Court Opinion

ID: 10231
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:52:30+00
Date Added: 2024-06-11T15:04:02.240250
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                          FOR THE FIFTH CIRCUIT
                             _______________

                                No. 96-30192
                             Summary Calendar
                              _______________

                          L&L OIL COMPANY, INC.,

                                                Plaintiff-Appellee,

                                   VERSUS

                M/V REBEL, her engines, tackle, gear,
                 appurtenances, etc. in rem, et al.,

                                                Defendants,

                        EKLOF MARINE CORPORATION,
                         Owner of the M/V REBEL,

                                                Claimant-Appellant.

                        _________________________

            Appeal from the United States District Court
               for the Eastern District of Louisiana
                            (95-CV-2720-F)
                      _________________________

                         August 28, 1996
Before SMITH, BENAVIDES, and DENNIS, Circuit Judges.

JERRY E. SMITH, Circuit Judge:*

      This admiralty suit arises out of the bankruptcy of Enjet,

Inc. (“Enjet”).      The plaintiff, L&L Oil Company, Inc. (“L&L”),

       Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion
should not be published except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
provided marine gas on Enjet’s order for the M/V REBEL.           When Enjet

filed for bankruptcy,        L&L turned to the M/V REBEL, in rem, for

payment. On cross-motions for summary judgment, the district court

entered judgment in favor of L&L, awarding the principal invoice

amount, together with pre- and post-judgment interest, plus costs.

Eklof Marine Corporation (“Eklof”), owner pro hac vice, appeals,

and we affirm.

                                      I.

     In 1983, Enjet entered into a tanker voyage charter party with

Eklof under which the vessel agreed to buy fuel from Enjet “at all

ports where such requirements arise and where Enjet is able to

supply, always provided that the prices quoted are competitive.”1

In return, Enjet agreed to certain conditions that insulated Eklof

from variations in the market price of fuel.

     L&L delivered 160,000 gallons of marine gas oil to the M/V

REBEL in November and December 1994.          L&L acted at the request of

     1
         Article 10 of the voyage charter party stated:

     Fuel Escalation Clause:    It is mutually understood and agreed
     Charterer will pay Owner for any fuel costs in excess of fifty-five
     cents ($0.55) per gallon. Owner will pay Charterer any fuel savings
     below fifty cents ($0.50) per gallon. Owner will purchase fuel for
     the performance of this contract from Enjet at all ports where such
     requirements arise and where Enjet is able to supply, always
     provided that the prices quoted are competitive. In the event of
     lower prices being quoted by another supplier at the port(s) in
     question, Owners undertake to give Enjet the opportunity to match
     such quotes.

                                       2
Enjet and prepared bunker receipts2 that were supplied by Enjet and

bore its logo and address.          The receipt contained the following

cautionary language:

     No disclaimer of any type or form will be accepted on
     this marine Bunker Receipt, and if any words of dis-
     claimer are applied, they will not alter, impair or waive
     ENJET INC’s maritime lien against the vessel’s ultimate
     responsibility for the debt incurred through this
     transaction.

L&L presented the receipts to the chief engineer for his signature.

     L&L invoiced Enjet and the M/V REBEL for the fuel in the

amount of $81,280, net due in thirty days, with specified interest

if not paid timely.      Enjet invoiced Eklof for the fuel and received

$53,250.    Enjet never paid L&L and filed for chapter 11 bankruptcy

protection.

                                      II.

     The district court granted L&L’s motion for summary judgment,

finding that L&L had a maritime lien under the maritime commercial

instruments and liens act (“the Act”), 46 U.S.C. § 31341 et seq.

(West Supp. 1995), which creates a maritime lien in favor of “a

person providing necessaries to a vessel on the order of the owner

or a person authorized by the owner.”              Finding that L&L was a

“person” and that it had provided necessaries to a vessel, the

court turned to the central issue in the case: whether Enjet had

authority to purchase such necessaries for the M/V REBEL.

