Petition for Writ of Certiorari — M/V Litsa v. Southeastern Maritime Co.

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‘s, Supreme Gourt, U.S,

8-20174 | © EILED

i JUN 9: 1808

hiss JOSEPH F. SPANIOL, JR.

; CLERK

———_}

IN THE

Supreme Court of the United States

OctToBER TERM, 1988

M/V LITSA (Ex LAURIE U), IN REM,

Petitioner.

VS.

SOUTHEASTERN MARITIME COMPANY,

PORT STEVEDORING COMPANY, INC.,

RYAN-WALSH STEVEDORING COMPANY, INC.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

DonaLp F. Mooney, Esq.

Attorney for Petitioner

21 West Street

New York, New York 10006

(212) 943-1270

QUESTIONS PRESENTED

1. Whether the Third Circuit erred

in departing from the long-established

admiralty rule that a maritime lienor

must act with a "high" or “extraordinary”

degree of diligence in enforcing its

maritime lien against a vessel which has

passed into the hands of a good faith

purchaser, erred in adopting a new lesser

standard of mere "reasonable" diligence,

and further erred in suggesting that

minimal diligence or inaction may con-

stitute reasonable diligence.

2. Assuming for the sake of

argument that "reasonable" diligence is

the proper standard, whether the Third

Circuit erred in finding that stevedore

respondents exercised reasonable dili-

gence in enforcing their maritime liens

when respondents, who had special

knowledge of the financial problems of

the prior vessel owners, took no action

at all despite numerous opportunities to

enforce their liens prior to the sale of

the vessel to her present owners.

WIT

“Va

upreme

STINT

Corporation

TABLE OF CONTENTS

Questions Presented i

List of Parties 283

Table of Authorities Vv

Citations to Opinions Below 1

Jurisdiction 2

Statutory Provisions Involved 2

Statement of the Case 4

Reasons for Granting the Writ 14

Conclusion 37

Appendix A

Opinion of the Third Circuit 38

Appendix B

Adjudication and Judgment of

the U.S. District Court 59

Appendix C

Judgment of the Third Circuit 74

Appendix D

Third Circuit denial of Peti-

tion for Rehearing In Banc 76

a oii. ue of

f 44>

bia

joe, tae

Table of Authorities

CASES

BOLD BUCCLEUGH, 7 Moore,

P.C. 267 (1852)

Dixie Machine & Metal Works

Inc. v. M/V ANDINO, 1983

A.M.C. 1166 (S.D.Fla. 1982)

The ELIZA JANE, 8 F. Cas.

488 (Case No. 4,363 (D.Mass.

1847)

The EVEROSA (Southern Coal

& Coke Co. v. Kugniecibas),

93 F.2d 732 (lst Cir. 1937)

The EVEROSA (Swan & Sons,

Inc. v. Kugniecibas), 20 F.

Supp. 8 (E.D.N.Y. 1937)

The JOHN CADWALDER, 99 F.2d

678 (3rd Cir. 1938)

John W. Stone Oil v. MISS

BERN, 663 F.Supp. 773

(S.D.Ala. 1987) 19,

The KEY CITY, 81 U.S. 653

(1871)

McLaughlin v. The DREDGE

GLOUCESTER, 230 ¥. Supp.

623 (D.N.J. 1964)

Merchants & Marine Bank v.

The T. E. Welles, 289 F.2d

188 (5th Cir. 1961)

22,

Page

15,

26,

18,

33:

Table of Authorities

CASES

The NIKITA, 62 F. 936 (5th

Cir. 1894)

OWYHEE, 66 F.2d 399 (2d

Cir. 1933)

The PRILLA, 21 F. Supp. 383

(D.Mass. 1937)

Tagaropoulos S.A. v. S.S.

SANTA PAULA, 502 F.2d 1171

(9th Cir. 1974)

Waterways Marine, Inc. v.

Brooks Liguid Transport,

Inc. 291 F. Supp. 703 (N.D.

Ill. 1968)

Federal Statutes

28 U.S.C. 1254(1)

46 U.S.C. 971

46 U.S.C. 974

Other Authorities

Black's Law Dictionary

(4th Ed. 1968)

Gilmore & Black, The Law

of Admiralty (2d Ed., 1975)

2 Benedict on Admiralty

Page

20,

SUPREME COURT OF THE UNITED STATES

October Term, 1988

No.

M/V LITSA,

Petitioner,

-against-

PORT STEVEDORING COMPANY, INC.,

RYAN-WALSH STEVEDORING COMPANY,

INC. and SOUTHEASTERN MARITIME

COMPANY,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

CITATIONS TO OPINIONS BELOW

The opinion of the Court of Appeals

for the Third Circuit is reported at 872

F.2d 554 (3rd Cir. 1989).~ It is printed

in Appendix A, infra, at p. 38. The

opinion of the U.S. District Court for

the District of Pennsylvania is unre-

ported. It is printed in Appendix B,

infra, at p. 59.

JURISDICTION

The judgment of the United States

Court of Appeals for the Third Circuit

was entered April 13, 1989. The order

denying petition for rehearing in banc

was entered on May 9, 1989. The juris-

diction of this Court is invoked under

26 U.S.C. L254(i}.

STATUTORY PROVISIONS INVOLVED

The relevant provisions of the

United States Maritime Lien Act, 46

U.S.C. 971, et seq., provide:

46 U.S.C. 971

Any person furnishing repairs, sup-

plies, towage, use of dry dock or marine

railway, or other necessaries, to any

vessel, whether foreign or domestic, upon

the order of the owner of such vessel, or

of a person authorized by the owner,

shall have a maritime lien on the vessel,

which may be enforced by suit in rem, and

it shall not be necessary to allege or

prove that credit was given to the

vessel.

46 0.5.C,. 974

Nothing in this chapter shall be

construed to prevent the furnisher of

repairs, supplies, towage, use of dry

dock or marine railway, or other neces-

Saries, or the mortgagee, from waiving

his right to a lien, or in the case of a

preferred mortgage lien, to the preferred

status of such lien, at any time by

agreement or otherwise; and this chapter

shall not be construed to affect the

rules of law existing on June 5, 1920,

in regard to (1) the right to proceed

against the vessel for advances, (2)

laches in the enforcement of liens upon

vessels, (3) the right to proceed in

personam, (4) the rank of preferred

maritime liens among themselves, or (5)

priorities between maritime liens and

mortgages, other than preferred mort-

gages, upon vessels of the United States.

(emphasis added)

STATEMENT OF THE CASE

(1) Background of Parties

Petitioner M/V LITSA is a Liberian

flag vessel owned by claimant Star War-

rant Shipping Corporation (hereinafter

"Star"), based in Piraeus, Greece. Star

purchased the vessel on December 8, 1982

from its prior owner Uiterwyk Lines Ltd.,

who traded the vessel under the name

LAURIE U (A304, 158-163*). The vessel

LAURIE U was operated by Uiterwyk Corpor-

—_—

* Petitioner submits the Court can determine

whether or not to grant the Writ without re-

viewing the Court of Appeals Record. However,

we have referred to the Record in the brief in

the event respondents order the Record from the

Third Circuit. Reference to "A" is to Appendix

Volume A, which includes the trial transcript

and pleadings. There will be references to the

trial exhibits which are in Appendix Volume B

(petitioner), Volume C (respondents Port and

Ryan-Walsh) and Volume D (respondent Semco).

The particular volume will be indicated by the

appropriate prefix and page, e.g., B14 for a

petitioner exhibit.

BRB. pew evar

ation, a Florida corporation based in

Tampa (hereinafter "Uiterwyk") (A178).

Prior to the purchase of the vessel

by Star, the three respondents provided

stevedoring and other services to the

vessel. Respondent Port Stevedoring Com-

pany, Inc. (hereinafter "Port") isa

stevedoring company based in Houston,

Texas and conducted business in several

Texas ports (A243). It provided services

to the LAURIE U in the port of Houston.

Respondent Ryan-Walsh Stevedoring

Company, Inc. (hereinafter "Ryan-Walsh")

is a stevedoring company based in Mobile,

Alabama and conducted business in about

20 U.S. Atlantic and Gulf ports (A175,

183-4). It provided services to the

LAURIE U in the port of New Orleans.

Respondent Southeastern Maritime Company

(hereinafter "Semco") is a ship agency

and stevedoring company based in Charles-

ton, South Carolina and conducted busi-

ness in ports in Florida, Georgia and

South Carolina (A80). It provided ser-

vices to the LAURIE U in the port of

Charleston.

(2) Summary of Claims

Date

Services

Claimant Amount Rendered Place

Port $111,994.71 May 13- Houston

23, 1982

$ 46,692.26 Aug. 1ll- Houston

14, 1982

$ 71,873.97 Ot. 14- Houston

20, 1982

Ryan- $ 25,404.21 July 26- New Or-

Walsh Aug. 6, leans

1982

Semco $ 22,184.87 May 27- Charles-

1982 ton

(C50, C134-141, D9-11)

(3) Itinerary of vessel

from May 1, 1982 through

April 1983 (C170-71)

Time in Port Port

1982

Apr 27 - May 12 New Orleans

May 13 - May 23 Houston

[Port's services]

May 28 - May 29 Charleston

[Semco's services]

SESS ee

—

May

Jun

Jul

Aug

30 - May 31 Hampton Roads

ll Gibraltar

14 = Jun 17 Malt

18 - Jun 19 La Goulette, Tunisia

22 - Jul 3 Alexandria

ll Gibraltar

24 - Aug 7 + New Orleans

[Ryan-Walsh's

services ]

9 - Aug 14 Houston

[Port's services]

29 = Sep 1 Casablanca

2 - Sep 3 Tangier

10 Alexandria

18 - Sep 22 Malta

ftp Gibraltar

9 - Oct 14 Port Arthur

14 - Oct 21 Houston

[Port's services]

5 - Nov 10 Casablanca

as Gibraltar

12 El Djazair

18 - Dec 1 Alexandria

3 - Dec 7 Piraeus

[Dec 5 - Star

purchases vessel]

28 - Dec 30 Dunkirk

31 - Jan 5 Rotterdam

5 - Jan 12 Dunkirk

19 Las Palmas, Canary Is.

Apapa, Lagos

a2 Abidjan, Ivory Coast

P te Abidjan

5 Abidjan

2 - Apr 14 Philadelphia

[vessel arrested]

Star was a good-faith purchaser

of the vessel without knowledge

of any maritime lien claim

The vessel was under the Liberian

flag while trading under the names LAURIE

U and LITSA. The registry for all Liber-

ian vesselswas maintained at 545 Fifth

Avenue, New York, New York, where claims

of maritime liens and mortgages could

have been recorded on the vessel's regis-

try to give notice of the lien claim

to the public, including prospective pur-

chasers (A334-8).

