CTC Imports & Exports v. Nigerian Petroleum Corp.
| Decision Date | 27 April 1990 |
| Docket Number | Civ. A. No. 89-1815. |
| Citation | 739 F. Supp. 966 |
| Parties | CTC IMPORTS & EXPORTS v. NIGERIAN PETROLEUM CORPORATION, Gulf Shipping Agency (Nigeria, Ltd.), Universe Maritime Pireaus Casa Marzelli, M/V VYTINA, Captain Stratis Nicholas, Rice Unruh, Shelton Russell, Individually and as Representative of British Petroleum, British Petroleum, and Addax Overseas, S.A. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
L. Obioma Aham, Philadelphia, Pa., for plaintiff.
James W. Johnson, Mary Elisa Reeves, Philadelphia, Pa., for defendants.
Presently before the court are the parties' cross-motions for summary judgment pursuant to Fed.R.Civ.P. 56, and defendants' motion for sanctions pursuant to Fed.R.Civ.P. 11 and 28 U.S.C. § 1927. For the reasons set forth herein, plaintiff's motion for summary judgment will be denied, defendants' motion for summary judgment will be granted, and defendants' motion for sanctions will be granted.
On February 16, 1989 Addax Overseas S.A., a Panamanian corporation, entered into a tanker voyage charter party with Palime Navigation Co. of Cyprus, owner of the M/V Vytina. Pursuant to voyage instructions by Addax, the Vytina was to proceed to Port of Bonny, Nigeria to load 105,000 metric tons of Bonny light crude oil to be carried to the United States. On February 20, the day the Vytina arrived in Nigeria, Addax contracted to sell 775,000 barrels of Bonny light crude to Sohio Supply Co. of Cleveland, Ohio. A February 28 amendment to the contract required delivery to Marcus Hook, Pennsylvania between March 14 and 16, with title passing to Sohio upon the Vytina's entrance into U.S. territorial waters. See Exhibit I to Motion for Summary Judgment of Defendant Addax Overseas S.A.
On February 24, 1989 the Vytina completed loading of 772,312 barrels of Bonny light crude. A Certificate of Origin dated February 24 shows that these 772,312 barrels were shipped by the Nigerian National Petroleum Corporation to Basic Resources Ltd. and were consigned to Banque Nationale de Paris. See Exhibit G. A Bill of Lading of the same date evidences a transfer of the crude from Basic Resources to the Vytina. See Exhibit F. The Vytina left port on February 24 with an estimated date of arrival at Marcus Hook of March 10.
On March 6, 1989 BP Oil Supply Company, Sohio's parent corporation, telexed Addax that it had received calls from parties representing CTC Imports & Exports claiming title and bills of lading for the oil aboard the Vytina and requested Addax to verify clear title. On March 7 Addax telexed its brokers, with a copy to Sohio, that the Vytina would lighter some 260,000 barrels at Big Stone Beach, Delaware on March 10. After lightering, the Vytina arrived at the BP oil refinery at Marcus Hook on March 13, where it was arrested by the plaintiff pursuant to Rule C of the Supplemental Admiralty and Maritime Rules. This arrest was vacated on March 15 by Judge Norma L. Shapiro acting as emergency judge.
Plaintiff's complaint alleges title to the oil aboard the Vytina through consignment by an entity known as Gulf Shipping Agency of Nigeria, Ltd. Plaintiff claims that its agent, John Indakwa, met with an individual named D.W. Fally who sold plaintiff 773,398 barrels of Bonny light crude from the Nigerian National Petroleum Corporation. In support of its claim, plaintiff proffers shipping documents, including a bill of lading, cargo manifest and Master's Receipt for Documents form, all executed on February 26, 1989; a date when the Vytina was in the Atlantic some seven hundred miles off the coast of Nigeria. See Exhibits A-E to Plaintiff's Complaint. In addition, both the master and the captain of the Vytina testified in deposition that the ship's seal and signatures on these documents were forgeries. Finally, Kuo Shiao-Lyn of the International Maritime Bureau of the International Chamber of Commerce informed plaintiff's shipping agent on March 10, 1989 that its documents were forged and offered assistance in an investigation. Based on this evidence, defendants seek dismissal of plaintiff's complaint and sanctions in the form of costs and attorneys fees.
