L&L Oil Company Inc v. Rebel MV

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 96-30192
Summary Calendar
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L&L OIL COMPANY, INC.,
Plaintiff-Appellee,
VERSUS
M/V REBEL, her engines, tackle, gear,
appurtenances, etc. in rem, et al.,
Defendants,
EKLOF MARINE CORPORATION,
Owner of the M/V REBEL,
Claimant-Appellant.
_________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
(95-CV-2720-F)
_________________________
August 28, 1996
Before SMITH, BENAVIDES, and DENNIS, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
This admiralty suit arises out of the bankruptcy of Enjet,
Inc. (“Enjet”). The plaintiff, L&L Oil Company, Inc. (“L&L”),
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion
should not be published except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
provided marine gas on Enjet’s order for the M/V REBEL. When Enjet
filed for bankruptcy, L&L turned to the M/V REBEL, in rem, for
payment. On cross-motions for summary judgment, the district court
entered judgment in favor of L&L, awarding the principal invoice
amount, together with pre- and post-judgment interest, plus costs.
Eklof Marine Corporation (“Eklof”), owner pro hac vice, appeals,
and we affirm.
I.
In 1983, Enjet entered into a tanker voyage charter party with
Eklof under which the vessel agreed to buy fuel from Enjet “at all
ports where such requirements arise and where Enjet is able to
supply, always provided that the prices quoted are competitive.”1
In return, Enjet agreed to certain conditions that insulated Eklof
from variations in the market price of fuel.
L&L delivered 160,000 gallons of marine gas oil to the M/V
REBEL in November and December 1994. L&L acted at the request of
1
Article 10 of the voyage charter party stated:
Fuel Escalation Clause: It is mutually understood and agreed
Charterer will pay Owner for any fuel costs in excess of fifty-five
cents ($0.55) per gallon. Owner will pay Charterer any fuel savings
below fifty cents ($0.50) per gallon. Owner will purchase fuel for
the performance of this contract from Enjet at all ports where such
requirements arise and where Enjet is able to supply, always
provided that the prices quoted are competitive. In the event of
lower prices being quoted by another supplier at the port(s) in
question, Owners undertake to give Enjet the opportunity to match
such quotes.
2
Enjet and prepared bunker receipts2 that were supplied by Enjet and
bore its logo and address. The receipt contained the following
cautionary language:
No disclaimer of any type or form will be accepted on
this marine Bunker Receipt, and if any words of dis-
claimer are applied, they will not alter, impair or waive
ENJET INC’s maritime lien against the vessel’s ultimate
responsibility for the debt incurred through this
transaction.
L&L presented the receipts to the chief engineer for his signature.
L&L invoiced Enjet and the M/V REBEL for the fuel in the
amount of $81,280, net due in thirty days, with specified interest
if not paid timely. Enjet invoiced Eklof for the fuel and received
$53,250. Enjet never paid L&L and filed for chapter 11 bankruptcy
protection.
II.
The district court granted L&L’s motion for summary judgment,
finding that L&L had a maritime lien under the maritime commercial
instruments and liens act (“the Act”), 46 U.S.C. § 31341 et seq.
(West Supp. 1995), which creates a maritime lien in favor of “a
person providing necessaries to a vessel on the order of the owner
or a person authorized by the owner.” Finding that L&L was a
“person” and that it had provided necessaries to a vessel, the
court turned to the central issue in the case: whether Enjet had
authority to purchase such necessaries for the M/V REBEL.
2
A bunker receipt acknowledges delivery of marine gas oil.
3
The court determined that Enjet had authority to purchase
necessities and bind the vessel under the Act. The court noted
that under § 31341(a)(3), a “person to whom the management of the
vessel at the port of supply is intrusted” is presumed to have such
authority. Relying on precedent finding that a charterer has such
managerial powers, the court concluded that Eklof had failed to
present any evidence rebutting the presumption contained in the
Act.
Concluding that Enjet had actual authority to bind the vessel
to a contract for necessities, the court rejected Eklof’s argument
that L&L did not have actual knowledge of Enjet’s authority; the
court found that knowledge was necessary only when actual authority
was lacking. The court also rejected Eklof’s assertion that the
“restrictive repair contractor” line of cases applies to this
case.3 The court determined that those cases are inapplicable
because there the contractor did not have actual authority to bind
the vessel, a characteristic that distinguishes Enjet.
Having concluded that L&L was entitled to a maritime lien, the
district court turned its attention to the claim that L&L had
waived its lien by using Enjet’s bunker receipts. According to the
court:
Although maritime liens may be waived or assigned,
the Fifth Circuit has insisted upon a strict standard of
3
See, e.g., Crescent City Marine, Inc. v. M/V NUNKI, 20 F.3d 665, 668-69 (5th
Cir. 1994); Farwest Steel Corp. v. Barge Sea Span 241, 828 F.2d 522, 525-26 (9th
Cir. 1987), cert. denied, 485 U.S. 1034 (1988).
4
proof. To show waiver, “evidence must be produced that
would permit the inference that the supplier purposefully
intended to forego the valuable privilege which the law
accords.” [Gulf Trading & Transp. Co. v. Vessel HOEGH
SHIELD, 658 F.2d 363, 368 (5th Cir. 1981)]. Proof that
a supplier “deliberately intended to look solely to the
owner’s personal credit” to satisfy his debt, for
instance, would meet this standard. [Equilease Corp. v.
M/V SAMPSON, 793 F.2d 598, 606 (5th Cir. 1986)].
Although “the formalities of assignment . . . have not
been rigidly defined,” [Tramp Oil & Marine, Ltd. v. M/V
MERMAID I, 630 F. Supp. 630, 634 (D. P.R. 1986)], the
same principles of clarity apply. See id. (holding, in
case concerning assignment of maritime lien incurred for
bunker oil, that “[a]ssignments must be in writing and
notice thereof is to be given to the debtor.”); Vulcan
Materials Co. v. Vulica Shipping Co., Ltd., 859 F. Supp.
242, 247 (W.D. La. 1994) (citing Tramp Oil).
The record does not satisfy Fifth Circuit require-
ments. L&L’s use of Enjet’s bunker receipts and its
invoicing of Enjet do not constitute purposeful conduct
sufficient to establish waiver. Both clearly show the
name of the vessel. See Gulf Trading & Transp. Co., 658
F.2d at 368 (holding that no waiver occurred in case
where fuel supplier sent receipts to charterer that
showed the name of the vessel). Neither do the words
printed on the receipts have any effect; they appear to
simply serve notice to the ship’s master that Enjet
preserved any maritime lien of its own, and that its
rights could not be changed by any additional disclaiming
language. The clause says nothing and does nothing about
the rights of L&L. And no dealings between L&L and Enjet
suggest that L&L assigned its lien or that Enjet was
subrogated to any of L&L’s claims against the REBEL. At
most, the clause language invoked by the defendant placed
L&L on notice that Enjet, too, meant to preserve its lien
rights against the vessel. The Court simply cannot infer
waiver or assignment of a lien on these facts.
Finally, the court awarded prejudgment interest at the rate
called for in the invoices from the time the invoices were sent.
The court found that good faith litigation over liability does not
constitute the “peculiar circumstances” necessary to deviate from
5
the general rule that such awards are the rule rather than the
exception.
The able district court addressed each of Elkof's contentions
in its thorough opinion. We AFFIRM, essentially for the reasons
given by the district court.
6