Three Fifty Markets Ltd. v. Argos M M/V

Filing 111

ORDER AND REASONS denying 94 Motion for Summary Judgment. Signed by Judge Eldon E. Fallon on 2/7/2024. (Reference: 23-595)(my)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
THREE FIFTY MARKETS LTD

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CIVIL ACTION

VERSUS

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NO. 23-595

M/V ARGOS M, her engines, etc. in rem

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SECTION L

ORDER & REASONS
Before the Court is a motion by Defendant Argos Bulkers Inc. for Summary Judgment. R.
Doc. 94. Plaintiff Three Fifty Markets Ltd. opposes the motion, R. Doc. 105. Defendant filed a
reply. R. Doc. 108. After considering the briefing and applicable law, the Court rules as follows.
I.

BACKGROUND
The Court is familiar with the extensive procedural and factual history of this case and will

not repeat it here. For a full history, see R. Doc. 89. For the purpose of this motion, the relevant
background is as follows.
On February 16, 2023, Three Fifty Markets Ltd. (“Three Fifty”), a commodity trading
company domiciled in the United Kingdom, filed a complaint in this Court against the Argos M
M/V (“the Vessel”), a Liberian-flagged vessel that was chartered to AUM Scrap and Metals
Trading LLC, a company alleged to be organized under the laws of the UAE. 1
In its complaint, Three Fifty alleges that it sold 800 metric tons of Very Low Sulphur Fuel
Oil to Three Fifty on October 11, 2022. R. Doc. 1 at 3. However, Three Fifty alleges, neither AUM
nor the Charterer, Shimsupa, has paid Three Fifty for the fuel, leaving a total amount due, including
interest, at $663,546.65 as of January 31, 2023. Id. at 5. As a provider of “necessaries” to the vessel

Though Three Fifty alleges that AUM is the Charterer of the vessel in its complaint, the Vessel indicated that the
actual charterer of the vessel is Shimsupa. R. Doc. 60.

1

within the meaning of the Commercial Instruments and Maritime Liens Act (“CIMLA”), 46 U.S.C.
§ 31342 et seq., Three Fifty claims to have an in rem maritime lien against the Vessel. In its
complaint, Three Fifty sought judgment in the amount of $663,546.65, arrest of the Vessel, sale
of the Vessel to pay the judgment due, and other “just and proper” relief. Id. at 6. 2
On February 16, 2023, this Court issued a warrant for the arrest of the Vessel and appointed
a substitute custodian. The Vessel was arrested six days later. Case No. 23-623 R. Doc. 18.
On March 21, 2023, Argos Bulkers Inc. 3, as owner of the Vessel, filed a Verified Statement
of Right or Interest, R. Doc. 24, and answered the complaint of Three Fifty. R. Doc. 26. In its
answer, the owner of the Vessel generally denied liability and stated that Three Fifty had not been
the physical supplier of the fuel and, because it did not provide the terms of the physical supplier,
it did not state a claim that a lien had been created. R. Doc. 26 at 3.
On August 1, 2023, Three Fifty filed a motion for summary judgment requesting that this
Court allow it to execute a maritime lien against the Vessel, which the Vessel opposed. R. Doc.
50; R. Doc. 60. After considering the briefs and oral argument, the Court denied the motion for
summary judgment because questions on whether Three Fifty reasonably assumed an individual
authorized by the Vessel purchased the fuel remain. R. Doc. 74. On January 2, 2024, the Vessel
filed the instant motion for summary judgment. R. Doc. 94.
II.

PRESENT MOTION
In its motion for summary judgment, the Vessel argues that no one with actual or apparent

authority to bind the Vessel purchased the fuel bunkers. R. Doc. 94. It argues that in its charter

2
In addition to this case against the Vessel, PMG Holding SRL filed suit similarly situated to the one at hand. Case
No. 23-623, R. Doc. 1. That case was consolidated with this matter and the parties recently reached a resolution.
Accordingly, this Court dismissed that matter on January 3, 2024. R. Doc. 96.
3
Because Argos Bulkers Inc. is the owner and claimant of M/V Argos M, the Court will collectively refer to Argos
Bulkers Inc. and M/V Argos M as “the Vessel” for the purpose of this order.

agreement with Shimsupa, there are several no lien clauses that prevent Three Fifty from executing
a lien against it. R. Doc. 94-1. It further argues that the instant motion for summary judgment
differs from Three Fifty’s earlier motion because it only needs to establish that Three Fifty lacks
evidence to prove one element of its claim. Id. Thus, because the Vessel provides evidence that no
one with authority purchased the bunkers in question, it prays that the Court grant its motion. Id.
In opposition, Three Fifty argues that the Court has already found that there are factual
questions which are to be resolved at trial surrounding this issue. R. Doc. 105. It further argues
that the fuel was purchased by an entity with actual or apparent authority. Accordingly, it avers
that it is entitled to its maritime lien on the Vessel. In reply, the Vessel emphasizes its earlier
arguments to stress that Three Fifty still fails to meet its burden to execute its lien. R. Doc. 108.
III.

