Mullane v. Chambers

United States Court of Appeals
For the First Circuit

No. 02-1791

DAVID E. MULLANE; JOAN-LESLIE MULLANE,

Plaintiffs, Appellees/Cross-Appellants,

ADELE CHAMBERS; JEAN FARESE,

Defendants, Appellants/Cross-Appellees,

FRANK COUSINS, SHERIFF, ESSEX COUNTY SHERIFF'S DEPARTMENT;
M/Y CENT'ANNI, (O.N. 967917) HER ENGINES, TACKLE,
EQUIPMENT AND FURNISHINGS, IN REM.

Defendants.

No. 02-2043

DAVID E. MULLANE; JOAN-LESLIE MULLANE,

Plaintiffs, Appellants,

ADELE CHAMBERS; JEAN FARESE; FRANK COUSINS, SHERIFF, ESSEX
COUNTY SHERIFF'S DEPARTMENT; M/Y CENT'ANNI, (O.N. 967917)
HER ENGINES, TACKLE, EQUIPMENT AND FURNISHINGS, IN REM.

Defendants, Appellees.

APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Robert E. Keeton, U.S. District Judge]
Before

Lynch, Circuit Judge,
Cyr, Senior Circuit Judge,
and Stahl, Senior Circuit Judge.

Paul L. Kenny, with whom Salim Rodriguez Tabit and Broadhurst,
Lakin & Lakin, were on brief for appellants.
Thomas E. Clinton, with whom Robert E. Collins and Clinton &
Muzyka, P.C., were on brief for appellee Mullane.
Robert Ciampitti, Jr., with whom Law Offices of Robert
Ciampitti, Jr., P.C., was on brief for appellee Sheriff's
Department.

June 27, 2003
STAHL, Senior Circuit Judge. This case requires us to

determine whether an unrecorded bill of sale purporting to convey

a federally documented yacht, the M/Y Cent'Anni, is valid as

against a judgment creditor and to review an award of $100,000.00

in punitive damages and an assessment of $43,720.44 in attorneys'

fees. We reverse and remand for further proceedings consistent

with this opinion.

On November 24, 1997, Dr. John J. Walsh, Jr. and Beatrice

M. Walsh conveyed the vessel, the M/Y Lady B., to David and Angela

Murphy, who, on December 8, 1997, documented the conveyance with

the Department of Transportation ("DOT") pursuant to the United

States Vessel Documentation System, 46 U.S.C. §§ 12101-12124 and

31321 (2002), and changed the vessel's name to "Lady B Gone." On

July 2, 1998, Dr. David Mullane, plaintiff-appellee/cross-

appellant, purchased the vessel from the Murphys but failed to

record the bill of sale or conveyance with the DOT until September

2, 1998.

In the meantime, Adele Chambers and Jean Farese,

defendants-appellants/cross-appellees, sought to levy on the vessel

to satisfy two Massachusetts state court writs of execution they

held against the Murphys, whom they believed to still own the

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vessel.1 On August 28, 1998, the Essex County Sheriff's Department

("Sheriff's Department"), defendant-appellee, with the two

executions in hand, seized the vessel, which at this point had the

name Cent'Anni painted on it, at the Seaport Marina in Lynn,

Massachusetts. The Murphys were on the vessel at the time of the

seizure. When asked by the Sheriff's Department whether they owned

the vessel, the Murphys responded that they had conveyed the vessel

back to the previous owners, i.e., the Walshes. The Mullanes were

never mentioned.

The Sheriff's Department was accompanied by a member of

the United States Coast Guard, who verified that the DOT records

showed that Angela and David Murphy were the registered owners. As

we noted, the July 1998 conveyance to the Mullanes (and the change

in the vessel's name from Lady B. Gone to Cent'Anni) was not

recorded with the DOT until September 2, 1998--five days after the

seizure.

On September 4, 1998, the Mullanes filed an amended

complaint2 in admiralty against Chambers, Farese, Sheriff Frank

Cousins, the Sheriff's Department, and the Cent'Anni seeking

1
Chambers and Farese each loaned money to David and Angela
Murphy and to several trucking companies owned by David Murphy.
After the Murphys and the other entities defaulted on the two
loans, on November 1, 1996, Farese obtained a money judgment of
$27,612.00, and on April 22, 1998, Chambers obtained a money
judgment of $70,123.32.
2
The original complaint was filed on September 1, 1998.

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repossession of the vessel and compensatory damages for harm to the

vessel allegedly sustained as a result of the seizure. Pursuant to

Rules D and E, the Mullanes also filed an emergency motion for

immediate arrest of the vessel and a motion to appoint substitute

custodian, which the court allowed. The United States Marshals

Service arrested the vessel, and after the Mullanes posted security

in the amount of $125,000.00, the vessel was released to them.

Chambers and Farese filed an answer and counterclaim on October 5,

1998. In their counterclaim, Chambers and Farese sought to have

the transfer to the Mullanes set aside as a fraudulent transfer to

defraud creditors under the Uniform Fraudulent Transfer Act, Mass.

