World Fuel Svc Singapore PTE v. M/V As Varesia ( 2018 )

Case: 17-30018 Document: 00514382773 Page: 1 Date Filed: 03/12/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 17-30018
Fifth Circuit
FILED
March 12, 2018
WORLD FUEL SERVICES SINGAPORE PTE, LIMITED, Lyle W. Cayce
Clerk
Plaintiff - Appellant
v.
M/V AS VARESIA, her engines, tackle, apparel, etcetera, in rem,
Defendant - Appellee
MS AS VARESIA GMBH & COMPANY KG,
Claimant - Appellee
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:16-CV-17435
Before BARKSDALE, DENNIS, and CLEMENT, Circuit Judges.
PER CURIAM:*
Appellant, a Singapore-based marine fuel supplier, seeks to recover a
debt arising from the supply of fuel to a Liberian-flagged vessel, the M/V AS
VARESIA, whose owner is the real party in interest in this case. This appeal
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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concerns whether the district court reversibly erred by vacating an arrest of
the vessel. Finding it did not, we AFFIRM.
I
In 2012, Plaintiff-Appellant World Fuel Services Singapore PTE Ltd.
(World Fuel) contracted to provide marine fuel to Denmar Chartering and
Trading GMBH (Denmar), which was chartering the cargo ship M/V AS
VARESIA (the Varesia). The fuel was delivered on November 4, 2012, and
World Fuel sent an invoice to the Varesia “AND/OR HER
OWNERS/OPERATORS” and Denmar for $612,459.56. The invoice indicated
that the balance was due by December 4, 2012. Denmar failed to pay this
invoice by the due date, but did wire one payment of $200,023 on January 18,
2013, and one payment of $500,023 on January 22, 2013. The parties dispute
whether these payments were to be apportioned to the Varesia invoice or to
other debts Denmar owed World Fuel.
Denmar liquidated via insolvency proceedings in Germany in or around
July 2013. World Fuel received notice of these proceedings by September 2013,
but did not participate in them. World Fuel alleges that, at the time of
Denmar’s insolvency, Denmar owed World Fuel over five million dollars across
multiple invoices, including the Varesia invoice. World Fuel claims that
Denmar’s failure to pay for the fuel gave rise to a maritime lien on the Varesia.
In May 2015, World Fuel sent a demand letter to MS AS VARESIA
GMBH & Company KG, the owner of the Varesia (the Owner). In May 2016,
World Fuel again demanded payment from the Owner and commenced a legal
action in Australia to arrest the vessel, but ultimately did not have the vessel
arrested.
On the evening of December 10, 2016, the Varesia arrived in the
Mississippi River. On December 15th, World Fuel filed a complaint in the
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Eastern District of Louisiana seeking to enforce its lien and seeking a warrant
for the arrest of the Varesia. A warrant issued that same day, but at World
Fuel’s request, the warrant was not served until the morning of January 5,
2017.
Hours after the warrant was served, the Owner filed a motion to vacate
the arrest, arguing, inter alia, that any lien had “been extinguished by the
operation of laches and/or by payment.” In its memorandum in support of
vacatur, the Owner contended that Denmar had allocated specific payments to
the Varesia invoice, thereby extinguishing any lien on the Varesia. The Owner
also argued that laches barred enforcement of the lien because (1) World Fuel’s
action was filed after the expiration of the analogous limitations period, (2)
World Fuel’s delay was not excusable, and, as a result of the unjustified delay,
(3) the Owner suffered prejudice in its ability to defend against the claim.
The district court held a hearing on the motion to vacate the morning of
Friday, January 6th. Counsel for World Fuel stated that he had not seen the
motion to vacate until “very late” the night before, and so had not had an
opportunity to research the laches issue. However, World Fuel asserted that
in the years between the invoice and the arrest of the vessel in New Orleans,
it “was attempting to collect from Denmar and following the [Varesia] to seek
an opportunity to enforce the lien,” suggesting that World Fuel could not
enforce its lien until the Varesia entered the United States. In response to the
court’s questions about what “course of conduct” demonstrated “any type of
attempt to pursue the claim,” rather than just the vessel, World Fuel pointed
to the demand letter sent to the Owner in 2015 and stated that there may have
been other factors showing World Fuel’s diligence. World Fuel continued that,
even if there was unjustified delay, there was no resultant prejudice to the
Owner inasmuch as the record was “clear” that the Owner had “the ear of
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Denmar’s [former] managing director,” the ability to get “documents from
him,” and the ability to get “a sworn declaration from him.”
