Caterpillar Financial Services Corp. v. F/V Site Clearance I , 275 F. App'x 199 ( 2008 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-2142
CATERPILLAR FINANCIAL SERVICES CORPORATION,
Plaintiff - Appellee,
ATLANTIC CAPES FISHERIES, INCORPORATED,
Intervenor/Plaintiff - Appellee,
v.
THE F/V SITE CLEARANCE I, her engines, tackle, appurtenances,
equipment, cables, apparel, fishing permits, furniture, and
necessaries appertaining thereto, in rem (Official Number
1052907); SITE CLEARANCE I, L.L.C.; MASSIE TOWING,
INCORPORATED; ROBERT J. THOMASSIE, JR.; MICHAEL P. DANIELS,
Defendants,
and
F/V CAPTAIN DYLAN, INCORPORATED,
Intervenor/Defendant - Appellant.
No. 06-2222
ATLANTIC CAPES FISHERIES, INCORPORATED,
Plaintiff - Appellee,
v.
F/V CAPTAIN DYLAN, INCORPORATED,
Defendant - Appellant,
and
CARLOS M. GUTIERREZ, Secretary of Commerce; PATRICIA A.
KURKUL, Regional Administrator for the National Marine
Fisheries Service,
Defendants.
Appeals from the United States District Court for the Eastern
District of North Carolina, at Raleigh and Elizabeth City.
Terrence W. Boyle, District Judge. (2:05-cv-00010-BO; 2:06-cv-
00024-BO)
Argued: November 2, 2007 Decided: April 25, 2008
Before NIEMEYER and KING, Circuit Judges, and James A. BEATY, Jr.,
Chief United States District Judge for the Middle District of North
Carolina, sitting by designation.
No. 06-2142 affirmed; No. 06-2222 dismissed by unpublished per
curiam opinion.
Thomas J. Muzyka, CLINTON & MUZYKA, P.C., Boston, Massachusetts,
for Appellant. Stephen M. Ouellette, OUELLETTE & SMITH,
Gloucester, Massachusetts, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
These appeals arise from proceedings in the Eastern District
of North Carolina, in which F/V Capt. Dylan, Incorporated,
unsuccessfully sought ownership of certain fishing permits assigned
to a vessel owned by Atlantic Capes Fisheries, Incorporated, but
used by The F/V Site Clearance I. Capt. Dylan’s claim to the
fishing permits stems from its September 2005 purchase of Site
Clearance I from Caterpillar Financial Services Corporation, which,
in turn, had obtained Site Clearance I by virtue of a July 2005
foreclosure sale ordered by the district court. During this same
time period, the fishing permits were first transferred from Site
Clearance I back to the Atlantic Capes vessel, and then restored to
Site Clearance I. To resolve their ensuing dispute over ownership
of the fishing permits, Atlantic Capes and Capt. Dylan intervened
in the original foreclosure action, and Atlantic Capes also brought
its own lawsuit against Capt. Dylan.
Capt. Dylan appeals from two decisions of the district court
in favor of Atlantic Capes. In No. 06-2142, Capt. Dylan contests
the court’s September 28, 2006 order in the original foreclosure
action, by which the court clarified that its prior foreclosure-
related orders excluded the disputed fishing permits from the sale
of Site Clearance I to Caterpillar, and thus mandated that the
permits be returned from Site Clearance I to the Atlantic Capes
vessel. See Caterpillar Fin. Servs. Corp. v. The F/V Site
3
Clearance I, No. 2:05-cv-00010 (E.D.N.C. Sept. 28, 2006) (the
“September 2006 Clarification Order”).1 In No. 06-2222, Capt.
Dylan challenges the court’s October 20, 2006 order in Atlantic
Capes’s lawsuit, recognizing that the central issue in that matter
— the ownership of the fishing permits — was resolved by the
September 2006 Clarification Order in the original foreclosure
action. See Atl. Capes Fisheries, Inc. v. Gutierrez, No. 2:06-cv-
00024 (E.D.N.C. Oct. 20, 2006) (the “October 2006 Atlantic Capes
Order”).2 As explained below, we affirm in No. 06-2142 and dismiss
No. 06-2222.
I.
A.