Star contracted to buy the vessel on

Nov. 3, 1982 and took title to the vessel

on Dec. 8, 1982 after it made a search of

the vessel's Liberian registry in New

York to determine whether any liens were

filed against the vessel (A304-5). The

Liberian authorities issued a Certificate

certifying that there were no liens or

encumbrances on the vessel, which certi-

ficate was required by Star before it

paid the purchase price (A305, C158).

Star was unaware of the respondents'

claims of liens against the vessel until

after its vessel was arrested in Phila-

delphia on April 6, 1983. The respon-

dents did not make any attempt to record

their liens at the Liberian registry in

New York, or give any notice to Star

(prior to arrest) that they had lien

claims against the vessel (A308-9).

(5) Prior to Star's purchase of the

vessel, respondents failed to take

any steps to enforce their maritime

liens, despite numerous opportuni-

ties to do so and despite knowledge

of Uiterwyk's financial problems

All of the respondents had a long

relationship with Uiterwyk and its prin-

cipals, Hendrik and Robert Uiterwyk, and

had provided services to numerous vessels

nominated by Uiterwyk. All respondents

knew that Uiterwyk had a very bad payment

record, had failed to comply with the

payment terms of their stevedoring con-

tracts, and was having particularly seri-

ous financial troubles in 1982, both

before and after they provided the ser-

vices at issue in this case.

Ryan-Walsh notified Uiterwyk on

numerous occasions that they would not

provide stevedoring services unless

monies were received prior to the loading

of the vessel (B47, 83, 103-5, 107-9,

113-17) anda confidential memorandum was

circulated to its top executives and

directors on September 1, 1982 that:

Uiterwyk is about to take a swan

dive . ... I would certainly

recommend we have something on

Standby to move quickly in our

interests, or perhaps consider

doing something before the dam

PUSSte . 3s tes

(emphasis added)

But Ryan-Walsh did nothing to exercise

its maritime lien for the Stevedoring

services rendered just weeks before this

memorandum was issued.

Semco knew in 1982 that Uiterwyk had

serious financial problems and that its

checks to Semco were bouncing in Septem-

ber and October 1982 (D150-73, Al53-6).

Port did not receive payments as

required under their contracts and

threatened to arrest vessels unless

payments were made (A266-7). Yet Port

continued to provide services to the

LAURIE U, not just once in May 1982, but

a second time in August 1982, and then a

third time in October 1982, all while the

prior invoices remained unpaid.

Had respondents exercised any degree

of diligence they would have Simply filed

a Claim of Lien in the Liberian registry,

Or arrested the vessel in any of the

numerous U.S. or foreign ports at which

the vessel called prior to her sale to

Star. Respondents' failure to exercise

diligence resulted in Star purchasing the

vessel without knowledge of the liens.

Uiterwyk and its affiliated com-

panies filed bankruptcy in the U.S. Bank-

——

ruptcy Court in Tampa on January 27,

1983. All respondents filed, inter alia,

the same claims in the bankruptcy which

they claimed in this action, and repre-

sented to the U.S. Bankruptcy Court that

such claims were unsecured and did not

claim they had any maritime lien as

security. Port and Ryan-Walsh are on the

Creditors Committee and have actively

participated in and prosecuted in the

Bankruptcy Court the claims which are

before this Court.

(6) Proceedings below

The vessel was arrested in Philadel-

phia on April 6, 1983. Respondents

intervened in the action and invoked the

admiralty and maritime jurisdiction of

the U.S. District Court for the Eastern

District of Pennsylvania (#83-1614).

Despite respondents taking no action to

enforce their maritime liens until April

1983, the District Court found that re-

spondents had exercised an "extraordinary

high degree of diligence" (App. B,p, 67).

Jurisdiction of the Court of Appeals

for the Third Circuit was invoked by the

M/V LITSA pursuant to 28 USC 1291. In

considering whether the District Court

ruled correctly, the Third Circuit did

not judge the conduct of respondents

under the well-established “extraordinary

high" degree standard but rather used a

new lesser "reasonable diligence" stan-

dard (App. A, p. 44). The Third Circuit

affirmed the judgment of the District

Court in all respects except for a remand

(not relevant to this petition) for re-

consideration as to whether some of the

items claimed give rise to maritime liens

and for exclusion of certain items which

it held did not give rise to maritime

liens.

REASONS FOR GRANTING THE WRIT

Prior to the decision of the Third

Circuit, the case law was virtually uni-

form that a maritime lienor must act with

a "high" or "extraordinary" degree of

diligence in enforcing the lien against a

vessel which has passed into the hands of

a good-faith purchaser, or else lose the

lien through laches. The Third Circuit,

however, departed sharply from the prece-

dent and held that a maritime lienor must

exercise mere “reasonable diligence," and

further held that reasonable diligence

was exercised even though there was

inaction prior to Uiterwyk's bankruptcy

despite the lienors' knowledge of serious

financial difficulties.

The Writ should be granted because:

(a) the decision of the Thira Circuit

is in conflict with a decision of the

Court of Appeals for the First Circuit

and decisions of U.S. District Courts,

(b) the decision of the Third Circuit

appears to be in conflict with a deci-

sion of this Court,

of importance to the international mari-

time industry, and

(d) even assuming arguendo that

reasonable diligence is the appropriate

standard, petitioner has suffered a

serious injustice because respondents did

not exercise any diligence whatsoever.

* * *

(a) The decision of the Court of

Appeals for the Third Circuit is

in conflict with the decision of

the Court of Appeals for the

First Circuit in the EVEROSA, 93

F.2d 732 (lst Cir. 1937) and deci-

Sions of various District Courts

The EVEROSA (Southern Coal & Coke

Co. v. Kugniecibas), 93 F.2d 732 (lst

Cir. 1937) is one of the leading cases on

the subject of laches and maritime

liens. The vessel had called at various

U.S. Gulf ports and Norfolk between

November 1933 and May 1934 before she

Sailed for Europe on May 17, 1934.

southern Coal supplied coal to the vessel

in Mobile on Nov. 22, 1933 and again in

Mobile on May 8, 1934 (nine days before

the ship sailed from Norfolk to Europe).

In August 1934 the vessel was sold to

Latvian owners who renamed her and trans-

ferred her to Latvian registry. The

lienor Southern Coal arrested the vessel

immediately upon its return to American

waters in November 1933. The Court of

Appeals held that the November 1933 lien

was barred for laches (but allowed the

May 1934 lien). It noted that the coal

company between November 1933 and May

1934 had six Opportunities to arrest the

vessel at various American ports (in-

Cluding the second return trip to Mobile

when the November claim was already six

months old) and, despite the fact it had

not been paid for the November 1933 coal

Supply, it furnished coal again in May

1934 on further credit to the owners.

(Just as Port provided additional ser-

vices to the LAURIE U in August and

October 1982 even though the May 1982

services were not paid for.) The Court

of Appeals stated, 93 F.2d 735, as

follows:

It is of the very essence of the

lienor's rights that they shall not

be slept upon. Being undisclosed

and cutting under titles subse-

quently acquired in good faith and

without notice of them, a high de-

gree of diligence is demanded in

their enforcement.

The [EVEROSA] called at various gulf

ports of this country half a dozen

times between the first coaling and

the second. There was unquestion-

ably a reasonable Opportunity to

enforce the lien.

(emphasis added)

The requirement of a high degree of

diligence was recognized in a related

case, The EVEROSA, (Swan & Sons, Inc. v.

Kugniecibas), 20 F. Supp. 8 (E.D.N.Y.

1937). The District Court noted that the

Ship chandler had furnished Supplies in

Norfolk in January 1934 and could have

arrested the ship at various U.S. Gulf

ports during March, April and May and

upon her return to Norfolk in May 1934

when the claim was four months old, but

failed to do so. The Court stated at 20

F. Supp. 11, as follows:

The presence of the [EVEROSA] in

Norfolk on May 16 and 17, 1934, is

not So easily overlooked. Over

three months had elapsed since the

Supplies were delivered; the vessel

was Known to be of foreign regis-

try, and to be engaged in peripa-

tetic pursuits. The claimant is a

ship chandler and is familiar with

the hazards of that Calling. This

definite display of indifference,

touching the Opportunity to enforce

its liens through appropriate ac-

tion, cannot fail to count heavily

against it, in balancing the

equities.

(emphasis added)

U.S. District Courts have followed

the dictates of the EVEROSA cases. In

McLaughlin v. Dredge GLOUCESTER, 230 F.

Supp. 623 (D.N.J. 1964), the Court held

at 630:

Where a maritime lien is to be

enforced to the detriment of a bona

fide purchaser without notice, the

libellant must act with extraordi-

nary diligence. As against such a

purchaser such lien will be lost

in equity after the lapse of a much

shorter period of time under the

doctrine of laches, than under ana-

logous limitation statutes.

(emphasis added)

In John W. Stone v. MISS BERN, 663

F. Supp. 773 (S.D.Ala. 1987), the art

found that the lienor was guilty of

laches for failing to enforce a maritime

lien within a 2-1/2 month period between

the rendering of services and the sale of

the vessel. The Court held at 778:

"Plaintiffs are required to act with

"extraordinary diligence' to enforce

a maritime lien against a bona fide

purchaser without notice." Trivizas

v. Tanjong Shipping Company, [1982

AMC] at 2523, McLaughlin v. Dredge

Gloucester, supra. The Everosa, 93

F.2d 732, 1938 A.M.C. 82 (1st Cir.

