JAY C. ZAINEY, District Judge.
The following motions are before the Court:
Plaintiff C-Port/Stone, LLC filed this action against Gulf Logistics, LLC in personam and the M/V GREY CUP in rem to recover payments for fuel, lube oil and water that were provided to the M/V GREY CUP as vessel necessaries.
Via its motion for summary judgment, C-Port/Stone moves to enforce its liens against the GREY CUP, the end result of which would be that Gulf Logistics would have to pay for Whistler's unsatisfied debts in order to avoid having the GREY CUP arrested and sold.
Via its motion for summary judgment, Gulf Logistics moves to dismiss the complaint arguing that any liens against its vessel, if they actually attached, have been extinguished.
A bench trial is scheduled to commence on November 28, 2018.
Summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," when viewed in the light most favorable to the non-movant, "show that there is no genuine issue as to any material fact." TIG Ins. Co. v. Sedgwick James, 276 F.3d 754, 759 (5th Cir. 2002) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986)). A dispute about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. (citing Anderson, 477 U.S. at 248). The court must draw all justifiable inferences in favor of the non-moving party. Id. (citing Anderson, 477 U.S. at 255). Once the moving party has initially shown "that there is an absence of evidence to support the non-moving party's cause," Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986), the non-movant must come forward with "specific facts" showing a genuine factual issue for trial. Id. (citing Fed. R. Civ. P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)). Conclusional allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not adequately substitute for specific facts showing a genuine issue for trial. Id. (citing SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993)).
When faced with a well-supported motion for summary judgment, Rule 56 places the burden on the non-movant to designate the specific facts in the record that create genuine issues precluding summary judgment. Jones v. Sheehan, Young, & Culp, P.C., 82 F.3d 1334, 1338 (5
The Court begins from the premise that invoices totaling $125,952.59 represent necessaries that C-Port/Stone provided to the GREY CUP on credit.
Pursuant to the Commercial Instruments and Maritime Lien Act, a person who provides necessaries to a vessel on the order of the owner or a person authorized by the owner has a maritime lien on the vessel, and may bring a civil action in rem to enforce the lien. 46 U.S.C. § 31342(a), (b). The provider of the necessaries is not required to allege or prove in the action that credit was given to the vessel. Id. § 31342(a)(3).
A presumption arises that one providing supplies to a vessel acquires a maritime lien, and the party attacking this presumption has the burden of establishing that the personal credit of the owner or charterer was solely relied upon. Equilease Corp. v. M/V Sampson, 793 F.2d 598, 605 (5
Gulf Logistics argues that the evidence of record establishes that C-Port/Stone looked solely to the credit of Whistler for payment. Gulf Logistics points out that C-Port/Stone processed a credit application for Whistler but not for the GREY CUP.
This contention is unpersuasive because the evidence establishes that C-Port/Stone had no notice as to which vessels would call at its dock for services requested by Whistler.
Furthermore, the testimony of C-Port/Stone's representative is not similar to the corporate testimony in Equilease, supra, and Racal Survey U.S.A., Inc. v. M/V Count Fleet, 231 F.3d 183 (5
Gulf Logistics questions C-Port/Stone's diligence in checking Whistler's creditworthiness before selling it necessaries on credit. Gulf Logistics also contends that C-Port/Stone continued to extend credit to Whistler even though it was not paying invoices on time. Gulf Logistics argues that C-Port/Stone should not reap the benefit of having a maritime lien cover its own poor credit practices.
Even if the jurisprudence recognized a punitive denial of the lien for reckless conduct by the creditor, the Court is not persuaded that C-Port/Stone's practices and conduct in this case rise to that level.
Gulf Logistics has failed to point to evidence sufficient to overcome the presumption that C-Port/Stone relied upon the credit of the GREY CUP with respect to the necessaries it provided. The Court finds unpersuasive Gulf Logistics' alternative contention that issues of fact as to whether C-Port/Stone relied on the credit of the GREY CUP to any extent preclude summary judgment. This Court would be the trier of fact at trial. None of the evidence is in dispute, only the legal ramifications of that evidence, which the Court appropriately resolves at this time.
In sum, C-Port/Stone obtained valid maritime liens on the GREY CUP totaling $125,952.59.
Even if C-Port/Stone obtained valid maritime liens on the M/V GREY CUP, Gulf Logistics argues that C-Port/stone should not be able to enforce the liens insofar as they pertain to "gap period" invoices or invoices for which C-Port/Stone obtained "new value" credit in defense of Whistler's bankruptcy trustee's preference action against C-Port/Stone.
Gulf Logistics' argument with respect to gap period invoices is that the relief order from the bankruptcy court dictated that Whistler would pay those invoices. But until the invoices are actually paid the liens on the GREY CUP related to those invoices remain extant and enforceable. C-Port/Stone need not exhaust its remedies against Whistler in order to enforce its liens.
Gulf Logistics' argument with respect to "new value" credit is that C-Port/Stone's liens should be reduced dollar for dollar for any amounts for which C-Port/Stone received new value credit in Whistler's bankruptcy when defending the trustee's preference action against C-Port/Stone. Gulf Logistics argues that all of the invoices at issue in this case would be subject to such an offset because C-Port/Stone used each of the invoices as "new value" to offset its preference liability to the bankruptcy estate.
The Court is persuaded that the pertinent question insofar as extinguishment of a maritime lien is concerned is whether and to what extent Whistler's debts to C-Port/Stone have been satisfied, whether by payment or by compromise. The Court is not so much concerned with the former (payment) because there has been no "payment" by either Whistler or a third party, and the Court is inclined to agree with C-Port/Stone's contention that the Bankruptcy Code's imputation of preference payments to new value debt does not likely in and of itself extinguish a statutory maritime lien. After all, a successful new value defense as to a preference should leave the creditor with a claim against the debtor for the antecedent debt.
The Court is more concerned with whether C-Port/Stone's maritime liens on the GREY CUP were extinguished inadvertently via compromise because it is the Court's understanding that C-Port/Stone settled the preference action that Whistler's trustee brought against it. The Court has no knowledge as to the terms of that settlement and whether it involved a compromise of all of C-Port/Stone's claims against Whistler, or if not for all of the claims, whether the debt still owed is at least $125,952.59, the total amount of the liens that C-Port/Stone is seeking to enforce. In other words, the Court is not persuaded that C-Port/Stone can enforce a lien against the GREY CUP for more than what remains on Whistler's debt to C-Port/Stone. The Court therefore denies C-Port/Stone's motion for judgment as a matter of law at this time.
Finally, the Court agrees with Gulf Logistics' argument that the breach of contract and quantum meruit claims against it should be dismissed. A vessel is a distinct entity from its owner and it statutorily liable for its own debts. World Fuel Servs., Inc. v. MAGDALENA GREEN M/V, 464 Fed. App'x 339, 341 (5
Accordingly, and for the foregoing reasons;