Trailer Bridge, Incorporated v. Louisiana International Marine, L.L.C.

Holding: The Fifth Circuit affirmed the district court's judgment that a valid maritime lien existed for unpaid towage services and that the no-lien clause did not bar the lien because the supplier lacked actual knowledge of it prior to contracting.
Standard: CIMLA actual knowledge requirement
Vote: Panel Decision
Practical effect: Suppliers of towage and other necessaries can enforce maritime liens against vessels even if a charter party contains a no-lien clause, provided the supplier did not have actual knowledge of that clause before the contract was executed.

The Fifth Circuit affirmed a district court judgment confirming a maritime lien for unpaid towage services against two barges. The court held that the lien supplier lacked actual knowledge of a no-lien clause at the time the contract was finalized.

Background

Trailer Bridge chartered two barges to Work Cat, which included a no-lien clause. Work Cat then chartered tugboats from Louisiana International Marine to tow the barges. Work Cat failed to pay LIM for towage services and filed for bankruptcy. LIM asserted a maritime lien against the barges. Trailer Bridge sued to declare the barges free of the lien, arguing the no-lien clause barred it and that LIM relied solely on Work Cat’s credit.

The court’s reasoning

The court applied the Commercial Instruments and Maritime Liens Act, which presumes charterer agents have authority to procure necessaries. The court found LIM provided towage, a statutory necessary, to a vessel. Trailer Bridge failed to prove LIM deliberately intended to look solely to Work Cat’s credit. Regarding the no-lien clause, the court held that actual knowledge must precede the agreement. LIM received the charter containing the clause after the tug charter was finalized, so the clause did not bar the lien. The court also affirmed the exclusion of fuel and lubricant costs from the lien value, as these were provided to the tug, not the barge.

Because LIM lacked actual knowledge of the no-lien provision at the time it contracted to provide towage services, a maritime lien attached to the barges.

Opinion at 2

What it means going forward

Suppliers of towage and other necessaries can enforce maritime liens against vessels even if a charter party contains a no-lien clause, provided the supplier did not have actual knowledge of that clause before the contract was executed.