Nautor Swan Global Service, S.L. v. S/V RED SKY

UNITED STATES DISTRICT COURT
DISTRICT OF RHODE ISLAND
NAUTOR SWAN GLOBAL 	:
SERVICE, S.L. 	:
:
v. 	: 	C.A. No. 22-00386-JJM
:
S/V RED SKY, her engines, tackle, 	:
furniture, apparel, appurtenances, etc., in rem 	:
REPORT AND RECOMMENDATION
Lincoln D. Almond, United States Magistrate Judge
Pending before me for a report and recommendation (28 U.S.C. § 636(b)(1)(B)) is
Defendant S/V Red Sky’s Motion to Dismiss for Lack of Jurisdiction and to Vacate Arrest
of Vessel. (ECF No. 14). Plaintiff filed an Opposition. (ECF No. 15). Defendant filed a
Reply. 	(ECF No. 17). 	A hearing was held on November 21, 2022. 	For the following
reasons, I recommend that Defendant’s Motion be DENIED.
Background
Plaintiff recently initiated this admiralty action by Verified Complaint seeking to
enforce a maritime lien for necessaries against the S/V Red Sky (the “Vessel”) pursuant to
46 U.S.C. § 31342. Plaintiff alleges that it provided approximately 324,943.08 € in unpaid
necessaries to the Vessel. This unpaid debt is the subject of a Debt Recognition Agreement
dated September 20, 2021. (ECF No. 1-1). The parties to such Agreement agreed that the
debt is unpaid and owed to Plaintiff and that it is “corresponding to the materials, works
done and services provided in relation to the Vessel.” Id. Plaintiff also alleges that, after
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the Agreement was executed, it provided an additional 119,094.30 € in unpaid services to
the Vessel. (ECF No. 1-2). Plaintiff alleges that it is the holder of a maritime lien against
the Vessel for the total amount of these unpaid necessaries and seeks by this action to arrest
the Vessel and enforce its maritime lien.
Discussion
Defendant seeks dismissal for lack of admiralty subject matter jurisdiction. First, it
argues that the Debt Recognition Agreement is a land-based financial agreement between
two corporations (Plaintiff and Red Sky Investments, Ltd.), and thus is not a maritime
contract subject to this Court’s admiralty jurisdiction. 	Second, it argues that Plaintiff’s
secondary claim for unpaid necessaries after the date of the Agreement is not stated with
sufficient particularity. Neither of Defendant’s arguments are persuasive.
Defendant’s first argument is based on a flawed premise. 	This is not an action
brought for breach of a maritime contract. It is an action to enforce a maritime lien which
arises by operation of law under the Federal Maritime Lien Act, 46 U.S.C. § 31342. Thus,
whether or not the Debt Recognition Agreement is a maritime contract is irrelevant. 	See
Newport News Shipbuilding & Dry Dock Co. v. SS INDEPENDENCE, 872 F. Supp. 262,
266 (E.D. Va. 1994) (“An action to enforce a maritime lien in rem against a vessel is distinct
from an action for breach of contract brought against a shipowner in personam.”). Plaintiff
references the Agreement in its Verified Complaint as part of the factual history and
presumably in direct support of its argument that there is an acknowledged and unpaid debt
for necessaries provided to the Vessel which triggers a maritime lien.
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Further, there is nothing in the Agreement or the pleadings to suggest that Plaintiff
waived its maritime lien for unpaid necessaries. 	The law requires a clear and deliberate
intention to waive enforceable lien rights. See P.R. Ports Auth. v. BARGE KATY-B, 427
F.3d 93, 105 (1st Cir. 2005); Newport News, 872 F. Supp. at 267. In an attempt to avoid this
heavy burden, Defendant asserts that it is not claiming waiver, and argues instead that
Plaintiff “substituted” the Agreement for its maritime lien and “transformed” the debt into a
financial instrument with more favorable terms. (ECF No. 17 at pp. 1-2). However, despite
the creative wordsmithing, Defendant is essentially arguing that Plaintiff gave up or waived
its maritime lien when it entered into the Agreement, and there is simply no basis upon which
to find such a waiver in this case. The Agreement is completely silent on the issue of liens
or waivers. 	It simply acknowledges the unpaid debt for necessaries and contains an
installment payment schedule. 	The fact that the Agreement also includes a personal
guarantee provision does not reasonably infer that Plaintiff accepted those agreements as a
waiver and substitution of its maritime lien security against the Vessel. In fact, the timing
suggests that the Agreement may have been negotiated to induce Plaintiff to provide further
necessaries to the Vessel despite the prior unpaid invoices.
Defendant’s final argument warrants little discussion. Since the Verified Complaint,
as a whole, clearly states a valid claim to enforce a maritime lien, the argument that
approximately 25% of the claimed debt for necessaries is not stated with sufficient
particularity is not grounds to dismiss the entire action and vacate the arrest of the Vessel.
Plaintiff has sufficiently supported its claim at this stage of the proceedings, and Defendant
can garner further details as to some of the charges through the discovery process.
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Conclusion
For the foregoing reasons, I recommend that Defendant’s Motion to Dismiss For
Lack of Jurisdiction and to Vacate Arrest of Vessel (ECF No. 14) be DENIED.
Any objection to this Report and Recommendation must be specific and must be filed
with the Clerk of the Court within fourteen days of its receipt. See Fed. R. Civ. P. 72(b); LR
Cv 72. Failure to file specific objections in a timely manner constitutes waiver of the right
to review by the District Court and the right to appeal the District Court’s decision. 	See
United States v. Valencia-Copete, 792 F.2d 4, 6 (1 st Cir. 1986); Park Motor Mart, Inc. v.
Ford Motor Co., 616 F.2d 603, 605 (1st Cir. 1980).
/s/ 	Lincoln D. Almond
LINCOLN D. ALMOND
United States Magistrate Judge
November 21, 2022
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