Valero Marketing & Supply Co. v. M/V Almi Sun, IMO

Case: 16-30194 Document: 00514518722 Page: 1 Date Filed: 06/19/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 16-30194 Fifth Circuit
FILED
June 19, 2018
VALERO MARKETING & SUPPLY COMPANY, Lyle W. Cayce
Clerk
Plaintiff - Appellant
v.
M/V ALMI SUN, IMO NO. 9579535, her engines, apparel, furniture,
equipment, appurtenances, tackle, etc., in rem; VERNA MARINE
COMPANY, LIMITED, appearing solely and restrictively as claimant of the
M/V Almi Sun,
Defendants – Appellees
Appeal from the United States District Court
for the Eastern District of Louisiana
Before HIGGINBOTHAM, JONES, and HAYNES, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
This case asks whether a bunker supplier, having entered into a contract
with a bunker trader that later went bankrupt, is entitled to assert a maritime
lien against the vessel that physically received its fuel. Because that supplier
cannot show that it provided necessaries “on the order of the owner or a person
authorized by the owner,” we affirm the district court’s denial of a maritime
lien.
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I.
While in Corpus Christi, Texas, the Almi Sun (the “Vessel”) needed
refueling. Almi Tankers S.A., an agent for the Vessel’s owner Verna Marine
Co. Ltd., contracted with O.W. Bunker Malta, Ltd., a fuel trader, to procure
bunkers. During negotiations, Almi Tankers requested the name of the
physical supplier, and O.W. Malta named Valero Marketing & Supply
Company. O.W. Malta issued a final sales order confirming Valero as the
supplier and listing itself as the seller. Another O.W. Bunker entity, O.W.
Bunker USA, Inc., then contracted with Valero to purchase the fuel. O.W.’s
involvement ended there. Valero coordinated delivery directly with the Vessel,
and Vessel agents tested and verified the bunkers’ quality. After delivery was
completed, an authorized officer of the Vessel signed the bunkering certificate,
and Valero submitted an invoice to O.W. USA.
In early November 2014, Almi Tankers learned that the O.W. Bunker
group of companies faced significant financial problems and might be unable
to pay Valero. Almi Tankers requested “written confirmation and evidence of
payment,” and “reserve[d] the right to make remittance directly to the physical
supplier and . . . hold any balance due . . . for payment.” O.W. Bunker and other
related entities filed for bankruptcy shortly thereafter.
Valero then brought this in rem action seeking a maritime lien for the
amount owed for the bunkering plus interest and fees. Verna appears as the in
rem claimant of the Vessel defending the action on the Vessel’s behalf. Both
Valero and Verna moved for summary judgment, and the district court granted
summary judgment in favor of Verna. Valero timely appeals.
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II.
We review the “‘district court’s grant of summary judgment de novo,
applying the same standards as the district court.’” 1 Summary judgment is
appropriate where “there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” 2 On summary judgment,
we view the evidence in the light most favorable to the nonmovant, and draw
all reasonable inferences in the nonmovant’s favor. 3
III.
The Commercial Instruments and Maritime Liens Act (“CIMLA”)
governs the circumstances under which a party is entitled to a maritime lien.
In relevant part, CIMLA states that a person providing necessaries to a vessel
“on the order of the owner or a person authorized by the owner” is entitled to a
maritime lien on the vessel. 4 Section 31341(a) lists “persons . . . presumed to
have authority to procure necessaries for a vessel:”
(1) the owner; (2) the master; (3) a person entrusted with the
management of the vessel at the port of supply; or (4) an officer or
agent appointed by—(a) the owner; (b) a charterer; (c) an owner
pro hac vice; or (d) an agreed buyer in possession of the vessel. 5
We apply the provisions of CIMLA stricti juris to ensure that maritime liens
are not “lightly extended by construction, analogy, or inference.” 6
It is not unusual for an entity supplying necessaries to a vessel to lack
privity of contract with the owner of that vessel, and to instead contract with
1 Green v. Life Ins. Co. of N. Am., 754 F.3d 324, 329 (5th Cir. 2014) (quoting Cooper v.
Hewlett-Packard Co., 592 F.3d 645, 651 (5th Cir. 2009)).
2 FED. R. CIV. P. 56(a).
3 Cox v. Wal-Mart Stores East, L.P., 755 F.3d 231, 233 (5th Cir. 2014).
4 46 U.S.C. § 31342(a).