1937); Merchants & Marine Bank v.

F/V_T.E. WELLS, 289 F.2d 188, 1961

A.M.C. 1042 (5th Cir. 1961). The

Claim will lapse in a much shorter

time and the court will undertake a

more rigid scrutiny of the circum-

stances of the delay in cases where

the vessel is in the hands of a bona

fide purchaser as Opposed to cases

where there has been no changes in

Ownership. The Key City, 81 U.S.

(14 Wall.) 653,20 L.Ed. 896 (1871).

(emphasis added)

Even the District Court below enunciated

the standard of diligence as "extraordi-

nary high" (App. B, p. 67).

We also refer to a case decided

over 140 years ago, The ELIZA JANE,

8 F. Cas. 488 (Case No. 4,363) (D.Mass.

1847), in which the Court rejected a

Six-month old lien Claim.

The leading maritime law commenta-

tors are in accord with these Court deci-

sions. Gilmore & Black in their Law of

Admiralty, (2d Ed.), state at 767:

It is a fair conclusion that good

faith purchase without notice will

bar all preexisting liens more than

a_few months old and that even such

liens will be barred unless the

lienors proceed with the utmost

re |

diligence (not, however, being re-

quired to pursue the ship in foreign

ports).

(emphasis added)

2 Benedict on Admiralty, states in para.

62:

As a general rule, those liens

arising under the Federal Maritime

Lien Act and any other liens not

already subject to a fixed statute

of limitation should be enforced

with a high degree of diligence

Since "courts do not look with favor

on delays", except if proven rea-

sonable.

(emphasis added)

The EVEROSA cases were decided over

fifty years ago. Vessels can now be

readily traced and their position esta-

blished within a day or two through such

sources as Lloyd's Watch Service and

other sources of intelligence such as the

ship listings in the Journal of Commerce,

all well known to the maritime industry

and maritime lawyers and the respondents,

who knew about and subscribed to these

sources of shipping intelligence and used

maritime lawyers. (A213, 227-8, 271-4;

B13-14; C145-50; D175-8.) Therefore, we

submit the time allotted to a lien claim-

ant to exercise the “extraordinary”

degree of diligence should be substan-

tially reduced from the time periods used

in the EVEROSA cases to reflect the

changes in worldwide communications and

intelligence. The respondents are all

large companies with access to maritime

lawyers and shipping intelligence. The

recent decision in the John W. Stone

case, supra, gives implicit recognition

to the speed with which a diligent lienor

can and should act in its enforcement of

lien claims more than a few months old

when there is a bona fide purchaser of

the vessel.

The difference between "reasonable

diligence" and "extraordinary diligence"

is not a matter of semantics but has real

meaning. For instance, Black's Law

Dictionary (‘4th Ed. 1968) defines "dili-

gence" as "[p]rudence; vigilant activity;

attentiveness; or care, of which there

are infinite shades, from the slightest

momentary thought to the most vigilant

anxiety." The text goes on to explain the

differences between the three types of

diligence:

The law recognizes only three

degrees of diligence: (1) Common

or ordinary, which men, in general,

exert in respect of their own con-

cerns; the standard is necessarily

variable with respect to the prin-

ciple. (2) High or great, which

is extraordinary diligence, or that

which very prudent persons take of

their own concerns. (3) Low or

slight, which is that which persons

of less than common prudence, or

indeed of no prudence at all, take

of their own concerns.

(emphasis added)

The cases cited by the Third Circuit

do not support the new diminished stan-

dard of diligence. The BOLD BUCCLEUGH, 7

Moore, P.C. 267 (1852), is an English

case decided nearly 140 years ago. Since

that time, the United States Courts, as

set forth above, have enunciated a stan-

dard of extraordinary or high degree of

diligence. Moreover, as noted by Gilmore

& Black, supra, at 764, the English

Court in the BOLD BUCCLEUGH:

[D]id in fact enforce a collision

lien against a ship which had passed

into the hands of a purchaser as-

sumed to be in good faith and with-—

out notice, but in favor of a lienor

who had acted with extraordinary

diligence.

(emphasis added)

The reference to "reasonable diligence"

in Merchants and Marine Bank v. T.E.

WELLS, 289 F.2d 188 (Sth Cir. 1961) at

190, is in the context of an assertion by

one of the parties:

Either alone, or as an ingredient

of laches, the Bank asserts also

that, as a matter of law, the lienor

failed to exercise reasonable dili-

Sence ~~.

(emphasis added)

The Fifth Circuit did not specifically

hold that reasonable diligence was the

proper test. Indeed, the issue of

whether the diligence standard was

"reasonable" or "extraordinary" was not

an issue in either of the above two cases

relied on by the Panel. However, if the

standard in the Fifth Circuit is one of

"reasonable" diligence as suggested by

the Court below, we submit there is a

further conflict then with the First

Circuit and the District Court decisions

cited above which requires resolution by

this Court.

(b) The decision of the Third

Circuit is in apparent conflict

with a decision of this Court

In The KEY CITY, 81 U.S. 653 (1871),

the Court summarized various rules of the

law of laches and maritime liens, in-

cluding, at 660:

That where the lien is to be

enforced to the detriment of a

purchaser for value, without notice

of the lien, the defence [laches]

will be held valid under shorter

time, and a more rigid scrutiny of

the circumstances of the delay, than

when the claimant is the owner at

the time the lien accrued.

(emphasis added)

The use of the words “shorter time" and

"rigid scrutiny" suggests that a lienor

must not just exercise "reasonable" dili-

gence, but take prompt action to enforce

the lien. We note the Courts in Mc-

Laughlin v. Dredge GLOUCESTER, supra,

and John W. Stone v. MISS BERN, supra,

relied on the KEY CITY in deciding that a

maritime lienor must exercise extra-

ordinary diligence in enforcing his lien.

The Third Circuit's decision is in appar-

ent conflict with the KEY CITY.

international maritime industry

The resolution of the conflicting

court decisions on laches and maritime

liens is not merely of academic interest,

but is rather a matter of practical

importance to the maritime industry.

Maritime liens are “undisclosed and cut .

- - under titles subsequently acquired in

TT lll.

good faith . .. ." EVEROSA, 93 F.2d

732 (lst Cir. 1937) at 735. The slack-

ened standard of diligence enunciated by

the Third Circuit effectively lengthens

the time in which maritime liens sur-

vive against vessels which have passed

into the hands of good-faith purchasers.

This, of course, greatly increases the

risk to vessel buyers that unpaid and

unknown lienors whose liens originated

months and years earlier will appear and

seize the vessel just purchased. The

high degree of diligence standard, on the

other hand, reduces the time in which

maritime liens survive, which accordingly

reduces the risk and potential costs to

vessel buyers.

The uniformity of the law on this

issue is also important to maritime

lienors, including stevedores. As it

———————

Stands now, a lienor who arrests a vessel

in Philadelphia will be held to a differ-

ent and lesser standard of diligence than

one who arrests the same vessel in Boston

or New York or Mobile.

M/V LITSA submits the admiralty law

must be uniform with respect to enforcing

maritime liens against vessels have been

sold te good-faith purchasers.

(d) Even assuming arguendo that

reasonable diligence is the

appropriate standard, petitioner

has suffered a serious injustice

because respondents did not exer-

cise any diligence whatsoever

Even a "reasonable diligence" stan-

dard required the respondents to take

some action to protect and enforce their

liens. Respondents, however, took no

action prior to the sale of the LITSA to

Star and petitioner suffered severe pre-

judice as a result. They only took

action after the bankruptcy when the

horse was already out of the barn.

aaa aie

Prior to the sale of the vessel, all

respondents were on notice of the serious

financial problems of Uiterwyk. Respon-

dent Ryan-Walsh provided services in late

July/early August 1982 in New Orleans.

Shortly thereafter, its top officers and

directors were advised on September l,

1982 by the officer in charge of their

New Orleans office (which rendered the

services involved in this litigation)

that "Uiterwyk is about to take a swan

dive" and that they should "consider

doing something before the dam bursts"

(B15; Al91-3). Yet nothing was done. As

of July 31, 1982 (at the very time they

were providing the services involved in

this litigation) a Ryan-Walsh analysis

(B79) showed outstanding invoices for

Uiterwyk vessels of $627,148.53, of which

more than two-thirds were more than 60

days old and almost half more than four

months old, despite the contract require-

ment that 80% be paid on Presentation of

invoices and the balance within 60 days.

Ryan-Walsh continually throughout 1982

threatened to Stop work unless some

Payments were received and indeed issued

Orders not to work and accused Uiterwyk

of repeatedly breaking Promises (B47,

33, 103-5, 107-9, 113-7).

Respondent Semco provided Services

to the vessel in Charleston in May 1982,

Thereafter, Uiterwyk's Checks to Semco

bounced, yet Semco took no steps to

enforce its lien (D170, 173). On five

Occasions prior to November 1982, Semco

deposited Uiterwyk checks which were

rejected by the bank. As far back as

Ulterwyk's accounts receivable (D150,

152). On June 14, 1982, a few weeks

after it rendered the services involved

in this litigation, its outstanding

receivables from Uiterwyk totalled

$564,120.22, which was $214,120.22 in

excess of what they could permit to be

outstanding (D154). In August 1982 Semco

threatened the arrest of vessels due to

the "continued failure" to pay accounts

receivable (D166). In September and

October 1982 checks bounced,

Respondent Port knew that Uiterwyk

had serious financial difficulties since

the Iranian revolution in 1979 and that

matters worsened in 1982, that it was not

paying its bills and that threats were

made by Port, including threats that they

would refuse to do any more work and

arrest vessels unless they received

Payment (A266-8, 285-9). According to

monthly statements Submitted by Port to

Uiterwyk during 1982 (B216-27) and Port's

running account (B228-35), indebtedness

to Port was increased from $800,000 in

1980 to more than $1,009,000 in 1982

without any substantial reduction, and

Port permitted the individual stevdoring

invoices to regularly age to six to seven

months, even though its contract required

80% payment on completion of services, a

contract requirement which was never hon-

ored. Yet Port continued to provide

services, including services to the

LAURIE U, not once in May 1982, but a

second time in August, and then a third

time in October 1982, all while the prior

invoices remained entirely unpaid (as

well as many other invoices for other

vessels).

