Opinion
Civil Action No: 01-669 Section:"D" (3)
June 17, 2002
ORDER AND REASONS
Upon agreement of counsel for Plaintiff, Stevens Shipping and Terminal Company, and counsel for Ruby Trading S.A., claimant of the in rem Defendant, the M/V JAPAN RAINBOW II, the Trial in this matter was submitted to the court on the parties' briefs, joint exhibits and depositions of Frank Coslick (the designated corporate representative of Stevens Shipping) and Clive Ferguson (an operations supervisor for Zodiac Maritime Agencies, Ltd.). Now, having reviewed these materials, the court rules.
The court MAINTAINS Ruby's Objections to the testimony of Mr. Coslick, and thus excludes from evidence the testimony which is subject of Ruby's Objections.
The claim of the other Plaintiff in this matter, Stevedoring Services of America, Inc., against the M/V JAPAN RAINBOW II, has been dismissed through compromise.
Factual Background
On or about February 3, 1997, Tokai Shipping Co., Ltd. (Tokai) time-chartered the M/V JAPAN RAINBOW II, for 60 to 64 months, pursuant to a time charter which contained the following "prohibition of liens clause" (a/k/a "no liens clause"):
Gulf Oil Trading Co. v. M/V CARIBE MAR, 757 F.2d 743, 745 (5th Cir. 1985).
Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their agents, which might have priority over the title and interest of the owners of the vessel.
(See Exhibit A, Time Charter, p. 3, lines 112-13).
On or about December 13, 2000, Tokai issued the "Sailing Instruction for the M.V. `JAPAN RAINBOW II' from Japan, through Panama, to ports along the eastern seaboard of the United States. (See Exhibit B, Sailing Instruction, also referred to as "Voyage Instructions"). This instruction contained a list of each port upon which the vessel was to call, with addresses, telephone numbers, fax numbers and other contact information for Tokai's agents in each port. (Id., p. 27). Tokai's agent in Savannah, Georgia was identified as Stevens Shipping Terminal Co. with the following information:
Name of Port Name of Agent Phone Number Address Facsimile Number Telex Number Cable Address SAVANNAH Stevens Shipping 912-651-4000 Terminal Co. 912-651-4014 P.O. Box 1648 RCA 210856 26 East Bay Street STEVENS SAVANNAH Savannah, Georgia 31498 U.S. A. (Id.).The sailing instruction was received by Zodiac Maritime Agencies, Ltd. (Zodiac), who acted as the owners' managing agent for the vessel. (Deposition of Clive Ferguson, pp. 5, 10-11). In late 2000, Zodiac learned that Tokai was having financial problems and became concerned that the vessel's "owners would be vulnerable in the event of unpaid bills." (Id. at 18, 30). Thus, Mr. Ferguson telefaxed each of the agents listed in Tokai's sailing instruction a notice that the governing charter party had a prohibition of lien clause. (Id. at 18-19). Mr. Ferguson specifically telefaxed this notice to Stevens Shipping ("Attn.: Agency Department") on January 23, 2001, via the fax number (912-651-4014) provided in Tokai's Sailing Instruction. (Id. at 20 and Ferguson Exhibit C, Facsimile Notice).
Clive Ferguson of Zodiac was the operations supervisor of the M/V JAPAN RAINBOW II. (Ferguson Dep. at 4).
The notice telefaxed to Stevens Shipping expressly advises that:
[T]here is a clause in the governing Charter Party prohibiting Charterers to permit any lien to be placed against the Vessel.
Headowners therefore request that you complete the heading of the attached Letter and pass a copy of the same to all Suppliers of Bunkers/Services to the Vessel during her forthcoming call at Savannah.
(Ferguson Exhibit C, Facsimile Notice).
The attached letter states:
The [subject) Charter contains a PROHIBITION OF LIEN CLAUSE, and you are hereby notified that neither the Charterer nor the Master nor any other person has the power or authority to order supplies or services on the credit of Owner's vessel or to create or permit to be created any liens upon said vessel. Your provision of supplies or performance of services at the request of the Charterer or Master or any other person is solely for the Charterer's account and will not result in a lien against the vessel, in rem, or a claim against the Owners, in personam, "in the event of the Charterers failing to pay for same.
Furthermore, the goods and/or services, regardless of the terms on which any other document may be signed, will be acknowledged, received and accepted solely for the account of the Charterers of the [M/V JAPAN RAINBOW II] and not for the account of the said vessel or her Owners. Accordingly, no lien or other claim against the said vessel or her Owners can arise in the event that Charterers fail to pay for the said goods and/or services.