5 46 U.S.C. § 31341(a).
6 Atlantic & Gulf Stevedores, Inc. v. M/V GRAND LOYALTY, 608 F.2d 197, 200–01
(5th Cir. 1979). In Atlantic & Gulf Stevedores, we ruled that a vessel’s chief officer is a “person
to whom management of the vessel at the port of supply is intrusted” for purposes of section
972 of the Federal Maritime Lien Act—the predecessor to CIMLA. Id. at 200–03. In so
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an intermediary. In Lake Charles, we recognized two lines of cases that deal
with such circumstances: the general/subcontractor line of cases and the
principal/agent, or “middle-man,” line of cases. 7 To determine which line of
cases applies, Lake Charles instructs that “it is not whether an intermediary
can be expected to supply the necessaries itself that distinguishes instances in
which the actual suppliers have liens, but it is rather the nature of the
relationship between each pair of entities that are involved in the transaction
at issue.” 8
As it happened in Lake Charles, ED&F Man Sugar, Inc. entered into an
agreement to purchase rice from Broussard Rice Mill, Inc. In that agreement,
the parties assigned the responsibility of providing stevedoring services to
Broussard. Broussard, working through an agent, awarded Lake Charles
Stevedores (“LCS”) the bid to load the rice onto the vessel. LCS loaded the rice,
and the vessel’s agents signed activity sheets and receipts. When Broussard
failed to pay, LCS asserted a maritime lien for its services. 9
holding, we acknowledged the doctrine of stricti juris but opined that the Federal Maritime
Lien Act “is not to be viewed through the constricting glass of [s]tricti juris” as its “legislative
history” required “a more liberal application than that which existed prior to the 1971
amendments to the Maritime Lien Act.” Id. at 201. We further explained that Congress
intended 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.” Id.
In subsequent decisions, however, we have clarified our “respect for the principle of
stricti juris,” counseling against application of the sweeping language set forth in Atlantic &
Gulf Stevedores to the present case. See Lake Charles Stevedores, Inc. v. PROFESSOR
VLADIMIR POPOV MV, 199 F.3d 220, 231 (5th Cir. 1999). As we discuss infra, Lake Charles
stands for the rule in our circuit that a subcontractor is generally not entitled to assert a
maritime lien “unless it can be shown that an entity authorized to bind the ship controlled
the selection of the subcontractor and/or its performance.” Id. at 229. Because Lake Charles
is on point, we are guided by its application of stricti juris here.
7 Id. at 228–29.
8 Id. at 230.
9 Id. at 222–23.
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We found those facts to be “more akin to those in which general
contractors have been engaged to supply a service and have called upon other
firms to assist them in meeting their contractual obligations.” 10 Typically, “the
general contractor supplying necessaries on the order of an entity with
authority to bind the vessel has a maritime lien”; however, “subcontractors
hired by those general contractors are generally not entitled to assert a lien on
their own behalf, unless it can be shown that an entity authorized to bind the
ship controlled the selection of the subcontractor and/or its performance.” 11
Because Man Sugar “retained no control over the selection of a stevedoring
concern, and Broussard accepted all the risk associated,” we held that LCS was
not entitled to a maritime lien. 12
Ken Lucky typifies the middle-man line of cases. 13 In that case, the
following sequence of events occurred: Bulkferts, Inc., the vessel’s
subcharterer, placed an order for fuel with its managing agent, Eurostem
Maritime Limited; Eurostem contacted Brook Oil Ltd., a fuel trader; Brook Oil
then instructed Gray Bunkering Services to place an order for fuel with Marine
Fuel, the physical supplier; Marine Fuel, in turn, asked Gray for assurances
about payment before delivery of the bunkers; Gray notified Marine Fuel that
it had been “nominated by the owner” of the vessel to supply the fuel; Marine
Fuel delivered the fuel; and the vessel’s chief engineer accepted the fuel with
the approval of the vessel’s master. 14 After having unsuccessfully sought
payment, Marine Fuel asserted a maritime lien on the vessel. 15
10 Id. at 230.
11 Id. at 229.
12 Id. at 230.
13 Marine Fuel Supply & Towing, Inc. v. M/V KEN LUCKY, 869 F.2d 473 (9th Cir.
1988).
