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JORDAN INTL. CO. v. M.V. "CYCLADES"

January 21, 1992

JORDAN INTERNATIONAL COMPANY OF DELAWARE, Plaintiff,
v.
M.V. "CYCLADES," her engines, tackle, boilers, etc., FORWARD MARINE, INC., and THALASSA SHIPPING, LTD., Defendants. THALASSA SHIPPING, LTD., Defendant and Third-Party Plaintiff, -v- MAHER TERMINALS, INC., and COIL KING STEEL HAULERS, INC., Third-Party Defendants.



The opinion of the court was delivered by: ROBERT P. PATTERSON, JR.

 ROBERT P. PATTERSON, JR., U.S.D.J.

 Defendant Forward Marine, Inc. ("Forward") moves pursuant to Rules 37 and 55 of the Federal Rules of Civil Procedure for judgment against Thalassa Shipping, Ltd. ("Thalassa"). For the reasons set forth below, Forward's motion is granted.

 BACKGROUND

 In 1987, Plaintiff Jordan International Company of Delaware ("Jordan") shipped 366 coils of cold-rolled sheet steel aboard the vessel M/V Cyclades (the "Cyclades"). At the time of the voyage, the Cyclades was owned by Thalassa, a foreign corporation with a place of business in Greece, and was under the direction of time-charterer Forward, a domestic corporation with a place of business in New York. In 1989, Plaintiff filed suit against both Forward and Thalassa, alleging that all 366 coils arrived damaged and seeking recovery in the amount of $ 240,786.73. In its pleadings, answers to interrogatories, and deposition testimony, Plaintiff claimed that the Cyclades was unseaworthy, that seawater had entered her holds, and that the coils had sustained rust damage.

 Thalassa answered Plaintiff's complaint, cross-claimed against Forward, and impleaded two third-party defendants. Forward also answered the Plaintiff's complaint and cross-claimed against Thalassa. Subsequently, Thalassa abandoned its defense of this action. Upon its failure to comply with this Court's July 17, 1990 Order directing the production of a witness for deposition and documents for inspection, Thalassa's pleadings were stricken. Forward, however, continued to defend the action and ultimately settled with Jordan for $ 12,500. By letter of counsel, Forward makes the following assertions of fact which are undisputed:

 The parties kept Thalassa advised of all of the proceedings - both before and after its default - including the settlement negotiations. Although given the opportunity to do so, Thalassa chose not to participate in the settlement. At no time did Thalassa object to the settlement.

 Letter from Kevin J. Hartmann of December 3, 1991 at 2.

 In its motion, Forward requests for judgment against Thalassa in the amount of $ 58,564.68, representing the amount Forward paid to settle the Plaintiff's claim ($ 12,500), attorneys' fees ($ 40,500), and disbursements ($ 5,564.68). Thalassa did not file any formal opposition to Forward's motion, but counsel for Thalassa was present on the return date of the motion and objected to the judgment requested by Forward, an objection subsequently reiterated in a letter to the Court dated November 27, 1991. Forward responded to Thalassa's objection by letter dated December 3, 1991.

 DISCUSSION

 Fed. R. Civ. P. 37(b)(2) provides that when a party fails to comply with a discovery order, a court may "render[] a judgment by default against the disobedient party." *fn1" Where, as here, after answering the complaint, cross-claiming, and impleading two third-party defendants, Thalassa purposely abandoned its defense of this action and disregarded this Court's order compelling discovery, a judgment of default is appropriate. See, e.g., Societe Internationale pour Participations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197, 212-13, 2 L. Ed. 2d 1255, 78 S. Ct. 1087 (1958) (default judgment is not appropriate sanction where there was no showing that failure to comply with a pretrial order was willful, in bad faith, or otherwise culpable); Sieck v. Russo, 869 F.2d 131, 134 (2d Cir. 1989) (affirming grant of motion pursuant to Rule 37(b) for judgment of default against party who intentionally absented itself from deposition and twice ignored court's order to appear).

 Thalassa argues that because Forward has failed to obtain a determination of its "actual liability" for the harms suffered by Jordan, a judgment requiring Thalassa to indemnify Forward is inappropriate. In support of this argument, Thalassa points to The Toledo, 122 F.2d 255, 257 (2d Cir. 1941), cert. denied 314 U.S. 689, 86 L. Ed. 551, 62 S. Ct. 302 (1941), where the Second Circuit stated:

 A claim for indemnity, however, requires that an actual liability be sustained by the indemnitee, and if he settles a claim without a determination of the rights in question, he bears the risk of proving an actual liability in the action over for indemnity (emphasis added).

 Thalassa, however, ignores the Second Circuit's subsequent modification of the Toledo holding in Atlantic Richfield Co. v. Interstate Oil Transport Co., 784 F.2d 106, 113 (2d Cir. 1986), cert. denied 479 U.S. 817, 93 L. ...


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