DHL Project & Chartering Limited v. Newlead Holding LTD et al

Filing 42

ORDER denying 27 Motion for Reconsideration re 24 Order on Motion to Vacate, Order on Motion to Strike. DHL shall show cause by no later than Friday, September 29, 2017, why DHL's claims against Defendants Newlead Shipping S.A., Newlead Castellano Ltd., Grand Venetico Inc., and Newlead Venetico Ltd. should not be dismissed for lack of jurisdiction. Signed by Chief Judge J. Randal Hall on 9/13/17. (loh)

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IN THE UNITED FOR THE STATES DISTRICT COURT SOUTHERN DISTRICT OF GEORGIA SAVANNAH DIVISION IN ADMIRALTY DHL PROJECT & CHARTERING * LIMITED, * * Plaintiff, * * NEWLEAD HOLDINGS LTD.; * NEWLEAD BULKERS 416-123 * NEWLEAD SHIPPING S.A.; CV * S.A.; NEWLEAD CASTELLANO LTD.; * GRAND VENETICO INC.; * and NEWLEAD VENETICO LTD., * • Defendants. * ORDER Before the Court Limited's ("DHL") Attachment and 27.) After a to is Plaintiff Motion for DHL Reconsideration Reinstate Attachment in I. May complaint in directing the 25, 2016, the present issuance of Chartering Vacatur filings of (Doc. and law and DHL's motion is DENIED. BACKGROUND1 upon of & Reduced Amount. careful review of the relevant the evidence properly before the Court, On Project the filing of DHL's action, the Court entered process for maritime verified an order attachment and 1 The Court has assumed the parties' familiarity with the facts and procedural history of this case. previous Orders. (See, A more thorough summary is available in the Court's e.g. , Docs. 24 & 38/ Ray Capital Inc., et al. v. M/V Newlead Castellano, IMO No. 9686338, (the "Ray Action"), Docs. 94 & 116.) et al., Case No. 4:16-CV-093 (S.D. Ga.) garnishment of the M/V Newlead Castellano, "Vessel") . Inc., (Docs. 1, 2.) On Oppenheim Capital Ltd., Shiptrade Limited DHL's 14, 9686338 2016, Ray Cheyenne Holdings Ltd., (collectively, a motion to vacate October IMO No. (the Capital and Labroy the "Interested Parties") attachment pursuant to Rule filed E(4) (f) of the Supplemental Rules for Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure, which the Court granted on November 18, In addition to vacating the directing Order 2016. (Docs. the 16, issuance attachment and garnishment of to show cause by no present (Doc. case 24, motion at for 15.) Vessel, mention. there December Court's have 5, 5, 2016, 2016 martitime lack of DHL as to why the jurisdiction. filed entered DHL's its present attachment several developments 1, DHL Industry into a Fuel 2016, Group "confidential Co., worthy and Ltd. of of non-party (the settlement "Sub- agreement" DHL is obligated to the Sub-Charterer in 2017, wherein of been the amount of $250,000.00.2 on February 22, vacatur December on inter alia, Judgment," December of the Court ordered DHL be dismissed for the Materials Charterer") whereby, to First, Zheijiang process reconsideration. Subsequent the On of the Vessel, later than should not 24.) it (Doc. 27-1, M 14(c), 24.) Second, DHL filed a "Motion for Entry of Final states 2 DHL has not provided a copy of its Charterer for this Court's review. that it settlement has entered into a agreement with the Sub- settlement agreement Agreement") regards whereby, with to the dated February Defendant claims inter alia, Newlead made NCL is 17, 2017 (the Castellano by DHL in obligated to "Settlement Ltd. the ("NCL") instant DHL in the with action, amount of $2,371,491.15 and has consented to the personal jurisdiction of this 33; Agreement, Court.3 (Doc. Capital Inc., et al., et al. Case No. 118-1 at 4-14, at S[ 1-2, summary v. see 2.) & 2(C); Third, judgment in on favor Action and ordered NCL Settlement M/V Newlead Castellano, 4:16-CV-093 SISI 2 also (S.D. March 9686338, (the "Ray Action"), Power Decl., of the to Ga.) IMO No. Ray 20, Ray Action, 2017, Interested the Doc. Court Parties show cause as to why its Doc. 118-1 granted in the Ray counterclaim for wrongful arrest against the Interested Parties should not be dismissed. (Ray Action, DHL filed a includes On March 30, 2017, renewed motion to intervene in the Ray Action, which a response Doc. to 116.) the Fourth, Court's order originally directed at NCL as well as a reconsider its grant of summary judgment (Ray Action, Doc. 118.) 6, States of Appeals Circuit the United issued its mandate Court show cause request that the Court Interested Parties. 