Opinion
Civil Action No. 01-0555 Section: E/2
March 20, 2001
RULING ON NOTION
Plaintiffs Gulf Marine Industrial Supplies, Inc., and J J Enterprises (collectively "Gulf Marine") filed a maritime complaint against New Filipino Maritime Agencies, Inc. ("New Filipino") in personam, pursuant to Supplemental Rule B, asserting claims for breach of certain maritime contracts for necessary supplies and related services rendered to M/V RUBEN ROSEBAY, M/V NAVIOS MARINER, M/V MARQUESA, M/V FOREST CREATOR, and M/V SEA DIAMOND, and breach of assignment upon notice to New Filipino. In its verified complaint, plaintiffs assert that New Filipino was the owner, operator, manager or undisclosed principal's general agent for these vessels.
Plaintiffs allege that defendant New Filipino is a foreign company doing business in Manila, the Republic of the Philippines, and acts through a local representative, Elizabeth Marinski, who also does business as State Ship Supply. The complaint states that New Filipino, acting through Elizabeth Marinski, maintained an open account with Gulf Marine to provision various vessels arriving in local ports with groceries and other supplies. Gulf Marine delivered the supplies ordered by Marinski on the open account directly to the vessels. Ms. Marinski did not deliver any supplies from Gulf Marine to the vessel, but made the arrangements for Gulf Marine to do so. The supplies in question were delivered from February 1999 through March 2000. In its complaint, plaintiff alleged that New Filipino received groceries and other supplies from Gulf Marine and owed the plaintiffs $26,844.17.
MS. Marinski had a similar arrangement with Michael Tecchie of Trans Ocean Marine Supply, another ship's chandler operating in the city of New Orleans.
In the verified complaint, plaintiffs also assert that this is an admiralty and maritime claim within the meaning of 9(h) of the Federal Rules of Civil Procedure and the Supplemental Rules governing certain admiralty and maritime claims and that this court has jurisdiction of this complaint pursuant to 28 U.S.C. § 1333 (1). The complaint alleges that defendant New Filipino has no agent within the jurisdiction of the Court and has no presence within this Court's jurisdiction for purposes of in personam jurisdiction or service of process.
Gulf Marine file a motion for issuance of summons and process of attachment and garnishment of goods, property, chattels, credits, monies, freights, assigned freights, bills of lading, bank accounts, and other property, amounting to $53,768.34. This amount was twice what plaintiffs alleged was owed by New Filipino to Gulf Marine. Gulf Marine sought to attach and garnish funds up to and including $53,768.34 found within the jurisdiction of this court, including funds that were in the account of Trans Oceans Marine Supply that had been received from New Filipino and were being held for New Filipino. This motion for issuance of attachment and garnishment was made pursuant to Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims. On March 5, 2001, Judge Mary Ann Vial Lemmon ordered the issuance of process of attachment and garnishment of up to $53,768.34 in funds held by Trans Oceans Marine Supply which are owed by, owed to, or claimed by defendants New Filipino. (Rec. Doc. No. 2). Certain funds belonging to New Filipino were garnished from Trans Oceans Marine Suppply and attached.
Subsequent to the entry of the order authorizing the motion for issuance of attachment and garnishment, this action was transferred to this section under Local Rules 3.1 and 3.1.1 E of the Uniform Local Rules of the Eastern, Middle, and Western Districts of Louisiana, as a related case to Gulf Marine Industrial Supplies. et al v. Marinski. et al, Civil Action No. 00-1478, Section "E".
New Filipino filed the instant motion to vacate the attachment and garnishment of funds ordered by Judge Lemmon and requested a prompt hearing thereon. A prompt hearing was held. Defendant New Filipino contends that plaintiffs' complaint does not support a Rule B attachment of these funds. Defendant also argues that it never had a contract or open account with plaintiffs Gulf Marine or J J, was never informed of the assignment of any invoices to it, except that regarding the M/V RUBEN ROSEBAY, after it had been paid. It contends that it paid Marinski, d/b/a State Ship Supply, for all of the provisions and supplies delivered. Finally, it contends that the contract which plaintiffs sue upon is not a maritime contract and that there is no admiralty or maritime claim present.
Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure provides in pertinent part:
With respect to any admiralty or maritime claim in personam a verified complaint may contain a prayer for process to attach the defendant's goods and chattels, or credits and effects in the hands of the garnishees to be named in the process to the amount sued for, if the defendant shall not be found within the district. Such a complaint shall be accompanied by an affidavit signed by the plaintiff or the plaintiff's attorney that, to the affiant's knowledge, or the best of the affiant's information and belief, the defendant cannot be found within the district. The verified complaint and affidavit shall be reviewed by the court and, if the conditions set forth in this rule appear to exist, an order so stating and authorizing process of attachment and garnishment shall issue. Supplemental process enforcing the court's order may be issued by the clerk upon application without further order of the court. . . .
Supplemental Rule B is a remedy used to attach property in order to (1) acquire jurisdiction over a defendant; (2) to obtain security for a claim; and (3) to seize property in connection with the enforcement of a judgment. Thomas J. Schoenbaum, Admiralty and Maritime Law, § 21-2, p. 469 (2d ed. 1994). Rule B provides for maritime attachment in connection with an in personam claim, which differs from an in rem attachment of a vessel. As described by Shoenbaum,
Maritime attachment presupposes an in personam claim, and Rule B allows the plaintiff to assert personal jurisdiction over a defendant who cannot be found through attachment of her property or garnishment of a debt owed to her; this is known (albeit erroneously) as quasi-in-rem jurisdiction. Unless the defendant is personally served with process, the plaintiff's recovery will be limited to the value of the property attached.
Maritime attachment serves both to obtain jurisdiction over a defendant through her property and to assure satisfaction of the claim. Attachment reaches only assets in the hands of the garnishee on the date of service; it is not effective against after-acquired property.Admiralty Practice Procedure, § 21-2, pp. 469-470. Attachment under Rule B serves to secure the defendant's appearance and assure satisfaction in the event the plaintiff's suit is successful. Heidmar, Inc. v. Anomina Ravennate Di Armamento Sp.A of Ravenna, 132 F.3d 264, 268 (5th Cir. 1998). If the defendant is not present in the district at the time the suit is filed and cannot be found for service of process, Rule B attachment will secure jurisdiction. The later appearance of the defendant will not dissolve the attachment. Id.
To obtain an order of maritime attachment pursuant to Rule B, the plaintiff must establish four elements: (1) the plaintiff has an in personam claim against the defendant which is cognizable in admiralty; (2) the defendant "cannot be found within the district" in which the action is commenced; (3) property belonging to the defendant is present or will soon be present in the district; and (4) there is no statutory or general maritime law proscription to the attachment. Admiralty Practice Procedure, § 21-2, p. 470; Western Bulk Carriers (Australia) v. P. S. International, Ltd., 762 F. Supp. 1302, 1306 (S.D. Ohio 1991).
In the complaint and at the hearing, plaintiffs allege that it had a contract to supply goods and services to a vessel, i.e., "necessaries", that it did supply provisions to the vessels being manned, crewed, and supplied by New Filipino, and that the contract to supply such provisions is a maritime contract. Defendant contends that it does not own, operate, or manage any of the vessels in question, it never contracted with plaintiffs Gulf Marine and J J Enterprises, but instead contracted with Elizabeth Marinski, doing business as State Ship Supply, and that at best, the contract which plaintiffs alleges was breached was an assignment by Marinski to J J Enterprises of the proceeds due her for the provisions. Defendant New Filipino contends that this assignment is not a maritime contract.
To determine whether the claim which plaintiffs bring sounds in admiralty, some guidance is provided by the Maritime Lien Act, 46 U.S.C. § 31342, which provides:
(a) Except as provided in subsection (b) of this section, a person providing necessaries to a vessel on the order of the owner or a person authorized by the owner —
(1) has a maritime lien on the vessel;
(2) may bring a civil action in rem to enforce the lien; and
(3) is not required to allege or prove in the action that credit was given to the vessel.
(b) This section does not apply to a public vessel.
Maritime liens may be enforced by a civil action in rem against the vessel, a remedy unique in admiralty.
There is no factual dispute that plaintiff Gulf Marine provided necessaries to the vessel in question. Defendant New Filipino contends that it is not the owner of the vessel, that it had a contract with the owner to furnish officers and crew and supply the vessel, and that it contracted with Elizabeth Marinski, d/b/a State Ship Supply to furnish those goods. While New Filipino may not be the owner of the vessels in question, it was authorized by the owner to secure those necessaries. While Marinski may not be employed by New Filipino, she certainly acted for them in securing the provisions and she did so by arranging for their purchase from and delivery by Gulf Marine. It appears to be factually undisputed that she does not warehouse provisions and had no truck with which to deliver them.
