D'Amico Dry Ltd. v. Primera Mar. (Hellas) Ltd.

• Decision Date: 29 July 2015
• Docket Number: No. 09 Cv. 7840(JGK).,09 Cv. 7840(JGK).
• Citation: 116 F.Supp.3d 349
• Parties: D'AMICO DRY LTD., Plaintiff, v. PRIMERA MARITIME (HELLAS) LTD., et al., Defendants.
• Court: U.S. District Court — Southern District of New York

116 F.Supp.3d 349

D'AMICO DRY LTD., Plaintiff,

v.PRIMERA MARITIME (HELLAS) LTD., et al., Defendants.

No. 09 Cv. 7840(JGK).

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

Signed July 29, 2015.

Thomas Leonard Tisdale, Timothy James Nast, Tisdale Law Offices, L.L.C., New York, NY, for Plaintiff.

John J. Reilly, Corrine Anetra Irish, Squire Patton Boggs (US) L.L.P., William Robert Bennett, III, Kate Bea Belmont, Blank Rome LLP, New York, NY, Myung Han Kim, Wilson Elser, Moskowitz Edelman & Dicker LLP, White Plains, NY, George Michael Chalos, Katherine Noelle Christodoulatos, Chalos & Co., P.C., Oyster Bay, NY, Briton Paul Sparkman, Chalos & Co., P.C., Houston, TX, for Defendants.

OPINION AND ORDER

JOHN G. KOELTL, District Judge:

The plaintiff, d'Amico Dry Limited ("d'Amico"), a foreign shipping company, initially brought this action against Primera Maritime (Hellas) Limited ("Primera") to enforce a money judgment issued by the English High Court of Justice (the "English Judgment"). Thereafter, d'Amico amended its complaint to add numerous other individual and corporate defendants (the "alter ego defendants"), seeking to hold them liable for the English Judgment on the grounds that they are Primera's alter egos. Sixteen of the alter ego defendants now jointly move to dismiss the claims against them pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, arguing that the plaintiff's action against them is claim and issue precluded by decisions of the United States District Courts for the Eastern and Southern Districts of Texas. For the reasons that follow, the defendants' motion is denied.

I.

The standards to be applied to a motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) are the same as those applied to a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir.2006). "Thus, [a court] will accept all factual allegations in the complaint as true and draw all reasonable inferences in [the] plaintiff[']s[ ] favor. To survive a Rule 12(c) motion, [the] complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir.2010). In deciding such a motion, the court may consider documents that are referenced in the complaint, documents that the plaintiff relied on in bringing suit and that either are in the plaintiff's possession or were known to the plaintiff when the plaintiff brought suit, or matters of which judicial notice may be taken. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.2002) ; Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir.1993) ; see also Morillo v. Grand Hyatt New York, No. 13cv7123, 2014 WL 3498663, at *6 (S.D.N.Y. July 10, 2014).

II.

In September 2009, d'Amico brought this action seeking to enforce the English Judgment that d'Amico had been awarded as a result of the alleged breach of a derivative financial contract, called a Forward Freight Agreement ("FFA"), that d'Amico had entered into with Primera. The parties have disputed and still dispute whether this Court has admiralty jurisdiction pursuant to 28 U.S.C. § 1333 to enforce the English Judgment. See D'Amico Dry Ltd. v. Primera Mar. (Hellas) Ltd., No. 09cv7840, 2011 WL 1239861, at *1–2 (S.D.N.Y. Mar. 28, 2011) (granting defendants' motion to dismiss for lack of subject matter jurisdiction because the English Court was not sitting as an admiralty court and the plaintiff's claim was not maritime in nature under English law), vacated, 756 F.3d 151, 158 (2d Cir.2014) (holding that United States law, not foreign law, determines whether a claim is maritime in nature for purposes of enforcing a foreign judgment based on that claim); Order Dated Mar. 31, 2015 (ECF No. 170) (denying defendants' second motion to dismiss for lack of subject matter jurisdiction). The factual background underlying d'Amico's claim against Primera is recounted in those decisions. The following factual and procedural background is provided for its relevance to the current motion.

A.

On December 20, 2010, this Court granted d'Amico leave to amend its Complaint, and d'Amico filed its Verified Amended Complaint ("VAC"). The VAC named twenty alter ego defendants, including two individuals and eighteen corporate entities. In the VAC, d'Amico alleged that all of the corporate defendants are "alter egos of Defendant Primera because Primera dominates and disregards their corporate forms to the extent that Primera is actually carrying on the business and operations" of the corporate defendants. VAC ¶¶ 20, 37, 59, 71, 81.

