Me. Unif. Rental, Inc. v. Star
| Decision Date | 07 September 2016 |
| Docket Number | CIVIL NO. 2:15-cv-442-DBH |
| Parties | MAINE UNIFORM RENTAL, INC. D/B/A PRATT ABBOTT UNIFORM & LINEN, INTERVENOR PLAINTIFF v. M/V NOVA STAR, in rem, DEFENDANT |
| Court | U.S. District Court — District of Maine |
On August 24, 2016, I conducted a bench trial of Pratt Abbott Uniform & Linen ("Pratt Abbott")'s1 claim to a maritime lien on the M/V Nova Star ("Nova Star"). I heard closing arguments the same day. The following are my findings of fact and conclusions of law. See Fed. R. Civ. P. 52.
1. In 2013, Singapore Technologies Marine Ltd. ("ST Marine") and Quest Navigation, Inc. ("Quest") entered into a joint venture to operate a ferry service between Yarmouth, Nova Scotia and Portland, Maine.
2. ST Marine and Quest incorporated Nova Star Cruises Ltd. in Nova Scotia to operate the ferry service. ST Marine owned ten percent of the company.
3. Nova Star Cruises Ltd. chartered a vessel owned by ST Marine, the M/V Nova Star, to make the crossing.
4. Nova Star Cruises Ltd. set out making the Nova Star a ferry service that was functionally the equivalent of a hotel that cruised between Yarmouth and Portland.
5. To equip the vessel, Nova Star Cruises Ltd. asked Pratt Abbott to supply the linens3 for the vessel. The General Manager of Pratt Abbott, Thomas Gridley, negotiated with Nova Star Cruises Ltd.'s CFO, Bruce Allain.
6. Pratt Abbott, a vendor that has worked with many hotels, offered Nova Star Cruises Ltd. the option of buying the linens up front, or renting from Pratt Abbott over a specific period of time linens that Pratt Abbott purchased and owned. In either event, Pratt Abbott would clean the linens and return them to the ship on a daily basis.
7. To reduce its upfront expenses and to better project its weekly costs, Nova Star Cruises Ltd. opted to rent the linens from Pratt Abbott over a five-year period.
8. Before finalizing the agreement, Nova Star Cruises Ltd. paid Pratt Abbott a $51,536.45 deposit, and Nova Star Cruises Ltd. filled out a credit application through Pratt Abbott. Pl.'s Ex. 1.
Pl.'s Ex. 1.
10. To meet Nova Star Cruises Ltd.'s needs under the contract, Pratt Abbott purchased upfront certain specialty items in large quantities, including specialty linen carts that could maneuver around tight spaces on the vessel, thousands of flat twin sheets, thousands of table napkins, and uniquely shaped table clothes. To meet the needs of Nova Star Cruises Ltd.'s rental contract, Pratt Abbott also purchased new equipment that it would not normally have purchased.
11. Under the contract, Pratt Abbott owns all of these linens and other specialty items.
12. At the end of the 2015 season, Nova Star Cruises Ltd. asked Pratt Abbott to leave specific inventory onboard the Nova Star vessel. Pratt Abbott did so and invoiced Nova Star Cruises Ltd. for the amount ($3,223.29) that it had requested to remain on the boat.
13. As it turned out, Nova Star Cruises Ltd. terminated the ferry service in 2015, after just two seasons.
14. A number of creditors seized the Nova Star through process originating in this court, asserting maritime liens against it. Most of the claimshave been settled, and ST Marine—the owner of the vessel—posted a bond that allowed the vessel to leave the port of Portland while the remaining claims are resolved.
15. When Pratt Abbott realized that the rental agreement was, in effect, terminated, it demanded that Nova Star Cruises Ltd. purchase all the linens, as the 2014 agreement provided.
16. Pratt Abbott also requested that Nova Star Cruises Ltd. pay unpaid invoices for items and rental services that had previously been supplied to the ship. The unpaid invoices total $16,187.50 for the last completed rental service and regular cleaning invoice ($12,558.21), the items that Nova Star Cruises Ltd. requested remain on the ship ($3,223.29), and specialty items that were cleaned and returned to the ship ($406). Pl.'s Ex. 6.
17. Nova Star Cruises Ltd. did not pay Pratt Abbott for any of these and did not respond to Pratt Abbott's demand to purchase the inventory of linens that Pratt Abbott had purchased for the Nova Star as provided in the rental agreement.
18. That inventory is sitting in Pratt Abbott's warehouse in Westbrook, Maine. The total replacement cost of the stored inventory under the contract is $178,023.02. Pl.'s Ex. 2.
