United States Court of Appeals,
Fifth Circuit.
No. 97-40709.
HEIDMAR, INC. and Heidenreich Marine, Inc., as agents for
Heidmar, Inc., Plaintiff-Appellant,
v.
ANOMINA RAVENNATE DI ARMAMENTO SP.A. OF RAVENNA and A.R.A.
Anomina Ravennate Di Armamento Sp.A. in personam, and the M/V
Pegasus Erre, Her Hull, Engines, Machinery, Tackle, Apparel,
Furniture, etc., in rem, Defendants-Appellees.
Jan. 15, 1998.
Appeal from the United States District Court for the Southern
District of Texas.
Before JOLLY, DAVIS and BARKSDALE, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
Appellants Heidmar, Inc. and Heidenreich Marine, Inc.
(collectively, "Heidmar") appeal an order of the district court
vacating the attachment of a vessel, the M/V Pegasus Erre ("Pegasus
Erre"), owned by appellees Anomina Ravennate Di Armamento Sp.A. of
Ravenna and A.R.A. Anomina Ravennate Di Armamento Sp.A.
(collectively, "Ravennate"). For the reasons set out below, we
conclude that the district court erred in vacating the attachment
and remand for further proceedings.
I.
Heidmar is a Liberian corporation with a principal place of
business in Greenwich, Connecticut. Heidmar provides ocean
transportation services, primarily transporting oil products for
petroleum companies. Heidmar does not own any vessels; rather, it
charters them as needed from other entities. Ravennate is an
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Italian corporate entity with a principal place of business in
Ravenna, Italy and the owner of the Pegasus Erre, an oil tanker.
In May 1995, Heidmar negotiated a time charter party with
Ravennate for the Pegasus Erre. Among other things, the charter
party required that the vessel be oil-tight, fit to carry crude
petroleum and its products, and in good order and condition. The
charter party also required Ravennate to have the vessel inspected
and approved by various oil companies during the life of the
charter party. The charter party provided that its terms would "be
construed and the relations between the parties determined in
accordance with the laws of England," and that either party could
elect to have any dispute arbitrated by a single arbitrator in
London.
The Pegasus Erre was delivered to Heidmar in November 1995.
In October 1996, however, Heidmar returned the Pegasus Erre to
Ravennate, complaining that the vessel was unfit and had not met
the terms of the charter party. Ravennate denied that it had
breached the charter party, and countered that rather Heidmar had
breached the charter party by returning the vessel before its
expiration. Unable to resolve their dispute, the parties commenced
arbitration proceedings in London. That arbitration is still
pending.
On March 7, 1997, Heidmar filed suit against the Pegasus Erre,
in rem, and against Ravennate, in personam, in the Southern
District of Texas. Heidmar sought a judgment against Ravennate and
the Pegasus Erre, as well as the arrest of the vessel pursuant to
2
Rule C of the Supplemental Rules for Certain Admiralty and Maritime
Claims.1
Heidmar filed its complaint at approximately 3:45 p.m. CST.2
Its complaint was accompanied by a motion for an expedited hearing
on its request for the arrest of the Pegasus Erre. Heidmar's
counsel was advised that he should await the arrival of a
magistrate judge who would conduct an ex parte hearing that
afternoon. Meanwhile, at approximately 4:00 p.m. CST, Ravennate
faxed a notification that it had appointed an agent for service of
process in the Southern District of Texas to Heidmar's headquarters
in Connecticut.3
At approximately 4:45 p.m. CST, a magistrate judge held a
hearing on Heidmar's request for the arrest of the Pegasus Erre.
Neither she nor Heidmar's counsel were aware of Ravennate's
appointment of an agent for service of process. The magistrate
judge granted Heidmar's request and issued a warrant for the arrest
1
Rule C provides that an action in rem may be brought: (a) to
enforce any maritime lien; or (b) whenever a statute of the United
States provides for a maritime action in rem or a proceeding
analogous thereto. Fed.R.Civ.P.Supp.R. C(1)(a), (b). If the court
finds that the conditions for an action in rem appear to exist, it
will issue an order authorizing a warrant for the arrest of the
vessel or other property that is the subject of the action.
Fed.R.Civ.P.Supp.R. C(3).
2
Heidmar's filing fee receipt is time-stamped 3:48:41 p.m.
CST. Although Ravennate suggests that Heidmar's complaint was not
filed until it was presented to a magistrate judge at approximately
4:45 p.m. CST, it is mistaken. See Fed.R.Civ.P. 5(e) ("The filing
of papers with the court as required by these rules shall be made
by filing them with the clerk of court....").