* * *

Despite the knowledge of Uiterwyk's

financial problems, respondents sat back

and did nothing. Port even provided ser-

vices on two more occasions. What should

respondents have done?

(i) Recording of maritime lien

The Liberian Maritime Law in

Section 111 expressly provided for the

recording of Notice of Claim of Lien (in

language almost identical to its U.S.

counterpart) as follows:

(1) The Commissioner or his

duly authorized agent shall upon

the request of any person record

notice of his claim to a lien upon

a registered vessel, together with

the nature, date of creation, and

amount of the lien and the name and

address of the person.

The failure to record a maritime lien has

been cited by the Courts as an important

factor in determining laches. The JOHN

CADWALDER, 99 F.2d 678, 680 (3rd Cir.

1938); John W. Stone v. MISS BERN, 663

F.Supp. 773, 779-80 (S.D.Ala. 1987);

Waterways Marine, Inc. v. Brooks Liquid

Transport, 291 F.Supp. 703, 704-5 (N.D.

Tll. 1968); Dixie Machine v. M/V ANDINO,

1983 A.M.C. 1166, 1168 (S.D.Fla. 1982),

Tagaropulos, S.A. v. SS SANTA PAULA, 502

F.2d 1171, 1172<3 (9th Cir. 1974)¢ Tne

NIKITA, 62 F. 936-7 (5th Cir. 1894).

Had the liens been recorded, notice would

have been given to the innocent purchaser

Star.

(ii) Arrest of vessel

All respondents had numerous

opportunities to arrest the vessel at

both U.S. and foreign ports prior to the

purchase by Star in December 1982, yet

failed to do so. Of particular appli-

cation to the special circumstances of

the case at bar is The PRILLA, 21 F.

Supp. 383 (D.Mass. 1937). The lienor was

a ship storage and repair company that

provided services to a boat during the

period May 1, 1935 to July 8, 1936.

It had received a payment on account in

June 1935. On July 3, 1936 another check

given to the lienor "was returned from

the bank unpaid." The vessel was sold in

early November 1936. The lienor had

difficulty finding where the boat was,

but knew where it was in September 1936

yet did not arrest it. The Court, in

rejecting the lien, held as follows at

384:

Whether or not the libelant had

been extending credit to the boat

or to Johanson personally, it was

certainly placed on notice at this

time that the credit of Johanson

was questionable. It was its duty

then to act promptly to protect its

lien.

The maritime lien, being a secret

one, is one that should be enforced

without unnecessary delay. As be-

tween the original parties, Johanson

would not be heard to claim that the

libelant was not diligent in its

efforts. Since the rights of the

third person have intervened, the

lien will be regarded as lost.

The person in whose favor it had

existed has had a reasonable oppor-

tunity to enforce it, and has not

done so. [Citation omitted.] Where

either Leonard or the libelant is

to sustain the loss, in good con-

science and equity, the loss ought

to be borne by the one who placed

himself in a position to suffer it,

where the other has been guilty of

no negligence.

(emphasis added)

(iii) Demanded payment up-front

Respondents could have insisted on

immediate payment or refused to do the

work. This is particularly applicable to

Port who, despite not being paid for the

May 1982 services, rendered additional

services in August. Then, despite not

being paid for its May or August ser-

vices, Port furnished more services in

October 1982.

Instead of registering their liens

or arresting the vessel or refusing to

continue to provide services, respon-

dents admitted they were content to wait

and hope to be paid by Uiterwyk. How-

ever, this is no excuse for failure to

move diligently to register or enforce

their liens. OWYHEE, 66 F.2d 399 (2d

Cir. 1933) at a0,

CONCLUSION

For the foregoing reasons, this

petition for a writ of certiorari

should be granted.

Respectfully submitted,

Donald F. Mooney

Counsel for Petitioner

21 West Street

New York, N.Y. 10006 -

(212) 943-1270

Dated: New York, New York

June 8, 1989

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APPENDIX

Appendix A

UNIFED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

NO. 88-1362

BERMUDA EXPRESS, N.V., SOUTHEASTERN

MARITIME COMPANY, PORT STEVEDORING

COMPANY, INC., RYAN-WALSH STEVEDORING

COMPANY, INC., NRS FINANCIAL CORP., ASSIGNEE

OF MALONE MARINE GROUP, INC., ZALESKY,

MARVIN d/b/a/ SEASIDE MARINE SUPPLY OF

HOUSTON, CHARLES L. MOLHO, d/b/a MANHATTAN

SHIP SUPPLY and THURMOND SUPPLY CoO.., INC.

M/V LITSA (Ex. LAURIE U) IN REM,

Appellant

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil No. 83-1614)

Argued December 6, 1988

Before: SLOVITER and BECKER,

Circuit Judges, and

BARRY, District Judge*

(Opinion filed April 13, 1989)

¥ Hon. Maryanne Trump Barry. United States District Court for

the District of New Jersey, sitting by designation.

Appendix A

Donald F. Mooney (Argued)

21 West Street

New York, New York 10006

Douglas H. Riblet

Rawle & Henderson

211 South Broad Street

Philadelphia, PA 19107

Attorneys for Appellant

Faustino Mattioni

Francis X. Kelly (Argued)

Mattioni, Mattioni & Mattioni, Ltd.

399 Market Street, 2nd Floor

Philadelphia, PA 19106

Attorneys for Appellee,

Southeastern Maritime Company

Thomas E. Seus (Argued)

Amy L. Currier

Kelly, Harrington, McLaughlin & Foster

1700 Atlantic Building

260 South Broad Street

Philadelphia, PA 19102

Attorneys for Appellees,

Port Stevedoring Company, Inc. and

Ryan-Walsh Stevedoring Company, Inc.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

ISSUES

The appellant vessel in an in rem action appeals

from the district court's final adjudication and

judgment awarding three stevedoting companies the

full amount of their claims based on maritime liens for

unpaid invoices for stevedoring services provided to

Appendix A

the vessel before it was sold to its present owner. The

principal issue on appeal is whether the claims of the

stevedore lienors were barred by the equitable doctrine

of laches. The conflicting interests involve, on one

hand, those of maritime lienors whose services are

essential for the smooth functioning of maritime

commerce and, on the other hand, those of bona fide

purchasers in good faith of vessels which may be

subject to such liens. We must also decide the scope of

“necessaries” which give rise to maritime liens under

46 U.S.C. § 971 (1982).

Il.

FACTS

Most of the facts relevant to this appeal are not in

dispute. Appellees, Port Stevedoring, Inc. (Port),

Ryan-Walsh Stevedoring Company (Ryan-Walsh), and

Southeastern Maritime Company (Semco), are in the

business of supplying stevedoring services to vessels at

various ports in the southern portion of the United

States. In 1982, Uiterwyk Corporation (Uiterwyk), the

general agent for Uiterwyk Lines, Ltd. which owned the

vessel, contracted with appellees to provide stevedoring

services for vessels nominated by Uiterwyk. This

contract covered the vessel involved in this litigation,

then known as the M/V LAURIE U, which sailed under

Liberian registry. The contracts all called for payment

of 80% of the amount due for services rendered upon

completion of such services for each vessel and

presentation of an invoice. Under the Port and Semco

contracts, the balance became due a reasonable time

after presentation of duly documented bills, while

under the Ryan-Walsh contract final payment was due

within sixty days after the presentation of such bilis.

Semco provided services to the M/V LAURIE U on

May 27 and 28, 1982 in Charleston, giving rise to a

claim of $22,184.87. Ryan-Walsh provided services to

the M/V LAURIE U on July 26-August 6, 1982 in New

Appendix A

Orleans, giving rise to a claim for $25,404.21. Port

provided services to the M/V LAURIE U in Houston on

three occasions in 1982, May 13-23, August 11-14, and

October 14-20, giving rise to claims for $112,994.71,

$46,692.26, and $71,873.97 respectively.

On October 21, the M/V LAURIE U left United

States waters and did not return until April 2, 1983. In

the interim, two significant events took place. On

December 8, 1982, Uiterwyk Lines, Ltd. sold the M/V

LAURIE U to Star Warrant Shipping Corp. (Star), a

shipping company operating out of Piraeus, Greece. In

the contract of sale, Uiterwyk Lines, Ltd. warranted to

Star that there were no maritime liens against the

vessel, and Star's search of the Liberian registry in New

York revealed that no claims had been filed against the

ship. Star renamed the vessel M/V LITSA. Shortly after

the sale, on January 27, 1983, Uiterwyk, the general

agent, filed a petition in bankruptcy in the Middle

District of Florida.

Upon learning of the bankruptcy, appellees filed

individual claims in the bankruptcy court and

contacted Lloyds Watch of London to determine the

status of Uiterwyk vessels which they had serviced.

Lloyds informed appellees of the purchase of the M/V

LAURIE U and the name change, and continued to

track the vessel's movements until it returned to

United States waters on April 2, 1983. Bermuda

Express, another claimant who has since settled with

Star, arrested the M/V LITSA in the Port of Philadelphia

on April 6, 1983. The district court had jurisdiction

over this suit in admiralty under 28 U.S.C. § 1333

(1982).

Appellees intervened as plaintiffs and proceeded to

trial against the M/V LITSA on their claims. After a

bench trial, the district court determined that all three

appellees had acted with the extraordinary degree of

diligence required to preserve their maritime liens, and

- Appendix A

that neither their participation in the bankruptcy

proceedings nor their failure to file notice of their

maritime liens waived their right to assert those liens.

The court entered the following judgments which

represent the full amounts of the claims and

prejudgment interest: Port, $324,185.31; Ryan-Walsh,

$35,588.16; Semco, $31,078.28.

The vessel appeals, arguing that the district court

erred in its analysis of the laches issue, that its finding

of no waiver was clearly erroneous, that some of the

claims were not necessaries giving rise to maritime

liens, and that the award of prejudgment interest was

not warranted.

