EVERGREEN MARINE v. SIX CONSIGNMENTS

Decision Date16 October 1992
Docket NumberCiv. A. No. 92-CV-10895-K.
Citation806 F. Supp. 291
PartiesEVERGREEN MARINE CORPORATION, Plaintiff, v. SIX CONSIGNMENTS OF FROZEN SCALLOPS, et al., Defendants.
CourtU.S. District Court — District of Massachusetts

Thomas J. Muzyka, Clinton & Muzyka, Boston, Mass., for plaintiff.

Hugh J. Gorman, III, Hinckley, Allen, Snyder & Comen, Boston, Mass., for defendants.

MEMORANDUM ORDER

KEETON, District Judge.

This action arises from plaintiff Evergreen Marine Corporation's ("Evergreen") delivery of six consignments of frozen scallops to defendant Gloucester Corporation ("Gloucester") absent receipt of bills of lading. Evergreen's First Amended Complaint ("Complaint") avers that defendant Gloucester failed to pay for the scallops. Evergreen brings suit against Gloucester, against Fleet National Bank and Cooperative Centrale Raiffesisen Boerenleen Bank, B.A. ("Banks"), lenders to Gloucester that have taken possession of the subject scallops (Banks' Mem.Supp.Mot.Partial Dismissal at 3), and against the scallops in rem. Now before the court are: (1) Banks' motion for partial dismissal (Docket No. 6, filed April 21, 1992) and supporting memorandum (Docket No. 7, filed April 21, 1992); (2) Evergreen's memorandum in opposition to Banks' motion for partial dismissal (Docket No. 12, filed May 6, 1992); (3) Banks' motion to dismiss or for summary judgment (Docket No. 15, filed May 15, 1992) with supporting memorandum (Docket No. 16, filed May 15, 1992); (4) Evergreen's memorandum in opposition to Banks' motion to dismiss or for summary judgment (Docket No. 19, filed June 22, 1992); and (5) Evergreen's memorandum objecting to the presentation and admissibility of the affidavit of Hugh Gorman submitted in support of the Banks' motion to dismiss the Complaint (Docket No. 20, filed June 22, 1992).

Evergreen's First Amended Complaint does not affect the Banks' motion for partial dismissal or supporting memorandum. The Banks incorporated their motion for partial dismissal into their motion to dismiss or for summary judgment. (Banks' Mem.Supp.Mot.Dismiss or Summ.J. at 2.) Accordingly, I will consider Banks' motion for partial dismissal, supporting memorandum, and Evergreen's opposition to partial dismissal in conjunction with Banks' motion to dismiss or for summary judgment and Evergreen's opposition to Banks' motion to dismiss or for summary judgment.

For the reasons stated below: (1) Banks' motion to dismiss Counts I and VII is allowed; (2) Banks' motion to dismiss Counts II and VI is denied; (3) Banks' motion for summary judgment as to Counts I and VII is dismissed as moot; (4) Banks' motion for summary judgment as to Counts II and VI will be allowed, subject to the order herein; and (5) Evergreen's objection to the presentation and admissibility of Hugh Gorman's affidavit is sustained.

I. Background and Summary of Rulings

The action relates to a contract of carriage between Evergreen and Towamarin, Ltd. ("Shipper") for delivery of six containers of frozen scallops. According to the Complaint, on various dates, Evergreen transported the scallops to Port Elizabeth, New Jersey from Tokyo, Japan. (Compl. Statement of Facts at ¶ 7.) Upon arrival of the scallops in New Jersey, a Gloucester representative told Evergreen that it had a right to the scallops pursuant to the bills of lading, not yet received from Japan. (Compl. Count I at ¶ 11.) Evergreen delivered the scallops to Gloucester in exchange for indemnity agreements and guarantees. (Compl. Count I at ¶ 11; Compl.Ex. B.) Gloucester transported the scallops to its warehouse in Lynn, Massachusetts where, Plaintiff alleges, they are currently located. (Compl. Count II, at ¶ 16.) Gloucester failed, however, to tender the original bills of lading and pay for the scallops. (Compl. Count I at ¶ 13.) Apparently, the Shipper has been paid. (Compl. Count I at ¶ 14.)

Coop. Raiffeisen Bank Lekkerrerk, S.A. of Holland ("Holland") holds the original bills of lading covering the six containers of scallops. (Compl.Ex. C.) Evergreen broke its contract of carriage with the shipper by failing to deliver the cargo to Holland, the holder of the bills of lading. (Tr. April 22, 1992 Hr'g at 4, Docket No. 13.) Holland made demand upon Evergreen for the value of the goods plus interest. (Compl.Ex. C.) Evergreen alleges that Holland is an affiliate of one of the defendant Banks. (Compl. Count VII at ¶ 56.)

