Industrial Maritime Carriers, LLC v. Dantzler, Inc.
Filing
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ORDER granting 32 Motion for Summary Judgment. Signed by Judge Marcia G. Cooke on 10/15/2014. (tm)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 13-22655-Civ-COOKE/TORRES
INDUSTRIAL MARITIME
CARRIERS, LLC,
Plaintiff,
vs.
DANTZLER, INC.,
Defendant.
_______________________________/
ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
The resolution of this wrongful arrest of vessel action requires a sole determination:
whether Defendant Dantzler, Inc. (“Dantzler”) honestly sought and acted reasonably upon
the advice of counsel in good faith when it arrested a vessel in Brazil pursuant to a court
order issued by a competent Brazilian Court. If answered in the affirmative, Defendant’s
reliance on the advice of counsel is absolutely privileged, and bars the wrongful arrest and
tortious interference with contract and/or business relationships claims brought by Plaintiff
Industrial Maritime Carriers, LLC (“IMC”) against it.
Having reviewed Defendant Dantzler’s Motion for Summary Judgment (ECF No.
32), Plaintiff’s Memorandum of Law in Opposition (ECF No. 36), Defendant Dantzler’s
Reply Memorandum (ECF No. 37), the record, and the relevant legal authority, Defendant
carries its burden of demonstrating that there is no genuine issue of material fact disputing
that it honestly sought and reasonably relied on the advice of counsel. Accordingly,
Defendant is entitled to summary judgment.
I.
BACKGROUND
The underlying material facts set forth are undisputed. On September 5, 2007,
Dantzler was awarded a judgment by the Second Civil Court of the County of Itajaí, State
of Santa Catarina (“Brazilian Court”) against Monsted Chartering (“Monsted”) in the
amount of BRL $2.5 Million Reais (“Judgment”). To execute upon the Judgment against
Monsted, Brazilian counsel for Dantzler petitioned the Brazilian Court for an order
authorizing the arrest of a vessel operated by Monsted’s purported successor in interest,
Scan-Trans Holdings A/S (“Scan-Trans”). Paulo Madeira (“Madeira”), Brazilian counsel
for Dantzler, decided alone to petition the Brazilian Court to arrest a vessel of operated by
Monsted’s successor in interest.
Madeira submitted the Judgment against Monsted and a fleet list for Scan-Trans,
along with evidence he believed showed Scan-Trans was the successor in interest to
Monsted by virtue of a merger, to the Brazilian Court. Following a review of the same, the
Brazilian Court issued an Order on June 7, 2013 to seize the M/V Industrial Fighter
(“Industrial Fighter”) in the Port of Santos in Brazil, which the Brazilian Court selected
from the Scan-Trans fleet list. In accordance with Brazilian Court’s Order, Tiago S.
Demarque, legal counsel for Dantzler in Brazil, travelled to the Port of Santos in order to
effectuate the arrest of M/V Industrial Fighter, and on Tuesday, June 18, 2013, seized
Industrial Fighter as of 7:00 a.m.
The following day, on Wednesday, June 19, 20131, Industrial Fighter’s timecharterer, Plaintiff IMC, sent a letter to Dantzler via e-mail and certified U.S. Mail
informing Dantzler that “neither Monsted nor Scan-Trans, nor any of their successor in
interest, have any ownership interest in” Industrial Fighter, which was supported by the
enclosed reports from Lloyd’s Register, Equasis Ship Folder and Thomson Reuters Accelus
indicating that the registered owner of the M/V Industrial Fighter was a German entity, MS
“ERIS J” Schiffahrtsgessellschaft mbH & Co. KG (“Eris”). IMC also demanded that
Dantzler “immediately instruct its Brazilian attorneys to release” Industrial Fighter. The
next day, on Thursday, June 20, 2013, IMC sent a second letter via facsimile and certified
mail to Dantzler’s registered agent, which Dantzler’s President, Antonio Godinez
(“Godinez”) received. Godinez then consulted with legal counsel in the United States and
Brazil regarding the content of IMC’s correspondence. Dantzler took no action to confirm
or deny IMC’s claims that no alleged successor of Monsted had any ownership interest in
Industrial Fighter, and took no additional action besides seeking advice of counsel to
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Dantzler disputes that it received IMC’s correspondence on June 19, 2013 because the
correspondence was addressed to the attention of “Dantzler, Inc., Legal Department,” which
Dantzler does not have.
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procure the release Industrial Fighter.
It is clear that Godinez communicated with counsel because on the following day,
Friday, June 21, 2013, IMC sent a third letter, this time to Dantzler’s U.S. legal counsel
confirming that they had spoken, and again explaining that because Industrial Fighter is
owned by Eris, the seizure of Industrial Fighter is wrongful, and further demanding that
Dantzler “immediately instruct its Brazilian attorneys to release” Industrial Fighter.
