Court Opinion

ID: 3065368
Source: CourtListenerOpinion
Date Created: 2015-10-14 22:31:03.901353+00
Date Added: 2024-06-11T11:49:44.940741
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

EQUATORIAL MARINE FUEL                     No. 08-57046
MANAGEMENT SERVICES PTE LTD.,
              Plaintiff-Appellant,            D.C. No.
              v.                          2:08-cv-07756-
                                              VBF-CT
MISC BERHAD,
                                              OPINION
             Defendant-Appellee.
                                     
      Appeal from the United States District Court
           for the Central District of California
     Valerie Baker Fairbank, District Judge, Presiding

                  Argued and Submitted
            July 7, 2009—Pasadena, California

                  Filed January 11, 2010

Before: Alex Kozinski, Chief Judge, Ferdinand F. Fernandez
           and N. Randy Smith, Circuit Judges.

             Opinion by Chief Judge Kozinski

                           743
          EQUATORIAL MARINE FUEL v. MISC BERHAD        745

                       COUNSEL

Brian D. Starer and Alan Heblack, Squire, Sanders & Demp-
sey L.L.P., New York, New York; and James H. Broderick,
Jr. and Jeffrey S. Renzi, Squire, Sanders & Dempsey L.L.P.,
Los Angeles, California, for the plaintiff-appellant.

William H. Collier, Jr., Elizabeth P. Beazley, James A.
Marissen and Tara B. Voss, Keesal, Young & Logan, Long
Beach, California, for the defendant-appellee.
746       EQUATORIAL MARINE FUEL v. MISC BERHAD
                         OPINION

KOZINSKI, Chief Judge:

  We consider whether the district court erred in vacating a
maritime attachment.

                            Facts

   Equatorial Marine Fuel Management Services sues MISC
Berhad for breach of contract and unjust enrichment. Equato-
rial, a supplier of marine fuel, claims MISC agreed to pur-
chase over $22 million worth of bunker fuel—which is used
to power ships—for vessels owned and operated by MISC.
Equatorial delivered the bunkers to MISC through Grandeur
Trading & Services, but MISC never paid Equatorial.

   MISC says it never contracted with Equatorial. According
to MISC, it entered into a contract with the bunker-trader
Market Asia Link (MA Link) to procure bunkers for MISC.
So long as MISC got its bunkers at the agreed upon price, it
didn’t much care who MA Link bought them from, which
turned out to be Equatorial. And MISC paid MA Link for all
the bunkers it received.

   Unfortunately, MA Link became insolvent and never paid
Equatorial. One party has to suffer the loss: Either Equatorial
won’t get paid or MISC will pay twice. Equatorial prefers the
latter option, so it brought this suit against MISC in federal
district court. In order to establish jurisdiction over MISC,
Equatorial filed an ex parte application for maritime attach-
ment of MISC’s property that could be found in the district,
including its ship Bunga Kasturi Lima, which the district
court granted. After receiving notice of the attachment, MISC
filed a motion to vacate it. Finding that Equatorial failed to
show it had a valid prima facie admiralty claim against MISC,
the district court vacated the attachment subject to MISC’s
posting a $400,000 bond pending Equatorial’s appeal.
           EQUATORIAL MARINE FUEL v. MISC BERHAD             747
                           Analysis

   [1] We review the order vacating the maritime attachment
for abuse of discretion, although we review any legal conclu-
sions underpinning the order de novo. Williamson v. Recovery
Ltd. P’ship, 542 F.3d 43, 48 (2d Cir. 2008). Under Rule B of
the Supplemental Admiralty Rules, plaintiff may attach a
defendant’s property if four conditions are met: (1) Plaintiff
has a valid prima facie admiralty claim against the defendant;
(2) defendant cannot be found within the district; (3) property
of the defendant can be found within the district; and (4) there
is no statutory or maritime law bar to the attachment. Aqua
Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434,
445 (2d Cir. 2006); see Fed. R. Civ. P., Supp. R. B.

   After receiving notice of the attachment, defendant may
contest it under Supplemental Rule E(4)(f). Fed. R. Civ. P.,
Supp. R. E(4)(f). At a Rule E hearing, defendant may argue
that the attachment should be vacated because plaintiff failed
to meet one of the four conditions for attachment. Aqua Stoli,
460 F.3d at 445; see also Fed. R. Civ. P., Supp. R. E. advisory
committee’s note (1985 amends.) (explaining that at a Rule E
hearing, defendant “can attack the complaint, the arrest, the
security demanded, or any other alleged deficiency in the pro-
ceedings”). Plaintiff has the burden of justifying a continued
attachment. Fed. R. Civ. P., Supp. R. E(4)(f).

