Racal Survey USA Inc v. M/V Count Fleet ( 2000 )

UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 98-31382
RACAL SURVEY U.S.A., INC.; NCS INTERNATIONAL, INC.,
Plaintiffs - Counter Defendants - Appellees,
VERSUS
M/V COUNT FLEET, her engines, tackle, furniture
& appurtenances in rem; ET AL.,
Defendants
TIDEWATER MARINE INTERNATIONAL, INC.,
Counter Claimant - Appellant.
--------------------------------------------------
No. 98-31383
RACAL SURVEY U.S.A., INC.; NCS INTERNATIONAL, INC.,
Plaintiffs,
VERSUS
M/V COUNT FLEET, her engines, tackle, furniture
& appurtenances in rem, ET AL.,
Defendants,
TIDEWATER MARINE INTERNATIONAL, INC.,
Intervenor Defendant - Appellant - Cross-Appellee,
VERSUS
INPUT/OUTPUT, INC.,
Intervenor Plaintiff - Appellee - Cross-Appellant.
Appeals from the United States District Court
For the Western District of Louisiana
October 24, 2000
Before EMILIO M. GARZA, DeMOSS, and STEWART, Circuit Judges.
DeMOSS, Circuit Judge:
In these consolidated appeals, Tidewater Marine International,
Inc., (“TMI”) primarily challenges two of the district court’s
rulings arising out of an admiralty dispute. First, TMI argues
that the district court erred in finding a maritime lien in favor
of Racal Survey U.S.A., Inc., and NCS International, Inc.,
(collectively “Racal”) over various vessels chartered by Coastline
Geophysical, Inc., (“Coastline”) from TMI. Second, TMI maintains
that the district court improperly denied TMI a maritime lien over
certain seismic equipment sold by Input/Output, Inc., (“Input”) to
Coastline.
Because Racal did not rely on the credit of the arrested
2
vessels or provide any necessaries to those boats, we reverse the
district court’s judgment granting a maritime lien in favor of
Racal. We, however, conclude that the district court did not err
with respect to its ruling denying TMI a maritime lien over the
seismic equipment sold by Input and, therefore, affirm the district
court’s ruling on that issue.
I. BACKGROUND
On February 16, 1996, Coastline entered into a Blanket Time
Charter Agreement (“First Charter”) with Tidewater Marine, Inc.,
(“Tidewater Marine”)1. According to that charter, Tidewater Marine
was to provide vessels suited for offshore activities in the
mineral and oil industry. Those vessels were to embark on a
seismic expedition in the Gulf of Mexico in search of oil and gas.
In conformance with the First Charter, on March 11, 1996, the two
parties executed separate letter agreements for four vessels: 1)
the M/V CAMERON SEAHORSE, 2) the M/V WHITTIE TIDE, 3) the M/V
TAYLOR TIDE, and 4) the M/V TOUPS TIDE.
To do its seismic operations, Coastline required certain
technical equipment. As a result, it made various inquiries to
Racal, who submitted a proposal to Coastline on February 12, 1996.
1
Tidewater Marine is a sister company of TMI. Both Tidewater
Marine and TMI are subsidiaries of Tidewater, Inc. (“Tidewater”).
Tidewater Marine operates vessels in domestic waters while TMI
operates vessels in foreign waters. Neither Tidewater Marine or
Tidewater is a party to this litigation.
3
That proposal outlined the equipment to be leased and the services
to be rendered to Coastline for its operations. Furthermore, Racal
submitted another proposal on March 25, 1996, which pertained to
the sale of certain other equipment to Coastline. On March 27,
1996, Racal shipped all of the required equipment to the shipyard
for installation. The equipment would allow the four vessels to
coordinate information among themselves to better facilitate the
search for oil and gas. Two of the vessels would lay cable upon
the ocean floor while a third, the source vessel, would send
information along the cable via airgun shots from caterpillar
machinery located on the vessel. A fourth vessel would record the
data generated from these airgun shots. In addition to Racal’s
equipment, other equipment provided by Input was installed on the
chartered vessels.
After the First Charter terminated, Coastline executed a
second Blanket Time Charter (“Second Charter”) on August 13, 1996.