Gen. Laws ch. 109A, §§ 1-12.

On February 29, 2000, Cousins and the Sheriff's

Department filed a motion for summary judgment, contending that

they had exercised due diligence in determining the record owner of

the vessel by relying upon the DOT records and by confirming

ownership through the Coast Guard. The Mullanes opposed the motion

on the grounds that the arrest was improper under state law and

that the Sheriff's Department was liable for the claimed damages to

the vessel under a bailment theory. While the motion was under

advisement, on March 22, 2000, the Sheriff's Department filed a

motion to enter and inspect the vessel, which the court allowed.

Claiming that the Mullanes had engaged in bad faith conduct by

failing to launch the vessel or provide adequate electrical supply

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as required by the March 22 order, on June 1, 2000, the Department

filed a motion to bar the Mullanes' claims regarding claimed

damages to the mechanical, electrical, and plumbing systems of the

vessel. On June 21, the court allowed the motion for summary

judgment and the motion to bar such claims. The Sheriff's

Department also filed a motion for attorneys' fees, seeking

$43,720.44, an amount equal to the all of the Department's

litigation expenses accrued up to that point in the case. The

court allowed the fee motion on March 9, 2001.

In December 2001, the court conducted a four-day bench

trial, and on June 6, 2002, issued an opinion and order and entered

final judgment. It determined that the Mullanes were bona fide

purchasers of the vessel as of July 2, 1998 and thus took the

vessel free of any interests held by Chambers and Farese. The

court also found that the vessel was damaged while in the Sheriff's

Department's care, but that the Mullanes had failed to prove the

amount of damages, and that, in any event, the Sheriff's Department

was immune from damages. Finally, the court imposed $100,000.00 in

punitive damages against Chambers and Farese, finding that they had

intentionally disregarded the Mullanes' rights to the vessel by

continuing to assert a claim to the vessel after learning of the

Mullanes' unrecorded bill of sale.

Chambers and Farese appeal from the district court's

judgment and award of punitive damages, and the Mullanes cross-

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appeal from the district court's order of attorneys' fees and

costs.3

As an initial matter, Chambers and Farese challenge the

district court's jurisdiction, which we review de novo. See Bull

HN Info. Sys., Inc. v. Hutson, 229 F.3d 321, 328 (1st Cir. 2000).

The amended complaint invoked the district court's admiralty

jurisdiction pursuant to 28 U.S.C. § 1333(1). Subsection 1333(1),

28 U.S.C. § 1333(1), grants to federal "district courts . . .

original jurisdiction, exclusive of the courts of the States, of:

(1) Any civil case of admiralty or maritime jurisdiction, saving to

suitors in all cases all other remedies to which they are otherwise

entitled."4 It is beyond dispute that admiralty jurisdiction

3
In their appellate brief, the Mullanes claimed to appeal the
district court's rulings in favor of the Sheriff's Department,
including its motion for summary judgment and to bar claims. It
appears that we lack jurisdiction to review this claim, as the
Mullanes failed to file a timely notice of appeal--the Mullanes
filed their notice of appeal on August 16, 2002, seventy-one days
after the judgment became final on June 6, 2002. Fed. R. App. P.
4(a)(1) (providing that the notice of appeal must be filed within
30 days after the judgment is entered). We need not decide this
issue since, at oral argument, the Mullanes' counsel made clear
that they were not pursuing any claims against Cousins or the
Department, but rather were appealing only the district court's
award of attorneys' fees.
4
While the first clause of 1333(1) grants to the district
court original subject matter jurisdiction over admiralty and
maritime cases, the "saving clause" reserves the right of a common
law remedy to be brought in state court or on the law side of the
federal district court. Thus, where there is a remedy available
both in admiralty and at common law, a claimant may (1) proceed in
admiralty in a federal district court or (2) commence a common law

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extends to possessory and petitory actions. Ward v. Peck, 59 U.S.

(18 How.) 267, 267 (1855) ("In this country . . . the ancient

jurisdiction over petitory suits or causes of property has been

retained [by courts of admiralty]."); Matsuda v. Wada, 128 F. Supp.

2d 659, 669 (D. Haw. 2000) (collecting cases); see also 1 S.F.

Friedell, Benedict on Admiralty § 201, at 13-3 (7th ed. 2002). A

possessory action is one in which a party seeks to recover

possession of a vessel of which she has been wrongfully deprived.

Gallagher v. Unenrolled M/V River Queen, 475 F.2d 117, 119 (5th

Cir. 1973); Friedell, supra, § 201, at 13-2. A petitory suit, on

the other hand, is one to assert legal title to a vessel. Jones v.

One Fifty Foot Gulfstar Motor Sailing Yacht, 625 F.2d 44, 47 (5th

Cir. 1980); Matsuda, 128 F. Supp. 2d at 669; Friedell, supra, §

201, at 13-1. The procedure to be followed in such cases is set

out in Rule D of the Supplemental Rules of the Federal Rules of

Civil Procedure, which provides, in relevant part, "In all actions

for possession, partition, and to try title . . . with respect to

a vessel, . . . the process shall be by a warrant of arrest of the

vessel."

