Ray Capital Inc et al v. M/V Newlead Castellano et al

Filing 151

ORDER GRANTING 148 MOTION Administrative Relief. IT IS FURTHER ORDERED that 146 Order on Motion to Amend/Correct, 116 Order on Motion for Summary Judgment, 147 Clerk's Judgment, 129 Judgment, and 128 Order on Motion for Rec onsideration are hereby AMENDED to reflect that the judgment entered in favor of Plaintiffs in this matter was against NCL and the proceeds from the interlocutory sale of the Vessel, but not DHL or the vessel itself. IT IS FURTHER ORDERED that 146 Order on Motion to Amend/Correct and 147 Clerk's Judgment are hereby AMENDED to reflect that DHL was added as an additional defendant in this matter by way of the Reconsideration Order. The Clerk is DIRECTED to issue and Amended Judgment in accordance with this order. Signed by Chief Judge J. Randal Hall on 4/19/2018. (pts)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
IN ADNIRALTY

RAY CAPITAL INC.; OPPENHEIM

*

CAPITAL LTD.; CHEYENNE HOLDINGS *

LTD.; and LABROY SHIPTRADE
LIMITED,

*
*
*

Plaintiffs,

*
*

V.

*

CV 416-093

*

M/V NEWLEAD CASTELLANO, IMG NO. *

9686338, her engines, tackle,
equipment, furniture,
appurtenances, etc., in rem;

*
*
*

NEWLEAD CASTELLANO LTD.; and
DHL PROJECT & CHARTERING LTD.,

*
*
*

Defendants.

*

ORDER

Before

relief.

the

Court

(Doc. 148.)

is

Plaintiffs'

motion

for

administrative

The instant action arises out of several

financing transactions and related financing instriiments entered
into
IMO

between
No.

Plaintiffs

9686338

(the

and defendants
''Vessel")

and

M/V

Newlead

Newlead

Castellano,

Castellano

("NCL", and together with the Vessel, "Defendants").

20,

2017,

the

Court

entered

Plaintiffs against Defendants.
Order").)

summary

judgment

in

Ltd.

On March

favor

of

(Doc. 116 (the "Summary Judgment

Before entering final judgment in Plaintiffs' favor,

however,

the

Court

ordered

Plaintiffs

to

''perfect

the

record

with admissible evidence with regards to the balance of their

claims against Defendants through [March 20, 2017], including an
itemization of the principal, interest, and costs and expenses

each Plaintiff claims iinder its respective instruments" by no
later than March 30, 2017.

(Id. at 17.)

The Court also ordered

Defendants to show cause, by no later than March 30, 2017, as to

why their counterclaim for wrongful arrest against Plaintiffs
should not

be

(Id. at 18.)

dismissed

with

prejudice and

this

case closed.

On March 21, 2017, Plaintiffs filed a supplemental

brief outlining the balance of their claims against Defendants
and evidence in support thereof.

(Doc. 117.)

On March

30,

2017, DHL Project & Chartering Limited ("DHL") filed a motion
wherein it: (i) renewed its prior attempts to intervene in the
present

action;

(ii)

sought

reconsideration

of

the

grant

of

summary judgment in favor of Plaintiffs; and (iii) purported to
respond

to

Defendants.

the

Court's

order

to

show

cause

directed

towards

(Doc. 118.)

On September 13, 2017, the Court entered an Order whereby
it,

inter

alia:

intervention

to

pursuant

Rule

to

defendant);

the

(ii)

(iii) directed

(i)

granted

extent

25(c)

it

was

(thereby

denied

DHL's

the Clerk

to

DHL's
a

motion

adding

motion

renewed

for

enter final

DHL

motion

for

as

substitution

an

additional

reconsideration;
judgment

for

in favor

and
of

Plaintiffs and close this case.

Order").)

(Doc. 128 (the ''Reconsideration

Notably, in adding DHL as an additional defendant in

this matter, the Court stated that it did so "with the express

understanding that DHL's rights and obligations upon being added
to this case are derived from those assigned to it by NCL and

nothing more."^
of

(Id. at 18, 32 n. 25.)

That same day, the Clerk

this Court entered judgment in favor

Doc. 129-2 (the "Original Judgment").)

