HEIDMAR, INC. аnd Heidenreich Marine, Inc., as agents for Heidmar, Inc., Plaintiff-Appellant, v. ANOMINA RAVENNATE DI ARMAMENTO SP.A. OF RAVENNA and A.R.A. Anomina Ravennate Di Armamento Sp.A. in personam, and the M/V Pegasus Erre, Her Hull, Engines, Machinery, Tackle, Apparel, Furniture, etc., in rem, Defendants-Appellees.
No. 97-40709.
United States Court of Appeals, Fifth Circuit.
Jan. 15, 1998.
Before JOLLY, DAVIS and BARKSDALE, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
Appellants Heidmar, Inc. and Heidenreich Marine, Inc. (collectively, “Heidmar“) appeal an order of the district court vacating the attachment of a vessel, the M/V Pegasus Erre (“Pegasus Erre“), owned by appellees Anomina Ravennatе Di Armamento Sp.A. of Ravenna and A.R.A. Anomina Ravennate Di Armamento Sp.A. (collectively, “Ravennate“). For the reasons set out below, we conclude that the district court erred in vacating the attachment and remand for further proceedings.
I.
Heidmar is a Liberian corрoration with a principal place of business in Greenwich, Connecticut. Heidmar provides ocean transportation services, primarily transporting oil products for petroleum companies. Heidmar does not own any vessels; rather, it charters them as neеded from other entities. Ravennate is an
In May 1995, Heidmar negotiated a time charter party with Ravennate for the Pegasus Erre. Among other things, thе charter party required that the vessel be oil-tight, fit to carry crude petroleum and its products, and in good order and condition. The charter party also required Ravennate to have the vessel inspected and approved by various oil companies during the life of the charter party. The charter party provided that its terms would “be construed and the relations between the parties determined in accordance with the laws of England,” and that either party could elect to have any dispute arbitrated by a single arbitrator in Lоndon.
The Pegasus Erre was delivered to Heidmar in November 1995. In October 1996, however, Heidmar returned the Pegasus Erre to Ravennate, complaining that the vessel was unfit and had not met the terms of the charter party. Ravennate denied that it had breached the charter party, аnd countered that rather Heidmar had breached the charter party by returning the vessel before its expiration. Unable to resolve their dispute, the parties commenced arbitration proceedings in London. That arbitration is still pending.
On March 7, 1997, Heidmar filed suit against the Pegasus Erre, in rem, and against Ravennate, in personam, in the Southern District of Texas. Heidmar sought a judgment against Ravennate and the Pegasus Erre, as well as the arrest of the vessel pursuant to
Heidmar filed its complaint at approximately 3:45 p.m. CST.2 Its complaint was accоmpanied by a motion for an expedited hearing on its request for the arrest of the Pegasus Erre. Heidmar‘s counsel was advised that he should await the arrival of a magistrate judge who would conduct an ex parte hearing that afternoon. Meanwhile, at approximatеly 4:00 p.m. CST, Ravennate faxed a notification that it had appointed an agent for service of process in the Southern District of Texas to Heidmar‘s headquarters in Connecticut.3
At approximately 4:45 p.m. CST, a magistrate judge held a hearing on Heidmar‘s request for the arrest of the Pegasus Erre. Neither she nor Heidmar‘s counsel were aware of Ravennate‘s appointment of an agent for service of process. The magistrate judge granted Heidmar‘s request and issued a warrant for the arrest
On March 12, the Pegasus Erre filed a motion to vacate the arrest on the ground that English law, which governs the charter party, does not provide for a maritime lien for breach of a charter party.4 At a hearing that day, the magistratе judge denied its motion.
A few days later, the magistrate judge issued an order setting the amount of security for the release of the Pegasus Erre at $839,078 plus interest. Ravennate subsequently posted a bond in that amount and the Pegasus Erre was released.
After the magistrate judge denied the Pegasus Erre‘s motion to vacate the arrest, Ravennate and the Pegasus Erre filed a motion to dismiss which the district court converted into a motion for summary judgment. On May 15, 1997, the court ruled that Heidmar could not proceed against the Pegasus Erre in rem under Rule C because English law does not рrovide for a maritime lien for breach of a charter party. The court, however, temporarily converted the arrest of the vessel into an attachment under Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims pending further briefing on the issue of whether Ravеnnate could be “found within the district” for purposes of Rule B.5
Heidmar now appeals the court‘s order vacating the attachment.
II.