     2
         A bunker receipt acknowledges delivery of marine gas oil.

                                       3
       The court determined that Enjet had authority to purchase

necessities and bind the vessel under the Act.                 The court noted

that under § 31341(a)(3), a “person to whom the management of the

vessel at the port of supply is intrusted” is presumed to have such

authority.     Relying on precedent finding that a charterer has such

managerial powers, the court concluded that Eklof had failed to

present any evidence rebutting the presumption contained in the

Act.

       Concluding that Enjet had actual authority to bind the vessel

to a contract for necessities, the court rejected Eklof’s argument

that L&L did not have actual knowledge of Enjet’s authority; the

court found that knowledge was necessary only when actual authority

was lacking.      The court also rejected Eklof’s assertion that the

“restrictive repair contractor” line of cases applies to this

case.3 The court determined that those cases are inapplicable

because there the contractor did not have actual authority to bind

the vessel, a characteristic that distinguishes Enjet.

       Having concluded that L&L was entitled to a maritime lien, the

district court turned its attention to the claim that L&L had

waived its lien by using Enjet’s bunker receipts.              According to the

court:

            Although maritime liens may be waived or assigned,
       the Fifth Circuit has insisted upon a strict standard of

       3
        See, e.g., Crescent City Marine, Inc. v. M/V NUNKI, 20 F.3d 665, 668-69 (5th
Cir. 1994); Farwest Steel Corp. v. Barge Sea Span 241, 828 F.2d 522, 525-26 (9th
Cir. 1987), cert. denied, 485 U.S. 1034 (1988).

                                         4
     proof. To show waiver, “evidence must be produced that
     would permit the inference that the supplier purposefully
     intended to forego the valuable privilege which the law
     accords.” [Gulf Trading & Transp. Co. v. Vessel HOEGH
     SHIELD, 658 F.2d 363, 368 (5th Cir. 1981)]. Proof that
     a supplier “deliberately intended to look solely to the
     owner’s personal credit” to satisfy his debt, for
     instance, would meet this standard. [Equilease Corp. v.
     M/V SAMPSON, 793 F.2d 598, 606 (5th Cir. 1986)].
     Although “the formalities of assignment . . . have not
     been rigidly defined,” [Tramp Oil & Marine, Ltd. v. M/V
     MERMAID I, 630 F. Supp. 630, 634 (D. P.R. 1986)], the
     same principles of clarity apply. See id. (holding, in
     case concerning assignment of maritime lien incurred for
     bunker oil, that “[a]ssignments must be in writing and
     notice thereof is to be given to the debtor.”); Vulcan
     Materials Co. v. Vulica Shipping Co., Ltd., 859 F. Supp.
     242, 247 (W.D. La. 1994) (citing Tramp Oil).

          The record does not satisfy Fifth Circuit require-
     ments.   L&L’s use of Enjet’s bunker receipts and its
     invoicing of Enjet do not constitute purposeful conduct
     sufficient to establish waiver. Both clearly show the
     name of the vessel. See Gulf Trading & Transp. Co., 658
     F.2d at 368 (holding that no waiver occurred in case
     where fuel supplier sent receipts to charterer that
     showed the name of the vessel). Neither do the words
     printed on the receipts have any effect; they appear to
     simply serve notice to the ship’s master that Enjet
     preserved any maritime lien of its own, and that its
     rights could not be changed by any additional disclaiming
     language. The clause says nothing and does nothing about
     the rights of L&L. And no dealings between L&L and Enjet
     suggest that L&L assigned its lien or that Enjet was
     subrogated to any of L&L’s claims against the REBEL. At
     most, the clause language invoked by the defendant placed
     L&L on notice that Enjet, too, meant to preserve its lien
     rights against the vessel. The Court simply cannot infer
     waiver or assignment of a lien on these facts.

     Finally, the court awarded prejudgment interest at the rate

called for in the invoices from the time the invoices were sent.

The court found that good faith litigation over liability does not

constitute the “peculiar circumstances” necessary to deviate from

                                5
the general rule that such awards are the rule rather than the

exception.

     The able district court addressed each of Elkof's contentions

in its thorough opinion.   We AFFIRM, essentially for the reasons

given by the district court.

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