Although similar in nature to the earlier charter agreement, the
Second Charter differed in three respects: 1) TMI, not Tidewater
Marine, was the vessel owner; 2) four different vessels would be
used; and 3) the seismic operations would be conducted off the
coast of Africa, not in the Gulf of Mexico. On August 19, 1996,
Coastline again agreed to separate letter agreements for four
vessels: 1) the M/V SECRETARIAT, 2) the M/V COUNT FLEET, 3) the M/V
COUNT TURF, and 4) the M/V MILTON TIDE. Between August 28, 1996,
and September 2, 1996, the equipment that had been placed onto the
4
First Charter vessels was transferred to the four new vessels at
Quality Shipyards, a subsidiary owned by Tidewater.
When the Africa survey concluded, the four vessels chartered
for that trip sailed to Trinidad and Tobago for another job.
During that voyage, the charter between Coastline and TMI
terminated due to non-payment of charter hire, but Coastline’s
equipment remained on board. Besides failing to pay TMI, Coastline
became insolvent and defaulted on its payments to Racal and Input.2
Upon the return of the Second Charter vessels to the United States,
Racal arrested three of them. TMI secured the release of the
vessels and removed and stored Coastline’s equipment. Shortly
thereafter, TMI arrested Coastline’s equipment, in some of which
Input claimed a UCC security interest, because of Coastline’s non-
payment of charter hire.
In district court, Racal filed a motion for partial summary
judgment requesting determination of the validity of its lien under
the Federal Maritime Lien Act (“FMLA”), 46 U.S.C. § 31342. TMI
opposed that motion and filed a cross-motion for summary judgment.
After taking the motions under advisement, the district court ruled
in favor of Racal. Moreover, the district court granted Input’s
“Application for Petitioner to Show Cause Instanter or,
2
With respect to Coastline’s obligations to Input, they derived
from Coastline’s failure to pay First Interstate Bank (“First
Interstate”), which had financed Coastline’s purchases from Input.
Input had guaranteed those purchases, and after Coastline’s default
to First Interstate, Input paid those obligations and took the
place of First Interstate.
5
Alternatively, Motion for Summary Judgment” and denied TMI’s motion
for summary judgment seeking recognition of its claimed maritime
lien in the Coastline equipment.
TMI now appeals both of those rulings.
II. STANDARD OF REVIEW
We review a grant or denial of summary judgment de novo. See
Webb v. Cardiothoracic Surgery Assocs., P.A., 139 F.3d 532, 536
(5th Cir. 1998). Summary judgment is proper if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with any affidavits filed in support of the motion, show
that there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law. See Fed.
R. Civ. P. 56(c). The summary judgment evidence is reviewed in the
light most favorable to the nonmovant. See Melton v. Teachers Ins.
& Annuity Ass’n, 114 F.3d 557, 559 (5th Cir. 1997). If the moving
party meets its initial burden of showing that there is no genuine
issue, then the burden shifts to the nonmovant to set forth
specific facts showing the existence of a genuine issue. See Fed.
R. Civ. P. 56(e). The nonmovant cannot satisfy his summary
judgment burden with conclusional allegations, unsubstantiated
assertions, or only a scintilla of evidence. See Little v. Liquid
Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). If the
nonmovant fails to respond, then summary judgment, if appropriate,
6
shall be entered against that party. See Fed. R. Civ. P. 56(e).
III. DISCUSSION
Both of TMI’s appeals involve the concept of a maritime lien,
a device developed as a necessary incident to the operation of
vessels. Piedmont & George’s Creek Coal Co. v. Seaboard Fisheries
Co., 41 S. Ct. 1, 3 (1920). Because a ship moves from place to
place, it is peculiarly subject to vicissitudes that would compel
abandonment of vessel or voyage, unless repairs and supplies are
promptly furnished. Id. Moreover, a ship is often absent from her
home port without access to funds and, as a result, must be able to
obtain upon her own account needed repairs and supplies. Id. That
and the resulting need to ensure that a ship did not sail away from
its debts contributed to the creation of the maritime lien. See
Equilease Corp. v. M/V SAMPSON, 793 F.2d 598, 602 (5th Cir. 1986)
(en banc).
