Opinion
00 Civ. 6925 (GBD)
May 31, 2002
MEMORANDUM OPINION AND ORDER
Background
On September 14, 2000, plaintiffs Patricia Hayes Associates, Inc. and Smithall Electronics, Inc. filed complaints against defendants the Big Red Boat (Two) ("BRB"), International Shipping Partners, Premier Cruises, Inc. and the Master of the Big Red Boat (Two) ("defendants"). Plaintiffs alleged that they provided goods and services to BRB pursuant to maritime contracts, that defendants failed to pay plaintiffs for the provision of these items, and that defendants were in default of their obligations to pay plaintiffs. Furthermore, plaintiffs asserted that they possessed a maritime lien against BRB in the amount of the goods and services that plaintiffs provided, as well as interests and costs. Plaintiffs alleged that their maritime lien against BRB entitled plaintiffs to a warrant of arrest pursuant to Supplemental Rule C of the Federal Rules of Civil Procedure.
At that time, Supplemental Rules for Certain Admiralty and Maritime Claims C(3) stated, in pertinent part, "the verified complaint and any supporting papers shall be reviewed by the court and, if the conditions for an action in rem appear to exist, an order so stating and authorizing a warrant for the arrest of the vessel or other property that is the subject of the action shall issue and be delivered to the clerk who shall prepare the warrant. If the property is a vessel or a vessel and tangible property on board the vessel, the warrant shall be delivered to the marshal for service.
Additionally, two other plaintiffs, Southern Marine Electric Company, Inc. and Alpha Marine, Inc. filed complaints against defendants on September 15, 2000, alleging that they furnished supplies to BRB, all of which were necessaries as defined in maritime law. Plaintiffs' further alleged that they made a demand for payment to the defendants, but that defendants failed to pay the money due and owing to plaintiffs and that plaintiffs were therefore entitled to a maritime lien against BRB which was enforceable in rem. These plaintiffs also requested that this Court issue a warrant in rem for the arrest of the vessel, and that this Court enter judgment in favor of plaintiffs for all sums demanded in the complaint, as well as interest, costs and attorney's fees.
On September 15, 2000, this Court signed the warrants of arrest requested by plaintiffs Patricia Hayes Associates, Smithall Electronics, Southern Marine and Alpha Marine, ordering the clerk of the court to issue a warrant of arrest and writ of maritime attachment pursuant to Rules B and C of the Supplemental Rules for Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure. Plaintiffs anticipated that the vessel, which was out of the jurisdiction at the time of the signing of the warrant, would arrive in this district on Saturday, September 16, 2000. At the time the vessel entered the district, the United States Marshals seized it pursuant to the warrant of arrest.
Subsequent to the arrest of the vessel, numerous other complaints and intervening complaints were filed against defendants pursuant to Fed.R.Civ.P. 24 and Local Admiralty Rule E.2 of the Local Rules of the United States District Courts for the Southern and Eastern Districts of New York. The various complaints allege that each plaintiff provided goods or I services that were defined as necessaries under maritime law and were therefore entitled to a maritime lien against BRB, as well as other relief.
Local Admiralty Rule E.2 states, in pertinent part, "[w]hen a vessel or other property has been arrested, attached or garnished, and is in the hands of the marshal or custodian substituted therefor, anyone having a claim against the vessel or property is required to present the claim by filing an intervening complaint, and not by filing an original complaint, unless otherwise ordered by a judicial officer." While subsequent plaintiffs were required to file a motion to intervene in the original complaint, many plaintiffs filed original complaints which were docketed separately from the lead case, Patricia Hayes Assoc. v. M/V Big Red Boat, II, et al., 00 Civ. 6925 (GBD).
