Dan-Bunkering (America) Inc. v. Ichor Oil, LLC
| Decision Date | 30 March 2023 |
| Docket Number | 3:20-cv-03341-S-BT |
| Parties | DAN-BUNKERING (AMERICA), INC., Plaintiff, v. ICHOR OIL, LLC, Defendant. |
| Court | U.S. District Court — Northern District of Texas |
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
This is a quasi in rem action initiated by Plaintiff Dan-Bunkering (America), Inc. (Dan-Bunkering), under Supplemental Rule B for Certain Admiralty and Maritime Claims, in which Dan-Bunkering asserts a claim for breach of maritime contract against Defendant Ichor Oil, LLC, and seeks execution of writs of maritime attachment and garnishment against Ichor Oil's property in this district. At this point in the litigation, the gravamen of the dispute is whether Garnishee B&G Futures, Inc. (B&G) owes $350,000 to Ichor Oil, against whom Dan-Bunkering has obtained a default judgment, and whether Dan-Bunkering is entitled to garnish B&G's accounts pursuant to a previously-issued writ of maritime attachment and garnishment. B&G has filed two dispositive motions, under Federal Rules of Civil Procedure 12(c) and 56, in which it seeks dismissal with prejudice of all claims that B&G Futures is indebted to Ichor Oil and/or Dan-Bunkering. Dan-Bunkering also moves for summary judgment against B&G on its maritime attachment and garnishment writ and on B&G's counterclaim for attorneys' fees. For the reasons stated the Court should DENY Dan-Bunkering's Motion for Summary Judgment (ECF No. 98), GRANT in part and DENY in part B&G's Motion for Judgment on the Pleadings (ECF No 101) and B&G's Motion for Summary Judgment (ECF No. 104).
The present dispute arises out of a series of transactions that occurred in 2019 for the purchase and sale of approximately 110,000 barrels of marine gas oil (bunker fuel), as illustrated by this simplified flowchart:
Maersk → B&G Futures → Ichor Oil → Dan-Bunkering → Phillips 66
See generally Pl.'s MSJ Br. (ECF No. 99); B&G Supp. Br. (ECF No. 119).
As alleged in its Verified Complaint, Dan-Bunkering is a Texas corporation that provides bunker fuel to ocean-going vessels in Texas and throughout the world, and Ichor Oil is a Florida limited liability company that sells various types of petroleum products including bunker fuel. Compl. 2 (ECF No. 1). In August 2019, Dan-Bunkering agreed to buy from Ichor Oil, and Ichor Oil agreed to sell to Dan-Bunkering, 110,000 barrels of bunker fuel. Compl. 2. Pursuant to their agreement (the “Dan-Bunkering - Ichor Contract”), Dan-Bunkering wired $500,000 to Ichor Oil. Compl. 2. However, Ichor Oil failed to deliver the bunker fuel to Dan-Bunkering; and, despite Dan-Bunkering's demands, Ichor Oil also failed to refund the $500,000 payment to Dan-Bunkering. Compl. 2.
Accordingly, on November 8, 2020, Dan-Bunkering initiated this action pursuant to Supplemental Rule B of the Federal Rules of Civil Procedure, asserting a claim for breach of a maritime contract against Ichor Oil and requesting writs of maritime attachment and garnishment against Ichor Oil's assets “in the hands of garnishees within this District.” Compl. 3. Ichor Oil did not respond to the Verified Complaint or otherwise defend against Dan-Bunkering's claim for breach of contract. Thus, Dan-Bunkering obtained a Clerk's Entry of Default (ECF No. 25) and, thereafter, a default judgment against Ichor Oil in the amount of $521,265.10 (ECF No. 38).
Although not alleged in its Verified Complaint, Dan-Bunkering further contends that, as part of the 2019 series of transactions, Ichor Oil entered into a contract to buy bunker fuel from B&G, an Ohio corporation (the “Ichor - B&G Contract”). Pl.'s MSJ Br. 2. According to Dan-Bunkering, Ichor Oil wired $350,000 of the $500,00 it received from Dan-Bunkering to B&G, but B&G breached the Ichor - B&G Contract by failing to provide any fuel to Ichor Oil. Pl.'s MSJ Br. 4, 9. As a result of B&G's alleged breach, Ichor Oil failed to fulfill its obligations under the Dan-Bunkering - Ichor Contract. Pl.'s MSJ Br. 9.
On December 4, 2020, Dan-Bunkering negotiated a settlement with Ichor Oil, which included an assignment to Dan-Bunkering of “all right, title and interest to all rights of recovery and causes of action which Ichor Oil, LLC has or may have against B&G Futures, Inc.” B&G App. Resp. Juris. 10 (ECF No. 120). The same day, Dan-Bunkering asked the Clerk of Court to issue supplemental process, without a further Court order,[1] for a pre-judgment writ of maritime attachment and garnishment against B&G. Pl.'s Appl. Writ 1 (ECF No. 19). The Clerk granted the request, B&G Process Maritime Attach. 1-3 (ECF No. 20), and Dan-Bunkering served the writ on B&G five days later, Writ Executed 1 (ECF No. 21).
