Erne Shipping v. Hbc Hamburg Bulk Carriers Gmbh

• Decision Date: 11 January 2006
• Docket Number: No. 05 Civ.8915(GWG).,05 Civ.8915(GWG).
• Citation: 409 F.Supp.2d 427
• Parties: ERNE SHIPPING INC., Plaintiff, v. HBC HAMBURG BULK CARRIERS GMBH & CO. KG, Defendant.
• Court: U.S. District Court — Southern District of New York

409 F.Supp.2d 427

ERNE SHIPPING INC., Plaintiff, v. HBC HAMBURG BULK CARRIERS GMBH & CO. KG, Defendant.

No. 05 Civ.8915(GWG).

United States District Court, S.D. New York.

January 11, 2006.

Charles E. Murphy, Tisdale & Lennon, LLC, New York, NY, for plaintiff.

Michael E. Unger, Lawrence J. Kahn, Freehill Hogan & Mahar, LLP, New York, NY, for defendant.

OPINION AND ORDER

GORENSTEIN, United States Magistrate Judge.

On October 20, 2005, plaintiff Erne Shipping Inc. ("Erne") was granted an ex parte order attaching assets of defendant HBC Hamburg Bulk Carriers GMBH & Co. KG ("HBC"). See Ex Parte Order for Process of Maritime Attachment, dated October 20, 2005 (Docket # 4). HBC now moves to vacate the attachment. The parties have consented to jurisdiction over this matter by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the reasons stated below, HBC's motion to vacate is denied.

I. BACKGROUND

A. Procedural History

Erne and HBC are currently participating in an arbitration in London involving Erne's claim that HBC breached two maritime contracts in 2003 and 2004. Erne is a shipping company based in Monrovia, Liberia. HBC is a shipping company based in Hamburg, Germany. Erne claims damages in the arbitration of $188,647.79, inclusive of fees, costs, and interest.

Relying on Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims ("Rule B"), Erne sought and obtained an order of attachment for this amount pending the outcome of the arbitration. See Verified Complaint, dated October 19, 2005 (Docket # 1) ("Compl."), ¶¶ 8, 11, 12, 14; Affidavit in Support of Prayer for Maritime Attachment, dated October 20, 2005 (Docket # 3) ("Aff. in Support"). Following expedited briefing by the parties, a hearing was held on November 4, 2005, pursuant to Rule E(4)(f), at which Erne was required to show cause why the order of attachment should not be vacated. See Defendant's Memorandum of Law in Support of Motion to Vacate the Attachment, dated October 31, 2005 (Docket # 14) ("Def.Mem."); Plaintiff's Memorandum of Law in Opposition to Motion to Vacate the Attachment, dated Nov. 3, 2005 (Docket # 6); Defendant's Reply Memorandum of Law in Further Support of Its Motion to Vacate the Attachment, dated Nov. 4, 2005 (Docket # 9). At the request of the Court, the parties submitted additional briefing after the hearing. See Defendant's Post-Hearing Memorandum of Law in Further Support of Its Motion to Vacate the Attachment, dated Nov. 16, 2005 (Docket # 15); Plaintiff's Reply Memorandum of Law in Opposition to Motion to Vacate Attachment, dated Nov. 16, 2005 (Docket # 17) ("Pl. Post-Hearing Mem."). HBC argues that it is entitled to vacatur because it can be "found" in this district within the meaning of Rule B.

B. Factual Background

1. Nature and History of HBC

HBC's primary business is "the chartering (leasing) of ships from vessel owners for a set period of time and subsequent sub-chartering of those ships to other companies to carry cargo either on a single voyage basis for which HBC collects freight or on a time basis for which HBC collects hire." See Third Declaration of Thomas Boggild, dated November 15, 2005 (Docket # 16) ("Third Boggild Decl."), ¶ 3.

HBC was incorporated in Germany in 1999, and was converted to a German limited partnership in 2001. See Declaration of Thomas Boggild, dated October 28, 2005 (Docket # 13) ("Boggild Decl."), ¶ 3. It has fifteen employees including directors. All of these employees are based in Hamburg. See Deposition of Thomas Boggild, dated November 10, 2005 (reproduced as Ex. 1 to Pl. Post-Hearing Mem.), at 8. HBC's website indicates that the company is located solely in Hamburg. See id. at 16-17.

HBC is a "substantial" company with a "strong and solid" industry reputation. See Boggild Decl. ¶ 4. In its capacity as a provider of ships for bulk cargoes and as a commercial ship management company for third parties, it has chartered more than 400 vessels between 2000 and 2005, and conducted more than 695 voyages, of which 134 were related to the United States. Id. ¶¶ 5, 6. It has also operated "numerous" vessels as "commercial managers" for other shipowners. Id. ¶ 6. HBC earned revenues of "approximately $406 million in gross in the years 2000-2004." Id. ¶ 7. Of this figure, approximately $69.5 million was earned as the result of doing business with "shippers, receivers, and charterers" in the United States. Id. As of June 2005, HBC had earned gross revenues of approximately $482 million, $73 million of which was earned as a result of doing business with United States-based shippers, receivers, and charterers. Id.

