Ryan-Walsh, Inc. v. M/V OCEAN TRADER, Civil Action No. S-94-1250.

• Decision Date: 25 March 1996
• Docket Number: Civil Action No. S-94-1250.
• Citation: 930 F. Supp. 210
• Parties: RYAN-WALSH, INC., et al., Plaintiffs, v. M/V OCEAN TRADER, in rem, Defendant.
• Court: U.S. District Court — District of Maryland

930 F. Supp. 210

RYAN-WALSH, INC., et al., Plaintiffs, v. M/V OCEAN TRADER, in rem, Defendant.

Civil Action No. S-94-1250.

United States District Court, D. Maryland.

March 25, 1996.

Robert P. O'Brien, Mary Alice McNamara, Niles, Barton & Wilmer, Baltimore, MD, Melvin J. Tublin, Poles, Tublin, Patestides & Stratakis, New York City, for defendant.

John Stephen Simms, Greber & Simms, Baltimore, MD, for plaintiffs.

MEMORANDUM OPINION

SMALKIN, District Judge.

This admiralty action is before the Court on the parties' cross-motions for summary judgment. The issues have been exhaustively briefed, and no oral hearing is necessary. Local Rule 105.6.

I. Factual background

The plaintiffs in this action claim that they have maritime liens against the in rem defendant, the M/V OCEAN TRADER, a vessel formerly known as the ANANGEL HAPPINESS.¹ The vessel's current owner, Waterville Navigation, Inc., is the claimant in this Court. The following facts are undisputed.

The plaintiff International Marine Fuels San Francisco, Inc. ("IMF-SF") provided bunkers to the ANANGEL HAPPINESS in Jakarta, Indonesia on June 13, 1990, and in Singapore on June 27, 1990. IMF-SF billed the time charterer of the ANANGEL HAPPINESS, Meridian Shipping, $86,716.42 for the fuel. Meridian did not pay IMF-SF before filing for bankruptcy in August, 1990. IMF-SF filed a claim in Meridian's bankruptcy that included the amount sought in the present action.

Plaintiff Ryan-Walsh, Inc., provided stevedoring and related services to the ANANGEL HAPPINESS in Savannah, Georgia, from April 19, 1990 through April 23, 1990. Because Ryan-Walsh and Meridian had agreed that Meridian would pay in advance for Ryan-Walsh's services, Meridian paid Ryan-Walsh $47,000 on or about April 17, 1990 as the estimated cost of the job. A surveyor representing the owners of the ANANGEL HAPPINESS supervised Ryan-Walsh's work at Savannah, however, and imposed additional conditions on the loading of the cargo. As a consequence, Ryan-Walsh's actual cost to load the vessel was substantially more than it had anticipated, and it billed Meridian for an additional $76,640.60 for its services to the ANANGEL HAPPINESS. Meridian did not pay the invoices before it filed for bankruptcy. Ryan-Walsh claimed the value of its services in the Meridian bankruptcy.

Plaintiffs Ceres-Gulf and Intracoastal rendered services to the ANANGEL HAPPINESS in Houston, Texas, between March 31, 1990 and April 5, 1990. Intracoastal provided tug services to the vessel at the request of Tagship, Inc., Meridian's agent in Houston. Intracoastal sent Tagship an invoice in the amount of $2,119.54 for its services. Intracoastal was never paid. Ceres-Gulf provided stevedoring and terminal services to the ANANGEL HAPPINESS. Some of the services were ordered by Meridian, but most were ordered by Houston Sea Packing, a space charterer of the vessel. Ceres-Gulf sent invoices to Houston Sea Packing for $83,826.16, and to Meridian for $8,164.47, but was paid by neither entity. Ceres-Gulf sent the invoices to Houston Sea Packing approximately once a week from August 9, 1990, through December 9, 1991, and then left the matter to its attorney for collection. Despite these efforts, Houston Sea Packing did not pay Ceres-Gulf. Ceres-Gulf also sent demand letters to Meridian and filed a claim in Meridian's bankruptcy for the $8,164.47 due from Meridian.

It is also undisputed that the ANANGEL HAPPINESS left United States waters at the end of April, 1990, and did not return until May, 1994. The plaintiffs arrested her soon after she arrived in Baltimore, her first port of call in the United States.

The parties also agree that the ANANGEL HAPPINESS was owned by Anangel Happiness Compania Naveria, S.A., when the liens allegedly arose in 1990. In October, 1990, shortly after Meridian's bankruptcy filing, the ship was bought by Lutecia Navigation Co., Ltd., and renamed the SEA CREST. Later that same month, the vessel was sold to Sea-Shore Shipping Co., Ltd, and named the OCEAN TRADER. The present owner, Waterville Navigation, Inc., acquired the ship in February, 1992. It is further undisputed that Captain Harry Loudaros, the owner and director of Waterville, was also a director of both Lutecia and Sea-Shore Shipping.

