Court Opinion

ID: 6579
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:18:56+00
Date Added: 2024-06-11T08:37:41.198559
License: Public Domain

United States Court of Appeals,

                            Fifth Circuit.

                             No. 93-3631.

     The FIRST NATIONAL BANK OF BOSTON, Plaintiff-Appellee,

                                   v.

         BECKWITH MACHINERY COMPANY, Intervenor-Appellant,

                                   v.

                   VIKING MARITEC, INC., Defendant.

                            July 22, 1994.

Appeal from the United States District Court for the Eastern
District of Louisiana.

Before JOHNSON, BARKSDALE and DeMOSS, Circuit Judges.

     PER CURIAM:

     Because the determinative issue in this case is clearly a

matter of Louisiana law, because there has been no ruling by a

Louisiana court on this issue, and because there is no federal

issue in this case, we hereby invoke the certification privilege

granted by Rule XII of the RULES   OF THE   SUPREME COURT   OF   LOUISIANA.1   Both

the plaintiff and the intervenor, when asked at oral argument

whether they would object to certification, indicated that they had

no objections.

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      "When it appears to ... any circuit court of appeal of the
United States, ... that there are involved in any proceedings
before it questions or propositions of law of this state which
are determinative of said cause ... and that there are no clear
controlling precedents in the decisions of the supreme court of
this state, such federal court before rendering a decision may
certify such questions or propositions of law of this state to
the Supreme Court of Louisiana for rendition of a judgment or
opinion." Rule XII, RULES OF THE SUPREME COURT OF LOUISIANA.

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     CERTIFICATE FROM THE UNITED STATES COURT OF APPEALS FOR THE

FIFTH CIRCUIT TO THE SUPREME COURT OF LOUISIANA:

     TO THE HONORABLE CHIEF JUSTICE AND ASSOCIATE JUSTICES OF THE

SUPREME COURT OF LOUISIANA:

                        I. Style of the Case

     The style of the case that we certify is First National Bank

of Boston, Plaintiff-Appellee, Beckwith Machinery Co., Intervenor-

Appellant, versus Viking Maritec, Inc., Defendant, No. 93-3631,

United States Court of Appeals for the Fifth Circuit, on appeal

from the United States District Court for the Eastern District of

Louisiana.      Jurisdiction   in   the   Federal   District   Court    was

established solely on diversity of citizenship.

                       II. Statement of Facts

     This case revolves around the construction and financing of a

towboat.     In 1992, Viking Maritec, Inc. ("Viking") and Avondale

Industries, Inc. ("Avondale") entered into a contract for Avondale

to build a towboat for Viking in exchange for a purchase price of

$2.8 million.    Viking entered into a credit agreement with First

National Bank of Boston ("FNBB") to finance the purchase price due

Avondale and to pay for other equipment for the vessel.                FNBB

agreed to lend Viking up to $4.8 million, and Viking executed a

construction note in favor of FNBB.           Viking also executed a

"Louisiana Ship Mortgage and Security Agreement," granting the bank

under the provisions of the LA.REV.STAT.ANN. 10:9-101-10:9-604 (West

1993) a security interest in the towboat and its materials and

components. FNBB perfected the security interest by filing a UCC-1

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financing statement in the proper office on August 6, 1992.                  The

documents stated that the Ship Mortgage Law and the Louisiana UCC

would govern   the   security   agreement.          In   early   1993,   Viking

purchased from Beckwith Machinery Company ("Beckwith") engines and

related machinery, which were incorporated into the tugboat.

     Viking did not pay either Beckwith or FNBB.             After its demand

for payment was not answered, FNBB filed an action in federal

district court to have the unfinished and undocumented towboat

seized and sold. Beckwith intervened, seeking priority through the

Louisiana Civil Code which gives privileges to certain classes of

creditors,   including    suppliers       of   ship-building     materials   and

equipment.   LA.CIV.CODE ANN. art. 3237 (West 1952).              FNBB filed a

motion asking the court to give priority instead to its perfected

UCC security interest.

     On July 26, 1993, the district court rendered a decision

formally ranking FNBB's security interest in the vessel ahead of

Beckwith's   materialman's    privilege.          Judgment   was   entered    on

September 3, 1993, giving priority to the bank's security interest.

Beckwith appeals from that judgment.           In its memorandum and order,

the district court expressed considerable doubt as to whether the

Louisiana legislature intended such a result.

                         III. Question Certified

     Which interest should have priority under Louisiana law:                (1)

a civil law "privilege" for suppliers of ship-building materials,

thus giving Beckwith creditor priority rights, or (2) an earlier

perfected UCC security interest, thus giving FNBB creditor priority

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rights.

                          IV. Conclusion

     We disclaim any intent that the Louisiana Supreme Court

confine its reply to the precise form or scope of the legal

question that we certify.   The answer provided by the Louisiana

Supreme Court will determine the issue on appeal in this case.   We

transfer to the Louisiana Supreme Court the record and appellate

briefs in this case with our certification.

     We CERTIFY the question stated to the Louisiana Supreme Court.

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