Opinion ID: 76995
Heading Depth: 2
Heading Rank: 2

Heading: Award of Damages and Imposition of a Maritime Lien in Favor of APJ

Text: 12 Next, we examine Sweet Pea's argument that the district court erred by awarding damages to APJ and imposing a maritime lien on the Vessel. In reviewing a judgment of a trial court, sitting without a jury in admiralty, the Court of Appeals may not set aside the judgment below unless it is clearly erroneous. McAllister v. United States, 348 U.S. 19, 20, 75 S.Ct. 6, 8, 99 L.Ed. 20 (1954). Moreover, a district court's findings of fact when sitting in admiralty are reviewed under the clearly erroneous standard. See Venus Lines Agency, Inc. v. CVG Int'l Am., Inc., 234 F.3d 1225, 1228 (11th Cir.2000). 13 Federal admiralty jurisdiction is invoked by a claim that an oral contract regarding the repair of a vessel was breached. See Hatteras of Lauderdale, Inc. v. Gemini Lady, 853 F.2d 848, 849-50 (11th Cir.1988). To recover damages on such a claim, a plaintiff must prove (1) the terms of a maritime contract; (2) that the contract was breached; and (3) the reasonable value of the purported damages. See Exxon Corp. v. Cent. Gulf Lines, Inc., 500 U.S. 603, 605-06, 111 S.Ct. 2071, 2073, 114 L.Ed.2d 649 (1991); Krauss Bros. Lumber Co. v. Dimon S.S. Corp., 290 U.S. 117, 124, 54 S.Ct. 105, 107, 78 L.Ed. 216 (1933). To establish a maritime lien on a vessel pursuant to 46 U.S.C. § 31342 in an in rem action, a plaintiff must prove: (1) it provided necessaries (2) at a reasonable price (3) to the vessel (4) at the direction of the vessel's owner or agent. See S.E.L. Maduro (Florida), Inc. v. M/V Antonio De Gastaneta, 833 F.2d 1477, 1482 (11th Cir.1987). 14 Because Sweet Pea argues, inter alia, that APJ failed to present any evidence that the charges for goods and materials listed in Exhibit 5 were reasonable, we focus our inquiry on the few cases which have construed the reasonableness element in APJ's admiralty claims. According to these cases, the reasonableness of charges, in the maritime context, is measured by whether they are customary, Ex parte Easton, 95 U.S. 68, 77, 24 L.Ed. 373 (1877), and in accord with prevailing charges for the work done and the materials furnished, Shelly Tractor & Equip. Co. v. The Boots, 140 F.Supp. 425, 426 (E.D.N.C.1956). Accordingly, to satisfy the evidentiary burden on this element, a plaintiff must present some modicum of evidence which compares the charges claimed with what other competitors would have charged for similar work or materials. See id.; see also Crescent Ship Serv. v. M/V Mitera Vassiliki, No. 94-2691, 1995 WL 389814 (E.D.La. June 28, 1995) (declining to grant summary judgment on the reasonableness element because plaintiff had not proffered any evidence that the charges were reasonable, competitive, or consistent with the prices charged by other firms in the industry). This burden may be satisfied by witness testimony that the charges were reasonably in accord with industry standards. See Jones v. Horton & Horton, 100 F.2d 345, 346 (5th Cir.1938). The failure to present such evidence, however, dictates that a plaintiff cannot prevail on its maritime claims. See TTT Stevedores of Tex., Inc. v. M/V Jagat Vijeta, 696 F.2d 1135, 1141 (5th Cir.1983). 15 Based on these standards, Sweet Pea argues that APJ failed to present any evidence by which the finder of fact could have determined that the charges summarized in Exhibit 5 were reasonable. 3 APJ makes two arguments in response. First, APJ argues that Sweet Pea waived its ability to contest the reasonableness of charges for goods and materials because, as the district court found, Sweet Pea agreed to a 15% mark-up on goods and materials purchased by APJ. That the parties agreed to a general mark-up on goods and materials, however, has no relevance for whether the actual prices of those goods and materials subject to the mark-up were reasonable. While the inclusion of a mark-up does not necessarily bar a maritime lien claim, see Galehead, Inc. v. M/V Anglia, 183 F.3d 1242, 1247 (11th Cir.1999) (per curiam), it is not logically probative of whether the charges underlying the lien claim are reasonable. Accordingly, APJ's waiver argument is unpersuasive. 4 16 Second, in its brief, APJ cites generally a 120-page span of trial testimony and asserts that it adduced evidence which established the reasonableness of the charges in Exhibit 5. 5 A thorough review of the testimony cited by APJ, however, demonstrates otherwise. In fact, in our review of the entire record, we discovered a dearth of any evidence submitted by APJ which would support the inference that the charges for goods and materials were reasonable. In its case in chief, no witness for APJ directly testified that the charges listed in Exhibit 5 were reasonable based on industry standards. Likewise, there was no indirect evidence by which a trier of fact could conclude that APJ satisfied its burden on the reasonableness element. For example, there were several instances in which witnesses for APJ testified that the mark-up on goods and materials bought by APJ was reasonable. See R8 at 1298-99, 1426. However, as we noted in our disposition of APJ's first waiver argument, testimony about the reasonableness of the mark-up does not establish that the underlying prices subject to the mark-up were reasonable. In addition, APJ offered testimony from Jellis that the invoices which were used to create Exhibit 5 represented the at cost price — i.e., without any mark-up — that APJ purchased goods and materials from vendors. See R6 at 810, R7 at 1081, 1119. Stating what APJ paid for goods and materials, however, in the absence of any evidence of comparable industry pricing to benchmark the pricing for these goods and materials, does not provide any basis for a trier of fact to conclude that APJ paid reasonable prices for the goods and materials. In fact, Jellis admitted that he would routinely receive invoices from vendors and forward them to Stevenson for payment without any inquiry into the reasonableness of what was being charged. See R6 at 857; R7 at 1150. Moreover, there was no evidence that APJ sought bids from various suppliers and ultimately contracted with the low-cost provider. Accordingly, testimony regarding what the goods and materials cost APJ cannot be taken as probative of the reasonableness of the charges in Exhibit 5. In addition, Jellis testified that he would refrain from charging Sweet Pea for certain items, which ultimately discounted the total amount of charges APJ billed to Sweet Pea. See R6 at 883. Assuming some of these discounts resulted in the exclusion of certain goods and materials from Exhibit 5, this evidence still does not speak to the reasonableness of the charges actually listed in Exhibit 5. Finally, we note that while there was testimony that the labor rates charged by APJ for subcontractors were reasonable based on the industry standard, see R8 at 1298, 1426, the reasonableness of these rates have no bearing on whether the prices for goods and materials bought from vendors were reasonable. In sum, our review of the record confirms that APJ presented no evidence by which a trier of fact could infer that the charges listed in Exhibit 5 were reasonable according to industry standards. Accordingly, because such a showing was a required element for APJ's maritime claims, the district court's award of damages in favor of APJ and its imposition of a maritime lien on the Vessel were clearly erroneous. See Hart v. Yamaha-Parts Distribs., Inc., 787 F.2d 1468, 1473 (11th Cir.1986) (reversing district court's determination because it was supported by no evidence in the record and therefore was clearly erroneous). 6 17