The following plaintiffs filed intervening or original complaints against BRB: Moran Towing Corporation and Metropolitan Pilots Association (tug and piloting services), Sysco Food Service and Ritter Sysco Food (food and supplies), Greenwich Insurance Company and NAC Reinsurance Corporation (bareboat charterers), Tramp Oil and Marine (fuel oil), Dynamic Electric (electrical supplies), Milder Medical Supplies (medical supplies), Boston Pilots and Massachusetts Port Authority (pnotage services and wharfage), Nordic and Callenberg Engineering (labor, materials and equipment), P O Ports (stevedoring and marine terminal services), Starboard Holdings, Ltd. (series of stores and goods), Unitor Ship Services (chemicals and refrigerants), Jim's Pump Repair, Inc.(plumbing supplies and services), Galehead, Inc.(fuel), QMR Industries (electrical supplies and services), A.C. Coin and Slot Service Co. Inc. (casino equipment), Mayfair Ship Supplies (ship supplies), Triton Marine Fuels (marine and fuel services), David Leonard, et al. (pilotage services), Spin, Inc. (gambling and casino concession), Clean Water of New York (removal and treatment of liquid waste), Assuranceforeningen Skuld (premiums calls and other charges with regards to PI insurance), Goltens New York Corp. (workman services and repair), Four Jay's of Merritt Island (amusement game equipment), High Seas Trading Company and Direct Ship Supply (equipment and supplies), Pieter Bunga and Arie Supit (negligence action against defendants), International Paint Inc. (paint supplies), Empire Seafood, Inc. (seafood), Steiner Transocean, Ltd. (beauty salon concession), and Image (photography and videography concession).
On September 28, 2000, this Court signed an order consolidating all claims filed against defendants and granting motions to intervene as to those claims uncontested by defendants. The bulk of the claims against BRB were settled, but various contested claims remain outstanding. BRB contests several claims, alleging that those individual plaintiffs did not possess a maritime lien. Additionally, BRB contests plaintiffs' claims for attorney's fees alleging that attorney's fees are not a maritime lien. Upon a showing that most of the claims against the vessel had been resolved and a showing that BRB arranged for adequate security to satisfy the remaining contested claims against the vessel, this Court signed an order releasing the vessel from arrest on November 10, 2000.
Discussion
Under 46 U.S.C. § 31342 (1989), "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." Necessaries are defined to include "repairs, supplies, towage, and the use of a dry dock or marine railway." 46 U.S.C. § 31301(4) (1989). However, the term has been interpreted broadly and "includes most goods or services that are useful to the vessel, keep her out of danger, and enable her to perform her particular function. Necessaries are the things that a prudent owner would provide to enable a ship to perform well the functions for which she was been engaged." Equilease Corp. v. M/V Sampson, 793 F.2d 598, 603 (5th Cir. 1986). See also Barwil ASCA v. M/V Sava, 44 F. Supp.2d 484, 487 (E.D.N.Y.) (citations omitted); Walker-Skageth Food Stores, Inc. v. The Bavois, 43 F. Supp. 109, 110 (S.D.N Y 1942) (defining necessaries as whatever is "reasonably needed" for a vessel's continued business and operation).
BRB moves for an order pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure dismissing the in rem complaints of the remaining claimants. Where a party relies on matters outside the pleadings in making a Rule 12(b)(6) motion, the motion is treated as a motion for summary judgment and decided in accordance with Rule 56. See Fed. R Civ. P. 12(b). A court must grant summary judgment if "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp. 475 U.S. 574, 587 (1986). A material fact is one that "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). There is a genuine issue of fact where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. However,
[i]n considering a motion for summary judgment, if [a court's] analysis reveals that there are no genuine issues of material fact, but that the law is on the side of the non-moving party, [the court] may grant summary judgment in favor of the non-moving party even though it has made no formal cross-motion. Summary judgment may be granted to the non-moving party in such circumstances so long as the moving party has had an adequate opportunity to come forward with all of its evidence. Notice to the moving party of the intention to grant summary judgment in favor of the non-moving party is not required; rather, the court must simply be satisfied that the moving party will not suffer any procedural prejudice resulting from an inadequate opportunity to fully present its case.Orix Credit Alliance, Inc. v. Horten, 965 F. Supp. 481, 484 (S.D.N.Y. 1997) (citations omitted). With these principles in mind, this Court now turns to the remaining claims.