19. Pratt Abbott's maritime lien claim against the Nova Star vessel is the total replacement cost of the inventory in storage and the balance of the unpaidinvoices, for a total claim of $194,510.12.
A. This court has jurisdiction under 28 U.S.C. § 1333(1).4
B. Under federal maritime law, "a person providing necessaries to a vessel on the order of the owner or a person authorized by the owner . . . has a maritime lien on the vessel." 46 U.S.C. § 31342. It "is not required to allege or prove in the action that credit was given to the vessel." Id.5
C. "[P]ersons who are presumed to have authority to procure 'necessaries' to a vessel . . . include the owner, the master, 'a person entrusted with the management of the vessel at the port of supply,' or an officer or agent appointed by the owner or 'a charterer' of the vessel." Cianbro Corp. v. George H. Dean, Inc., 596 F.3d 10, 14 (1st Cir. 2010) (quoting 46 U.S.C. § 31341). I conclude that Nova Star Cruises Ltd., as charterer of the vessel Nova Star, Mark Amundsen, as President of Nova Star Cruises Ltd., and Bruce Allain, as CFO of Nova Star Cruises Ltd., had authority to procure necessaries for the ship.
D. According to the statute, the term "necessaries" "includes repairs, supplies, towage, and the use of a dry dock or marine railway." 46 U.S.C.§ 31301(4). But 46 U.S.C. § 31301(4) is not an exhaustive list. Simply stated, the term "necessaries" "should be interpreted broadly in order to encourage the provision of services that will keep ships active . . . [and a lien can attach] whenever the goods or services that were provided to the vessel were necessary for its continued operation." Farrell Ocean Servs., Inc. v. United States, 681 F.2d 91, 92-93 (1st Cir. 1982); see Trico Marine Operators, Inc. v. Falcon Drilling Co., 116 F.3d 159, 162 (5th Cir. 1997) . I conclude that the supplies and services that Pratt Abbott provided under the contract enabled the Nova Star to run as a mobile hotel between Portland and Yarmouth and qualify as "necessaries" under 46 U.S.C. § 31301.
E. "It has long been the law that an essential element of establishing a maritime lien is that the necessaries be either (1) physically delivered to the vessel, or (2) constructively dispatched to the vessel by the handing over of the supplies to the owner or the owner's authorized agent for use on the designated vessel." Cianbro, 596 F.3d at 14-15 (citing Piedmont & George's Creek Coal Co. v. Seaboard Fisheries Co., 254 U.S. 1, 6-7 (1920)).
F. Because of the nature of the rotating inventory that Pratt Abbott provided the Nova Star, there were two types of delivery in this case. First there was delivery of the rental and cleaning services that Pratt Abbott provided to the Nova Star. Pratt Abbott owned the linens and on a daily basis it provided a service whereby it "delivered" certain linens on a temporary basis to the ship and retrieved them the next day. I conclude that those services were delivered to thevessel for purposes of the maritime lien requirement. See Itel Containers Int'l Corp. v. Atlanttrafik Exp. Serv. Ltd., 781 F. Supp. 975, 986 (S.D.N.Y. 1991), rev'd on other grounds, 982 F.2d 765 (2d Cir. 1992). That supports payment of the $12,558.21 invoice for past services. But there is a second category. Some of the specialized items Pratt Abbott purchased remained with the ship. In 2015, Pratt Abbott left on the ship the items that the Nova Star requested remain on the ship or be returned to the ship. That supports payment of the $3,223.29 invoice that Nova Star Cruises Ltd. requested remain on the ship and the $406 invoice for the specialty items that were cleaned and returned to the ship and remained there. Those physical items have also been "delivered" to the ship for purposes of the maritime lien requirement. See Port Welcome Cruises, Inc. v. S. S. Bay Belle, 215 F. Supp. 72, 86 (D. Md.), aff'd sub nom. Humble Oil & Ref. Co. v. S. S. Bay Belle, 324 F.2d 954 (4th Cir. 1963). The maritime lien for the services and physical items described in this paragraph is in the total amount of $16,187.50.
G. The items that remain in Pratt Abbott's inventory in Westbrook have not been "delivered" to the ship in such a way as to create a maritime lien. Pratt Abbott continues to own them, and any previous movement of these items to and from the ship was simply the rental and cleaning service provided under the rental contract. Pratt Abbott may have a breach of contract claim against the charterer Nova Star Cruises Ltd. for failing to purchase the inventory at the replacement cost rate once it terminated...
To continue reading
Request your trial