DHL

appealed

the

Reconsideration

of Plaintiffs.

On September 27, 2017,

Order

to

the

Court of Appeals for the Eleventh Circuit.

subsequently
aforementioned

moved

for

appeal

the

and

the

voluntary
Eleventh

appeal as dismissed on February 27, 2018.
On

March

9,

2018,

Plaintiffs

(See

filed

United

States

(Doc. 130.)

dismissal
Circuit

of

entered

DHL

its
the

(See Doc. 142.)
a

motion

to

amend,

seeking to amend the Original Judgment so as "to reflect

the

monies recovered by Plaintiff[s] and to quantify the attorney's
fees incurred by Plaintiff[s] so that they may also be added to
the [Original J]udgment."

(Doc. 143, at 1.)

On March 19, 2018,

^ In the Reconsideration Order, the Court denied DHL's motions to intervene in
this matter on the grounds that DHL was not a party to the financing
instruments that formed the basis of Plaintiffs' claims against Defendants
and

DHL

had

failed

to

demonstrate

that

it

otherwise

had

a

"sufficient

interest relating to the property or transaction which is the subject of the
present action." (See Doc. 128, at 14-15.) Because DHL claimed that it was

"assignee of NCL's defenses and counterclaims and ownership interest in the
Proceeds" from the Court's interlocutory sale of the Vessel, however, the
Court construed DHL's request to intervene as a request to substitute
pursuant to Federal Rule of Civil Procedure 25(c) and added DHL as an
additional defendant.
(Id. at 16-18 (internal quotations and alterations
omitted) (citing Doc. 118, at 6-7; and Doc. 118-1 at 4-14, 3 2(B)).)

the Court: (i) adopted the Eleventh Circuit's Mandate dismissing
DHL's appeal as
case;

and

(iii)

the Order of
instructed

this Court; (ii) reopened

''any

party

seeking

to

this

oppose

or

otherwise respond to Plaintiffs' motion to amend the [Original]
Judgment" to "file their response thereto by Friday, March 30,
2018."

(Doc. 145 (emphasis omitted).)

Neither Defendants nor

DHL filed a response to Plaintiffs' motion to amend.

On April

9, 2018, the Court entered an Order granting in part and denying

in

part

Plaintiffs' motion

to

amend,

whereby

the

Court:

(i)

granted Plaintiffs' request to amend the Original Judgment to
reflect

the

Plaintiffs'
"Amendment

amended

partial
request

for

Order").)

judgment

satisfaction

in

thereof;

attorney's

That

favor

same

of

fees.

day,

and

(ii)

(Doc.

the

Plaintiffs.

Clerk

(Doc.

denied

146

(the

entered

147

an

(the

"Amended Judgment").)

On April 10, 2018, Plaintiffs filed their instant motion
for

administrative

relief.

(Doc.

148.)

Therein,

Plaintiffs

point out that - despite the Court adding DHL as an additional
defendant in this action by way of the Reconsideration Order DHL does not appear in the caption of either the Amendment Order
or

the Amended Judgment.

147.)

(See Doc. 148; see also Docs. 146,

Accordingly, Plaintiffs seek to amend the case captions

of the Amendment Order and the Amended Judgment to reflect that
DHL was added as a defendant in

this matter.

(See Doc. 148.)

In

its

response

in

opposition

to

Plaintiffs'

motion

for

administrative relief, DHL states that it has "no objection to

the Court amending any pleading as required to properly reflect
the

status

extent

of

that

the

parties in

Plaintiffs

seek

the case," but objects "to

a

change

in

the

caption

on

the
[the

Amended Judgment] in order to create confusion as to whom the
judgment has been issued against."

(Doc. 149, at 5.)

Indeed,

DHL asserts that the Summary Judgment Order and Reconsideration
Order "are clear in

against

the

awarding

Newlead

judgment in

Defendants,

favor of

specifically

Plaintiffs

[NCL]

and

the

Vessel," that "DHL was added to this action as defendant merely

to the extent of the rights and obligations assigned to it"; and
that NCL "did not assign

DHL

its

liabilities."

(Id.

at

5-6

(emphasis omitted).)

Here,

DHL's

the

Court

response

in

administrative relief.

