Ray Capital Inc et al v. M/V Newlead Castellano et al, No. 4:2016cv00093 - Document 94 (S.D. Ga. 2016)
Court Description: ORDER denying DHL Project & Chartering Limited's 80 Motion to Intervene; and denying as moot DHL Project & Chartering Limited's 90 Motion to Authorize 'in custodia legis expenses'. Signed by Judge J. Randal Hall on 10/4/2016. (jah)
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Ray Capital Inc et al v. M/V Newlead Castellano et al Doc. 94 IN THE UNITED FOR THE STATES DISTRICT COURT SOUTHERN DISTRICT OF GEORGIA SAVANNAH DIVISION IN ADMIRALTY RAY CAPITAL INC.; LTD.; OPPENHEIM * CHEYENNE HOLDINGS CAPITAL LTD.; * and LABROY SHIPTRADE * LIMITED, * * Plaintiffs, * * v. * CV M/V NEWLEAD CASTELLANO, IMO NO. 9686338, her engines, tackle, equipment, furniture, appurtenances, etc., in rem, * * * * and NEWLEAD CASTELLANO LTD., 416-093 * * Defendants. * ORDER This by intervenor 80.) DHL matter comes DHL Plaintiffs filed motion a has review. intervene Project For the Court in fully the on a motion & Chartering Limited filed a response reply been before support briefed reasons and stated 89). is intervene ("DHL"). in opposition (doc. to (doc. 85), Accordingly, ripe herein, for DHL's the (Doc. and DHL's Court's motion to is DENIED. I. On April 19, BACKGROUND 2016, Plaintiffs instituted the instant action by filing a verified complaint with this Court alleging a number of claims against M/V Newlead Castellano, IMO No. 9686338, in Dockets.Justia.com rem ("Vessel") Thereafter, now and Newlead Plaintiffs assert the Castellano amended following their claims: Ltd. complaint (1) a (Doc. 1.) that they such foreclosure claim pursuant to Ray Capital's promissory note and the Maritime Lien Act and the ("Act"); Ship (2) preferred (4) preferred a Act, foreclosure mortgages pursuant to and a Mortgage and 46 U.S.C. claim the ยง pursuant Act; (3) a of mortgages. contract (Am. claim to of Doc. seq. Plaintiffs' claim seamen's wages; pursuant Compl., et foreclosure Plaintiff Ray Capital's payment breach 31301, to Plaintiffs' 18.) The Court subsequently entered orders directing the issuance of a warrant for the maritime arrest - as well as the issuance of process of maritime attachment and garnishment - of the Vessel.1 (Docs. 8, 10. ) On May 25, 2016, DHL instituted an independent action, Case No. Ltd. 4:16-CV-123 (S.D. Ga.), against Defendant Newlead Castellano as well as Newlead Holdings Ltd., Newlead Shipping S.A., Newlead Bulkers S.A., Grand Venetico Inc., and Newlead Venetico Ltd ("DHL Action").2 (DHL Action, Compl., Doc. 1, 11 21-69.) 1 On May 3, 2016, Defendant Newlead Castellano Ltd. filed a Motion to Vacate Plaintiffs' 2016, arrest and attachment of the Vessel. (Doc. the Court entered an order vacating Plaintiffs' 15.) On July 14, arrest of the Vessel, but denying the vacatur of Plaintiffs' attachment of the Vessel. (Doc. 47.) On August 15, 2016, Plaintiffs filed an Emergency Motion for Reconsideration seeking to reinstate their arrest of the Vessel. (Doc. 49.) 2016, the Court reinstated Plaintiffs' arrest of the Vessel. On August 4, (Doc. 64.) 2 DHL's complaint in the DHL Action alleges: (1) a breach of contract claim against Newlead Shipping S.A., Newlead Bulkers S.A., and Grand Venetico Inc.; and (2) an alter ego claim against Newlead Holdings Ltd. for its control of The Court directing subsequently the entered issuance of an order process of Court July 14, entered sale of the an 2016, on order directing Vessel the to DHL attachment motion (doc. Rule (Doc. 48, sold on August 8, 2016, Doc. 2016,4 and the Court 2016. (Docs. 75.) On July 28, DHL Procedure, as subsequently entered an order confirming the sale on August 16, 65, the admiralty of amended in part by the Court's Order dated August 4, The Vessel was and 28), interlocutory Federal Supplemental Admiralty Rule E(9)(a). 65.) Action (DHL Action, Doc. 2.) Plaintiffs' pursuant the maritime garnishment for seizure of the Vessel.3 On in filed a 2016, motion instant action. to shortly before the consolidate (DHL Action, Doc. the 11.) sale of the Vessel, DHL Action with the On August 25, 2016, the Court denied DHL's motion to consolidate on the grounds that the two actions (DHL Action, did not present Doc. 13, at 3-4.) common questions On September 8, the instant motion to intervene in this case. of law 2016, (Doc. or fact. DHL filed 80.) Newlead Shipping S.A., Newlead Bulkers S.A., Defendant Newlead Castellano Limited, Grand Venetico Inc., and Newlead Venetico Ltd. (DHL Action, Compl., Doc. 1, II 21-69. ) 3 Notably, DHL states that the dispute underlying the DHL Action "is based on an indemnity claim for an arbitration award which may be issued against DHL in Hong Kong arbitration. Thereafter, DHL will pursue recovery against Newlead Shipping and/or Grand Venetico Inc. in London. [DHL] brings this action solely to obtain quasi in rem jurisdiction over [the defendants in the DHL Action] and security for its claims." (DHL Action, Compl. I 71.) 