Gilbert P. Verbit, Boston, Mass., for plaintiff, appellant.

Thomas M. Brown with whom John F. Barnicle and Eaton, Peabody, Bradford & Veague, Bangor, Me., were on brief, for defendant, appellee.

Before CAMPBELL, Chief Judge, COFFIN, Circuit Judge, and FUSTE,* District Judge.

FUSTE, District Judge.

Plaintiff-appellant, Dr. E.G. Fischer ("Fischer"), appeals from a summary judgment of the district court dismissing his diversity action for slander of title against the defendant-appellee Bar Harbor Banking and Trust Company ("Bank"). Fischer v. Bar Harbor Banking & Trust Co., 673 F. Supp. 622 (D.Me.1987). Fischer contends the Bank committed this misdeed in asserting a lien on a sailboat being constructed for him by Ocean Cruising Yachts of Maine, Inc. ("OCY"). For the reasons set forth below, we affirm.

In 1983, Fischer entered into a contract with OCY for the construction of a custom-built sailboat at a total cost of $172,000. Under the terms of the contract, which required periodic progress payments, title would not pass from OCY to Fischer until Fischer paid the full purchase price and until OCY made delivery to him. At the time of contracting, Fischer was neither aware of any loan arrangements between OCY and the Bank, nor of any lien or security interests the Bank held against OCY property. We note that Fischer did not require OCY to provide a performance bond, a requirement often imposed by commercially sophisticated customers in similar circumstances.

By March 27, 1984, Fischer had made $112,125 in progress payments to OCY. Nonetheless, OCY, whose operations were financed by the Bank since 1979, was experiencing financial difficulties, particularly with its cash flow. To deal with this, in February 1984, the Bank consolidated two existing $100,000 loans to OCY into one loan. As guarantee for this new single obligation, OCY executed in favor of the Bank a promissory note for $200,000 and entered into a security agreement over four hulls in progress, including Fischer's sailboat hull. See Me.Rev.Stat.Ann. tit. 11, Secs. 9-101-113. On March 12, 1984, the Bank filed with the Maine Secretary of State the financing statement in order to perfect its security interest.1

Fischer remained unaware of OCY's relation with the Bank and its financial troubles until the spring of 1984. In May, the president of OCY, Henry R. Hinckley III, informed Fischer that OCY was in serious financial trouble, its loan payments to the Bank were overdue, and the Bank claimed a lien on four sailboats, including his craft-in-progress. On May 19, 1984, Fischer, Hinckley, and the president of the Bank, Mr. Avery, met in an effort to resolve the situation. At that meeting, the Bank would not agree to release its security interest on the four boats unless OCY made a $200,000 loan payment. The Bank confirmed this position in writing, with a June 13, 1984 letter to Fischer from its vice-president and treasurer, John Reeves, stating the Bank would release its lien on Fischer's craft only upon a $50,000 payment. The Bank also sought $50,000 payments from each of the other three boat owners. The attorney for OCY, reacting to OCY's financial troubles, in a May 21, 1984 letter to the four prospective boat owners proposed a payment plan, and agreed that the Bank's lien was superior to their interests in the hulls.

Fischer later responded with a letter to the Bank drafted by his lawyer, contending that he was a "buyer in ordinary course of business" and, therefore, took free and clear of any security interest held by the Bank. Me.Rev.Stat.Ann. tit. 11, Sec. 9-307(1). Thereafter, in July 1984, Hinckley informed Fischer that OCY was terminating operations. Fischer requested the removal of his boat to another shipyard, which was accomplished without the Bank's interference. Construction was completed in August of 1984. In the same month, Hinckley signed a bill of sale transferring title in the boat from OCY to Fischer that contained the following proviso: "Manufacturers Warranty and Title is Given Subject to Bank Lien." This condition was included at the advice of the attorney for OCY. The Bank was not aware of this inclusion.

On May 24, 1985, Fischer filed suit in federal court. On October 25, 1985, the Bank filed termination statements with the Maine Secretary of State regarding the UCC secured interest on the four boats. On June 5, 1986, the Bank filed with the district court a release of its lien on Fischer's boat.

