Opinion ID: 1132344
Heading Depth: 3
Heading Rank: 1

Heading: State law applies

Text: When the Browns said they could not make the payments, the Bakers voluntarily took the boat back. Was this a repossession within the terms of the Uniform Commercial Code, or a foreclosure action under the Ship Mortgage Act? The Browns argue that AS 45.09.104 [2] does not preclude the application of AS 45.09.503, AS 45.09.504 and AS 45.09.505 in the instant case. They further contend that the Ship Mortgage Act is inapplicable here even though there was a $200,000 preferred mortgage agreement. We agree. Generally, the U.C.C., as adopted in Alaska, applies to security interests in vessels ( see, e.g., Blumenstein v. Phillips Insurance Center, Inc., 490 P.2d 1213 (Alaska 1971)), unless the area has been preempted by federal law. The Ship Mortgage Act, 46 U.S.C. § 951, is such a preemptive statute. In J. Ray McDermott Co., Inc. v. Vessel Morning Star, 457 F.2d 815, 818 (5th Cir.1972), cert. denied, 409 U.S. 948, 93 S.Ct. 271, 34 L.Ed. 218 (1972), the court stated: The Ship Mortgage Act, when read together with the statutes delineating the judicial sale procedure in the federal courts forms a comprehensive procedure for the foreclosure of a preferred ship's mortgage, the sale of the vessel and any resulting deficiency adjudged against the debtor in personam. [3] In Reedsburg Bank v. Apollo, 508 F.2d 995 (7th Cir.1975), the court also described the exclusive jurisdiction of the federal court in regard to the Ship Mortgage Act. Only the jurisdiction to foreclose the lien of the mortgage and to determine its priority in relation to that of other liens in a proceeding in rem is made exclusive by the Act. (46 U.S.C. § 951). The Act confers federal jurisdiction over an action in personam in admiralty to obtain a deficiency judgment against the mortgagor (46 U.S.C. § 954(a); see also Supplemental Rules for Fed.R.Civ.P. for Certain Admiralty and Maritime Claims, Rule C(1)(b), but leaves the state court with concurrent jurisdiction over such an action. Cf. Madruga v. Superior Court, supra, 346 U.S. [556] at 560-561, 74 S.Ct. 298 [300-301, 98 L.Ed. 290]. There is no suggestion anywhere in the Act that issues other than those necessarily arising in the foreclosure action and issues concerning the enforceability of other maritime liens are within the exclusive jurisdiction of the federal court or must be adjudicated in the foreclosure action. Id. at 999 (emphasis added; footnote omitted). In the instant case, upon default there was no foreclosure action and therefore the Ship Mortgage Act is inapplicable. The Bakers have not directed the court to any other federal statute that would preclude the application of AS 45.09.503-.505 and we are unaware of any. Thus we conclude the state law is applicable here.