PORTLAND PILOTS INC, et al. v. NOVA STAR M/V, et al.

Filing 292

FINDINGS OF FACT AND CONCLUSIONS OF LAW as to the claims of Maine Uniform Rental, Inc. (Pratt Abbott) - By JUDGE D. BROCK HORNBY. (mnw)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
MAINE UNIFORM RENTAL, INC.
D/B/A PRATT ABBOTT UNIFORM &
LINEN,
INTERVENOR PLAINTIFF
V.
M/V NOVA STAR, in rem,
DEFENDANT

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CIVIL NO. 2:15-CV-442-DBH

FINDINGS OF FACT AND CONCLUSIONS OF LAW
On August 24, 2016, I conducted a bench trial of Pratt Abbott Uniform &
Linen (“Pratt Abbott”)’s1 claim to a maritime lien on the M/V Nova Star (“Nova
Star”). I heard closing arguments the same day. The following are my findings
of fact and conclusions of law. See Fed. R. Civ. P. 52.
FINDINGS OF FACT2
1.

In 2013, Singapore Technologies Marine Ltd. (“ST Marine”) and

Quest Navigation, Inc. (“Quest”) entered into a joint venture to operate a ferry
service between Yarmouth, Nova Scotia and Portland, Maine.
2.

ST Marine and Quest incorporated Nova Star Cruises Ltd. in Nova

Scotia to operate the ferry service. ST Marine owned ten percent of the company.

The legal name of the plaintiff is Maine Uniform Rental, Inc. doing business as Pratt Abbott
Uniform & Linen. Like the parties, I use the name “Pratt Abbott.” This Pratt Abbott is not the
same as Pratt Abbott retail laundry and dry cleaning; this is the industrial side of the business.
2 At the beginning of closing argument, the lawyers for both parties agreed that I could consider
the maritime context laid out in the claim of the Portland Development Corporation, a case tried
the preceding day and observed by all counsel, since the evidence had not been repeated for this
case.
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3.

Nova Star Cruises Ltd. chartered a vessel owned by ST Marine, the

M/V Nova Star, to make the crossing.
4.

Nova Star Cruises Ltd. set out making the Nova Star a ferry service

that was functionally the equivalent of a hotel that cruised between Yarmouth
and Portland.
5.

To equip the vessel, Nova Star Cruises Ltd. asked Pratt Abbott to

supply the linens3 for the vessel. The General Manager of Pratt Abbott, Thomas
Gridley, negotiated with Nova Star Cruises Ltd.’s CFO, Bruce Allain.
6.

Pratt Abbott, a vendor that has worked with many hotels, offered

Nova Star Cruises Ltd. the option of buying the linens up front, or renting from
Pratt Abbott over a specific period of time linens that Pratt Abbott purchased and
owned. In either event, Pratt Abbott would clean the linens and return them to
the ship on a daily basis.
7.

To reduce its upfront expenses and to better project its weekly costs,

Nova Star Cruises Ltd. opted to rent the linens from Pratt Abbott over a five-year
period.
8.

Before finalizing the agreement, Nova Star Cruises Ltd. paid Pratt

Abbott a $51,536.45 deposit, and Nova Star Cruises Ltd. filled out a credit
application through Pratt Abbott. Pl.’s Ex. 1.
9.

In April 2014, Pratt Abbott entered into a contract with CFO Bruce

Allain and Mark Amundsen, whereby Nova Star Cruises Ltd. agreed to rent the

I use this term broadly, as the parties did at trial, to encompass everything that Pratt Abbott
provided to the Nova Star vessel, including towels, linens, carts, napkins, etc.
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2

linens from Pratt Abbott over a five-year period. The contract specified that
[i]f the contract is terminated prior to the expiration date,
Customer [Nova Star Cruises Ltd.] agrees to promptly
purchase all merchandise that has been ordered for or put
into service for the Customer at Company’s [Pratt Abbott’s]
then current published replacement rate schedule (this
agreed sale of all merchandise is in recognition of the
substantial investment of the company including, but not
limited to, merchandise, equipment, labor, energy,
transportation and future planning).

Pl.’s Ex. 1.
10.

To meet Nova Star Cruises Ltd.’s needs under the contract, Pratt

Abbott purchased upfront certain specialty items in large quantities, including
specialty linen carts that could maneuver around tight spaces on the vessel,
thousands of flat twin sheets, thousands of table napkins, and uniquely shaped
table clothes. To meet the needs of Nova Star Cruises Ltd.’s rental contract,
Pratt Abbott also purchased new equipment that it would not normally have
purchased.
11.

Under the contract, Pratt Abbott owns all of these linens and other

specialty items.
12.

At the end of the 2015 season, Nova Star Cruises Ltd. asked Pratt

Abbott to leave specific inventory onboard the Nova Star vessel. Pratt Abbott did
so and invoiced Nova Star Cruises Ltd. for the amount ($3,223.29) that it had
requested to remain on the boat.
13.

As it turned out, Nova Star Cruises Ltd. terminated the ferry service

in 2015, after just two seasons.
14.

