David Middleton v. M/V Glory Sky I ( 2014 )

Case: 13-13508 Date Filed: 05/28/2014 Page: 1 of 8
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-13508
________________________
D.C. Docket No. 1:13-cv-21588-JLK
DAVID MIDDLETON,
d.b.a. Foodservice Specialty Marketing,
a.k.a. Specialty Marketing,
Plaintiff-Counter Defendant-
Appellant,
versus
M/V GLORY SKY I,
a 219.8’ cargo vessel, VIN 7523996 Call Sign 3EKX4,
flying the Panamanian flag, in rem,
Defendant-Counter Claimant-
Appellee,
FOFO TRANSPORT INC.,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(May 28, 2014)
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Before HULL, BLACK and FARRIS, * Circuit Judges.
PER CURIAM:
This admiralty case arises from the alleged maritime conversion of 3,800
fifty-pound bags of black beans owned by David Middleton. The district court,
adopting a magistrate judge’s report and recommendation, concluded that
Middleton’s allegations did not establish a tort on navigable water and that the
court therefore lacked subject-matter jurisdiction over Middleton’s claims. Upon
review and with the benefit of oral argument, we affirm the district court’s
dismissal.
I. BACKGROUND 1
The essential facts of the case are straightforward. In August 2011, Emile
Destin agreed to store 5,500 fifty-pound bags of black beans owned by Middleton
at a warehouse Destin operated through Fo Fo Import-Export Retail, Inc. (Fo Fo
Import) in Hialeah, Florida. After a series of authorized distributions from the
warehouse, 3,800 bags remained. Then, in either October or early November
2011, Middleton learned that Destin had removed the remaining 3,800 bags and
*
Honorable Jerome Farris, United States Circuit Judge for the Ninth Circuit, sitting by
designation.
1
Because the district court resolved Middleton’s claims under the assumption that his
allegations are true, we will likewise assume the truth of Middleton’s allegations in our recitation
of the facts and in our ensuing analysis.
2
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intended to transport them for sale in Haiti. 2 Destin had taken the beans from the
warehouse to the M/V GLORY SKY I, a ship Destin operated through Fo Fo
Transport, Inc. (Fo Fo Transport), where it was docked on the Miami River.
Middleton met Destin aboard the GLORY SKY on November 7, 2011, and
demanded he return the beans, but Destin refused. Ultimately, the beans were
shipped to Haiti and sold to an undisclosed third party without compensation to
Middleton.
On June 26, 2012, Middleton sued Fo Fo Import and Destin in state court for
breach of contract and civil theft, obtaining a default judgment of $228,000. On
May 3, 2013, Middleton commenced the instant action in federal court against the
GLORY SKY in rem. Middleton sought and obtained arrest of the GLORY SKY
pursuant to Rule C(3)(a)(i) of the Supplemental Rules for Admiralty or Maritime
Claims and Asset Forfeiture. The GLORY SKY responded with an emergency
motion for a hearing requiring Middleton to show cause why the court should not
vacate the arrest of the GLORY SKY for lack of subject-matter jurisdiction. On
July 14, 2013, Middleton filed an amended complaint. The magistrate judge
scheduled a hearing for July 19, 2013, but, before the hearing commenced and
2
Middleton’s operative complaint alleged that a Fo Fo Import employee told him they
had been taken on or about October 20, 2011, while other evidence he submitted indicates that he
learned the beans had been taken through a series of e-mails on November 3-4, 2011. For our
purposes, it makes no difference whether he learned the beans had been removed on October 20
or November 3.
3
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without taking any evidence, determined that even assuming Middleton could
prove all of his allegations, no maritime tort occurred. As a result, no admiralty
jurisdiction existed. The district court eventually adopted the magistrate judge’s
reasoning, vacated the arrest of the GLORY SKY, and dismissed Middleton’s
claim for lack of subject matter-jurisdiction. Middleton filed a timely appeal. 3
II. STANDARD OF REVIEW
The magistrate judge issued the report and recommendation that formed the
basis of the district court’s dismissal of Middleton’s claims following a show-cause
hearing. However, the magistrate judge received no evidence and performed an
analysis functionally equivalent to review of a motion to dismiss for lack of
subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1).