Greenwich Insurance Company and NAC Reinsurance Corporation
Greenwich Insurance Company and NAC Reinsurance Corporation ("Sureties") have moved to file an intervening claim pursuant to Rule E.2 of the Local Admiralty and Maritime Rules of the United States District Court for the Southern and Eastern Districts of New York and Rule 24(a) of the Federal Rules of Civil Procedure. Sureties issued a Federal Maritime Commission Passenger Vessel Surety Bond to Premier which requires Sureties to refund a maximum of $5,000,000 to passengers for unperformed cruises aboard BRB. Premier provided $3.7 million as collateral for the bond. Sureties allege that the bond creates a maritime lien against BRB. BRB contests this claim on the basis that the bond is merely a promise to pay money and is therefore not a maritime contract.
The caselaw in this circuit supports BRB's position. In Fednav, Ltd. v. Isoramar, S.A., 925 F.2d 599 (2d Cir. 1991), the court of appeals held that an agreement between Fednav, the owner of the vessel, and Isoramar, the charterer of the vessel, for Fednav's contribution to the settlement of claims against Isoramar and the vessel for damage to cargo was not a maritime contract. In reaching its decision, the court stated "[t]he Fednav-Isoramar contribution agreement is a separate and distinct contract that is not maritime in nature because it involves neither maritime services nor maritime transactions." 925 F.2d 599, 601-602. The court relied primarily on Pacific Surety Co. v. Leatham Smith Towing Wrecking Co., 151 F. 440 (7th Cir. 1907) and Kossick v. United Fruit Co., 365 U.S. 731 (1961). In Pacific Surety, the court held that a bond between a surety and a charterer to guarantee the charterer's performance of the charter party was not a maritime contract. The court reasoned that
[t]he direct subject-matter of the suit is the covenant to pay . . . damages, which neither involves maritime service nor maritime transactions; and . . . the mere fact that the event and measure of liability are referable to the charter party does not make the bond a maritime contract, nor makes its obligation maritime in the jurisdictional sense.
151 F. 440, 443. The holding in Pacific Surety was adopted by the United States Supreme Court in Kossick. See 365 U.S. 731, 735 ("A suit on a bond covering cargo on general average is governed by admiralty law, while an agreement to pay damages for another's breach of a maritime charter is not.") (citations omitted). This line of cases has been consistently followed in this circuit. See, e.g. Compagnie Francaise de Navigation a Vapeur v. Bonnasse, 19 F.2d 777 (2d Cir. 1927); United Philippine Lines, Inc., 1997 AMC 2132 (S.D.N.Y. 1997); Kreatsoulas v. Freights of the Levant Pride and the Levant Fortune, 838 F. Supp. 147 (S.D.N.Y. 1993);Black Sea State Steamship Line v. Association of International Trade District 1, 95 F. Supp. 180 (S.D.N.Y. 1951); Northern Star S.S. Co. of Canada v. Kansas Milling Co., 75 F. Supp. 534 (S.D.N.Y. 1947).
The bond in this case is not unlike the contribution agreement inFednav and the bond in Pacific Surety. Under the bond, Sureties merely agreed to refund passenger monies for unperformed cruises on BRB. This agreement involves "neither maritime services nor maritime transactions." 925 F.2d 599, 601-602; 151 F. 440, 443. As such, this Court finds that the bond between Sureties and Premier is not a maritime contract and, thus, Sureties cannot assert a maritime lien against the vessel.
Even if this Court were to find that the bond is a maritime contract, Sureties could not prevail. Sureties have not demonstrated that they have actually paid out any claims, nor that the claims against the BRB exceed the $3.7 million collateral provided by Premier. See Sureties Letter dated January 22, 2001.