Simultaneously, on Thursday, June 20, 2013, Eris, as owner of Industrial Fighter,
petitioned the Brazilian Court for release of Industrial Fighter. On the following business
day, Monday, June 24, 2013, based upon Eris’ motion for release, the Brazilian Court
ordered the release of Industrial Fighter, which was perfected on Tuesday, June 25, 2013 at
1:00 p.m.
II.
LEGAL STANDARD
Summary judgment “shall be granted if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that the moving party is entitled to a judgment
as a matter of law.” Allen v. Tyson Foods, Inc., 121 F.3d 642 (11th Cir. 1997) (quoting Fed.
R. Civ. P. 56(c)) (internal quotations omitted); Damon v. Fleming Supermarkets of Florida, Inc.,
196 F.3d 1354, 1358 (11th Cir. 1999). Thus, the entry of summary judgment is appropriate
“against a party who fails to make a showing sufficient to establish the existence of an
element essential to that party’s case, and on which that party will bear the burden of proof
at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
“The moving party bears the initial burden to show the district court, by reference to
materials on file, that there are no genuine issues of material fact that should be decided at
trial.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). “Only when that
burden has been met does the burden shift to the non-moving party to demonstrate that
there is indeed a material issue of fact that precludes summary judgment.” Id. Rule 56
“requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by
the ‘depositions, answers to interrogatories, and admissions on file,’ designate ‘specific facts
showing that there is a genuine issue for trial.”
Celotex, 477 U.S. at 324.
Thus, the
nonmoving party “may not rest upon the mere allegations or denials of his pleadings, but
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must set forth specific facts showing that there is a genuine issue for trial.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (internal quotation marks omitted).
“A factual dispute is genuine if the evidence is such that a reasonable jury could
return a verdict for the non-moving party.” Damon, 196 F.3d at 1358. When deciding
whether summary judgment is appropriate, “the evidence, and all inferences drawn from the
facts, must be viewed in the light most favorable to the non-moving party.” Bush v. Houston
County Commission, 414 F. App’x 264, 266 (11th Cir. 2011).
III.
DISCUSSION
General maritime law applies to this action because “[t]his [vessel] seizure was
sufficiently connected to traditional maritime activity to invoke the maritime jurisdiction of
the district court.” Marastro Compania Naviera, S.A. v. Canadian Mar. Carriers, Ltd., 959 F.2d
49, 52 (5th Cir. 1992) (citing Molett v. Penrod Drilling Co., 826 F.2d 1419 (5th Cir. 1987)).
“Maritime law controls the substantive law of maritime seizures and requires that damages
be awarded only on a showing of ‘bad faith, malice, or gross negligence.’ It also establishes
that ‘advice of competent counsel, honestly sought and acted upon in good faith is alone a
complete defense to an action for malicious prosecution.’”2 Marastro Compania Naviera, S.A.,
959 F.2d at 53 (quoting Frontera Fruit Co. v. Dowling, 91 F.2d 293, 297 (5th Cir. 1937)); see
also Furness Withy (Chartering), Inc., Panama v. World Energy Sys. Associates, Inc., 854 F.2d 410,
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Notwithstanding its holding that “Marastro acted in good faith and did not show a wanton
disregard for the rights of NAFED or Canadian and that neither NAFED nor Canadian is entitled to
damages for wrongful seizure,” the Marastro court awarded storage expenses to Canadian for
property under seizure pursuant to 28 U.S.C. § 1921(a)(1)(E). Marastro Compania Naviera, S.A.,
959 F.2d at 53-54. Plaintiff asserts that it is entitled to similar costs. See Pl.’s Mot. Leave File Supp.
Memo, ECF No. 45.
Federal law permits the Court assess and the U.S. Marshal to collect fees for “[t]he keeping of
attached property (including boats, vessels, or other property attached or libeled), actual expenses
incurred, such as storage, moving, boat hire, or other special transportation, watchmen's or keepers'
fees, insurance, and an hourly rate, including overtime, for each deputy marshal required for special
services, such as guarding, inventorying, and moving.” 28 U.S.C. § 1921(a)(1)(E). Assuming,
arguendo, that an award of such costs is recoverable by Plaintiff, such a determination would not
defeat the entry of summary judgment in favor of Defendant as to both counts of Plaintiff’s Original
Complaint for Declaratory Judgment and Damages. Plaintiff may move for costs, which Defendant
oppose, consistent with the applicable Federal and Local Rules.
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411 (11th Cir. 1988) (“It is an established principle of maritime law that one who suffers a
wrongful attachment may recover damages from the party who obtained the attachment,
provided he prove that such party acted in bad faith.”). Negligence will not suffice to
maintain an action for wrongful arrest; rather, the detainee must show that the arrest arose
from malice, bad faith, or reckless disregard of the other party’s legal rights. Coastal Barge
Corp. v. M/V Mar. Prosperity, 901 F. Supp. 325, 328 (M.D. Fla. 1994). This controlling legal
tenet, the parties do not dispute.