The focus of Fischer's case for damages was that the Bank's March 12, 1984 UCC financing statement covering his hull and its continued assertion of a lien constituted slander of title to the sailboat. He contended that the Bank should have known that he was a buyer in ordinary course, and that the Bank was only trying to extract or extort $50,000 from him. Fischer also sought a declaration that the Bank had no valid lien. The Bank answered that the lien was asserted in good faith and before title passed to Fischer, or, in other words, that it possessed the conditional privilege of a rival claimant. Fischer moved for summary judgment on the request for declaratory relief, and partial summary judgment on his damage claim. Shortly thereafter, the Bank moved to dismiss the complaint or for summary judgment on all issues. Fed.R.Civ.P. 12(b) and 56.

Before disposition of these motions, a U.S. Magistrate's Recommended Decision scuttled Fischer's theory. The Magistrate recommended that the district court grant the Bank's motion and dismiss Fischer's damage claim. He further recommended that the court reserve judgment on the motion for declaratory relief pending a written statement that the demand for declaratory judgment had not been mooted. Fischer filed objections to the recommendation and resorted to in extremis maneuvering by requesting certification to the Maine Supreme Judicial Court of the issues of state law regarding slander of title. The district court declined, and on de novo review, held that the Bank possessed the conditional privilege of a rival claimant, that Fischer did not set forth specific facts to establish actual malice, an element of his slander action, and that because the Bank filed the termination statement and a release of its lien, his request for declaratory relief was moot.

Fischer's main contention on appeal is that the district judge abused his discretion in denying his request to certify to the Maine Supreme Judicial Court the following issues on which there exists no Maine authority: (1) whether Maine jurisprudence would recognize the doctrine of "qualified privilege of a rival claimant" in an action for slander of title, (2) if so, whether the Bank is a "rival claimant" within the meaning of that privilege. On appeal, for the first time Fischer argues that the district court should have certified an additional issue: (3) whether he is a "buyer in ordinary course of business" under Me.Rev.Stat.Ann. tit. 11, Sec. 9-307(1). We find no abuse of discretion on the part of the district court. Certification was not in order.

The decision whether to certify a state law issue to the state's high court "in a given case rests in the sound discretion of the federal court."2 Lehman Bros. v. Schein, 416 U.S. 386, 391, 94 S. Ct. 1741, 1744, 40 L. Ed. 2d 215 (1974). "The purpose of certification is to ascertain what the state law is ..." Tarr v. Manchester Insurance Corp., 544 F.2d 14, 15 (1st Cir.1976). However, "[i]n the absence of a definitive ruling by the highest state court, a federal court may consider 'analogous decisions, considered dicta, scholarly works, and any other reliable data tending convincingly to show how the highest court in the state would decide the issue at hand.' " Michelin Tires, etc. v. First National Bank of Boston, 666 F.2d 673, 682 (1st Cir.1981).

With regard to the recognition of the conditional privilege of a rival claimant,3 the district court found no "significant split in authority among other jurisdictions." Fischer, 673 F. Supp. at 625 n. 5. We think the district court correctly found no real debate in the law that one who maintains a competing claim to an interest in the property of another is conditionally privileged to assert a lien on that property in order to preserve his interest. See Restatement (2nd) of Torts ("Restatement") Sec. 647 comment g (1977). With this right, a "rival claimant is conditionally privileged to disparage another's property in land, chattels or intangible things by an assertion of an inconsistent legally protected interest in himself." Restatement Sec. 647.4

The court properly decided, first, that the Bank effectively became a rival claimant and, second, that the Bank was entitled to assert the privilege. At the time that the Bank perfected its security interest, both had a legally protectable interest in the hull: Fischer contracted OCY for its construction and made almost three-quarters of its purchase price in progress payments, and the Bank had secured $200,000 in earlier loans with this hull and other boats under construction.5

We find Fischer's request for certification particularly inappropriate here. As plaintiff, he had knowledge of the state of the law under his theories for recovery, and had the choice of forums to file suit, either in the local courts or the federal court under diversity jurisdiction, 28 U.S.C. Sec. 1332. As this court has previously stated:

[O]ne who chooses the federal courts in diversity actions is in a peculiarly poor position to seek certification. We do not look favorably, either on trying to take two bites at the cherry by applying to the state court after failing to persuade the federal court, or on duplicating judicial effort.

