PNC Bank DE v. F/V Miss Laura , 381 F.3d 183 ( 2004 )

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
8-25-2004
PNC Bank DE v. F/V Miss Laura
Precedential or Non-Precedential: Precedential
Docket No. 03-1695
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Recommended Citation
"PNC Bank DE v. F/V Miss Laura" (2004). 2004 Decisions. Paper 353.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/353
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PRECEDENTIAL District Judge: Honorable Joseph E.
Irenas
UNITED STATES COURT OF _____________
APPEALS Argued: March 22, 2004
FOR THE THIRD CIRCUIT
_____________ Before: FUENTES, SMITH and
GIBSON,* Circuit Judges.
No. 03-1695
_____________ (Filed: August 25, 2004)
For Appellant:
PNC BANK DELAWARE, a banking Cianciulli & Ouellette
institution organized under the laws of Stephen M. Ouellette (ARGUED)
the State of Delaware with a place of 163 Cabot Street
business in Wilmington, County of New Beverly, MA 01915
Castle, State of New Jersey
For Appellee:
v. Archer & Greiner
Arthur H. Jones, Jr.
F/V MISS LAURA, (O.N. 542762), her One Centennial Square
engines, machinery, equipment, masts, P.O. Box 3000
fishing permits, etc., in rem Haddonfield, NJ 08033
R.D. GRIER & SONS, INC.; MAINE Tompkins, Clough, Hirshon & Langer
SHIPYARD & MARINE RAILWAY, Leonard W. Langer (ARGUED)
INC.; SMITHWICK & MARINERS 3 Canal Plaza
INSURANCE COMPANY; P.O. Box 15060
DON'S HYDRAULICS, INC., Portland, ME 04112-5060
Intervenor-Plaintiffs in District Court
_______________________
Maine Shipyard & Marine Railway, Inc.,
Appellant OPINION OF THE COURT
_______________________
_____________
On Appeal from the United States
District Court *The Honorable John R. Gibson,
for the District of New Jersey United States Court of Appeals for the
No. 01-cv-04427 Eighth Circuit, sitting by designation.
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JOHN R. GIBSON, Circuit Judge: permits"). The amount and species of fish
that a particular vessel is licensed to catch
often depends on that vessel's fishing
This case presents the novel history, and certain species cannot be
question of whether, assuming a vessel's fished at all except by or in place of
fishing history may be the subject of a vessels that have previously held permits
maritime lien, the lien follows the transfer to do so. See, e.g., 50 C.F.R. §
of the fishing history to a replacement 648.4(a)(1)(i). However, when a vessel
vessel after the original vessel sinks. The sinks, its fishing history does not go down
district court held that fishing history could with the ship; instead, the history and
not be "salvaged" from a sunken vessel permits may be applied to a replacement
and therefore any maritime lien that may vessel. See id. Thus, when the Miss
have existed was extinguished at the time Penelope sank, Greenly applied her fishing
of the sinking. We affirm, but on different history and permits to the vessel he bought
grounds. to replace her, the F/V Miss Laura.
I. Greenly's purchase of the Miss
Laura was financed by the appellee, PNC
Maine Shipyard & Marine Railway,
Bank Delaware, Inc., which made an
Inc., provided repair services in 1997 to
initial loan of $475,000 and later increased
the vessel F/V Miss Penelope, which was
the amount of the loan to $570,000. In
owned by David Greenly. This provision
exchange, Greenly executed and delivered
of services entitled Maine Shipyard under
a Promissory Note to PNC, which was
federal law to a maritime lien against the
secured by a Preferred Ship Mortgage on
vessel and its appurtenances. See 46
the Miss Laura. Greenly later defaulted on
U.S.C. § 31342 (2000); Gowen, Inc. v.
the note.
F/V Quality One, 244 F.3d 64, 67 (1st Cir.
2001). The Miss Penelope sank on PNC commenced the present action
January 28, 1998. seeking the judicial sale of the Miss Laura.
Maine Shipyard intervened, claiming that
As a result of a complex scheme of
it held a maritime lien on the Miss Laura
federal rules and regulations designed to
to the extent of her fishing permits and
protect declining fishing stocks and
history because the permits and history had
otherwise conserve fishery resources, the
been transferred from the Miss Penelope.
fishing history and fishing permits of a
Maine Shipyard further contends that its
vessel like the Miss Penelope are integral
lien has priority over any security interest
to the value of the vessel itself. See
held by PNC.
generally 16 U.S.C. § 1801 (2000);
Gowen, 244 F.3d at 68 (some fishing II.
vessels "are valuable significantly, and
Maine Shipyard rests its argument
sometimes almost entirely, because of their
primarily on Gowen, Inc. v. F/V Quality
2
One, 244 F.3d 64, 67-70 (1st Cir. 2001), in fleet cannot be made liable under the
which the First Circuit held that a vessel's [Federal Maritime Lien Act] for supplies
fishing permits were appurtenances to the furnished to the others, even if the supplies
vessel and therefore subject to a lien on the are furnished to all upon orders of the
vessel. The court reasoned that the market owner under a single contract."); In re
value and creditworthiness of the vessel Container Applications Int'l, Inc., 233 F.3d
depended as much on the fishing permits 1361, 1365-66 (11th Cir. 2000) (following
as on tangible items like the engine or Piedmont and denying maritime lien
navigation equipment; thus, a creditor's because the purported lienholder did not
lien should be understood to extend over provide necessaries to any particular
the permits. Id. at 68-69. vessel). The vessel-specific character of
maritime liens results from the legal
PNC persuasively responds that
fiction that a vessel receiving services "is
Gowen does not govern the instant
considered to be a distinct entity
situation because the fishing permits in
responsible only for its own debts." Foss
that case were still attached to the original
Launch & Tug Co. v. Char Ching Shipping
vessel, whereas the present situation
U.S.A., Ltd., 808 F.2d 697, 701 (9th Cir.