At the end of the motion hearing, the district court stated that it did not
believe that the Owner’s argument regarding apportionment of payments to
the Varesia debt successfully defeated World Fuel’s right to effect an arrest in
good faith. However, the court requested an opposition memorandum from
World Fuel addressing the Owner’s arguments with respect to laches. The
court expressed concern that the Varesia had been taken out of commerce,
which the Owner claimed cost roughly $27,000 per day. Accordingly, the court
stated that any additional filings should be submitted by 9:00 am Monday,
January 9th, so as to expedite the matter while giving World Fuel the
opportunity to “respond fully to the laches argument.” The court indicated that
it might rule on the motion as early as 9:45 am on January 9th.
On January 9th, the court extended the deadline for filing a response to
11:00 am. World Fuel failed to file any opposition before the deadline. At 2:15
pm, the court ruled that, “[o]n the showing made,” the warrant for the arrest
of the Varesia was improvidently issued and should be vacated. After the
district court entered its order, World Fuel filed its opposition. The district
court then entered an order denying World Fuel’s “Ex Parte Emergency Motion
to Reconsider.” That motion is not in the record on appeal.
On January 10th, World Fuel filed a notice of appeal “from the
order/judgment” that was “rendered and entered on January 9, 2017,” citing to
the docket number of the order vacating the arrest of the Varesia.
II
In maritime cases, as is the general rule in civil appeals, we review the
district court’s factual determinations “for clear error and its conclusions of law
de novo.” United States v. Ex-USS Cabot/Dedalo, 297 F.3d 378, 381 (5th Cir.
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2002) (emphasis omitted). “The existence of laches is a question of fact,” Esso
Int’l, Inc. v. The SS Captain John, 443 F.2d 1144, 1150 (5th Cir. 1971) (citing
McDaniel v. Gulf & S. Am. Steamship Co., 228 F.2d 189 (5th Cir. 1955)), and
therefore it is reviewed for clear error.
III
Under the Commercial Instruments and Maritime Liens Act, “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(a)(1). 1 When a party has a maritime lien, the mechanism of
enforcement is an in rem action commenced by the arrest of the vessel. See,
e.g., Merchs. Nat’l Bank v. Dredge Gen. G. L. Gillespie, 663 F.2d 1338, 1344–
45 (5th Cir. 1981). After a vessel is arrested, the owner is entitled to a prompt
post-seizure hearing, “at which the plaintiff shall be required to show why the
arrest or attachment should not be vacated or other relief granted consistent
with” the applicable rules of procedure. FED. R. CIV. P. SUPP. R. E(4)(f) (Rule
E); see also Rule E Notes of Advisory Committee on 1985 Amendments (“The
plaintiff has the burden of showing why the seizure should not be vacated.”).
“The hearing is not intended to definitively resolve the dispute between the
parties; rather, the [c]ourt must make a preliminary determination whether
reasonable grounds exist for the arrest.” A. Coker & Co. v. Nat’l Shipping
Agency Corp., No. CIV. A. 99-1440, 1999 WL 311941, at *1 (E.D. La. May 17,
1999) (citing Salazar v. Atl. Sun, 881 F.2d 73, 79–80 (3d Cir. 1989)).
World Fuel argues that the district court’s deadline to file an opposition
did not allow sufficient time to prepare an opposition memorandum. World
Fuel asserts that its ability to meet this deadline was hampered because its
1The parties do not dispute for present purposes that the basic prerequisites of this
provision have been met.
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“witness for the laches issue was largely unavailable to gather documents and
prepare his supporting affidavit because of out-of-town Navy Reserve” duty.
The Federal Rules of Civil Procedure do not impose any formal
requirements for a post-seizure hearing, leaving the procedural details to local
rules or the district court’s discretion. See S & S Diesel Marine Servs. v. M/V
F-Troop, No. 11-60020-CIV, 2011 WL 1899402, at *8 (S.D. Fla. May 18, 2011)
(“As the Supplemental Admiralty rules do not specify the form of the post-
arrest hearing, the details of the proceeding are left to the [c]ourt’s discretion.”