Here, the Mullanes asserted legal title and sought

immediate repossession of their vessel, which allegedly had been

wrongfully taken by Chambers, Farese, and Cousins. And pursuant to

action, either in state court or in a federal district court under
diversity. 14A C. Wright, A. Miller, & E. Cooper, Federal Practice
and Procedure § 3672, at 303-10 (3d ed. 1998) (collecting cases).

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Rule D, they successfully moved the district court to arrest the

vessel. The district court, therefore, had original subject matter

jurisdiction under 28 U.S.C. § 1333(1).

Chambers and Farese rely upon a line of cases holding

that actions seeking original possession of the vessel premised

upon breach of a purchase agreement for the sale of a vessel fall

outside admiralty jurisdiction. See, e.g., Richard Bertram & Co.

v. The Yacht, Wanda, 447 F.2d 966, 967 (5th Cir. 1971). Chamber's

and Farese's reliance on those cases is misplaced. Those cases

stand for the "well established general rule that admiralty will

not entertain suits where the substantive rights of the parties

flow from a contract to sell or construct a vessel." Jones, 625

F.2d at 47. By contradistinction, the Mullanes had no contractual

relationship with Chambers and Farese and alleged that they held

legal title to the vessel and sought immediate repossession of and

damages for harm caused to their vessel. Cf. id.

Chambers and Farese also contend that the court lacked

admiralty jurisdiction because the vessel no longer had status as

a "vessel," as it was "out of service" at the Windward Yacht Yard

in Newburyport, Massachusetts, and thus "not operating commercially

or otherwise on a maritime venture or purpose." Chambers and

Farese appear to be invoking the "dead ship doctrine," under which

a ship loses its status as a vessel when its "function is so

changed that it has no further navigation function." Goodman v.

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1973 26 Foot Trojan Vessel, Ark. Registration No. AR1439SN, 859

F.2d 71, 73 (8th Cir. 1988); see also Dluhos v. Floating and

Abandoned Vessel, Known as New York, 162 F.3d 63, 71 (2d Cir.

1998). Simply taking a vessel temporarily out of service, however,

does not render it a dead ship: as the Supreme Court has

instructed, "it is generally accepted that a vessel does not cease

to be a vessel when she is not voyaging, but is at anchor, berthed,

or at dockside." Chandris, Inc. v. Latsis, 515 U.S. 347, 373

(1995) (internal quotation marks omitted). Chambers and Farese

offer no authority for the proposition that the duration and

location of the Cent'Anni's storage takes it out of admiralty

jurisdiction. In any event, the Sheriff's Department seized the

vessel at the Seaport Marina in Lynn, Massachusetts; only later was

the vessel moved to Newburyport, where it was temporarily taken out

of navigation for security purposes.

III

We now turn to the merits. First, we address Chambers'

and Farese's appeal of the district court's ruling that the

Mullanes' unrecorded bill of sale was valid against them. We then

turn to their challenge to the award of $100,000.00 in punitive

damages. Finally, we address the Mullanes' appeal of the district

court's award of $43,720.44 in attorneys' fees.

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A

Chambers and Farese appeal on the theory that the

unrecorded conveyance is invalid as against them under the plain

language of 46 U.S.C. § 31321(a)(1).5 Before determining this

issue, however, we first address the Mullanes' claim that the levy

was not properly issued under state law.

After finding that the Sheriff's Department was required

to comply with Mass. Gen. Laws ch. 223, § 44 (2000)6 before seizing

the vessel, the district court held that the seizure "was contrary

to state law" because "[n]o order or affidavit was attached to the

execution, nor was any writ of attachment filed with th[e]

5
At oral argument, the Mullanes argued that Chambers and
Farese were barred from enforcing their state court judgments by
levy of execution and instead were required to file an in rem
action in admiralty. This is not the law. A state court can
enforce its judgment by levy on a vessel owned by the judgment
debtor under the "saving to suitors" clause. Rounds v. Cloverport
Foundry & Mach. Co., 237 U.S. 303 (1915); Friedell, supra, § 125,
at 8-17; G. Gilmore & C.L. Black, Jr., The Law of Admiralty 38 (2d
ed. 1975).
6
Mass. Gen. Laws ch. 223, § 44 provides in full:

No ship or vessel shall be attached in a civil
action unless the plaintiff or a person on his
behalf makes affidavit and proves to the
satisfaction of a justice of a court that he
has a good claim and reasonable expectation of
recovering an amount, exclusive of all costs,
equal at least to one-third of the amount of
damages claimed, which affidavit shall be
annexed to the writ of attachment, and the
certificate of the justice that he is
satisfied that the same is true shall be
annexed to the writ of attachment or endorsed
thereon.

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[district] court." We disagree. Section 44 simply does not apply

to levies of execution: Section 44 applies only to prejudgment

attachments. A prejudgment attachment is a process issued by the

court before judgment has been rendered, authorizing the seizure of

the real and personal property of the defendant to be held as

security for any judgment the plaintiff may recover in the action.

