Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

M. W. Zack Metal Co. v. International Navigation Corp.

decided: April 12, 1982.

M. W. ZACK METAL CO., PLAINTIFF-APPELLANT-CROSS-APPELLEE,
v.
INTERNATIONAL NAVIGATION CORPORATION OF MONROVIA, JANSEN & CO., CONTAM LINIE, HANS H. JANSEN, JURGEN K. KRAFFT, NEWCASTLE PROTECTION & INDEMNITY ASSOCIATION, THE LONDON STEAMSHIP OWNER'S MUTUAL INSURANCE ASSOCIATION, LTD., DEFENDANTS-APPELLEES. NEWCASTLE PROTECTION & INDEMNITY ASSOCIATION AND THE LONDON STEAMSHIP OWNER'S INSURANCE ASSOCIATION LIMITED, DEFENDANTS-APPELLEES-CROSS-APPELLANTS.



Appeal from a judgment entered by the United States District Court for the Southern District of New York, Robert W. Sweet, Judge, dismissing M.W. Zack Metal Co.'s complaint which sought recovery for cargo damage and for fraud, and cross-appeal by Newcastle Protection & Indemnity Association and the London Steamship Owner's Mutual Insurance Association Limited from dismissal of their counterclaim alleging malicious prosecution and abuse of process. Affirmed. Judge Cardamone filed an opinion concurring in part and dissenting in part.

Before Meskill and Cardamone, Circuit Judges, and Holden, District Judge.*fn*

Author: Meskill

M. W. Zack Metal Co. ("Zack") appeals from a judgment entered by the United States District Court for the Southern District of New York, Robert W. Sweet, Judge, dismissing its complaint, which sought recovery for cargo damage and for fraud. Newcastle Protection & Indemnity Association and the London Steamship Owner's Mutual Insurance Association Limited (the "Insurers") cross-appeal from Judge Sweet's dismissal of their counterclaim for malicious prosecution and abuse of process. For the reasons set forth below, we affirm the district court's decision in all respects.

BACKGROUND

Zack comes before this Court with a matter that was first litigated over twenty-two years ago and that has consumed an inordinate amount of the resources of courts in this country and abroad. The facts and procedural history of the dispute are as follows.

On January 18, 1960, Zack purchased ninety-three coils of Austrian hot rolled steel which it had contracted to sell in the United States to Dearborn Steel Sales, Inc. The steel was shipped under a clean bill of lading from Belgium to New York aboard the S.S. SEVERN RIVER, a vessel owned by International Navigation Corporation of Monrovia ("International"), a Liberian corporation, and under charter to Jansen & Co. (the "Charterer"), a German partnership. The steel was damaged in transit and, after Dearborn Steel refused to accept shipment, was sold by Zack to a German company for approximately one-half of Zack's cost.*fn1

On February 11, 1960, Zack commenced suit against the SEVERN RIVER and the Charterer in the United States District Court for the Southern District of New York seeking to recover $80,000 in damages, the difference between the market value of the steel in good condition and its salvage value less resale expenses. That action was dismissed without prejudice for failure to prosecute, service having never been effected on any of the defendants. Thereafter, on January 27, 1961, Zack sent a letter to the Charterer's agent in New York, Oceana of Canada Ltd., requesting an extension until May 15, 1961 of the limitations period under the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. § 1303(6) (1976).*fn2 Oceana granted Zack's request.

Three days before the extension was due to expire, Zack filed identical actions for the cargo loss in the United States District Court for the District of New Jersey and the United States District Court for the Eastern District of New York. The following day, Zack filed a similar action in the County Court for Commercial Affairs in Hamburg, Germany. Both district court cases were dismissed for failure to prosecute.

While the German case was pending, Zack brought an action in New York State Supreme Court against its cargo underwriter, Federal Insurance Company ("Federal") to recover for the cargo loss. On March 14, 1968, after two trials and two appeals, and during a third trial, a settlement was reached under which Zack received $40,000 on the cargo damage claim plus $19,453 in interest.*fn3 The settlement also permitted Zack to continue the action in Germany provided that Federal received fifty-five percent of any net recovery.

In 1970 the Insurers, indemnity insurers of the Charterer and International, purchased Federal's interest in the outcome of the German litigation. Zack then commenced an action against the Insurers charging them with fraud in purchasing Federal's interest. Zack represents that this action is still pending.

On December 7, 1971, after ten years of litigation, the German trial court found the Charterer, its partners and International liable to Zack for $64,000 plus interest and costs.*fn4 International's liability was limited to execution upon the SEVERN RIVER, which, unknown to the German court, had foundered at sea some three years earlier.

Later in 1971, Newcastle, in an effort to forestall execution on the judgment pending the outcome of an appeal, signed a guarantee of satisfaction of payment to Zack to become operative upon either the entry of a final decision by the German courts or upon a settlement agreement. During the pendency of the appellate proceedings in Germany, Zack filed suit in the United States District Court for the Eastern District of Virginia seeking to recover against International by attaching one of its vessels, the VIRTUS, in Norfolk. Zack asserted that the attachment action was proper because the SEVERN RIVER had run aground. The attachment order was eventually vacated and the suit dismissed. On appeal, the Fourth Circuit affirmed the dismissal, holding that because the German judgment was "in rem" against the SEVERN RIVER, it "furnish(ed) no basis for the assertion of an in personam liability of the owner or the attachment of any other vessel owned by International." M. W. Zack Metal Co. v. International Navigation Corp., 510 F.2d 451, 452-53 (4th Cir.), cert. denied, 423 U.S. 835, 96 S. Ct. 60, 46 L. Ed. 2d 53 (1975).

On January 9, 1975, the Hanseatic Provincial Court of Appeals in Germany dismissed Zack's claim against International, finding that the written extension of time to sue from February 16 to May 15, 1961 given to Zack by the Charterer's agent in New York did not bind International, causing Zack's claim against the shipowner to be time-barred under COGSA, 46 U.S.C. § 1303(6), and applicable German law. In addition, while the court found that the Charterer and its partners were liable for the cargo damage, it reduced their liability to $33,000 plus interest and costs.*fn5 Thereafter, the Insurers posted a bond to guarantee satisfaction of payment of the Charterer's liability and a lien to protect its interest in Zack's recovery. Zack has yet to execute on the judgment of the German appeals court.

In 1976, Zack moved in the United States District Court for the District of New Jersey to have its claim against the SEVERN RIVER restored to the docket. The district court denied the motion and the Third Circuit affirmed. M. W. Zack Metal Co. v. S.S. Severn River, No. 386-61 (D.N.J. Oct. 19, 1976), aff'd by order, 577 F.2d ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.