Aegean Mar. Petroleum S.A v. Kavo Platanos M/V

• Docket Number: 2:15-cv-00172-JHC
• Decision Date: 03 November 2023
• Parties: AEGEAN MARITIME PETROLEUM S.A., Plaintiff, v. KAVO PLATANOS M/V, ET AL., Defendants.
• Court: U.S. District Court — Western District of Washington

1

AEGEAN MARITIME PETROLEUM S.A., Plaintiff, v. KAVO PLATANOS M/V, ET AL., Defendants.

No. 2:15-cv-00172-JHC

United States District Court, W.D. Washington, Seattle

November 3, 2023

ORDER

JOHN H. CHUN, UNITED STATES DISTRICT JUDGE

I Introduction

This matter comes before the Court on Defendant Canpotex Shipping Services, Ltd.'s Motion to Vacate Order on Motion to Arrest Vessel.^[1] Dkt. # 111; see also Dkt. # 9. The Court has considered: the materials filed in support of and in opposition to, the motion; pertinent portions of the record, and the applicable law. Being fully advised-and after holding a hearing under Supplemental Admiralty Rule (“SAR”) E 4(f)-the Court DENIES the motion.

II Background

In 2014, Defendant Canpotex chartered a vessel, the M/V KAVO PLATANOS (“Vessel”). Dkt. # 82 at 3. In October 2014, Canpotex contracted with O.W. Bunkers (U.K.), Ltd (“OW”) to have 900 metric tons of bunker fuel delivered to the Vessel in Vancouver, Canada. Dkt. # 79-1. OW then contracted with Plaintiff Aegean Maritime Petroleum S.A. (“Aegean”) to deliver the bunker fuel to the Vessel. Dkt. # 79-3. When Aegean delivered the fuel, the Vessel's Chief Engineer accepted delivery. Dkt. # 79-4. In November 2014, OW declared bankruptcy. Dkt. # 82 at 3. Aegean sent an invoice to OW for the bunker fuel but never received payment. Id. So Aegean then sent Canpotex a Notice to Pay for $463,050, the cost of the bunker fuel delivery. Dkt. # 54. Canpotex did not pay Aegean.

In February 2015, Aegean brought suit against the Vessel in rem and in personam against Defendants Canpotex, Indy Maritime SA (the owner of the Vessel), and Gourdomichalis Maritime SA (the manager of the Vessel) to recover for the bunker fuel delivery. Dkt. # 1. Soon after Aegean's initial complaint was filed, on February 6 2015, the Court authorized the arrest and seizure of the Vessel (including all bunkers aboard) and a writ of maritime attachment and garnishment. Dkt. ## 9, 12. Based on the Supplemental Rules for Admiralty Rules B, C, and D (“Supplemental Rule” or “SAR”), the Court determined that the conditions for an action in rem were present. Dkt. # 9 at 1. The Court also concluded that a writ of maritime attachment and garnishment was appropriate under Supplemental Rules B, C, and D. Dkt. # 12 at 1. Canpotex then posted $494,013 with this Court as a substitute security to secure release of the Vessel.^[2]Dkt. # 21.

In May 2015, Canpotex moved to dismiss, transfer, or stay the action. Dkt. # 34. The Court granted a stay pending the resolution of similar cases in the Southern District of New York relating to OW's bankruptcy. Dkt. # 54. The Court stayed the case for six years. These New York “test cases” have since been resolved; they generally held that under United States maritime law, subcontractors (here Aegean) delivering bunker fuel do not have valid maritime liens over vessels for nonpayment unless they can show that the contractor (here, OW) was acting as an “agent” of the Vessel to engage specific subcontractors. See U.S. Oil Trading LLC v. M/V VIENNA EXPRESS, 911 F.3d 652, 662-63 (2d Cir. 2018). On facts much like those here, OW was not considered an “agent,” so the subcontractor that delivered fuel did not have a maritime lien against the involved vessel. See Clearlake Shipping Pte Ltd. v. NuStar Energy Servs., Inc., 911 F.3d 646, 651-52 (2d Cir. 2018); see also Aegean Bunkering (USA) LLC v. M/T AMAZON, 730 Fed.Appx. 87, 89 (2d Cir. 2018); O'Rourke Marine Servs. L.P., L.L.P. v. M/V COSCO HAIFA, 730 Fed.Appx. 89, 91 (2d Cir. 2018); Chemoil Adani Pvt. Ltd. v. M/V MARITIME KING, 742 Fed.Appx. 529, 531 (2d Cir. 2018).

After the Court lifted the stay in December 2021, see Dkt. # 70, Canpotex moved to dismiss the case. Dkt. # 77. Aegean amended its complaint. Dkt. # 79. While the original complaint filed in 2015 asserted claims under U.S. law, the amended complaint asserted claims based on Canadian law, including its statute governing maritime liens.