Ili.

LEGAL PRINCIPLES

Our standard of review on the laches issue has

various components. We review factual findings such

as length of delay and prejudice under the clearly

erroneous standard; we review the district court's

balancing of the equities for abuse of discretion; and

our review of legal precepts applied by the district court

in determining that the delay was excusable is plenary.

See Churma v. United States Steel Corp., 514 F.2d

589, 592-93 (3d Cir. 1975).

The statute governing maritime liens provides that

persons supplying various enumerated services or

“other necessaries" to a vessel are entitled to a

maritime lien on the vessel “which may be enforced by

suit in rem.” 46 U.S.C. § 971.’ The statute does not

1. The text of the relevant statute provides in full that:

Any person furnishing repairs, supplies, towage, use of

dry dock or marine railway, or other necessaries, to any

vessel, whether foreign or domestic, upon the order of

Appendix A

require maritime lienors to file claims of their liens. At .

common law maritime liens had historically been

considered secret liens, good even against a good faith

purchaser of a ship without notice of the lien's

existence. See Piedmont & Georges Creek Coal Co. uv.

Seaboard Fisheries Co., 254 U.S. i, 12 (1920); G.

Gilmore & C. Black, The Law of Admiralty 588 (2d ed.

1975). Both at common law and .under the statute,

however, maritime liens may be lost by laches in their

prosecution. See G. Gilmore & C. Black at 588.

in The Bold Buccleugh, 7 Moore, P.C. 267 (1852),

the English Privy Council case which serves as the

original authority on the issue, G. Gilmore & C. Black

at 595, the court enforced a maritime lien against the

ship although it had since been sold; the court,

however, noted that the lien may be lost “by negligence

or delay where the rights of third parties may be

compromised.” Id. at 285.

Shortly thereafter, the United States Supreme

Court enunciated a similar principle. In The Key City,

81 U.S. (14 Wall.) 653, 660 (1872), the Court stated

that “laches or delay in the judicial enforcement of

maritime liens will, under proper circumstances,

constitute a valid defence;” that there is no “arbitrary

or fixed period of time” for its operation but that the

determination that a lienor was guilty of laches would

“depend on the peculiar equitable circumstances of

that case;" and that “where the lien is to be enforced to

the detriment of a purchaser for value, without notice

of the lien, the defence will be held valid under shorter

time, and a more rigid scrutiny of the circumstances of

the owner of such vessel, or of a person authorized by the

owner, shall have a maritime lien on the vessel, which

may be enforced by suit in rem, and it shall not be

necessary to allege or prove that credit was given to the

vessel.

46 U.S.C. 8 971.

Appendix A

the delay, than when the [party claiming laches] is the

owner at the time the lien accrued.”

The parties dispute whether a maritime lienor

must exercise “extraordinary diligence” in order to

preserve a claim against a bona fide purchaser, see

McLaughlin v. Dredge Gloucester, 230 F. Supp. 623,

630 (D.N.J. 1964); see also G. Gilmore & C. Black at

767 & n.387, or whether “reasonable diligence” is

sufficient, see The Bold Buccleugh, 7 Moore, P.C. at

285 (“where reasonable diligence is used, and the

proceedings are had in good faith, the lien may be

enforced, into whosesoever possession the thing may

come”). While it is possible that the difference in

semantics would not be dispositive since diligence by

its very nature requires “steady, earnest, attentive, and

energetic application and effort,” Webster's Third New

International Dictionary (1976), we believe that the

lienor should be held to a “reasonable diligence”

standard. See Merchants & Marine Bank v. The T.E.

Wells, 289 F.2d 188, 190 (5th Cir. 1961) (applying a

reasonable diligence test). The lienor must take such

steps as are appropriate under the circumstances. The

district court used the standard most favorable to the

vessel and found nonetheless that the lienors exercised

the “extraordinary high degree of diligence” required to

preserve and enforce the liens. App. A at 376. If we

conclude that there is the requisite support for a

conclusion of reasonable diligence, we are bound to

affirm.

Appellant argues that in considering the diligence

of the lienors in this case, we need look no further than

the analysis used by the courts in the two Everosa

cases decided half a century ago. In the first Everosa

case, The Everosa (Southern Coal & Coke Co. v.

Kugniecibas), 93 F.2d 732 (1st Cir. 1937), the libelant,

Appendix A

Southern Coal & Coke Company, had provided coal to

the vessel at issue on November 22, 1933 and May 8,

1934 for which it had received only partial payment.

Shortly after the second coaling, the ship sailed for

foreign waters and did not return until November

1934, at which time Southern libeled the ship. Id. at

733-35. While it had been in foreign waters, it was sold

to a bona fide purchaser.

The district court found for . 1e ship against the

lienor on both claims on the ground that no lien arose,

a holding rejectea by the court of appeals. The appellate

court then considered the ship's laches defense,

apparently as a matter of first impression, and held

that laches did not bar enforcement of the lien for the

second coaling because the ship left the United States

nine days after the coaling and “[aJbsence of the vessel

from the country operates to relieve the lienor to some

extent from the imputation of laches." Id. at 735.

Although the court noted that there was evidence that

the ship had returned to this county before the voyage

on which she was libeled, id., it nonetheless held

“there was clearly no laches.” Id.

The question of the enforceability of the lien for the

first coaling was, the court noted, “very close.” Id. It

concluded that that lien was barred by laches because

the ship had “called at various gulf ports of this

country half a dozen times between the first coaling

and the second,” and thus the lienor “unquestionably”

had “a reasonable opportunity to enforce the lien.” Id.

The court also noted that the lienor “knew or could

easily have discovered” that the vessel at the time of the

coalings was held by the party receiving the coal under

charter and not as owner, “and that rights of third

persons might be affected.” Id. at 735-36.

The second Everosa case, The Everosa (Swan &

Sons v. Kugniecibas), 20 F. Supp. 8 (E.D.N.Y. 1937),

involved claims filed by companies which had supplied

Appendix A

the vessel in Norfolk, Virginia, in February 1934 and in

New Orleans in April 1934 before it sailed for foreign

waters in May 1934. In this case, however, the lienors

did not file their libels until 1937, although the ship

had returned to United States waters twice in the

interim. The court held that inasmuch as the company

supplying the vessel at Norfolk had an opportunity to

‘enforce its lien when the vessel returned to Norfolk in

May 1934 before it sailed abroad, and that the creditors

(including the libelant) were notified of the bankruptcy

proceeding of the operator which was initiated in June

1934, see id. at 11, both of which events were prior to

the transfer of title of the ship in August 1934, the

balance of equities required dismissal of the libel.? On

the other hand, the court held that the second lienor

was not barred by laches because the ship sailed

abroad within a month of its supply services, and,

although the ship returned to the United States at

various times, it did not return to New Orleans during

those visits. It held that failure to take advantage of

those opportunities for affirmative action “does not

fatally portray lack of diligence.” Id. at 13.

Appellant urges that the Everosa cases mandate a

finding that Semco, Ryan-Walsh, and Port did not

exercise the requisite diligence in enforcing their liens.

Aithough some of the facts in the Everosa cases are

analogous to the M/V LAURIE U situation, all of the

cases stress that the question of due diligence is one

peculiar to the facts of each case. For this reason, it is

not particularly useful to review the facts of the many

other cases referred to by appellant and the

distinguishing factors pointed out by appellees. We

accept the legal principles from the Everosa cases that

lienors are not required to attempt to enforce their

2. In this case, unlike in the first Everosa case, the court stated

that the company ordering supplies was both owner and charterer.

20 F. Supp. at 9. -

Appendix A

liens in foreign waters and that the existence of a

reasonable opportunity for the lienor to arrest the

vessel before the purchase is an important factor in the

laches analysis.

However, the fact that it would have been possible

or even feasible to locate and arrest the vessel at a port

in the United States is not dispositive of the question of

whether or when the appellees in this case should have

done so. The custom of the shipping industry, for

example, must also inform the analysis of what

constitutes diligence under the circumstances of a

given case.

The arrest of a vessel is a remedy of last resort, and

one which has the potential to seriously disrupt the

flow of maritime commerce. Therefore, we decline to

establish a firm rule which would require a maritime

lienor to arrest a vessel, particularly if there are

available other reasonable methods, consistent with

industry custom, to secure payment. The relevant

consideration instead is what would have been the

commercially reasonable practice. Components of

diligence thus include industry custom, the amount of

the lien, the pattern of dealing between the parties, and

whether the lienor had information that the interests

of a third party would likely be adversely affected by its

failure to act.

~ Appellant argues that we should also consider

whether the lienors filed their claims on the ship's

of their liens on the Liberian Registry in New York, a

relatively simple and inexpensive means of giving

notice, evinces a failure of the lienors to exercise the

requisite degree of diligence.

Several cases have treated failure to record a claim

of lien as a relevant factor in assessing the equities of a

laches defense. See, e.g., Tagaropulos, S.A. v. S.S.

Santa Paula, 502 F.2d 1171, 1172 (9th Cir. 1974);

Appendix A

John W. Stone Oil Distributor, Inc. v. M/V Miss Bern,

663 F. Supp. 773, 780 (S.D. Ala. 1987); Dixie Machine

Welding and Metal Works, Inc. v. M/V Andino, 1983

A.M.C. 1166, 1168 (S.D. Fla. 1982); Waterways

Marine, Inc. v. Brooks Liquid Transport, Inc., 291 F.

Supp. 703 (N.D. Ill. 1968). Each case, however, has its

own set of facts and no situation directly parallels the

one before us.

All parties agree that there is no statutory

requirement that a maritime lien be filed in order to be

valid.? At the time Congress enacted the Maritime

Liens Act, it could have but failed to require filing. It

has made no attempt to change the statute in this

respect since then. The district court thus concluded

that the lienors here did not lack diligence “merely

because the claims were not filed with the Liberian

Ship Registry in New York.” App. at 376 (emphasis

added). Obviously, however, the ability to have filed the

lien is a consideration that cannot be completely

ignored in the relevant balancing. It is significant

whether it was a custom of the industry to record liens

for necessaries.

