Kingstate Oil v. M/V Green Star, KUK-JE
| Decision Date | 03 April 1987 |
| Docket Number | Nos. 86-5685 and 86-5712,KUK-JE,No. 86-5685,No. 86-5712,86-5685,86-5712,s. 86-5685 and 86-5712 |
| Citation | 815 F.2d 918 |
| Parties | In the Matter of KINGSTATE OIL v. M/V GREEN STAR. (Two Cases) DREW AMEROID INTERNATIONAL CORP. v. M/V GREEN STAR, her engines, boilers, tackle, etc., In Rem, and Kukje Shipping Company Limited, In Personam. (Two Cases) B.P. OIL INTERNATIONAL LIMITED v.SHIPPING CO., LTD. (Two Cases) ATLANTIC STEAMERS SUPPLY CO. (N.J.) INCORPORATED v. M/V GREEN STAR, her engines, boilers, tackle, etc., In Rem and Kukje Shipping Company Limited, in Personam. (Two Cases) McALLISTER BROTHERS, INC., v. M/V GREEN STAR, her engines, boilers, tackle, etc., In Rem, and Kukje Shipping Company Limited, In Personam. (Two Cases) OVERSEAS SHIPPING, INC., v. M/V GREEN STAR, her engines, boilers, tackle, etc., In Rem, and Kukje Shipping Company Limited, In Personam. (Two Cases) M.J. RUDOLPH CORP. v. M/V GREEN STAR, her engines, boilers, tackle, etc., In Rem, and Kukje Shipping Company Limited, In Personam. (Two Cases) KINGSTATE OIL and Bank of Pusan, Plaintiffs in Intervention, v. KUK JE SHIPPING COMPANY LIMITED, In Personam, and M/V GREEN STAR, In Rem, Defendants in Intervention. (Two Cases) WITTE CHASE CORPORATION v. M/V GREEN STAR, her engines, boilers, tackle, etc., In Rem, and Kukje Shipping Company Limited, In Personam. (Two Cases) KINGSTATE OIL, Jung Jin Park, Young Ho Kim, Bag Myeong In, Bong Hun Jeong, Nam Sung Hyun, Gyo Seob Gim, I Seung Dae, Park Hong Min, Hong Samyoung, Gu Yeong Hund, Byum Sung Duk, Kim Jung Kei, Kim Tae Ok, Kim Haeng Sam, Kim Jung Bok, Kang Mai Mook, Lee Gab Yeol, Lee Kim Mun, Jung Gweon Park, Jeon Dae Yun, Byen Tto Sik, Jeon Su Saeng, Lee Hyeong Jo and Kim Su Han, Plaintiffs in Intervention, v. M/V GREEN STAR, her engines, boilers, tackle, appurtenances, cargo, etc., In Rem, and Kukje Shipping Company Ltd., In Personam. (Two Cases) DREW AMEROID INTERNATIONAL CORP. and Eklof Marine Corp., Intervening Plaintiffs, v. M/V GREEN STAR, her engines, boilers, tackle, etc., In Rem, and Kukje Shipping Company Limited, In Personam. (Two Cases) DREW AMEROID INTERNATIONAL CORP. and |
| Court | U.S. Court of Appeals — Third Circuit |
Martin B. Mulroy (argued), Hill, Rivkins, Carey, Loesberg, O'Brien & Mulroy, Newark, N.J., for Bank of Pusan.
William P. Byrne (argued), Cichanowicz, Callan & Keane, New York City, for Nissho Iwai American Corp.
Andrew J. Goldstein, Allyn Z. Lite, Hope M. Pomerantz (argued), Goldstein, Till & Lite, Newark, N.J., for Kingstate Oil, et al.
Keith L. Flicker (argued), Quinn, Coti, Flicker & Llorca, Fort Lee, N.J., Mark C. Flavin, Geoffrey D. Ferrer, Haight, Gardner, Poor & Havens, on the brief, New York City, for Korean Development Bank.
Sidney H. Kalban, Phillips & Cappiello, P.C., New York City, for Jung Jin Park, et al. and Kim Hyun Jin, et al.
Richard K. Willard, Asst. Atty. Gen., Thomas W. Greelish, U.S. Atty., Janis G. Schulmeisters, Attorney in Charge (Marie Louise Hagen, of counsel), U.S. Dept. of Justice, Civ. Div., Torts Branch, New York City, for U.S., amicus curiae.