Order,

the

concurs

with

opposition

the

to

reasoning set forth in

Plaintiffs'

motion

for

To the extent that the Summary Judgment

Reconsideration

Order,

the

Original

Judgment,

the

Amendment Order, and the Amended Judgment fail to reflect that
the

judgment

entered

in

favor

of

Plaintiffs

was

against

Defendants alone,^ that failure was an oversight by the Court.

^ i.e., against the Vessel and NCL, but not DHL (except to the extent of any
interest claimed by DHL in the funds
registry in relation to this matter).

previously-held by the Court in

its

Additionally,

in

reviewing

the

aforementioned

orders

and

judgments, the Court has discovered sua sponte another oversight
committed by the Court, namely the entry of judgment against the

Vessel

directly.

On

July 14,

2016,

pursuant

to

Plaintiffs'

request, the Court directed the United States Marshal for the
Southern District of Georgia, Savannah Division, to conduct an
interlocutory sale of the Vessel.

(See Docs. 28, 48, 65.)

The

Vessel was subsequently sold to a third party in accordance with
the Court's directions and Plaintiffs requested that the sale be
confirmed.

(See Docs. 66, 68,

70.)

On August 16, 2016,

the

Court entered an Order confirming the interlocutory sale of the

Vessel

to

Order").)

the

third

party.

(See

Doc.

75

(the

"Confirmation

In the Confirmation Order, the Court explicitly held

that "any claims in the Vessel existing on the date [of entry of
the Confirmation Order] are terminated and the Vessel is sold
free and clear of such claims pursuant to 46 U.S.C. § 31326(a)."

(Id.

at

7.)

Further,

the

Court

held

that

"[t]hose

claims

terminated pursuant to [the Confirmation Order] shall attach in
the same amount and in accordance with their priorities to the

proceeds of the [interlocutory] sale [of the Vessel] as provided
in 46 U.S.C. § 31326(b), and shall have the priority established
under

subsections

46

U.S.C.

§

31326(b)(1)

and

(2)."

(Id.)

Therefore, it was inappropriate for this Court to grant summary

judgment - and direct the entry of judgment - against the Vessel

directly; rather, the Court should have granted summary judgment
- and directed the entry of judgment - against the proceeds from

the interlocutory sale of the Vessel.

See 46 U.S.C. § 31326.

Notably, the Clerk previously distributed to Plaintiffs from the
Court's registry the remaining proceeds from the interlocutory
sale of

also

the Vessel

Doc.

143,

to

at

Plaintiffs.

2-3

(See Doc. 146,

(stating

that

the

at 5; see

Plaintiffs

have

recovered $6,682,868.88 from the Court's registry).)

Accordingly,
60(a),

IT

IS

pursuant to

HEREBY

administrative

relief

ORDERED

the

that

Reconsideration

ORDERED
(Doc.

Summary

Order

Federal Rule

(doc.

that

148)

is

Civil

Plaintiffs'
GRANTED.

Judgment
128),

of

the

Order

motion

IT

(doc.

Original

Procedure

IS

for

FURTHER

116),

Judgment

the
(doc.

129-2), the Amendment Order (doc. 146), and the Amended Judgment

(doc.

147)

are

hereby

AMENDED

to

reflect

that

the

judgment

entered in favor of Plaintiffs in this matter was against NCL

and the proceeds from the interlocutory sale of the Vessel, but
not DHL or

the Vessel itself.

IT IS FURTHER ORDERED that

the

Amendment Order and the Amended Judgment are hereby amended to
reflect that DHL was added as an additional defendant in

matter

by way of

the Reconsideration Order.

this

The Clerk SHALL

ISSUE an amended judgment in this matter that: (i) identifies
DHL in the case caption; and (ii) enters judgment in the amount
of $1,068,390.12 in favor of Plaintiff Labroy Shiptrade Limited

and against Defendant Newlead Castellano Ltd. and the proceeds
from the interlocutory sale of the M/V Newlead Castellano, IMO
No. 9686338, alone.

ORDER

ENTERED

The case shall remain CLOSED.

at

Augusta,

Georgia,

this

day

of

April, 2018.

HALL, CHIEF JUDGE

UNITEp' STATES DISTRICT COURT
5UTHERN DISTRICT OF GEORGIA