Mullane v. Chambers
| Decision Date | 22 December 2004 |
| Docket Number | No. CIV.A.98-11797-WGY.,CIV.A.98-11797-WGY. |
| Citation | 349 F.Supp.2d 190 |
| Parties | David E. MULLANE and Joan-Leslie Mullane, Plaintiffs, v. Adele CHAMBERS, In Personam, Jean Farese, In Personam, Frank Cousins, In Personam, and Essex County Sheriff's Dept., In Personam, and M/V Cent'Anni (O.N.967917) her engines, tackle, equipment, furnishings, In Rem, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Robert A. Ciampitti, Jr., Law Offices of Robert Ciampitti, Jr., Boston, MA, for Frank Cousins, Defendant.
Alfred P. Farese, Jr., Law Office of Alfred Paul Farese, Jr., Everett, MA, Thomas J. Muzyka, Clinton & Muzyka P.C., Boston, MA, for David E. Mullane, Joan-Leslie Mullane, Counter Defendants.
Paul L. Kenny, Medford, MA, John F. Lakin, AFSCM Council 93, Boston, MA, Salim R. Tabit, Broadhurst, Lakin & Lakin, Andover, MA, for Adele Chambers, Jean Farese, Counter Claimants.
The central issue in this case is whether an unrecorded bill of sale purporting to convey a federally documented vessel, the M/Y Cent'Anni (formerly known as "Lady B Gone"), from David and Angela Murphy (the "Murphys") to Dr. David Mullane ("Mullane") is valid against judgment creditors Adele Chambers ("Chambers") and her mother Jean Farese ("Farese").
Originally, this case was heard in the district court before Judge Keeton, who held a four-day bench trial in December 2001. On June 6, 2002, Judge Keeton issued his opinion in Mullane v. Chambers, 206 F.Supp.2d 105 (2002), and entered final judgment in favor of the Mullanes. Chambers and Farese appealed. The First Circuit reversed and remanded the case to the district court for further proceedings. Mullane v. Chambers, 333 F.3d 322, 339 (1st Cir.2003). The case has been randomly redrawn to this session of the Court.
The full history of this case is best recounted in Judge Keeton's opinion, see Mullane, 206 F.Supp.2d at 107-11, and those seeking more detail would be wise to consult it. For purposes of this limited remand, the relevant background is as follows. On November 24, 1997, Dr. and Mrs. John J. Walsh conveyed the vessel M/Y Lady B. to the Murphys. Mullane, 333 F.3d at 325. On December 8, 1997, the Murphys recorded the conveyance with the Department of Transportation pursuant to the United States Vessel Documentation System, 46 U.S.C. §§ 12101-12124, 31321 (2002), and changed the vessel's name to "Lady B Gone." Mullane, 333 F.3d at 325. On July 2, 1998, the Murphys sold the Lady B Gone to Mullane, who did not record the bill of sale or conveyance until September 2, 1998. Id.
During this time, Chambers and Farese obtained two Massachusetts state court writs of execution against the Murphys for loans made directly to the Murphys and to trucking companies owned by David Murphy. Id. at 325-26 & 326 n. 1. Farese had obtained a money judgment for $27,612.00 against the Murphys on November 1, 1996, and Chambers had obtained a money judgment for $70,123.32 against the Murphys on April 22, 1998. Id. at 326 n. 1. Chambers and Farese sought to levy on the vessel purportedly owned by the Murphys to satisfy the writs. Id. at 325. On the morning of August 28, 1998, the Essex County Sheriff's Department seized the vessel at the Seaport Marina in Lynn, Massachusetts. Id. at 326. At the time of the seizure, the Murphys were on board the vessel and the vessel had the name "Cent'Anni" painted on its transom. Id. The Sheriff's Department asked the Murphys whether they owned the vessel, and they replied that they had conveyed the vessel back to its former owners, i.e., Dr. and Mrs. Walsh. Id. A member of the United States Coast Guard, who had accompanied the Sheriff's Department, confirmed that the Department of Transportation records showed that the Murphys were the registered owners of the vessel. Id. At no time during the seizure were the Mullanes mentioned. Id.
Five days after the seizure, Mullane recorded the conveyance of the Lady B Gone with the Department of Transportation and changed the vessel's name to "Cent'Anni." Id. On September 4, 1998, Mullane and his wife Joan-Leslie Mullane, filed an amended complaint against Chambers, Farese, Sheriff Frank Cousins, the Sheriff's Department, and the Cent'Anni, seeking repossession of the vessel and compensatory damages. Id. Chambers and Farese filed an answer and counterclaim on October 5, 1998, seeking to have the transfer set aside as a fraudulent conveyance under Mass. Gen. L. ch. 109A. Id.
Judge Keeton held a four-day bench trial in December 2001. Id. at 327. He subsequently ruled on June 6, 2002 that the Mullanes were bona fide purchasers of the vessel as of July 2, 1998 and took the vessel free of any interests held by Chambers and Farese. Mullane, 206 F.Supp.2d at 119. The court also ruled that the vessel was damaged while in the Sheriff's care, but that the Mullanes failed to prove the amount of damages and that the Sheriff's Department was immune from damages. Id. at 117-118. The court imposed $100,000 in punitive damages against Chambers and Farese, holding that they intentionally disregarded the Mullanes' right to the vessel after learning of the unrecorded sale at the time of the seizure or soon thereafter. Id. at 119.