   [2] MISC argues that Equatorial’s claims aren’t maritime in
nature, and the district court therefore lacked admiralty juris-
diction. To determine whether Equatorial’s claims sound in
admiralty, we look to whether “the principal objective” of the
claimed contract or dealings “is maritime commerce.” Norfolk
S. Ry. v. James N. Kirby, Pty Ltd., 543 U.S. 14, 25 (2004).
Here, Equatorial’s claim is that it supplied bunkers to MISC’s
ships, and regardless of whether this fuel was delivered by a
third party, the alleged dealings are clearly maritime in nature.
See Exxon Corp. v. Cent. Gulf Lines, Inc., 500 U.S. 603,
748       EQUATORIAL MARINE FUEL v. MISC BERHAD
612-13 (1991). Thus, the district court properly exercised
admiralty jurisdiction over Equatorial’s claims.

   [3] Nevertheless, the district court properly vacated the
attachment because Equatorial failed to show it had a valid
prima facie breach of contract or unjust enrichment claim
against MISC. As to Equatorial’s breach of contract claim,
Equatorial failed to show it had a contract with MISC. Equa-
torial’s verified complaint alleges that MISC “agreed” to each
sale and delivery of fuel by Equatorial and “accepted and
used” that fuel. MISC, however, denied this allegation and
presented evidence that it contracted only with MA Link—
including a copy of its contract with and documentation of its
payments to MA Link.

   [4] To contradict MISC’s evidence, Equatorial relies on the
documents attached to its complaint and its response to the
motion to vacate: letters from MA Link to Compass Marine
Fuels (a bunker broker used by Equatorial) showing MISC as
the “buyer” and Equatorial as the “seller”; invoices from
Compass to Equatorial listing MISC as the “buyer” and Equa-
torial as the “seller”; bunker delivery notes from Grandeur
stating that it delivered bunkers to MISC; and tax invoices
from Equatorial addressed to MISC as the buyer, which were
sent to Compass. But these documents, which were never sent
to MISC, don’t show that MISC was even aware that Equato-
rial was the bunker supplier, let alone that it entered into a
contract with Equatorial. At most, these documents show that
Equatorial thought it was contracting with MISC. But con-
tracting, like dancing the tango, takes two; one party’s belief
that there was an agreement isn’t enough. See 1-4 Arthur L.
Corbin et al., Corbin on Contracts § 4.13 (rev. ed. 1993).

   [5] Equatorial argues that MA Link was MISC’s agent. We
decline to consider this claim because Equatorial failed to
allege an agency relationship between MISC and MA Link in
its complaint, which it never sought to amend. See P.R. Ports
Auth. v. Barge Katy-B, O.N. 606665, 427 F.3d 93, 106 (1st
           EQUATORIAL MARINE FUEL v. MISC BERHAD             749
Cir. 2005) (“Given [plaintiff’s] failure properly to plead post-
sale port charges as an alternate basis for an in rem claim, the
district court’s vacation of the arrest is unimpugnable.”).

   [6] Equatorial also failed to show it had a valid prima facie
unjust enrichment claim against MISC. Even though Equato-
rial arranged for the delivery of the bunkers which MISC
accepted and used, MISC presented unrebutted evidence that
it paid MA Link for the bunkers. Because MISC paid for the
bunkers, it hasn’t been unjustly enriched. See In re De
Laurentiis Entm’t Group Inc., 963 F.2d 1269, 1273 n.6 (9th
Cir. 1992) (recognizing that California law does not provide
a quantum meruit claim where the benefitted party has paid
a general contractor for the work done, even if the general
contractor failed to pay the subcontractors who did the work).

   [7] Equatorial argues that it isn’t required to prove its case
just to defeat the motion to vacate. This is certainly true, but
in order to justify the continued attachment of MISC’s prop-
erty, Equatorial had the burden of showing that it had a valid
prima facie breach of contract or unjust enrichment claim. See
Aqua Stoli, 460 F.3d at 445; cf. Mitchell v. W.T. Grant Co.,
416 U.S. 600, 609 (1974) (“[W]e think it comports with due
process to permit the initial seizure on sworn ex parte docu-
ments, followed by the early opportunity to put the creditor to
his proof.”). Equatorial failed to carry this burden. Once
MISC came forward with evidence showing that it contracted
with MA Link, not Equatorial, and paid MA Link for the bun-
kers, Equatorial needed to do something to contradict this
showing. Because Equatorial failed to do this, the district
court properly vacated the attachment. See Williamson, 542
F.3d at 52-54 (district court properly vacated attachment
where defendant produced evidence at the Rule E(4)(f) hear-
ing that it didn’t contract with plaintiffs, contradicting the
generalized allegations in plaintiffs’ verified complaint).

  AFFIRMED.