Superior Shipyard & Fabrication v. M & T Oceanographic Research, LLC

• Court: Louisiana Court of Appeal
• Decided: June 20, 2012
• Docket: CA-0011-1522
• Status: Unknown

Opinion

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

11-1522

SUPERIOR SHIPYARD & FABRICATION, INC.

VERSUS

M & T OCEANOGRAPHIC RESEARCH, LLC

**********

APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF VERMILION, NO. 93,577-J HONORABLE KRISTIAN DENNIS EARLES, DISTRICT JUDGE

SHANNON J. GREMILLION JUDGE

Court composed of Jimmie C. Peters, Elizabeth A. Pickett, and Shannon J. Gremillion, Judges.

REVERSED AND REMANDED.

R. Chadwick Edwards, Jr. Edwards & Bellaire, L.L.C. P. O. Box 217 Abbeville, LA 70511-0217 (337) 893-2884 COUNSEL FOR PLAINTIFF/APPELLEE: Superior Shipyard & Fabrication, Inc.

Sean D. Kennedy I. Matthew Williamson MacHale A. Miller Miller & Williamson, L.L.C. 1100 Poydras St., Suite 3150 New Orleans, LA 70163-3150 (504) 525-9800 COUNSEL FOR DEFENDANT/APPELLANT: M & T Oceanographic Research, LLC GREMILLION, Judge.

Defendant/appellant, M&T Oceanographic Research, L.L.C. (M&T),

appeals the trial court’s rulings regarding the sequestration of the vessel, M/V

Blazing Seven, and its grant of summary judgment in favor of plaintiff/appellee,

Superior Shipyard & Fabrication, Inc. (Superior). For the following reasons, we

reverse the trial court’s rulings and remand for further proceedings.

FACTS

M&T is engaged in procuring charter vessels for academic research

conducted by such agencies as Louisiana State University, Texas A&M University,

and the National Oceanographic & Atmospheric Administration (NOAA). In the

course of its business, M&T contracted with SeaCrest Marine, L.L.C., owner of the

M/V Brody Paul, to charter the vessel for research. Thereafter, M&T contracted

with Superior to have an A-frame and boom built to allow the Brody Paul to tow

sonar arrays. In addition to fabricating the A-frame and boom, Superior did other

work that it maintains was necessary to mount the assembly and otherwise prepare

the vessel for its voyages. Superior also maintains that all of the work it performed

was authorized by Thomas Tunstall, an alleged principal of M&T.

M&T argues that the Brody Paul was already at Superior’s shipyard in

Golden Meadow, Louisiana, when it chartered the vessel and that work was

already being done on the vessel at SeaCrest’s direction. Therefore, M&T

maintains that much of the work for which it was invoiced by Superior was

actually SeaCrest’s responsibility. When it received the invoices, M&T contested

many of the charges, but paid those it did not. The total amount of the invoice was

$89,827.80. M&T paid $10,000.00 and contested the remainder.

The work done by Superior was performed between August 30, 2010, and

October 6, 2010. M&T maintains that the A-frame fabrication was ordered on August 30 and completed on September 1, after which the Brody Paul was taken

on a voyage on behalf of NOAA. That voyage was completed on September 7 and

the Brody Paul returned to Superior’s shipyard. M&T terminated its charter of the

Brody Paul in December 2010 and chartered the M/V Blazing Seven.

On February 18, 2011, Superior filed a Petition for Writ of Sequestration in

which it alleged that M&T removed the A-frame from the Brody Paul and installed

it on the Blazing Seven, and that pursuant to La.Civ.Code art. 3237 and La.Code

Civ.P. art. 3571, it possessed a privilege on the Blazing Seven. Therefore, Superior

alleged, it was appropriate for the Vermillion Parish Sheriff to seize the vessel and

hold it at its berth. 1 Superior posted a replevin bond of $200,000.00 with its

petition. The writ of sequestration was executed by the sheriff on February 18,

2011.

