PORTLAND PILOTS, INC.; WORLD FUEL SERVICES, INC., d/b/a Trans-Tec; SPRAGUE OPERATING RESOURCES, LLC; BROWN SHIP SERVICES; CITY OF PORTLAND; PORTLAND DEVELOPMENT CORPORATION; COCKETT MARINE OIL DMCC; MCCALLISTER TOWING AND TRANSPORTATION COMPANY INC., d/b/a Portland Tugboat LLC; DNV GL AS, Plaintiffs,
v.
NOVA STAR M/V, in rem, Defendant, Appellee, MAINE UNIFORM RENTAL, INC., d/b/a Pratt Abbott Uniform & Linen, Plaintiff, Appellant, NOVA STAR CRUISES LTD, in personam; SINGAPORE TECHNOLOGIES MARINE LIMITED, quasi in rem; BUNKERS AND RELATED FUEL ABOARD THE M/V NOVA STAR, in rem, Defendants.
APPEAL
FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MAINE Hon. D. Brock Hornby, U.S. District Judge
Robert
W. Kline, with whom Kline Law Offices LLC was on brief, for
appellant.
Edward
S. MacColl, with whom Thompson, MacColl & Bass, LLC, P.A.
was on brief, for appellee.
Before
Howard, Chief Judge, Torruella and Barron, Circuit Judges.
TORRUELLA, Circuit Judge.
We have
before us an appeal from the district court's judgment
limiting the in rem maritime lien claim of
Plaintiff-Appellant Maine Uniform Rental, Inc., d/b/a Pratt
Abbott Uniform & Linen ("Pratt Abbott" or
"Appellant") on the arrested ship, the M/V NOVA
STAR ("NOVA STAR"). Pratt Abbott's claim arises
from its agreement (the "Agreement") with the
ship's charterer, Nova Star Cruises Limited ("Nova
Star Cruises"), to rent linens and other related items
for the ship's ferry service. Given this case's
maritime and admiralty nature, [1]and the need to interpret the
Federal Maritime Lien Act[2] (FMLA) to reach a resolution, this case
was properly before the district court. 28 U.S.C. §
1331. This Court has appellate jurisdiction of that district
court's final decisions, 28 U.S.C. § 1291, and the
case is now properly before us.
We are
asked to extend the reach of a maritime lien claim to
encompass a pre-established purchase cost of items rented by
a charterer pursuant to a temporary rental and service
contract.
After
review of the record and the parties' arguments, we
refrain from doing so and affirm the judgment of the district
court.
I.
BACKGROUND
A.
Setting Sail (The Facts)
Given
that neither party claims to challenge the court's
factual findings, we draw the facts from the district
court's findings, filling in undisputed facts from the
record as necessary to the analysis.
In
2013, Singapore Technologies Marine Ltd. ("ST
Marine"), owner of the NOVA STAR, and Quest Navigation,
Inc. ("Quest") entered into a joint venture to
operate a ferry service between Yarmouth, Nova Scotia, and
Portland, Maine. Together, ST Marine and Quest incorporated
Nova Star Cruises in Nova Scotia to operate the ferry
service, and Nova Star Cruises chartered the NOVA STAR. The
plan was to turn the NOVA STAR into a floating hotel that
cruised between Yarmouth and Portland.
Appellant
is a Maine corporation in the business of supplying linens,
uniforms, mats, rugs, towels, and related items to large
customers, such as hotels, restaurants, medical
establishments, and auto dealerships. The relationship
between Nova Star Cruises and Pratt Abbott began when Nova
Star Cruises reached out to Pratt Abbott asking if it would
be interested in supplying linens[3] for the NOVA STAR. While the
general practice in the hotel industry is to have customers
purchase their own goods with the supplier processing (wash,
dry, fold, press, etc.) and returning them, Pratt Abbott
offered Nova Star Cruises the option of renting the linens to
reduce its upfront expenses. Nova Star Cruises opted for the
rental option. In April 2014, Nova Star Cruises entered into
the Agreement with Pratt Abbott, agreeing to rent linens over
a five-year period. The Agreement included a clause that
stated:
If the contract is terminated prior to the expiration date,
[Nova Star Cruises] agrees to promptly purchase all
merchandise that has been ordered for or put into service for
[Nova Star Cruises] at [Pratt Abbott's] then current
published replacement rate schedule (this agreed sale of all
merchandise is in recognition of the substantial investment
of [Pratt Abbott] including, but not limited to merchandise,
equipment, labor, energy, transportation and future
planning).