As the issues discussed are dispositive of the claim, the Court does not reach the other arguments proffered by the parties. For the foregoing reasons, Sureties motion to intervene is DENIED.
SPIN, Inc.
BRB also opposes the intervening lien claim of Spin, Inc. ("Spin"). Spin provided casino and gambling equipment for use aboard BRB. Spin asserts a lien against BRB for $247,569.12, which represents the unpaid balance of the purchase price for 103 machines. This equipment is still aboard BRB and BRB has indicated to this Court that it plans to keep the equipment. (Tr. at 31, December 20, 2000.) BRB alleges that Spin waived its lien claims because it did not rely on the credit of the vessel to protect its security interests. BRB argues that Spin contracted for its security interest in the lease agreement and sales agreement it entered into with Premier by retaining title to the equipment until all payments were made, receiving a purchase money security interest in the equipment through a UCC financing statement, and obtaining a promissory note from Premier. BRB also argues that there is no reservation of a lien on the vessel in the agreements. Moreover, those contracts call for application of Florida state law, which BRB asserts does not grant in rem liens against vessels, therefore BRB argues that no maritime lien under federal law should arise.
Although federal statute provides for a maritime lien for those who provide necessaries to a vessel, this lien may be waived by relying on a security interest other than that provided in the statute. 46 U.S.C. § 31305 (1989); W.A. Marshall Co, Inc. v. The President Arthur, 279 U.S. 564 (1929); Itel Containers International Corp. v. Atlanttrafix Express Service Ltd., 781 F. Supp. 975 (S.D.N.Y. 1992),rev'd on other grounds, 982 F.2d 765 (2d Cir. 1992). "'[A]n express renunciation of the lien is not essential,' a supplier may waive the lien by taking action which indicates it is not being relied on." Itel, 781 F. Supp. at 984 (citing Marshall, 279 U.S. at 568). However, this action must be clear and unequivocal in order to constitute a waiver. Nacirema Operating Co., Inc. v. S.S. Al Kulsum, 407 F. Supp. 1222 (S.D.N.Y. 1975). "[T]here is a legal presumption that a supplier of necessaries has not waived its maritime lien. Therefore, the "burden is on the party alleging waiver to prove that the supplier has in fact chosen to forego its lien." Itel, 781 F. Supp. at 984 (citations omitted).
This Court cannot conclude that Spin has waived its maritime lien against BRB. The security provisions Spin included in the agreements it entered into with Premier are not sufficient for this Court to imply that Spin waived its lien against the vessel. See Nacirema, 407 F. Supp. at 1226. Those who supply necessaries to vessels are "entitled to rely on the credit of the owner or operator as well as that of the vessel."Itel, 781 F. Supp. at 985. See also Dampskibsselskabet Dannebrog v. Signal Oil Gas Co. of California, 310 U.S. 268, 275 (1940). BRB primarily relies on Marshall and its progeny to support its argument that the contractual security provisions constitute a waiver. Spin's claim is easily distinguishable, however, from the claim in that case. InMarshall, the claimant required "personal security for the payment of the purchase price" and made contracts which specifically provided that the owner should "pay for' the [necessary] at the time of its delivery by trade acceptances endorsed by three designated persons, who in consideration for the contracts agreed to endorse the acceptances." 279 U.S. 570, 572-73. Based on these facts, the Supreme Court held that the claimant had waived its lien against the vessel. The security provisions in the agreements between Spin and Premier can hardly be characterized as providing that Premier officers would personally guaranty that payment would be made. The security provisions did not equate to Spin's relying exclusively upon Premier so as to extinguish its rights against the vessel. Furthermore, the fact that Spin did not reserve a lien in the lease agreement does not waive its lien. Spin was not required to take affirmative steps to reserve its lien. See 46 U.S.C. § 31342(a)(3) (a supplier of necessaries "is not required to allege or prove in the action that credit was given to the vessel.");Itel, 781 F. Supp. at 985; Nacirema, 407 F. Supp. at 1226. Finally, contrary to BRB's position, the agreement's provision that Florida law shall govern the agreements does not prevent a maritime lien from arising under federal law. BRB relies on Aurora Maritime Co. v. Abdullah Mohamed Fahem Co., 85 F.3d 44 (2d Cir. 1996) to support its argument. However, that case held that federal maritime law preempts conflicting provisions of state law. Id. (citing American Dredging Co. v. Miller, 510 U.S. 443 (1994). Consequently, even if Florida law does not provide for in rem liens against vessels as BRB asserts, Spin may still avail itself of the federal provision for such rights.
