Praxis Energy Agents Pte Ltd v. M/V Pebble Beach ( 2022 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 21-2809
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PRAXIS ENERGY AGENTS PTE LTD,
Appellant
v.
M/V PEBBLE BEACH, its engines, tackle, apparel and freights
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On Appeal from the United States District Court
for the District of Delaware
(D.C. Civil No. 1-17-cv-00559)
District Judge: Honorable Leonard P. Stark
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Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
September 19, 2022
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Before: CHAGARES, Chief Judge, McKEE and PORTER, Circuit Judges
(Opinion filed: September 27, 2022)
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OPINION*
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*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
CHAGARES, Chief Judge.
Praxis Energy Agents Pte Ltd. (“Praxis”) filed this in rem admiralty proceeding
against the M/V Pebble Beach (the “Vessel”) seeking payment for providing bunkers, or
marine fuel, to the Vessel. Praxis argues that the District Court erred in concluding that it
did not have a valid maritime lien at the time of the Vessel’s arrest in Delaware. It
further asserts that the District Court erred in awarding attorneys’ fees to the prevailing
party under the terms of the relevant contract. For the following reasons, we will affirm.
I.
We write primarily for the parties and recite only the facts essential to our
decision. Sithonia Shipholding S.A. (“Sithonia”), as owner of the Vessel, entered into a
charter party agreement with Greatwin Carrier (Holdings) Co. Ltd. (“Greatwin”). This
agreement provided that Greatwin “will not procedure [sic] suppliers, necessaries or
services including, inter alia, bunkers on the credit of the owners or the vessel or in the
owner’s name or the vessel’s name . . . .” Appendix (“App.”) 174.
During its charter of the Vessel, Greatwin contracted with Praxis to provide
bunkers for the Vessel. This contract incorporated by reference Praxis’s standard terms
and conditions. Section 10.00 of those standard terms and conditions provides that “[i]t
is agreed and acknowledged that the sale of Products to the Buyer and/or their acceptance
on the Vessel create a maritime lien over the Vessel for the price of the Products[.]”
App. 26. The standard terms and conditions further specify that agreement shall be
governed by “the General Maritime Law of the United States of America.” App. 30.
2
The bunker delivery was completed, but Greatwin failed to pay Praxis for the
bunkers. Approximately one year later, Praxis brought a lawsuit in Brazil against
Sithonia, Greatwin, and the manager of the Vessel alleging that they were liable for the
cost of the bunkers pursuant to Praxis’s standard terms and conditions. The Brazilian
court ordered the arrest of the Vessel, and Sithonia provided security to obtain its release.
Praxis filed this in rem action pursuant to Supplemental Rule C of the Federal
Rules of Civil Procedure in the United States District Court for the District of Delaware.
The District Court ordered a warrant for the arrest of the Vessel. Sithonia thereafter
appeared as the owner of the Vessel, posted security to have the Vessel released, and
filed counterclaims seeking attorneys’ fees under Praxis’s standard terms and condition,
which award such fees to the prevailing party in a proceeding to interpret or enforce any
rights under the contract. As a result of the counterclaims, the District Court ordered
Praxis to provide countersecurity under Supplemental Rule E(7)(a).
The parties cross-moved for summary judgment, and the District Court granted
Sithonia’s motion on the ground that Praxis did not have a valid maritime lien at the time
it initiated the action in the District Court. Praxis sought reconsideration of this decision
approximately ten months later, which the court denied. The District Court subsequently
awarded Sithonia $170,402.01 in attorneys’ fees and ordered that all countersecurity
posted by Praxis be retained until it had paid the judgment or until all appeals had been
ruled upon. Praxis timely appealed.
3
II.1
An in rem action pursuant to Supplemental Rule C requires the existence of a valid
maritime lien at the time the action is filed. See Petroleos Mexicanos Refinacion v. M/T
King A, 554 F.3d 99, 102 (3d Cir. 2009); see also Supplemental Rule C(1) (“An action in
rem may be brought . . . [t]o enforce any maritime lien.”).2 Where security is posted to
release a vessel from arrest, “the maritime lien transfers from the vessel” to the security
that is substituted for it. Petroleos, 554 F.3d at 104.
Praxis maintains that the District Court held incorrectly that it did not possess a
maritime lien against the Vessel at the time of its arrest in Delaware due to its maritime
lien being “tied up in the security held by the Brazil Court.” App. 187. In support of this
argument, Praxis relies principally on the affidavit of its Brazil counsel Dr. Luiz
Leonardo Goulart. Dr. Goulart’s affidavit was submitted to the District Court for the first
time in connection with Praxis’s motion for reconsideration.3 Praxis has not provided a
reason for its failure to submit the affidavit at the time when the parties moved for
summary judgment. We conclude that the District Court acted within its discretion in not
1
The District Court had subject matter jurisdiction under 28 U.S.C. § 1333(1). We have
jurisdiction under 28 U.S.C. § 1291. We review the District Court’s grant of summary
judgment de novo and may affirm on any basis supported by the record. Panzarella v.
