PATRICIA MINALDI, District Judge.
Before the court is a Motion for Partial Summary Judgment (Rec. Doc. 87) filed by C&G Welding, Inc. ("C&G"), an Opposition (Rec. Doc. 113) filed by Offshore Contractors, Ltd. ("Offshore Contractors"), a Response (Rec. Doc. 177) filed by C&G, a Response (Rec. Doc. 181) filed by Offshore Contractors, a Motion for Partial Summary Judgment (Rec. Doc. 165) filed by Cashman Equipment Corporation ("Cashman") and Servicio Marina Superior, L.L.C. ("Servicio"), a Response (Rec. Doc. 172) filed by Bear Marine Services, Ltd. ("Bear Marine"), and a Motion for Summary Judgment (Rec. Doc. 167) filed by Union Bank of Nigeria, PLC ("Union Bank"), an Opposition (Rec. Doc. 171) filed by Cashman and Servicio, an Opposition (Rec. Doc. 173) filed by Bear Marine, and a Reply (Rec. Doc. 183) filed by Union Bank. For the following reasons, C&G's Motion for Partial Summary Judgment (Rec. Doc. 87) is
On February 18, 2015, Cashman and Servicio filed a Motion for Writ of Garnishment of the GLOBAL IROQUOIS pursuant to Rule B of the Supplemental Rules for Admiralty or Maritime Claims as Asset Forfeiture Actions ("Rule B").
A grant of summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A dispute is said to be "genuine" only where a "reasonable jury could return a verdict for the non-moving party." Dizer v. Dolgencorp, Inc., No. 3:10-cv-699, 2012 U.S. Dist. LEXIS 24025, at *16 (W.D. La. Jan. 12, 2012) (citing Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006)). "Rule 56[(a)] mandates the entry of summary judgment . . . against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Webber v. Christus Schumpert Health Sys., No. 10-1177, 2011 U.S. Dist. LEXIS 99235, at *14 (W.D. La. Sept. 2, 2011) (citing Patrick v. Ridge, 394 F.3d 311, 315 (5th Cir. 2004)).
In ruling upon a motion for summary judgment, the district court shall draw all inferences in a light most favorable to the nonmoving party. Id. at *3 n. 1 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (additional citation omitted)). However, the court will not, in the absence of proof, "assume that the nonmoving party could or would prove the necessary facts." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citing Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990)). "The non-movant cannot preclude summary judgment by raising `some metaphysical doubt as to the material facts, conclusory allegations, unsubstantiated assertions, or by only a scintilla of the evidence.'" Cormier v. W&T Offshore, Inc., No. 10-1089, 2013 U.S. Dist. LEXIS 53416, at *18-19 (W.D. La. Apr. 12, 2013) (citing Little, 37 F.3d at 1075).
The Ship Mortgage Act, 46 U.S.C. §§ 31301-43 ("the Act"), governs the priority of claims and sets forth the required showing to establish a preferred mortgage on a vessel. The Act provides that the holder of a foreign mortgage lien "may be afforded `preferred mortgage' status if the mortgage has been [1] duly and validly executed and [2] duly registered under the (applicable) foreign law." Nevi Mar. Co. v. M/V ALEXANDER'S UNITY, No. 92-2561, 1993 WL 386257, at *2 (E.D. La. Sept. 21, 1993) (alteration in original) (internal quotation marks omitted) (citing 46 U.S.C. § 31301(6)(B)) (additional citations omitted). Under the Act, a "preferred mortgage is a lien on the mortgaged vessel." 46 U.S.C. § 31325(a). Section 11 of the Vanuatu Maritime Act states that the "nonstatutory general maritime law of the United States of America is hereby declared to be and is hereby adopted as the general maritime law in respect of all vessels registered under [the Vanuatu Maritime] Act." It is well established general maritime law of the United States that once a vessel is in custodia legis, no liens may attach to that vessel. Oil Shipping (Bunkering) B.V. v. Sonmez Denizcilik Ve Ticaret A.S., 10 F.3d 176, 178 (3d Cir. 1993) (citing Kingstate Oil v. M/V GREEN STAR, 815 F.2d 918, 922-24) (3d Cir. 1987)).