The function of a motion for summary judgment is to avoid a useless trial in cases where it is unnecessary and would only cause delay and expense. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977). To this end, the court may examine the pleadings and other material offered for the purpose of determining if there is a genuine issue of material fact to be tried. Sims v. Mack Truck Corp., 488 F.Supp. 592, 597 (E.D.Pa. 1980). Summary judgment "shall be rendered forthwith" if it appears from an application of substantive law to the uncontroverted facts that the movant is entitled to judgment as a matter of law. Fed.R. Civ.P. 56(c). See also Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986).
In considering a motion for summary judgment, the court must determine whether the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show there is a genuine issue of material fact, and whether the moving party is entitled to judgment as a matter of law. Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 896 (3d Cir.1987) (en banc); Arnold Pontiac-GMC, Inc. v. General Motors Corp., 786 F.2d 564, 568 (3d Cir.1986). "As to materiality, the substantive law will identify which facts are material." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). An issue is "genuine" only if the evidence is such that a reasonable jury could find for the non-moving party. Id.
The burden to demonstrate absence of material fact issues remains with the moving party regardless of which party would have the burden of persuasion at trial. If, however, the non-movant will bear the burden of persuasion at trial, the party moving for summary judgment may meet its burden by showing that the evidentiary materials of record, if reduced to admissible evidence, would be insufficient to carry the non-movant's burden of proof. Celotex, supra, 477 U.S. at 327, 106 S.Ct. at 2554.
A party resisting a Rule 56 motion cannot expect to rely upon bare assertions, conclusory allegations, or a mere cataloguing of affirmative defenses. Celotex, supra, 477 U.S. at 323-24, 106 S.Ct. at 2552-53; Gans v. Mundy, 762 F.2d 338 (3d Cir. 1985). Once the moving party has presented the evidence which would require a directed verdict at trial, the burden shifts to the opposing party to respond with specific facts showing that a genuine issue for trial exists. If the non-moving party does not so respond, summary judgment shall be entered against them. Anderson v. Liberty Lobby, Inc., 477 U.S. at 247-48, 106 S.Ct. at 2509-10.
Given this standard, plaintiff's complaint must be dismissed on two grounds. As a threshold procedural matter, plaintiff's failed to verify its complaint as required by Rule C(2) of the Supplemental Admiralty and Maritime Rules. This is a jurisdictional defect which requires dismissal. However, plaintiff's complaint must also be dismissed on substantive grounds. Defendants' documentation, taken in conjunction with the deposition of Captain Stratis Nicholas, prove a conclusive chain of title to the cargo from the Nigerian National Petroleum Corporation through Basic Resources to Addax and, finally, to Sohio upon the Vytina's entrance into U.S. territorial waters. See Exhibits A-R to Defendant Addax's Motion for Summary Judgment and Exhibits 1-3 to Defendant Palime Navigation Co.'s Motion for Summary Judgment. Moreover, plaintiff's exhibits together with deposition testimony of Captain Nicholas and Mr. Shiao-Lyn establish that plaintiff's documents are indeed forgeries and cannot support its claim. Since no genuine issue of fact as to proper title to the Vytina's cargo remains, summary judgment must be granted in favor of defendant and against the plaintiff.
Defendants seek sanctions against plaintiff and its counsel for failure to conduct a reasonable inquiry into the authenticity of plaintiff's documents prior to filing the complaint and arresting the vessel, and for failure to withdraw the complaint following the deposition testimony of, among others, Captain Nicholas.
Federal Rule of Civil Procedure 11 provides:
Every pleading, motion and other paper of a party represented by an attorney shall be signed by at least one attorney of record in the attorney's individual name, whose address shall be stated. The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion or other paper; that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation ... If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay the other party or parties the amount of reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney's fee.
The purpose of Rule 11's certification requirement is to discourage pleadings which are frivolous, legally unreasonable, or without factual foundation. Lieb v. Topstone Industries, Inc., 788 F.2d 151, 157 (3d Cir. 1986). The Third Circuit applies a test of "reasonableness under the circumstances" to determine whether an attorney has filed a pleading in violation of the rule. Napier v. Thirty or More...
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