Based on these findings, this Court holds that Spin has not waived its maritime lien against BRB and such lien is GRANTED in the amount of $247,569.12, the unpaid purchase price for the gambling and casino equipment Spin supplied for use aboard BRB. This Court's holding is further supported by BRB's continued retention of the equipment. To hold otherwise would allow BRB to be unjustly enriched by the agreements between Spin and Premier.
A.C. Coin Slot Service Co. Inc.
BRB also opposes the intervening lien claim of A.C. Coin Slot Service Co. Inc. ("A.C. Coin"). A/C Coin also provided casino and gambling equipment for use aboard BRB and asserts a lien against the vessel for unpaid lease payments in the amount of $28,520 for six machines that were delivered to BRB pursuant to a lease agreement between A/C Coin and Premier. In December 2000, the parties indicated to this Court that they had reached an agreement for A/C Coin to retrieve the equipment from the boat. (Tr. at 43.) BRB opposes A/C Coin's claim on the same basis as it opposes the Spin claim. However, their arguments are even weaker as applied to A/C Coin's claim. A/C Coin entered into lease and license agreements with Premier. The similarities of these Agreements with those of Spin are merely that A/C Coin retained title, which is logical since the equipment was not sold to Premier, and the license agreement provided that New Jersey law applies to the contract. For the reasons stated with respect to Spin, this Court holds that A/C Coin has not waived its lien against BRB and such lien is GRANTED in the amount of $28,520 for unpaid lease payments.
Four Jay's of Merrit Island
BRB opposes the intervening lien claim of Four Jay's of Merritt Island ("Four Jay's"). Four Jay's alleges that, pursuant to a lease agreement with Premier, it rented 43 pieces of amusement game equipment and bill changers for use on BRB. The equipment was delivered to BRB in May 2000 in consideration of agreed rental payments. Four Jay's alleges that it provided invoices of charges for the lease of the equipment, and that it sustained damages in the amount of $50,234.90, representing unpaid lease payments and other revenues. Four Jay's also sought to recover for the loss of the value of the equipment, together with interest, costs and attorney's fees. The claim for the loss of the value of the equipment is moot given that the equipment was recovered from the ship in October 2000 by order of this Court.
BRB contests Four Jay's lien claim on two grounds. First, BRB reiterates the waiver argument it asserted against the lien claim of Spin. BRB argues that Four Jay's relied on other forms of security rather than the credit of the vessel, specifically a security deposit of two months' payments pursuant to the lease agreement and the filing of a UCC financing statement to protect its interest in the equipment. BRB also reiterates its arguments regarding the lack of a reservation of a lien on the vessel in the lease agreement and the agreement specifying application of Florida state law. Additionally, BRB also asserts that Four Jay's has failed to mitigate its damages by failing to act to collect the lease payments sooner, therefore any lien claim that might exist would be subject to a laches defense. Under the lease agreement, Four Jay's received three months payment at signing, the first month's payment plus the security deposit, on March 8, 2000. Lease Agreement ¶ 4d. The equipment was delivered on or about May 9, 2000 and the boat was arrested on September 16, 2000. No additional payments were made between May and September 2000.
