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Caterpillar Financial Services Corp. v. Charter Connection Corp.

August 6, 2008


The opinion of the court was delivered by: M. James Lorenz, United States District Court Judge


In this admiralty action, Plaintiff Caterpillar Financial Corporation ("Caterpillar") filed a motion to dismiss A.K. Suda, Inc.'s ("Suda") first cause of action for a maritime lien against the vessel Belle Amie. For the reasons stated below, Caterpillar's motion to dismiss is treated as a motion for summary adjudication. Suda opposed the motion and filed a cross-motion for summary adjudication of the same cause of action. For the reasons which follow, Caterpillar's motion is GRANTED and Suda's motion is DENIED.

Caterpillar brought this action pursuant to 46 U.S.C. §§ 31322 and 31325 against the Belle Amie in rem, Charter Connection Corporation ("Charter") in personam, and guarantors Pete and Pamela Terrebonne*fn1 in personam to collect amounts due under its preferred ship mortgage. Suda intervened in the action alleging it had a maritime lien for necessaries. Suda claims the lien is based on the engineering and design services it performed for the Belle Amie prior to Caterpillar's mortgage, and seeks to recover over $479,000 plus interest, costs and fees against the same vessel.

Caterpillar argues the maritime lien claim should be dismissed for lack of admiralty jurisdiction because the subject matter of Suda's underlying contract was to provide design and engineering services for construction of a vessel and not to a completed vessel, and was therefore not a maritime contract. In its opposition and in support of its own motion for summary adjudication, Suda argues that admiralty jurisdiction exists for its maritime lien claim and that the claim should be summarily adjudicated in its favor because it meets the requirements for a statutory maritime lien.

Although Caterpillar's motion was filed as a motion to dismiss, it is converted to a motion for summary adjudication. Caterpillar's motion does not rest on the allegations in Suda's complaint, but instead relies on the declaration of Michael E. Thompson and attached exhibits to argue for dismissal. See Fed. R. Civ. Proc. 12(d). Because Caterpillar's motion was supported by an affidavit and Suda cross-moved for summary adjudication of the same claim, both parties had a "reasonable opportunity to present all the material that is pertinent to the motion." See id.

Furthermore, where, as here, "jurisdiction is so intertwined with the merits that its resolution depends on the resolution of the merits, the trial court should employ the standard applicable to a motion for summary judgment." Ventura Packers, Inc. v. F/V Jeanine Kathleen, 305 F.3d 913, 922 (9th Cir. 2002). "[T]he Maritime Lien Act enumerates the elements required both a valid necessaries lien and the right to enforce that lien in admiralty." Id. Where the Maritime Lien Act inextricably intertwines the questions of subject matter jurisdiction and the claim for relief, both questions are considered according to the standards applicable on summary judgment. See id.

Federal Rule of Civil Procedure 56(c) empowers the court to enter summary judgment on factually unsupported claims or defenses, and thereby "secure the just, speedy and inexpensive determination of every action." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 327 (1986). Summary judgment is appropriate if "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 919 (9th Cir. 2001).

In this case, the parties filed cross-motions regarding Suda's claim for a maritime lien. The mere fact the parties filed cross-motions "does not necessarily mean there are no disputed issues of material fact and does not necessarily permit the judge to render judgment in favor of one side or the other." Starsky v. Williams, 512 F.2d 109, 112 (9th Cir. 1975). "[E]ach motion must be considered on its own merits." Fair Hous. Council of Riverside County, Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001).

Each moving party bears the initial burden of demonstrating the absence of a "genuine issue of material fact for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). A fact is material if it could affect the outcome of the suit under the governing substantive law. Id. at 248. A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

Suda bears the burden of proof at trial on its maritime lien claim. Accordingly, on Caterpillar's motion, Caterpillar as the moving party can meet its burden by pointing out the absence of evidence from the nonmoving party. It need not disprove Suda's case. See Celotex, 477 U.S. at 325; see also Garneau v. City of Seattle, 147 F.3d 802, 807 (9th Cir. 1998).

In contrast, Suda bears a heavier burden as the moving party on its own cross-motion. "When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." C.A.R. Transp. Brokerage Co., Inc. v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted).

If the movant meets his burden, the burden shifts to the non-movant to show summary adjudication is not appropriate. Celotex, 477 U.S. at 317, 324. The non-movant does not meet this burden by showing "some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The non-movant must go beyond the pleadings to designate specific facts showing there are genuine factual issues which "can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson, 477 U.S. at 250.

In considering the motion, the non-movant's evidence is to be believed and all justifiable inferences are to be drawn in his favor. Anderson, 477 U.S. at 255. Determinations regarding credibility, the weighing of evidence, and the drawing of legitimate inferences are jury functions, and are not appropriate for resolution by the court on a summary judgment motion. Id. Furthermore, on cross-motions, the court must consider evidence submitted in support of and in opposition to both motions before ruling on either one. Fair Hous. Council, 249 F.3d at 1136.

The substantive statute underlying Suda's claim is the Maritime Lien Act. Under the act, "a person (1) providing necessaries (2) to a vessel (3) on the order of the owner or a person authorized by the owner has a necessaries lien on the vessel and may bring a civil action in rem to enforce that lien." Ventura Packers, 305 F.3d at 922; see also 46 U.S.C. ยง 31342. ...

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