14 Id. at 475.
15 Id.
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The Ninth Circuit found that Marine Fuel was entitled to a lien because
the parties agreed that the order originated from Bulkferts, the subcharterer,
an entity with authority to bind the ship. 16 Due to that concession, the Ninth
Circuit did not “reach . . . the district court’s conclusion that Brook was not
Bulkfert’s agent,” concluding that Marine Fuel did not need to “establish
agency between Brook and Bulkferts to fall within the scope of one entitled to
a maritime lien under [CIMLA].” 17
IV.
In this case, there is no dispute that bunkers qualify as necessaries and
that Valero provided those necessaries to the Vessel. The sole inquiry before
us is whether Valero furnished the necessaries to the Vessel “on the order of
the owner or a person authorized by the owner.” We conclude that it did not.
The record shows that Verna, through its agent Almi Tankers, contacted
OW Malta because it was a “reputable bunker trader[]”;that during
negotiations, Almi Tankers asked who would be the bunker fuel supplier, and
it did not object to Valero’s selection; that the sales order confirmation listed
Valero as the supplier; that Valero provided the entire bunkering service that
Almi Tankers contracted for, with no assistance from O.W. or its affiliates; that
the Vessel’s agents monitored and tested Valero’s performance; and that Almi
Tankers expressed concern about O.W.’s ability to pay Valero.
These facts do not demonstrate that Valero provided the bunkers to the
Vessel “on the order of the owner or a person authorized by the owner.” Valero
provided the bunkers at O.W.’s request, and O.W. is not a “person [] presumed
16 Id. at 477.
17 Id. The Ninth Circuit separately examined the master’s implied authority to incur
a lien against the vessel upon accepting the supplies that Marine Fuel delivered, and
determined that the master had such authority because a ship’s master has presumed
authority to incur a lien under CIMLA. Id. at 477–78.
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to have authority to procure necessaries[.]” 18 These facts are “more akin to
those in which general contractors have been engaged to supply a service and
have called upon other firms to assist them in meeting their contractual
obligations.” 19 Thus, Valero must show that an entity authorized to bind the
ship “controlled [its] selection . . . and/or its performance.” 20 The record,
however, proves no more than the Vessel’s awareness of Valero, not that the
Vessel “controlled” the selection or performance of Valero. Mere awareness
does not constitute authorization under CIMLA. 21
Despite Valero’s urging, we decline to apply Ken Lucky. As mentioned
supra, the Ninth Circuit’s holding—that the physical supplier could assert a
lien—turns on the parties’ concession that the physical supplier sold the
bunkers to an entity with authority to bind the vessel. 22 Here, Valero dealt
with O.W., not with Verna or Almi Tankers, and the record does not establish
that O.W. served as Verna’s or Almi Tankers’ agent. 23 Thus, Ken Lucky is
inapplicable.
18 46 U.S.C. § 31341(a); see also ING Bank N.V. v. M/V TEMARA, No. 16-4019, 2018
WL 2944306, -- F.3d -- , at *6 (2d Cir. June 13, 2018) (finding that physical supplier was not
entitled to a maritime lien when it provided necessaries at the direction of an O.W. Bunker
entity acting as an intermediary “rather than at the direction of the owner or the charterer
of the Vessel, or any other statutorily-authorized person”); Barcliff, LLC v. M/V DEEP
BLUE, 876 F.3d 1063, 1071 (11th Cir. 2017) (same); Galehead, Inc. v. M/V ANGLIA, 183
F.3d 1242, 1245 (11th Cir. 1999) (finding that supplier provided the bunkers at the trader’s
request, and that the trader is not a “person [] . . . presumed to have authority to procure
necessaries”); Port of Portland v. M/V PARALLA, 892 F.2d 825, 828 (9th Cir. 1989) (denying
maritime lien when supplier dealt with general contractor, not vessel owner or vessel owner’s
agent).
19 Lake Charles, 199 F.3d at 230.
20 Id. at 229.
21 Id. at 232 (explaining that CIMLA’s authority requirement would be rendered
meaningless if “awareness that necessaries are being supplied was sufficient, even though
those necessaries were procured by an entity without authority to bind the vessel”).
22 Ken Lucky, 869 F.2d at 477.
23 Id.
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V.