This Court is not persuaded that Four Jay's waived its lien against BRB. As noted above, BRB points to several factors which BRB argues, in totality, indicate waiver. The security deposit of two months payments provided for in a 36 month lease agreement does not evidence an intent to waive. This is not a case where the claimant made provisions to secure all or most of the amount owed under the contract in case of default. See Marshall, 279 U.S. 564. The security deposit was a small portion of the entire lease and cannot be construed as indicating an intent to waive the statutorily provided right to a maritime lien. The UCC financing statement filed by Four Jay's to protect its interest in the equipment does not indicate waiver. The agreement between Four Jay's and Premier is a lease agreement. As such, Four Jays retained title, which is specifically indicated in the agreement. Lease Agreement ¶ 7. A UCC financing statement to protect Four Jay's equity interest in the equipment does not negate its maritime lien for lease payments under the lease agreement. Furthermore, this Court's rejection of BRB's arguments regarding the lack of a reservation of a lien in the lease agreement and the agreement specifying application of Florida law in its analysis of the Spin claim applies equally here. Supra at 9-10. The lease agreement also specifically states that "[i]f any of the provisions hereof are in conflict with any applicable statute or rule of law, then such provisions shall be deemed inoperative to the extent that they may conflict therewith and shall be deemed modified to conform to such statue [sic] or rule of law." Lease Agreement ¶ 18.
Finally, BRB's assertion of a laches defense is without merit. "Laches is a party's unexcused and unreasonable delay in asserting its rights and prejudice therefrom to another." Liebowitz v. Elsevier Science, Ltd., 927 F. Supp. 688 (S.D.N.Y. 1996). BRB does not offer any support for this claim. In light of the continuing business relationship between the parties, this Court is not persuaded that there was unexcused or unreasonable delay by Four Jay's. In a lease agreement for a term of 36 months where security has been provided, a three month default does not give rise to a laches defense. Thus, none of the factors indicated by BRB, individually or jointly, leads this Court to conclude that Four Jay's waived its maritime lien.
BRB's additional basis for contesting Four Jay's lien claim is that even if there were a lien claim, it could not be in the asserted amount of $50,234.90, given that three month's payment was made at the time of contracting and that the vessel was arrested in September 2000. Therefore, according to BRB, less than $10,000 should be due after that credit is applied to the advance payments. The Court is in agreement with BRB on this point. Four Jay's argues that the security deposit is outweighed by the costs to remove the equipment from the vessel, physical damages to the equipment, storage costs, and attorney's fees, which Premier is required to pay for under the lease agreement. Attorney's fees, however, are not necessaries under the maritime lien statute. See, e.g. Gulf Marine and Industrial Supplies, Inc. v. Golden Prince M/V, 230 F.3d 178, 180-181 (5th Cir. 2000); Bradford Marine, Inc. v. M/V "Sea Falcon", 64 F.3d 585, 588-589 (11th Cir. 1995); American Oil Trading, Inc. v. M/V Sava, 47 F. Supp.2d 348, 352 (E.D.N Y 1999); James Creek Marina v. Vessel My Girls, 964 F. Supp. 20, 23 (D.D.C. 1997). Therefore, Four Jay's is not entitled to a maritime lien against the vessel for those fees. Id. The rationale underlying this exclusion is that attorney's fees do not ensure the continued operation of the vessel. See Equilease, 793 F.2d 598, 603. This Court is of the opinion that this rationale applies equally to the other costs Four Jay's seeks to recover from BRB, and that those costs are not necessaries. Thus, those costs will not be credited against the security deposit and the security deposit will be credited against the unpaid lease payments. See Lease Agreement ¶ 5d.
The remaining issue to be resolved is the determination of when the lease payments ceased accruing. BRB argues that accrual terminated in September 2000 when the vessel was arrested. Four Jay's argues that accrual terminated in October 2000 when the equipment was recovered. "When a vessel is in the custody of the court, with some exceptions, the doctrine of in custodia legis prevents new liens from accruing against it except those for supplies and services that are necessary for the ship's care and preservation." Itel, 781 F. Supp. 975, 985 (citing Collie v. Ferguson, 281 U.S. 52 (1930)). Since the amusement game equipment was not necessary for the vessel's care and preservation after its arrest by order of this Court on September 16, 2000, accrual terminated on that date. Accordingly, the intervening lien claim of Four Jay's is GRANTED in an amount equal to the unpaid lease payments through September 16, 2000, minus the amount received as a security deposit. Starboard Holdings, Ltd.
