Malin International Ship Repair & Drydock, Inc. v. Modu Prospector

161 F. Supp. 3d 481, 2015 U.S. Dist. LEXIS 143220, 2015 WL 11151114
CourtDistrict Court, S.D. Texas
DecidedOctober 21, 2015
DocketCIVIL ACTION NO. 3:13-CV-0039
StatusPublished
Cited by2 cases

This text of 161 F. Supp. 3d 481 (Malin International Ship Repair & Drydock, Inc. v. Modu Prospector) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Malin International Ship Repair & Drydock, Inc. v. Modu Prospector, 161 F. Supp. 3d 481, 2015 U.S. Dist. LEXIS 143220, 2015 WL 11151114 (S.D. Tex. 2015).

Opinion

ORDER AND OPINION ON MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION

GEORGE C. HANKS, JR., UNITED STATES DISTRICT JUDGE

The Court has considered the Report and Recommendation of the United States Magistrate Judge (Dkt. 110), the Objections filed by Malin International Ship Repair & Drydock, Inc. (“Malin”), and the Response by Maxim Crane Works, LP (“Maxim”).

In accordance with 28 U.S.C. § 636(b)(1), this Court is required to “make a de novo determination of those portions of the [magistrate judge’s] report or specified proposed findings or recommendations to which objection [has been] made.” In this regard, the Court is permitted to “accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” Id.; see also Fed. R. Civ. P. 72(b)(3).

As part of its de novo review, Court has considered Maxim’s motion for partial summary judgment and Malm’s cross-motion for partial summary judgment (Dkt. 94, 96, 98, 101), as well as Malin’s motion for leave to file supplementary summary judgment evidence (Dkt. 103) and Maxim’s response (Dkt. 104). After careful consideration of the Objections, the Response, the pleadings, and the arguments of the parties, the Court will ACCEPT the Magistrate Judge’s Recommendation, in part, [483]*483and REJECT the Recommendation, in part.

For reasons set out more fully below, the Court DENIES both motions for summary judgment.

PROCEDURAL SUMMARY

Malin and Maxim dispute the ownership of two large mobile cranes that were, at one time, located upon the PROSPECTOR. The PROSPECTOR has been variously described as a “Mobile Offshore Drilling Unit” (a “MODU”), a “semi-submersible rig,” “a semi-submersible drilling vessel,” a “Watercraft,” a “rig (project),” and, perhaps most tellingly, “an un-useable large floating object.”

These cranes were indisputably first owned by Maxim, who rented them to an entity known as PRC. PRC promised Maxim that the cranes would remain at “TNT Marine, 2915 Todd Rd., Galveston, Texas 77550,” but PRC instead moved the cranes onto the PROSPECTOR, and then moved the PROSPECTOR to Malin’s facility so that Malin could perform repairs and other work upon it.

However, PRC then failed to pay Malin’s invoices. Malin filed this lawsuit, suing the PROSPECTOR in rem to enforce a maritime lien arising from the work Malin had performed upon it, and suing PRC for breach of contract and other claims. At Malin’s request, this Court issued an order arresting the PROSPECTOR. Eventually, PRC and Malin jointly asked this Court to order the sale of the PROSPECTOR by the U.S. Marshal. At that sale, Malin purchased the PROSPECTOR, and by virtue of that purchase, now claims ownership of several rented items that had been on or around the PROSPECTOR, including the mobile cranes that PRC had rented to Maxim.

After the sale of the PROSPECTOR, Maxim intervened in this lawsuit to seek a declaration that it is the owner of the cranes and a judgment against Malin for theft and conversion of the cranes under Texas law. In response, Malin also seeks a declaratory judgment that the cranes and other rented items are now owned by Malin “pursuant to the Order of this Court and the US Marshal’s Bill of Sale free and clear of all liens, claims, and encumberances.”