(Id.).
Zodiac received a fax confirmation that the above notice and attached letter were successfully transmitted to the fax number listed for Stevens Shipping in the Sailing Instruction at 13:59 hours on January 23, 2001. (See Ferguson Exhibit D, Fax Confirmation). Further, that fax number belongs to a fax machine located in the Stevens Shipping's corporate office in Savannah, Georgia, and that particular fax machine was assigned to Stevens Shipping's agency department. (Deposition of Frank Coslick at 7-8, 10). However, Stevens Shipping denies seeing the notice.
Mr. Ferguson testified that sending the notice of the no lien clause was not a regular occurrence. (Ferguson Dep. at 44-45). But the actual manner in which the notice was sent (i.e., via confirmed fax) was not unusual. Mr. Ferguson explained that at the time in question, faxes were used in the shipping business as customary and reliable means of communication, and confirmations of the faxes were evidence that faxes were received. (Ferguson Dep. at 19-20, 25-26, 43).
Frank Coslick is the vice-president of finance for Stevens Shipping. (Coslick Dep. at 4).
Mr. Coslick (who was deposed as the corporate representative of Stevens Shipping) testified that he spoke to less than half of the people who worked in the subject Stevens office as to whether or not they saw the faxed notice at any time. And he spoke to these people about a year after it had been faxed. (Coslick Dep. at 20-21). These people told Mr. Coslick that they had not seen the notice and had no knowledge of it. (Id. at 21).
On February 20, 2001 (four weeks after Zodiac faxed the notice of the prohibition of liens clause to Stevens Shipping), the M/V JAPAN RAINBOW II arrived in Savannah, where Stevens Shipping provided agency and stevedoring services to the vessel. Approximately three weeks later, on March 13, 2001, Stevens Shipping arrested the M/V JAPAN RAINBOW II and filed this suit, making an in rem claim in the amount of $49,164.00, for the services it provided to the vessel in Savannah.
In its Complaint, Stevens Shipping seeks $49,164.00; however, in its Trial brief, Stevens Shipping claims it is owed $85,236.65.
Legal Analysis
A party who has actual knowledge of a prohibition of liens clause before supplying goods or services to a vessel cannot later claim a maritime lien for those goods or services. Gulf Oil Trading Co. v. M/V CARIBE MAR, 757 F.2d 743, 749 (5th Cir. 1985).Here, Zodiac faxed a two-page Notice of the prohibition of liens clause contained in the subject charter party to Stevens Shipping's agency department on January 23, 2001 (approximately a month before Stevens Shipping provided agency and stevedoring services to the M/V JAPAN RAINBOW II in Savannah). The Notice unambiguously informed Stevens Shipping that suppliers (like Stevens Shipping) could not rely on the credit of the vessel or claim a maritime lien, but would have to look to Tokai (the charterer) for payment. Although Stevens Shipping claims it never saw this fax, the court finds that the Zodiac's confirmation of this fax creates at least a rebuttable presumption that Zodiac delivered the notice, and that Stevens Shipping received it. And on this record, Stevens Shipping has offered an incompetent showing to rebut this presumption.
Proof that a letter was placed in a U.S. post office mail receptacle creates a [rebuttable] presumption that it reached its destination in the usual time and was actually received by the person to whom it was addressed." Beck v. Somerset Technologies, Inc., 882 F.2d 993, 996 (5th Cir. 1989).
In Beck, the court found that a copy of a properly addressed letter, a certified mail receipt and signed return post cards constituted sufficient evidence to create a presumption that the letter was received by the Plaintiffs employer corporation. The court farther found that testimony by an employee of the corporation that he did not remember receiving the letter and that he did not recall that the person who signed the return receipt worked for the corporation, was not sufficient to rebut the presumption that the letter was received. Id. at 996-97.
Here, the court sees no reason why it cannot make the same inference regarding the subject confirmed facsimile, since the use of facsimiles in the shipping industry at the time in question was customary and accepted as generally reliable.
The court thus concludes, as a matter of fact and law, that by receiving this fax (which, again, is a customary and reliable means of communication in the shipping industry), Stevens Shipping had the requisite "actual knowledge" of the prohibition of liens clause thereby defeating its claim to a federal maritime lien. Knowing that there was a prohibition of lien clause, Stevens Shipping was "then in a position to make an informed business decision, and may [have] refuse[d] to [service] the vessel, [made] other arrangements for payment, or assume[d] the risk." Gulf Oil Trading Co., 757 F.2d at 749. It chose the latter, and cannot now rely on the materialman's statutory presumption that the charterer had authority to bind the vessel for the services it performed after receiving the faxed notice of the prohibition of lien clause.
