels. The district court granted summary judgment in favor of the United States. MCI appealed, claiming that the district court erred in finding that no issue of material fact existed with respect to whether MCI was entitled to a maritime lien under the Maritime Lien Act ("MLA"), and in finding that even if MCI were entitled to such a lien, its failure to comply with the Contract Disputes Act ("CDA") barred recovery in district court. We find that the district court's exercise of subject matter jurisdiction was proper, notwithstanding section 788 of the Public Vessels Act. We therefore AFFIRM that portion of the district court's opinion. However, we find that the district court erred in awarding summary judgment to the United States. First, we find that a material issue of fact does exist regarding MCI's entitlement to a maritime lien. Second, we find that the CDA does not preclude the bringing of an admiralty proceeding in which the United States has already waived sovereign immunity, merely because the admiralty cause of action arises out of an arguably contractual relationship. Consequently, for the reasons set forth more fully herein, we REVERSE and REMAND this case to the district court for proceedings consistent with this opinion.

Factual History

In the early 1970's, the United States entered into two identical Master Ship Repair Contracts with Braswell Shipyards, Inc. ("Braswell") to do repair and alteration work on U.S. naval vessels. The first contract was between Braswell and the Navy's Supervisor of Shipbuilding, Conversion and Repair ("SupShip") in Charleston, South Carolina. The second was between Braswell and the Navy's Military Sealift Command ("MSC") in Bayonne, New Jersey. Under these master contracts, the Navy could issue job orders to Braswell for repairs to particular Navy vessels on a periodic job-by-job basis. Braswell was responsible for furnishing materials, labor, and services necessary to complete the job. The master contracts also permitted Braswell to hire subcontractors to perform repairs specified in the job orders; however, the trial court found that the contracts did not purport to make Braswell an agent of the government.

On February 17, 1984, the Navy issued job orders to Braswell as the successful bidder among Master Ship Repair Contract holders to repair the USNS NEOSHO, a fleet tanker owned and operated by the MSC, and the YRST-2, a naval salvage vessel. On March 15, 1984, Braswell was awarded the job order to repair the SCHEREZADE, a Navy mine warfare training vessel. Appellant MCI was one of the subcontractors which submitted bids to Braswell in order for Braswell to submit its bid to the Navy. After having been awarded the aforementioned job orders based upon its general contractor's bid, Braswell contracted with MCI for the painting, cleaning, and coating of the three vessels. MCI performed the specified work on all three vessels in its subcontract with Braswell.

United States Government inspectors from MSC and SupShip inspected and approved MCI's work. MCI submitted an invoice to Braswell for the completed work on the ships. MSC and SupShip, according to their agreements with Braswell, paid Braswell for the repairs performed by MCI. Braswell, however, failed to pay MCI for the work.

Consequently, on July 20, 1984, counsel for MCI formally notified MSC that it had performed repairs on the NEOSHO and that MCI reserved the right to sue the government pursuant to 46 U.S.C.App. Secs. 741, 742, and 971 if Braswell did not remit immediately the $76,000 due MCI for repairs to that vessel. Shortly thereafter, MCI sued Braswell for the amounts owed for repairs on all three vessels. Less than one month later, on August 13, 1984, Braswell filed for Chapter 11 reorganization.

Procedural History

On August 15, 1984, MCI filed an in personam action against the United States, alleging subject matter jurisdiction pursuant to the Suits in Admiralty Act ("SAA"), 46 U.S.C.App. Secs. 741-52 (1988), and the Maritime Lien Act, 46 U.S.C.App. Secs. 971-75 (Supp. V 1987) (now codified as amended 46 U.S.C. Secs. 31341-43 (1988)). The gist of the complaint was that although MCI was filing an in personam action to recover damages, it was relying on the Maritime Lien Act (which contains an in rem provision similar to a common law mechanic's lien) to attach a lien to the three ships in order to secure payment of the amounts owed. Defendant United States moved for dismissal based on lack of subject matter jurisdiction. On August 13, 1985, the district court granted defendant's motion, and dismissed MCI's suit for lack of jurisdiction. On appeal, Marine Coatings of Alabama, Inc. v. United States, 792 F.2d 1565 (1986), a previous panel of this court reversed the district court's dismissal because it had impermissibly ruled on the basis of a Fed.R.Civ.P. 12(b)(1) motion to dismiss rather than a Rule 12(b)(6) motion for summary judgment. See id. at 1565-66. The case was remanded for further proceedings consistent with the panel's opinion. On remand, both MCI and the United States moved for summary judgment. On April 9, 1987, the district court granted appellee United States' motion for summary judgment and denied MCI's motion. Marine Coatings of Alabama, Inc. v. United States, 674 F.Supp. 819, 827 (S.D.Ala.1987).

The district court held that it had jurisdiction to hear the case either under the SAA or the Public Vessels Act ("PVA") (codified at 46 U.S.C.App. Secs. 781-90 (1988)). ¹ Then the court held that Braswell was not one authorized by the owner (the United States) of the three public vessels involved to procure MCI's services for the vessels as required by section 972 of the Maritime Lien Act. The court therefore found that MCI would not have been entitled to a maritime lien on the vessels if they had been privately owned. Consequently, because MCI would have been unable to obtain a maritime lien against a private owner under the same circumstances, it could not obtain one against the United States under either the SAA or PVA. ²

The court went on to hold that even if MCI were entitled to a maritime lien, the court still lacked subject matter jurisdiction because MCI had failed to comply with the Contract Disputes Act ("CDA") (codified at 41 U.S.C. Secs. 601-13 (1988)). The CDA is a statute that waives sovereign immunity for claims against the United States relating to contracts. In order to pursue such a claim, the CDA requires that certain procedures be followed in order to bring a claim (by a subcontractor, in this instance) against the United States relating to a contract. MCI did not comply with the CDA, so the district court held that it lacked jurisdiction based on the CDA, even if MCI were able to prove it was entitled to a maritime lien.

The court reasoned that MCI's claim was a claim "relating to a contract," and therefore the CDA applied. The court determined that MCI's maritime lien theory was based upon an underlying contract theory, because, "MCI could assert essentially the same right to recover from the Government by arguing that it had a contract for services with the Government made through the Government's alleged agent, Braswell." (R-39, 16). The court pointed out that MCI's allegation that Braswell was a person authorized by the owner to procure services within the meaning of the MLA was basically the same as alleging that Braswell was "an agent of the owner." As a result, the court then stated:

MCI should not be able to avoid complying with the Contract Disputes Act merely by stating its claim in such a way that the claim does not appear to fall within the Act. Since MCI's claim is essentially based on an underlying contract for services, the Court concludes that the Contract Disputes Act applies to the resolution of the claim.

(R-39, 16-17). Accordingly, because MCI had not complied with the CDA, the court granted summary judgment in favor of the United States.

MCI appeals. The United States cross-appeals the district court's finding of jurisdiction under the SAA or PVA. It asserts that 46 U.S.C.App. Sec. 788 bars the use of a maritime lien against a public vessel.

Discussion

The district court's grant of summary judgment in the case before us presents two main issues. The first main issue is whether the district court properly determined that MCI was not entitled to a maritime lien. The maritime lien issue presents two points of discussion: first, whether the "no lien" clause of the PVA prohibits a lien against a public vessel and therefore precludes subject matter jurisdiction; second, whether MCI has raised a genuine issue of material fact as to whether it is entitled to a maritime lien according to the MLA. The second major issue is whether, if in fact a material issue of fact remained as to whether MCI was entitled to a maritime lien, the CDA prohibits MCI from pursuing its in personam ³ claim via the SAA or PVA without complying with the CDA's...