2017, to vacating this in favor Finally, for Court's the of the on July Eleventh Order denying 3 Further, as part of the Settlement Agreement, NCL has allegedly assigned its ownership interest in the Vessel's substitute res to DHL (up to the amount of $2,371,491.15 plus any costs and fees incurred by DHL in the present action and the Ray Action), as well as all of NCL's rights, defenses, and counterclaims with respect to the claims asserted by the Interested Parties in the Ray Action. (See Settlement Agreement, 1 2(B).) DHL's intervention in the Ray Action and "remand[ed] [this Court] status Doc. of to proceed as the case." it sees (Ray Action, fit in light Doc. 126, at the case to of the 3; current Ray Action, 127.) II. A party may seek to DISCUSSION alter or amend a judgment in a civil case within twenty-eight days after the entry of the judgment.4 Fed. R. Civ. P. 59(e). Because reconsideration of a judgment after its entry is an extraordinary remedy which should be used sparingly, a convincing nature decision. Bostic at *1 used (S.D. "to evidence movant Ga. must to v. that could forth induce Astrue, July 31, relitigate set the old have court No. 2012). or to law A Rule 59(e) raise raised of a reverse l:12-CV-082, matters, been facts 2012 strongly its WL prior 3113942, motion may not be argument prior to or the present entry of judgment,'' as "the only grounds for granting a Rule 59(e) motion are newly-discovered fact." Arthur v. evidence King, 500 or F.3d manifest 1335, errors 1343 of (11th law Cir. or 2007) 4 A Court may also grant relief from a judgment or order pursuant to Rule 60(b). See Fed. R. Civ. P. 60(b). "The first five provisions of Rule 60(b) provide relief in specific circumstances, including in the event of mistake, fraud, or newly discovered evidence." Aldana v. Del Monte Fresh Produce N.A., Inc., 741 F.3d 1349, 1355 (11th Cir. 2014). When these specific circumstances are lacking, however, "Rule 60(b)(6) provides a catch-all, authorizing a court to grant relief from a judgment for xany other reason that justifies relief.'" Id^_ (quoting Fed. R. Civ. P. 60(b)(6)). To prevail under Rule 60(b)(6), however, a party "must demonstrate that circumstances are sufficiently extraordinary to warrant relief." (internal quotations and citations omitted). the Id. (quotations rehashing omitted). arguments "Rule already 59(e) is rejected by refuting the court's prior decision." at *1 not a the Bostic, court 686 (M.D. Here, Ga. DHL evidence, Inc., for or 2012 WL (quoting Wendy's Int'l v. Nu-Cape Const., 680, vehicle for 3113942, 169 F.R.D. 1996)). has newly law or any alter, attachment the of "new the DHL relief from and its Vessel developments of fact" bases Rederi AS Fla. 2001) Rule B facts Supp. M/Y known 146 validity Dream, determining issue, at the time 1307 there (S.D. June an was 26, the Ltd. Ohio v. Amazonica, Ala. of Pty. reasonable res. Because DHL relies 27, at 5-6), concern Dannebrog 1307, 1311 (S.D. writ of attachment under a inquiry must P.S. burden focus (citing IntTl, see is on Ltd., also W. the Bulk 762 F. 834554, at challenges the the for issuing on Transamerica 1997 WL ("When a defendant grounds of 2d 97-0556-CB-S, the all they are not See attachment." v. DHL's Supp. 1991))); No. 1997) attachment, F. court's of vacating attachment. whether "[t]he (Australia), 1302, (S.D. prove True (In Leasing Inc. *2 the Order which (see Doc. reinstating should Carriers upon for v. the or substitute post-attachment developments valid fact, discovered that would justify a finding that the Court should amend, grant of demonstrate reason otherwise errors to other or manifest failed plaintiff the writ. to In making its determination on this issue, the Court's inquiry must focus on the (citations v. facts known omitted)); but at c. f. Mar Caribe de Navigacion, Fla. Nov. 17, post-arrest 1999) the Linea C.A., (courts may hearing that was time of the Naviera de attachment." Cabotaje, 1999 WL 33218589, consider not evidence presented at C.A. at *4 (M.D. presented at time of original arrest to determine whether reasonable grounds existed to arrest vessel) . Furthermore, finding that admiralty DHL claim thinly-veiled vacating to against Court the demonstrate refute and to Doc. has that Defendants to attachment (Compare the assertion failed attempt its arguments. Indeed, DHL's 21, is the rehash at nothing DHL's complaint alleges a direct - erred prima more in facie than reasoning for Doc. 27, at 5-6.) thoroughly considered, as a previously-rejected with rejected the very argument DHL now raises; its valid Court's 