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UNITED ROPE DISTRIB., INC. v. KIMBERLY LINE

July 8, 1991

UNITED ROPE DISTRIBUTORS, INC., PLAINTIFF,
v.
KIMBERLY LINE AND KIM-SAIL LTD., DEFENDANTS. KIMBERLY LINE AND KIM-SAIL LTD., THIRD-PARTY PLAINTIFFS, V. SEATRIUMPH MARINE CORP., THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Cedarbaum, District Judge.

OPINION AND ORDER

Seatriumph Marine Corporation ("Seatriumph") moves to dismiss the third-party complaint for lack of personal jurisdiction. Plaintiff United Rope Distributors is a Delaware Corporation with its principal place of business in Minnesota. Defendant and third-party plaintiff Kim-Sail, Ltd. ("Kim-Sail") is a Cayman Islands corporation with its principal place of business in New York City.*fn1 Third-party defendant Seatriumph is a Liberian corporation with its principal place of business in Greece.

BACKGROUND

At the time of the events giving rise to this action, Seatriumph was the owner of the M.V. Katia. (Third-Party Complaint, ¶ 3.) Seatriumph had chartered the Katia to a Danish company, Copenship A/S, under a head charter in January 1988. (Lord Ex. 2.)*fn2 Copenship A/S had in turn subchartered the vessel to Kim-Sail in October 1988. (Lord Ex. 3.)

In November of 1988, Kim-Sail, through its general agent in New York, Kersten Shipping Agency, Inc., accepted 300,000 bales of twine from Sisalana, S.A. of Salvador, Brazil, for shipment to United Rope Distributors in Superior, Wisconsin. The twine was loaded onto the Katia beginning on November 5, 1988 in Salvador, Brazil. The cargo was never delivered because the Katia sank on or about November 25, 1988.

United Rope Distributors brought this admiralty action against Kim-Sail for damages arising from the loss of the cargo. Kim-Sail impleaded Seatriumph, seeking indemnity or contribution for any liability Kim-Sail is found to have to United Rope Distributors. Seatriumph moves to dismiss the third-party complaint on the ground that this court lacks personal jurisdiction over it.

THE FACTS

The facts that Kim-Sail submits to show that Seatriumph is subject to personal jurisdiction under CPLR § 301 as a foreign corporation doing business in New York are as follows.

The Katia called at New York in December of 1986 and April of 1987. (Lord Ex. 7.)

In August, 1982, Seatriumph and four other borrowers borrowed $2.5 million from Bank of America International Trust and Savings Association, a California bank. The loan agreement provided for payment to be made in United States dollars at that bank's New York branch. (Lord Ex. 6.) On September 22, 1982, Seatriumph granted a $3.1 million mortgage on the Katia to the bank in order to secure the loan.*fn3 The mortgage was recorded on that date in a Certificate of Ownership and Encumbrance registered in Seatriumph's name at Liberia's Bureau of Maritime Affairs in New York City. (Lord Ex. 5.) The loan was completely paid off on September 30, 1988. (Id.)

Seatriumph's head charter with Copenship required all hire thereunder to be paid in United States dollars. (Lord Ex. 2, Line 58.) More importantly, the head charter also provided that hire was to be paid to the owner's bankers in New York, specifically:

  continental bank international, new york branch . . . 520
  madison avenue, new york, n.y. 10022 . . . attention miss
  eileen pierson . . . in favour of m.v. `katia'

(Lord Ex. 2, Clause 50.)

Michael Petropoulos, the president of Seatriumph, affirmed in affidavits that Seatriumph has never had a bank account in New York. Rather, the bank account designated in the head charter for receipt of hire was held by Richmond Investments Ltd., which had agreed with Seatriumph's managing agent, Global Ship Management Ltd., to receive the Katia's charter hire. (Aug. 30, 1989 Petropoulos Aff., ¶ 6.) Richmond, according to Petropoulos, was not a collection agent for Seatriumph but "simply had an account in New York which Richmond agreed (with Global) could be used from time to time for the receipt of funds." (Oct. 20, 1989 Petropoulos Aff., ¶ 3.) In addition, Petropoulos stated that not all of Seatriumph's hire and freight was paid in New York by wire transfer into Richmond's New York account; Seatriumph also used an account which it held at Continental Bank in Pireaus, ...


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