On February 22, 2011, M&T filed an emergency motion for expedited

hearing on its motion to dissolve the writ. A special fixing was assigned and the

matter heard on February 23 in Lafayette Parish, after which the trial court denied

the motion to dissolve the writ on the ground that while the privilege may not have

attached to the Blazing Seven, it did attach to the A-frame that was still mounted on

the vessel. On February 24, 2011, M&T filed a similar motion, which was denied

with the notation that the motion was rendered moot because the trial court had

heard the matter that day.

The back-and-forth over the sequestration of the vessel continued with

filings to dissolve the sequestration filed on February 25, February 28, and March

3, in which M&T moved to dissolve the sequestration by filing a bond in the

amount of $75,873.36.

1 The Blazing Seven was berthed at Intracoastal City Dry Dock in Abbeville, Louisiana, at the time the petition was filed. 2 Superior amended its petition on March 3 to allege that M&T and its

principals, Marcie Guilbeau and Thomas Tunstall, were indebted to it on open

account for $95,593.22 plus interest, attorney fees, and costs of court. The

following day, the trial court granted M&T’s last motion to dissolve the

sequestration. On March 17, 2011, M&T, Guilbeau, and Tunstall answered the

amended petition and denied their indebtedness to Superior. Tunstall and Guilbeau

also interposed peremptory exceptions of no cause of action. M&T also excepted

on the grounds that Superior’s petition failed to state a cause of action in open

account. Tunstall also denied that he was a member of M&T.

On March 24, 2011, Superior filed what it styled a partial motion for

summary judgment, but which prayed for judgment in the total amount of M&T’s

alleged indebtedness of $95,593.22, subject to credit for payments of $10,000.00

and $14,046.10, plus interest of 1.5% per month, reasonable attorney fees, and

costs of court. In support of its motion, Superior attached the affidavits of James

Paul Autin, a supervisor with Superior, who attested that all of the invoiced work

was authorized by Tunstall, and that M&T removed the Brodie Paul from

Superior’s shipyard on October 6, 2010. It also attached the affidavit of Scott

Michael Duet, the sales public relations officer for Superior, who testified that all

of Superior’s work was done pursuant to a written contract signed by Guilbeau on

behalf of M&T. That contract specified that Superior had a lien on the vessel for

all work performed, and that Guilbeau agreed to be personally liable for the debt.

It described the work as “FABRICATE & INSTALL A-FRAME AND BOOM

FOR SONAR AS DIRECTED.”

On March 28, 2011, M&T filed a notice of its intent to seek supervisory

writs from this court to review the trial court’s denial of its motion to dissolve the

sequestration. No application was ever filed, though. 3 M&T opposed Superior’s motion for summary judgment and attached the

unsworn statement of Tunstall. This opposition was filed on April 21. Also on

April 21, Superior filed a motion to strike Tunstall’s statement because it did not

constitute an affidavit as required in La.Code Civ.P. art. 966. M&T’s explained

that it was unable to obtain Tunstall’s sworn affidavit because Tunstall was at sea

on a charter for LSU and had no access to a notary public.

The motion to strike and the motion for summary judgment were heard on

April 25, 2011. The trial court struck Tunstall’s statement because it did not

constitute an affidavit and granted summary judgment. Counsel for M&T

requested that his client be granted a continuance to allow for Tunstall’s statement

to be notarized. The trial court indicated that had a motion for a continuance been

filed earlier, it might have considered that request, but under the circumstances it

was not inclined to grant the request. Summary judgment in the amounts prayed

for was granted.

After Tunstall returned from sea, he executed an actual affidavit. M&T

moved for new trial, which the trial court denied.

ASSIGNMENTS OF ERROR

1. The trial court committed legal error by issuing a writ of sequestration and compounded that error by failing to grant the motion to dissolve the writ of sequestration and seizure of the BLAZING SEVEN upon M&T demonstrating that La. Civil Code Art. 3237 did not confer on Superior the right to assert a lien against a vessel with which it had no contact and on which it had performed no work;

2. The trial court committed legal error by finding that Superior was entitled to a materialmen’s lien on the items installed aboard the BLAZING SEVEN and upholding the sequestration and seizure of the vessel on the basis of that erroneous finding;

3. The trial court abused its discretion by refusing to grant a brief continuance of the hearing on Superior’s motion for summary judgment to permit Mr. Tunstall to return to shore, appear before a