The original foreclosure action, referenced in the Eastern
District of North Carolina as No. 2:05-cv-00010, was initiated by
Caterpillar under the Maritime Commercial Instruments and Liens Act
(specifically, 46 U.S.C. § 31325), to foreclose on The F/V Site
Clearance I. Caterpillar had made a $1.6 million loan in February
2004 to the vessel’s owner, Site Clearance I, L.L.C., with three
guarantors (Massie Towing, Incorporated; Robert J. Thomassie, Jr.;
1
The September 2006 Clarification Order is found at J.A. 263-
72. (Our citations to “J.A. ” refer to the contents of the Joint
Appendix filed by the parties in this appeal.)
2
The October 2006 Atlantic Capes Order is found at J.A. 295-
97.
4
and Michael P. Daniels) executing three separate guarantees. As
security for its promissory note, Caterpillar was granted a
“Preferred Ship Mortgage,” which gave Caterpillar a first-priority
security interest in Site Clearance I. At that time, the only
fishing permits appurtenant to Site Clearance I were open access
fishing permits (the “Open Access Permits”).
Five months later, in July 2004, Site Clearance I, L.L.C.,
entered into a “Seafood Marketing Agreement” with Atlantic Capes,
whereby Atlantic Capes allowed The F/V Site Clearance I to make use
of certain limited access fishing permits (the “Limited Access
Permits”) that were then assigned to Atlantic Capes’s fishing
vessel The F/V Maelstrom. Caterpillar executed a written
“Acknowledgment” by which it consented to the Seafood Marketing
Agreement and agreed that the Limited Access Permits were not
considered appurtenant to Site Clearance I, were not part of
Caterpillar’s security interest in the vessel, and would not be
sought in any potential foreclosure action. Site Clearance I,
L.L.C., subsequently defaulted on its repayment obligations to
Caterpillar.
On February 22, 2005, Caterpillar initiated the foreclosure
action by filing a Verified Complaint, naming as a defendant the
“Vessel SITE CLEARANCE I, . . . her engines, anchors, cables,
rigging, tackle, apparel, furniture, equipment, its fishing
permits, including all renewals, wherever found, and all other
5
appurtenances and necessaries therewith appertaining.” J.A. 11
(emphasis added).3 The Complaint requested “[t]hat Process in rem
and a Warrant of Arrest be issued . . . against the Defendant
Vessel SITE CLEARANCE I, her engines, anchors, cables, rigging,
tackle, apparel, fishing permits, furniture, and all the other
necessaries therewith appertaining.” Id. at 20 (emphasis added).
Of significance, a copy of the Open Access Permits — but not the
Limited Access Permits — was attached to the Complaint. See id.
at 44.
The following day, February 23, 2005, the district court
entered an order authorizing the Clerk of Court “to issue a warrant
for the arrest of the F/V SITE CLEARANCE I[,] her engines, boats,
tackle, apparel, furniture, equipment, and appurtenances, etc.”
Caterpillar Fin. Servs. Corp. v. The F/V Site Clearance I, No.
2:05-cv-00010 (E.D.N.C. Feb. 23, 2005) (the “February 2005 Order to
Arrest”).4 Pursuant to the warrant, Site Clearance I was seized by
the United States Marshal in March 2005. Thereafter, Atlantic
Capes applied to the National Marine Fisheries Service (the “NMFS”)
to have the Limited Access Permits transferred back to The F/V
3
The other defendants named in the Verified Complaint were
Site Clearance I, L.L.C., and the three loan guarantors (Massie
Towing, Thomassie, and Daniels).
4
The February 2005 Order to Arrest is found at J.A. 63-64.
6
Maelstrom. On May 4, 2005, the NMFS approved the requested
transfer.
On June 22, 2005, the district court issued an order directing
the Marshal to sell “the ‘SITE CLEARANCE I’, . . . engines, tackle,
appurtenances, equipment, cables, apparel, fishing permits,
furniture, and necessaries appertaining thereto, etc.” See
Caterpillar Fin. Servs. Corp. v. The F/V Site Clearance I, No.
2:05-cv-00010 (E.D.N.C. June 22, 2005) (the “June 2005 Order to
Sell”) (emphasis added).5 On July 15, 2005, the vessel was sold at
auction to Caterpillar for $350,000. On August 2, 2005, a
“Memorandum of Agreement” was executed under which Caterpillar was
to sell Site Clearance I to Capt. Dylan for $700,000 on an “AS IS,
WHERE IS” basis. See J.A. 444-46. In subsequent communications,
Caterpillar and Capt. Dylan acknowledged and discussed the issue of
whether the Limited Access Permits were appurtenant to Site
Clearance I and would be part of the purchase of the vessel. The
Caterpillar representatives involved in these discussions were
aware that Caterpillar may have previously agreed that the Limited
Access Permits would not be considered appurtenant to Site
Clearance I, but they apparently did not have knowledge or
possession of Caterpillar’s written Acknowledgment of the Seafood
Marketing Agreement by which it promised not to seek the Limited
Access Permits in any foreclosure action.