Stevens Shipping argues that to gain the "actual knowledge" that Tokai lacked authority to bind the vessel with maritime liens, Stevens Shipping would not only have had to receive the fax, but would also have had to "read" or "sign" the fax as well. (Stevens Shipping's Memo. at 5-6, 10-11). The court rejects this argument, and finds that the fax confirmation demonstrating successful transmission of the notice to Stevens Shipping establishes that Stevens Shipping received the notice and had knowledge of its contents. The law simply cannot allow a supplier to deny knowledge of a no lien clause when it was delivered in a manner that was both customary and reliable in the shipping business.
Accordingly;
IT IS ORDERED that Stevens Shipping's in rem claim against the M/V JAPAN RAINBOW II be and is hereby DISMISSED.
* * * * * * MINUTE ENTRY
Before the court is the "Motion to Strike Affidavits Attached to Plaintiff's Trial Memorandum" filed by Ruby Trading S.A., claimant of the in rem Defendant, the M/V JAPAN RAINBOW II. Plaintiff, Stevens Shipping and Terminal Company, filed a memorandum in opposition. The motion, set for expedited hearing on Thursday, June 13, 2002, is before the court on briefs, without oral argument.
Having reviewed the memoranda of counsel and the applicable law, the court finds that the motion should be granted. The parties in this matter agreed to cancel the Trial (set for March 25, 2002), and submit the matter on the briefs, stipulations and documentary evidence. However, the parties subsequently determined that they could not agree to Stipulations, and Ruby (with Plaintiff's consent) requested that the court allow the parties to take depositions and submit those depositions in lieu of stipulations. The parties did not request that they be allowed to submit Affidavits (instead of or in addition to depositions), and the court would not have agreed to such a request because the submissions were to take the place of the Trial.
The parties then took the depositions of Clive Ferguson of Zodiac and Frank Coslick of Stevens Shipping. The transcripts of those two depositions have been highlighted in compliance with the court's order (Minute Entry, Doc. No. 27), and have been submitted to the court along with a joint bench book of exhibits and the parties' respective briefs.
However, Plaintiff also attached to its Trial Memorandum, the Affidavits of three of its employees, Frank Coslick, Ed Mauncy and Deborah Tillman, and certain e-mails. Although the court agreed to resolve this matter on the briefs, with documentary evidence and depositions, in lieu of a Trial, the court must still apply the Federal Rules of Evidence. In doing so, the court concludes that the subject Affidavits and e-mails are inadmissible hearsay in this Trial-type setting, and thus must be excluded from the Trial evidence. Plaintiff had ample opportunity to depose the Affiants, but apparently chose not to do so. Accordingly;
The Trial in this matter was originally scheduled to be held on March 25, 2002. However, upon Joint Motion of the parties, the court continued this Trial date to allow the parties to submit the matter on stipulations and briefs. (Doc. No. 26). The court held a Telephone Conference with counsel for the parties on March 21, 2002, and therein the parties agrees to submit their joint stipulations and briefs (in lieu of a Trial) on April 17, 2002. In a Minute Entry entered on March 27, 2002, the court instructed the parties on how the Bench Book should be prepared, as well on how deposition transcripts (if submitted) should be presented for submission. (Doc. No. 27). The parties then filed a Joint Motion for Extension of Time to Submit Trial on Stipulations and Briefs. The court granted this motion, extending the deadline for submission to May 1, 2002. (Doc. No. 28). On May 1, 2002, Ruby filed an "Unopposed Motion to Continue Deadline for Submission of Briefs and Evidence and to Allow Submission of Depositions in Lieu of Stipulations" (which the court granted) because "despite their best efforts, the parties [had] been unable to agree to stipulations as to the relevant facts and therefore propose[d] submitting depositions in lieu of stipulations." (Doc. No. 3O, p. 2).
Finally, the court notes that one of the Affiants, Frank Coslick, was in fact deposed and his deposition has been submitted to the court.
IT IS ORDERED that the "Motion to Strike Affidavits Attached to Plaintiff's Trial Memorandum" filed by Ruby Trading S.A., claimant of the in rem Defendant, the M/V JAPAN RAINBOW II, be and is hereby GRANTED;
IT IS FURTHER ORDERED that the Affidavits of Frank Coslick, Ed Mauncy and Deborah Tillman, and printed e-mails attached to Plaintiff's Trial Memorandum be and are hereby EXCLUDED from the Trial evidence.