Valero Marketing & Supply Co. v. M/V Almi Sun, IMO No. 9579535

160 F. Supp. 3d 973, 2016 A.M.C. 632, 2016 U.S. Dist. LEXIS 15086, 2016 WL 475905
CourtDistrict Court, E.D. Louisiana
DecidedFebruary 8, 2016
DocketCIVIL ACTION NO. 14-2712
StatusPublished
Cited by2 cases

This text of 160 F. Supp. 3d 973 (Valero Marketing & Supply Co. v. M/V Almi Sun, IMO No. 9579535) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Valero Marketing & Supply Co. v. M/V Almi Sun, IMO No. 9579535, 160 F. Supp. 3d 973, 2016 A.M.C. 632, 2016 U.S. Dist. LEXIS 15086, 2016 WL 475905 (E.D. La. 2016).

Opinion

ORDER

NANNETTE JOLIVETTE BROWN, UNITED STATES DISTRICT JUDGE

Before the Court is Verna Marine Co. Ltd.’s (“Verna”) “Cross Motion for Summary Judgment,”1 wherein it contends that [975]*975it is entitled to summary judgment in its favor finding that Plaintiff Valero Marketing and Supply Co. (“Valero”) does not have a maritime lien claim against the MTV Almi Sun, IMO No. 9579535 (“Vessel”).2 Having considered the motion, the memo-randa in support and in opposition, the oral arguments made at the hearing on the motion, the record, and the applicable law, the Court will grant the motion.

I. Background

A. Factual Background

This lawsuit arises out of a dispute wherein Valero, a marine fuel supplier, alleges that it supplied approximately 200 metric tons of marine bunker fuel to Vessel, owned by Verna Marine Co. Ltd. (“Verna”),3 on or about October 25, 2014 at Corpus Christi, Texas, for which it was never paid.4 Valero contends that it 'entered into a maritime contract for the supply of fuel bunkers to the Vessel (“Bunker Contract”) with O.W. Bunker USA, Inc. (“O.W. USA”), which Valero alleges acted as an agent or broker for the vessel.5 The Bunker Contract required payment for the bunkers within 30 calendar days of delivery and provided for the accrual of interest on any late payments.6 The Bunker Contract also contained a provision stating:

IT IS UNDERSTOOD THAT IN CONSIDERATION OF EXTENDING THE ABOVE CREDIT TERMS, VALERO IS ALSO RELYING ON THE CREDIT OF THE ABOVE VESSEL AS UNDER U.S. LAW, AND VALERO EXPRESSLY RETAINS ITS RIGHT OF MARITIME LIEN AGAINST THE VESSEL. ANY ATTEMPT TO IMPAIR OR LIMIT SAID LIEN AGAINST THE VESSEL SHALL NOT BE ALLOWED.7

In a practice common to the marine bunker fuel industry, O.W. Bunker Malta Ltd. (“O.W. Malta”) received requests from vessel owners or charterers, which it would then send to O.W. USA, who then selected a local fuel supplier — in this case, Valero.8 Valero delivered 199.98 of metric tons of fuel to the Vessel, and alleges that although the “authorized vessel officer” of the Vessel acknowledged receipt of the fuel and stamped Valero’s bunkering certificate,9 Valero has never received the $124,388.24 that it is owed for its services.10

After Valero supplied bunkers to the Vessel, the O.W. Bunker group of companies, including O.W. Malta and O.W. USA, underwent a complete collapse of their worldwide business operation.11 Valero contends that O.W. USA advised Valero that it would not make any of the required payments under their sales agreement, and that on November 13, 2014, O.W. USA and other related entities filed for Chapter 11 bankruptcy.12 O.W. Malta, from which the bunkers had been ordered in the first place, also declared bankruptcy at about the same time.13 The owners of the Vessel [976]*976then commenced arbitration proceedings in London against O.W. Malta and its alleged assignee bank, ING Bank, seeking a declaration of non-liability toward O.W. Malta/ING Bank with respect to their alleged claim for payment.14

B. Procedural Background

On November 26, 2014, Valero filed the instant suit and requested that this Court arrest the Vessel, which the Court granted on the same day.15 Valero and the Vessel’s owner then entered into a security agreement whereby a letter of undertaking was posted as the substitute res for Valero’s claim against the vessel.16 On April 10, 2015, Verna, appearing solely and restrictively as in rem claimant and owner of the Vessel, filed an answer.17 Valero filed a motion for summary judgment on June 5, 2015,18 which the Court denied on December 28, 2015.19 In that order, the Court concluded that, as a matter of law on the alleged undisputed facts presented, Valero did not have a maritime lien against the Vessel.20

While Valero’s motion v^as pending, Verna filed a cross motion for summary judgment on December 22, 2015.21 On December 29, 2015, Valero requested that the Court continue the submission deadline and extend trial and other deadlines in order to accommodate its intention to take a corporate deposition of Verna.22 The Court declined to continue the trial date, but granted a limited extension of the discovery deadline, and continued the submission date for the instant motion to February 3, 2016.23

On January 25, 2016, Valero filed a motion for reconsideration of the Court’s pri- or order denying summary judgment to Valero.24 The next day, on January 26, 2016, Valero filed its opposition to Verna’s cross motion for summary judgment.25 The Court held oral argument on the cross motion for summary judgment on February 3, 2016.26

II. Parties’ Arguments

A Verna’s Arguments in Support of Summary Judgment

In Verna’s cross motion for summary judgment, the Vessel owner incorporates its arguments that were made in opposition to Valero’s motion for summary judgment,27 and which the Court ultimately addressed in its order denying the motion.28 The motion also seeks to inform the Court of several updates that occurred in the months following the initial briefing. Namely, the motion states that the O.W. Bunker bankruptcy has resulted in a tide of litigation brought by both the ultimate suppliers of bunkers, such as Valero, and in some cases by trustees of the O.W. Bunker bankruptcy estates and/or ING Bank.29

Verna contends that concurrent arbitration in England will likely require Verna to [977]*977pay O.W. Malta for the bunkering fuel at issue, and therefore a ruling against it in this matter would expose Verna to double payment.30 Verna refers to The Res Cogi-tans, a recent decision by the England Court of Appeal, in which Verna was not involved, where the court held that a vessel owner was required to pay O.W. Malta for the fuel that was physically delivered to the vessel by an independent fuel supplier because title to the fuel remained with O.W. Malta.31

Verna also alleges that the Southern District of New York has recently recognized that the equities of the bankruptcy crisis favor vessel owners, citing a decision by Judge Valerie E. Caproni, who expressed concern that vessel owners would be put in a position of paying twice for the same fuel bunkers.32 Verna contends that Valero’s proper remedy is to make a claim against O.W. USA in the company’s bankruptcy proceedings, along with other creditors, rather than “jump the line” by asserting a maritime lien.33

Finally, Verna cites a decision by another section of the Eastern District of Louisiana, Martin Energy Services, L.L.C. v. M/V Bourbon Petrel,

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Bluebook (online)
160 F. Supp. 3d 973, 2016 A.M.C. 632, 2016 U.S. Dist. LEXIS 15086, 2016 WL 475905, Counsel Stack Legal Research, https://law.counselstack.com/opinion/valero-marketing-supply-co-v-mv-almi-sun-imo-no-9579535-laed-2016.