Before
finalizing the Agreement, Nova Star Cruises paid Pratt Abbott
a deposit of $51, 536.45 and filled out a credit application
through Pratt Abbott. On this application, Nova Star Cruises
provided its bank account information at the Bank of Nova
Scotia.
Pratt
Abbott purchased specific items in large quantities to meet
Nova Star Cruises's needs pursuant to the contract, such
as special linen carts that could maneuver around tight
spaces on the vessel, bed sheets, table linens, and napkins.
Some of these linen products, such as the table cloths, were
uniquely shaped to meet the needs of the NOVA STAR. Pratt
Abbott also purchased new equipment that it would not have
purchased otherwise in order to meet the needs of the rental
contract. Under the contract, Pratt Abbott maintained
ownership of all these linens and specialty items.
At the
end of the 2015 ferry season, Nova Star Cruises asked that
Pratt Abbott leave specific items onboard the NOVA STAR.
Pratt Abbott did so and sent Nova Star Cruises an invoice for
the cost of the items. That same year, Nova Star Cruises
terminated the ferry service after just two seasons. Upon
realizing that the Agreement was, in effect, terminated,
Pratt Abbott demanded that Nova Star Cruises purchase the
inventory of linens pursuant to the Agreement and pay
past-due invoices. The unpaid invoices totaled $16, 187.50
for the last completed rental service and regular cleaning
($12, 558.21), the items that Nova Star Cruises requested
remain on the ship ($3, 223.29), and the specialty items that
were cleaned and returned to the ship prior to its arrest
($406). Nova Star Cruises ignored Pratt Abbott's requests
for payment. The inventory of linens that Pratt Abbott had
purchased for use on the NOVA STAR remains in Pratt
Abbott's warehouse in Westbrook, Maine.
The
total replacement cost of the stored inventory under the
Agreement is $178, 023.02.[4]
B.
Steering the Course (Procedural History)
A
number of creditors asserted maritime liens against the NOVA
STAR in the U.S. District Court for the District of Maine,
and the district court issued several warrants for the
ship's arrest. On November 17, 2015, Pratt Abbott filed a
motion to intervene, asserting its own maritime lien against
the arrested vessel for the replacement cost of the stored
inventory and the balance of unpaid invoices. A week later,
Pratt Abbott also filed a verified complaint against the
vessel and Nova Star Cruises for the same amount, alleging
breach of contract, unjust enrichment, and quantum meruit. In
its in rem action, Appellant initially claimed a lien in the
amount of $262, 001.50, but this claim has since been reduced
to $194, 510.12 ($16, 187.50 for the unpaid invoices, and
$178, 023.02 for its stored inventory). On November 30, 2015,
the district court granted ST Marine's motion to
substitute the vessel for a bond.
The
district court held a one-witness bench trial on Pratt
Abbott's maritime lien claim on August 24, 2016. At the
conclusion, the district court found that the supplies and
services that Pratt Abbott had provided to the NOVA STAR
under the Agreement, allowing the ship to operate as a mobile
hotel, constituted "necessaries"[5] under maritime
law. However, the court found that the lien did not extend to
the period after the arrest, when the rental items were no
longer being used by the NOVA STAR. Additionally, the court
found that only the rental and cleaning services provided by
Pratt Abbott before the service ceased at the end of the 2015
season, the specialized items that Nova Star Cruises
requested remain with the ship, and the specialty items that
were cleaned and returned to the ship had been provided or
"delivered" for purposes of the maritime lien
requirement. See Cianbro Corp. v. George H. Dean,
Inc., 596 F.3d 10, 14-15 (1st Cir. 2010); see also
Piedmont & George's Creek Coal Co. v. Seaboard
Fisheries Co., 254 U.S. 1, 6-7 (1920). The district
court denied Pratt Abbott's claim for the replacement
cost of the inventory remaining in its Maine warehouse,
...