The dissent says that we fail to follow Lake Charles because in that case,
“we made clear that the ‘subcontractor’ line of cases is itself divided into two
lines of cases: (1) cases requiring ‘an entity with authority to bind the vessel’
to ‘direct that the general contractor hire a particular subcontractor in order
for that subcontractor to be entitled to a lien’; and (2) cases requiring the
subcontractor to be ‘identified and accepted by the vessel’s owner or charterer
prior to performance.’” The dissent’s view likely emerges from the following
passage in Lake Charles:
In keeping with the notion that subcontractors may acquire liens
where the vessel’s owners retain control over their selection and/or
performance, the Ninth and Second Circuits require that an entity
with authority to bind the vessel direct that the general contractor
hire a particular subcontractor in order for that subcontractor to
be entitled to a lien. See Port of Portland, 892 F.2d at 828; Farwest,
828 F.2d at 526; Integral Control Sys., 990 F. Supp. at 301. In other
cases in which subcontractors have been found to be entitled to a
lien, those subcontractors were identified and accepted by the
vessel’s owner or charterer prior to performance. See Stevens, 913
F.2d at 1525, 1534; Turecamo of Savannah, Inc. v. United States,
824 F. Supp. 1069, 1072 (S.D. Ga. 1993). Owner involvement in
directing, testing, and/or inspecting subcontractor performance
has also been cited in support of finding a lien in favor of a
subcontractor. See Stevens, 913 F.2d at 1535; cf. Marine Coatings,
932 F.2d at 1375 n.9 (listing operator’s inspecting subcontractor
work and giving provisional and final acceptance to work
performed by the subcontractor among evidence that supported
court’s conclusion that a genuine issue of fact existed regarding
general contractor’s authority to bind the vessel). Based on these
cases, we agree with the district court that LCS has not shown it
was entitled to a lien under the circumstances presented here. 24
We do not read Lake Charles as the dissent does. To these eyes, the above
specifies three factual scenarios that color the general proposition that a
24 Lake Charles, 199 F.3d at 231 (footnote omitted).
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subcontractor is not entitled to a lien, “unless it can be shown that an entity
authorized to bind the ship controlled the selection of the subcontractor and/or
its performance.” 25 We see no adoption, let alone a clear one, of “two lines of
cases” branching from the subcontractor line of cases.
Even assuming that Lake Charles divided the subcontractor line of cases
into “two lines of cases” sub silentio, Valero cannot establish that it falls in
either one. Verna, through Almi Tankers, neither “direct[ed] that the general
contractor hire a particular subcontractor” nor “identified and accepted” Valero
“prior to performance.” The record merely shows that Verna, through Almi
Tankers, was aware that Valero would physically supply the bunkers.
The dissent also says that the majority opinion “creates an unnecessary
circuit split with the Eleventh Circuit,” citing Galehead and likening this case
to Marine Coatings and Stevens. 26 Specifically, the dissent states that Marine
Coatings and Stevens reflect the Eleventh Circuit’s embrace of the “second line
of cases” of the subcontractor line of cases—i.e., cases requiring the
subcontractor to be identified and accepted by the vessel’s owner or charterer
prior to performance. The dissent, however, overlooks Barcliff, in which the
Eleventh Circuit held that a subcontractor in the same contractual scenario as
here was not entitled to a maritime lien. 27 In so holding, the Eleventh Circuit
reviewed Galehead, Marine Coatings, and Stevens. 28 In determining the law of
the Eleventh Circuit, we prefer its own statement of its law.
To begin, a review of the facts and holding in Barcliff dispel any notion
that we create a circuit split. 29 Technip UK Limited, the vessel owner, sent a
25 Id. at 229.
26 See Marine Coatings of Ala., Inc. v. United States, 932 F.2d 1370 (11th Cir. 1991);
Stevens Tech. Servs., Inc. v. United States, 913 F.2d 1521 (11th Cir. 1990).
27 Barcliff, 876 F.3d at 1071–73.
28 Id.
29 Id. at 1065–67; 1071–73.
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request to O.W. Bunkers (UK) Limited and two other suppliers seeking bunker
fuel. Technip awarded the contract to O.W. UK. Thereafter, O.W. UK entered
into a contract with O.W. Bunker USA, Inc., who then contracted with Radcliff,
the physical supplier of the bunkers. Like the present case, Radcliff
coordinated delivery with the vessel, and upon delivery, the vessel’s chief
engineer signed a delivery certificate. After O.W. filed for bankruptcy, Radcliff,
having gone unpaid and thus finding itself in the same situation as Valero,
asserted a maritime lien against the vessel. The Eleventh Circuit ruled that
Radcliff was not entitled to a lien because “Radcliff acted on the order of O.W.