involves the transfer of the fishing permits
1987). Because Maine Shipyard provided
to a replacement vessel. Thus, even if we
no services to the Miss Laura, its attempt
were to follow Gowen and hold that a
to enforce a lien over that vessel violates
vessel's fishing permits may be the subject
this principle of maritime liens. The Miss
of a maritime lien, we would still need
Laura cannot be held responsible for the
some legal basis for concluding that the
debts of the Miss Penelope.
lien extends to a replacement vessel once
the permits are transferred. In resolving this case, we need not
endorse the district court's position that
Maine Shipyard simply ignores this
fishing history cannot be salvaged from a
problem, perhaps because neither Gowen
sunken vessel. The court believed that
nor other statutory or case law provides
Maine Shipyard's lien over the fishing
such a legal basis. Instead, the law of
permits could survive the sinking of the
maritime liens has consistently recognized
Miss Penelope, if at all, only through
that a maritime lien attaches only to the
principles of salvage law. However, the
specific vessel to which services are
court concluded that salvage law was
provided. See, e.g., 46 U.S.C. § 31342inapplicable because it understood salvage
(2004) ("[A] person providing necessaries
to involve some sort of physical rescuing
to a vessel on the order of the owner or a
or saving of a tangible piece of property,
person authorized by the owner– (1) has a
which did not occur here. Thus, it held
maritime lien on the vessel. . . .")
that Maine Shipyard's lien extinguished at
(emphasis added); Piedmont & Georges
the time of the sinking.
Creek Coal Co. v. Seaboard Fisheries Co.,
254 U.S. 1, 4 (1920) ("[O]ne vessel of a We believe this rationale comes
3
needlessly close to conflicting with the afloat," Maine Shipyard has not cited, nor
theory of Gowen, and are mindful of our have we found, any cases where a lien
obligation to avoid circuit conflict. Under over salvaged or never-sunken parts of a
the district court's reasoning, any lien held vessel was extended to a subsequent vessel
by Maine Shipyard over the Miss to which those parts became attached.
Penelope's fishing permits ceased to exist Instead, maritime liens have consistently
once the vessel sank. It is possible that a been limited to the specific vessel to which
court following Gowen would not agree; services were provided. See Piedmont,
after all, the fishing permits continued to 254 U.S. at 4 ("The difficulty which under
exist in at least some form, retained the general maritime law would have
significant value, and contributed to the blocked recovery by the [purported
creditworthiness of the vessel in the first lienholder] is solely that it did not furnish
place. See Gowen, 244 F.3d at 68 ("Thus, coal to the vessels upon which it asserts a
not only the market value but the maritime lien; and there is nothing in the
creditworthiness of the fishing vessel may [Federal Maritime Lien Act] which
well depend on its permits quite as much removes that obstacle."); see also 1
as on its engine, physical dimensions, and Thomas J. Schoenbaum, Admiralty and
navigation equipment."); see also United Maritime Law, § 9-1 (4th ed. 2004) ("A
States v. Freights, Etc. of the Mount maritime lien is a privileged claim upon
Shasta, 274 U.S. 466, 470 (1927) maritime property, such as a vessel, arising
(intangibles may be subject to maritime out of services rendered to or injuries
liens against the vessel); The Fort Wayne, caused by that property."). We are bound
6 F. Cas. 119, 122 (S.D. Ohio 1861) ("[I]f to follow this long-standing principle here
any part of the vessel is saved, this lien and therefore conclude that any lien held
adheres to it, even to the last plank."). by Maine Shipyard on the Miss Penelope's
Should a creditor attempt to foreclose on a fishing permits and history ceased to exist
sunken vessel's fishing permits before the once the Miss Penelope sank and the
permits become incorporated into a second fishing history was incorporated into the
vessel, a court following Gowen might Miss Laura.
enforce the lien, whereas the district
Because we hold that Maine
court's rationale clearly would deny it.
Shipyard has no cognizable property
Rather than in vite this possible interest in the Miss Laura, we need not
conflict, we base our holding on the consider its assertion that PNC is ineligible
undisputed fact that Maine Shipyard did to assert a lien in an in rem action against
not provide services to the vessel over the Miss Laura. Maine Shipyard has no
which it now claims a lien. Even if, as standing to make such a challenge. See,
Maine Shipyard metaphorically suggests, e.g., Citicorp Sav. of Illinois v. First
the "valuable and transferable fishing Chicago Trust Co. of Illinois, 645 N.E.2d
permits and history remain very much 1038, 1045 (Ill. App. Ct. 1995) ("Standing
4
requires injury in fact to a legally
cognizable interest."); Southern Maryland
Oil, Inc. v. Kaminetz, 272 A.2d 641, 644-
45 (Md. 1971) (party lacks standing to
challenge a mortgage foreclosure sale
unless that party has an interest in the
proceeds of the sale or has an interest in
the property which may be adversely
affected as a result of the sale).
We will affirm the district court's
judgment.
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