Such attachments are governed by Mass. Gen. Laws ch. 223, §§ 42-59

and Mass. R. Civ. P. 4.1.

In contrast, a writ of execution is the process by which

the judgment creditor satisfies a money judgment against the

judgment debtor. Mass. R. Civ. P. 69; Miller v. London, 1 N.E.2d

198, 200 (Mass. 1936). It constitutes a court order to a sheriff

or other authorized officer to seize and sell the "property, real

or personal, of the debtor, and in some cases in default of

property to take the body of the debtor and commit him to jail."

Miller, 1 N.E.2d at 200. Executions, in general, are governed by

Mass. Gen. Laws ch. 235, §§ 3-23 and Mass. R. Civ. P. 69, and

levies of executions on personal property are governed by Mass.

Gen. Laws. ch. 235, §§ 28-45. Other than pointing to the

requirements of Mass. Gen. Laws. ch. 223, § 44, the Mullanes rely

on no other statute or case law, and we found none, that requires

the Sheriff's Department to do more than what they did in this

case. In short the levy of the vessel was proper, and thus

Chambers and Farese perfected their interest in the vessel by

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taking possession of it before the Mullanes had recorded their

prior purchase agreement.

This brings us to the central issue of the case: whether

the recording statute relating to federally documented vessels, 46

U.S.C. § 31321, renders an unrecorded bill of sale or conveyance

invalid as against a seller's judgment creditors who levy the

vessel without notice. Subsection 31321(a)(1), 46 U.S.C. §

31321(a)(1), states:

A bill of sale, conveyance, mortgage,
assignment, or related instrument, whenever
made, that includes any part of a documented
vessel or a vessel for which an application
for documentation is filed, must be filed with
the Secretary of Transportation to be valid,
to the extent the vessel is involved, against
any person except–

(A) the grantor, mortgagor, or assignor;

(B) the heir or devisee of the grantor,
mortgagor, or assignor; and

(emphasis added). Despite the unambiguous language of the statute,

the Mullanes essentially ask that we rewrite it to read, "against

any person excluding judgment creditors." Certainly an argument

can be made that the drafters intended to protect only subsequent

purchasers, mortgagees, and possibly creditors who had something in

the nature of a specific lien on the vessel and to exclude other

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general creditors of the vendor, like Chambers and Farese.

Nonetheless, strictly as a matter of policy, Congress could have

decided also to protect general creditors. See, e.g., Graeber v.

Hickel Inv. Co., 803 P.2d 871 (Ala. 1990) (discussing policy

reasons for protecting judgment/execution creditors who rely on

title records before levying). In fact, as we demonstrate below,

Congress has excluded judgment creditors from the protections of

other recording statutes. Here, we are faced with plain and

unambiguous language that extends the protections of the recording

statute to "any person," and like other courts that have considered

the issue, we find no extraordinary circumstances sufficient to

require us to look beyond its plain meaning. The parties in this

controversy failed to brief the issue in any helpful manner:

neither brief provides developed argumentation or cites to any case

law supporting the respective positions, even though such case law

is available and listed in the annotations to the statute. And the

subsection is never mentioned in the district court's opinion. In

sum, given the plain and unambiguous language of the statute, we

hold that the Mullanes' unrecorded bill of sale is invalid against

Chambers and Farese unless they had actual notice.

In construing the terms of a statute, we start with the

statutory text, according it its ordinary meaning by reference to

the "specific context in which that language is used, and the

broader context of the statute as a whole." Robinson v. Shell Oil

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Co., 519 U.S. 337, 341 (1997); see also In re Bajgar, 104 F.3d 495,

497 (1st Cir. 1997). When the statutory language is plain and

unambiguous, "judicial inquiry is complete, except in rare and

exceptional circumstances." Rubin v. United States, 449 U.S. 424,

430 (1981) (internal quotations and citations omitted); see also

Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 (2002); Pritzker v.

Yari, 42 F.3d 53, 67-68 (1st Cir. 1994) ("We will not depart from,

or otherwise embellish, the language of a statute absent either

undeniable textual ambiguity or some other extraordinary

consideration, such as the prospect of yielding a patently absurd

result.").7 This is not one of those cases.

There is nothing ambiguous about the term "any person."

Congress chose the broadest possible term to describe the third

parties it intended to protect, and did not qualify the term in any

way. The statute as written thus extends protection to any

creditors, including judgment creditors like Chambers and Farese,

who rely upon the record title of the vessel. Several state

supreme courts have applied the statute accordingly. Graeber v.

Hickel Inv. Co., 803 P.2d 871 (Ala. 1990); Benner v. Scandinavian

7
As instructed by the House Report to the 1998 Act to which
subsection 31321(a)(1) was a part, "the literal language of the
statute should control the disposition of the cases. There is no
mandate in logic or in case law for reliance on legislative history
to reach a result contrary to the plain meaning of the statute,
particularly where that plain meaning is in no way unreasonable."
H.R. Rep. No. 100-918, at 16 (1988), reprinted in 1988 U.S.C.C.A.N.
6104, 6109.

