D'Amico Dry Limited v. Primera Maritime (Hellas) Limited

Filing 124

MEMORANDUM OPINION AND ORDER re: 117 MOTION for Reconsideration re; 116 Clerk's Judgment filed by D'Amico Dry Limited. The plaintiff's motion under Federal Rules of Civil Procedure 60(b) and 59(e) is denied. The Clerk is directed to close Docket No. 117. (Signed by Judge John G. Koeltl on 7/28/2011) (mro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
────────────────────────────────────
D’AMICO DRY LIMITED,
Plaintiff,

09 Civ. 7840 (JGK)

- against PRIMERA MARITIME (HELLAS) LIMITED,
ET AL.,

MEMORANDUM OPINION
AND ORDER

Defendants.
────────────────────────────────────
JOHN G. KOELTL, District Judge:
The plaintiff, D’Amico Dry Limited (“D’Amico”) brought this
action against Primera Maritime (Hellas) Limited (“Primera”) to
enforce a money judgment issued by the English High Court of
Justice.

Primera moved to dismiss the complaint pursuant to

Federal Rule of Civil Procedure 12(b)(1) for lack of subject
matter jurisdiction, and on March 26, 2011, the Court granted
the motion.

D’Amico has now filed a motion for reconsideration

pursuant to Federal Rules of Civil Procedure 59(e) and 60(b).
For the reasons discussed below, the motion is denied.

I.

On October 13, 2010, the Court held an evidentiary hearing
to resolve disputed issues of fact relevant to its jurisdiction.
See Alliance for Envtl. Renewal, Inc. v. Pyramid Crossgates Co.,

436 F.3d 82, 83-84 (2d Cir. 2006).1

After the hearing, the Court

found the following facts, none of which is contested:

D’Amico

is a charterer of dry bulk cargo vessels in international trade.
Most of its vessels are committed to use by its customers on a
long-term basis, but D’Amico also employs its vessels on the
short-term “spot” market.

In addition, D’Amico sometimes enters

into derivative financial contracts called “Forward Freight
Agreements” (“FFAs”) to hedge its chartering business.

FFAs are

agreements “to pay the difference between a price agreed today
and the future price of moving a product from one location to
another, or for the future price of hiring a ship over a period
of time.”

Brave Bulk Transp. Ltd. v. Spot On Shipping Ltd., 07

Civ. 4546, 2007 WL 3255823, at *2 (S.D.N.Y. Oct. 30, 2007)
(internal quotation marks omitted).
At the beginning of September 2008, D’Amico’s fleet was
underemployed, and therefore it determined to enter into an FFA
to hedge against the risk that it would not be able to employ
profitably the remainder of its ships.

On September 2, 2008,

D’Amico agreed to sell, and Primera agreed to buy, an FFA
dependent upon monthly average freight rates for the routes and
types of vessels D’Amico employed.

D’Amico so structured the

FFA because it wanted to hedge against fluctuations in the

1

The factual background of this case is set forth in greater
detail in the Court’s Opinion and Order dated March 26, 2011.
2

market for the physical trade in which it was engaged.

If the

market for chartered vessels declined, Primera would owe money
to D’Amico under the FFA; if it improved, D’Amico would owe
Primera money.
By early 2009, the charter market had declined
precipitously, and D’Amico invoiced Primera for $795,963.20,
pursuant to the terms of the FFA, on January 30, 2009.

Primera

refused to pay the invoice, and D’Amico brought suit to enforce
the parties’ agreement in the High Court of Justice, Queen’s
Bench Division, Commercial Court.

A judgment was ultimately

entered against Primera in the amount of $1,766,278.54 (“the
English Judgment”).

II.

D’Amico brought suit in this Court seeking to enforce the
English Judgment.

Primera moved to dismiss the action pursuant

to Federal Rule of Civil Procedure 12(b)(1) for lack of subject
matter jurisdiction.

On December 20, 2010, the Court granted

D’Amico leave to amend the complaint to add a number of
additional defendants, and deemed the motion to dismiss as
directed against the amended complaint (“the Complaint”).

By

Opinion and Order dated March 26, 2011 (“the Order”), the Court
granted the motion to dismiss, and closed the case.

3

In ruling on the motion to dismiss, the Court noted that
there was no diversity jurisdiction, and no treaty providing
jurisdiction over the cause of action; nor did the Full Faith
and Credit Clause of Article IV § 1 of the United States
Constitution apply, because the judgment to be enforced had been
rendered by a foreign court.

See Aetna Life Ins. Co. v.

Tremblay, 223 U.S. 185, 190 (1912); Att’y Gen. of Can. v. R.J.
Reynolds Tobacco Holdings, Inc., 268 F.3d 103, 126 n.29 (2d Cir.
2001).

The only basis on which jurisdiction was asserted was

the “general principle,” grounded in concerns of comity and
apparently predating the nation’s founding, empowering admiralty
courts to enforce the decrees of foreign admiralty courts.