Prior to 1910, however, a maritime lien was hardly a certainty
for the supplier of necessaries because the law was full of
exceptions. Gulf Oil Trading Co. v. M/V CARIBE MAR, 757 F.2d 743,
747 (5th Cir. 1985). To remedy that situation, Congress in 1910
enacted the Federal Maritime Lien Act (“FMLA”), 46 U.S.C. §§ 971-
975,3 to bring a degree of uniformity to the area of maritime
3
Congress superseded that prior version of the FMLA in 1988 and
recodified much of it at 46 U.S.C. §§ 31341-31343.
7
liens. Id. The FMLA essentially preempted the various state
statutes with respect to the conferral of maritime liens for
repairs, supplies, and other necessaries. Equilease, 793 F.2d at
602-03. And it eliminated the distinction that had been drawn
between a vessel in her home port and a vessel in a foreign port.
Id. Before the FMLA, a lien could be given for necessaries
furnished to a vessel in a port of a foreign state if the
necessaries were furnished upon the credit of the vessel, but no
such lien could be given for necessaries furnished in a vessel’s
home port or state. Id.Section 971 of the FMLA provided a maritime lien to “any
person furnishing repairs, supplies, towage, use of dry dock or
marine railway, or other necessaries, to any vessel, whether
foreign or domestic, upon the order of the owner of such vessel, or
of a person authorized by the owner,” and it further stated that
the furnishing person need not “allege or prove that credit was
given to the vessel.” 46 U.S.C. § 971 (superseded 1988). Section
972 created a presumption that the managing owner, ship’s husband,
master, or any person to whom the management of the vessel at the
port of supply was intrusted had authority to procure necessaries.
Section 973 added to the individuals presumed to have authority to
procure necessaries under § 972, including those officers and
agents appointed by a charterer, by an owner pro hac vice, or by an
agreed purchaser in possession of the vessel. Although that
8
section broadened the group of individuals presumed to have
authority to procure necessaries, it also placed a significant
limitation and duty upon the supplier of necessaries. Under § 973,
if the furnisher knew, or by exercise of reasonable diligence could
have ascertained, that because of the terms of a charter party,
agreement for sale of the vessel, or for any other reason, the
person ordering repairs, supplies, or other necessaries was without
authority to bind the vessel, then a maritime lien could not
attach. In 1971, Congress deleted the “exercise of reasonable
diligence” language because that language had severely hampered
suppliers’ ability to obtain a maritime lien.4 Gulf Oil, 757 F.2d
at 747-48. As for § 974, that section pertained to a furnisher’s
ability to waive its right to a maritime lien by agreement or
otherwise.
In 1988, Congress superseded the prior version of the FMLA and
enacted new provisions primarily at 46 U.S.C. §§ 31341-31343.5 See
4
Congress also deleted the reference to knowledge of a
prohibition of lien clause as creating a bar to the formation of a
maritime lien. See Gulf Oil, 757 F.2d at 748. In Gulf Oil,
however, we concluded that the deletion of that language did not
signify any Congressional desire to render prohibition of lien
clauses completely ineffectual and held that actual knowledge could
still bar a maritime lien. See id. at 749.
5
Section 31341 provides in pertinent part:
(a) The following persons are presumed to have authority to
procure necessaries for a vessel:
(1) the owner;
(2) the master;
(3) a person entrusted with the management of the vessel
at the port of supply; or
9
Silver Star Enters., Inc. v. SARAMACCA MV, 82 F.3d 666, 668 n.2
(5th Cir. 1996). The most significant change was that Congress
included a definition for “necessaries.” See 46 U.S.C. § 31301(4).
Section 31301(4) states that “‘necessaries’ includes repairs,
supplies, towage, and the use of a dry dock or marine railway.” In
the prior version of the FMLA, “necessaries” was not defined, but
its meaning could be derived from the context of § 971, which
stated that a maritime lien could be received for furnishing
“repairs, supplies, towage, use of dry dock or marine railway, or
other necessaries.” Although § 31301(4) enumerates specific kinds
of “necessaries,” Congress did not intend to make any substantive
change to the law. See H.R. Rep. No. 100-918 (1988). Indeed,
besides some other minor changes in language, such as replacing the
term “furnishing” with the word “providing,” little changed
substantively. See, e.g., Silver Star, 82 F.3d at 668 n.2; H.R.