Poised against the diligence or lack thereof of the

lienor is the action of the purchaser of the vessel. A

balancing of the equities requires consideration not

only of the bona fides of the purchaser, t.e., its lack of

actual knowledge of unpaid liens and its search of the

ship's registry, but also of its efforts to ascertain

whether, in light of the absence of any lega’

requirement of filing liens, there are in fact liens

outstanding. See Tagaropulos S.A. v. S.S. Santa

3. Appellant is somewhat disingenuous in its various

references to the International Convention for the Unification of

Certain Rules Relating to Maritime Liens and Mortgages, April 10,

1926, 120 L.N.T.S. 187. The significant fact is that the United

States is not a signatory, and thus the provisions of the Convention

are irrelevant to this case.

Appendix A

Paula, 502 F.2d 1171, 1172 (9th Cir. 1974) (Purchaser

“made every effort to unearth all claims against the

ship.” It checked both the home port and ship's log for

liens; although no liens were entered in the log,

purchaser discovered entries for repairs, contacted

shipyards and learned of outstanding unpaid bills).

Finally, we note that it is for the district court in

the first instance to perform the equitable balancing of

all the relevant factors. Our review will be facilitated if

the district courts fully discuss the factors considered

on the issue of diligence and make explicit their

balancing of the equities in reaching a decision on

laches. We thus proceed to examine the record to

discern the factors which explicitly or implicitly

informed the district court’s judgment in this case.

An exhibit introduced in evidence shows that the

vessel was not in a United States port during the entire

period from October 21, 1982 until April 2, 1983.‘ The

4. The itinerary of the vessel from May 1, 1982 through April

1983 was as follows:

Time tn Port Port

1982

Apr 27 - May 12 New Orleans

May 13 - May 23 Houston [Port's services]

May 28 - May 29 Charleston |Semco's services]

May 30 - May 31 Hampton Roads

Jun 11 Gibraltar

Jun 14 - Jun 17 Malta

Jun 18 - Jun 19 La Goulette, Tunisia

Jun 22 - Jul 3 Alexandria

Jul 6 - Jul 7 Malta

Jun 11 Gibraitar

Jul 24 - Aug 7 New Orleans [Ryan-Walsh’'s

services]

Aug 9 - Aug 14 Houston [Port's services} ~

Aug 29 - Sep 1 Casablanca

Appendix A

appellees learned of Uiterwyk’s bankruptcy proceeding

shortly after it was commenced, and they acted to

enforce their liens within days of the vessel's

subsequent return to United States waters. The initial

inquiry relevant to appellees’ diligence is thus whether

they had a reasonable opportunity to enforce their liens

between the time each lien arose and October 21, 1982,

when the ship left United States, waters.

Patently, Port could not have taken any action in

United States waters to enforce its third lien, that

based on the services it provided between October

14-20, 1982, because the vessel left the United States

immediately thereafter. Semco and Ryan-Walsh, on the

other hand, had provided their services earlier.

However, throughout the entire period following the

services provided by Semco in Charleston (May 27 and

28) and by Ryan-Walsh in New Orleans (July 26 -

August 6), the vessel was out of the country except for

two Houston stops {August 9-14 and October 14-21)

Sep 2 - Sep 3 Tangier

Sep 10 Alexandria

Sep 18 - Sep 22 Malta

Sep 25 Gibraltar

Oct 9 - Oct 14 Port Arthur, Texas

Oct 14 - Oct 21 Houston [Port's services]

Nov 5 - Nov 10 Casablanca, Morocco

Nov 11 Gibraltar

Nov 12 E] Djazair

Nov 18 - Dec 1 Alexandria, Egypt

Dec 3 - Dec 17 Piraeus, Greece

Dec 28 - Dec 30 Dunkirk, France

1983

Dec 31 - Jan 5 Rotterdam, Netherlands

Jan 19 Las Palmas, Canary Islands

Jan 27 Abidjan, Ivory Coast

Jan 29 Abidjan

Mar 5 Abidjan

Apr 2 - Apr 14

Philadelphia, Pennsylvania

Appendix A

and one stop at Port Arthur, Texas (October 9-14). If we

look to the vessel's return to the particular port where

the stevedoring company provided the services, which

was the dispositive factor leading the court to

determine that laches did not bar one of the claims in

the second Everosa case, 20 F. Supp. at 13, we note

that the vessei did not return to Charleston or New

Orleans following the provision of services by Semco

and Ryan-Walsh at these ports.

We are aware, as appellant argues, that modern

technology associated with the shipping industry has

made it easier than in the Everosa period for lienors to

track ships, thus increasing opportunities to arrest

vessels and enforce liens. Nonetheless, we cannot rule

on the record developed by the appellant here that the

stevedore companies had the obligation to track the

vessel, which primarily served foreign ports

throughout this entire period, to the Texas ports and

arrest the ship on one of the three occasions when it

would have been possible to do so.

It is true, as appellant argues, that these

companies could have easily filed their liens on the

ship's registry and thereby given notice to a prospective

purchaser. However, we have pointed out that there is

no legal requirement for such an action and,

significantly, there was no evidence of an industry

custom to do so. In fact, appellant's expert, although

testifying that he advises his clients to record their

liens, conceded that “as a practice and custom ...

there are claims for which liens have not been

registered.” App. A at 353.

Appellant notes that there is evidence signifying

that at least some of the appellees knew of Uiterwyk’'s

poor financial condition.” Appellant, however, has

5. For exampie, a Ryan-Walsh memorandum dated September

1, 1982. refers to rumors that Uiterwyk ts about to take a “swan

dive” and that it should “perhaps consider doing something before

Appendix A

produced no evidence that appellees were actually

aware of the impending bankruptcy or the forthcoming

sale of the vessel at a time when they still had

opportunities to execute on their liens. Appellees’

failure to enforce the liens was consistent with their

past practice in dealing with Uiterwyk, which was a

slow payer. Previously, their demands for payment and

threats to arrest vessels were sufficient to procure

payment, albeit belatedly. Appellant has not shown it

was commercially unreasonable of appellees to wait for

payment. In light of these circumstances, we find no

basis to question the district court's conclusion that

these lienors exercised the requisite diligence with

respect to their liens and that Port exercised such

diligence with respect to its October lien.®

It is more difficult to evaluate Port's diligence in

the case of its two earlier liens, that arising from its

May services and that arising from its August services.

Port clearly had the opportunity to take action against

the ship because it returned to Houston where Port

provided additional services notwithstanding the

unpaid bills. In both instances Port extended further

credit for new services.

However, Port's liens were only five months and

two months old at the time the ship left United States

waters. In many of the relevant cases the liens had been

outstanding for substantially over a year before the

lienor sought enforcement. See Tagaropulos, S.A. v.

the dam bursts.” App. B at 15. Uiterwyk checks to Semco bounced

in September and October 1982. App. A at 153-56.

6. At one point in its opinion the district court stated that

appellees promptly pursued their maritime liens upon learning of

Uiterwyk’s bankruptcy proceeding. It is clear from the next

sentence, where the court noted that the vessel was arrested within

six to eleven months of the stevedoring services rendered by the

plaintiffs, App. A at 375, that the court in fact examined diligence

from the standpoint of the entire relevant period.

Appendix A

S.S. Santa Paula, 502 F.2d 1171, 1172 (9th Cir. 1974)

(two years); Phelps v. The Cecelia Ann, 199 F.2d 627,

628 (4th Cir. 1952) (more than two years); The John

Cadwalader, 99 F.2d 678, 679 (3d Cir. 1938) (five to

nine years); Dixie Machine Welding and Metal Works,

Inc. v. M/V Andino, 1983 A.M.C. 1166 (S.D. Fla. 1982)

(two and one-half years).

Appellant has shown little that Port could have

done short of the draconian measure of arresting the

ship, with the exception of filing the lien which we have

noted is not required as a matter of law. Appellant

introduced no evidence of other commercially

reasonable practice available to Port. Port's

Vice-President testified that it was not customary for

Port or any other stevedoring company to require

advance payment before it rendered services. App. A at

261. Moreover, Port was receiving payments from

Uiterwyk through 1982. While it did not receive any

payment which was applied to the invoices for this

particular vessel, it did receive $100,000 from Uiterwyk

on November 10, 1982 which was applied to older bills,

App. A at 264, thus giving ii reason to believe that it

would eventually be paid. Therefore, we cannot

conclude that Port was guilty of a lack of diligence that

would deprive it of its maritime lien.

Under these circumstances, we need not consider

whether there were some steps that Star, a

sophisticated shipowner which purchased over 70

vessels, could have taken to protect itself which it failed

to take, such as the inquiry of the general agent or of

the port agents and suppliers in the ports that the

vessel had visited. See Tagaropulos, 502 F.2d at 1172.

It was the function of the district court to make the

balance between the actions of the lienors and the new

purchaser. In the few cases that have reached a court of

appeals, the appellate courts have tended to rely on the

trial court's judgment. See, e.g.. Tagaropulos, 502

Appendix A

F.2d at 1171; Phelps v. The Cecelia Ann, 199 F.2d 627

(4th Cir. 1952); see also Gardner v. Panama Railroad

Co., 342 U.S. 29, 30 (1951) (issue of laches is one

primarily addressed to the discretion of the trial court).

Although it is possible that we would not have decided

the issue as did the district court, we cannot hold that

it abused its discretion in balancing the equities as it

did in concluding that these claims were not barred by

laches.’

IV.

NECESSARIES

Under the Maritime Liens Act, a lien is provided for

“lajny person furnishing ... necessaries, to any

vessel.” 46 U.S.C. 8 971 (emphasis added). The term

“necessaries” has been interpreted broadly to include

all services which will facilitate operation of ships. See

Farwest Steel Corp. v. Barge Sea-Span 241, 769 F.2d

620, 623 (9th Cir. 1985) (“[t}he term ‘necessaries’

under section 971 refers to ‘supplies which are

necessary to keep the ship going,’ quoting

Dampskibsselskabet Dannebrog v. Signal Oil & Gas

Co., 310 U.S. 268, 280 (1940)); Farrell Ocean

Services, Inc. v. United States, 681 F.2d 91, 92-93 (1st

Cir. 1982).

r In light of the strong presumption in favor of maritime liens,

appellant has not met its burden of proving that appellees

deliberately intended to waive their statutory rights to such liens.