Cantwell v. University of Massachusetts, 551 F.2d 879, 880 (1st Cir.1977); see also Venezia v. Miller Brewing Co., 626 F.2d 188, 192 n. 5 (1st Cir.1980). Furthermore, his seeking certification on the issue of buyer in ordinary course is made for the first time on appeal. Though the failure to raise the issue would not necessarily prevent our certifying at this late stage, it considerably weakens plaintiff's insistence on his right to certification. Cf., Perkins v. Clark Equipment Co., 823 F.2d 207, 210 (8th Cir.1987). We take a dim view of Fischer's attempt to circumnavigate the reach of the district court on an issue not properly before the court. We note that in his complaint, Fischer sought a declaration that the Bank had no valid lien on the sailboat, rather than a declaration that he was a buyer in ordinary course.

Moving to the district court's other substantive determinations, we agree that Fischer provided insufficient evidence to show that the Bank acted with malice in filing its March 12, 1984 filing statement, and continuing to assert a lien on the unfinished sailboat. In deciding this issue, the court correctly determined that it was of no consequence whether, in order to judge actual malice, Fischer occupied the esteemed position of buyer in ordinary course.6 Whether Fischer is a buyer in ordinary course is not the issue. The issue is whether the answer to that question was so obvious as to constitute a finding that the Bank acted with actual malice. For both legal and factual reasons, the answer to this inquiry is no. Though a review of the authorities cited in the district court opinion indicates that in a contest for possession of the hull Fischer could have won on the merits, see Holstein v. Greenwich Yacht Sales, Inc., 122 R.I. 211, 404 A.2d 842 (1979) (identification of the goods of the contract cuts off the creditor's security interest), there is support for the Bank's position, see Chrysler Corp. v. Adamatic, Inc., 59 Wis. 2d 219, 208 N.W.2d 97 (1973) (buyer does not become buyer in ordinary course until title passes to buyer). Fischer, in his brief on appeal, makes much of commentators' negative criticism of the Adamatic case, but offers no authority in support of his claim that he was a buyer in ordinary course at the time the Bank perfected the secured transaction. Fischer ignores the fact that under the hull construction contract with OCY, title to the boat would not pass until the full purchase price had been paid.7 Under the Adamatic case, the Bank had sufficient legal authority to support its position. Having structured the ship's construction contract under the Adamatic approach, the appellant stands on thin ice in disclaiming the application of that particular view. What existed at this point were competing claims to a superior interest between the two parties. The Bank, like Fischer, was at least entitled to press its right to superiority before relinquishing it in the judicial setting.8

Lastly, merely because Fischer's lawyer asserted in an extrajudicial letter that Fischer was a buyer in ordinary course does not mean the Bank had to drop sails and paddle home. Institutions who hand out loans to businesses are expected to protect their investments in order to decrease their exposure to monetary loss. The Bank merely acted in accordance with its customary practice with OCY. See footnote 1, p. 5. Moreover, it was OCY's attorney who took the position that the Bank had a priority interest over the four sailboat buyers. OCY, not the Bank, included the qualification on the bill of sale that the purchase was subject to the Bank's lien. The facts, together with the status of the law, seen as a whole, are insufficient to establish malice on the part of the Bank.

We conclude that the district court properly denied certification that Maine jurisprudence would recognize the conditional privilege of a rival claimant in a slander of title action, and that the district court properly applied the privilege to the facts.

The decision of the district court is affirmed.

COFFIN, Circuit Judge (dubitante).

I respectfully question whether the district court properly granted summary judgment on the issue of the Bank's malice. Although the evidence of malice in this case is not strong, I do not believe a jury would be foreclosed from finding that the Bank acted maliciously, and therefore was not entitled to exercise the privilege of a rival claimant.

In an affidavit, Bank President Robert Avery stated that he continued to believe the Bank's liens on the four boats were superior to the interests of the boat buyers "until the point in time when this Court rendered a decision in the case of David Pyles v. Ocean Cruising Yachts of Maine, Inc. and Bar Harbor Banking & Trust Company, No. 84-0227-B." (Emphasis added.) In the Pyles case, the district court granted a preliminary injunction allowing Pyles--another of the four boat buyers whose boats were involved in the OCY-Bar Harbor security arrangement--to remove his boat from OCY's shipyard upon his furnishing a surety bond and a certificate of property insurance coverage. Despite Avery's statement implying that he no longer believed the lien was valid as of the time of the Pyles decision, which was issued July 25, 1984, the Bank's lawyer on August 3 sent a letter to Fischer asserting the Bank's security interest in the boat and noting that the Bank would be entitled to any improvements Fischer decided to make on the vessel.

I believe that Avery's affidavit supports plaintiff's argument that a factual dispute, based on objective evidence, remains on the issue of malice.