8-10; already heard, a Court and while DHL argues that opposed to contingent - breach of contract claim against the relevant Defendants,5 the 5 (See Doc. 27, at 3 ("In [the] vacatur order, this Court reasoned that DHL had not pleaded a valid prima facie admiralty claim against the Defendants, because DHL's indemnity claims were contingent' upon a finding that DHL was liable to [the Sub-Charterer] and because DHL Ahas not alleged that Defendants have actually breached their agreement with DHL.' [(Doc. 24, at 11.)] But this analysis fails to consider the entirety of DHL's complaint: DHL has alleged a separate breach of contract by the Newlead Defendants pursuant to its own charter party, based on the Defendants' failure to provide a seaworthy vessel. [ (]See [Doc] 1 at 6-7. [)]"); see also Doc. 27, at 6 ("Simply, DHL adequately alleged that the Defendants had a duty to provide a seaworthy vessel, of the breach vessel . . . due .").) to these and that the cracking of the hull and detention structural deficiencies was clear evidence of paragraphs of its complaint on which it relies6 for such argument are the state exact only a paragraphs that this contingent breach of Court contract attachment under Rule B is not available.7 15.) In until a sum, because plaintiff has "a claim actually for made explicitly for to which (See Doc. 24, at 9- indemnity a claim found does payment to not the accrue third 6 See Doc. 1, II 21 ("DHL has a contingent indemnity claim . . . for breach of the charter party in connection with the deficiencies found with the vessel [M/V Newlead Venetico] . . . ." (emphasis added))/ id. I 24 ("If there is a finding in the sub-charter arbitration [between DHL and the Sub-Charterer in Hong Kong] that there was a personal want of due diligence to make the vessel seaworthy on the part of Owners for which DHL is responsible, Newlead Shipping, Newlead Bulkers, and Grand Venetico Inc. will have breached their obligations to DHL with respect to seaworthiness and maintenance, which caused the detention of the vessel [M/V Newlead Venetico] in Australia, the delays in the delivery of cargo, and the losses claimed by [the SubCharterer]." (emphasis added)); id. I 25 (" . . . Grand Venetico Inc., and/or Newlead Shipping and Newlead Bulkers have contingent joint and several liability to DHL." (emphasis added))/ id. I 26 (" . . . Newlead Shipping, Newlead Bulker and/or Newlead Holdings have contingent joint and several liability for the contractual breach as successors-in-interest to Grand Venetico Inc." (emphasis added))/ see also id. I 20 ("Upon a finding by the Hong Kong arbitration panel that there was a personal want of due diligence on the part of [Defendants] Newlead Shipping and/or Grand Venetico, Inc. to make the [M/V] Newlead Venetico seaworthy, for which DHL is responsible, DHL will be liable to [the Sub-Charterer] and will thereafter pursue its. claim against Newlead Shipping and/or Grand Venetico Inc. in London Arbitration for indemnity pursuant to the time charter." (emphasis added))/ id. I 71 ("The underlying dispute arising from the charter party, is based on an indemnity claim for an arbitration award which may be issued against DHL in Hong Kong arbitration." (emphasis added)).) Notably, while DHL baldly states in a footnote to its complaint that it has "direct contract claims against Newlead Shipping and/or Grand Venetico as ^owner(s)' pursuant to the charter party," DHL never provides any explanation as to the factual or legal basis for these "direct" claims. (See id. I 21 n.3.) 7 DHL also takes issue with the Court's observations that: (a) DHL did not initiate the London arbitration proceedings against Defendants Grand Veneticp Inc. and Newlead Shipping S.A. until after having obtained attachment of the Vessel in the present action/ and (b) the London arbitration proceedings do not include NCL as a party thereto. Neither of these observations, however, is essential to the Court's paramount conclusion that DHL's primary claim for breach of contract was, at the time of attachment, a prospective contingent indemnity claim for which attachment under Rule B was not available. (See Doc. 24, at 12-13.) Rather, these observations were simply additional examples of the contingent nature of Plaintiff's claims. party" under English law Sub-Charterer against claims against Tradeline vacatur at was proper. 