4 notary and sign the affidavit attached to M&T’s opposition memorandum;

4. The trial court committed reversible error by denying M&T’s motion for new trial on the granting [of] summary judgment in favor of Superior where the judgment clearly appeared contrary to Superior’s own evidence;

5. The trial court committed reversible error by denying M&T’s motion for new trial on the granting [of] summary judgment in favor of Superior where M&T obtained new evidence, the notary’s seal on Mr. Tunstall’s affidavit, that could not with due diligence have been obtained prior to the hearing on the motion for summary judgment due to Mr. Tunstall’s absence while working offshore; and

6. The trial court abused its discretion by denying M&T’s motion for new trial on the entry of summary judgment in favor of Superior after excluding Mr. Tunstall’s countervailing testimony inasmuch as the denial resulted in a miscarriage of justice and deprived M&T of an opportunity to present its substantive defenses and obtain a judgment on the merits rather than by what amounted to a default.

Superior has responded to the appeal and moved to strike portions of M&T’s

brief as making factual assertions unsupported by the record. Superior also moved

to strike any portion of M&T’s brief referencing the denial of M&T’s motion for

new trial as a non-appealable judgment. Further, Superior interposed exceptions of

res judicata, asserting that the judgment regarding the sequestration of the Blazing

Seven is final and cannot now be raised on appeal; no cause of action, arguing that

M&T’s answer to the amended petition failed to raise the sequestration as an issue;

no right of action, by which Superior maintains that M&T failed to plead

ownership or other interest by which it could be considered a proper party to

dispute the sequestration; and absence of justiciable interest, given that the writ of

sequestration has now been dissolved.

ANALYSIS

Superior’s Motion to Strike

Superior maintains that several of M&T’s factual assertions—whether the

invoiced work was performed at its request or at the request of SeaCrest, whether 5 the invoiced work was all performed on the Brody Paul, whether the hours

Superior billed were all necessitated by fabrication and installation of the A-frame

and boom or were caused by Superior’s errors that required having to repeat work

already done, and whether the hours billed were inflated—are derived solely from

the unsworn statement of Tunstall, which was stricken by the trial court in

response to Superior’s motion to strike.

Generally, even sworn affidavits constitute hearsay. Arkla, Inc. v. Maddox

and May Bros. Casing Serv., Inc., 624 So.2d 34 (La.App. 2 Cir. 1993). Exceptions

for their admissibility are found in various statutes, including La.Code Civ.P. arts.

966 and 967, which govern motions for summary judgment. Unsworn statements,

such as Tunstall’s, that are not affidavits nor are attached to an affidavit can be

given no weight in determining whether a genuine issue of material fact exists.

Reynolds v. City of Pineville, 03-77 (La.App. 3 Cir. 7/16/03), 851 So.2d 1245, writ

denied, 03-2718 (La. 12/19/03), 861 So.2d 569. We agree with Superior that

Tunstall’s statement should not be considered on appeal.

Superior’s Exceptions of Res judicata, No Cause of Action, No Right of Action, and Lack of Justiciable Issue

Superior maintains that the issue of the sequestration of the Blazing Star is

barred from consideration because M&T noticed its intent to apply for supervisory

writs and abandoned that effort. This abandonment, according to Superior,

subjects the issue of sequestration to issue preclusion under La.R.S. 13:4231.

Further, because M&T failed to raise the issue of the validity of the sequestration

or to assert a reconventional demand regarding the sequestration, “it failed to state

a cause of action for relief relating to the sequestration prior to the entry of a final

judgment.” Appellee’s Motion to Strike and Exceptions at ¶ 6. Superior also

argues that because M&T failed to plead ownership or exclusive control of the

6 Blazing Seven, it has no right to bring any action regarding the sequestration.

Lastly, Superior argues that because M&T ultimately succeeded in having the

sequestration dissolved, the matter of the sequestration no longer presents a

justiciable controversy

Sequestration is a provisional remedy under the Louisiana Code of Civil

Procedure, available to one claiming ownership or the right to possession of

property, or who claims a mortgage, security interest, lien, or privilege over that

property when the defendant has it within its power to conceal, dispose of, or waste

the property or revenues therefrom, or to remove the property from the parish

during the pendency of an action. La.Code Civ.P. art. 3571. An order denying

dissolution of a sequestration has long been recognized as interlocutory and not

subject to direct appeal. See Wolff v. McKinney, 21 La.Ann. 634 (1869). On the

basis of that proposition, it becomes apparent that M&T had two choices: it could

apply for writs or defer the issue for its appeal should it not prevail at the trial court.