See Gulf Oil Trading Co. v. M/V Caribe Mar, 757 F.2d 743, 750 (5th

Cir. 1985); Farrell Ocean Services, Inc. v. United States, 681 F.2d

91, 93-94 (Ist Cir. 1982). Thus, the district court's finding that

appellees did not waive their liens is not clearly erroneous.

We also reject appellant's contention that the claims filed by

the appellees as unsecured creditors in the bankruptcy proceeding

against Uiterwyk Corp., the general agent, operated to release the

maritime liens that the appellees held against the ship. Although

we would be concerned were there a double recovery, we were

advised at oral argument that there has been no distribution in the

bankruptcy proceeding.

Appendix A

Stevedoring services have generally been treated as

necessaries within the meaning of section 971, see,

e.g., Universal Shipping, Inc. v. Panamanian Flag

Barge, 563 F.2d 483 (lst Cir. 1976), and appellant

acknowledges that stevedoring services give rise to a

maritime lien. It argues, however, that some of the

charges on appellees’ invoices are not “necessaries”.

Specifically, it objects to “charges for overtime,

container royalties, Guaranteed Annual Income

contributions, vacation, pension and welfare portions

of charges for labor, extra labor for truck drivers,

moving containers, and commissions for soliciting

freight” on the ground that these charges do not relate

to services actually provided to the vessel. Appellant's

Brief at 45. |

It is undisputed that most of the items to which

appellant objects represent payments which the

stevedoring companies are required to make to the

stevedores under the applicable collective bargaining

agreements. As such, they are part and parcel of the

cost of stevedoring services and are passed on to the

owner of a vessel. It is an economic fact of life on the

waterfront that if these payments are not made, the

vessel will be unable to obtain the stevedoring services

which are required for the operation of any cargo

bearing ship. See Atlantic and Gulf Stevedores, Inc. v.

M.V. Rosa Roth, 587 F. Supp. 1033, 1035 (S.D.N.Y.

1984). Therefore, we hold that the maritime lien for

necessaries under 46 U.S.C. 8 971 encompasses those

payments covered by the vessel's contract for services

which stevedoring companies must pay to the

stevedores pursuant to the terms of a collective

bargaining agreement.

In this case, the district court required payment of

additional items which are not covered by a collective

bargaining agreement. Semco’'s claim includes

$2,687.10 in manifest and booking commissions for

Appendix A

services performed by Semco as its agent in procuring

cargo and collecting freight charges. We need not

decide whether cargo itself is a necessary under section

971, see The Majestic II, 285 F. 91 (S.D. Fla. 1922)

(supplier of cargo for resale did not have maritime lien

against vessel which carried the cargo), because we

believe that in any event it is unreasonable to include

commissions for solicitation of freight and provision of

financial services as necessaries. Accord E.S.

Binnings, Inc. v. M/V Saudi Riyadh, 815 F.2d 660,

663 (11th Cir. 1987). Such commissions are outside

the realm of stevedoring maritime contracts and

cannot be the subject of a maritime lien.

The support documents for Semco's claim also

included a bill for $160.00 for moving chassis, which

are the frames used to move large shipping containers

around pier areas. Use of chassis in connection with

loading cargo on and off vessels has been held to be a

necessary giving rise to a maritime lien. See Itel

Containers International Corp. v. Atlanttrafik Express

Service, Ltd., 668 F. Supp. 225, 229 (S.D.N.Y. 1987)

(chassis leased in excess of those actually used on

board ship were necessaries within meaning of 8 971).

In this case, however, Semco's own witness testified

that the bill in question was just for moving chassis

and had “nothing to do with stevedoring.” App. A at

124. To the extent this component of Semco’s claim

and any other components of the other appellees’

claims represent charges for movement of chassis for

purposes not directly related to loading or unloading

the vessel, they are not necessaries giving rise to.

maritime liens.

It is unclear from the record before us whether

there are additional items of the asserted claims which

were not required by the collective bargaining

agreement or which were not necessary to facilitate the

use of the vessel. On remand, the district court should

Appendix A

adjust any amount which is not consistent with the

above analysis. We assume the parties can agree on

these issues, but if they faii to do so, the district court

may conduct such additional proceedings as required.

PREJUDGMENT INTEREST

Appellant contends that the district court abused

its discretion in awarding prejudgment interest. The

award of prejudgment interest in admiralty cases for

compensatory purposes is within the trial judge's

discretion, and we have held that such interest is to be

denied only in exceptional circumstances. See In re

Bankers Trust Co., 658 F.2d 103, 108 (3d Cir. 1981),

cert. denied, 456 U.S. 961 (1982). Appellant has not

pointed to any exceptional circumstances such as bad

faith by the appellees or delay in prosecution of their

claims which would preclude such an award. Id. We

find no abuse of discretion in this respect in the award

of prejudgment interest.

VI.

CONCLUSION

We recognize that it may appear inequitable to

permit enforcement of maritime liens against a

purchaser without notice of those liens, particularly

when giving notice through registration of the liens is

a simple matter. However, whether such registration

should be imposed as a requirement for the ability to

satisfy liens against a ship when it has been acquired

by a subsequent purchaser ts a policy decision that is

more appropriately made by Congress than by the

courts. The judicial decision on a laches defense must

be made without interposition of our view as to what

the law should be.

Appendix A

In this case, we cannot say that the outstanding

liens were so long overdue that, in the circumstances

here, the district court was obliged to hold that they

could not be enforced. We will, therefore, defer to the

district court's exercise of its discretion, and we will

affirm its judgment in all respects except that we will

remand for the purpose of its reconsideration of the

items which may appropriately be considered as

necessaries under the Maritime Liens Act in

accordance with our discussion above.

A True Copy:

Teste:

Clerk of the Untted States Court of Appeals

for the Third Circutt

Appendix B

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

SOUTHEASTERN MARITIME : CIVIL ACTION

COMPANY, PORT STEVEDORING:

COMPANY, INC., RYAN-WALSH:

STEVEDORING COMPANY,INC. :

VS.

M/V LITSA (Ex.LAURIE U) -:

cope " NO. 83-1614

ADJUDICATION

GREEN, J. APRIL 13, 1988

After a nonjury trial of the three

remaining claims filed against the M/V

Litsa, owned by Star Warrant Shipping

Company ("Star"), I make the following:

FINDINGS OF FACT

1. On December 8, 1982, Star pur-

chased and received delivery of a vessel

known as the M/V Laurie U from its owner

Uiterwyk Lines, Ltd., a Liberian company.

Star conducts its business in Greece. A

search of the Liberian ship registry in

New York did not disclose any claims or

maritime liens filed against the vessel,

Appendix B

and in fact none of the claims and liens

asserted herein were filed in the Liber-

ian registry. At time of sale said ves-

sel was in the port of Piraeus, Greece.

Star did not know prior to purchase of

the vessel of any of the liens asserted

by intervening plaintiffs.

2. On or about April 6, 1983, said

vessel, then named the M/V Litsa, was

arrested in the port of Philadelphia.

Said arrest was in accordance with Rule

C of the Supplemental Fed. R. Civ. P.

3. On Or about April 8, 1983,

Southeastern Maritime Company ("Semco")

was granted leave to intervene as a

plaintiff in this action pursuant to

petition filed.

4... On April 8, 1983, Port Steve-

doring Company, Inc. ("Port") was granted

leave to intervene as a plaintiff in this

action, pursuant to petition filed.

5. On April 12, 1983, Ryan-Walsh

” Appendix B

Stevedoring Company ("Ryan") was granted

leave to intervene as a plaintiff in

this action, pursuant to petition filed.

6. The claims asserted by Semco,

Port and Ryan are for stevedoring ser-

vices, provided to the M/V Laurie U

prior to its change of ownership. The

lien claims are based upon the Federal

Maritime Lien Act, 46 U.S.C. § 971 et

seq.

7. All of the stevedoring services

rendered by intervening plaintiffs were

performed pursuant to contracts with

Uiterwyk Corporation, the general agent :

and operator of said vessel. No con-

tractual relationship exists between the

intervening plaintiffs and Star, the

present owner.

8. Since approximately 1973 Semco

also acted as local special agent on

behalf of Uiterwyk Corporation at the

port of Charleston, South Carolina but

Appendix B

not as general agent of the vessel.

9. All of the intervening plain-

tiffs pursued and sought payment from

Uiterwyk Corporation, however, none of

the intervening plaintiffs intended to

waive lien rights and, in fact, none of

intervening plaintiffs did.

10. Semco learned on approximately

January 27, 1987 that Uiterwyk Corpora-

tion had filed a petition in bankruptcy.

Semco promptly requested the Lloyd's of

London watch service to advise as to the

position, new name and/or new owner of

the M/V Laurie U. There is no evidence

that. Semco knew prior to January 27,

1983 of any change in ownership of the

M/V Laurie U.

ll. Uiterwyk Corporation was the

general agent for the vessel, not Semco.

Semco has a valid maritime lien for the

necessaries furnished to the M/V Litsa.

The evidence of record establishes that

Appendix B

Semco acted with extraordinary diligence

in pursuing its claim. Semco is not

guilty of laches or other inequitable

conduct that would defeat Semco's re-

duced claim in the amount of $22,184.87

in whole or in part.

12. Between July 26 and August 6,

1982, in the port of New Orleans, Ryan

performed stevedoring services on the

M/V Laurie U to the amount of $25,404.21.

13. In the port of Houston, Texas,

Port serviced the M/V Laurie U as fol-

lows: between May 13 and May 23, 1982,

services were rendered in the amount of

$112,994.71; between August 11 and

August 14, 1982, services were rendered

in the amount of $46,692.26; between

October 14 and October 20, 1982, ser-

vices were rendered in the amount of

$71,873.97 for a total of $231,560.94.

