United States District Court, S.D. New York
For Plaintiff: Harold M. Kingsley, Kingsley Kingsley & Calkins, Hicksville, New York.
For Defendant: Patrick F. Lennon, Anne Casey Levasseur, Lennon, Murphy, Caulfield & Phillips, LLC, New York, New York.
MEMORANDUM & ORDER
Vernon S. Broderick, United States District Judge.
Plaintiff Thyssenkrupp Materials N.A., Inc. (" Thyssenkrupp" ) brought this action to recover losses arising from a three-month delay in shipping cargo from Turkey to the United States due to the seizure by creditors of the vessel Defendant Western Bulk Carriers A/S (" WBC" ) chartered to complete that voyage, asserting against WBC claims of financial unseaworthiness sounding in both tort and contract. WBC now moves for summary judgment as to both claims. WBC's motion concerning the tort claim of financial unseaworthiness is granted because this tort has not been recognized in this Circuit, and Plaintiff fails to allege the type of damages required under this tort. Defendant's motion directed to the contract claim is denied as premature, as discovery had not been completed at the time of the filing of the motion.
On or about February 27, 2012, Thyssenkrupp and WBC entered a charter party contract. (Plf.'s 56.1, ¶ 5; Lennon Decl., Ex. 4.) Pursuant to the charter party, Thyssenkrupp chartered from WBC the vessel M/V Sanko Mineral (the " M/V Sanko" or " Ship" ) for the purpose of carrying approximately 7,415 metric tons of steel plate from Turkey to the ports of New Orleans and Houston. (Plf.'s 56.1, ¶ 5.) The M/V Sanko was owned at all relevant times by The Sanko Steamship Company of Japan (" Sanko" ). ( Id. ¶ 1.) WBC chartered the Ship from Sanko and nominated it to perform the voyage under the charter party with Thyssenkrupp. ( Id. ¶ ¶ 2, 13.) After WBC nominated the M/V Sanko, it responded to a Thyssenkrupp questionnaire, which included disclosure of the vessel's ownership. ( Id. ¶ 13; see Lennon Decl., Ex. 1 at 6-22.) Thyssenkrupp accepted the M/V Sanko to perform the voyage under the charter party. (Plf.'s 56.1, ¶ 14.)
On May 7, 2012, during the course of that voyage, creditors attached the M/V Sanko pursuant to an ex parte order issued by the District Court for the District of Maryland. ( Id. ¶ 10; see Lennon Decl., Ex. 6.) The Ship was held in the port of Baltimore for approximately three months, until August 2, 2012. (Plf.'s 56.1, ¶ ¶ 10, 15; see Lennon Decl., Ex. 8.) Upon release, the Ship completed its voyage and delivered the cargo of steel to the destination ports sometime in August 2012. (Plf.'s 56.1, ¶ 16; Kingsley Decl., Ex. 1 at 5.)
Thyssenkrupp claims that it sold the steel at a discount. It claims that on the scheduled arrival date the steel had a market value of $6,582,176.44, but that the intended purchaser rejected the steel because of the delay. (Kingsley Decl., Ex. 1 at 5.) As a result, Thyssenkrupp sold the steel to different buyers at the discounted price of $6,004,964.44, a difference of $577,212.00. ( Id.; see Plf.'s 56.1, ¶ 9.) Thyssenkrupp further alleges that four plates of steel, each with a claimed value of $10,834.20, were missing upon discharge in Houston. (Kingsley Decl., Ex. 1 at 5.) Thyssenkrupp does not allege any physical damage to the cargo. (Lennon Decl., Ex. 5 at 5; see Plf.'s 56.1, ¶ 9; Kingsley Decl., Ex. 1 at 5.)
II. Procedural History
Thyssenkrupp filed its Complaint on February 25, 2013, seeking to recover the
difference between the value of the steel when it was scheduled to arrive and the price at which it was sold, the value of the four allegedly missing plates, and attorneys' fees. The Complaint delineates all Thyssenkrupp's claims in a single paragraph:
The cargo described in Schedule A was lost, damaged and depreciated by defendants due to the fault, neglect, deviation, unseaworthiness, maritime tort, tortious interference with contract, breach of warranty, sinking, stranding, salvage expenses, general average, delay, financial unseaworthiness, breach of contract and conversion of defendants, their agents and servants, and delivered by defendants in non-conforming and contaminated condition, mis-delivered and non-delivered.
(Doc. 1, ¶ 6.) On May 9, 2013, WBC filed an answer to the Complaint generally denying the allegations in the Complaint and asserting various affirmative defenses, among them that WBC exercised due diligence to make the M/V Sanko seaworthy. (Doc. 6 at 4.)
A case management plan was entered on May 10, 2013 (Doc. 8), after which discovery commenced. On October 28, 2013, the case was referred to Magistrate Judge Sarah Netburn for general pretrial purposes. (Doc. 11.) Discovery was scheduled to close on March 18, 2014. (Docs. 27 & 55.)
In November 2013, Thyssenkrupp moved to compel discovery related to WBC's motives in entering into the charter party and in nominating the M/V Sanko. On November 26, 2013, Thyssenkrupp submitted a letter to Magistrate Judge Sarah Netburn outlining its arguments in favor of such discovery, and WBC submitted a response letter on December 7, 2013. ( See Docs. 16 & 18.) By order dated December 18, 2013, Judge Netburn denied discovery related to WBC's motives on the grounds that such discovery would be relevant only to a tort claim for financial unseaworthiness, but that Thyssenkrupp had not adequately demonstrated the viability of such a tort. (Doc. No. 19.) Thyssenkrupp objected to that ruling. (Doc. 21.) On January 22, 2014, Judge Ronnie Abrams affirmed the denial of discovery with leave for reconsideration in the event that Thyssenkrupp demonstrated the viability of its tort claim or any other basis of entitlement to the discovery. (Doc. 28.) Judge Abrams scheduled a conference for February 11, 2014 to discuss addressing the viability of the tort claim.  ( Id.)
The parties appeared before me on February 11, 2014, made arguments about the viability of a maritime tort claim of financial unseaworthiness, and discussed the logistics related to briefing that issue. The parties agreed that WBC would file a motion for summary judgment as to the tort claim. On February 18, 2014, WBC filed a motion seeking summary judgment against the tort claim as well as against Thyssenkrupp's breach of contract claim of financial unseaworthiness under the charter party. (Doc. 37.) The next day, Thyssenkrupp wrote a ...