United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS October 16, 2003
For the Fifth Circuit
Charles R. Fulbruge III
Clerk
No. 02-30365
MARITREND, INC.,
Plaintiff – Appellant,
VERSUS
SERAC & COMPANY (SHIPPING) LTD., et al.,
Defendants;
SEVILLA WAVE M/V, her engines, tackle, apparel, etc., in rem,
Defendant – Appellee;
PIMPERNEL SHIPPING COMPANY, LTD.,
Claimant – Appellee.
Appeal from the United States District Court
For the Eastern District of Louisiana
Before WIENER, BENAVIDES, and DENNIS, Circuit Judges.
DENNIS, Circuit Judge:
Maritrend, Inc., appeals the district court’s ruling that it
waived its maritime lien on a vessel to which it had provided
stevedoring services. We reverse and remand this case for the
-1-
entry of judgment in favor of Maritrend on its in rem claim against
the vessel.
I. BACKGROUND
In July 2000, Maritrend contracted with Serac & Company
(Shipping) Ltd. (“Serac”), the agent for an undisclosed charterer,
to provide stevedoring services to the M/V SEVILLA WAVE in the Port
of New Orleans. After providing those services, Maritrend sent
invoices to Serac but never received payment.1
Seeking to recover the value of its services, Maritrend filed
an in personam action against Serac in the United States District
Court for the Eastern District of Louisiana. Maritrend later
amended its complaint to add an in rem claim against the SEVILLA
WAVE, which it simultaneously seized. Pimpernel Shipping Company,
Ltd. (“Pimpernel”), claimed ownership of the vessel and filed an
answer to the amended complaint.
After a full bench trial, the district court found Serac
liable in personam to Maritrend for the claimed amount, $73,104.80,
plus interest.2 But the court rejected Maritrend’s in rem claim
against the SEVILLA WAVE, concluding that Maritrend had relied
1
Maritrend did not invoice the SEVILLA WAVE, its owner, or its
agent for the stevedoring services. Maritrend did, however,
invoice the SEVILLA WAVE (through the vessel’s agent) for standby
time it incurred when the vessel’s crane malfunctioned. The
district court found that the vessel was liable for the standby
time and entered judgment against the vessel’s owner accordingly.
That portion of the judgment is not at issue in this appeal.
2
Serac provided no defense against Maritrend’s claim.
-2-
solely on Serac’s credit for payment for its stevedoring services
and had therefore waived its maritime lien against the vessel.
Maritrend timely appealed.
II. ANALYSIS
A. Standard of Review
“The standard of review for a bench trial is well established:
findings of fact are reviewed for clear error and legal issues are
reviewed de novo.”3 However, “[t]he clearly erroneous standard of
review does not apply to [those] factual findings made under an
erroneous view of controlling legal principles.”4
B. Creation and Waiver of Federal Maritime Liens
Congress enacted the Federal Maritime Lien Act (“FMLA”) in
1910 to bring uniformity to the law governing maritime liens.5
Although Congress recodified the FMLA in 1988 as part of the
Commercial Instruments and Maritime Liens Act (“CIMLA”),6 it did
not make any substantive changes to the law.7 Section 31342(a)
of the current codification provides that
3
Kona Tech. Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 601
(5th Cir. 2000).
4
Lake Charles Stevedores, Inc. v. PROFESSOR VLADIMIR POPOV M/V,
199 F.3d 220, 223 (5th Cir. 1999).
5
Racal Survey U.S.A., Inc. v. M/V COUNT FLEET, 231 F.3d 183,
187 (5th Cir. 2000).
6
See 46 U.S.C. §§ 31301–31343.
7
See Racal Survey, 231 F.3d at 188 (stating that the caselaw
that developed under the FMLA remains “persuasive, if not
controlling”).
-3-
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.8
“Necessaries” include stevedoring services,9 and there is no
dispute here that Maritrend provided such services to the SEVILLA
WAVE. It is likewise undisputed that Serac had the authority to
procure necessaries, including stevedoring services, for the
SEVILLA WAVE. The only question before us is whether Maritrend
relied on the credit of the SEVILLA WAVE for payment for its
services.