2. Business "Registration" in New York

In August 2005, HBC "register[ed]" with the New York State Department of State's Division of Corporations "so as to create a formal presence within the United States in New York City," which it determined would "also help to serve HBC's growing connections with cargo shippers located elsewhere throughout the United States." Boggild Decl. ¶¶ 21-22. HBC "is comfortable with the fact that its registration in New York makes it liable to answer any suit brought by any party in any New York Court for any amount of damages." Id. ¶ 23. HBC has also appointed Michael Unger, its attorney in New York, as its agent to accept service of process here. See id. ¶ 24.

3. Contracts with New York-based Companies

HBC has pointed to two main types of contracts that it has with New York-based companies. First, it states that it has "fixed" — that is, contracted to charter, see T. 29-16 vessels with shipbrokers in New York State in the last five years. See Boggild Decl. ¶ 9.¹ These shipbrokers earn a commission based on a percentage of the daily hire rate or freight charges paid to HBC by the shippers or charterers. See Third Boggild Decl. ¶ 4.

Second, between 2000 and the present, HBC has entered into 14 contracts with three different New York-based shippers (or charterers) to carry cargoes. See Boggild Decl. ¶ 10; T. 36. It has provided copies of the 14 "charter parties" (i.e., contracts) with these shippers. See Ex. A to Boggild Decl.

Between 2000 and 2004, HBC earned gross revenues of approximately $8.79 million from shipments undertaken on behalf of New York-based companies. See Boggild Decl. ¶ 15.

HBC has also pointed to two additional contracts it has made with New York companies. HBC was party to a "Forward Freight `Swap' Agreement" with Fairfield Bulk Carriers Inc., an agreement that had been negotiated by a company located in Harrison, New York. See Third Boggild Decl. ¶ 11. The agreement, which covered the first half of 2005, was "essentially a derivatives contract whereby HBC attempts to insulate itself from market fluctuations in freight rates for future shipments during the covered period." Id. ¶ 11.

Since 2003, HBC has also contracted with Fleetweather, which is based in Hopewell Junction, New York, to provide weather routing information for more than 80% of HBC-operated vessels. HBC has "almost daily contact" with Fleetweather, and occasionally retains its services to conduct "post-voyage analysis" in the event of a weather-related dispute. HBC pays Fleetweather approximately $32,000 per year for these services. See Boggild Decl. ¶ 16.

4. Vessels in New York Waters

HBC states that three vessels it has "time chartered" have called at the Port of New York to unload cargo. See Third Boggild Decl. ¶ 8. Erne notes that it was the customer's decision as to where these boats called. See Pl. Post-Hearing Mem. at 6. HBC states in response that it was "well aware that the customer intended the cargo to be carried to New York," and "had the option of not entering into the contract with the customers." See Third Boggild Decl. ¶ 8.

5. Other Contacts

HBC alleges that it markets its services to New York-based cargo shippers. See Boggild Decl. ¶ 14. Specifically, in December 2003, one of HBC's partners, Georg Greilinger, met with "various current and potential customers" in New York. Id. In addition, at a maritime convention in Stamford, Connecticut, Mr. Greilinger also met with other New York-based companies with which HBC does business or to which it has marketed its services. See id. HBC has also marketed itself to New York companies at various international shipping meetings and trade fairs around the world. At these meetings, HBC solicits business from, among others, New York-based brokers, vessel owners, and shippers. HBC "hopes to continue to do business with those companies with whom it has already formed a business relationship, and to have an opportunity to do business with other companies whom it meets through these contacts." See Third Boggild Decl. ¶ 12.

In two of its charter parties, HBC has agreed to arbitrate any disputes in New York. See Boggild Decl. ¶ 12, Ex. B.

6. HBC's Plans for a New York Office

With respect to HBC's intention to establish a physical office in New York in the future, HBC states it has "generally reviewed newspapers and other materials in order to get an idea of the likely cost of such an office," and it "remains committed to establishing a New York office for the purpose of expanding its relationships with New York and other U.S. companies." Third Boggild Decl. ¶ 14. HBC states it is "generally aware of the tax implications [of establishing a New York office] and is currently investigating which New York accounting firm it will hire to handle HBC's accounting needs." Id. ¶ 15. HBC has not retained immigration attorneys because it "intends to hire a U.S. citizen who is familiar with the New York and surrounding market." Id. ¶ 16.

II. DISCUSSION

A. Rule B Attachment

Rule B(1)(a) provides:

If a defendant is not found within the district, a verified complaint may contain a prayer for process to attach the defendant's tangible or intangible personal property — up to the amount sued for — in the hands of garnishees named in the process.

If the plaintiffs filings show...