Rockin "D" Marine Servics, LLC v. Sea Endeavor M/V, et al

Filing 54

ORDER AND REASONS granting 51 Motion for Summary Judgment. For the foregoing reasons, the Court GRANTS plaintiff's motion for summary judgment. Allied Shipyard's claims are DISMISSED WITH PREJUDICE. Signed by Judge Sarah S. Vance on 9/19/2017. (cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ROCKIN “D” MARINE SERVICES,
LLC
VERSUS

CIVIL ACTION
NO. 17-1146

M/V SEA ENDEAVOR ET AL.

SECTION “R” (4)

ORDER AND REASONS
Before the Court is plaintiff Rockin “D” Marine Services, LLC’s motion
for summary judgment on intervenor Allied Shipyard, Inc.’s claims against
defendant M/V SEA ENDEAVOR.1 For the following reasons, the Court
grants plaintiff’s motion.

I.

BACKGROUND
Plaintiff and Allied Shipyard both have maritime liens against the M/V

SEA ENDEAVOR. On September 15, 2014, Sea Endeavor, LLC executed a
mortgage on the M/V SEA ENDEAVOR in the amount of $1,500,000 in favor
of plaintiff. 2 Plaintiff filed this mortgage at the U.S. Coast Guard National

1
2

R. Doc. 51.
R. Doc. 51-7 at 1; R. Doc. 51-3 at 7.
1

Vessel Documentation Center on March 11, 2015. 3 A balance of $982,347.11
remains unpaid on the mortgage. 4
Allied Shipyard provided materials, repair services, and machinery in
the amount of $172,411.56 to the M/V SEA ENDEAVOR. 5 Allied Shipyard
filed a notice of claim of lien for these services on February 24, 2016. 6
According to that notice, the lien was established on December 16, 2015. 7 A
balance of $118,711.56 remains unpaid for Allied Shipyard’s services.8
On February 9, 2017, plaintiff filed this action to foreclose on its ship
mortgage. The U.S. Marshals Service seized the vessel on February 13, 2017,
pursuant to this Court’s order.9 Allied Shipyard then intervened to assert its
maritime lien against the M/V SEA ENDEAVOR.10 The Court granted
plaintiff’s motion to enter default against anyone who failed to appear and
file a claim against the vessel, and directed the Marshals Service to sell the
vessel at public auction. 11 After several auctions with no bids above the

3
4
5
6
7
8
9
10
11

R. Doc. 51-7 at 1.
Id. at 2.
R. Doc. 12 at 2 ¶ 5.
R. Doc. 51-7 at 2.
R. Doc. 51-3 at 8.
R. Doc. 12 at 2 ¶ 6.
R. Doc. 8.
R. Doc. 12.
R. Doc. 26.
2

minimum starting bid, plaintiff purchased the vessel for $10,000 on August
7, 2017.12 The Court confirmed this sale on August 11. 13
Plaintiff now moves for summary judgment on Allied Shipyard’s claims
against the M/V SEA ENDEAVOR.14

Allied Shipyard does not oppose

plaintiff’s motion. No other parties have come forth with competing claims.

II.

STANDARD
Summary judgment is warranted when “the movant shows that there

is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069,
1075 (5th Cir. 1994). When assessing whether a dispute as to any material
fact exists, the Court considers “all of the evidence in the record but refrain[s]
from making credibility determinations or weighing the evidence.” Delta &
Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99
(5th Cir. 2008).

All reasonable inferences are drawn in favor of the

nonmoving party, but “unsupported allegations or affidavits setting forth
‘ultimate or conclusory facts and conclusions of law’ are insufficient to either

12
13
14

R. Doc. 48.
R. Doc. 50.
R. Doc. 51.
3

support or defeat a motion for summary judgment.” Galindo v. Precision
Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at
1075. “No genuine dispute of fact exists if the record taken as a whole could
not lead a rational trier of fact to find for the non-moving party.” EEOC v.
Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014).
If the dispositive issue is one on which the moving party will bear the
burden of proof at trial, the moving party “must come forward with evidence
which would entitle it to a directed verdict if the evidence went
uncontroverted at trial.” Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257,
1264-65 (5th Cir. 1991). The nonmoving party can then defeat the motion by
either countering with evidence sufficient to demonstrate the existence of a
genuine dispute of material fact, or “showing that the moving party’s
evidence is so sheer that it may not persuade the reasonable fact-finder to
return a verdict in favor of the moving party.” Id. at 1265.
If the dispositive issue is one on which the nonmoving party will bear
the burden of proof at trial, the moving party may satisfy its burden by
merely pointing out that the evidence in the record is insufficient with
respect to an essential element of the nonmoving party’s claim. See Celotex,
477 U.S. at 325. The burden then shifts to the nonmoving party, who must,
by submitting or referring to evidence, set out specific facts showing that a
4

genuine issue exists. See id. at 324. The nonmovant may not rest upon the
pleadings, but must identify specific facts that establish a genuine issue for
trial. See, e.g., id.; Little, 37 F.3d at 1075 (“Rule 56 mandates the entry of
summary judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to establish the
existence of an element essential to that party’s case, and on which that party
will bear the burden of proof at trial.” (quoting Celotex, 477 U.S. at 322)).