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Am. Bank, 131 P. 1149 (Wash. 1913); Secrist v. German Ins. Co., 19

Ohio St. 476 (1869); Potter v. Irish, 76 Mass. 416 (1858); see also

Ellis v. Rickett, 164 N.Y.S. 243 (N.Y. App. Div. 1917) (citing

Parker Mills v. Jacot, 21 N.Y. Super. Ct. 161 (1861)); cf.

Lewistown Propane Co. v. Ford, 308 Mont. 243, 245-47 (2002)

(construing similar provision of Federal Aviation Act as protecting

judgment creditors); Bank of Honolulu v. Davids, 709 P.2d 613, 619

(Haw. Ct. App. 1985) (same); Marsden v. S. Flight Serv., 227 F.

Supp. 411, 415, 418-19 (M.D.N.C. 1961) (same). These courts

reasoned that Congress intended to protect any third party,

including attachment or judgment creditors, who relies upon the

title records and found no evidence that Congress intended to

exclude any class of persons from the term "any person." Neither

have we.

This reading of the subsection is reinforced when

considering its remarkable breadth when compared with the language

Congress has used in other recording statutes. See, e.g., 7 U.S.C.

§ 2531(d) ("[C]onveyance . . . shall be void as against any

subsequent purchaser or mortgagee for a valuable consideration,

without notice, unless it . . . is filed for recording in the Plant

Variety Protection Office . . . .") (emphasis added); 17 U.S.C. §

1320(d) ("[C]onveyance . . . shall be void as against any

subsequent purchaser or mortgagee for a valuable consideration,

unless it is recorded in the Office of the Administrator . . . .")

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(emphasis added); 35 U.S.C. § 261 ("[C]onveyance shall be void as

against any subsequent purchaser or mortgagee for a valuable

consideration, without notice, unless it is recorded in the Patent

and Trademark Office . . . ."). If Congress meant to exclude a

particular class of persons from the protection of § 31321(a)(1),

it certainly knew how and could have done so clearly and

explicitly.

Our acceptance of the term "any person" at face value is

further buttressed by the overall purpose of the subsection. The

language of subsection 31321(a)(1), like that of other recording

statutes, reveals a legislative intent to protect third parties who

rely upon the title records of the vessel. Like other creditors,

judgment creditors rely upon these documents at expense and risk.

If a wrongful levy is made on a vessel, which is then sold at a

sheriff's sale, they could be held liable for trespass, conversion,

and damages, and would be responsible for their own legal fees in

defending the levy against unrecorded interests. This case

presents an apt illustration. In addition to being responsible for

their own legal fees in defending the levy, Chambers and Farese

were held responsible for $100,000.00 in punitive damages for

pressing their claim to the vessel. Furthermore, as a unanimous

Alaska Supreme Court reasoned, an attaching or judgment creditor

could "be injured by their reliance on the erroneous [title]

record[: the creditor] might be liable to [the holder of the

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unrecorded bill of sale] for damages resulting from the sinking of

the vessel or for its lost use even though [the creditor] seized

the vessel in reliance on the record of ownership exactly as it

should have." Graeber, 803 P.2d at 873.

It is also worth noting that, despite the case law

extending protection to attachment and judgment creditors and the

use of more specific terms in other recording statutes, see, e.g.,

35 U.S.C. § 261 ("[C]onveyance shall be void as against any

subsequent purchaser or mortgagee for a valuable consideration,

without notice, unless it is recorded . . . ."), Congress has twice

reenacted the recording statute and retained the term "any person"

to describe the third parties it intended to protect.8

We recognize that two state courts have reached a

different conclusion, holding that the statute was intended to

protect only subsequent purchasers and mortgagees. These courts

relied on the general common law rule that the rights of an

attaching or judgment creditor are no greater than those held by

the debtor; in other words, the creditor's rights are limited to

8
The recording statute traces its roots back to the Vessel
Sales and Mortgage Recording Act of July 29, 1850, ch. 27, § 1, 9
Stat. 440. The Act of 1850 was passed, in part, to establish a
federal clearing house of recorded instruments affecting title to
federally documented vessels so that third parties had one place to
look to for reliable information as to what claims, liens, or other
encumbrances exist against the vessel. White's Bank v. Smith, 74
U.S. (7 Wall.) 646, 651 (1868). The recording statute was
reenacted in 1920, Ship Mortgage Act of 1920, ch. 250, § 30, 41
Stat. 1000, and again in 1988, Pub. L. No. 100-710, 102 Stat. 4741,
virtually unchanged from its original form.

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the debtor's actual title in the property. Fort Pitt Nat'l Bank v.

Williams, 9 So. 117, 118-19 (La. 1891); Richardson v. Montgomery,

49 Pa. 203, 206-10 (1865). The Williams court further reasoned

that the vessel recording statute was passed "simply to protect

persons who have dealt on the faith of the recorded title, and as

to whom it would be fraud to give effect to unrecorded titles to

their detriment," a group which would not include judgment

creditors. 9 So. at 119.

