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FRANK B. HALL & CO. v. S.S. SEAFREEZE ATL.

November 23, 1976.

FRANK B. HALL & CO., INC., Plaintiff,
v.
S.S. SEAFREEZE ATLANTIC et al., Defendants.



The opinion of the court was delivered by: HAIGHT

MEMORANDUM AND ORDER

HAIGHT, District Judge:

 This case requires consideration of the boundaries of admiralty jurisdiction. The channels in these jurisprudential waters are not always buoyed with complete certainty.

 Plaintiff Frank B. Hall & Co., Inc. ("Hall") is an insurance broker, dealing, among other matters, in the placement of policies of marine insurance. Hall commenced this action against the S.S. SEAFREEZE ATLANTIC, the corporate shipowner, its corporate affiliates, their individual principals, and both the record and beneficial mortgagee of the ship. The last two defendants are State Street Bank & Trust Co. and the Central Bank of Argentina. The latter bank, which is foreign, is the beneficial mortgagee of the vessel, and in accordance with United States law it gave the mortgage to the former bank, a United States bank, as trustee.

 Hall sues to recover the amount of $24,185.54 which it advanced in premiums in order to avoid the cancellation of a policy of insurance covering the SEAFREEZE ATLANTIC. Hall alleges that its claim falls within the admiralty jurisdiction. That is the only jurisdictional basis pleaded in the complaint.

 Defendants State Street Bank & Trust Co. and Central Bank of Argentina move pursuant to Rule 12(b)(1), F.R.C.P., for an order dismissing the complaint for lack of admiralty jurisdiction.

 The Court grants the motion made on behalf of the defendant banks; and, in the light of the facts revealed by the motion papers, dismisses the complaint as against all defendants, in rem and in personam.

 I.

 It appears without contradiction from the motion papers that the SEAFREEZE ATLANTIC was built by American Export Lines under an experimental program, with the aid of a federal subsidy, pursuant to the Fishing Fleet Improvement Act, 46 U.S.C. §§ 1401-1413. Designed to catch, freeze and package fish, the SEAFREEZE ATLANTIC was built at a cost of $6,000,000, and was commissioned in 1969.

 The vessel went on seven voyages. American Export Lines found her to be commercially inoperable. The SEAFREEZE ATLANTIC was docked and decommissioned in April, 1971. It appears that she has never sailed again, at least on a commercial voyage. The vessel has been berthed at Norfolk, Virginia at least since April, 1974, and possibly since her decommissioning in 1971. The SEAFREEZE ATLANTIC still lies at her berth in Norfolk.

 The defendant banks became involved with the SEAFREEZE ATLANTIC in April of 1974, when Central Bank of Argentina funded a purchase of the vessel for $1,125,000. The purchaser-mortgagor was defendant Transatlantic Fishing Corporation, which purchased from American Export Lines all of the stock of defendant American Stern Trawlers, Inc., a then subsidiary of American Export Lines, and the former owner of the SEAFREEZE ATLANTIC. Defendant World Trade Chambers, Inc. is apparently affiliated with Transatlantic Fishing Corporation, although the precise corporate relationship is not clear; nor is its understanding essential to disposition of this jurisdictional motion.

 The new owners of the SEAFREEZE ATLANTIC hoped to free her from legal restrictions governing her use, possibly sell her to a foreign buyer, but in any event to restore the vessel to commercial operation. The fact of the matter is that the new owners have never succeeded in that aim, and, as noted above, the SEAFREEZE ATLANTIC still languishes at her berth in Norfolk. She is now well into the sixth year of her idleness; and there is no present indication of when, if ever, her present owners may be able either to reactivate the vessel, or sell her to other interests who will restore her to operation.

 In April of 1974, Hall was retained as an insurance broker to effect a policy of insurance upon the hull and machinery of the SEAFREEZE ATLANTIC. The advice of insurance *fn1" reflects that, as of April 25, 1974, Port Risk insurance attached on the SEAFREEZE ATLANTIC, such insurance to remain in effect "until time of sailing". The assureds were identified as:

 "American Stern Trawlers, Inc., and Trans-Atlantic Fishing Corporation and State Street Bank & ...


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