Certain factual matters are disputed by the parties. The plaintiffs contend that each corporate owner of the ANANGEL HAPPINESS is related in some way to "the Angelicoussis Group," a group of corporations owned and operated by the Angelicoussis family. Indeed, the plaintiffs have gone to great lengths to identify possible links between various individuals and corporate entities involved in this case. By contrast, the claimant, Waterville, argues that it is entirely independent of the other corporate owners of the ANANGEL HAPPINESS and has no relationship whatever with any corporation connected with the Angelicoussis family.

II. Summary judgment standards

Summary judgment may be entered in a civil case if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits ... show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Summary judgment may be appropriate even though the record contains conflicting evidence with respect to the facts, because "only disputes over facts that might affect the outcome of the suit under governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). In deciding a motion for summary judgment, this Court must consider the facts and draw its inferences in the light most favorable to the party opposing the motion. See Tuck v. Henkel Corp., 973 F.2d 371, 374 (4th Cir. 1992), cert. denied, 507 U.S. 918, 113 S.Ct. 1276, 122 L.Ed.2d 671 (1993). The task of the Court is to decide whether or not there exist genuine issues of material fact, warranting trial. No such issue exists unless there is sufficient evidence favoring the non-moving party to support a finding in that party's favor. Anderson v. Liberty Lobby, 477 U.S. at 249, 106 S.Ct. at 2510-11.

III. Laches

The claimant contends that the plaintiffs' claims to maritime liens against the vessel are barred in their entirety by the doctrine of laches. According to the claimant, it would be inequitable for this Court to enforce the claims against it because it is a bona fide purchaser of the vessel without notice of the liens. The plaintiffs respond that both the vessel's continuous absence from the United States and the claimant's actual or constructive knowledge of the maritime liens excuse any delay in their filing this action.

It is well established that "laches or delay in the judicial enforcement of maritime liens will, under proper circumstances, constitute a valid defense." The Key City, 14 Wall. (81 U.S.) 653, 660, 20 L.Ed. 896 (1871). In The Key City, the Supreme Court held the laches defense inapplicable to a maritime lien claim filed three and a half years after the lien arose. The Court observed that the application of the doctrine of laches depends upon "the peculiar equitable circumstances" of each case. Ibid. The claimants in The Key City, like the claimant in the present case, contended that they were innocent purchasers of the vessel subject to the lien. The Court agreed that where a bona fide purchaser lacks notice of the lien "the defense will be held valid under shorter time, and a more rigid scrutiny of the circumstances of the delay, than when the claimant is the owner at the time the lien accrued." Ibid. Nevertheless, the Court held that the claimants were not entitled to the benefit of the "rule for the protection of purchasers without notice" because of the circumstances under which they acquired the vessel. 14 Wall. at 661.

The principles set forth in The Key City remain the basis of laches law in the admiralty jurisprudence of this Circuit.² The Court of Appeals for the Fourth Circuit has more fully described the application of laches to a maritime lien claim against a purchaser of a ship:

"... wherever a secret lien is sought to be established upon a vessel which has passed into the possession of a bona fide owner who was ignorant of its existence, and who had no reasonable opportunity to discover it, the court will make rigid scrutiny of the circumstances of the delay, and if there has been reasonable time to enforce the lien, and the vessel has been within reach of process, the party neglecting to avail himself of it will not be allowed to enforce it to the prejudice of an innocent third party."

Norfolk Sand & Cement Co. v. Owen, 115 F. 778, 780 (4th Cir.1902). See also Phelps v. The Cecelia Ann, 199 F.2d 627 (4th Cir.1952). Later, in Giddens v. Isbrandtsen Co., 355 F.2d 125 (4th Cir.1966), the Court considered the procedural aspects of the defense of laches:

"The defendant has the burden of ultimately proving inexcusable or inadequately excused delay, plus prejudice, inasmuch as laches is an affirmative defense. F.R.Civ.P. 8(c) ... The court weighs the excuse, or absence of excuse, against the actual or reasonably anticipated injury."

Giddens, 355 F.2d at 128.³ In the present action, therefore, the claimant Waterville must establish both that the plaintiffs unreasonably delayed filing their lien claims, and that Waterville was prejudiced by the delay.⁴

It is undisputed that the services giving rise to the alleged liens were provided to the ANANGEL HAPPINESS more than four years before the plaintiffs began this action. State statutes of limitations for analogous claims are generally a factor in determining whether there has been a sufficient delay to invoke the laches defense. See Giddens, 355 F.2d at 128; The Cecelia Ann, 199 F.2d at 628; Rea v. An-Son Corp., 79 F.R.D. 25, 28 (W.D.Ok.1978). The plaintiffs have cited to the four-year limitations statutes of Georgia, Texas...