5
The June 2005 Order to Sell is found at J.A. 89-90.
7
On August 23, 2005, the district court entered an order
recognizing the sale to Caterpillar of “the vessel and all her
related equipment, tackle, appurtenances, fishing permits, etc.,”
and approving and confirming “the sale of the Vessel SITE CLEARANCE
I, and all her engines, tackle, appurtenances, fishing permits,
equipment, necessaries, etc.” for the sum of $350,000. See
Caterpillar Fin. Servs. Corp. v. The F/V Site Clearance I, No.
2:05-cv-00010 (E.D.N.C. Aug. 23, 2005) (the “August 2005 Order
Confirming Sale”) (emphasis added).6 In a September 1, 2005 e-mail
message, Capt. Dylan assured Caterpillar that “[w]e are simply
requesting that Caterpillar convey to us, exactly what was granted
to [it] by the Marshal through the foreclosure.” J.A. 150. The
following day, September 2, 2005, Caterpillar closed its private
sale of Site Clearance I to Capt. Dylan for $700,000.
Around that same time, the NMFS informed Atlantic Capes that,
on September 9, 2005, it would be rescinding the transfer of the
Limited Access Permits from Site Clearance I to The F/V Maelstrom.
The NMFS cited newly discovered information that Site Clearance I
had been seized by the United States Marshal prior to the date that
Atlantic Capes requested the return of the permits — a seizure
that, in the view of the NMFS, had deprived it of the power to
authorize the transfer. Accordingly, the NMFS deemed the transfer
6
The August 2005 Order Confirming Sale is found at J.A. 96-97.
8
“void” and declared the Limited Access Permits “restored” to Site
Clearance I. See J.A. 125.
On September 15, 2005, however, Caterpillar alerted Capt.
Dylan by facsimile message, with a copy of its written
Acknowledgment of the Seafood Marketing Agreement attached, that
“Caterpillar was placed on notice several months after the mortgage
was filed that the [Limited Access Permits were] not to be
considered an appurtenance of the vessel or collateral for the
mortgage,” and that, “[a]s such, Caterpillar would likely be
estopped from claiming that they were among those permits arrested
with the subject vessel.” J.A. 157. Caterpillar offered to
discuss alternative arrangements if that news affected Capt.
Dylan’s desire to own Site Clearance I, but Capt. Dylan did not
attempt to relinquish the vessel. Thereafter, on October 7, 2005,
the NMFS officially transferred the Limited Access Permits to Site
Clearance I (now owned by Capt. Dylan).
On October 25, 2005, Atlantic Capes filed a motion to
intervene as a plaintiff in the foreclosure action, a complaint
against Site Clearance I, a cross-claim against Caterpillar, and a
“Motion to Clarify Confirmation of Sale” — all asserting Atlantic
Capes’s rights to the Limited Access Permits. On December 14,
2005, Capt. Dylan filed a motion to intervene, as well as an
opposition to Atlantic Capes’s Motion to Clarify Confirmation of
Sale. On April 14, 2006, the district court granted the motions to
9
intervene pursuant to Federal Rule of Civil Procedure 24, deeming
both Atlantic Capes and Capt. Dylan to be proper intervenors.
During a June 28, 2006 hearing on the pending issues, Caterpillar
indicated that, consistent with Atlantic Capes’s view, the Limited
Access Permits were not among the rights it obtained by purchasing
Site Clearance I.
Thereafter, in its September 2006 Clarification Order, the
district court observed that the dispute between Atlantic Capes and
Capt. Dylan “turns on an ambiguity seized upon by both parties:
whether [the term] ‘fishing permits’” — as used in the Verified
Complaint, the June 2005 Order to Sell, and the August 2005 Order
Confirming Sale — “encompassed the ‘Limited Access Permits.’”
