The opinion of the court was delivered by: MIRIAM GOLDMAN CEDARBAUM
Plaintiff United Rope Distributors ("United Rope") 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.
Defendant and third-party defendant Seatriumph Marine Corporation ("Seatriumph") is a Liberian corporation with its principal place of business in Greece. Plaintiff joined Seatriumph as a defendant after my original decision on personal jurisdiction.
Seatriumph moves, pursuant to Rule 3(j) of the Civil Rules of the Southern and Eastern Districts of New York, for reargument of its motion to dismiss the third-party complaint for lack of personal jurisdiction, or, in the alternative, for certification of the order to the United States Court of Appeals for the Second Circuit, pursuant to 28 U.S.C. § 1292(b). Because United Rope also asserts a claim against Seatriumph, I deem Seatriumph's renewed motion to include a request for the same relief against United Rope's complaint.
In denying the initial motion to dismiss, I ruled that Seatriumph was "doing business" in New York within the meaning of section 301 of the New York Civil Practice Law and Rules ("CPLR"). 770 F. Supp. 128 (S.D.N.Y. 1991). Upon reconsideration, I adhere to that conclusion, but write again to emphasize that Richmond Investments Ltd. ("Richmond") has never been located in New York. Accordingly, I deny the motion to dismiss in its entirety, but grant the motion for certification.
Familiarity with my earlier opinion is assumed. I will repeat only some of the facts here.
At the time of the events giving rise to this action, Seatriumph was the owner of one ship, the M.V. Katia. (Third-Party Compl. para. 3.) In January 1988, Seatriumph chartered the Katia to a Danish company, Copenship A/S, under a head charter. (Lord Ex. 2.)
Copenship A/S 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 on the Katia to United Rope in Superior, Wisconsin. Unfortunately, the cargo never reached its destination because the Katia sank on or about November 25, 1988.
United Rope brought this admiralty action against Kim-Sail for damages arising from the loss of the cargo. Kim-Sail, in turn, impleaded Seatriumph, seeking indemnity or contribution for any liability Kim-Sail is found to have to United Rope.
(1) The Katia called at New York in December of 1986 and April of 1987. (Lord Ex. 7.)
(2) 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. 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.)
(3) Seatriumph's head charter with Copenship required all hire thereunder to be paid in United States dollars to a bank account 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'
The bank account designated in the head charter for receipt of hire was held in the name of Richmond, a Liberian corporation whose principal place of business is in Pireaus, Greece. Ownership and control of Richmond, Seatriumph, and Global Ship Management Co. ("Global Ship"), Seatriumph's managing agent, overlap. Although Michael Petropoulos, the president of Seatriumph, in an earlier affidavit sought to distance himself from Richmond, saying that he "believed" that "Richmond Investments Ltd. was in the business of receiving charter hire for various ships," the directors of Richmond are Michael Petropoulos, C. Petropoulos (his mother), and D. Petropoulos. (Aug. 30, 1989 Petropoulos Aff. para. 6; Petropoulos Dep. at 124-25.) The directors of Seatriumph are Michael Petropoulos, C. Petropoulos, and A. Dousladzi. C. Petropoulos is also Seatriumph's vice-president. (Petropoulos Dep. at 15, 117-19.) C. Petropoulos and A. Dousladzi are also directors of Global Ship. (Petropoulos Dep. at 123.)
A substantial amount of the Katia's charter hire and freights was paid into the Richmond account in New York. (Petropoulos Dep. at 137.) Petropoulos admitted at his deposition that he had signed the signature card to open Richmond's account into which Seatriumph's hire was paid, (Petropoulos Dep. at 56-57, 67); that Seatriumph had made withdrawals out of the account; that Petropoulos had signed checks on the account as payments made on behalf of Seatriumph, (Petropoulos Dep. at 72-74); and that he had sent the telexes to Continental Bank in New York which contained instructions from Richmond to make payments on Seatriumph's behalf, (Petropoulos Dep. at 84-85.).
From December 1987 through February 1989, 107 checks and 47 wire transfers were made on the New York bank account on behalf of Seatriumph. (Petropoulos Dep. Exs. 1O, 11.) There is no evidence, however, that any of the checks, telexes, or withdrawals originated from New York, rather than Pireaus. (Petropoulos Dep. at 72.)
(4) Kim-Sail points to discrete transactions by a New York broker, Kersten, involving either the Katia or Seatriumph. Kersten, as an intermediate broker, negotiated two charters of the Katia in 1987. (Sondheim Exs. 5C, 7.) From April 16, 1987 to July 2, 1987, Kersten collected six installments of a charterer's hire under a time charter of the Katia that it had brokered, and sent them to the Richmond account at Continental Bank in New York. (Sondheim Exs. 6 G, H, I, J, K, L.) It should be noted ...