A number of creditors seized the Nova Star through process

originating in this court, asserting maritime liens against it. Most of the claims
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have been settled, and ST Marine—the owner of the vessel—posted a bond that
allowed the vessel to leave the port of Portland while the remaining claims are
resolved.
15.

When Pratt Abbott realized that the rental agreement was, in effect,

terminated, it demanded that Nova Star Cruises Ltd. purchase all the linens, as
the 2014 agreement provided.
16.

Pratt Abbott also requested that Nova Star Cruises Ltd. pay unpaid

invoices for items and rental services that had previously been supplied to the
ship. The unpaid invoices total $16,187.50 for the last completed rental service
and regular cleaning invoice ($12,558.21), the items that Nova Star Cruises Ltd.
requested remain on the ship ($3,223.29), and specialty items that were cleaned
and returned to the ship ($406). Pl.’s Ex. 6.
17.

Nova Star Cruises Ltd. did not pay Pratt Abbott for any of these and

did not respond to Pratt Abbott’s demand to purchase the inventory of linens
that Pratt Abbott had purchased for the Nova Star as provided in the rental
agreement.
18.

That inventory is sitting in Pratt Abbott’s warehouse in Westbrook,

Maine. The total replacement cost of the stored inventory under the contract is
$178,023.02. Pl.’s Ex. 2.
19.

Pratt Abbott’s maritime lien claim against the Nova Star vessel is the

total replacement cost of the inventory in storage and the balance of the unpaid

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invoices, for a total claim of $194,510.12.
CONCLUSIONS OF LAW
A.

This court has jurisdiction under 28 U.S.C. § 1333(1).4

B.

Under federal maritime law, “a person providing necessaries to a

vessel on the order of the owner or a person authorized by the owner . . . has a
maritime lien on the vessel.” 46 U.S.C. § 31342. It “is not required to allege or
prove in the action that credit was given to the vessel.” Id.5
C.

“[P]ersons who are presumed to have authority to procure

‘necessaries’ to a vessel . . . include the owner, the master, ‘a person entrusted
with the management of the vessel at the port of supply,’ or an officer or agent
appointed by the owner or ‘a charterer’ of the vessel.” Cianbro Corp. v. George
H. Dean, Inc., 596 F.3d 10, 14 (1st Cir. 2010) (quoting 46 U.S.C. § 31341). I
conclude that Nova Star Cruises Ltd., as charterer of the vessel Nova Star, Mark
Amundsen, as President of Nova Star Cruises Ltd., and Bruce Allain, as CFO of
Nova Star Cruises Ltd., had authority to procure necessaries for the ship.
D.

According to the statute, the term “necessaries” “includes repairs,

supplies, towage, and the use of a dry dock or marine railway.”

46 U.S.C.

“The district courts shall have original jurisdiction, exclusive of the courts of the States, of
“(1) Any civil case of admiralty or maritime jurisdiction . . . .”
5 The First Circuit continues to maintain that it is a “well-established precept that the
requirements for the allowance of a maritime lien are strictly construed.” Cianbro Corp. v. George
H. Dean, Inc., 596 F.3d 10, 14 (1st Cir. 2010). Some other courts have said that the 1971
amendments to the Federal Maritime Lien Act liberalized this standard, see, e.g., Atl. & Gulf
Stevedores, Inc. v. M/V Grand Loyalty, 608 F.2d 197, 201 (5th Cir. 1979) (“We view the legislative
history of these sections to mandate a more liberal application than that which existed prior to
the 1971 amendments to the Maritime Lien Act. Our review leads us inexorably to the conclusion
that it was the intent of the Congress to make it easier and more certain for stevedores and others
to protect their interest by making maritime liens available where traditional services are
routinely rendered.”). I follow Cianbro, but in this case the choice of standard does not affect my
conclusion.
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§ 31301(4). But 46 U.S.C. § 31301(4) is not an exhaustive list. Simply stated,
the term “necessaries” “should be interpreted broadly in order to encourage the
provision of services that will keep ships active . . . [and a lien can attach]
whenever the goods or services that were provided to the vessel were necessary
for its continued operation.” Farrell Ocean Servs., Inc. v. United States, 681 F.2d
91, 92–93 (1st Cir. 1982); see Trico Marine Operators, Inc. v. Falcon Drilling Co.,
116 F.3d 159, 162 (5th Cir. 1997) (“[N]ecessaries include most goods or services
that are useful to the vessel, keep her out of danger and enable her to perform
her particular function.” (internal quotation marks omitted)). I conclude that the
supplies and services that Pratt Abbott provided under the contract enabled the
Nova Star to run as a mobile hotel between Portland and Yarmouth and qualify
as “necessaries” under 46 U.S.C. § 31301.
E.

“It has long been the law that an essential element of establishing a

maritime lien is that the necessaries be either (1) physically delivered to the
vessel, or (2) constructively dispatched to the vessel by the handing over of the
supplies to the owner or the owner’s authorized agent for use on the designated
vessel.” Cianbro, 596 F.3d at 14-15 (citing Piedmont & George’s Creek Coal Co.
v. Seaboard Fisheries Co., 254 U.S. 1, 6-7 (1920)).
F.