Prior to the initial passage of the FMLA, “the law was
settled that a federal maritime lien could arise only for
necessaries furnished in reliance upon the credit of the vessel.
Credit to the ship, as distinguished from credit to the owner,
was essential to the existence of a maritime lien.”10 Although §
31342(a)(3) of the CIMLA, like former § 971 of the FMLA, provides
that the supplier “is not required to allege or prove . . . that
credit was given to the vessel,” the Supreme Court has held that
this language “serve[s] only to remove from the creditor the
8
46 U.S.C. § 31342(a).
9
See TTT Stevedores of Texas, Inc. v. M/V JAGAT VIJETA, 696
F.2d 1135, 1138 (5th Cir. 1983) (stating that “[t]here is no
question that supplying stevedoring services gives rise to a
maritime lien”).
10
Equilease Corp. v. M/V SAMPSON, 793 F.2d 598, 605 (5th Cir.
1986) (en banc).
-4-
burden of proving that he had relied on the credit of the
vessel.”11 We have therefore recognized that “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, are still
very much with us today.”12 Thus, under § 31342(a), “a
presumption arises that one furnishing supplies to a vessel
acquires a maritime lien, and the party attacking this
presumption has the burden of establishing that the personal
credit of the owner or charterer was solely relied upon.”13 “To
meet this burden, evidence must be produced that would permit the
inference that the supplier purposefully intended to forego the
lien.”14
Because the statutory presumption in favor of a maritime
lien is a strong one, we are usually reluctant to conclude that a
supplier has waived its lien.15 We have held that the supplier’s
11
Id. (discussing Piedmont & George’s Creek Coal Co. v. Seaboard
Fisheries Co., 254 U.S. 1 (1920)). See Racal Survey, 231 F.3d at
189 (noting the similarity between current § 31342(a)(3) and the
provision of the FMLA that the Supreme Court construed in
Piedmont).
12
Equilease, 793 F.2d at 605.
13
Id.
14
Id. at 606.
15
This is particularly true when the case concerns traditional
services such as stevedoring. See Atl. & Gulf Stevedores, Inc. v.
M/V GRAND LOYALTY, 608 F.2d 197, 201 (5th Cir. 1979) (finding that
it “was the intent of the Congress to make it easier and more
certain for stevedores and others to protect their interests by
making maritime liens available where traditional services are
-5-
primary reliance on the personal credit of a charterer is
insufficient to rebut the statutory presumption. For example, in
Gulf Trading & Transportation Co. v. The Vessel HOEGH SHIELD
(“HOEGH SHIELD”), the plaintiff brought an in rem action against
a vessel to which it had supplied fuel within the territorial
jurisdiction of the United States pursuant to a contract with the
vessel’s English charterer.16 After delivering the fuel, the
plaintiff sent an invoice to the charterer in London, but the
charterer never made payment.17 In the action against the
vessel, the vessel’s owner argued that the plaintiff had waived
its maritime lien because: (1) according to the deposition
testimony of the plaintiff’s credit agent, the fuel was supplied
on the charterer’s credit; (2) there had been no conversations
between the plaintiff and the vessel’s owner; (3) the plaintiff
never sent an invoice to the vessel’s owner; and (4) the
plaintiff took no action against the vessel until the charterer
became insolvent.18 Although these facts clearly indicated that
the plaintiff was relying on the charterer’s credit when it
supplied the fuel, we held that they were insufficient to
establish sole reliance on that credit or to permit an inference
routinely rendered”).
16
658 F.2d 363, 364–65 (5th Cir. Unit A Oct. 1981).
17
Id. at 364.
18
See id. at 366, 368.
-6-
that the plaintiff purposefully intended to forgo its lien on the
vessel.19
Similarly, we concluded in Gulf Oil Trading Co. v. M/V
CARIBE MAR, that sole reliance on personal credit, as opposed to
the credit of the vessel, was not established even though the
creditor had a long-term business relationship with the
charterer, had extended large amounts of credit to the charterer
in the past, and was aware of the prohibition of lien clause in
the contract.20 Thus, “the simple existence of a business
relationship and credit arrangements could hardly be
realistically construed as an intent or purpose by [the creditor]
to waive its lien on the vessel.”21
Despite our prior caselaw reiterating the difficulty of
proving that a creditor has waived its lien, two cases subsequent
to HOEGH SHIELD and Gulf Oil Trading Co. identify the
circumstances that support a finding of waiver. In Equilease
Corp. v. M/V SAMPSON, this court determined that sufficient
evidence exists to find that a creditor waives its right to a
federal maritime lien when a creditor’s testimony that he relied
solely on entities besides the vessel for credit is combined with
unambiguous statements in the creditor’s original brief
19
Id. at 368.