(citing Salazar, 881 F.2d at 79)). World Fuel did not object to the district
court’s deadline at the motion hearing and, on appeal, World Fuel does not
point to any rule contravened by the district court’s short deadline. The district
court did not arbitrarily set a tight deadline; rather, it explained its concern
that the Owner was incurring significant costs each day the Varesia was
arrested and therefore out of commerce. World Fuel does not argue that this
concern was unfounded. Thus, World Fuel has not shown that the district
court abused its discretion in setting the deadline to file an opposition
memorandum.
Nor has World Fuel established an abuse of discretion as to the district
court’s refusal to withhold judgment until it received World Fuel’s response.
Extra-record materials cited by World Fuel show that, at 7:29 am on the day
its response was due, World Fuel requested an extension until 11:00 am based
on the unavailability of its witness. This extension was granted. At 11:44 am,
a district court law clerk emailed counsel for World Fuel, inquiring about the
status of the opposition on the judge’s behalf. World Fuel replied that it
“should have everything together by 1:30 [pm].” The law clerk responded that
the judge was in a meeting until 1:00 pm. At 1:59 pm, counsel for World Fuel
emailed that the “client and his supervisor [were] reviewing the papers for
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approval. [He] should have them shortly.” The court issued its order at 2:15
pm. World Fuel emailed its response to the court at 2:22 pm. At 2:45 pm,
World Fuel emailed the judge’s law clerk an “Ex Parte Emergency Motion to
Reconsider,” which, as reflected by the record, was denied.
The court granted World Fuel the only two extensions it expressly
requested, formally to 11:00 am and then tacitly to 1:30 pm. In light of the
district court’s broad discretion to enforce its filing deadlines, cf., e.g., Hetzel v.
Bethlehem Steel Corp., 50 F.3d 360, 367 (5th Cir. 1995), World Fuel has not
demonstrated that the district court abused its discretion by failing to grant
additional extensions.
Further, to the extent World Fuel argues that the district court erred by
failing to reconsider its order in light of World Fuel’s late-filed opposition,
World Fuel’s failure to appeal the denial of its motion for reconsideration
deprives us of jurisdiction to review that order. One of the minimum
prerequisites for a notice of appeal is to “designate the judgment, order, or part
thereof being appealed.” FED. R. APP. P. 3(c)(1)(B); see Kinsley v. Lakeview
Reg’l Med. Ctr. LLC, 570 F.3d 586, 589 (5th Cir. 2009). This rule is construed
liberally, such that “[a] mistake in designating orders to be appealed does not
bar review if the intent to appeal a particular judgment can be fairly inferred
and if the appellee is not prejudiced or misled by the mistake.” N.Y. Life Ins.
Co. v. Deshotel, 142 F.3d 873, 884 (5th Cir. 1998) (citing Friou v. Phillips
Petroleum Co., 948 F.2d 972, 974 (5th Cir. 1991)). However, “when only a
specified judgment or part thereof is noticed, the notice of appeal is generally
strictly construed.” Lockett v. Anderson, 230 F.3d 695, 700 n.3 (5th Cir. 2000)
(quoting United States v. O’Keefe, 128 F.3d 885, 890 n.4 (5th Cir. 1997)).
World Fuel’s notice of appeal references the particular docket number of
the order vacating the arrest and in no way intimates that other orders are
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being appealed. Moreover, World Fuel’s briefing does not make clear that it is
appealing the order denying reconsideration, and World Fuel does not argue
that this court has jurisdiction over an appeal from that order. Inadequately
briefed arguments are generally deemed forfeited. See Carl E. Woodward,
L.L.C. v. Acceptance Indem. Ins. Co., 743 F.3d 91, 96 (5th Cir. 2014). We
therefore will not consider whether the district court abused its discretion in
denying World Fuel’s motion for reconsideration, as this issue is not properly
before us.
This leads us to the district court’s merits determination, which we will
consider in light of the arguments and evidence before the court at the time it
ruled. See World Fuel Servs. Singapore Pte, Ltd. v. Bulk Juliana M/V, 822
F.3d 766, 772 n.2 (5th Cir. 2016) (arguments not made in the district court
cannot be raised for the first time on appeal); Theriot v. Par. of Jefferson, 185
F.3d 477, 491 n.26 (5th Cir. 1999) (“An appellate court may not consider new
evidence furnished for the first time on appeal and may not consider facts
which were not before the district court at the time of the challenged ruling.”). 2
Where a party unreasonably delays in asserting a maritime lien, the lien
may be extinguished by the doctrine of laches. See The Key City, 81 U.S. 653,
660 (1871). “Laches is an equitable doctrine that, if proved, is a complete
defense to an action irrespective of whether the analogous state statute of
limitation has run.” Mecom v. Levingston Shipbuilding Co., 622 F.2d 1209,
1215 (5th Cir. 1980). This court employs a three-part test to determine
whether laches precludes enforcement of a lien, deciding: (1) whether there
was a delay in asserting the lien; (2) whether the delay was excusable; and (3)
whether the delay resulted in undue prejudice to the party against whom the
2World Fuel fails to explain why this court should consider its additional arguments
and evidence. Thus, and for the reasons previously discussed, we will not.