USA, not Technip.” 30
To reach that holding, the Barcliff court reviewed its jurisprudence on
maritime liens. It began with the circuit’s general rule, as set forth in
Galehead, which provides: “Where the owner directs a general contractor to
provide necessaries to its vessel, a subcontractor retained by the general
contractor to perform the work or provide the supplies is generally not entitled
to a maritime lien.” 31 The Barcliff court then noted that Galehead recognizes
an exception to the general rule. That is, “where the general contractor is not
an agent of the owner, and the owner does not initially order the subcontractor
to perform the work, it might still be said that the owner ‘somehow authorized’
30Id. at 1071.
31 Id. In Galehead, Genesis Container Line, a charterer, contacted Polygon Energy
Services, Inc. to obtain fuel bunkers for its vessel, and Polygon contacted Establissment
Asamar, Ltd. to supply the fuel. Asamar then engaged the physical supplier. This
arrangement occurred twice, and Genesis failed to pay Asamar both times. Asamar thereafter
assigned its rights to a collection agency, Galehead, who brought suit. 183 F.3d at 1244. The
Eleventh Circuit ruled that Galehead was not entitled to a lien, reasoning that “Asamar did
not provide the bunkers on order of the owner or an authorized agent.” Id. at 1245. Rather,
the Eleventh Circuit determined that “Asamar provided the bunkers at Polygon’s request,
and Polygon is not a “‘person [] . . . presumed to have authority to procure necessaries[.]’” Id.
(quoting 46 U.S.C. § 31341(a)).
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the work if it ‘was sufficiently aware of, and involved in, [the] work that it
might be said that [the subcontractor] was working for [the owner].’” 32
This “significant-and-ongoing-involvement exception” emerged from
Marine Coatings and Stevens. The Barcliff court proceeded to review these
cases, explaining that Marine Coatings “involved extensive maintenance, such
as painting, coating, and cleaning” and that Stevens involved “repair work.” 33
In addition, those cases, the Barcliff court observed, involved an owner and a
subcontractor that “developed a relationship over an extended period of time
as the work progressed.” 34 The Barcliff court then turned specifically to
Stevens, noting that “the owner was in contact almost exclusively with the
subcontractor because the general contractor did not have the capability to
perform the work,” and “the owner dealt directly with the subcontractor and
its employees directed, inspected, tested, and approved the subcontractor’s
work on a continuing basis.” 35 In short, “the owner’s participation with the
subcontractor was so substantial that it could not seriously be argued the work
was not done on the owner’s orders.” 36 The Barcliff court concluded by
acknowledging that “[t]he Galehead panel juxtaposed Marine Coatings and
Stevens with cases involving a one-off transaction, ‘where the degree of
involvement with the owner is minimal or non-existent;’” 37 and that “[o]ne of
those cases involved fuel provision.” 38
Against this background, Marine Coatings and Stevens are inapplicable
in light of Barcliff and Galehead. Though Barcliff determined that the physical
supplier had waived its argument concerning the Galehead exception, no
32 876 F.3d at 1071 (quoting Galehead, 183 F.3d at 1245).
33 Id. at 1072.
34 Id.
35 Id. (citing Stevens, 913 F.2d at 1525–26, 1535).
36 Id. (citing Stevens, 913 F.2d at 1525–26, 1535).
37 Id. (quoting Galehead, 183 F.3d at 1246).
38 Id.
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circuit split results by following the holding in Barcliff. We are unaware of a
case in the Eleventh Circuit, and the dissent proffers none, that applies Marine
Coatings and Stevens to find that a subcontractor may acquire a lien for a one-
off transaction in which the vessel owner was merely aware of the
subcontractor’s identity. 39 The circuits to have addressed the sequence of
contracts before us agree that such physical suppliers are not entitled to a
maritime lien. 40
VI.
We affirm the district court’s grant of summary judgment for Verna.
39 See Galehead, 183 F.3d at 1246 (“That a charterer of a vessel becomes aware that
some work performed was by a party somewhere down the chain of contracting and re-
contracting does not give rise to a maritime lien.”).
40 See ING Bank, 2018 WL 2944306, at *6–8; Barcliff, 876 F.3d at 1071–73.
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HAYNES, Circuit Judge, dissenting:
The majority opinion fails to follow our prior precedent in Lake Charles
Stevedores, Inc. v. Professor Vladimir Popov MV, 199 F.3d 220, 231 (5th Cir.
