Opinion
Civil Action No. 00-2354 Section "R" (5)
June 18, 2001.
ORDER AND REASONS
Before the Court is respondents' motion to vacate attachment. For the reasons stated below, the Court denies respondents' motion.
I. BACKGROUND
On August 6, 2000, the M/V ANANGEL ENDEAVOUR collided with the M/V IVAN SUSANIN south of the entrance to the Southwest Pass of the Mississippi River. At the time, the M/V ANANGEL ENDEAVOUR ("Anangel") was carrying 21, 399 metric tons of corn owned by M/S Tareem Poultry Co. Ltd., Al Zhaheri Poultry Farms, and their interested underwriters ("cargo claimants"). As a result of the collision, the owners of the Anangel abandoned the voyage and instructed cargo claimants to collect their remaining onboard cargo. Cargo claimants discharged the corn from holds 1, 3, 4, and 5 into ten barges for salvage, leaving corn in the number 2 cargo hold.
On September 29, 2000, petitioner Anangel filed a complaint seeking exoneration or limitation of its liability and an order attaching the discharged cargo pursuant to Supplemental Admiralty Rule B(1) of the Federal Rules of Civil Procedure. In support of its motion for attachment, petitioner alleged that cargo claimants wrongfully abandoned and refused to discharge the cargo in hold no. 2 and that cargo claimants may be liable to petitioner for indemnity as a result of the "both to blame collision clause" in the bill of lading. This Court granted Anangel's motion to attach the cargo. By agreement of the parties, the cargo in the barges was subsequently sold for a total of $656,176.36, which is now held in a certificate of deposit pursuant to a security agreement.
In the limitation proceeding, the cargo claimants assert claims for damages against Murmansk Shipping ("Murmansk"), the owner of M/V IVAN SUSANIN. Murmansk in turn asserts a claim against petitioner seeking indemnity and contribution for any amounts that Murmansk owes cargo claimants. Petitioner argues that under the bill of lading, the cargo claimants must indemnify petitioner for any damages it must pay the owners of the non-carrying vessel, Murmansk for cargo claims.
On April 9, 2001, the cargo claimants filed a motion to vacate the attachment, alleging that petitioner has no claim against them as a matter of law.
II. DISCUSSION
A. Legal Standard
Supplemental Rule B of the Federal Rules of Civil Procedure provides that plaintiffs in maritime in personam actions may obtain a prejudgment attachment of a defendant's goods or chattel, if the defendant is not found within the district in which the in personam action has been brought. See Satra Metallurgical, Inc. v. Delmar Int'l, S.A., 1994 WL 577433, *1 (E.D. La. 1994). The attachment process has two purposes (1) to provide the court with a vehicle through which it can assert its jurisdiction over the defendant and (2) to secure any judgment issued in plaintiff's favor. See Id. (citing Swift Co. Packers v. Cornpania Columbiana del Caribe, 339 U.S. 684, 693, 70 S.Ct. 861, 867 (1950)). In considering the propriety of an attachment, the court's inquiry is limited to an assessment of whether the underlying complaint alleges an in personam action grounded in maritime law and whether the attachment was necessary to effectuate jurisdiction. See Id.
The Court notes that both the Charterparty and the bill of lading in this case provide that all disputes arising out of these contracts shall be arbitrated in New York. This arbitration provision does not oust the Court of jurisdiction. The Federal Arbitration Act states:
If the basis of jurisdiction be a cause of action otherwise justiciable in admiralty, then, notwithstanding anything herein to the contrary, the party claiming to be aggrieved may begin his proceeding hereunder by libel and seizure of the vessel or other property of the other party according to the usual course of admiralty proceedings, and the court shall then have jurisdiction to direct the parties to proceed with the arbitration and shall retain jurisdiction to enter decree upon the award.9 U.S.C. § 8. Therefore, several courts have allowed writ of attachments to remain despite the commencement of arbitration. See Unitramp, Ltd. v. Mediterranean Brokerage and Agents, S.A.S., 1993 WL 386298, *1 (E.D. La. 1993). Thus, the Court finds that the propriety of the attachment is properly before the Court even though the substantive claims are subject to arbitration.
On a motion to vacate a maritime attachment, the attaching party has the burden of proving "why the arrest or attachment should not be vacated or other relief granted consistent with these rules." FED. R. CIV. P. Supplemental Rule E(4)(f). Thus, the attaching party must present sufficient evidence to show probable cause for the attachment. See Continental Ins. Co. v. Adriatic Tankers Shipping Co., 1995 WL 649942, *1 (E.D. La. 1995). When considering a motion to vacate, the Court need not definitively resolve the dispute between the parties, but instead it must only determine whether there are reasonable grounds for issuing the order. See Cashman Equipment Corp. v. Trans Caribbean Trans. Co., Ltd., 1996 WL 626294, *2 (E.D. La. 1996). Because the cargo claimants argue that petitioner fails to state a cause of action against them, the Court will apply a standard similar to Rule 12(b)(6). See id. In a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court must accept the well-pleaded allegations as true. See id. (citing St. Paul Ins. of Bellaire v. Afia Worldwide Ins., 937 F.2d 274, 279 (5th Cir. 1991)). In its opposition to the motion to vacate, petitioner claims that it has shown probable cause for the attachment by demonstrating two claims against the cargo claimants.
B. Both to Blame Clause
In the United States, a cargo claimant may recover from the non-carrier colliding vessel for one hundred percent of its damages despite the fact that both the carrier and non-carrier were negligent. See Allied Chemical Corp. v. Hess Tankship Co., 661 F.2d 1044, 1058 (5th Cir. 1981). Under a "Both to Blame" clause, a cargo owner bears the cost of a collision when both ships are at fault, to the extent that the claim for the cargo is paid by the carrying ship to the non-carrying ship. See 2 THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW § 14-8, at 323 (1994). Such a "Both to Blame" clause is present in the bill of lading between the parties here.
