NuStar Energy Services, Inc. v. M/V COSCO AUCKLAND, IMO NO. 9484261 et al

Filing 56

MEMORANDUM AND ORDER DENYING 35 MOTION to Dismiss 28 Answer to Third Party Complaint, Answer to Counterclaim and Answr to ING Bank N.V. Counter-Claims Cross-Claims (Signed by Judge Keith P Ellison) Parties notified.(sloewe, 4)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
NUSTAR ENERGY SERVICES, INC.,
Plaintiff,
VS.
M/V COSCO AUCKLAND, IMO NO.
9484261, et al,
Defendants.

October 26, 2015
David J. Bradley, Clerk

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§ CIVIL ACTION NO. 4:14-CV-3648
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MEMORANDUM AND ORDER
Defendants, four COSCO vessels, have sought interpleader relief from this Court and
have named ING Bank as a Third-Party Defendant. Plaintiff NuStar Energy Services, Inc.
(“NuStar”) has filed before this Court a Motion to Dismiss ING Bank N.V.’s CounterClaims/Cross-Claims. Doc. No. 35. In this action involving alleged maritime liens against the
four COSCO vessels, NuStar argues that interpleader is inappropriate and that ING Bank is not a
proper party to this case. After considering the submissions of the parties and the applicable law,
the Court concludes that the requirements for a Rule 22 interpleader have been met and the
motion should be denied.
I.

BACKGROUND
In 2014, the owners of the four COSCO vessels—the COSCO Auckland, the COSCO

Haifa, the COSCO Venice, and the Tian Bao He—submitted orders for fuel bunkers to COSCO
Petroleum Ptd. Ltd. (“Petroleum”).

Petroleum appointed Chimbusco Americas, Inc.

(“Chimbusco”) as its agent to procure the bunkers for the vessel owners. Chimbusco then
contracted with O.W. Bunker Far East (Singapore) Pte. Ltd. (“O.W. Far East”), which in turn
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contracted with O.W. Bunker USA, Inc. (“O.W. USA”), for the requested bunkers. Finally,
O.W. USA contracted with NuStar to physically supply the bunkers to the COSCO vessels.
NuStar supplied the bunkers directly to the COSCO vessels, fulfilling its obligations under the
contract between NuStar and O.W. USA. The chief engineer for each vessel accepted and signed
for the deliveries.
After NuStar delivered the bunkers, however, members of the O.W. Bunker group—
including O.W. Far East and O.W. USA—filed voluntary petitions in the U.S. Bankruptcy Court
for the District of Connecticut, and O.W. USA notified NuStar that it did not intend to make any
of the payments due under the sales contracts. Doc. No. 22 at 13; Doc. No. 45 at 4. NuStar is a
party in interest in the bankruptcy proceedings. Two of the COSCO vessel owners—the owner
of COSCO Auckland and the owner of Tian Bao He—have received invoices from O.W. Far
East for the bunker deliveries, but none of the owners has made payments to any party. Doc. No.
13 at 11-13.
Before filing this lawsuit, NuStar and the COSCO vessel owners reached an agreement
whereby NuStar would refrain from arresting the vessels, and the COSCO vessels’ authorized
agent, Chimbusco, would deposit the disputed funds—totaling $2,690,804.70—into an escrow
account. Doc. No. 1-1 at 2-3. NuStar then filed this lawsuit in rem. NuStar asserts that it has a
maritime lien against each vessel under 46 U.S.C. § 31301 et seq., and it brings this action to
recover the value of the fuel it delivered. It is undisputed that NuStar delivered the fuel bunkers
to the COSCO vessels, and that those bunkers are “necessaries” under 46 U.S.C. § 31342;
however, the parties disagree as to whether or not the bunkers were provided to the vessels “on
the order of the owner[s] or [] person[s] authorized by the owner[s].”

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In its Answer and Third Party Complaint, the COSCO vessels assert a claim for
interpleader relief under Federal Rule of Civil Procedure 22 and name the O.W. entities and ING
Bank as counter-defendants. Doc. No. 13 ¶¶ 54-57, 91. The COSCO vessels also claim to have
satisfied the requirements of the Federal Interpleader Act, 28 U.S.C. § 1335, and they assert that
the funds in escrow satisfy the bond requirements under that Act. Doc. No. 13 ¶ 94.
ING Bank asserts that it is a secured party as to assets of the bankruptcy debtors. Doc.
No. 45 at 4, 7. In its Answer to the Counterclaim and Third Party Complaint, however, O.W.
USA denies “that ING is a third-party beneficiary of the Bunker supply at issue and assignee of
the Debtors’ receivables.” Doc. No. 27 at 5.
In its Motion to Dismiss ING Bank’s Counter-Claims/Cross Claims, NuStar asserts that
the interpleader is invalid because, under the security agreement between NuStar and COSCO,
the funds in escrow can be paid only to NuStar, if indeed NuStar is found to hold a maritime lien
against the vessels. ING Bank argues that the interpleader is proper because ING Bank and
NuStar have competing claims for payments on the same bunker deliveries, exposing the
COSCO vessel owners to multiple liability on the same obligations.
II.