20
757 F.2d 743, 750 (5th Cir. 1985).
21
Id.
-7-
indicating the credit relied on was not the vessel’s.22 The fact
that the creditor also testified that “[t]here was no intent for
us to give up anything” did not disturb the district court’s
finding that any federal maritime lien that existed was waived
because the bulk of the evidence and testimony showed that
creditor did not rely on the credit of the vessel.23
In Racal Survey U.S.A., Inc. v. M/V COUNT FLEET, this court
found that a creditor had clearly indicated its intent to forgo a
federal maritime lien based on the testimony of the creditor
company’s president.24 When asked whether the creditor was
relying on the credit of the ship, the creditor’s president
testified that there was no reliance because the customer was a
stevedoring company, not the vessel or the vessels’ owner, and
thus he had no contract or dealings with the ship.25 In finding
waiver, this court stated that “[a]lmost nothing is more
conclusive than such testimony” on the critical issue of the
reliance necessary to preserve the lien.26
Taken together, Equilease and Racal Survey stand for the
22
See 793 F.2d 606, 607 (5th Cir. 1988).
23
Id.
24
See 231 F.3d 183, 189.
25
Id.
26
Id. at 190. This court has also stated that testimony
reflecting that a creditor looked exclusively to another party for
payment would also create the inference that the creditor was not
relying on the vessel for payment. Id.
-8-
proposition that testimony regarding which party a creditor
relied on can be determinative of whether the maritime lien was
waived. But those decisions did not weaken the heavy burden
placed on the party attacking the presumption. If the evidence
shows that the claimant relied on the credit of the vessel to
some extent, we will not find a waiver of the maritime lien.27
C. The Evidence at Trial and Review of the District Court’s
Decision
A bench trial in this case was held on January 14, 2002. At
trial, the district court heard testimony and was presented
exhibits on behalf of both parties. Maritrend president William
Bergeron (“Bergeron”) testified that Maritrend “initially
rel[ies] upon the contract that we have with the party, but we
always rely on a maritime lien right,” as a “fallback position.”
Indeed, in his testimony, Bergeron attests to this belief at
least five times. Bergeron also indicated that he thought Serac
owned the vessel to which Maritrend was providing stevedoring
services. Similarly, Donald Broussard, an employee at Maritrend,
testified that “the first course of action” was always to recover
payment from Serac, but if it failed to pay, the company
“implemented vessel seizure procedures.” Finally, Petra Smith,
Maritrend’s vice president, testified that it was her
responsibility to collect delinquent and overdue invoices for
27
See Equilease, 793 F.2d at 607 n.12.
-9-
stevedoring services and that she only contacted Serac, as
opposed to the owners or managers of the SEVILLA WAVE, for
payment.
Among the exhibits offered at trial were the tariff document
and copies of invoices. The tariff document, which was part of
the stevedoring services contract, was prepared by Maritrend and
placed on file with the Board of Commissioners of the Port of New
Orleans. The tariff document does not explicitly state that the
SEVILLA WAVE was responsible for stevedoring services, however,
as the district court noted, there was no indication in the
tariff document or any of the record evidence that Maritrend
intended to waive its federal maritime lien. While the invoices
were not sent directly to the SEVILLA WAVE, they indicated on
their face that the charges contained therein were made “FOR THE
ACCOUNT OF THE OWNER(S)/AGENT(S) AND/OR CHARTERER(S) OF THE M/V
SEVILLA WAVE.” There is no language on the invoices that
indicates any intent to waive a maritime lien.