The parties dispute whether the language found in the Both to Blame Clause applies to this case. The relevant portion reads:
If the liability for any collision in which the vessel is involved while performing the Charterparty fails to be determined in accordance with the laws of the United States of America, the following clause shall apply:
If the vessel comes into collision with another vessel as a result of the negligence of the other vessel and any act, neglect or default for the master, mariner, pilot or the servants of the Carrier in the navigation or in the management of the vessel, the owners of the goods carrier [sic) hereunder will indemnify the Carrier against all loss or liability to the other or non-carrying vessel or her Owners in so far as such loss or liability represents loss of or damage to any claim whatsoever of the owners of the said goods, paid or payable by the other or non-carrying vessel or her owners to the owners of the said goods and set off, recouped or recovered by the other or non-carrying vessel or her owners as part of their claim against the carrying vessel or carrier.
The foregoing provisions shall also apply where the Owners, operators or those in charge of any vessel or vessels or objects other than, or in addition to, the colliding vessels or objects are at fault in respect to a collision or contact.
( See Resp.'s Mem. Supp. Mot. to Vacate Attachment Ex. A.) (emphasis added). This clause requires the cargo claimants to indemnify the carrying vessel Anangel, regardless of fault, against any loss or liability it must pay to the non-carrier for cargo claims.
As stated above, the parties dispute whether this clause applies to the collision in question. The cargo claimants cite the use of the word "fails" for their proposition that the clause only applies when United States law does not. Because the collision occurred in the territorial waters of the United States, cargo claimants contend that the Both to Blame Clause does not apply. Therefore, cargo claimants argue that they have no liability to the Anangel and there is no justification for attaching the proceeds from the sale of the corn. Cargo claimants also claim that the United States Supreme Court has invalidated "both to blame" clauses because they attempted to stipulate immunity from the carrying vessel's negligence. See United States v. Atlantic Mutual Ins. Co., 343 U.S. 236, 72 5. Ct. 666 (1952).
On the other hand, petitioner contends that the word "fails" is a misprint and that instead the section should read "falls to be determined in accordance with the laws of the United States of America." Anangel therefore claims that the parties intended to be bound by the Both to Blame Clause when United States law does apply. Therefore, because it is undisputed that U.S. law applies to this case, the petitioner argues that the Both to Blame Clause is effective and grants petitioner a cause of action against the cargo claimants. To support the proposition that the provision should read "falls" rather than "fails", petitioner cites to Gaskell's Bills of Lading: Law and Contracts, 346 (2000), which also contains the word "falls" in the preamble to the Both to Blame Clause. Anangel also points to the presence of another misprint in the same Both to Blame Clause as evidence that the word "fails" is an error. Further, petitioner claims that the holding of Atlantic Mutual Insurance invalidating both to blame provisions is limited to common carriers, and they submit evidence that the voyage in question was under a private contract.
Petitioner further cites the Charterparty as evidence that the provision was intended to read "falls". Petitioner argues that the disputed bill of lading incorporates the terms of the Charterparty, which contains a Both to Blame clause. In the Charterparty, the Both to Blame clause also reads "falls." Petitioner claims that the Charterparty is further evidence that the Both to Blame clause was to apply.
The Court finds that the determination of the meaning and scope of the bill of lading involves questions of fact. Further, the Court recognizes that there is authority to support petitioner's contention that the Atlantic Mutual Insurance holding is limited to common carriers. See SCHOENBAUM, § 14-8 at 324 ( citing Allseas Maritime S.A. v. M/V Mimosa, 574 F. Supp. 844, 853 (S.D. Tex. 1983); Alamo Chemical Trans. Co. v. N/V Overseas Valdes, 469 F: Supp. 203, 215 (E.D. La. 1979)). Petitioner has offered evidence that the contract in question was one for private carriage, which the cargo claimants have not rebutted.
Cargo claimants also argue that, in any event, petitioner's claim is premature because it is based on indemnity, and their liability is contingent on Anangel's liability to the non-carrying vessel, which is yet to be established. Cargo claimants have identified a number of scenarios in which Anangel's claim against the cargo claimants would never arise. In response, petitioner has cited authority in which courts have permitted a maritime attachment based on a contingent claim. See Staronset Shipping, Ltd. v. North Star Navigation, Inc., 659 F. Supp. 189, 191 (S.D.N.Y. 1987) (denying motion to vacate attachment based on indemnity claim before owner incurred liability under the indemnity claim).
At oral argument, the cargo claimants conceded that courts have equitable power to permit attachments to secure premature claims. Cargo claimants assert, however, that this attachment is inequitable because there are a number of scenarios in which its liability to Anangel would never arise, even if the Both to Blame clause were enforceable. The Court does not agree that the attachment is inequitable. This is not a case in which Anangel has not yet been sued on the potentially indemnity-triggering liability, so that the ripeness of the indemnity claims is remote. The non-carrier has asserted a claim against Anangel in these same consolidated proceedings in which petitioner has filed its indemnity claim against the cargo claimants. Thus, all of these claims can be resolved in the same proceeding. Moreover, the cargo claimants do not dispute that they could be liable to Anangel if the Both to Blame clause were enforced. They simply argue that there are other possible results which render this outcome speculative. Further, cargo claimants point to no exigent circumstances that would render it essential that the money attached be returned immediately. The Court therefore finds it equitable to maintain the attachment.
Because the Court finds that petitioner has demonstrated reasonable grounds for the attachment by virtue of the Both to Blame clause, it need not address petitioner's second claim regarding discharge expenses.
III. CONCLUSION
For the reasons stated, the Court denies the motion to vacate the attachment.