LEGAL STANDARDS
In the Fifth Circuit, “interpleader statutes and rules are liberally construed to protect the

stakeholder from the expense of defending twice, as well as to protect him from double liability.”
In re Bohart, 743 F.2d 313, 325 (5th Cir. 1984) (internal quotation marks omitted). Federal Rule
of Civil Procedure 22 provides:
“Persons with claims that may expose a plaintiff to double or multiple liability may be
joined as defendants and required to interplead. Joinder for interpleader is proper even
though:
(A) the claims of the several claimants, or the titles on which their claims depend, lack a
common origin or are adverse and independent rather than identical; or
(B) the plaintiff denies liability in whole or in part to any or all of the claimants.
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. . . A defendant exposed to similar liability may seek interpleader through a crossclaim
or counterclaim. . . . This rule supplements—and does not limit—the joinder of parties
allowed by Rule 20. The remedy this rule provides is in addition to—and does not
supersede or limit—the remedy provided by 28 U.S.C. §§ 1335, 1397, and 2361. An
action under those statutes must be conducted under these rules.”
Fed. R. Civ. P. 22.
The interpleader statute, 28 U.S.C. § 1335, requires the party facing multiple adverse
claims to deposit the disputed funds into the registry of the court. Murphy v. Travelers Ins. Co.,
534 F.2d 1155, 1159 (5th Cir. 1976). As the COSCO vessels have not done so, this interpleader
may proceed only under Rule 22, which does not require a deposit. Id.
Although Rule 22 does not necessarily require that a discrete stake or fund be at issue,
“even under rule interpleader the threat of multiple litigation must arise from some single
obligation of the plaintiff to one or more competing claimants.” 21 Fed. Proc., L. Ed. § 49:2.
“[A] prerequisite for permitting interpleader is that two or more claimants must be ‘adverse’ to
each other. The requirement that the claims as to which interpleader is sought be adverse to each
other is not met when the ‘stakeholder’ may be liable to both claimants. Thus, the protection
against ‘double or multiple liability’ provided by Rule 22 is protection only against double or
multiple liability that is unjustifiable because the plaintiff has but a single obligation.” Bradley
v. Kochenash, 44 F.3d 166, 168 (2d Cir. 1995) (internal quotation marks and citations omitted).
In other words, if a party could, “as a matter of theory, justifiably be found liable to both sets” of
claimants, the interpleader complaint is improper and should be dismissed. Bradley v.
Kochenash, 44 F.3d 166, 168-69 (2d Cir. 1995).
III.

ANALYSIS
The COSCO vessels each face competing claims to a maritime lien—by NuStar, O.W.

USA, and ING Bank, on behalf of O.W. Far East—based upon the delivery of the same bunkers.
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These claims arise from a single obligation: the obligation of the vessels to pay for the fuel they
received. That NuStar has secured its claims, and its claims alone, with the escrowed funds has
little bearing on the issues here. ING Bank does not claim a right to those particular funds, but to
the underlying liens themselves. It is not necessary for ING Bank to have standing to assert a
claim against the escrowed funds in order for ING Bank to be a proper party in this interpleader;
it is enough that its claims are adverse to NuStar’s, and that, with regard to the maritime liens,
the COSCO vessels could not “justifiably be found liable” to both parties. At this point in the
proceedings, the Court need not decide which claims are meritorious. See Auto Parts Mfg.
Mississippi, Inc. v. King Const. of Houston, LLC, 782 F.3d 186, 194 (2015). The competing
claims have been made, and this interpleader is the proper method of resolving them.
IV.

CONCLUSION
For the foregoing reasons, this Court finds that the pending interpleader action is

consistent with Rule 22. The Motion to Dismiss ING Bank N.V.’s Counter-Claims/CrossClaims is DENIED.
IT IS SO ORDERED.
Signed this 26th day of October, 2015.

KEITH P. ELLISON
UNITED STATES DISTRICT JUDGE

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