Rep. No. 100-98. Accordingly, much of the case law remains
persuasive, if not controlling.
(4) an officer or agent appointed by–
(A) the owner;
(B) a charterer;
(C) an owner pro hac vice; or
(D) an agreed buyer in possession of the vessel.
Section 31342 reads in pertinent part:
(a) . . . [A] person providing necessaries to a vessel on the
order of the owner or a person authorized by the owner
(1) has a maritime lien on the vessel;
(2) may bring a civil action in rem to enforce the lien;
and
(3) is not required to allege or prove in the action that
credit was given to the vessel.
10
With that history in mind, we now review each of the claimed
maritime liens.
A. Racal v. TMI
In appealing the district court’s judgment finding a maritime
lien in favor of Racal over the four vessels used during the Second
Charter, TMI raises several arguments to support reversal. Because
TMI most adamantly contends that Racal does not have a lien over
the vessels because Racal did not rely on the credit of the
vessels, we address that argument first.
Subsection 31342(a)(3) provides that a person providing
necessaries to a vessel “is not required to allege or prove . . .
that credit was given to the vessel.” The prior version of the
FMLA contained a similarly worded statement at § 971. In
construing that prior version, the Supreme Court held that the
relevant language only served to remove from the supplier the
burden of proving that it relied on the credit of the vessel. See
Equilease, 793 F.2d at 605 (interpreting Piedmont). That is, we
must presume that the supplier relied on the credit of the vessel.
The FMLA may have created a presumption of credit based on the
vessel, but it did not do away with “the idea of credit to the
vessel being a prerequisite to a lien, and the concomitant
principle that credit to the owner negates the lien.” Id. Because
under the FMLA a presumption arises that one providing supplies to
a vessel acquires a maritime lien, the party attacking the
11
presumption must establish that the personal credit of the owner or
the charterer was solely relied upon. Id. “To meet this burden,
evidence must be produced that would permit the inference that the
supplier purposefully intended to forego the lien.” Id.TMI argues that it satisfied that burden and complied with
Fifth Circuit case law, as stated in Equilease. For support, it
points to testimony by Richard Pender, Racal’s president:
Q: So you weren’t relying on credit of Tidewater or
any of its vessels when you were entering into this
contract with Coastline?
. . .
A: Yeah, I mean, our contract was with Coastline. That was
our customer.
. . .
Q: At the time of contracting with Coastline, you weren’t
looking to Tidewater or any of its vessels for payment of
Coastline’s contract with NCS?
. . .
A: I had no contract with Tidewater.
Q: You had no dealings with Tidewater whatsoever?
A: No. I had no – no.
Racal counters that Pender’s testimony does not aid TMI’s
position that Racal intended to forego a maritime lien because the
testimony does not specifically indicate that Racal planned to
waive the lien and rely solely on the credit of a party other than
the vessel. According to Racal, Equilease and the cases preceding
it held that a party opposing the maritime lien has the burden to
12
prove that the supplier looked solely to a party’s personal credit.
See Equilease, 793 F.2d at 606; see also Point Landing, Inc. v.
Alabama Dry Dock & Shipbuilding Co., 261 F.2d 861, 867 (5th Cir.
1958); Sasportes v. M/V SOL DE COPACABANA, 581 F.2d 1204, 1209 (5th
Cir. 1978) (quoting Point Landing). Because Pender’s testimony
does not state that Racal looked solely to Coastline or some entity
other than the vessels, Racal contends that TMI has failed to rebut
the presumption.
In Equilease, a financing corporation instituted foreclosure
proceedings on the preferred mortgages of three chartered vessels.
Equilease, 793 F.2d at 600. The charterer’s insurance broker
intervened in the proceedings, attempting to recover for the
vessels’ unpaid insurance premiums. Id. Among other things, the
insurance broker claimed a maritime lien under the FMLA for the
insurance. Id. The financing corporation charged that insurance
did not constitute a necessary for purposes of the FMLA. Id.Sitting en banc, we held that insurance constituted a necessary but
that the insurance broker failed to meet the statutory requirement
of reliance on the credit of the vessel when furnishing the
insurance. Id. at 607.