Because of the nature of the rotating inventory that Pratt Abbott

provided the Nova Star, there were two types of delivery in this case. First there
was delivery of the rental and cleaning services that Pratt Abbott provided to the
Nova Star. Pratt Abbott owned the linens and on a daily basis it provided a
service whereby it “delivered” certain linens on a temporary basis to the ship and
retrieved them the next day. I conclude that those services were delivered to the
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vessel for purposes of the maritime lien requirement. See Itel Containers Int’l
Corp. v. Atlanttrafik Exp. Serv. Ltd., 781 F. Supp. 975, 986 (S.D.N.Y. 1991), rev’d
on other grounds, 982 F.2d 765 (2d Cir. 1992). That supports payment of the
$12,558.21 invoice for past services. But there is a second category. Some of
the specialized items Pratt Abbott purchased remained with the ship. In 2015,
Pratt Abbott left on the ship the items that the Nova Star requested remain on
the ship or be returned to the ship. That supports payment of the $3,223.29
invoice that Nova Star Cruises Ltd. requested remain on the ship and the $406
invoice for the specialty items that were cleaned and returned to the ship and
remained there. Those physical items have also been “delivered” to the ship for
purposes of the maritime lien requirement. See Port Welcome Cruises, Inc. v. S.
S. Bay Belle, 215 F. Supp. 72, 86 (D. Md.), aff’d sub nom. Humble Oil & Ref. Co.
v. S. S. Bay Belle, 324 F.2d 954 (4th Cir. 1963). The maritime lien for the services
and physical items described in this paragraph is in the total amount of
$16,187.50.
G.

The items that remain in Pratt Abbott’s inventory in Westbrook have

not been “delivered” to the ship in such a way as to create a maritime lien. Pratt
Abbott continues to own them, and any previous movement of these items to and
from the ship was simply the rental and cleaning service provided under the
rental contract. Pratt Abbott may have a breach of contract claim against the
charterer Nova Star Cruises Ltd. for failing to purchase the inventory at the
replacement cost rate once it terminated the contract, but that is not the same
as a maritime lien claim against the vessel for necessaries furnished to the
vessel. The Westbrook inventory has not been “physically delivered to the vessel
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or constructively dispatched to the vessel by the handing over of the supplies to
the owner or the owner’s authorized agent for use on the designated vessel,” and
thus Pratt Abbott cannot assert a maritime lien against the vessel for the
replacement cost of the inventory.

Moreover, Pratt Abbott cannot assert a

maritime lien for rental services that it did not actually provide to the vessel. The
lien extends to the period during which the rental items were actually
necessaries but does not include the period after the arrest, when the rental
items were no longer being used by the Nova Star. Itel Containers, 781 F. Supp.
at 986-87, rev’d on other grounds, 982 F.2d 765 (2d Cir. 1992); see Dresdner
Bank AG v. M/V Olympia Voyager, 465 F.3d 1267, 1272-75 (11th Cir. 2006)
(holding that for value of ongoing insurance, “the vessel’s arrest stopped the
lien’s accrual”; thus, the maritime lien was limited to the value of the insurance
pre-arrest).
H.

A lienor need not prove that it relied on the credit of the vessel in

providing necessaries. See Racal Survey U.S.A., Inc. v. M/V Count Fleet, 231
F.3d 183, 189 (5th Cir. 2000) (“[T]he [Federal Maritime Lien Act] . . . create[s] a
presumption of credit based on the vessel.”). However, the Federal Maritime Lien
Act
did not do away with the “idea of credit to the vessel being a
prerequisite to a lien . . . .” Because under the [Federal
Maritime Lien Act] a presumption arises that one providing
supplies to a vessel acquires a maritime lien, the party
attacking the presumption must establish that the personal
credit of the owner or the charterer was solely relied upon.
“To meet this burden, evidence must be produced that would
permit the inference that the supplier purposefully intended
to forego the lien.”

Id. (citations omitted) (quoting Equilease Corp. v. M/V Sampson, 793 F.2d 598,
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605-06 (5th Cir. 1986)). The only evidence in the record that Pratt Abbott waived
its claim to a maritime lien and instead relied solely on the personal credit of the
charterer Nova Star Cruises Ltd. is the credit application listing Nova Star
Cruises Ltd. and its ownership. I conclude that this evidence is insufficient—by
any standard of proof—to overcome the presumption that Pratt Abbott relied
upon the credit of the vessel and thus did not purposefully forego a maritime
lien.
The Clerk shall enter JUDGMENT for the intervenor plaintiff Pratt Abbott in
the amount of $16,187.50.6
SO ORDERED.
DATED THIS 7TH DAY OF SEPTEMBER, 2016
/s/ D. Brock Hornby_______________
D. BROCK HORNBY
UNITED STATES DISTRICT JUDGE

6

I have not relied upon the testimony that I allowed de bene over Nova Star’s objection.
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