The record evidence demonstrates that Dantzler, honestly and in good faith, did
nothing except rely on the advice of counsel to discharge the duty for which Dantzler hired
counsel. Following six years of not collecting on the Judgment against Monsted, Brazilian
counsel for Dantzler continued seeking methods for collection, which is uncontroverted that
he was legally permitted to do. In doing so, based upon competent, albeit faulty evidence,
Madeira petitioned the Brazilian Court to arrest a vessel he thought to be operated by
Monsted’s successor in interest. Upon the receipt of notice that Dantzler had arrested
property not belonging to Monsted, Godinez immediately communicated with its United
States and Brazilian counsel that an error may have been made, and honestly sought advice
as to how to proceed. While IMC makes much of the fact that Dantzler had no input in the
process of collecting on the judgment against Monsted and did not instruct counsel on next
steps following the receipts of IMC’s communications, it was not required to do so given
that it was Dantzler who legitimately was seeking legal advice. Had Dantzler known how to
proceed legally, there would be no need to seek legal advice of counsel.
To defeat summary judgment, Plaintiff heavily relies upon Coastal Barge Corp. v. M/V
Mar. Prosperity, which held that the ship owner was liable for wrongful arrest of the vessel
where the ship owner brought a second action against the vessel without disclosing to the
court a promise not to re-arrest the vessel in further pursuit of claims for relief. 901 F. Supp.
325 (M.D. Fla. 1994). However, Plaintiff’s reliance is inapt in this matter where the material
facts in the determination of bad faith in Coastal Barge Corp. are absent here. The Coastal
Barge Corp. was influenced heavily by the fact that Coastal withheld from the warrant issuing
court that it promised not to re-arrest the vessel.
Coastal possessed knowledge which may well have precluded the arrest of the
Maritime Prosperity, were it supplied to the Court. Coastal consciously
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withheld that information, and the Court ordered the arrest of the ship. Once
the Court obtained the information, it quashed the arrest warrant. Whether or
not Plaintiff followed the advice of its attorneys, its omission exhibited a
reckless disregard for the truth, and that omission cannot be considered
negligent. Coastal may have a good faith basis for believing that the
consideration given in exchange for its promise was illusory. However, that
cannot translate into a good faith basis for causing the rearrest of the Maritime
Prosperity by the omission of a pertinent fact.
Coastal Barge Corp., 901 F. Supp. at 329. Here, there is no evidence that Dantzler withheld
any information from the Brazilian Court when it petitioned for the arrest of the Industrial
Fighter. Importantly, Dantzler did not receive the information regarding the improper arrest
until after the Brazilian Court issued the arrest order. That more and accurate information
could have been provided with additional diligence of Brazilian counsel would constitute
negligence, which, as enunciated in Coastal Barge Corp, is insufficient to maintain an action
for wrongful arrest.
Plaintiff’s urging of the applicability of Sea Star Line Caribbean, LLC v. M/V
SUNSHINE SPIRIT, Case No. 09-1152 (JAF), 2009 WL 3878246 (D.P.R. Nov. 13, 2009) is
similarly misplaced. In Sea Star Line Caribbean, LLC, the court held that a charterer acted
with malice or gross negligence in wrongfully arresting a vessel owner's vessel because it had
implied actual knowledge of a no liens clause in a demise charter that became a joint asset
of the charterer’s partnership with a sub-charterer. Here, there is no legal doctrine that
would impute actual knowledge of Industrial Fighter’s owner to Dantzler. The mere
proposition that Dantzler is a sophisticated business entity engaged in the trade of carriage
of goods by sea does not sully with the requisite bad faith or malice Dantzler’s reliance on
its counsel, who failed to ascertain the true owner of Industrial Fighter.
IV.
CONCLUSION
For the aforementioned reasons, Defendant Dantzler’s Motion for Summary
Judgment (ECF No. 32) is GRANTED. Plaintiff’s Original Complaint for Declaratory
Judgment and Damages (ECF No. 1) is DISMISSED with prejudice. Pursuant to Federal
Rule of Civil Procedure 58, a separate judgment shall issue contemporaneously.
Accordingly, it is ORDERED and ADJUDGED that the Defendant City of Miami
Gardens’ Motion for Summary Judgment (ECF No. 24) is GRANTED. Plaintiff’s
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Complaint for relation in violation of FLSA is DISMISSED.
DONE and ORDERED in Chambers at Miami, Florida, this 15th day of October
2014.
Copies furnished to:
Edwin G. Torres, U.S. Magistrate Judge
Counsel of record
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