4 The Vessel was sold to non-party Strategic Shipping, Inc. for a sale price of $7,400,000.00 USD plus the current market price of any fuel or gas oil remaining on board the Vessel at the time of its delivery to Strategic Shipping, Inc. (Doc. 75.) II. A party wishing to avenues: (1) intervene may do intervention as of right; permission of the court. of right DISCUSSION requires so or through one of (2) intervention with See Fed. R. Civ. P. 24. courts to "permit anyone two Intervention as intervene to who[] . . . claims an interest relating to the property or transaction that is the disposing impede Civ. of the existing P. subject the of the action, action may as a ability to protect movant's parties adequately 24(a)(2). and practical represent Intervention is its that with so situated matter impair interest, interest." permission that of or unless Fed. the R. court allows courts to "permit anyone to intervene who [] . . . has a claim or defense that shares question of law or fact." with the party seeking establish that: (1) to action Fed. R. Civ. P. 24(b)(1)(B). intervene as a common Here, DHL (Doc. 80 1 7.) seeks to intervene as a matter of right.5 A main a matter of right its application to intervene is timely; must (2) it has an interest relating to the property or transaction which is the subject of the action; (3) it is so situated that disposition of the action, as a practical matter, may impede or 5 While DHL does not explicitly seek in the alternative to intervene with permission of the court, the Court notes that this avenue is foreclosed to DHL based on the Court's prior finding that the DHL Action and the instant action do not share a commonality of questions of law or fact. (See DHL Action, Doc. 13, at 3-4.) impair its ability interest is the suit. 1989) to protect that interest; and (4) its represented inadequately by the existing parties to Chiles v. Thornburgh, 865 F.2d 1197, 1213 (11th Cir. (citing Athens Lumber Co. v. Federal Election Commfn, F.2d 1364, 1366 (11th Cir. 1982)). Also, the intervenor 690 must accompany its motion to intervene with "a pleading that sets out the claim or defense for which intervention is Civ. P. determining interest, interest the in the 594 substantial, proceedings." Id. the least is (11th Cir. 1991) interest; must it Therefore, legally interest a intervener's party subject the real of in the must be an be (citing Athens Lumber the intervenor must have a protectable and citations more interest interest than "which omitted). just the in an the The economic substantive law as belonging to or being owned by the applicant." Hawley Ins. Co. 1311 (11th Cir. interest omitted). at which (quotations intervener's an be of Worlds v. Pepft of Health & Rehab. Servs., State of Co. , 690 F.2d at 1366). recognizes must transaction Fla. , 929 F.2d 591, "direct, sufficiency intervenor the proceeding. 1308, Fed. R. 24(c) . In Mt. sought." that v. Sandy Lake Properties, 2005) derives Inc., 425 F.3d ("A legally protectable interest is from a legal right.") (citations The Co. , 425 Co. , reasoning F.3d an at insurer of the Eleventh Circuit 1311-12, is filed declaratory a insured property owners, or indemnify under the the insureds, who insurer Hawley Ins. Mt. Hawley Ins. judgment action against claiming that it had no duty to defend subject insurance policy for death that occurred on the insureds' After Mt. In instructive. in moved for property. default Id. a drowning at 1309-10. judgment against the the personal representative of the drowned decedent - had filed a wrongful death action sought to intervene under both Rule 24(a) against & (b) the insureds - in an attempt to argue that the insurer's requested relief should be denied. Id. The was Eleventh Circuit held that the applicant's interest purely economic and insufficient to support intervention. Id. at the 1311. applicant's contingent The Eleventh interest upon his Circuit was "purely prevailing separate wrongful death lawsuit. further noted speculative" against the that because insureds it was in the Id. Here, DHL's interest in the subject matter of the instant action is purely economic. DHL is not a party to the promissory notes mortgages or Plaintiffs' preferred claims, ship nor does interest in those instruments. should Plaintiffs Defendants, be Plaintiffs' DHL that have