Stolthaven Houston, Inc. v. The Rachel B

The Rachel B (defendant) was a ship owned by Zarepta (defendant) and chartered by Norfolk L.P. The charter agreement was between Zarepta, Norfolk, and Hiltveit Associates (Hiltveit) (defendant), Norfolk’s managing agent. The charter agreement stated that it was a bareboat charter, provided full possession and control of the Rachel B to Norfolk, and assigned all responsibility for the navigation, supply, operation, fueling, and repair of the ship to Norfolk. Under the charter, Zarepta was entitled to inspect the ship, be informed of any changes to its business, and approve insured repairs. The Rachel B was berthed at the dock of Stolthaven Houston, Inc. (plaintiff). While the ship was berthed, it was detained by the United States Coast Guard and required to undergo mandatory repairs. These mandatory repairs prevented the Rachel B from leaving the berth as planned, and as a result Stolthaven Houston was unable to service its next scheduled customer. Stolthaven Houston filed a complaint against Zarepta and Hiltveit to recover the damages from its lost business. At the time of the complaint, the court was unaware that the bareboat charter was in place. The court issued an attachment against Zarepta’s assets. Zarepta sought to have the attachment order vacated on the grounds that there was no prima facie admiralty case against it under the terms of the bareboat charter.