Maxim and Malin filed cross-motions for summary judgment on the ownership of the cranes, and the motions have been fully briefed and argued to this Court as well as the Magistrate Judge.

FACTUAL OVERVIEW

The following factual overview is gleaned from the numerous pleadings in this case, as well as other cases on this Court’s docket.

1. THE PROSPECTOR 1971 - 2003

Built in 1971, the PROSPECTOR boasts a long series of former owners and a rather checkered past. In 2003, the PROSPECTOR was owned by Diamond Offshore Services Company (“Diamond”), who described it at that time as a “[sjteel hulled, non-self-propelled, Marshall Islands flag, semi-submersible drilling vessel.” (Dkt. dill. Diamond sold the PROSPECTOR to its next owner, with the conditions that (1) the new owner agreed to a complete “drilling ban”, and (2) the new owner promised that “all future owners would be made aware of and would agree to the terms of the ban.” (Dkt. 41).

2. THE PROSPECTOR arrives at Malin in May 2012

In April 2010, the PROSPECTOR was known as the “VIKING PROSPECTOR f/k/a OCEAN PROSPECTOR,” and it was located at the Gulf Copper shipyard in Galveston. In June 2010, it was sold to KTM Services, Inc., who intended to sell it [484]*484for scrap. (Dkt. 41-2, 41-6). However, before KTM could scrap it, the PROSPECTOR was arrested by Gulf Copper, who claimed a maritime lien due to outstanding invoices, and it was sold at a Marshal’s sale while it sat at Gulf Copper’s facility. See 3:ll-cv-00132. It was then purchased by Mr. Francisco Moreno, who in turn entered into a “Viking Prospector Joint Venture Dismantling Agreement” with PRC Environmental, Inc. (“PRC”), the stated purpose of that joint venture being to “dismantle, market and sell [the PROSPECTOR] as scrap.” (Dkt. 41-7).

At some point in its history, the PROSPECTOR had large, stationary cranes upon it, but' these stationary cranes had been removed by the time it was acquired by Mr. Moreno. Accordingly, on March 29, 2012, PRC rented two large mobile cranes from Maxim Crane Works. In the Rental Agreement, PRC promised that that the cranes “shall remain in [PRC’s] possession and control at all times,” and that they would be located at “TNT Marine, 2915 Todd Rd., Galveston, Texas 77550.” (Dkt. 94-1). Notwithstanding these promises, PRC moved Maxim’s cranes onto the PROSPECTOR and the PROSPECTOR was then moved to Malin’s facility.

On May 10, 2012, PRC signed a “General Agreement” with Malin, agreeing that Malin would moor and berth the PROSPECTOR and “perform Work described [in the Agreement] and in various Contractor’s Proposals ... and in drawings and specifications provided by the Company.” (Dkt. 1-2). The record does not contain any of these Contractor’s Proposals, drawings, and specifications. The Agreement does refer to “ongoing move preparations and sundry repair items in anticipation of the [.PROSPECTOR’S] final disposition” as well as “ensuring] the [PROSPECTOR’s] condition and continued mobility and stability.” The Agreement also refers to “the [.PROSPECTOR’S] anticipated conversion pursuant to current rig conversion plans.” Significantly, the Agreement also contained a prescient “Disclosure” stating, “Malin is very concerned about the possibility that the rig (project) may be abandoned, leaving Malin with an un-useable large floating object for disposal.” (Dkt. 1-2).

3. Malin’s Work on THE PROSPECTOR

When the PROSPECTOR first arrived at Malin’s facility — with the cranes PRC had rented from Maxim — it was already deemed to be in poor condition, and its condition continued to deteriorate over time. Nonetheless, Malin contends that PRC and Moreno decided against scrapping the PROSPECTOR

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Bluebook (online)
161 F. Supp. 3d 481, 2015 U.S. Dist. LEXIS 143220, 2015 WL 11151114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/malin-international-ship-repair-drydock-inc-v-modu-prospector-txsd-2015.