Court Opinion

ID: 4321468
Source: CourtListenerOpinion
Date Created: 2018-10-17 00:00:21.894418+00
Date Added: 2024-06-11T07:49:36.913374
License: Public Domain

Case: 17-30792   Document: 00514683829        Page: 1   Date Filed: 10/16/2018

        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                                United States Court of Appeals
                                                                         Fifth Circuit

                                                                       FILED
                                    No. 17-30792                 October 16, 2018
                                                                  Lyle W. Cayce
STATE BANK & TRUST COMPANY,                                            Clerk

             Plaintiff - Appellee

v.

C & G LIFTBOATS, L.L.C.; AMC LIFTBOATS, INCORPORATED, also
known as A.M.C. Liftboats, Incorporated; POLLY D. CHERAMIE, in
personam; ADAM A. CHERAMIE, in personam; LIL AL M/V, in rem; MR.
ALAN M/V, in rem; WHITNEY M/V L/B, in rem,

             Defendants - Appellants

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

Before KING, SOUTHWICK, and HO, Circuit Judges.
LESLIE H. SOUTHWICK, Circuit Judge:
      The district court granted summary judgment to the plaintiff, holding
that the plaintiff had a preferred ship mortgage under the Ship Mortgage Act.
The defendants appealed. The district court’s order, though, did not finally
determine the rights or obligations of the parties in this dispute, which leaves
us without jurisdiction.
      The appeal is DISMISSED.
    Case: 17-30792      Document: 00514683829      Page: 2    Date Filed: 10/16/2018

                                   No. 17-30792
               FACTUAL AND PROCEDURAL BACKGROUND
      The plaintiff State Bank & Trust Company sought to foreclose on four
ship mortgages and seize three vessels owned by defendants C&G Liftboats,
LLC and AMC Liftboats, Inc. The defendants argued in the district court that
there was no subject matter jurisdiction to hear the plaintiff’s claim in
admiralty because the underlying mortgages used to secure the vessels were
invalid under Louisiana law, and therefore could not be valid preferred ship
mortgages under the Ship Mortgage Act.             The district court denied the
defendants’ motion to dismiss and granted in part the plaintiff’s motion for
summary judgment, holding that a collateral chattel mortgage, even if invalid
under Louisiana law, meets the requirements of the Ship Mortgage Act. See
46 U.S.C. §§ 31321, 31322.
      The limit of the district court’s order was to recognize that the plaintiff
had a preferred ship mortgage under the Ship Mortgage Act on the vessel “Lil
Al,” allowing the plaintiff to proceed in its foreclosure action in federal court.
The district court did not grant judgment on the plaintiff’s claim that the
defendants defaulted nor hold that the relevant mortgage was enforceable.
The defendants appealed the district court’s order. Jurisdiction was claimed
under 28 U.S.C. § 1292(a)(3). The district court stayed further proceedings
pending our resolution of the appeal.

                                   DISCUSSION
      Under 28 U.S.C. § 1292(a)(3), “the courts of appeals . . . have jurisdiction
of appeals from . . . interlocutory decrees of . . . district courts . . . determining
the rights and liabilities of the parties to admiralty cases in which appeals from
final decrees are allowed.” Section 1292(a)(3) is construed narrowly; it does
not “permit interlocutory appeals in admiralty except where the order . . . had
the effect of ultimately determining the rights and obligations of the parties.”
                                          2
    Case: 17-30792       Document: 00514683829     Page: 3   Date Filed: 10/16/2018

                                    No. 17-30792
Treasure Salvors, Inc. v. Unidentified Wrecked and Abandoned Sailing Vessel,
640 F.2d 560, 564 (5th Cir. 1981). “Orders which do not determine parties’
substantive rights or liabilities . . . are not appealable under section 1292(a)(3),
even if those orders have important procedural consequences.” Celtic Marine
Corp. v. James C. Justice Companies, Inc., 760 F.3d 477, 480 (5th Cir. 2014)
(quoting Francis v. Forest Oil Corp., 798 F.2d 147, 150 (5th Cir. 1986)). An
order which merely permits a party to proceed in an action is not sufficiently
final to grant jurisdiction under Section 1292(a)(3). Id. at 480-81.
         In Celtic Marine, we held there to be no jurisdiction to hear an appeal of
a district court order re-opening a case under Federal Rule of Civil Procedure
60(b).     Id.   The motion sought to re-open the case in order to enforce a
settlement agreement. Id. at 480. The order granting the motion made a
procedural ruling but was not a grant of final relief. Id. at 480-81.
         Here, the district court’s order finally determined that the plaintiff has
a preferred ship mortgage on “Lil Al,” but deferred all other requests for relief.
For example, the district court’s order did not find that the defendants
defaulted on the collateral mortgages. The defendants deny the allegation in
the plaintiff’s complaint that they were in default.
         The district court’s order holding that the plaintiff had a valid preferred
ship mortgage on Lil Al merely allows the plaintiff to proceed on its foreclosure
action in federal court. The district court did not finally determine the parties’
rights as to Lil Al, and we therefore lack appellate jurisdiction under Section
1292(a)(3).
         The defendants refer us to decisions in which we found jurisdiction under
Section 1292(a)(3). In one case, we reviewed an order in which the district
court held that one creditor’s claim had priority over another against a vessel,
the proceeds of which would satisfy only one of the debts. Bank One, Louisiana
N.A. v. Mr. Dean MV, 293 F.3d 830, 831-32 (5th Cir. 2002). We had jurisdiction
                                          3
    Case: 17-30792     Document: 00514683829      Page: 4    Date Filed: 10/16/2018

                                  No. 17-30792
because the summary judgment order disposed of the appealing party’s rights
in the vessel, as the question of priority was the final issue to be decided. Id.
In the other case cited by the defendants, we held that interlocutory sale orders
are appealable under Section 1292(a)(3). Silver Star Enters., Inc. v. M/V
Saramacca, 19 F.3d 1008, 1012-13 (5th Cir. 1994). Jurisdiction exists in that
circumstance because an interlocutory sale order extinguishes the owners’
rights in a vessel, thus satisfying the finality requirement of Section 1292(a)(3).
Id. at 1013.
      In the present case, the district court’s order permitted the plaintiff to
continue in its foreclosure action and explicitly deferred all the plaintiff’s other
requests for relief. Therefore, the district court’s order did not ultimately
determine the “rights and liabilities of the parties.” 28 U.S.C. § 1292(a)(3).
      DISMISSED.

                                         4