See

Penhallow v. Doane, 3 U.S. (3 Dall.) 54, 97, 118 (1795); see
also Int’l Sea Food, Ltd. v. M/V Campeche, 566 F.2d 482, 484
(5th Cir. 1978).
The Court thus asked whether the English Judgment was
rendered in an exercise of the admiralty jurisdiction of the
English court – whether the claim adjudicated was, under English
law, maritime in nature.

See Victrix S.S. Co., S.A. v. Salen

Dry Cargo A.B., 825 F.2d 709, 713 (2d Cir. 1987) (“[A]n
admiralty court has jurisdiction of a claim to enforce a foreign
judgment that is itself based on a maritime claim.”).

The Court

examined the relevant jurisdictional statutes and case law, and
determined that the breach of contract claim brought by D’Amico

4

was not, under English law, maritime in nature.

As a result,

the Court ruled that the English Judgment had not been rendered
in an exercise of the English court’s admiralty jurisdiction,
and could not be enforced pursuant to the “general principle”
articulated by the Supreme Court in Penhallow.

There being no

other basis upon which jurisdiction was asserted, the Court
granted the motion to dismiss for lack of subject matter
jurisdiction under Federal Rule of Civil Procedure 12(b)(1).

III.

While there are no formal guidelines, courts have
recognized four basic grounds on which a judgment may be altered
or amended pursuant to Rule 59(e): the need to prevent manifest
injustice, the need to correct errors of law or fact, the
availability of new evidence, or an intervening change in
controlling law.

See Virgin Atl. Airways, Ltd. v. Nat’l

Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992).
Reconsideration of a court’s prior order “is an extraordinary
remedy to be employed sparingly” in the interest of finality.
In re Health Mgmt. Sys., Inc. Sec. Litig., 113 F. Supp. 2d 613,
614 (S.D.N.Y. 2000) (citation omitted).

In a motion for

reconsideration, a party may not “advance new facts, issues or
arguments not previously presented to the Court.”

5

Torres v.

Carry, 672 F. Supp. 2d 346, 348 (S.D.N.Y. 2009) (citation
omitted).

An identical standard applies to a motion to alter or

amend a judgment under Local Civil Rule 6.3.

See In re

Evergreen Mut. Funds Fee Litig., 240 F.R.D. 115, 117 (S.D.N.Y.
2007).
“There is a considerable overlap between Rule 59(e) and
Rule 60.”

11 Charles Alan Wright, Arthur R. Miller & Mary Kay

Kane, Federal Practice & Procedure § 2817 (2d ed. 1995).

Rule

60(b) sets forth the grounds by which a court, in its
discretion, can provide relief from a final judgment or order.
See Fed. R. Civ. P. 60(b); Nemaizer v. Baker, 793 F.2d 58, 61
(2d Cir. 1986).

Rule 60(b) allows a court to relieve a party

from a final judgment for, among other reasons, “(1) mistake,
inadvertence, surprise, or excusable neglect;” “(2) newly
discovered evidence that, with reasonable diligence, could not
have been discovered in time to move for a new trial under Rule
59(b);” or “(6) any other reason that justifies relief.”
R. Civ. P. 60(b).

Fed.

Rule 60(b) exists to strike a balance between

“serving the ends of justice and preserving the finality of
judgments.”

While Rule 60(b) should be read broadly to do

“substantial justice,” final judgments should not be reopened
casually.

Id.

Relief under Rule 60(b) should be granted “only

upon a showing of exceptional circumstances.”

Id.; see also

Minima v. N.Y. City Dep’t of Homeless Servs., No. 09 Civ. 1027,

6

2010 WL 176829, at *1 (S.D.N.Y. Jan. 19, 2010); Meteor AG v.
Fed. Express Corp., No. 08 Civ. 3773, 2009 WL 3853802, at *3
(S.D.N.Y. Nov. 18, 2009).
In its motion for reconsideration, D’Amico does not dispute
the Court’s determination that the English Judgment was not
rendered in an exercise of the High Court’s admiralty
jurisdiction.

Rather, it argues that the Court applied the

wrong legal standard in holding that it had subject matter
jurisdiction to enforce the English Judgment only if that
judgment adjudicated a claim that was within the maritime
jurisdiction of the English court.

The plaintiff acknowledges

that this was precisely the position it took in its papers in
opposition to the motion to dismiss.

However, it now claims

that it was mistakenly led to adopt this position based on
“misleading dicta” in Victrix, 825 F.2d 709.

Pl’s Mem. of L. in

Sup. of Mot. for Recons. (“Pl. Mem.”) at 3.2

Specifically, it

claims that Victrix’s statement that “an admiralty court has
jurisdiction of a claim to enforce a foreign judgment that is
itself based on a maritime claim” applies only to in rem claims
brought against property, and not to in personam claims brought
against defendants.

Pl. Mem. at 3-4.

2

It further argues that

Because the Court finds that full consideration of all of the
plaintiff’s arguments would not alter the result in this case,
there is no need to decide whether the plaintiff’s professed
failure to construe correctly the case law would constitute
“excusable neglect,” as the plaintiff claims. Pl. Mem. at 4.
7

Hilton v. Guyot, 159 U.S. 113 (1895) provides the correct
standard for an in personam suit to enforce a foreign judgment.
Pl. Mem. at 5.