This complaint is that of a ship's chandler for payment for the provisioning of necessaries to a ship upon the request of the owner's agent, i.e., New Filipino, although it was through the owner's agent's intermediary, Elizabeth Marinski or State Ship Supply. It is not a complaint in rem to enforce a maritime lien, but an in personam action in which Rule B was used to attach and garnish property for purposes of securing personal jurisdiction over the defendant and having funds with which any judgment secured could be satisfied. The evidence at the hearing was that in addition to furnishing provisions for the ship, Gulf Marine would receive wire transfers of substantial amounts of cash, i.e., as much as $60,000, from New Filipino, with instructions to deliver it to Marinski, so she could deliver the cash to the ship's captain. While the exact legal nature of the relationship between these parties will likely be the subject of much dispute, there is at least a factual issue whether Marinski was acting as the agent for New Filipino, who was acting on behalf of the vessel owners. Thus, the Court finds that the plaintiffs have satisfied the requirement of establishing that their claim is maritime in nature as it concerns the furnishing of necessaries to a vessel.
In order to establish the requirements of Rule B for attachment, the plaintiff must also show that (1) the defendant is not present within this district, (2) goods or funds belonging to the defendant are found within this district, and (3) there is no proscription to the attachment and garnishment of those goods under maritime law. New Filipino is a foreign corporation with no agent for service of process in this district and it claims the funds garnished from Trans Ocean were its property. Finally, defendant has not shown that there is any proscription under maritime law to the garnishment and attachment of its property. The Court finds that plaintiffs have satisfied the showing required to attach and garnish funds under Rule B.
Rule E of the Supplemental Rules provides that any party claiming an interest in property which has been attached is entitled to a prompt hearing at which plaintiff shall be required to show cause why the attachment should not be vacated. Rule E(4)(e). If the court upholds the attachment, the property owner may post a bond of sufficient amount to secure the claim. Rule E(5) states that:
. . . [W]henever process of maritime attachment and garnishment or process in rem is issued the execution of such process shall be stayed, or the property released, on the giving of security, to be approved by the court or clerk, or by stipulation of the parties, conditioned to answer the judgment of the court or of any appellate court. The parties may stipulate the amount and nature of such security. In the event of the inability or refusal of the parties so to stipulate the court shall fix the principal sum of the bond or stipulation at an amount sufficient to cover the amount of plaintiff's claim fairly stated with accrued interest and costs; but the principal sum shall in no event exceed (i) twice the amount of the plaintiff's claim or (ii) the value of the property on due appraisement, whichever is smaller. The bond or stipulation shall be conditioned for the payment of the principal sum and interest thereon at 6 per cent per annum.
Plaintiffs herein requested attachment of twice the amount due to secure any judgment of the principal amount, attorney's fees, and interest. In their verified complaint, the plaintiffs alleged that the amount due was $26,884.17, and they moved to attach twice that amount, or $53,768.34. At the hearing, plaintiffs conceded that there was an error in the calculation of the amount due and that the amount they now contend is due for the provisions supplied to the vessels in question is $19,273.76. Twice the amount due under the revised calculation is $38,547.52, which is $15,220.82 less than the amount attached and garnished.
Accordingly, insofar as the amount that was attached was more than twice the amount plaintiffs contend is owed, the attachment and garnishment must be vacated in part to release the excess funds. Because the Rule B attachment of the property was appropriate for the reasons stated herein, the attachment and garnishment will be upheld in the amount of twice the amount plaintiffs' claim, i.e., $38,547.32 ($19,273.76 x 2). Since the defendant has filed an answer to the verified original complaint and a counter-claim, upon the filing of the answer to the counter-claim, a pretrial conference and trial date, and discovery cutoff dates will be assigned.
Accordingly, for the above and foregoing reasons,
IT IS ORDERED that the motion of defendant New Filipino Maritime Agencies, Inc., to vacate the attachment of funds is hereby GRANTED IN PART, and the attachment and garnishment of the sum of $15,220.82 is hereby VACATED;
IT IS FURTHER ORDERED that the motion of defendant New Filipino Maritime Agencies, Inc., to vacate the attachment of the remaining $38,547.52 is hereby DENIED.