III. DISCUSSION
The Ship Mortgage Act, 46 U.S.C. § 31301, et seq., governs the priority
of the claims asserted here. Specifically, when a vessel is sold at a judicial
sale, all claims against the vessel are terminated and subsequently attach to
the proceeds of the sale. When, as in this case, a “preferred ship mortgage”
is asserted, the order of priorities is the following: (1) expenses of justice; (2)
preferred maritime liens; (3) the preferred mortgage; and (4) other maritime
liens. See 46 U.S.C. § 31326; Thomas J. Schoenbaum, Admiralty and
Maritime Law § 9-6 (5th ed. 2011); see also Governor and Co. of Bank of
Scotland v. Sabay, 211 F.3d 261, 270 (5th Cir. 2000) (“A preferred ship
mortgage ‘has priority over all claims against the vessel (except for expenses
and fees allowed by the court, costs imposed by the court, and preferred
5

maritime liens).’” (quoting 46 U.S.C. § 31326(b)(1))). Under the statute, a
“preferred maritime lien” is defined as a “maritime lien on a vessel (A) arising
before a preferred mortgage was filed under section 31321 of this title; (B) for
damage arising out of a maritime tort; (C) for wages of a stevedore . . . ; (D)
for wages of the crew of the vessel; (E) for general average; or (F) for salvage,
including contract salvage.” 46 U.S.C. § 31301(5).
The facts in this case are undisputed. Plaintiff asserts a preferred
mortgage against the M/V SEA ENDEAVOR. A preferred mortgage is one
that includes the whole of the vessel, is filed in substantial compliance with
46 U.S.C. § 31321, and covers a documented vessel. See 46 U.S.C. § 31322(a).
Under Section 31321, a ship mortgage must (1) identify the vessel; (2) state
the parties’ names and addresses; (3) state the amount of the obligations that
is or may become secured by the mortgage, excluding interest, expenses, and
fees; (4) state the mortgagor’s interest in the vessel; (5) state the mortgaged
interest; and (6) be signed and acknowledged. 46 U.S.C. § 31321(b). Having
reviewed the mortgage document, 15 the Court finds that plaintiff’s mortgage
satisfies all of the requirements of Section 31322 as set forth above.
Moreover, plaintiff’s preferred mortgage was recorded at the U.S. Coast
Guard National Vessel Documentation Center, “[giving] rise to a

15

R. Doc. 1-4.
6

presumption of regularity which in the absence of other evidence is sufficient
to establish the mortgage’s validity.” Westinghouse Credit Corp. v. O/S
DOROTHY CLAIRE, 732 F. Supp. 59, 61 (E.D. Tex. 1989) (citing State Street
Bank & Trust Co. v. SEA FREEZE, 1981 A.M.C. 2001, 2003-04 (E.D. Va.
1979)). The Court therefore finds that plaintiff has a preferred mortgage on
the vessel.
Allied Shipyard has asserted a maritime lien against the M/V SEA
ENDEAVOR for necessaries. “Necessaries” include repairs and supplies. 46
U.S.C. § 31301(4). Plaintiff contends that Allied Shipyard provided repair
work to the M/V SEA ENDEAVOR for which it was never fully paid.16 These
services clearly fall within the definition of “necessaries.” Accordingly, the
Court finds that Allied Shipyard has a valid maritime lien against the M/V
SEA ENDEAVOR. See 46 U.S.C. § 31342 (providing that “a person providing
necessaries to a vessel on the order of the owner . . . has a maritime lien on
the vessel”).
As discussed above, preferred maritime liens take priority over
preferred mortgages. But to be a preferred maritime lien, the lien must
either arise before a preferred mortgage was filed or fall into one of five
specific categories. See 46 U.S.C. § 31301(5). Because none of the five

16

R. Doc. 51-7 at 2.
7

specific categories applies here, Allied Shipyard’s maritime lien is preferred
only if it arose before plaintiff filed its mortgage.
A maritime lien arises at the moment “when the goods or services are
supplied or performed.” Gulf Trading & Transp. Co. v. The Vessel Hoegh
Shield, 658 F.2d 363, 367 (5th Cir. 1981). Plaintiff filed its mortgage on
March 11, 2015. Plaintiff contends, and Allied Shipyard does not dispute,
that there is no evidence in the record showing that Allied Shipyard provided
its services before plaintiff filed its mortgage. 17 In fact, Allied Shipyard’s
notice of claim of lien suggests that its lien arose in December 2015.
Thus, plaintiff’s preferred mortgage takes priority over Allied
Shipyard’s maritime lien and must be satisfied in full before Allied Shipyard
can receive any proceeds from the sale of the M/V SEA ENDEAVOR.
Because the sale did not fully satisfy plaintiff’s mortgage, there are no
proceeds from the sale to distribute to Allied Shipyard, and plaintiff is
entitled to summary judgment.

17

R. Doc. 51-2 at 5-6.
8

IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS plaintiff’s motion for

summary judgment.

Allied Shipyard’s claims are DISMISSED WITH

PREJUDICE.

19th
New Orleans, Louisiana, this _____ day of September, 2017.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

9