Cashman, Servicio, and Bear Marine argue that the mortgage is null and void under the Act because it was executed on April 15, 2015, two months after the GLOBAL IROQUOIS was placed in custodia legis. Union Bank responds that because the alleged debt was incurred before the court took custody of the vessel, it had the authority to create a lien even if the GLOBAL IROQUOIS was in judicial custody. Cashman, Servicio, and Bear Marine cite to an array of cases
Regardless of when the debt was incurred, the law is clear that liens may not attach to a vessel in custodia legis. The parties all agree that the mortgage took place after the GLOBAL IROQUOIS was in judicial custody, and Union Bank does not dispute that the mortgage is a maritime lien. The fact that the debt was used to secure the purchase of the vessel is irrelevant. Union Bank was free to execute a mortgage on the GLOBAL IROQUOIS anytime up to the point at which the vessel was placed in custodia legis, but it failed to do so. The court finds that the preferred mortgage on the GLOBAL IROQUOIS was not duly executed because it occurred after the vessel was in judicial custody, and thus the mortgage is not afforded "preferred mortgage" status under the Act.
For a Rule B attachment to issue, a plaintiff must have "a valid prima facie admiralty claim against the defendant." Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434, 445 (2d Cir. 2006). In determining whether a contract gives rise to maritime jurisdiction, courts should look to "the nature of the character of the contract, and the true criterion is whether it has reference to maritime service or maritime transactions." Norfolk S. Ry. Co. v. Kirby, 125 S.Ct. 385, 393 (2004) (citations omitted) (internal quotation marks omitted). "In order to be considered maritime, there must be a direct and substantial link between the contract and the operation of the ship, its navigation, or its management afloat. . . ." Alphamate Commodity GMBH v. CHS Europe SA, 627 F.3d 183, 187 (5th Cir. 2010). "It is well-established that a charter party agreement is a maritime contract." Fednav, Ltd. v. Isoramar, S.A., 925 F.2d 599, 601 (2d Cir. 1991). Courts have found "that an admiralty court can review questions of . . . alter ego." Vitol, S.A. v. Primerose Shipping Co. Ltd., 708 F.3d 527, 538 (4th Cir. 2013) (citations omitted).
On October 15, 2010, OPI International Contractors, Ltd. ("OPI International"), executed separate charter agreements with Cashman and Servicio.
Bear Marine argues that its Participation Agreement
Union Bank asserts that Cashman, Servicio, and Bear Marine are not creditors of Offshore Contractors, but instead that Cashman and Servicio are judgment creditors of OPI International, and that Bear is a creditor of OPI Nigeria. Thus, Union Bank argues, Cashman, Servicio, and Bear Marine are not entitled to proceeds from the sale of the vessel because none of them were creditors of the entity that owned the vessel, Offshore Contractors. Union Bank frames the Consent Judgment, which makes previous judgments in favor of Cashman and Servicio against OPI International enforceable against Offshore Contractors, as nothing more than a settlement agreement that is incapable of establishing whether those entities are alter egos of one another. In support of this view, Union Bank cites Martin v. Wilks, a case in which the Supreme Court found that consent decrees between a local government and black firefighters did not preclude white firefighters from asserting federal employment rights inconsistent with those consent decrees. 490 U.S. 755, 761-63 (1989).
By entering into the Consent Judgment, Offshore Contractors essentially judicially confessed that it was an alter ego of OPI International. There is a presumption that the Consent Judgment is true, and Union Bank has failed to offer anything other than speculation to overcome this presumption. Moreover, unlike the white firefighters in Martin that sought to assert an established legal right, Union Bank does not have a legal right to force Offshore Contractors to argue that OPI International is not its alter ego. Union Bank did have the legal right to timely execute a preferred mortgage that would have protected its interests, or to more timely intervene in the matter and raise any objections to the proposed Consent Judgment before it was granted, but it slept on those rights.
In their motion for summary judgment, Cashman and Servicio argue that their claims outrank and take priority over any of Bear Marine's claims. In its response, Bear Marine acknowledges that it is only entitled to any proceeds of the sale of the vessel that exceed Cashman and Servicio's judgments. Thus, Cashman and Servicio's motion is
C&G's motion sought judgment against Offshore Contractors granting it the full amount of its past due invoices and for attorney's fees and costs. Offshore Contractors agrees that it owes C&G the sum of $234,079 for past due invoices,