Accordingly, we will treat the district court’s order as a dismissal under Rule
12(b)(1) and review it de novo. See Aqua Log, Inc. v. Lost & Abandoned Pre-Cut
Logs & Rafts of Logs, 709 F.3d 1055, 1058 (11th Cir. 2013).
III. DISCUSSION
“‘[A] party seeking to invoke federal admiralty jurisdiction . . . over a tort
claim must satisfy conditions both of location and of connection with maritime
activity.’” Doe v. Celebrity Cruises, Inc., 394 F.3d 891, 900 (11th Cir. 2004)
3
On December 5, 2013, this Court entered an order denying Appellees’ motion to
dismiss for lack of appellate jurisdiction and holding that the district court’s order of dismissal is
immediately appealable under 28 U.S.C. §§ 1291 and 1292(a)(3).
4
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(quoting Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S.
527, 534, 115 S. Ct. 1043, 1048 (1995)). The condition of location, which asks
whether the alleged tort occurred “on navigable water,” is at issue in this appeal.
See Broughton v. Fla. Int’l Underwriters, Inc., 139 F.3d 861, 865 (11th Cir. 1998).
In the instant case, Middleton alleged the tort of conversion. “In the
admiralty context, as elsewhere, conversion is simply an intentional and wrongful
exercise of dominion or control over a chattel, which seriously interferes with the
owner’s rights in the chattel.” 4 Evergreen Marine Corp. v. Six Consignments of
Frozen Scallops, 4 F.3d 90, 94 (1st Cir. 1993) (emphasis removed); see also
Restatement (Second) of Torts § 222A (1965). In this context, admiralty
jurisdiction “depends on whether the [converted] chattel was ‘on navigable waters’
at the time of the alleged wrongful exercise of dominion.” Evergreen, 4 F.3d at 94.
Destin removed Middleton’s beans from the warehouse in Hialeah without
permission and with the intent to take them to Haiti and sell them. This act
constituted a conversion because it was an unauthorized, intentional, and
substantial interference with Middleton’s ownership of the beans. See id. Because
no other acts were necessary to satisfy the elements of a conversion, Destin’s
4
The question whether admiralty jurisdiction applies to Middleton’s claim implicates
choice-of-law questions. See Aqua Log, 709 F.3d at 1061 (“When admiralty jurisdiction is
invoked, a uniform body of federal maritime law applies.”). However, admiralty law
occasionally analogizes and refers to principles of state law, see In re Dearborn Marine Serv.,
Inc., 499 F.2d 263, 277 n.27 (5th Cir. 1974), and the parties have not indicated, nor are we aware
of, any differences between federal law and Florida law that bear on the outcome of this appeal.
5
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conversion of the beans was complete at the time he first removed the beans from
the warehouse. See Wallace v. Kato, 549 U.S. 384, 388, 127 S. Ct. 1091, 1095
(2007) (“[I]t is the standard rule that accrual occurs when the plaintiff has a
complete and present cause of action.” (internal brackets and quotation marks
omitted)). Consequently, Destin converted the beans in the warehouse, not on
navigable water, and Middleton must point to some other conversion that occurred
on navigable water to establish admiralty jurisdiction.
In the operative complaint, Middleton alleged that it was Destin’s refusal to
return the beans during the November 7, 2011, meeting aboard the GLORY SKY
that “effectively brought the vessel into the conversion.” 5 Middleton argues that
the operative conversion “took place . . . when the [GLORY SKY], through Destin,
refused Middleton’s demand to return the beans.” However, demand is not an
element of conversion, and Destin therefore did not commit a new conversion
when he refused to return the beans. See Senfeld v. Bank of N.S. Trust Co.