In March 2022, Canpotex moved to dismiss Aegean's amended complaint. Dkt. # 82. The Court granted Canpotex's motion to dismiss but provided Aegean an opportunity to amend its complaint. Dkt. # 98. Aegean filed a second amended complaint (“SAC”), asserting five causes of action based on Canadian law. Dkt. # 99. Canpotex again moved to dismiss the SAC. Dkt. # 100. The Court granted this motion in part, as to the in rem maritime lien claims filed under Supplemental Admiralty Rule C but denied the motion as to all other claims. Dkt. # 109.

In this order, the Court clarified that causes of action two through five remained, clarifying that: (1) Aegean's breach of contract claim should be analyzed under Greek law and (2) Aegean's unjust enrichment claim should be analyzed under Canadian law. See id. at 20-26. The Court concluded that although the complaint was unclear whether (1) cause of action four, maritime attachment and garnishment under Supplemental Rule B, and (2) cause of action five, arrest of all bunkers on board the Supplemental Rule D, were “distinct causes of action” rather than “types of relief,” they should not be dismissed because they “may rise and fall with the breach of contract and unjust enrichment claims.” Id. at 27.

Canpotex now moves to vacate the Court's order to arrest the Vessel under Supplemental Rule E(4)(f) and Local Admiralty Rule (“LAR”) 115(d).^[3] Dkt. # 111. Because the Court dismissed Aegean's in rem maritime lien claim in its previous order, see Dkt. # 109, Canpotex requests a prompt hearing at which Aegean “must show cause why the arrest and writs of attachment and garnishment for [the Vessel] should not be vacated.” Dkt. # 111 at 1-2. Canpotex contends that the Court should vacate the attachments under “SAR B and SAR D arising out of the in personam claims” because: (1) Aegean's contract claims fail under Greek law and (2) Aegean's claims of unjust enrichment fail under Canadian law. See id. at 2-3. The Court conferred with the parties on September 8, 2023, and set out another briefing schedule. Dkt. # 118; see also Dkt. # 119. Aegean filed its opposition,^[4] to which Canpotex replied. The Court then held a Supplemental Rule E(4)(f) hearing on November 3, 2023. See Dkt. ## 122, 123.

III Discussion

A. Procedural Framework

Canpotex moves under Supplemental Rule E(4)(f), challenging Aegean's arrest and writs of attachment and garnishment; Canpotex seeks return of the $494,013 substitute security, plus interest accrued. Dkt. # 12 at 1.

Aegean responds that Canpotex's motion under Supplemental Rule E(4)(f) is untimely and an attempt to move for reconsideration under Local Rule 7(h). Dkt. # 114 at 2. Aegean also maintains that, because Canpotex's request for relief would effectively dismiss this action, the motion to vacate is “akin to a motion for summary judgment.” Dkt. # 116 at 2.

1. Supplemental Admiralty Rules B, D, and E

a. Supplemental Rule B

Supplemental Rule B applies to in personam or quasi in rem actions^[5] related to attachment and garnishment. To begin the attachment process, “if a defendant is not found within the district,” a plaintiff must submit “a verified complaint” that includes “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.” SAR B(1)(a). Supplemental Rule B governs Aegean's (1): breach of contract claim (cause of action two), (2) unjust enrichment claim (cause of action three), and (3) the attachment and garnishment of the bunkers aboard the Vessel (cause of action four). Dkt. # 99 at 10-12.

b. Supplemental Admiralty Rule D

Supplemental Rule D applies to all “actions for possession . . . with respect to the possession of cargo or other maritime property.” SAR D. This rule controls any claims related to the arrest of the bunkers on board the Vessel (cause of action five). Dkt. # 99 at 12-13.

c. Supplemental Admiralty Rule E

Supplemental Rule E provides the maritime attachment and garnishment procedure for in personam and in rem actions, complementing Supplemental Rules B and D. It states: “Whenever property is arrested or attached, any person claiming an interest in it shall be entitled to a prompt hearing at which the plaintiff shall be required to show why the arrest or attachment should not be vacated or other relief granted consistent with these rules.” SAR E(4)(f) (emphasis added).

“Rule E(4)(f) is designed to satisfy the constitutional requirement of due process by guaranteeing to the shipowner [sic] a prompt post-seizure hearing at which [he or she] can attack the complaint, the arrest, the security demanded, or any other alleged deficiency in the proceedings.” SAR E (Notes of Advisory Committee on Rules-1985 Amendment). “[T]he court is required to hold a hearing as promptly as possible to determine whether to allow the arrest or attachment to stand. The plaintiff has the burden of showing why the seizure should not be vacated. Id. The plaintiff must demonstrate “a fair or reasonable probability” of success on the underlying claim. OS Shipping Co. v. Glob. Mar. Tr. (s) Priv. Ltd., 2011 WL 1750449, at *5 (D. Or. May 6, 2011) (“[T]he prevailing test appears to be a “probable cause” standard[.]”)

Aegean asserts that Canpotex failed to file a verified statement of interest in the Vessel within the required timeframe and thus cannot be considered a party with an interest in the arrested or attached property under Supplemental Rule E(4)(f). Aegean highlights that Supplemental Rule C(6)(a) provides that “a person who asserts a right of possession or any ownership interest in the property that is the subject of the action[,]” must file a verified statement of right or interest: (A) within 14 days after the...