1999) and creates an unnecessary circuit split with the Eleventh Circuit. See
Galehead, Inc. v. M/V Anglia, 183 F.3d 1242, 1245–46 (11th Cir. 1999) (per
curiam); see also Noramco Shipping Corp. v. Bunkers Int’l Corp., No.
6:02CV515-ORL-22DAB, 2003 WL 22594419, at *7 (M.D. Fla. Apr. 30, 2003)
(“Under Eleventh Circuit jurisprudence, the right of a subcontractor to assert
a maritime lien against a vessel for necessaries is not restricted by a rigid rule
but instead depends on the degree of involvement between the owner and the
subcontractor.”). Accordingly, I respectfully dissent.
I agree that Valero is a subcontractor under the “general
contractor/subcontractor” line of cases. Lake Charles explains the general
proposition that “subcontractors hired by those general contractors are
generally not entitled to assert a lien on their own behalf, unless it can be
shown that an entity authorized to bind the ship controlled the selection of the
subcontractor and/or its performance.” 199 F.3d at 229. However, this
exception is not as narrow as the majority opinion makes it seem.
Unmentioned by the majority opinion, in Lake Charles we made clear that the
“subcontractor” line of cases is itself divided into two lines of cases: (1) cases
requiring “an entity with authority to bind the vessel” to “direct that the
general contractor hire a particular subcontractor in order for that
subcontractor to be entitled to a lien”; and (2) cases requiring the subcontractor
to be “identified and accepted by the vessel’s owner or charterer prior to
performance.” Id. at 231. In the second line of cases, “[o]wner involvement in
directing, testing, and/or inspecting subcontractor performance has also been
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cited in support of finding a lien in favor of a subcontractor.” 1 Id. We clearly
adopted both lines of cases but found that the subcontractor in Lake Charles
did not meet either one. See id.
The Eleventh Circuit has embraced the second line of cases. In Marine
Coatings of Alabama v. United States, the Eleventh Circuit addressed the
question of the availability of a subcontractor lien in a repair services contract.
932 F.2d 1370, 1375–76 (11th Cir. 1991). There, the United States Navy
entered into Master Ship Repair Contracts with Braswell Shipyards, Inc., that
permitted Braswell to hire subcontractors, although “the contracts did not
purport to make Braswell an agent of the government.” Id. at 1732. Braswell
subcontracted with Marine Coatings of Alabama, Inc. (“MCI”), for the painting,
cleaning, and coating of three vessels, and the United States inspected and
approved MCI’s work. Id. at 1373. The United States paid Braswell, but
Braswell filed for Chapter 11 without paying MCI. Id. Despite being a
subcontractor, MCI asserted a maritime lien against the three vessels, and the
Eleventh Circuit found “a genuine issue as to whether the government
procured MCI’s work, authorized the work, or ratified the procurement of
MCI’s work. Alternatively, there is a genuine issue as to whether Braswell
was authorized by the government to procure MCI’s work.” Id. at 1376.
Likewise, in Stevens Technical Services., Inc. v. United States, the Sealift
Antarctic needed a “major overhaul.” 913 F.2d 1521, 1525 (11th Cir. 1990).
1Compare Galehead, 183 F.3d at 1245 (“Where the level of involvement between the
owner and the third-party provider was significant and ongoing during the pertinent
transaction, the courts have found a triable issue of fact about whether the third-party
deserved a lien.”), with Cianbro Corp. v. George H. Dean, Inc., 596 F.3d 10, 17–18 (1st Cir.
2010) (holding that subcontractor was not entitled to a lien where “the record establishes that
[the vessel’s owners] did not have any participation in the subcontracting of this work or
control over its performance”), and Bonanni Ship Supply, Inc. v. United States, 959 F.2d
1558, 1565 (11th Cir. 1992) (“[T]he mere fact of acceptance and full compensation to the prime
contractor, absent any allegation that the [vessel’s owner] had any knowledge of performance
by the subcontractor plaintiff, is insufficient to create a genuine issue of material fact
regarding whether the plaintiff was a maritime lienor under the MCILA.”).
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Marine Transport Lines, Inc. (“MTL”), on behalf of the United States
government, solicited bids, and Atlantic submitted a bid that identified
Stevens as a subcontractor. Id. Atlantic then entered into a memorandum of
understanding with Stevens, dividing the work between the two of them. Id.
Subsequently, Atlantic’s bid was accepted and MTL awarded it the contract.