APPLICABLE LAW
Summary judgment is proper when “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). The court must view
the evidence in the light most favorable to the nonmovant. Coleman v. Hous. Indep. Sch. Dist.,
113 F.3d 528, 533 (5th Cir. 1997). Initially, the movant bears the burden of presenting the basis
for the motion; that is, the absence of a genuine issue as to any material fact or facts. Celotex Corp.
v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the nonmovant to come forward
with specific facts showing there is a genuine dispute for trial. See Fed. R. Civ. P. 56(c); Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). “A dispute about a material
fact is 'genuine' if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Bodenheimer v. PPG Indus., Inc., 5 F.3d 955, 956 (5th Cir. 1993) (citation
omitted).
I.

ANALYSIS
The federal maritime lien is a unique security device, serving the dual purpose of keeping

ships moving in commerce while not allowing them to escape their debts by sailing away.”
Equilease Corp. v. M/V Sampson, 793 F.2d 598, 602 (5th Cir. 1986). Under CIMLA, a person
providing necessaries to a vessel on the order of the owner, or a person authorized by the owner
(1) has a maritime lien on the vessel; (2) may bring a civil action in rem to enforce the lien; and
(3) is not required to allege or prove that credit was given to the vessel. 46 U.S.C. § 31342.
When this issue was presented to the Court for the first time in Three Fifty’s Motion for
Summary Judgment, the Court held that the fuel bunkers provided to the Vessel were
“necessaries.” Nov. 1, 2023 Oral Argument Transcript 7:5. Thus, the Court focuses its brief
discussion on whether the Vessel authorized the purchase of the bunkers.
The Court agrees with the Vessel’s argument that for it to prevail on summary judgment,
it only needs to establish that Three Fifty fails to meet one of the elements of its CIMLA claim.
Accordingly, the Court must delve into agency law principles to determine whether the fuel was
purchased by an entity with authorization.
Pursuant to 46 U.S.C. § 31341, charterers and their agents are presumed to have the
authority to “procure necessaries for a vessel.” 46 U.S.C. § 31341(a)(4). Accordingly, maritime
law embraces the principles of agency. West India Indus., Inc. v. Vance & Sons AMC–Jeep, 671
F.2d 1384 (5th Cir. 1982). “Actual authority is the power of an agent to do an act on behalf of his
principal which he is privileged to do because of the agent’s manifestations to him.” Chilsan
Merch. Marine Co., Ltd. v. M/V K Fortune, 220 F. Supp. 2d 492, 497 (E.D. La. 2000). Apparent
authority is created as to a third person by conduct of the principal which, reasonably interpreted,
causes the third person to believe that the principal consents to the act done on his behalf by the
person purporting to act for him. Restatement (Second) Agency of § 27. “Apparent authority is
distinguished from actual authority because it is the manifestation of the principal to the third

person rather than to the agent that is controlling.” Cactus Pipe & Supply Co., Inc. v. M/V
Montmartre, 756 F.2d 1103, 1111 (5th Cir. 1985).
Further, the Fifth Circuit has consistently held that maritime liens are enforceable against
a non-party to the contract. World Fuel Servs. Singapore, Pte. Ltd., 822 F.3d at 773 (“[W]e must
follow this court’s [previous] decision. . . which unabashedly enforced, against a non-party to the
contract a maritime lien. . .”) (citing Liverpool & London S.S. Prot. & Indem. Ass’n v. QUEEN OF
LEMAN M/V, 296 F.3d 350 (5th Cir. 2002)).
Much like when the issue was presented to the Court for the first time, it currently holds
that there are several factual questions that remain that cannot be reconciled at this stage. The
validity of Three Fifty’s maritime lien hinges on whether it was reasonable for it to believe AUM
had actual or apparent authority to make bunkers purchase on behalf of the Vessel. As stated during
oral argument on Three Fifty’s previous motion for summary judgment, the Court reminds the
parties that “once it’s a question of reasonable[ness], that’s always a question of fact.” Nov. 1,
2023 Oral Argument Transcript 11:17-11:18. The Court further stresses that germane to resolving
whether AUM—or any other entity authorized by the Vessel—made the fuel bunker purchase
involves taking a closer look at the past practices between the parties, the customs in the industry,
as well as the nature and extent of the charterer and its agents’ authority. Because this is a factually
intensive inquiry, the Court finds that this issue is best resolved at trial and denies summary
judgment at this time.
IV.

CONCLUSION
For the foregoing reasons, Defendant’s Motion for Summary Judgment, R. Doc. 94, is

DENIED.
New Orleans, Louisiana this 7th day of February, 2024.

United States District Judge