(Cayman) Ltd., 450 So. 2d 1157, 1161 (Fla. 3d DCA 1984) (“[W]hile a demand
and refusal constitute evidence that a conversion has occurred, it is unnecessary to
prove a demand and refusal where the conversion can be otherwise shown.”); see
also 8A Am. Jur. 2d Bailments § 74 (“[T]he elements of demand and refusal are
not required if other evidence establishes an act of conversion.”). Destin had
5
Middleton did not allege in his complaint, nor did he argue in his brief on appeal, that
the GLORY SKY was liable for conversion committed by Fo Fo Transport.
6
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already converted the beans when he removed them from the warehouse, and any
subsequent refusal to return them was merely a reassertion of his already-
completed conversion.
Because Destin’s refusal established no new liability in him, there was no
maritime liability arising from this act in which the GLORY SKY could share. See
Lamb v. Interstate S.S. Co., 149 F.2d 914, 916 (6th Cir. 1945) (“It is true that the
owner of a vessel is liable in personam and the vessel is liable in rem for injuries
done to persons by the negligence of the Master or crew, but the negligence must
be such as would make the owner of the vessel under the same circumstances,
liable in a suit at common law.” (emphasis added)).
On appeal, Middleton asserts an additional theory that the GLORY SKY
committed a new, maritime conversion when Destin loaded the converted beans
onto it. Although we readily accept Middleton’s repeated assertion of the GLORY
SKY’s separate legal identity, see Cont’l Grain Co. v. The FBL-585, 364 U.S. 19,
22-23, 80 S. Ct. 1470, 1473 (1960); Canadian Aviator v. United States, 324 U.S.
215, 224, 65 S. Ct. 639, 644 (1945), this does not mean, nor does Middleton cite
any authority establishing, that the GLORY SKY can be liable for a tort even when
its operator has not committed one. “The general rule in respect of torts committed
by the master or crew of a vessel is that, apart from the personal liability of
tortfeasors, the vessel is liable in rem . . . .” 1 Benedict on Admiralty § 176
7
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(Joshua S. Force ed., 7th ed. rev. 2013) (footnotes omitted) (emphasis added). The
GLORY SKY, though a separate legal entity under maritime law, see Cont’l
Grain, 364 U.S. at 22-23, 80 S. Ct. at 1473, could only act through Destin. As a
consequence, it could not re-appropriate the beans for its own purposes and thereby
commit a new conversion separate from Destin’s. Instead, by loading the beans
onto the GLORY SKY, Destin only furthered his already-completed conversion
that had taken place on land. The only acquisition of the beans with intent to
acquire a proprietary interest in them occurred at the warehouse. Thus, a new,
maritime conversion did not occur when the beans were loaded onto the GLORY
SKY. 6
IV. CONCLUSION
In light of the foregoing, we conclude that the district court did not err in
dismissing Middleton’s claims for lack of subject-matter jurisdiction. 7
AFFIRMED.
6
Under Middleton’s view, conversions invariably give rise to admiralty jurisdiction if the
tortfeasor ever loads the converted property onto a ship he controls, even if this occurs long after
and far removed from the actual conversion of the property. This result undermines the situs
prong of the test for admiralty jurisdiction and uses the fictional separateness of a ship in
admiralty to expand the reach of admiralty jurisdiction to torts that are otherwise entirely land
based.
7
Middleton also asserted a claim under the Declaratory Judgment Act, 28 U.S.C. § 2201.
However, the Declaratory Judgment Act does not provide an independent basis for federal
jurisdiction. Provident Life & Accident Ins. Co. v. Transamerica-Occidental Life Ins. Co., 850
F.2d 1489, 1491 (11th Cir. 1988). Accordingly, the lack of subject-matter jurisdiction over
Middleton’s conversion claim requires dismissal of his declaratory-judgment claim for the same
reason.
8