Id. During the course of the work, government representatives inspected,
tested, and approved the work performed by both Atlantic and Stevens. Id. at
1525–26. Once work was completed, MTL paid Atlantic, but Atlantic failed to
pay Stevens. Id. at 1526. Stevens subsequently filed actions against Atlantic
in personam and against the Sealift Antarctic in rem. Id. In vacating and
remanding for further reconsideration, the Eleventh Circuit pointed to several
factors that might have indicated Stevens was entitled to a maritime lien:
(1) that the government’s representatives were aware of Steven’s performance
and the principal contract showed Stevens as a subcontractor having more
than 15 percent of the contract’s value; (2) that the government’s
representatives knew that Atlantic was not capable of full performance on its
own; (3) that the contract covering the work was fully authorized by the
government’s representatives; (4) that the government’s representatives
worked directly with Stephens in discussing, testing, and inspecting Stephen’s
work; and (5) that all of the work was accepted and fully compensated to
Atlantic. Id. at 1534–35.
Here, the majority opinion significantly understates Almi’s involvement
in the bunkering transaction when it describes it as a “one-off transaction in
which the vessel owner was merely aware of the subcontractor’s identity.” To
the contrary, the parallels to Stevens, in light of the standards adopted in Lake
Charles, are clear: (1) during negotiations with O.W., Almi made a point to
discover who would perform the bunkering; it did not object to Valero’s
selection and thus impliedly approved Valero prior to finalizing the bunkering
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agreement; (2) Almi knew that O.W., as a “reputable bunker trader,” could not
bunker the vessel itself but would purchase bunkers from a physical supplier;
(3) the contract with O.W., which designated Valero as the supplier, was fully
authorized by a party with authority to bind the vessel; (4) the vessel’s agents
engaged directly with Valero and tested and approved of Valero’s bunkers; and
(5) the vessel’s agents approved of the bunkers and signed a certificate
confirming performance.
The majority opinion’s reliance on Barcliff, LLC v. M/V DEEP BLUE,
IMO No. 9215359 is misplaced. See 876 F.3d 1063, 1071–73 (11th Cir. 2017).
As an initial matter, Barcliff determined that the central issue here was not
properly before it, thus the commentary relied on by the majority opinion is
mere dicta. See id. at 1073. Even if it were not dicta, Barcliff does not mandate
the result reached by the majority opinion. As already shown, similar to
Stevens, Almi “was sufficiently aware of, and involved in, [Valero’s services]
that it might be said that [Valero] was working for [it].” See id. at 1071
(quoting Galehead, 183 F.3d at 1245). Moreover, Barcliff does not exclude one-
off bunkering services that satisfy this rule. Barcliff indicated that the
exception has not been applied where the owner’s involvement was “minimal
or non-existent,” and then it observed that “[o]ne of those cases involved fuel
provision.” Id. at 1072 (citing Tramp Oil & Marine, Ltd. v. M/V Mermaid I,
805 F.2d 42, 45 (1st Cir. 1986)). In Tramp Oil, however, no relationship existed
between the vessel’s owner and the fuel broker seeking the lien, and the
vessel’s owner did not know about the fuel broker (who was retained by an
intermediary) until after its work was completed. See Tramp Oil, 805 F.2d at
45 (“In this case, however, no relationship existed between Tramp and the
vessel, and neither the vessel owner nor the charterer even knew of Tramp
until after Tramp had made the payment to Exxon.”).
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Although a subcontractor, the interactions between the vessel and
Valero are such that Valero is entitled to assert a maritime lien. That O.W.
was expected to pay Valero is not the point; “[e]xpectations that payment for
the services would be made by some party other than the vessel does not vitiate
a lien by one who, as permitted under [the Act], is not required to prove reliance
on the credit of the vessel.” 2 Stevens, 913 F.2d at 1536.
For these reasons, I conclude Valero is entitled to relief. From the
majority opinion’s decision to the contrary, I therefore respectfully dissent.
2 Verna argued in its brief and at oral argument that it has already paid OW Malta
for the fuel in order to settle a contractual arbitration dispute in the United Kingdom; that
this decision will result in Verna being forced to pay twice for the same fuel. That reality is
one of Verna’s own making—an attempt to extinguish O.W.’s claims while this action was
pending. I note that Almi Tankers expressed concern to O.W. regarding the conglomerate’s
financial situation and reserved the right to pay Valero directly, ultimately deciding to pay
O.W. Verna’s unilateral decision does not control the outcome here.
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