Initially, B&G did not respond to the December 9, 2020 writ. Dan-Bunkering thus moved for and obtained a “default judgment” against B&G. Mot. Default J. (ECF No. 30); B&G Default J. (ECF No. 37). Six weeks later, B&G moved to vacate this default judgment based on the absence of a Whitney certificate from the Texas Secretary of State's Office. B&G Mot. Vacate (ECF No. 55). B&G also filed an Answer to Dan-Bunkering's process of maritime attachment and garnishment and an original counterclaim for attorneys' fees. B&G Orig. Answer (ECF No. 59).
While the motion to vacate was pending, Dan-Bunkering sought to recover on its default judgment against B&G, registering the default judgment in Florida and receiving a court order allowing Dan-Bunkering to garnish B&G's Florida bank accounts with PNC Bank. Order 1-2, Dan-Bunkering (America) Inc. v. Ichor Oil, LLC, No. 21-mc-00095 (N.D. Fla. Sept. 7, 2021), ECF No. 7. On September 21, 2021, the Court granted B&G's Motion to Vacate Default Judgment and dissolved any post-judgment writs against B&G's accounts. Op. & Order 10 (ECF No. 73).
Thereafter, B&G filed its First Amended Answer to the writ of maritime attachment and garnishment. B&G First Am. Answer (ECF No. 91).
B&G denies that it is, or was at the time writ was served, indebted to Ichor. B&G First Am. Answer 1. Although B&G admits that it received $350,000 from Ichor Oil in August 2019, B&G alleges that it received those funds as payment for an option to extend the time Ichor Oil had to perform the Ichor - B&G Contract. B&G First Am. Answer 2. B&G further alleges that Ichor Oil's inability to perform the Dan-Bunkering - Ichor Contract was caused by Dan-Bunkering's breach of its obligations to Ichor Oil and Dan-Bunkering's attempt to circumvent Ichor Oil and B&G in an effort to obtain bunker fuel directly from B&G's source (Maersk). B&G First Am. Answer 2. Finally, B&G asserts a counterclaim to recover its costs and attorneys' fees related to the writ, pursuant to Rule B(1)(e) of the Supplemental Rules for Admiralty or Maritime Claims & Asset Forfeitures, Fed.R.Civ.P. 64, Tex.R.Civ.P. 677, and this Court's inherent authority to sanction. B&G First Am. Answer 3.
Dan-Bunkering then moved for summary judgment against B&G on the December 9, 2020 writ, Pl.'s First MSJ (ECF No. 75), which motion the Court denied without prejudice after the parties filed a joint motion for leave to further brief the issues and supplement the record. See Order (ECF No. 86). The Court also held a Rule 16 conference and entered a scheduling order (and an amended scheduling order) providing that the parties had until December 17, 2021, to amend their pleadings and until May 20, 2022, to file any motions that would “dispose of all or any part of this case, including motions for summary judgment.” Sched. Orders (ECF Nos. 90, 97).
On May 20, B&G filed its Motion for Judgment on the Pleadings, in which it argues that Dan-Bunkering has not alleged sufficient facts to plead it is entitled to invoke the remedy of maritime attachment and garnishment against B&G. B&G Mot. J. Pleadings 12 (ECF No. 101). By its motion, B&G asks the Court to dismiss with prejudice all claims that B&G is indebted to Ichor Oil and/or Dan-Bunkering and for “other . . . relief” to which it may be entitled. B&G Mot. J. Pleadings 13 (ECF No. 101). The same day, B&G and Dan-Bunkering also filed the pending motions for summary judgment. Pl.'s MSJ (ECF No. 98); B&G's MSJ (ECF No. 104). As in its earlier motion that was denied without prejudice, Dan-Bunkering seeks summary judgment against B&G on the December 9, 2020 writ, as well as on B&G's counterclaim for attorneys' fees. Pl.'s MSJ 1. Dan-Bunkering argues there is no genuine dispute that B&G breached the Ichor - B&G Contract, B&G owes Ichor Oil at least $350,000, Ichor Oil breached the Dan-Bunkering - Ichor Contract, and Ichor Oil owes Dan-Bunkering more than $500,000. Pl.'s Br. MSJ 9-11. B&G denies that it breached the Ichor - B&G Contract and further disputes that Dan-Bunkering is entitled to summary judgment on the December 9, 2020 writ because Ichor Oil assigned any claims Ichor Oil had against B&G to Dan-Bunkering on December 4, 2020. B&G Br. MSJ 4-8, 10. By its summary judgment motion, B&G seeks dismissal with prejudice of all claims that B&G is indebted to Ichor Oil and/or Dan-Bunkering and such other relief to which it may be entitled. B&G MSJ 1. The parties fully briefed the issues presented by the pending dispositive motions.
Upon review of the parties' arguments, it became apparent that the parties dispute which contract-the Dan-Bunkering - Ichor Contract or the Ichor - B&G Contract-constitutes the relevant contract giving rise to Dan-Bunkering's claims to B&G's assets. The Court thus sua sponte questioned the basis for its subjectmatter jurisdiction and the resulting applicability of the Supplemental Rules governing maritime attachment and garnishment.[2] The parties filed supplemental briefs addressing these concerns. Pl.'s Resp. Juris. (ECF No. 116); B&G Resp. Jur...
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