293 F. under English third Shipping law Co. , it to the claim is a relevant in because a DHL's DHL's 2008) had also Blue F.3d 488, 495 that claim was yet to incur v. Grand Cir. 2013) (2d substantive law defines the prima facie should By contrast, procedural v. Corp. Whale 722 SPA (upholding indemnity plaintiff the of Navigazione see inquiry is (2d plaintiff's substantive admiralty claim Cir. Assessing law. contract vacatur and 36, 37 payment to the attachment, Pi remedy. substantive a of sought unripe ("Admiralty law provides the remedy; right breach Bottiglieri where party); Dev. were App'x attachment direct time See of to a the Defendants LLC, liability China alleged Defendants attachment unripe nor and DHL had not made be governed whether question, the validity a of by a the claim sounds answer to which supplies the source of a court's subject matter jurisdiction."). DHL therefore has failed to demonstrate any error in the Court's Order vacating attachment that would affect that ruling or otherwise necessitate its reversal.9 8 The charter party contract which forms the basis of DHL's breach of contract claim against Defendants is governed by English law. (See Doc. 1-1, at 8-9 ("This Charter Party shall be governed by and construed in accordance with English Law.").) 9 To the extent that it may hereafter seek to attach the Vessel's substitute res on the basis of the facts as they presently exist, this remedy is not available because of DHL's settlement of its breach of contract and alter-ego claim with NCL; by way of the Settlement Agreement, DHL no longer has an active case or controversy against the owner of the Vessel's substitute res, NCL. See Yunker v. Allianceone Receivables Mgmt. , 8 Inc., 701 F.3d 369, 372 III. Upon the foregoing and due Reconsideration Attachment Court CONCLUSION of Vacatur in Reduced Amount continues to have consideration, of Attachment (doc. 27) serious jurisdiction over the present case. cause by claims no later against Castellano than Friday, Defendants Ltd., and Inc., 29, Cir. 2012) ("A case becomes moot when it no the its DHL shall show 2017, why S.A., DHL's Newlead and Newlead Venetico should not be dismissed for lack of jurisdiction (llth regarding Shipping for Reinstate Moreover, Accordingly, September Motion to is DENIED. concerns Newlead Grand Venetico DHL's Ltd. 10 longer presents a live controversy with respect to which the court can give meaningful relief. As a general principle, settlement between the parties in litigation renders the case moot." (internal quotations and citations omitted)); U.S. Fire Ins. Co. v. Caulkins Indiantown Citrus Co., 931 F.2d 744, 747 (llth Cir. 1991) ("[T]he controversy must be Alivef throughout the case; federal jurisdiction is not created by a previously existing dispute." (citations omitted)). Moreover, even were DHL to allege that NCL breached the Settlement Agreement, DHL could not seek attachment under Rule B because such a claim would not sound in admiralty. See D'Amico Dry Ltd. v. Primera Mar. (Hellas) Ltd., 756 F.3d 151, 159 (2d Cir. 2014) ("[A]n agreement to pay to resolve a maritime claim is not itself a maritime contract and does not subsequent suit claim."); Consol. on that Bathurst, agreement confer admiralty jurisdiction over a to resolve the underlying maritime Ltd. v. Rederiaktiebolaget Gustaf Erikson, 645 F. Supp. 884, 886 (S.D. Fla. 1986) ("An agreement to satisfy an obligation arising from a maritime tort or contract is not a maritime contract, and an action for breach of such a contract is not an admiralty claim."). 10 DHL initiated this action on May 25, 2016. (See Doc. 1.) To date, however, Plaintiff has only purported to serve Defendants Newlead Holdings Ltd., Newlead Bulkers S.A., and NCL. (See Docs. 26, 28, and 29.) While the 90-day deadline for service imposed by Federal Rule of Civil Procedure 4(m) does not apply to service on foreign defendants, a plaintiff is still bound to "deploy reasonable due diligence in attempting service of process on a foreign defendant." See Brown v. True & Assocs., Ltd., Case No. 4:12-CV-233, 2012 WL 5364346, at *1 n.l (S.D. Ga. Oct. 22, 2012) (citing Lozano v. Bosdet, 693 F.3d, 485 (5th Cir. 2012)). Moreover, because DHL asserts that it has settled it claims against NCL, its standing to maintain an action against NCL appears lacking. at 747. See Yunker, 701 F.3d at 372; U.S. Fire Ins. Co., 931 F.2d ORDER ENTERED at Augusta, Georgia, this September, /^^~ day of 2017. :f JUDGE IITED STATES DISTRICT COURT DISTRICT 10 OF GEORGIA

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