On Chambers and Farese's appeal, the First Circuit held that "the levy of the vessel was proper, and thus Chambers and Farese perfected their interest in the vessel by taking possession of it before the Mullanes had recorded their prior purchase agreement." Mullane, 333 F.3d at 329. The court next turned to what it considered "the central issue of the case: whether the recording statute relating to federally documented vessels, 46 U.S.C. § 31321, renders an unrecorded bill of sale or conveyance invalid as against a seller's judgment creditors who levy the vessel without notice." Id. at 329-330. The recording statute provides:
A bill of sale, conveyance, mortgage, assignment, or related instrument, whenever made, that includes any part of a documented vessel or a vessel for which an application for documentation is filed, must be filed with the Secretary of Transportation to be valid, to the extent the vessel is involved, against any person except —
(A) the grantor, mortgagor, or assignor;
(B) the heir or devisee of the grantor, mortgagor, or assignor; and
(C) a person having actual notice of the sale, conveyance, mortgage, assignment, or related instrument.
46 U.S.C. § 31321(a)(1) (emphasis added). The First Circuit noted that neither party sufficiently briefed the application of section 31321 to this case and that the district court never even mentioned the statute in its opinion. Mullane, 333 F.3d at 330. Reading the "plain and unambiguous language of the statute," the court ruled that "the Mullanes' unrecorded bill of sale is invalid against Chambers and Farese unless they had actual notice." Id. at 330 (emphasis added).
Because Judge Keeton found only that Chambers and Farese had notice of the sale to Mullane either at the time of the seizure or soon thereafter, the district court did not resolve the "crucial question" of "whether they had actual notice either before or at the time of the levy." Id. at 333. "Because the district court did not apply subsection 31321(a)(1) and did not make a factual finding as to whether Chambers and Farese had actual notice at the time of the levy," the First Circuit remanded the case for further proceedings. Id. (emphasis added). The narrow question before this Court, therefore, is whether Chambers and Farese had "actual notice" of the sale to Mullane before or at the time of the levy.1
The issue of whether Chambers and Farese had actual notice of the vessel's sale to Mullane at or before the time of seizure is not entirely new. At the summary judgment stage, the Mullanes argued that Chambers knew that the Murphys had sold the vessel before the seizure, and that this knowledge could be imputed to the Sheriff's Department. Appellants' Record App., Vol. I, at 127. In her deposition testimony, Chambers recounted that she learned from the Coast Guard that the Murphys owned a vessel named the Lady B Gone. Def.'s Designation of Witness Test. [Doc. No. 214], Ex. 11 ("Chambers Dep."), at 33. She went down to the marina prior to the seizure to see if she could find it. Id. at 32. When she asked an unidentified man at the dock whether he knew where she could find the Lady B Gone, the man responded Id. at 31; Appellants' Record App., Vol. I, at 127-28. From this evidence, the Mullanes argued that Chambers knew that the Murphys' vessel had been sold. Id. Considering the testimony in the light most favorable to the nonmovants, Judge Keeton held that proof was lacking that Chambers knew that the Murphys were no longer in possession of the vessel. Id. at 128. "At best," concluded Judge Keeton, "Chambers knew that the Murphys owned a boat and that it was no longer called LADY B GONE." Id.
Unfortunately, the question of whether Chambers and Farese had actual knowledge of the sale of the vessel from Murphy to Mullane before or at the time of the levy was not developed further at the December 2001 trial before Judge Keeton. Therefore, this Court allowed the parties to introduce additional evidence on the limited subject of what, if anything, Chambers and Farese knew about the sale and when. In May 2004, the Court held a two-day bench trial. See Trial Tr., Vol. I [Doc. No. 220]; Trial Tr., Vol. II [Doc. No. 218]. At the close of final arguments, the Court reflected upon the testimony from the bench and found as matter of fact that Chambers and Farese did not have actual knowledge before or at the time of the levy that Murphy had conveyed the vessel to Mullane. Trial Tr., Vol. II, at 30-32.
The Mullanes argue that this finding of fact alone does not dispose of the issue of actual notice. They contend, as matter of law, that the term ...
To continue reading
Request your trial
-
Martin v. Performance Boat Brokerage.Com, LLC
...David and Angela Murphy to Dr. David Mullane was valid against judgment creditors Adele Chambers and Jean Farese. Mullane v. Chambers, 349 F.Supp.2d 190, 191–92 (D.Mass.2004), aff'd438 F.3d 132 (1st Cir.2006). Dr. and Mrs. John Walsh conveyed the vessel M/Y Lady B. to the Murphys, who recor......
-
Mullane v. Chambers
...elsewhere. This case has been tried twice, by two different district court judges, each of whom published an opinion. Mullane v. Chambers, 349 F.Supp.2d 190 (D.Mass.2004); Mullane v. Chambers, 206 F.Supp.2d 105 (D.Mass.2002). It has been the subject of a published opinion by this court. Mul......
-
SMS Fin. JDC, LP v. Cope, 16-6063
...that Neibauer had implied actual notice. Authority from other courts on this point is persuasive. See, e.g., Mullane v. Chambers, 349 F. Supp. 2d 190, 194-97 (D. Mass. 2004) (discussing and applying standard), aff'd, 438 F.3d 132 (1st Cir. 2006). As noted in Mullane,If a person has knowledg......