In determining that the insurance broker did not rely on the
credit of the vessel, we specifically noted two items from the
record. First, it referred to the testimony of a former manager of
the insurance broker. That testimony revealed that the insurance
13
broker looked solely to the charterer, the financing corporation,
or another party other than the vessels.
Q: So you are saying you relied only on Dunnamis, Equilease,
and/or Eltra, is that a fair statement?
A: That’s a fair statement.
Id. at 606. Second, we found a statement in the insurance broker’s
initial appellate brief admitting to sole reliance on a party other
than the vessels. In that brief, the insurance broker stated, “The
Unilease Companies were totally funded for the operations of the
Vessels by Equilease and it was the credit of Equilease upon which
all parties placed total reliance.” Id.In light of the fact that the insurance broker appeared to
rely solely on the credit of entities other than the vessels, the
judgment in Equilease was in keeping with prior Fifth Circuit case
law. But we also concluded in Equilease that “in the absence of
reliance–intention, by presumption, or otherwise–there is no right
to claim a lien.” Equilease, 793 F.2d at 606 n.9. Thus, we held
that by deliberately choosing not to rely on the credit of a
vessel, a supplier, as a matter of law, purposefully intends to
forego its right to claim a maritime lien. Id.Here, TMI does not point to any evidence directly indicating
that Racal intended solely to look towards Coastline or some party
other than the vessels for payment, although some items in the
14
record do suggest such a posture.6 But Pender’s testimony clearly
indicates that Racal did not rely on the credit of the vessels.
Almost nothing is more conclusive than such testimony as to whether
there was reliance. Not even testimony that Racal looked solely to
another party for payment better demonstrates that Racal did not
provide the supplies on the credit of the vessels. When evidence
reveals that a supplier looked solely to a party other than a
vessel for payment, we are persuaded that the supplier was not
relying on the credit of the vessels because of the logical
inference that can be derived from that evidence. In the instant
case, we need not trouble ourselves with any inference as the
evidence is directly on point. Accordingly, consistent with
Equilease, because the testimony explicitly shows that Racal
deliberately chose not to rely on the credit of the four chartered
vessels, as a matter of law, Racal purposefully intended to forego
its maritime lien.7 See id.6
For example, Racal forwarded a promissory note to Coastline to
finance the purchase of a computer system. In addition, Racal’s
lease proposal to Coastline states that Racal would submit itemized
bills to Coastline and that Coastline had to make payment within 30
days. Of course, neither piece of evidence is sufficient to
demonstrate that Racal solely relied on Coastline’s credit. See
Point Landing, 261 F.2d at 867.
7
The two other cases cited by Racal in its brief, Point Landing
and Sasportes, do not sway our view. First, given any conflict
between those two cases and Equilease, the latter controls as an en
banc decision. Second, in neither Point Landing or Sasportes was
there direct evidence indicating that the supplier did not rely
upon the credit of the vessel. Rather, in both cases, the sole
reliance element was emphasized to demonstrate the lack of evidence
15
But even if Racal had relied upon the credit of the vessels,
TMI insists that a maritime lien could not have attached because
the equipment and services, which allegedly were necessaries, were
not provided to the vessels. Under § 31342, a supplier of
necessaries must provide those goods or services to a vessel to
receive a maritime lien. Likewise, under § 31342's predecessor
statute, a supplier had to furnish necessaries to a vessel to
receive the benefits of a lien. See 46 U.S.C. § 971 (superseded
1988). As previously noted, the change in terms did not materially
alter the law, and we have continued to rely on case law preceding
the recodification to interpret the current statute. See, e.g.,
Silver Star, 82 F.3d at 668-69.
The seminal case in this area is the Supreme Court’s decision
in Piedmont & George’s Creek Coal Co. v. Seaboard Fisheries Co, 41
S. Ct. 1 (1920). In that case, a coal company sought a maritime
lien on several vessels that had utilized the coal company’s coal.