3
Ravennate's fax transmittal sheet is time-stamped 4:05 CST.
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of the Pegasus Erre. The vessel arrived in Corpus Christi, Texas
on March 9, and was arrested the following day.
On March 12, the Pegasus Erre filed a motion to vacate the
arrest on the ground that English law, which governs the charter
party, does not provide for a maritime lien for breach of a charter
party.4 At a hearing that day, the magistrate judge denied its
motion.
A few days later, the magistrate judge issued an order setting
the amount of security for the release of the Pegasus Erre at
$839,078 plus interest. Ravennate subsequently posted a bond in
that amount and the Pegasus Erre was released.
After the magistrate judge denied the Pegasus Erre's motion to
vacate the arrest, Ravennate and the Pegasus Erre filed a motion to
dismiss which the district court converted into a motion for
summary judgment. On May 15, 1997, the court ruled that Heidmar
could not proceed against the Pegasus Erre in rem under Rule C
because English law does not provide for a maritime lien for breach
of a charter party. The court, however, temporarily converted the
arrest of the vessel into an attachment under Rule B of the
Supplemental Rules for Certain Admiralty and Maritime Claims
pending further briefing on the issue of whether Ravennate could be
"found within the district" for purposes of Rule B.5
4
To reiterate, the charter party provided that its terms would
"be construed and the relations between the parties determined in
accordance with the laws of England."
5
Rule B provides, in relevant part: "With respect to any
admiralty or maritime claim in personam a verified complaint may
contain a prayer for process to attach the defendant's goods and
4
On June 19, 1997, the court ruled that Ravennate could be
found within the district for purposes of Rule B and issued an
order vacating the attachment. The court also ruled that Ravennate
had not waived its objection to arrest of the Pegasus Erre, as
Heidmar had argued, and ordered the release of the bond. The court
stayed further proceedings in the case pending the outcome of the
London arbitration.
Heidmar now appeals the court's order vacating the attachment.
II.
As a preliminary matter, we must address Ravennate's
contention that we lack jurisdiction over this interlocutory
appeal. Generally, we may only hear appeals from final orders
unless the district court has certified an order for appeal. See
28 U.S.C. §§ 1291, 1292(b). Heidmar contends, however, that the
district court's order is a collateral order appealable under Cohen
v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93
L.Ed. 1528 (1949). In Cohen, the United States Supreme Court
recognized an exception to the final judgment rule for orders that
"fall in that small class which finally determine claims of right
separable from, and collateral to, rights asserted in the action,
too important to be denied review and too independent of the cause
itself to require that appellate consideration be deferred until
the whole case is adjudicated." 337 U.S. at 546, 69 S.Ct. at 1225-
26.
chattels ... if the defendant cannot be found within the district."
Fed.R.Civ.P.Supp.R. B(1).
5
In Swift & Co. Packers v. Compania Colombiana Del Caribe,
S.A., 339 U.S. 684, 70 S.Ct. 861, 94 L.Ed. 1206 (1950), the Supreme
Court held that an order vacating attachment was appealable under
Cohen because "[a]ppellate review of the order ... at a later date
would be an empty rite after the vessel had been released and the
restoration of the attachment only theoretically possible." Id. at
689, 70 S.Ct. at 865. We find Swift & Co. controlling and
therefore conclude that we have jurisdiction over this appeal.
III.
A.
The initial question presented in this appeal is one of
timing: in order for a defendant to be "found within the district"
for purposes of Rule B, must the defendant be present in the
district at the time the complaint is filed, or may the defendant
appear some time thereafter? Ravennate argues that a defendant can
be found within the district if it is present at the time of
seizure. Heidmar, on the other hand, argues that a defendant
cannot be found within the district if it is not present at the
time the plaintiff files its complaint.
Heidmar relies on LaBanca v. Ostermunchner, 664 F.2d 65 (5th
Cir.1981). In determining whether attachment was appropriate under
Rule B in that case, we stated: "The issue before us now is
whether the [defendants] could be found within the Middle District
of Florida at the time appellant filed this action." Id. at 67
(emphasis added). Although Ravennate correctly observes that we
did not squarely address the issue of whether the defendant must be
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present at the time the complaint is filed or at some other time,
we conclude that in LaBanca we correctly looked for presence at the
time the complaint was filed.
First, the text of Rule B itself indicates that, at the very
least, courts do not look for presence at the time of attachment.