In holding for Pimpernel, the district court found that the
trial testimony established that “Maritrend relied solely on the
credit of Serac, its customer, for payment of [the stevedoring]
services.”28 It rested its decision on the both testimonial and
documentary evidence. The principal testimony that the district
court relied on was the testimony that Maritrend failed to seek
28
Maritrend, Inc. v. Serac & Co., 2002 U.S. Dist. LEXIS 2483 at
*5-6 (E.D. La. 2002).
-10-
payment from the vessel until several months after non-payment by
Serac and that Maritrend expected its customer, Serac, to pay the
invoices. The district court also noted that the documentary
evidence supported its conclusion because Maritrend’s invoices
were only addressed and sent to Serac and the tariff document was
silent as to whether the vessel was responsible for stevedoring
charges.
The district court also stated that in light of our
decisions in Racal Survey and Equilease, it was bound to rule
against Maritrend. It decided this despite the fact that it
found Bergeron’s testimony that Maritrend always relied on the
credit of the vessel as a fallback position when providing
stevedoring services was “completely credible,”29 and “the record
evidence did not suggest any reason that Maritrend would
relinquish its right to a lien.”30
After reviewing the record and applicable case law, we find
that there was insufficient evidence adduced at trial to overcome
the presumption that Maritrend relied on the credit of the
SEVILLA WAVE with respect to the stevedoring services it provided
in order to preserve a federal maritime lien. This court has
repeatedly indicated the strength of the maritime lien
presumption, especially in traditional areas such as
29
Id.
30
See id. at * 8, n.8(internal citation and quote omitted).
-11-
stevedoring.31 Such a strong presumption in favor of a lien
places a “heavy burden” on parties seeking to show a waiver of
the lien, forcing them to show that a creditor “deliberately
intended to forego the valuable privilege which the law accords
and look solely to the owner’s personal credit.”32 Neither
Equilease Corp. nor Racal Survey weakens this presumption or the
burden placed on the party attacking the presumption.33
In applying this standard, this court has found testimonial
evidence sufficient to defeat this presumption only in cases
where testimony “clearly indicate[d] that [the creditor] did not
rely on the credit of the vessels,”34 and there was no other
evidence, testimonial or otherwise, supporting the creditor’s
reliance on the vessel.35 Furthermore, this court has found
31
See Atlantic & Gulf Stevedores, Inc. v. M/V GRAND LOYALTY, 608
F.2d 197, 201 (5th Cir. 1979) (finding that it “was the intent of
the Congress to make it easier and more certain for stevedores and
others to protect their interests by making maritime liens
available where traditional services are routinely rendered”).
32
Gulf Oil Trading Co., 757 F.2d at 750 (emphasis in original)
(citations and internal quotation marks omitted).
33
See, e.g., Equilease, 793 F.2d at 605-606; Racal Survey, 231
F.3d 189.
34
Racal Survey, 231 F.3d at 190 (emphasis added). See also
Point Landing, Inc., 261 F.2d at 867 (suggesting that “convincing
testimony” in conjunction with other evidence might be enough to
rebut the presumption).
35
See Equilease, 793 F.2d at 606 (weighing testimony indicating
that the creditor had relied on the owner’s and charter’s personal
credit for payment against vague testimony that the creditor did
not intend “to give up anything”); Racal Survey,231 F.3d at 189-90
(finding clear evidence that Racal had not relied on the credit of
-12-
evidence such as only invoicing the charterer or a long-standing
business relationship with the charterer to be inadequate to show
that a creditor relied solely on such charterer.36
Here, neither testimonial nor documentary evidence supports
the conclusion that Maritrend “solely relied” on the credit of
Serac. First, although the testimony as a whole shows that
Maritrend relied on Serac for payment, it also shows that
Maritrend did not rely solely on Serac because it was aware of
and generally relied upon its maritime lien rights against the
SEVILLA WAVE. Bergeron, who the district court found “completely
credible,” testified that Maritrend always intended to rely on
the credit of the vessel as a “fallback” position. This
testimony was further supported by Broussard’s statement that
Maritrend’s practice was to implement ship seizure procedures
when invoices for stevedoring services were not timely paid.
Therefore, this situation is unlike the cases in Equilease and
Racal Survey, where there was clear testimonial evidence by the
party seeking to impose a federal maritime lien that it did not
rely on the credit of the vessel.37
Second, the documents presented to the district court
the vessel when its president testified that he had no contract or
dealings with the company that owned the vessel, nor was he relying
on its credit when it entered into a contract with the charterer).