Simply relying upon the common law principle of "first in

time, first in right" is unpersuasive. At common law, without the

benefit of recording statutes, this same principle applied to

subsequent purchasers and mortgagees. 5 H.T. Tiffany & B. Jones,

Tiffany Real Prop. Ch. 34, § 1257 (2002). If A conveyed property

to B and then made an identical conveyance to C, B prevailed over

C on the theory that A no longer had any interest to convey.

Taking the argument to its logical terminus then would lead to the

unpalatable result that subsequent purchasers would not be

protected by the vessel statute on the ground that when they

purchased the vessel, the vendor no longer had an interest to sell.

But the recording act changed this result. Moreover, while it is

ordinarily true that the rights of an attaching or judgment

creditor do not have priority over a prior unrecorded conveyance,

many states have abrogated this principle by protecting creditor's

rights through a recording statute. See, e.g., Muller v.

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Waldschmidt, 185 B.R. 522, 554-55 (Bankr. M.D. Tenn. 1995)

(construing Tenn. Code Ann. § 66-26-103 as protecting judgment

creditors); Whitaker v. Hill, 179 S.W. 539 (Tex. App. 1915)

(holding that former version of Tex. Property Code Ann. § 13.001

changed the common law rule by protecting execution creditors); see

also Sky Harbor, Inc. v. Jenner, 435 P.2d 894, 896-97 (Colo. 1968);

Hillside Coop. Bank v. Cavanaugh, 122 N.E. 187, 189 (Mass. 1919);

Blum v. Schwartz, 20 S.W. 54, 55-56 (Tex. 1892); Hitz v. Nat'l

Metro. Bank, 111 U.S. 722, 728 (1884). And to say that judgment

creditors who rely "on the faith of the recorded title" when

levying their execution do not do so "to their detriment" is

baseless. As we said, judgment creditors may rely upon title

records at the risk of being held liable for trespass, conversion,

and any damage sustained to the vessel during a wrongful levy.

Most important, these courts point to no textual basis

for saying that subsection 31321(a)(1) applies to purchasers and

mortgagees alone. Certainly Congress is not required to list every

"person" it had in mind when it says that it is protecting "any

person." In short, without some indication from Congress that it

intended to exclude judgment creditors, we will not engraft such a

policy limitation on the statute. As instructed by the Supreme

Court, "courts must presume that a legislature says in a statute

what it means and means in a statute what it says there. When the

words of a statute are unambiguous, then, this first canon is also

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the last: 'judicial inquiry is complete.'" Conn. Nat'l Bank v.

Germain, 503 U.S. 249, 253-54 (1992) (quoting Rubin, 449 U.S. at

430). Because subsection 31321(a)(1) is explicit as to whom it

protects, our inquiry is at an end.9

Chambers and Farese are not yet out of the deep,

however. The recording statute protects only those persons having

no actual notice of the unrecorded conveyance at the time their

interests attached. 42 U.S.C. § 31321(a)(1)(C). The district

court found that Chambers and Farese had notice of the unrecorded

conveyance either at the time of the seizure or soon thereafter.

The crucial question, however, is whether they had actual notice

either before or at the time of the levy. It is not sufficient

that they learned of the unrecorded conveyance after they levied

upon the vessel. Because the district court did not apply

subsection 31321(a)(1) and did not make a factual finding as to

whether Chambers and Farese had actual notice at the time of the

levy, we remand the case for further proceedings consistent with

this opinion. If Chambers and Farese did not have actual notice,

then the Mullanes' complaint against them should be dismissed, and

their seizure of the vessel was valid to enforce a judgment debt

against the Murphys. Because the vessel has now been released

9
We recognize that in many instances, recording statutes like
this one prove to be a harsh reality for purchasers like the
Mullanes, but the Mullanes had a means to protect their interests:
they could have filed their bill of sale with the Secretary
pursuant to subsection 31321(1)(1). This they failed to do.

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under what would in those circumstances be an erroneous order, we

leave it to the district court on remand to sort through the

remaining issues.

We make one final note. If the district court finds that

Chambers and Farese had actual notice of the transfer, there

remains the issue of whether the transfer was fraudulent as defined

by section 5 of the Uniform Fraudulent Transfer Act, Mass. Gen.

Laws. ch. 109A, § 5, which would allow Chambers and Farese to avoid

it under Mass. Gen. Laws. ch. 109A, § 8. Despite being raised in

Chambers' and Farese's counterclaim, the district court never cited

to or analyzed Chapter 109A, presumably because of its holding that

the validity of the transfer was governed by federal law, not state

law. See Mullane, 206 F. Supp. 2d at 109-10. However, we agree

with Chambers and Farese that state law governs the validity of the

transfer and that the district court should have considered whether

the transfer was avoidable under Mass. Gen. Laws. ch. 109A, § 8,

and/or whether the Mullanes had any defenses under Mass. Gen. Laws.

ch. 109A, § 9. See Chase Manhattan Fin. Servs. v. McMillian, 896

F.2d 452, 460 (10th Cir. 1990) (holding that state law, not

admiralty, governs the validity of transfers of title); St. Paul

Fire & Marine Ins. Co. v. Vest Transp. Co., 666 F.2d 932, 938 (5th

Cir. 1982); Jones, 625 F.2d at 47-49 (applying Florida law to

determine title); S.C. Loveland, Inc. v. East West Towing, Inc.,

608 F.2d 160, 164 (5th Cir. 1979); Gilmore & Black, supra, at 26 &

-22-
n.90 (noting that contracts for the sale of a vessel are non-

maritime); cf. Stewart & Co. v. Rivara, 274 U.S. 614, 618 (1927).