Hilton provides generally that a foreign

judgment may be recognized and enforced where there has been an
opportunity for a full and fair trial abroad before a court of
competent jurisdiction.

See id. at 202.

The plaintiff offers no evidence for a jurisdictional
distinction between in rem and in personam claims, and the cases
it cites indicate that there is none.

As the plaintiff notes,

Victrix – which set out the standard applied by the Court in its
prior Order – was itself an in personam action.
F.2d at 711.

Victrix, 825

Similarly, in International Sea Food, in which the

Court of Appeals for the Fifth Circuit held that federal courts
have jurisdiction to enforce the decrees of foreign admiralty
courts, the court applied the same standard to in rem and in
personam claims, both of which were brought, without
distinguishing them in any way.

See Int’l Sea Food, 566 F.2d at

483.
Moreover, the plaintiff’s reliance on Hilton is misplaced.
Hilton was a diversity case in which there was no dispute as to
subject matter jurisdiction.

In that case, the Supreme Court

merely recognized the power of the federal courts to enforce
foreign judgments on comity grounds in appropriate
circumstances.

That power does not create subject matter

8

jurisdiction, and, like the other powers of the federal courts,
cannot be exercised in its absence.

If the plaintiff were

correct, federal courts would have jurisdiction to enforce the
judgment of a foreign court so long as there had been due
process in entering the judgment.

There would be no requirement

of independent subject matter jurisdiction in the federal court.
D’Amico cites no support for that proposition, and it is not
supported by Hilton.
D’Amico argues that the English Judgment should be enforced
pursuant to Hilton because this Court has subject matter
jurisdiction over its claim under 28 U.S.C. § 1333, which
provides for admiralty or maritime jurisdiction in federal
courts.

D’Amico argues, in essence, that a district court has

admiralty jurisdiction to enforce a foreign judgment where the
court would have had admiralty jurisdiction over the subject
matter of the foreign dispute.

That is not the case.

An action

to enforce a foreign judgment is a separate civil action
imposing its own jurisdictional requirements, and a suit to
enforce a judgment rendered on a maritime claim is not itself
maritime in nature.

See Bergen Indus. & Fishing Corp. v. Joint

Stock Holding Co., 2002 AMC 1078, 1079 (W.D. Wa. 2002) (citing
Restatement (Third) Foreign Relations § 481 cmt. g, h (1987)).
As the court wrote in Bergen:

9

Plaintiffs argue that because the underlying facts
centered on a charter agreement, the action arises
under this Court’s admiralty jurisdiction.
But this
action no longer involves a maritime dispute; the
action
on
the
charter
contract,
unquestionably
maritime in character, was litigated in England. The
separate question here is whether the English judgment
should be enforced.
This is a unique civil action
untouched by the substantive law leading up to
judgment. Admiralty does not supply jurisdiction over
this action.
Id. (citations omitted).

An action to enforce a foreign court’s

judgment on a maritime claim is closely analogous to a suit to
enforce an agreement to settle such a claim, which courts have
repeatedly held to be outside the admiralty jurisdiction of the
federal courts.

See Folksamerica Reinsurance Co. v. Clean Water

of N.Y., Inc., 413 F.3d 307, 322-23 (2d Cir. 2005) (collecting
cases); Fednav, Ltd. v. Isoramar, S.A., 925 F.2d 599, 601 (2d
Cir. 1991) (agreement to contribute to settlement of charter
claim not a maritime contract); Pac. Surety Co. v. Leatham &
Smith Towing & Wrecking Co., 151 F. 440, 443 (7th Cir. 1907)
(action upon covenant to pay damages for breach of charter party
not within admiralty jurisdiction, cited in Kossick v. United
Fruit Co., 365 U.S. 731, 735 (1961)).3

3

The only case to the contrary cited by the plaintiff is Flame
S.A. v. Primera Mar. (Hellas) Ltd., No. 09 Civ. 8138, 2010 WL
481075 (S.D.N.Y. Feb. 2, 2010), in which the district court
asserted subject matter jurisdiction over a suit to enforce an
English judgment on a claim for breach of an FFA. Id. at *2.
The plaintiff is correct that Flame “is on all fours.” Pl. Mem.
at 7. However, the court in Flame did not distinguish between
an action for breach of an FFA and an action to enforce a
10

The Court thus does not have subject matter jurisdiction to
enforce the English Judgment pursuant to 28 U.S.C.

§

1333.

As

the Court rejected, in its prior Order, the only other basis
upon which jurisdiction was asserted, and the plaintiff does not
challenge the correctness of that decision, the motion for
reconsideration is denied.

CONCLUSION

The plaintiff's motion under Federal Rules of Civil
Procedure 60(b) and 59(e) is denied.

The Clerk is directed to

close Docket No. 117.
SO ORDERED.
Dated:

New York, New York
July 28, 2011
Judge

foreign court judgment in such an action; it assumed that if the
court would have had jurisdiction over the substance of the
underlying dispute, it also had jurisdiction over a suit to
enforce the judgment. For the reasons explained above, this
assumption is incorrect.
11