September 2006 Clarification Order 5. The court explained that any
ambiguity in its orders “was inadvertent, since from the outset
neither Caterpillar, nor [Site Clearance I, L.L.C.], nor the Court
intended for the Limited Access Permits to be seized or sold along
with Site Clearance I.” Id. at 6. The court acknowledged that
“[t]he Verified Complaint did not specify whether the Limited
Access Permits were included among” those items against which
Caterpillar sought foreclosure, but observed that “Caterpillar
acknowledged in July 2004 [in its written Acknowledgment of the
Seafood Marketing Agreement] that the Limited Access Permits would
not form part of its security interest in Site Clearance I, and
10
that Caterpillar would not seek those permits as part of any
foreclosure action.” Id.The district court thus determined that “the ‘fishing permits’
described in Caterpillar’s Verified Complaint included the Open
Access and other permits appurtenant to Site Clearance I, but
excluded the Limited Access Permits at issue here.” September 2006
Clarification Order 6-7. And, the court explained that its
February 2005 Order to Arrest, June 2005 Order to Sell, and August
2005 Order Confirming Sale “were meant only to enable Caterpillar
to obtain the relief sought by its Verified Complaint —
foreclosure upon Site Clearance I and all the items Caterpillar
understood as legally connected to the vessel.” Id. at 7.
According to the court,
[i]n ordering the seizure and eventual sale of Site
Clearance I, the Court did not intend “fishing permits”
to reach beyond the scope of the relief requested by
Caterpillar in its Verified Complaint. The broader, more
literal view of “fishing permits,” which NMFS
understandably adopted in rescinding the transfer of the
permits back to F/V MAELSTROM, and which Capt. Dylan
argues for here, was incorrect.
Id. The court also noted that fishing permits are generally
treated as appurtenant to commercial fishing vessels — a point
supported by a case relied on by Capt. Dylan, Gowen, Inc. v. F/V
Quality One, 244 F.3d 64 (1st Cir. 2001) — but that the Limited
Access Permits at issue here (unlike the permits in Gowen) had been
specifically excluded from foreclosure by the lender. See id. at
11
7 n.5. For these reasons, the court granted Atlantic Capes’s
Motion to Clarify Confirmation of Sale, and, pursuant to Federal
Rule of Civil Procedure 60(a), clarified its prior February 2005
Order to Arrest, June 2005 Order to Sell, and August 2005 Order
Confirming Sale “to reflect the exclusion of the Limited Access
Permits from the foreclosure and sale of Site Clearance I.” Id. at
7. The court further ordered the NMFS “to restore the transfer of
the Limited Access Permits from Site Clearance I to Atlantic
Capes.” Id. On October 24, 2006, Capt. Dylan noted an appeal from
the interlocutory September 2006 Clarification Order.
B.
Meanwhile, on October 11, 2005, in the District of
Massachusetts, Atlantic Capes initiated its own lawsuit, seeking
rescission of the NMFS’s actions and restoration of the Limited
Access Permits. Atlantic Capes named as defendants — in addition
to Capt. Dylan — the Secretary of Commerce and a Regional
Administrator for the NMFS. In the operative complaint (an Amended
Complaint filed on October 31, 2005), Atlantic Capes alleged
violations of the Fishery Conservation and Management Act, 16
U.S.C. §§ 1801-1891d, invoking the district court’s jurisdiction
under, inter alia, 16 U.S.C. § 1855(f). On July 13, 2006, the
Massachusetts district court ordered the case transferred to the
Eastern District of North Carolina, where it was referenced as No.
2:06-cv-00024.
12
By its October 2006 Atlantic Capes Order, the district court
in North Carolina disposed of three pending motions that
“ultimately turn[ed] upon a single issue: the legal status of the
Limited Access Permits.” October 2006 Atlantic Capes Order 4. In
so doing, the court recognized that, by its September 2006
Clarification Order in the original foreclosure action, it had
“decided this issue already, . . . holding that the [Limited Access
Permits] were not among the legal rights targeted by Caterpillar[]”
in the original foreclosure action and, thus, should have remained
with Atlantic Capes. Id. Accordingly, the court dismissed as moot
the three pending motions, and reiterated its directive to the NMFS
“to restore the transfer of the Limited Access Permits from Site
Clearance I to Atlantic Capes.” Id. On November 17, 2006, Capt.
Dylan noted an appeal from the interlocutory October 2006 Atlantic
Capes Order.
II.
We consolidated these appeals by order of January 3, 2007.