We recognize that Mass. Gen. Laws ch. 109A, §9 provides

several defenses to "a person who took in good-faith," which vary

depending on whether the person had paid "reasonably equivalent

value" for the property, and that the district court found that Dr.

Mullane was a bona fide purchaser for value without notice of any

adverse claims to the vessel and thus concluded that whether the

underlying transaction was fraudulent was immaterial. In making

this ruling, however, the court failed to consider the specific

sections of or the case law interpreting Chapter 109A and instead

patched together definitions and elements from the Massachusetts

Uniform Commercial Code in determining whether a defense to a

fraudulent transfer existed. It also made its ruling without ever

determining whether the underlying transfer to Mullane was

fraudulent under Mass. Gen. Laws. ch. 109A, § 5. We cannot say

from the district court's opinion whether its use of a hodgepodge

of definitions and standards and its failure to make an initial

determination of whether the transfer was, in fact, fraudulent made

any difference in this case. We believe that it is in the

interests of all concerned to have the entire fraudulent transfer

claim decided by the district court in the first instance. We

therefore vacate the district court's ruling on this issue and

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remand the case to the district court so that it may ascertain

whether the sale was a fraudulent transfer.

Chambers and Farese also appeal the district court's

award of $100,000.00 in punitive damages. Even though the

plaintiffs did not seek punitive damages, the court sua sponte

awarded them, reasoning that

defendants' conduct in this case constituted
an intentional and conscious disregard for the
rights of plaintiffs. When the defendants had
the vessel seized they were either aware, or
soon became aware, that [Murphy] had sold his
ownership interest in the vessel to Dr.
Mullane. They nevertheless continued to
assert a right to the vessel in satisfaction
of David Murphy's debt, and by that course of
action deprived Dr. Mullane of his rights with
respect to possession and use of the vessel.

Mullane v. Chambers, 206 F. Supp. 2d 105, 119 (D. Mass. 2002).

Essentially, the court awarded punitive damages merely because

Chambers and Farese continued to assert their legal claims to the

vessel after the Mullanes finally presented their bill of sale.

Given our holding above, there is no longer a basis for the award.

But it is important to note that we would have reversed even if we

had found in favor of the Mullanes. It is true that punitive

damages are available in admiralty "where defendant's intentional

or wanton and reckless conduct amounted to a conscious disregard of

the rights of others." CEH, Inc. v. F/V Seafarer, 70 F.3d 694, 699

(1st Cir. 1995) (collecting cases). However, it is equally true

-24-
that punitive damages are "rarely imposed." Id. It should go

without saying that simply presenting a defense in a lawsuit is not

the type of conduct that warrants punitive damages. This was not

a case by the Mullanes of abuse of process or malicious

prosecution, nor was there any finding of a violation of Rule 11 of

the Federal Rules of Civil Procedure. Tellingly, at oral argument

the Mullanes agreed that there was nothing in the record to support

punitive damages and that they could not defend such an award.

Thus, we reverse the award of $100,000.00 in punitive damages.

Finally, we turn to the Mullanes' appeal of the district

court's award of attorneys' fees to the Sheriff's Department.10

There is a nagging issue of jurisdiction since the Mullanes filed

their notice of appeal more than thirty days after the June 6 final

judgment was entered. Fed. R. App. P. 4(a)(1) (providing that

notice of appeal must be filed within 30 days after the judgment or

order has been entered); id. 4(a)(7) ("A judgment or order is

entered for purposes of this Rule 4(a) when it is entered in

compliance with Rules 58 and 79(a) of the Federal Rules of Civil

Procedure.").11

10
Chambers and Farese raise other sundry arguments and
challenges. We have considered them and find that they are without
merit and not deserving discussion.
11
Rule 4(a)(7) was amended in 2000 to read,

-25-
We think it helpful to sketch the procedural background.

After the district court granted the Sheriff's Department motion to

bar claims concerning damages to the mechanical, electrical, and

plumbing systems on the ground that the Mullanes had engaged in bad

faith conduct to prevent the Sheriff's Department from mounting a

defense, the Department filed a motion for attorneys' fees under

Rule 54(d)(2) of the Federal Rules of Civil Procedure, invoking the

court's inherent powers to sanction the Mullanes. On March 9,

2001, the court issued an opinion and order, in which it awarded

attorneys' fees, made a presumptive finding that a reasonable fee

award was $43,720.44 (the amount of the entire litigation up to

(A) A judgment or order is entered for
purposes of this Rule 4(a):

(i) if Federal Rule of Civil Procedure
58(a)(1) does not require a separate document,
when the judgment or order is entered in the
civil docket under Federal Rule of Civil
Procedure 79(a); or

(ii) if Federal Rule of Civil Procedure
58(a)(1) requires a separate document, when
the judgment or order is entered in the civil
docket under Federal Rule of Civil Procedure
79(a) and when the earlier of these events
occurs:

• the judgment or order is set forth on a
separate document, or

• 150 days have run from entry of the judgment
or order in the civil docket under Federal
Rule of Civil Procedure 79(a).