36
Gulf Oil Trading Co.,757 F.2d at 750.
37
See Equilease, 793 F.2d at 606; Racal Survey, 231 F.3d 189-90.
-13-
provide no evidence that Maritrend did not rely on the credit of
the vessel. As discussed above, invoicing only the charterer is
not dispositive because it only shows that a party attempted to
receive the payment from the charterer first, not that it never
intended to rely on the credit of the vessel.38 It is true that
the tariff document expressly identifies certain charges to be
applied to the vessel and that this list does not include
stevedoring services. Again, this only shows that Serac, the
charterer, was initially responsible for the stevedoring
payments. Nothing in the tariff document shows that Maritrend
did not intend to seek payment from the vessel in the event that
Serac failed to pay. Therefore, these documents are insufficient
to overcome the strong presumption that a federal maritime lien
exists when necessaries, such as stevedoring services, are
provided to a vessel.
In sum, we disagree that our decisions in Equilease and
Racal Survey compelled the district court to rule against
Maritrend based on these case facts. As the district court
observed, Maritrend’s resorting to its lien only after Serac
defaulted is “typical of what is done in the normal course of
business.”39 If a supplier of necessaries forfeits his lien on
the vessel by conducting his business in accordance with this
38
See HOEGH SHIELD, 658 F.2d at 368.
39
Maritrend, at *6, n.5.
-14-
prevailing practice, then the lien would be available only to
suppliers who do not need it. Neither the CIMLA nor our cases
interpreting its provisions supports such a result. The implied
maritime lien is a security device, and its purpose is “to enable
a vessel to obtain supplies or repairs necessary to her continued
operation by giving a temporary underlying pledge of the vessel
which will hold until payment can be made or more formal security
given.”40 We would frustrate this purpose if we prohibited
enforcement of the lien whenever the supplier’s efforts to
collect from the person who ordered the necessaries were
unsuccessful.
Although Maritrend expected Serac to pay for the stevedoring
services, and its conduct reflected that reasonable expectation,
Bergeron’s trial testimony established that Maritrend relied on
the credit of the SEVILLA WAVE as a “fallback position,” which is
exactly what the law contemplates.41 Because Pimpernel offered
40
PROFESSOR VLADIMIR POPOV, 199 F.3d at 223 (quoting S. Coal &
Coke Co. v. F. Grauds Kugniecibas (“The Everosa”), 93 F.2d 732, 735
(1st Cir. 1937)).
41
As Judge John R. Brown explained in an opinion he wrote for
the Eleventh Circuit, that a supplier of necessaries expected
payment from the party with whom it contracted is of “no decisive
significance” in cases such as this one:
Expectations that payment for the service would be made
by some party other than the vessel does not vitiate a
lien by one who, as permitted under § [31342(a)(3)], is
not required to prove reliance on the credit of the
vessel. . . . The classic case in its simplest form
involves a time-charterer who, under the charter is
responsible for paying for the loading and discharge of
-15-
no evidence to rebut that testimony, and the district court did
not find that testimony incredible, it could not meet its burden
of proving that Maritrend relied solely on Serac’s credit. We
therefore hold that the district court’s finding that Maritrend
waived its lien on the SEVILLA WAVE was erroneous as a matter of
law.
III. CONCLUSION
For the foregoing reasons, we reverse the district court’s
ruling that Maritrend waived its maritime lien on the SEVILLA
WAVE and remand this case for the entry of judgment in favor of
Maritrend on its in rem claim against the vessel for the value of
the stevedoring services it provided.
REVERSED AND REMANDED WITH INSTRUCTIONS.
cargo, arranges with a contracting stevedore to furnish
the services including that of longshoremen. Obviously,
the stevedore expects to be paid by the charterer. On
failure of the time-charterer to pay, the stevedoring
contractor has a maritime lien. His earlier and initial
expectations do not diminish or destroy the stevedore’s
maritime lien.
Stevens Technical Servs., Inc. v. United States, 913 F.2d 1521,
1536 (11th Cir. 1990).
-16-