Latest Decision in the O.W. Bunker Saga
In the latest decision in the O.W. Bunker saga, the U.S. Court of Appeals for the Eleventh Circuit, in an unpublished opinion dated May 10, 2018, affirmed a judgment of a U.S. District Court in Florida holding that a U.S. physical supplier of bunkers may recover payment from the vessel owner on the basis of quantum meruit where the vessel owner contracted with bunker trader O.W. Bunker, not the physical supplier. Martin Energy Services v. Boldini, (docket no. 17-10899).
The simplified factual background is that Boldini Ltd., the owner of the vessel BRAVANTE VIII, contracted with an O.W. Bunker entity for a supply of bunkers to the BRAVANTE VIII, with the supply to be provided at Panama City, Florida. Martin Energy, who had no contract with Boldini, physically supplied the bunkers to the BRAVANTE VIII but was not paid. Shortly thereafter, O.W. Bunker filed for bankruptcy. Martin Energy then sued Boldini alleging various theories including quantum meruit, and sought a Rule B attachment of the BRAVANTE IX, another vessel owned by Boldini. However, Boldini brought an interpleader claim forcing Martin Energy and ING Bank (O.W. Bunker’s secured lender and assignee of O.W. Bunker’s rights) to litigate the issue of who is entitled to be paid for the bunker supply. Pursuant to the interpleader procedure, Boldini deposited with the court’s registry the funds owed for the bunker supply and was discharged from further liability.
It appears that the BRAVANTE IX was never attached under Rule B, as Boldini’s interpleader with deposit of funds to the court’s registry rendered such a step moot.
The court, relying on Florida law in the absence of controlling federal maritime law, held that the elements of a quantum meruit claim were satisfied by Martin Energy: (1) Martin Energy conferred a benefit on Boldini by supplying the bunkers, (2) Boldini had knowledge of the benefit, (3) Boldini accepted or retained the benefit, and (4) the circumstances were such that it would be inequitable for Boldini to retain the benefit without paying its fair value. The court awarded Martin Energy $286,200 for the bunker supply and awarded ING Bank $3,900 for “the amount the relevant O.W. Bunker entities would have received as ‘resellers’ or ‘traders’ of the fuel.”
Since the parties conceded at oral argument before the Eleventh Circuit that there was no issue in the case concerning a maritime lien against the BRAVANTE VIII, the court did not address the issue of whether a maritime lien for the bunker supply should belong to the assignee of the bunker trader or to the U.S. physical supplier of the bunkers. Rather, the claim of the physical supplier (Martin Energy) was an in personam action directed at the owner of the vessel that was supplied with the bunkers.
[Lyons & Flood Note: Over the past few years many U.S. court decisions have held that the bunker trader, not the physical supplier, has a maritime lien against the vessel supplied with the bunkers. Martin Energy shows the potential for a physical supplier to try to make an end run around these decisions by asserting a quantum meruit claim against a vessel owner who has not paid anyone for the bunkers, and arguing that Rule B is available to obtain jurisdiction over the vessel owner and security for the claim. However, it should be noted that the Eleventh Circuit in Martin Energy did not expressly decide whether a quantum meruit claim can be the basis of a Rule B attachment.]
The Martin Energy decision can be accessed here.
If you have any comments or questions regarding this newsletter, please feel free to contact Randolph Donatelli at rdonatelli@lyons-flood.com or Martin West at mwest@lyons-flood.com.
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