Before GIBBONS, Chief Judge, SEITZ and ALDISERT, Circuit Judges.
This appeal from a district court's order confirming the judicial sale of a cargo ship requires us to decide if the costs of unloading the vessel after the sale should be treated as administrative costs. The vessel's charterer and the consignee of the cargo contend that the court abused its discretion in refusing to treat unloading expenses as administrative expenses. A preliminary question is whether we have jurisdiction to entertain this appeal. We hold that we do have jurisdiction and conclude that the district court did not abuse its discretion.
On July 29, 1986, the cargo ship M/V GREEN STAR was arrested in Port Newark, New Jersey on behalf of Kingstate Oil, which had in rem claims against the ship and in personam claims against Kuk Je Shipping, her owner. At the time of the arrest, the GREEN STAR was under charter to appellant Nissho Iwai American Corporation, and scrap metal bound for Korea was being loaded on board. Nissho Iwai completed loading after the arrest, apparently in response to assurances from Kuk Je, and issued a bill of lading for the cargo to appellant Bank of Pusan.
On August 13, 1986, the district court ordered the interlocutory sale of the GREEN STAR, the proceeds to be deposited with the court to satisfy claims against the vessel or her owner. Bank of Pusan filed an application to have the costs of unloading the scrap, estimated to be about $250,000, treated as an administrative expense charged against the proceeds of the sale. The GREEN STAR was sold at auction with the cargo on board on August 28, 1986 for $540,000. In the course of proceedings to confirm the sale, the district court granted motions to intervene by Nissho Iwai, Bank of Pusan, Kingstate Oil and other creditors (appellees), the GREEN STAR's crew (appellees Park, et al.), and its mortgagee (appellee Korean Development Bank). The district court also denied Bank of Pusan's application for administrative expenses. Bank of Pusan and Nissho Iwai appeal from the denial of the application for administrative expenses.
Appellants contend that jurisdiction on appeal is proper pursuant to 28 U.S.C. Sec. 1292(a)(3). That section vests courts of appeals with jurisdiction of appeals from "[i]nterlocutory decrees of ... district courts ... determining the rights and liabilities of the parties to admiralty cases...." 28 U.S.C. Sec. 1292(a)(3). Appellants concede that the district court did not determine the merits of their claims against Kuk Je Shipping or the GREEN STAR. 1 Br. for appellant Bank of Pusan at 8, 14. They maintain, however, that "as a practical matter" the court's denial of the application to treat the expenses of unloading the steel as an administrative cost constitutes "a very real and final determination" of their rights to a share of the proceeds from the sale of the GREEN STAR sufficient for interlocutory appeal under section 1292(a)(3). Br. for appellant Bank of Pusan at 14. They say that the financial realities of this experience support their contention of finality: the sale realized only $540,000; the cost of unloading amounted to some $250,000; and, although theoretically they have a right to have their claims ultimately processed in due course, unless they succeed in declaring the unloading costs as an administrative expense, their claims will be worthless because of the priority of liens of the mortgagee and the ship's crew. Accordingly, they argue, under the peculiar facts of this case, the determination of the administrative expense question is in reality a final determination of the merits of their claims, and hence is appealable. We are impressed by this appealability argument.
To be appealable under section 1292(a)(3), an order in admiralty need not determine all rights and liabilities of all parties. Bankers Trust Co. v. Bethlehem Steel Corp., 761 F.2d 943, 945 n. 1 (3d Cir.1985); see, e.g., Jones & Laughlin Steel, Inc. v. Mon River Towing, Inc., 772 F.2d 62, 64 n. 1 (3d Cir.1985) (). Case law indicates, however, that the order appealed from must conclusively determine the merits of a claim or defense. See Todd Shipyards Corp. v. Auto Transportation, S.A., 763 F.2d 745, 751 (5th Cir.1985) (); Bankers Trust Co., 761 F.2d at 945 n. 1 (); Gulf Towing Co. v. Steam Tanker, Amoco New York, 648 F.2d 242, 244 (5th Cir.1981) ().
Older cases from this court are more explicit. In In Re Bave, 314 F.2d 335, 336 (3d Cir.1963), for example, we said that we lacked jurisdiction of an appeal from the district court's denial of a motion to discontinue a limitation proceeding because "[n]either the merits of the petition nor of appellant's defenses has been determined by the Order from which th[e]...
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