The amendments became effective December 1, 2002 and thus have no
bearing on this appeal.

-26-
that point), and allowed each party five weeks to file a motion for

a modification. The order also provided that if no party filed

such a motion, the clerk was "authorized to make an Order awarding

attorneys' fees in the amount of the court's presumptive finding,

together with taxable costs." The court's opinion and order were

entered on the docket on March 9. On April 17, 2001, the Mullanes

filed a motion to modify, which the court denied at a case

management conference on July 31, 2001. Although the clerk made a

notation of the court's denial on the docket, it did not issue a

separate order or judgment.

On the first day of trial, on December 11, 2001, the

Sheriff's Department filed a motion for final judgment as to less

than all parties under Fed. R. Civ. P. 54(b) on the order granting

its motions for summary judgment, to bar claims, and for attorneys'

fees. The Mullanes filed an opposition. Finally, on June 6, 2002,

the court issued an opinion and order, in which it, among other

things, ordered the Sheriff's Department's Rule 54(b) motion to be

dismissed as moot and ordered the clerk to enter a final judgment

on a separate document as follows: "For the reasons explained in

the Opinion and Order of June 6, 2002, it is ORDERED, Plaintiffs

are hereby declared and adjudged to be the true owners of the

Motorized Yacht Cent'Anni. Judgment for the plaintiffs in the

amount of $100,000.00, plus costs." The clerk entered the final

judgment accordingly on June 6.

-27-
On July 18, 2002, after the time for filing a notice of

appeal had expired, the Mullanes filed a motion requesting a

separate entry of judgment on the orders granting the Sheriff's

Department motions for summary judgment and for attorneys' fees,

or, in the alternative, for leave to file a notice of appeal late.

In a memorandum and order issued on August 6, 2002, the court

denied the motion. According to the court, taking together the

orders of June 21, 2000 (allowing in part motion for summary

judgment), March 9, 2001 (allowing motion for attorneys' fees), and

June 6 (ruling in favor of the Sheriff's Department on immunity

grounds), established that the Mullanes "won nothing . . . against

the [Sheriff's Department] and that the [Sheriff's Department] won

attorneys' fees of $43,720.44." The court concluded that "[w]hen

the Final Judgment of June 6, 2002 closed the case, the previous

interlocutory orders in favor of the sheriff in some respects and

against him in other became final because the case was declared

closed by a Final Judgment." We disagree.

Our starting point is Rule 54(d). Rule 54(d)(A)

provides, in part, that upon granting a motion for attorneys' fees,

"[t]he court shall find the facts and state its conclusions of law

as provided in Rule 52(a), and a judgment shall be set forth in a

separate document as provided in Rule 58." Fed. R. Civ. P.

-28-
54(d)(2)(C) (emphasis added). Former Rule 5812 required that

"[e]very judgment . . . be set forth on a separate document" and

provided that a "judgment is effective only when so set forth and

when entered as provided in Rule 79(a)." The time then for filing

a notice of appeal on the order awarding attorneys' fees did not

start to run unless and until a separate judgment was entered.

See, e.g., Green v. Nevers, 196 F.3d 627, 630-31 (6th Cir. 1999).

Although Rule 58 does not require that a separate

judgment use any particular words or form of words, nonetheless, we

interpret Rule 58 fairly strictly; as the Supreme Court has

instructed, Rule 58 "must be mechanically applied to avoid new

uncertainties as to the date on which a judgment is entered."

United States v. Indrelunas, 411 U.S. 216, 222 (1973). In general,

the judgment should be self-sufficient, complete, and describe the

parties and the relief to which the party is entitled. Willhauck

v. Halpin, 919 F.2d 788, 792-794 (1st Cir. 1990); Reytblatt v.

Denton, 812 F.2d 1042, 1043-44 (7th Cir. 1987) (collecting cases);

Claybrook Drilling Co. v. Divanco, Inc., 336 F.2d 697, 699 (10th

Cir. 1964); 11 C. Wright, A. Miller, & E. Cooper, Federal Practice

and Procedure § 2785, at 22 (2d ed. 1995) ("[T]he separate judgment

12
Rule 58 was amended in 2002 to read, in relevant part, "Every
judgment and amended judgment must be set forth on a separate
document, but a separate document is not required for an order
disposing of a motion: . . . (C) for attorney fees under Rule 54."
The 2000 amendments became effective December 1, 2002 and thus are
not relevant to our decision.

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. . . should be self-sufficient and should not merely incorporate