See Piedmont, 41 S. Ct. at 2. Under the arrangement between the
supporting the view that the supplier had not relied on the credit
of the vessel. If a supplier solely relied on the credit of a
party other than the vessel, then the only logical inference would
be that the supplier did not rely on the credit of the vessel. But
acceptance of a mortgage or a promissory note by the supplier, as
was the case in Point Landing, does not inexorably lead to the
conclusion that the supplier relied solely on the credit of a party
other than the vessel or that the supplier did not rely on the
credit of the vessel. See Point Landing, 261 F.2d at 867. In the
present case, we do not just have evidence of a mortgage or a
promissory note, but specific testimony that Racal did not rely
upon the credit of the vessels.
16
coal company and the vessels’ prior owner, the coal company agreed
to furnish such coal as would be required to operate the vessels
and the factories of the vessels’ prior owner. Id. No coal was
delivered directly to the vessels, and there was no reference on
any invoice to the vessels. Id. at 2. Instead, the coal was
loaded onto barges, towed to the factories, and then placed in bins
to commingle with coal from sources other than the coal company.
Id. Partly due to those facts, the Supreme Court concluded that
the coal company had not furnished the coal to the vessels and that
the vessels’ prior owner had actually furnished the coal. Id. at
4.
Relying on Piedmont and other circuit’s interpretations of §
31342, we recently declined to extend coverage of the FMLA to bulk
cargo containers leased to vessel owners or charterers. See Silver
Star, 82 F.3d at 667. In Silver Star, a cargo container company
provided nearly 120 cargo containers to a shipper that owned and/or
chartered several vessels. Id. When a preferred mortgagee sought
to enforce its mortgages against two of the shipper’s vessels, the
cargo container company intervened, claiming maritime lien rights
arising from the lease of the containers. Id. We found no such
rights because the cargo container company provided the containers
to the shipper, not to the vessels. Id. at 669. The lease did not
earmark particular containers for service on particular vessels.
Id. at 667. The shipper had ultimate authority as to which vessels
17
the containers were going to be placed. Id. at 669. And neither
the shipper or the cargo container company knew aboard which ship
a particular container would be placed at any given time. Id.Despite Piedmont and Silver Star’s misgivings about the
extension of maritime liens to situations where necessaries were
not apparently designated for specific vessels, the district court
ruled that Racal had provided necessaries to the four chartered
vessels. In so holding, the district court cited as support
another Supreme Court case, Dampskibsselskabet Dannebrog v. Signal
Oil & Gas Co., 60 S. Ct. 937 (1940). There, an oil company
contracted with a shipping company to sell fuel oil to the “vessels
owned, chartered, or operated by W.L. Comyn & Sons.” Id. at 938.
Later, two vessels were chartered to W.L. Comyn & Sons, and the oil
company supplied them with fuel oil. Id. Ultimately, the oil
company libeled the two vessels for fuel oil supplied to the
vessels on the charterer’s orders. Id. at 939. In acknowledging
that a maritime lien could be asserted against the vessels, the
Supreme Court referred to Piedmont and noted that “the oil was
supplied exclusively for the vessels in question, was delivered
directly to the vessels and was so invoiced.” Id. at 942.
Comparing that statement with the facts in the instant case, the
district court found that Racal delivered the seismic equipment
directly to the vessels.
We believe that was error. Although the Dampskibsselskabet
18
court stated that “the oil was supplied exclusively for the vessels
in question, was delivered directly to the vessels and was so
invoiced” in response to the vessels’ owners’ contention that
Piedmont precluded a maritime lien from attaching, the owners did
not raise the Piedmont case to contest whether the oil company had
furnished the oil to the vessels. Rather, the owners pressed
Piedmont because that case, like theirs, involved a general
contract to supply a necessary, and they thought that Piedmont
somehow affected the issue of whether the oil company had supplied
oil upon the charterer’s credit and not upon the credit of the
vessels. That is, the holding of Dampskibsselskabet did not
actually pertain to whether the oil company had provided fuel oil
to the vessels.