As a preliminаry matter, we must address Ravennate‘s contention that we lack jurisdiction over this interlocutory appeal. Generally, we may only hear appeals from final orders unless the district court has certified an order for appeal. See
III.
A.
The initial question presented in this appeal is one of timing: in order for a defendant to be “found within the district” for purposes of Rule B, must the defendant be present in the district at the time the complaint is filed, or may the defendant appear some time thereafter? Ravennate argues that a defendant can be found within the district if it is present at the time of seizure. Heidmar, on the other hand, argues that a defendant cannot be found within the district if it is not present at the time the plaintiff files its complaint.
Heidmar relies on LaBanca v. Ostermunchner, 664 F.2d 65 (5th Cir.1981). In determining whether attachment was appropriate under Rule B in that case, we stated: “The issue before us now is whether the [defendants] could be found within the Middle District of Florida at the time appellant filed this action.” Id. at 67 (emphasis added). Although Ravennаte correctly observes that we did not squarely address the issue of whether the defendant must be
First, thе text of Rule B itself indicates that, at the very least, courts do not look for presence at the time of attachment. Rule B provides that a party seeking attachment must submit along with its complaint an affidavit signed by the party or its attorney that, to the best of the affiant‘s knowledgе or belief, the defendant cannot be found within the district.
Second, we recognize that attachment serves two purposes: 1) securing the defendant‘s appearance and 2) assuring satisfaction in case the plaintiff‘s suit is successful. See Swift & Co. Packers v. Compania Colombiana Del Caribe, S.A., 339 U.S. 684, 693, 70 S.Ct. 861, 867, 94 L.Ed. 1206 (1950). Thus, the appearance of the defendant before seizure is effected does not entirely vitiate the justification for attachment. As the Supreme Court has observed, “an attachment is not dissolved by the subsequent appearance of respondent.” Id.
Third, wе believe that a time-of-filing rule furthers the interests of fairness and judicial economy. Testing for presence
Finally, the only other circuit court that has dealt with the issue befоre us affirmed an order of attachment because the defendant was not within the district at the time attachment was sought and granted. See Navieros Inter-Americanos, S.A. v. M/V Vasilia Express, 120 F.3d 304, 314-15 (1st Cir.1997) (observing that to hold otherwise would allow “a defendant who was otherwise safely outside the service power of the district court [to] effectively avoid Rule B attachment by waiting until after the plaintiff filed a Rule B motion to designate an agent for service“).
Accordingly, we hold that a defendant cannot be found within the district for purposes of Rule B if it is not present in the district at the time the complaint is filed. A defendant is рresent in the district if 1) the defendant can be found within the district in terms of jurisdiction, and 2) the defendant can be found within the district for service of process. LaBanca v. Ostermunchner, 664 F.2d 65, 67 (5th Cir.1981).
In this case, the record reflects that Ravennate could not be found within the Southern District of Texas for service of process аt the time Heidmar filed its complaint. Heidmar filed its
B.
We must next consider Ravennate‘s alternative argument that attachment is nevertheless inappropriate because Ravennate was present in the district at the time the district court converted the Rule C arrest into a Rule B attachment. Heidmar argues that we must reject this argument in light of Sembawang Shipyard, Ltd. v. Charger, Inc., 955 F.2d 983 (5th Cir.1992). In Sembawang, the plaintiff sought the arrest of a vessel under Rule C after the defendant breached a repair contract. The district court issued an arrest warrant and the vessel was seized. The defendant thereafter secured the release of the vessel by posting a bond. On appeal, we concluded that the arrest of the vessel was improper because the requirements of Rule C had not been met. See id. at 986-89. We determined, however, that the plaintiff should have proceeded under Rule B and that its failure to do so was merely a technical pleading error. See id. at 989. Because the defendant had not shown that it had been prejudiced by the plaintiff‘s error, we allowed the plaintiff to proceed against the bond as if the plaintiff had originally proceeded under Rule B. See id. In
Heidmar, too, should have proceeded under Rule B, and Ravennate has not alleged that it has suffered any prejudice from Heidmar‘s mistake in seeking arrest under Rule C instead of attachment under Rule B. Accordingly, we conclude that Heidmar may proceed as if it had originally brought this action under Rule B.
IV.
For the reasons set out above, we conclude that the district court erred in vacating the attachment of the Pegasus Erre. We therefore vacate that portion of its June 19, 1997 order vacating attachment and remаnd for further proceedings consistent with this opinion.
VACATED AND REMANDED.