14. Ryan and Port have valid mari-

time liens for the necessaries furnished

Appendix B

to the M/V Litsa. The evidence of re-

cord establishes that Ryan and Port

acted with extraordinary diligence in

pursuing their claims. Ryan and Port

are not guilty of laches or inequitable

conduct that would defeat their claims

in whole or in part.

15. Star's counterclaim asserted

against intervening plaintiffs for un-

lawful arrest of the vessel is not sup-

ported by the evidence.

DISCUSSION

The evidence clearly reveals that

all of the liens are asserted for steve-

doring services provided to the Laurie U

while in United States ports. Said ser-

vices were rendered between May 13, and

October 20, 1982 by Port, between July

26, and August 6, 1982 by Ryan and be-

tween May 27-28, 1982 by Semco. Ex-

penses incurred by the stevedores for

Support services, and labor fringe

Appendix B

benefit costs are properly included as

"necessaries" under the Federal Maritime

Lien Act. See TTT Stevedores of Texas,

Inc. v. M/V Jagat Vijeta, 696 F. 2d 1135,

1138 (5th Cir. 1983); Universal Shipping,

Inc. v. Panamanian Flag Barge, 563 F.2d

483, 484 (lst Cir. 1976).

The evidence further discloses that

the Laurie U was in the United States

port of Houston, Texas on October 14 to

21, 1982 and, thereafter, was not ina

United States port until April 2, 1983.

At the time of the ship's sale and de-

livery to the new owner on December 8,

1982, it was anchored in the port of

Piraeus, Greece. The maritime liens

asserted by intervening plaintiffs were

promptly pursued upon learning of the

bankruptcy proceedings involving Uiter-

wyk Corp. and within days of the Laurie

U's return to a United States port. The

arrest of the vessel in Philadelphia and

Appendix B

the filing of intervenors' complaints in

this action occurred within six to

eleven months of the rendering of all

stevedoring services by said plaintiffs.

It is true that between October 20,

1982, when the Laurie U departed from the

United States port in Houston, Texas, and

April 2, when it returned to a United

States port in Philadelphia, the inter-

vening plaintiffs had the capacity to

track the ship and to know its where-

abouts in foreign ports. However, the

arrest of the vessel in a foreign port

is not required to preserve a lien under

the Maritime Lien Act. See G. Gilmore

and C. Black, The Law of Admiralty, at

767 (2d ed. 1975).

Thus, I conclude that the inter-

vening plaintiffs exercised the extra-

ordinary high degree of diligence re-

guired to preserve and enforce the mari-

time liens herein asserted. I also

Appendix B

conclude that there was no failure to

exercise the extraordinary high degree

of diligence merely because the claims

were not filed with the Liberian Ship

Registry in New York. Obviously, re-

gistration would have given notice of

intervening plaintiffs' liens to a pros-

pective purchaser. However, such notice

is not required as a matter of .law and

the failure to give such notice is

neither probative of an intention not

to acquire a lien nor of an intention

to waive the lien. See Piedmont and

George's Creek Coal Company v. Seaboard

Fisheries Company, 254 U.S. l, 12 (1920)

("The maritime lien is a secret one. It

may operate to the prejudice of mort-

gagees or of purchasers without notice.");

Layton Industries, Inc. v. Sport Fishing

Cruiser Gladiator, 263 F. Supp. 356, 359

(D. Mass. 1967).

The ship owner Star contends that

Appendix B

the claims are grossly inequitable.

Star also argues that the claims should

be dismissed for laches. The evidence,

however, does not establish inequitable

conduct as claimed by Star. The fact

that plaintiffs sought payment from

Uiterwyk Corporation, the general agent,

filed claims against the general agent

and participated in bankruptcy proceed-

ings involving the general agent simply

is not probative of inequitable conduct.

Certainly, intervening plaintiffs were

entitled to claim against the general

agent without relinquishing their lien

claims against the vessel. Moreover,

they did not sleep on their rights. As

soon as claimants received notice of the

bankruptcy proceeding against the general

agent, promptly moved to locate, track

and arrest the vessel when it next re-

turned to a United States port. Inter-

vening plaintiffs actively pursued col-

Appendix B

lection of their claims and at no time

acted inequitably or to the prejudice

of the new wide owner.

Accordingly, intervening plaintiffs’

liens remain intact and they are en-

titled to recover from the owner of the

vessel the amounts due for stevedoring

services rendered to the vessel plus

prejudgment interest.

CONCLUSIONS OF LAW

1. This court has jurisdiction of

the subject matter of this maritime

litigation and the causes of action are

based upon Federal Maritime Lien Act.

2. Intervening plaintiffs, Semco,

Port and Ryan, have maritime liens under

the Federal Maritime Lien Act, 46 U.S.C.

§ 971, by virtue of their supplying

necessaries to the arrested vessel pur-

suant to contract with the vessel's then

general agent. Universal Shipping v.

Panamanian Flag Barge, supra.

Appendix B

a An action in rem to enitosce the

maritime liens has been timely brought

pursuant to the Supplemental Rules for

Certain Admiralty and Maritime Claims,

and a full bench trial provided to the

parties.

4. Federal law did not require in-

tervening plaintiffs to file any notice

of claim or lien with the Liberian

Registry.

5. There was no lack of extra-

ordinary diligence by the intervening

plaintiffs in asserting the liens and no

prejudice to defendant resulted from

repeated attempts to collect from

Uiterwyk, Corp.

6. There are no exceptional cir-

cumstances that would make prejudgment

interest inappropriate and, accordingly,

compensatory prejudgment interest from

intervention to date will be awarded at

8% per annum, which approximates the

Appendix B

prevailing rate of interest in Pennsyl-

vania at the relevant time. See Matter

of Bankers Trust Co., 658 F.2d 103, 108

(3d Cir. 1981), cert. den. 456 U.S. 961

(1982). Thus, interest will be awarded

to intervening plaintiffs as follows:

Semco $8,893.38

Ryan 10,183.95

Port 92,624.37

7. Intervening plaintiffs are

entitled to judgment on the counterclaim

asserted by defendant.

Appendix B

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

SOUTHEASTERN MARITIME : CIVIL ACTION

_COMPANY, PORT STEVEDORING:

COMPANY, INC., RYAN-WALSH:

STEVEDORING COMPANY, INC.:

vs. :

M/V LITSA (Ex. LAURIE U)-'

IN REM = NO.83-1614

JUDGMENT

AND NOW, this 13th day of April,

1988, IT IS ORDERED that judgment is en-

tered in favor of Southeastern Maritime

Company on its claim and against defend-

ants in the amount of $31,078.28, in-

cluding prejudgment interest to date.

IT IS FURTHER ORDERED that judgment

is entered in favor of Ryan-Walsh Steve-

doring Company, Inc. on its claim and

against defendants in the amount of

$35,588.16, including prejudgment interest

to date.

IT IS FURTHER ORDERED that judgment

is entered in favor of Port Stevedoring

Appendix B

Company, Inc. on its claim and against

defendants in the amount of $324,185.31,

including prejudgment interest to date.

IT IS FURTHER ORDERED that judgment

is entered in favor of Southeastern Mari-

time Company, Ryan-Walsh Stevedoring

Company, Inc. and Port Stevedoring

Company, Inc. and against defendant on

defendant's counterclaims.

BY THE COURT:

/s/ Clifford Scott Green, J.

CLIFFORD SCOTT GREEN, J.

Appendix C

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 88-1362

BERMUDA EXPRESS, N.V. SOUTHEASTERN

MARITIME COMPANY, PORT STEVEDORING

COMPANY, INC., RYAN-WALSH STEVEDORING

COMPANY INC., NRS FINANCIAL CORP.,

ASSIGNEE OF MALONE MARINE GROUP, INC.,

ZALESKY, MARVIN d/b/a SEASIDE MARINE

SUPPLY OF HOUSTON, CHARLES L. MOLHO,

d/b/a MANHATTAN SHIP SUPPLY AND

THURMOND SUPPLY CO., INC.,

VS.

M/V LITSA (ex. LAURIE U)

IN REM

M/V LITSA (Ex. LAURIE U),

Appellant

(D.C.Civil No. 83-1614)

ON APPEAL FROM THE UNITED STATES

DISTRICT COURT FOR THE EASTERN

\ DISTRICT OF PENNSYLVANIA

Present: SLOVITER and BECKER, Circuit

Judges and BARRY, District

Judge*

JUDGMENT

This cause came on to be heard on

*Hon. Maryanne Trump Barry, United States

District Court for the District of New Jersey,

sitting by designation.

Appendix C

the record from the United States

District Court for the Eastern District

of Pennsylvania and was argued by

counsel December 6, 1988.

On consideration whereof, it is now

here ordered and adjudged by this Court

that the judgment of the said District

Court entered Aprii 14, 1988, be, and

the same is hereby affirmed in all

respects except insofar as the matter

is remanded to the said District Court

for reconsideration in accordance with

the opinion of this Court of the items

which may appropriately be considered

as necessaries under the Maritime Liens

Act.

ATTEST:

/s/ Sally Mrovos

Clerk

April 13, 1989

——

Appendix D

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 88-1362

BERMUDA EXPRESS, N.V., et al.

M/V LITSA,

Appellant

SUR PETITION FOR REHEARING

Present: GIBBONS, Chief Judge, SEITZ,

HIGGINBOTHAM, SLOVITER, BECKER, STAPLE-

TON, MANSMANN, GREENBERG, HUTCHINSON,

SCIRICA, COWEN, and NYGAARD, Circuit

Judges, and BARRY, District -Judge*

The petition for rehearing

filed by

M/V LITSA, appellant,

in the above-entitled case having been

Submitted to the judges who participated

in the decision of this court and to all

the other available circuit judges of

the circuit in regular active service,

*Hon. Maryanne Trump Barry, United States

District Court for the District of New Jersey,

sitting by designation.

Appendix D

and no judge who concurred in the deci-

Sion having asked for rehearing, and a

majority of the circuit judges of the

circuit in regular active service not

having voted for rehearing by the court

in banc, the petition for rehearing is

denied.

By the Court,

: /s/

: Circuit Judge

Dated: May 9, 1989

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.