The fact that M&T began the process of applying for writs is irrelevant. The

denial of the motion to dissolve the sequestration is interlocutory, and we have not

previously ruled on the propriety of that denial.

Superior’s contention that res judicata might bar M&T’s appeal carries no

merit. Res judicata bars the relitigation of causes of action in subsequent actions

that have been decided by valid and final judgments. La.R.S. 13:4231. Section

4231 specifically provides that appeal or other direct review is excepted from the

doctrine. And as we have already pointed out, the denial of M&T’s motion to

dissolve the sequestration is not a final judgment. The exception is denied.

The exception of no cause of action is a peremptory exception governed by

La.Code Civ.P. art. 927. It tests the legal sufficiency of the petition to determine

whether the law affords a remedy under the facts alleged. Moreno v. Entergy 7 Corp., 10-2268 (La. 2/18/11), 64 So.3d 761. Superior is correct in stating that

M&T asserted no reconventional demand from the sequestration. However, the

amending pleading by which Superior asserted its demand on open account was

filed the day before the trial court dissolved the sequestration, and M&T’s answer

to that was filed after the court dissolved the sequestration. In other words, for the

purposes of the amended petition, there was no allegation by Superior regarding

the sequestration and nothing that M&T was required to plead about the

sequestration. It simply was not an issue by that time. M&T’s failure to plead

anything in its answer to the amended petition does not affect its ability to

complain to this court about it. Superior’s exception of no cause of action is

denied.

Superior also excepts on the ground that M&T failed to plead ownership or

exclusive control of the Blazing Seven and, thus, failed to state a right to contest

the validity of the sequestration. There is a fundamental flaw in Superior’s

reasoning: Superior itself cited M&T as the sole defendant in its petition for writ

of sequestration. At the time it undertook to have the Blazing Seven sequestered,

Superior obviously felt that M&T had some basis to contest it or M&T would not

have been named the sole defendant.

Lastly, Superior excepts because the sequestration has been dissolved. Thus,

according to Superior, there is no real controversy before the court. The claim by

Superior is that the dissolution of the sequestration has been rendered moot. M&T

counters that it was required to post security of over $75,000.00, and that money is

still tied up awaiting the resolution of Superior’s action. An issue is moot when a

judgment or decree on the issue has been deprived of any practical significance,

been made purely abstract or academic, or “can serve no useful purpose and give

no practical relief or effect.” Cat’s Meow, Inc. v. City of New Orleans through 8 Dep’t. of Fin., 98-0601, p. 8 (La. 10/20/98), 720 So.2d 1186, 1193. In the present

matter, there is true practical significance to whether M&T should be required to

maintain the bond that secured the dissolution; accordingly, the matter is not moot.

Sequestration of the Blazing Seven

The sequestration of the Blazing Seven was invoked by Superior based upon

its claim to a privilege on the vessel under La.Civ.Code art. 3237, which

establishes and ranks privileges on the price of ships and other vessels for such

things as legal charges incurred to obtain the sale of the vessel, debts for pilotage,

wharfage, towage, maintenance, repairs, wages of the crew, and the like. The term

of the privilege created by Article 3237 is six months.

A separate statute establishing a general privilege over movables must also

be considered. Louisiana Revised Statute 9:4502 creates a privilege over movables,

including marine vessels, in favor of one engaged in the making or repair of marine

vessels. However, if the vessel is removed from the place of business where the

work was done, the privilege only lasts 120 days. La.R.S. 9:4502(A)(1). Because

of the timing of the work and the filing of the petition for writ of sequestration,

M&T argues that this privilege no longer attached.

The work was commenced by Superior on August 30 and ended on October

6, 2010. The petition for writ of sequestration was filed on February 18, 2011.