Rather, successful in a form the legally basis of protectable DHL's argument is that, their action against liens on the proceeds from the sale of the Vessel will there be will recover on Castellano have priority over those less its Mt. Ltd. Hawley no) money available unrelated This more flawed than in (or of claims argument DHL, from which DHL can Defendant Newlead against is and therefore near-identical to - if not the argument rejected by the Eleventh Circuit Ins. expressed therein. Co., and Moreover, it fails while for the same reasons DHL cites non-binding case law for the proposition that a proposed intervener's interest in a specific fund is sufficient to entitle intervention in a case affecting that fund, DHL conclusory allegation has that a provided Rule no support B maritime for attachment its alone creates such a property interest.6 DHL's interest is also highly speculative, given that it is contingent upon: 6 DHL's (a) a ruling by a Hong Kong arbitration panel citation to Gaines v. Dixie Carriers, Inc., 434 F.2d 52 (5th Cir. 1970) is inapposite, as Gaines is easily distinguished on its facts. Id. at 54 (plaintiff's former attorney, with whom plaintiff had signed a contingency fee agreement, was entitled to intervene to protect claimed interest in settlement funds where plaintiff dismissed attorney without cause immediately prior to settlement). DHL's other citations to cases finding an interest in "specific funds" sufficient to entitle intervention are also factually distinguishable. See Mountain Top Condo. Ass'n v. Dave Stabbert Master Builder, Inc., 72 F.3d 361, 365-68 (3d Cir. 1995) (condominium owners were entitled to intervene in suit between condominium board and contractor where funds at issue were required to be held in express trust for benefit of condominium owners by Virgin Islands statute and condominium's by-laws); Hardy-Latham v. Wellons, 415 F.2d 674, 676 (4th Cir. 1968) (in a suit to recover a broker's commission on the sale of a business, individuals who claimed they were entitled to a "finder's fee" from the broker's commission were entitled to intervene as they had an interest in both the transaction and the funds that were the subject of the action); U.S. Commodity Futures Trading Comm'n v. Giddens, 2012 WL 603592 at *7 (N.D. Ga. Feb. 24, 2012) (investor was entitled to intervene in suit by United States Commodity Futures Trading Commission against managers of commodity investment pools alleged to have misappropriated multiple investor funds where investor sought return of $80,000.00 he had transferred to managers prior to freezing of assets held by managers and none of the parties objected to intervention). that DHL is Materials Action, liable to Industry Compl. Shipping, its Fuel Groups SIS! 15-20); S.A., Newlead subcharterer, (b) Co. non-party Ltd. Zheijiang ("Zheijiang") (DHL a finding that non-parties Newlead Bulkers S.A., and Grand Venetico Inc. are contingently obligated to indemnify DHL in connection with Zheijang's claims against DHL (id. 11 21-26); Defendant Newlead Shipping, S.A., Newlead Bulkers S.A. the alter egos Defendant Castellano of Newlead to Grand Venetico Newlead non-party Castellano Inc.) Castellano to Ltd. contingent liability claims that DHL's proper Each quasi based in of protectable right. Ltd. is Holdings the such a degree liable (icL one of Newlead for Ltd. that successor-in-interest as to make DHL's 11 27-69); Defendant aforementioned and (d) a finding of the Vessel was claims have (or yet (id. to 11 70-75). occur, and in As DHL's interest is contingent upon the pending interest least or Grand Venetico Inc. are Newlead aforementioned events other at aforementioned fact may never occur. outcome and rem Rule B attachment on DHL's of these Ltd. (c) a finding that that litigation, would it support is not a intervention legally as of See Mt. Hawley Ins. Co., 425 F.3d at 1311 n. 6. Because DHL has not demonstrated it has a sufficient interest relating to the property or transaction which is the subject of this action, the Court need not further analyze DHL's request to intervene. See Chiles, 865 F.2d at 1213. Accordingly, DHL's Because has authorize DHL in motion been custodia to intervene denied legis (doc. intervention, expenses (doc. 80) is DHL's 90) DENIED. motion to DENIED AS is MOOT.7 ORDER ENTERED at Augusta, October, Georgia, this ~H^ day of 2016. RANDAL STATES DISTRICT 7 DHL is not precluded, however, HALL DISTRICT OF JUDGE GEORGIA from pursuing recovery of its in custodia legis expenses by properly moving for an order authorizing these expenses in the DHL Action.
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