Rule B provides that a party seeking attachment must submit along
with its complaint an affidavit signed by the party or its attorney
that, to the best of the affiant's knowledge or belief, the
defendant cannot be found within the district. Fed.R.Civ.P.Supp.R.
B(1). Rule B further provides that if the court upon review of the
complaint and the affidavit finds that the conditions set forth in
the rule appear to exist, the court shall authorize attachment.
Id. Thus, it is apparent that the determination of whether the
defendant can be found within the district must be made before
attachment is ordered.
Second, we recognize that attachment serves two purposes: 1)
securing the defendant's appearance and 2) assuring satisfaction in
case the plaintiff's suit is successful. See Swift & Co. Packers
v. Compania Colombiana Del Caribe, S.A., 339 U.S. 684, 693, 70
S.Ct. 861, 867, 94 L.Ed. 1206 (1950). Thus, the appearance of the
defendant before seizure is effected does not entirely vitiate the
justification for attachment. As the Supreme Court has observed,
"an attachment is not dissolved by the subsequent appearance of
respondent." Id.
Third, we believe that a time-of-filing rule furthers the
interests of fairness and judicial economy. Testing for presence
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after the complaint has been filed would permit a defendant to wait
until a plaintiff files a complaint and then appoint an agent for
service of process for the sole purpose of defeating attachment.
By the time the defendant appears, the court may have devoted
substantial time and energy to the consideration of the plaintiff's
complaint.
Finally, the only other circuit court that has dealt with the
issue before us affirmed an order of attachment because the
defendant was not within the district at the time attachment was
sought and granted. See Navieros Inter-Americanos, S.A. v. M/V
Vasilia Express, 120 F.3d 304, 314-15 (1st Cir.1997) (observing
that to hold otherwise would allow "a defendant who was otherwise
safely outside the service power of the district court [to]
effectively avoid Rule B attachment by waiting until after the
plaintiff filed a Rule B motion to designate an agent for
service").
Accordingly, we hold that a defendant cannot be found within
the district for purposes of Rule B if it is not present in the
district at the time the complaint is filed. A defendant is
present in the district if 1) the defendant can be found within the
district in terms of jurisdiction, and 2) the defendant can be
found within the district for service of process. LaBanca v.
Ostermunchner, 664 F.2d 65, 67 (5th Cir.1981).
In this case, the record reflects that Ravennate could not be
found within the Southern District of Texas for service of process
at the time Heidmar filed its complaint. Heidmar filed its
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complaint on March 7, 1997 at approximately 3:45 p.m. CST. There
is no evidence that Ravennate appointed an agent for service of
process in the Southern District of Texas any earlier than
approximately 4:00 p.m. CST that day. We conclude therefore that
Ravennate could not be found within the district for purposes of
Rule B and that the district court erred in reaching a contrary
conclusion.
B.
We must next consider Ravennate's alternative argument that
attachment is nevertheless inappropriate because Ravennate was
present in the district at the time the district court converted
the Rule C arrest into a Rule B attachment. Heidmar argues that we
must reject this argument in light of Sembawang Shipyard, Ltd. v.
Charger, Inc., 955 F.2d 983 (5th Cir.1992). In Sembawang, the
plaintiff sought the arrest of a vessel under Rule C after the
defendant breached a repair contract. The district court issued an
arrest warrant and the vessel was seized. The defendant thereafter
secured the release of the vessel by posting a bond. On appeal, we
concluded that the arrest of the vessel was improper because the
requirements of Rule C had not been met. See id. at 986-89. We
determined, however, that the plaintiff should have proceeded under
Rule B and that its failure to do so was merely a technical
pleading error. See id. at 989. Because the defendant had not
shown that it had been prejudiced by the plaintiff's error, we
allowed the plaintiff to proceed against the bond as if the
plaintiff had originally proceeded under Rule B. See id. In
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effect, we allowed the conversion of the Rule C arrest to a Rule B
attachment to relate back to the original filing of the complaint.
Heidmar, too, should have proceeded under Rule B, and
Ravennate has not alleged that it has suffered any prejudice from
Heidmar's mistake in seeking arrest under Rule C instead of
attachment under Rule B. Accordingly, we conclude that Heidmar may
proceed as if it had originally brought this action under Rule B.
IV.
For the reasons set out above, we conclude that the district
court erred in vacating the attachment of the Pegasus Erre. We
therefore vacate that portion of its June 19, 1997 order vacating
attachment and remand for further proceedings consistent with this
opinion.
VACATED AND REMANDED.
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