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lien is asserted. See id. Courts regularly look to an analogous statute of
limitations to guide the analysis of what constitutes an unreasonable or
inexcusable delay. See, e.g., id. But “[r]ather than marking an absolute cut-
off date beyond which injured parties may no longer effectively bring suit, the
analogous limitations period determines where falls the burden of proving or
disproving inexcusable delay and resulting prejudice.” Barrois v. Nelda Faye,
Inc., 597 F.2d 881, 884 (5th Cir. 1979). “Where . . . the statute has run prior to
instituting suit, the plaintiff must prove either absence of prejudice or excuse
for delay to repel a claim of laches.” Mecom, 622 F.2d at 1215 (citing Watz v.
Zapata Off-Shore Co., 431 F.2d 100, 11 (5th Cir. 1970)).
In the district court, the Owner asserted that: (1) the analogous statute
of limitations was three years; (2) World Fuel had not taken any action against
the Owner in those three years, aside from tracking the vessel and contacting
the Owner once in May 2015 and once in May 2016, despite the fact that World
Fuel knew that Denmar was insolvent by September 2013; (3) the Varesia
ported multiple times in jurisdictions in which World Fuel could have arrested
her; and (4) World Fuel’s delay prejudiced the Owner’s ability to defend against
World Fuel’s claim because it can no longer obtain corporate records from
Denmar that might substantiate the Owner’s other principal theory in defense,
that there was an agreement to allocate certain payments to the Varesia debt.
At the time of the district court’s ruling, World Fuel’s counterarguments
were limited. It had not made any arguments supporting its assertion that a
different analogous statute of limitations should be considered. World Fuel
argued that it had been diligent in enforcing its lien as, from 2012 until the
time of the arrest in 2016, World Fuel attempted “to collect from Denmar and
follow[ed] the vessel to seek an opportunity to enforce the lien”; it sent a
demand letter to the Owner in 2015; and it filed papers commencing arrest
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proceedings in Australia in 2016. World Fuel also implied that the Varesia
had not docked anywhere that World Fuel could have seized her until she
arrived in New Orleans, though the Owner disputed this point. World Fuel
claimed that the Owner had not been prejudiced by the delay in enforcement
because it had access to Denmar employees who could testify in support of the
Owner’s position as well as documents bearing on its defense.
World Fuel had the “burden of showing why the [arrest of the Varesia]
should not be vacated.” See Rule E Notes of Advisory Committee. In light of
its failure to make specific and timely arguments to the contrary, World Fuel
cannot show that it was erroneous for the district court to look to Louisiana’s
three-year statute of limitations and, accordingly, to place the burden of
proving excusable delay or lack of prejudice on World Fuel. See Barrois, 597
F.2d at 884. The Owner made plausible arguments tending to show that World
Fuel’s delay was not reasonable and that the Owner was prejudiced by this
delay. World Fuel’s contention that it sent two demand letters and tracked the
Varesia is not sufficient to show diligence. Nor was World Fuel’s disputed
assertion that it was unable to seize the Varesia before she arrived in New
Orleans. And although World Fuel argued that the Owner could obtain some
information from Denmar’s former managing director, World Fuel provided
nothing to the district court tending to rebut the Owner’s claim that other
relevant documentary evidence was rendered unavailable by delaying
enforcement of the lien until long after Denmar’s liquidation. Like many of the
issues in this appeal, invocation of laches “is addressed to the sound discretion
of the trial court.” Goodwyn v. Dredge Ginger Ann, 342 F.2d 197, 197 (5th Cir.
1965). Given the circumstances, World Fuel has not shown that the district
court’s invocation of laches at this preliminary stage in the proceedings
constitutes reversible error.
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***
For these reasons, we AFFIRM the order of the district court.
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