Accordingly, Superior’s privilege under La.R.S. 9:4502 lapsed on February 4,

2011, assuming arguendo it even attached to the Blazing Seven.

However, any privilege it may have enjoyed under La.Civ.Code art. 3237

would still have attached. The question regarding that privilege is whether it

properly attached to the Blazing Seven, which was not the vessel on which the

work was performed. The Civil Code provides us guidance.

9 Privileges are classified as either general, meaning they attach to all

movables in general, or special, meaning they only attach to certain movables.

La.Civ.Code arts. 3190, 3191. Louisiana Civil Code art. 3191 governs the general

privileges on all movables, which are paid in the following order:

1. Funeral charges.

2. Law charges.

3. Charges, of whatever nature, occasioned by the last sickness, concurrently among those to whom they are due.

4. The wages of servants for the year past, and so much as is due for the current year.

5. Supplies of provisions made to the debtor or his family, during the last six months, by retail dealers, such as bakers, butchers, grocers; and, during the last year, by keepers of boarding houses and taverns.

6. The salaries of clerks, secretaries, and other persons of that kind.

Louisiana Civil Code art. 3217(2) affords a special privilege in favor of “a

workman or artisan for the price of his labor, on the movable he has repaired or

made, if the thing continues still in his possession.” Article 3239 provides,

“Creditors having privileges on ships or other vessels, may pursue the vessel in the

possession of any person who has obtained it by virtue of a sale; in this case,

however, a distinction must be made between a forced and a voluntary sale.”

Further, La.Civ.Code art. 3237(8), on which Superior relies, establishes a privilege

on the price of ships for (emphasis added):

Sums due to sellers, to those who have furnished materials and to workmen employed in the construction, if the vessel has never made a voyage; and those due to creditors for supplies, labor, repairing, victuals, armament and equipment, previous to the departure of the ship, if she has already made a voyage.

10 The employment of the definite article “the” implies that the privilege was

intended to attach to the vessel on which materials were supplied or on which work

was performed. The privilege was intended to be special and not general.

The trial court, at the February 23 hearing on M&T’s motion to dissolve the

sequestration, quite correctly found that Superior did not have a privilege over the

Blazing Seven, but did enjoy a materialmen’s lien over the A-frame and boom. But

a materialmen’s lien is established by La.R.S. 9:4502, which, as we have already

discussed, had expired by the time the Blazing Seven was sequestered.

We conclude, therefore, that the trial court erred in not dissolving the

sequestration.

Superior’s Motion for Summary Judgment

An appellate court reviews a grant of summary judgment de novo, applying

the same standards as would a trial court. Schroeder v. Bd. of Sup=rs. of La. State

Univ., 591 So.2d 342 (La.1991). Summary judgment is governed by La.Code

Civ.P. arts. 966 and 967. Article 966 provides that while the burden of proving

entitlement to summary judgment rests with the mover, if the mover will not bear

the burden of proof at trial on the matter that is before the court on the motion for

summary judgment, the mover’s burden on the motion does not require him to

negate all essential facts of the adverse party’s claim, action or defense, but rather

to point out to the court that there is an absence of factual support for one or more

elements essential to the adverse party’s claim, action or defense. Thereafter, if the

adverse party fails to produce factual support sufficient to establish that he will be

able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of

material fact. Hardy v. Bowie, 98-2821 (La. 9/8/99), 744 So.2d 606.

Superior submitted affidavits in support, as we have already noted. It

maintains that these affidavits are sufficient to satisfy the essential elements in a 11 suit on open account. The plaintiff must prove the existence of an enforceable

contract for the extension of credit. Bieber-Guillory v. Aswell, 98-559 (La.App. 3

Cir. 12/30/98), 723 So.2d 1145. In Broussard v. Guilbeaux, 93-1353 (La.App. 3

Cir. 5/4/94), 640 So.2d 509, we stated that, in order to prove the existence of an

open account, a plaintiff must show that the record of the account was kept in the

course of business and it must corroborate the account’s accuracy with supporting

testimony. Thereafter, La.R.S. 9:2781 shifts the burden to the defendant to prove

that the account is inaccurate or that he is entitled to credit. Id.