Capt. Dylan maintains that we possess jurisdiction under both 28
U.S.C. § 1291 (jurisdiction over appeals from “final decisions of
the district courts”) and 28 U.S.C. § 1292(a)(3) (jurisdiction over
appeals from “[i]nterlocutory decrees . . . determining the rights
and liabilities of the parties to admiralty cases in which appeals
from final decrees are allowed”). We recognize that we possess
13
§ 1292(a)(3) jurisdiction in No. 06-2142 (concerning the September
2006 Clarification Order in the original foreclosure action). Our
jurisdiction is in doubt, however, with respect to No. 06-2222
(relating to the October 2006 Atlantic Capes Order). That is, it
does not appear that the October 2006 Atlantic Capes Order
constitutes an appealable “final decision[]” under § 1291 or an
appealable “[i]nterlocutory decree[]” in an “admiralty case[]”
within the meaning of § 1292(a)(3). In any event, in light of our
affirmance in No. 06-2142 (which we explain below), No. 06-2222 is
moot and dismissed for that reason.
III.
Relevant to No. 06-2142, Capt. Dylan challenges the September
2006 Clarification Order on several grounds.7 The key issue before
us is whether the district court was authorized under Federal Rule
of Civil Procedure 60(a) to clarify its prior foreclosure-related
orders as it did. Our review of the Rule 60(a) issue is for abuse
of discretion. See Kocher v. Dow Chem. Co., 132 F.3d 1225, 1229
(8th Cir. 1997). Under the version of Rule 60(a) in effect at the
time of the September 2006 Clarification Order, “[c]lerical
mistakes in judgments, orders or other parts of the record and
errors therein arising from oversight or omission may be corrected
7
Notably, both Atlantic Capes and Caterpillar are designated
as appellees, but Caterpillar has waived the filing of a brief and
adopted the brief of Atlantic Capes.
14
by the court at any time of its own initiative or on the motion of
any party and after such notice, if any, as the court orders.”8 As
we have recognized, Rule 60(a) is properly utilized “to perform a
completely ministerial task” (such as “making a judgment more
specific in the face of an original omission”), but not to “revisit
the merits of the question” or “reconsider[] the matter.” Kosnoski
v. Howley, 33 F.3d 376, 379 (4th Cir. 1994) (internal quotation
marks omitted).
By its September 2006 Clarification Order, the district court
relied on Rule 60(a) simply to specify that its prior foreclosure-
related orders excluded the Limited Access Permits from the arrest
and sale of The F/V Site Clearance I — a necessary clarification
in view of the NMFS’s misinterpretation of the prior orders and
consequent decision that the Limited Access Permits belonged with
Site Clearance I. The court’s exclusion of the Limited Access
Permits from the arrest and sale of Site Clearance I was entirely
consistent with the understanding of Caterpillar and the defendants
in the foreclosure action at the time the prior orders were
entered. Accordingly, it was perfectly within the court’s
authority to perform the “ministerial task” of clarifying its prior
8
Rule 60(a) was amended as part of the general restyling of
the Civil Rules, effective December 1, 2007, and now provides in
pertinent part as follows: “The court may correct a clerical
mistake or a mistake arising from oversight or omission whenever
one is found in a judgment, order, or other part of the record.
The court may do so on motion or on its own, with or without
notice.”
15
orders to reflect that shared understanding. Cf. Kosnoski, 33 F.3d
at 379 (affirming court’s use of Rule 60(a) to specify amount of
interest previously awarded, where “both parties understood that
interest had been awarded” and the rate and time frame for
computation, leaving as “[t]he court’s only task . . . to do the
calculation and make the amount official”). Indeed, it would have
been impossible for the court to “revisit” or “reconsider” the
status of the Limited Access Permits in its September 2006
Clarification Order, because that issue first came before the court
only after Capt. Dylan latched onto the use of the general term
“fishing permits” in the court’s prior orders to argue that the
Limited Access Permits were seized and sold with Site Clearance I
(despite having notice from Caterpillar that the Limited Access
Permits were never appurtenant to or part of its security interest
in the vessel). We therefore reject any notion that the court
abused its discretion by relying on Rule 60(a) for its September
2006 Clarification Order.9
9
Capt. Dylan further maintains on appeal that the district
court lacked jurisdiction in the foreclosure action to issue the
September 2006 Clarification Order, that Atlantic Capes had no
standing to seek clarification of the court’s prior foreclosure-
related orders, and that Atlantic Capes’s clarification request was
time-barred. We have carefully considered these contentions, and
conclude that they are without merit. We also find it unnecessary
to reach any additional issues raised by Atlantic Capes in its
response brief, e.g., whether Capt. Dylan is estopped from pursuing
rights to the Limited Access Permits and whether Capt. Dylan’s
conduct risked a fraud on the court.
16
IV.
Pursuant to the foregoing, we affirm in No. 06-2142 and
dismiss No. 06-2222.
No. 06-2142 AFFIRMED
No. 06-2222 DISMISSED
17