Assuming, though, that the Dampskibsselskabet court’s
statement was not dicta, we still conclude that the district court
erred in finding that Racal provided the seismic equipment and
services to the vessels.8 Contrary to Dampskibsselskabet, Racal
did not supply the equipment and services exclusively for the four
Second Charter vessels. Indeed, Racal and Coastline entered into
several agreements with respect to the services and the leased and
sold equipment months before the Second Charter vessels were ever
8
The district court also found as important the fact that the
seismic equipment was installed at a shipyard that is a subsidiary
of TMI’s mother corporation. We do not find that fact to be
determinative in reaching our conclusion.
19
selected. Racal cannot fairly say that the alleged necessaries
were exclusively provided to the Second Charter vessels when the
equipment, and the attendant services, was first procured to be
placed in unnamed vessels that were later designated as the First
Charter vessels. The equipment was sold or leased to Coastline,
which had control over which vessels the equipment was to be
placed. Subsequent to the Gulf of Mexico operation, Coastline
merely transferred the equipment, and the attendant services, to
the Second Charter vessels. Accordingly, we believe that the
instant case more closely parallels the situations confronted in
Piedmont and Silver Star and conclude that Racal’s equipment and
services were not provided to the vessels.
Because Racal did not provide the equipment and services,
which constituted the alleged necessaries, to the vessels and
because Racal deliberately chose not to rely on the credit of the
four chartered vessels, we find that the district court erred in
granting Racal’s summary judgment motion claiming a maritime lien
in TMI’s Second Charter vessels.9 Therefore, we reverse and remand
for proceedings consistent with this opinion.
B. TMI v. Input
TMI’s other issue on appeal concerns the district court’s
ruling denying TMI a maritime lien over Coastline’s equipment
9
TMI raised two other arguments in support of reversal. In light
of our holding, we need not address those arguments.
20
despite Coastline’s breach of the charter for non-payment. The
district court orally held that Coastline’s equipment was not cargo
and declined to extend the concept of a maritime lien to items
other than cargo. In challenging the district court’s decision,
TMI contends that a general maritime lien may be asserted for
breach of a charter and that, in any case, Coastline’s equipment
was cargo.
Maritime liens are stricti juris and will not be extended by
construction, analogy, or inference. Piedmont, 41 S. Ct. at 4.
Moreover, they are largely statutorily created. See Lake Charles
Stevedores, Inc. v. PROFESSOR VLADIMIR POPOV MV, 199 F.3d 220, 224
(5th Cir. 1999), cert. denied, 120 S. Ct. 2006 (2000). Thus, to
determine the validity of a maritime lien, we must normally refer
to statutory law or those liens that have been historically
recognized in maritime law. Id.Here, TMI’s claimed maritime lien clearly does not come within
the province of the FMLA. As for non-statutory maritime law, TMI
has been unable to uncover a single case directly on point that
suggests that a shipowner may assert a maritime lien against the
charterer for items that are not cargo. The cases cited by TMI are
inapposite and actually concern maritime liens in favor of the
charterer against the boat owner. See E.A.S.T., Inc. v. M/V ALAIA,
876 F.2d 1168 (5th Cir. 1989); International Marine Towing, Inc. v.
Southern Leasing Partners, Ltd., 722 F.2d 126 (5th Cir. 1983). Nor
21
do those cases extend a maritime lien to items other than cargo for
breach of a charter. The lack of precedential authority and the
stricti juris nature of a maritime lien are damning to TMI’s cause,
and we conclude that TMI’s attempt to extend the concept of a
maritime lien is unavailing.
With respect to TMI’s other contention that Coastline’s
equipment was cargo, we find no error on the part of the district
court. The evidence clearly indicates that TMI differentiated
between cargo and Coastline’s equipment. Furthermore, unlike
cargo, much of Coastline’s equipment had to be installed onto the
vessels. Accordingly, we affirm the district court’s judgment
denying TMI a maritime lien over Coastline’s equipment.
IV. CONCLUSION
For the foregoing reasons, we reverse the district court’s
judgment granting a maritime lien to Racal and remand for
proceedings consistent with this opinion. As for the district
court’s judgment denying TMI a maritime lien on Coastline’s
equipment, we affirm.
22