Four Jay's also claims that the security deposit was not fully paid and that there is still an amount owed of $1,200. (Letter from Four Jay's to this Court dated January 10, 2001, at 1-2.). BRB is not responsible for that amount and it should not be included in the amount of unpaid lease payments.
BRB opposes the lien claim of Starboard Holdings, Ltd. ("Starboard"), a concessionaire who claims a maritime lien for amounts allegedly due under its concession agreement. Starboard entered into a concession agreement with Premier Cruises to sell its concessions in gift shops I aboard a fleet of Premier vessels, including BRB. The items sold in the gift shop remained the property of the concessionaire and, under the concession agreement, the concessionaire was required to pay a percentage of the sales to Premier. The ship's purser collected the funds for payment of Starboard goods sold aboard the ship. In its original verified complaint, Starboard demanded $640,000, representing, among other things, the value of the goods that remained on the ship. In September 2000, pursuant to an order of this Court, Starboard removed the unsold concession items from the vessel. Starboard alleges that there is still an outstanding debt of $138,541.53, representing the goods sold aboard the vessel.
BRB first argues that the concessions are not necessaries because they were delivered or furnished to third parties and, therefore, were not for the vessel's own internal use or consumption. Additionally, BRB argues that a maritime lien was not created because Starboard relied solely on the credit of the passengers and did not rely on the credit of the vessel. Second, BRB also argues that, even if the goods sold pursuant to the concession agreement are necessaries, Starboard's claim should still be denied because the agreement calls for delivery to a fleet of vessels and a maritime lien is not created by a bulk supply of goods to a fleet of vessels.
This Court is not persuaded that Starboard provided necessaries to BRB and is entitled to a maritime lien. "The maritime lien is a secret one. It may operate to the prejudice of prior mortgagees or of purchasers without notice. It is therefore stricti juris and will not be extended by construction, analogy or inference." Piedmont George's Creek Coal Co. v. Seaboard Fisheries Co., 254 U.S. 1, 12 (1920) (citations omitted). Although the term necessaries is broadly interpreted, the statute does require that necessaries are provided "to a vessel." See 46 U.S.C. § 31342; Barwil, 44 F. Supp.2d 484, 487; Integral Control Systems Corp. v. Consolidated Edison Co., Inc., 990 F. Supp. 295, 298 (S.D.N.Y. 1998) (citations omitted). That requirement has not been met in this case. Starboard entered into a concession agreement with Premier, under which Premier granted Starboard permission to sell its goods in the gift shop aboard the vessel. Concession Agreement ¶ 2.1. Starboard never gave up custody, control, or ownership of the goods until they were sold to third-parties, i.e. passengers, officers, and crew. Concession Agreement ¶ 2.2. Furthermore, the concession was operated by Starboard employees, who were under the sole control of Starboard except in matters related to health, safety, or discipline aboard the vessel pursuant to the agreement. Concession Agreement ¶¶ 9.1, 9.3, 9.5. This is not a case where Premier purchased goods or services from Starboard so that Premier could use or sell the goods or services aboard the vessel. See, e.g. Dampskibsselskabet, 310 U.S. 268; Barwil, 44 F. Supp.2d 484; Atlantic Gulf Stevedores, Inc. v. M.V. Rosa Roth, 587 F. Supp. 1033 (S.D.N Y 1033); Walter-Skageth Food Stores, Inc. v. The Bavois, 43 F. Supp. 109 (S.D.N.Y. 1942) (items held to be necessaries where party supplied goods or services directly to the charterer or owner of a vessel). Essentially, Starboard merely operated its own gift shop aboard the vessel. The decision to purchase goods from Starboard were individual consumer decisions, not a decision by Premier to provide these goods to those aboard the vessel. Thus, Starboard did not provide I, necessaries to a vessel.