Superior annexed the affidavits of Toby Philip Morvant, James Paul Autin,

and Scott Michael Duet. Morvant attested that he prepared the attached invoices,

which were prepared from daily summaries (also attached) that were kept in the

normal course of Superior’s business. Autin testified that he was the supervisor in

charge of the work performed on the Brody Paul, that all of the work reflected in

the invoices was performed at the request of Tunstall, and that he prepared the

daily summaries from which Morvant prepared the invoices. Duet testified that the

work on the Brody Paul reflected in the invoices was performed in accordance

with the written contract executed by Guilbeau and that neither Guilbeau nor

Tunstall had ever disputed the amount of the invoiced work until January 30, 2011.

These affidavits set forth the necessary elements of proof of an open-account

claim.

M&T sought to introduce the statement, entitled an affidavit, of Tunstall.

That statement was stricken by the trial court. Counsel for M&T then requested

that he be given a continuance of the hearing in order to obtain the sworn affidavit

of Tunstall, who was at sea at the time and had no access to a notary public. That

motion was denied. We generally review a refusal to grant a continuance to

12 determine whether the trial court abused its discretion. Moreno Props. Two, L.L.C.

v. Acadiana Inv. Group. L.L.C., 09-634 (La.App. 3 Cir. 12/9/09), 25 So.3d 232.

In Trahan v. State through Department of Health and Hospitals, 95-320

(La.App. 3 Cir. 10/4/95), 663 So.2d 242, we determined that the trial court did not

abuse its discretion in refusing to continue the hearing on a motion for summary

judgment until discovery was complete. We arrived at this conclusion by

analyzing the situation through the prism of La.Code Civ.P. articles 1601 and

1603, which govern trial continuances. Because of the length of time that passed

between the filing of suit and the motion for summary judgment and the fact that

plaintiffs had not propounded written discovery until five days before the hearing

on the motion, we held that the trial court did not abuse its discretion in denying

the continuance.

Louisiana Code of Civil Procedure Article 1602 governs peremptory

grounds for granting a continuance. If the party applying for a continuance “has

been unable, with the exercise of due diligence, to obtain evidence material to his

case,” or if “a material witness has absented himself without the contrivance of the

party,” the court has no discretion and must grant the continuance. Here, the

situation is complicated by virtue of the fact that the unavailable witness is a party.

Tunstall had, according to M&T’s counsel, been at sea since April 1, 2011. The

motion for summary judgment was filed on March 24, 2011, and the order fixing it

for hearing on April 25, 2011, was signed that same day.

We consider a number of factors relevant to our decision. The litigation was

initiated slightly over two months before the motion for summary judgment was

filed, and Superior’s amended pleading alleging M&T’s liability on open account

was filed just three weeks before the motion. The matter was set for hearing once

and had not previously been continued for any reason. The motion to strike the 13 statement of Tunstall was filed on April 21, 2011, the Thursday before the

Monday, April 25, hearing on Superior’s motion for summary judgment. Under

these circumstances, without regard to whether the continuance was mandated

under the peremptory grounds set forth in La.Code Civ.P. art. 1602 or

discretionary under art. 1601, we find the trial court erred in not allowing M&T the

continuance.

Because we find the trial court should have allowed M&T the opportunity to

obtain the notarized affidavit of Tunstall, we need not consider M&T’s remaining

assignments of error, as they are moot.

CONCLUSION

The privilege established in Superior’s favor for the work it performed on

the Brody Paul did not extend to the Blazing Seven. Because Superior waited more

than 120 days before seeking sequestration, its privilege over the A-frame and

boom had expired. The trial court erred in failing to dissolve the sequestration of

the Blazing Seven. M&T was prevented from obtaining the sworn affidavit of

Tunstall, who was at sea and unable to appear before a notary public. Given the

brief duration of the litigation in this matter, the trial court erred in not continuing

the hearing on Superior’s motion for summary judgment.

The judgment in favor of Superior is reversed. All costs of this appeal are

taxed to plaintiff/appellee, Superior Shipyard and Fabrication, Inc.