The VAC organizes the alter ego defendants into five smaller groups, based on each group's alleged close relationship with Primera. In Section I, d'Amico alleges that several defendants share the same address, fax number, and registered address, and that they are all controlled by defendants Paul and Nikolaos Coronis. Id. ¶¶ 23–26. According to d'Amico, the corporate defendants all took out a loan as joint and several borrowers pursuant to a "May Facilities Agreement" in order to finance shared vessels, and Primera was the corporate guarantor for the loan. Id. ¶¶ 29–30.

Section II makes similar allegations for a separate group of alter ego defendants, alleging that they share a common address and phone and fax numbers. Id. ¶¶ 37–42. In this Section, d'Amico alleges that this group entered into an "April Facilities Agreement" to finance two different shared vessels. Id. ¶ 45. Section II also alleges that three alter ego defendants signed an "ISDA Agreement," in which they were all to "be regarded as one party." Id. ¶¶ 52–54. Finally, Sections III, IV, and V make similar allegations of shared control and relatedness between Primera and other alter ego defendants. See id. ¶¶ 59–88. For example, d'Amico alleges that another group of alter ego defendants were made parties and guarantors to the May Facilities Agreement in a supplemental agreement, but that the contact information remained as only Primera's. Id. ¶¶ 64–67.

On March 31, 2015, the Court issued a scheduling order, setting the date for the end of all discovery as September 4, 2015. Soon after, the alter ego defendants requested a pre-motion conference in order to stay discovery on the alter ego issues, and to file the present motion to dismiss.

On May 20, 2015, the Court held a conference and issued an order staying discovery on the issue of alter egos until July 6, 2015. See Order Dated May 20, 2015 (ECF No. 184). On May 29, 2015, sixteen of the corporate alter ego defendants (the "moving defendants") filed the present joint motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure.¹ The Court has not renewed the stay of discovery and has set a new date for the completion of discovery.

The defendants move for dismissal of the VAC based on two grounds alone: (1) res judicata, or claim preclusion, based on decisions from the United States District Courts for the Eastern and Southern Districts of Texas; and (2) collateral estoppel, or issue preclusion, based on the same decisions. The defendants argue that the issue of whether the moving defendants are Primera's alter egos has already been decided by those two Texas federal courts and thus precludes d'Amico's claims against them.

B.

In May 2010, non-party Flame SA filed an in rem complaint and a writ of arrest against a vessel, the M/V Lynx, in the United States District Court for the Eastern District of Texas, and arrested the vessel. See Thompson Decl. ¶¶ 3–6; Flame S.A. v. M/V Lynx, No. 10cv278 (E.D.Tex.2010). Flame sought to enforce a separate English Judgment that it had been awarded by arresting the Lynx, which was owned by non-party Camela Navigation, Inc. ("Camela"), an alleged alter ego of Primera.

Camela appeared in the action shortly thereafter and moved to vacate the attachment. On June 22, 2010, Judge Clark of the Eastern District issued a decision denying Camela's motion to vacate. Flame S.A. v. M/V Lynx, No. 10cv278, 2010 WL 10861354, at *1 (E.D.Tex. June 22, 2010). The decision came after the court held two hearings, and it included detailed findings of fact as to the relationship between Camela and Primera. Id. at *1, *4–11. After assessing the twelve factors for alter ego determinations under Fifth Circuit law, the court concluded that Flame had met its burden of showing that Camela was Primera's alter ego, and therefore denied the motion to vacate the attachment. Id. at *13.

On June 25, 2010, d'Amico filed an intervening complaint in the Eastern District of Texas action. Thompson Decl. ¶ 10, Ex. 6. The intervening complaint sought to enforce the English Judgment at issue in this action, and named only Camela and Primera as defendants. Id. Ex. 6. Neither defendant ever responded to d'Amico's complaint. Id. ¶ 12. On July 27, 2010, a trial was held on the alter ego issue. Id. On August 5, 2010, Flame and Camela entered into a Stipulation and Order of Dismissal agreeing that Flame would dismiss its claims with prejudice and vacate its arrest of the Lynx. Id. ¶ 13, Ex. 8.

The following day, the district court issued a 31–page opinion entitled Findings of Fact and Conclusions of Law on Alter Ego. Id. ¶ 14, Ex. 9. The court weighed the evidence of the relationship between Primera and Camela, including, among other things, their "overlapping ownership," "overlapping management," their lack of consolidated financial statements, and the fact that Camela operated with "inadequate capital," but not "grossly inadequate capital." Id. Ex. 9, at 13, 17, 20, 23–24. Ultimately, the court concluded that it was a "close question," but that "there is insufficient evidence in the record to establish, by a preponderance of the evidence, that Camela is Primera's alter ego." Id. at 29. The court noted that the warrant of arrest obtained by Flame had already been vacated, and ordered that d'Amico's writ of...