The Concession Agreement was originally entered into between Cruise Holdings, Ltd. and Greyhound Leisure Services, Inc. Apparently, Cruise Holdings, Ltd. later assigned its interest to Premier and Greyhound Leisure Services, Inc. later assigned its interest to Starboard. Concession Agreement Addendum #2.
Starboard argues that their lien status is supported by the fact that purchasers were only allowed to make purchases on their ship accounts and that the funds from these purchases was collected by the purser, who was then charged with disbursing the funds to various parties, including Starboard, but failed to pay Starboard in this instance. Starboard argues that the purser was acting for the vessel. The purser is not clearly included in the definition of "a person entrusted with the management of the vessel at the port of supply; or an officer or agent appointed by the owner [or] a charterer" such that he/she would be "presumed to have authority to procure necessaries for [the] vessel." See 46 U.S.C. § 31341(a). However, even if this Court accepts Starboard's argument that the purser had the authority to bind the vessel, the practice of the purser collecting and disbursing the money does not amount to the purser "procur[ing] necessaries for [the] vessel." Id. As Starboard concedes, the purser was merely acting as a "banker" in this transaction. See Plaintiffs letter of October 4, 2000.
As this issue is dispositive of the claim, the Court does not reach the other arguments proffered by the parties. For the foregoing reasons, Starboard's motion to intervene is DENTED.
Image
BRB also opposes the intervening lien claim of Image. Image entered into a concession agreement with Premier Cruises and was granted the right to operate photographic development, video, and other related services aboard BRB for an agreed percentage of the gross receipts from those services. Image alleges that it is owed a balance of $7,387.45 pursuant to that agreement. BRB adopts the arguments it set forth in opposition to the Starboard lien claim and contends that Image is not entitled to a lien because "(1) its contract was to perform general, unquantified services on a fleet, not simply the [BRB], (2) the services provided were to passengers, not the Vessel or crew, and (3) Image looked at all times to the credit of the passengers, and not the Vessel." Defendant's Letter dated January 8, 2001.
The concession agreement between Image and Premier contains provisions relating to ownership and concession employees that are very similar to those in the concession agreement between Starboard and Premier. Concession Agreement ¶¶ 2.1, 2.3, 8.1, 8.7. For the reasons discussed with respect to the denial of Starboard's intervening lien claim, Image's motion to intervene is DENIED.
Steiner Transocean, Ltd.
Finally, BRB opposes the intervening lien claim of Steiner Transocean, Ltd. ("STL"). STL operated a beauty salon concession on a number of vessels in the Premier fleet, including BRB. STL alleges that pursuant to a three-year agreement with Premier, it was entitled to receive an agreed percentage of the gross receipts of the services relating to the business. STL further alleges that it was not paid from July 2000 through September 2000, totaling an amount due of $21,798.34. The claim for the loss of the value of the equipment is moot given that the equipment was recovered from the ship in November 2000 by order of this Court. BRB contests STL's lien claim, primarily arguing that, pursuant to the contract, STL has waived its lien against BRB.
As previously discussed, a party may waive its maritime lien, either expressly or by implication, however, such waiver must be clear and unequivocal. Supra at 8-9. STL's contract with Premier provides that "[n]either STL, nor any of its agents or employees shall have any right, power or authority to create, impose or permit to be created or imposed upon the Vessel any lien whatsoever." Agreement ¶ 6(f). This Court cannot imagine a clearer waiver. STL has expressly and unequivocally waived any lien it might have against BRB.
Additionally, BRB contests STL's lien claim on the same basis that it contests the lien claims of Starboard. This Court's previous analysis with respect to concession agreements applies equally to STL's claims.See supra at 18; Agreement p. 1; Agreement ¶¶ 5(a)-(f). Accordingly, STL's motion to intervene is DENTED.