Navient Solutions, Inc., 37 F.4th 867, 872 (3d Cir. 2022). We similarly review any
determinations of foreign law de novo. Hay Grp. Mgmt., Inc. v. Schneider, 965 F.3d
244, 249 (3d Cir. 2020).
2
The Commercial Instruments and Maritime Liens Act provides that “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 and may bring an action in rem to enforce it. 46 U.S.C. §
31342(a). Charterers and their agents, among others, are presumed to have authority to
procure necessaries. Id. § 31341. It is undisputed that bunkers are necessaries.
3
The District Court noted that Praxis’s motion for reconsideration was itself untimely.
4
considering Dr. Goulart’s affidavit on Praxis’s motion for reconsideration. See Long v.
Atl. City Police Dep’t, 670 F.3d 436, 446 (3d Cir. 2012) (noting that we review “whether
the District Court’s denial of reconsideration constitutes an abuse of discretion”).
Because Praxis submitted Dr. Goulart’s affidavit for the first time on its untimely motion
for reconsideration, we also will not consider it on appeal. See Harsco Corp. v. Zlotnicki,
779 F.2d 906, 909 (3d Cir. 1985) (concluding that the District Court “appropriately did
not consider” an affidavit containing evidence that was available prior to the summary
judgment “in its disposition of [a] motion for reconsideration”); Frietsch v. Refco, Inc.,
56 F.3d 825, 828 (7th Cir. 1995) (declining to consider an expert affidavit on foreign law
submitted on a motion for reconsideration and noting that “[i]t is not the purpose of
allowing motions for reconsideration to enable a party to complete presenting his case
after the court has ruled against him”).4
We do not consider Dr. Goulart’s affidavit and accordingly agree with the District
Court’s observation that the pleading in the Brazilian action “indicate[s] that the action
was brought in connection with the maritime lien.” App. 187. While the Vessel was not
named as a defendant in the Brazil action, the pleading asserts that the claim was based
on section 10.00 of Praxis’s standard terms and conditions, which sets forth the clause
4
Praxis argues that we may rely on Dr. Goulart’s affidavit under Federal Rule of Civil
Procedure 44.1, which provides that “[i]n determining foreign law, the court may
consider any relevant material . . . whether or not submitted by a party . . . .” Fed. R. Civ.
P 44.1. While we have noted this rule permits us to consider “materials not considered
by the District Court,” Ferrostaal, Inc. v. M/V Sea Phoenix, 447 F.3d 212, 216 (3d Cir.
2006), it “imposes no duty upon [us] to do so,” Bel–Ray Co. v. Chemrite (Pty) Ltd., 181
F.3d 435, 440 (3d Cir. 1999).
5
relating to maritime liens. There is also authority that Brazilian law recognizes maritime
liens for necessaries, although the parties dispute whether it would do so under the
circumstances here. See Bominflot, Inc. v. The M/V Henrich S, 465 F.3d 144, 148 & n.6
(4th Cir. 2006); William Tetley, Maritime Liens and Claims 1275–77 (2d ed. 1998).
Based on the pleading in the Brazil action and the parties’ presentation of Brazilian law,
we conclude that the District Court did not err in determining that Praxis had a valid
maritime lien in the security held by the Brazil court.
III.
Praxis next argues that the District Court erred in awarding Sithonia attorneys’
fees that it incurred in connection with the Delaware action. We review the
reasonableness of an attorneys’ fee award for an abuse of discretion and any
corresponding legal conclusions de novo. See Jama v. Esmor Corr. Servs., Inc., 577 F.3d
169, 173 (3d Cir. 2009).
The District Court awarded Sithonia $170,402.01 in costs and attorneys’ fees
pursuant to section 22.04 of Praxis’s standard terms and conditions. This clause provides
that the “prevailing party shall have the right to recover from the losing party its
reasonable costs and attorneys’ fees incurred” in a proceeding to interpret or enforce any
rights under the contract. App. 30.
We conclude that the District Court committed no abuse of discretion in
determining the amount of Sithonia’s reasonable attorneys’ fees. The District Court
reviewed invoices submitted by Sithonia’s attorneys, determined that the rates charged by
those attorneys were consistent with prevailing hourly rates, and found that the amount of
6
work performed was “entirely commensurate with the unusual and complex legal issues
involved and the extensive and not entirely foreseeable amount of litigation that occurred
in this case.” Supplemental Appendix 5 (quotation marks omitted). We further see no
legal error in the District Court’s interpretation of the “prevailing party” standard
provided for in Praxis’s standard terms and conditions. The District Court was not
required to reduce the attorneys’ fees award based on its rejection of some of the
arguments that Sithonia made on summary judgment. While Sithonia did not prevail on
certain issues, the District Court granted summary judgment in Sithonia’s favor on the
sole count in Praxis’s complaint.5
IV.
For the foregoing reasons, we will affirm the District Court’s judgment.
5
Because we will affirm both the District Court’s grant of summary judgment in favor of
Sithonia and its award of attorneys’ fees, we do not reach Praxis’s arguments that the
court erred in ordering and retaining countersecurity under Supplemental Rule E(7).
7