The Banks now control the warehouse, the scallops therein, and the assets of Gloucester. (Compl. Count II at ¶ 16.) Evergreen made demand upon the Banks for the scallops or their value. (Compl. Count VI at ¶ 49.) The Banks have refused to surrender the goods, claiming a perfected security interest. (Banks' Mem.Supp.Mot.Partial Dismissal at 3.) Evergreen responds that the Banks have neither a possessory nor a petitory interest in the scallops. (Compl. Count II at ¶ 18.)

Evergreen claims subject matter jurisdiction in federal court pursuant to both admiralty and diversity jurisdiction. (Compl. Statement of Jurisdiction at 1.) The Banks' motion for dismissal as to Count I challenges the Court's authority to assume admiralty jurisdiction. Evergreen responds that it can establish admiralty jurisdiction under a bailment theory. As explained in Part IIA, a bailment relationship, absent particular circumstances, does not confer admiralty jurisdiction. The Banks' motion to dismiss Count I is, therefore, allowed.

Evergreen's remaining claims against the Banks are based upon state law. In the Complaint, Evergreen successfully pleads the elements of replevin and conversion, but fails to set forth sufficient factual allegations regarding the elements of tortious interference with a contract. Accordingly, the Banks' motion to dismiss Counts II and VI is denied, but their motion to dismiss Count VII is allowed.

The Banks seek summary judgment as to Evergreen's claims against them. In this order, I allow the Banks' motion to dismiss Counts I and VII. Accordingly, I need only consider Counts II and VI in the motion for summary judgment. The only disputed issue of fact is whether or not the Banks currently possess the scallops. This fact does not, however, affect the Banks' motion for summary judgment. Whether or not Evergreen establishes that the scallops are in the Banks' possession, the Banks' interest in the scallops relative to Evergreen's must be decided as a matter of law. Since the Banks' interest is superior to Evergreen's, the motion for summary judgment as to Counts II and VI is allowed.

II. Motion to Dismiss

For purposes of considering the motion to dismiss, the court accepts as true the factual assertions set forth in the Complaint and in all documents attached as exhibits to the Complaint. Conley v. Gibson, 355 U.S. 41, 45-48, 78 S.Ct. 99, 101-03, 2 L.Ed.2d 80 (1957). The court must also draw all reasonable inferences from those assertions in plaintiff's favor. McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273, 276, 96 S.Ct. 2574, 2576, 49 L.Ed.2d 493 (1976). To survive a motion to dismiss, however, plaintiff must set forth in the Complaint "factual allegations, either direct or inferential, regarding each material element necessary to sustain recovery under some actionable legal theory." Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir.1988).

A. Subject Matter Jurisdiction

The Banks' motion to dismiss for lack of subject matter jurisdiction as to Count I of the Complaint is allowed. Count I is a Petition for Possession and Arrest of Cargo Pursuant to Supplemental Admiralty Rule D. Rule D applies to admiralty jurisdiction only. For the reasons stated below, Evergreen has not established any legal basis for admiralty jurisdiction in this case. Thus, Rule D does not govern this action. Accordingly, Evergreen cannot maintain a claim in Count I.

Evergreen contends that it can establish admiralty jurisdiction under a bailment theory. (Evergreen's Opp'n Banks' Mot.Dismiss at 20-1.) To support its theory, Evergreen relies on Baker Oil Tools, Inc. v. Delta S.S. Lines Inc., 562 F.2d 938 (5th Cir.1977). Evergreen submits that it was a bailee of the scallops and that as such, it has standing to sue to recover possession or the value of the scallops. Further, Evergreen contends that Gloucester's interference with Evergreen's rights in the scallops took place while the scallops were covered by Evergreen's outstanding bills of lading.

Neither Baker, nor any other case of which I am aware, supports Evergreen's contention that outstanding bills of lading in conjunction with bailee status confer admiralty jurisdiction. Baker stands for the proposition that in particular circumstances, a federal court is not precluded from exercising admiralty jurisdiction over a common law bailment action. Id. The particular circumstances in Baker were based upon the carrier's liability to the shipper, governed by the Harter Act 46 U.S.C.App. § 190 et seq. (1970). Id. at 940. Neither the Harter Act, nor any similar legislation that treats controversies as falling within admiralty jurisdiction applies in the present case. The Baker court itself recognized that not all bailments fall within admiralty jurisdiction. Id. at 941, n. 5.

Evergreen also contends that this court is empowered to exercise admiralty jurisdiction based upon tortious interference with a maritime contract. The Supreme Court established admiralty jurisdiction upon a finding of maritime locale plus a relationship to traditional maritime activity. Executive Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249, 93 S.Ct. 493, 34 L.Ed.2d 454 (1972). Here, there is no claim that the dispute is related to traditional maritime activity. In construing the language of Executive Jet, the First Circuit recognized a limited exception to the "locality plus" rule. Carroll v. Protection Maritime Insurance Co., 512 F.2d 4 (1st Cir. 1975) (conferring admiralty jurisdiction over suits by seamen denied employment due to insurers' blacklisting practices). As...

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