Hannah Brothers v. Osk Marketing & Communications
| Decision Date | 24 April 2009 |
| Docket Number | No. 1:09-cv-00654-RJH.,1:09-cv-00654-RJH. |
| Citation | 609 F.Supp.2d 343 |
| Parties | HANNAH BROTHERS, Plaintiff, v. OSK MARKETING & COMMUNICATIONS, INC., OSK Projektmanagemant, Oliver Schrott Kommunikation GMBH, Siemens Aktiengesellschaft, & Siemens Energy & Automation, Inc., Defendants. |
| Court | U.S. District Court — Southern District of New York |
James H. Power, Holland & Knight LLP, New York, NY, for Plaintiff.
Hal Watson, Teo'Bryan Baun Choen Cuebler Karamanian, Birmingham, MI, Joseph Nicholas Froehlich, Lord, Bissell & Brook, LLP, Michael D. Wilson, Hill, Rivkins & Hayden LLP, New York, NY, for Defendants.
The question in this maritime attachment proceeding is whether the plaintiff may effectively pierce the corporate veil of a contractual counterparty by alleging that the defendants entered into an unwritten "maritime joint venture." Since the complaint here does not plausibly allege the existence of such a joint venture, the Court rejects plaintiff's novel theory of enterprise liability and vacates its prior attachment orders. In addition, the Court grants in part and denies in part a request for attorneys' fees, interest, and costs by defendant Siemens A.G.
This dispute involves six corporate entities involved in the aborted North American tour of the "Exiderdome," a floating exhibition of automation technology.1 Plaintiff Hannah Brothers ("Hannah") is an Illinois partnership, which is engaged in the maritime trade. Defendants are German companies or their U.S. affiliates. Siemens A.G. ("Siemens") is a large German conglomerate. Siemens Energy & Automation, Inc. is a U.S. affiliate of Siemens A.G. Oliver Schrott Kommunikation GmbH ("OSK") is a large German public relations firm. OSK Projektmanagemant ("OSK PM") is a German affiliate of OSK. OSK Marketing & Communications, Inc. ("OSK Marketing"), a Delaware corporation that is headquartered in New York City, is a U.S. affiliate of OSK. (See Compl. ¶¶ 3-7 Ex. 1.)
On March 3, 2008, an affiliate of Hannah, Hannah Marine Corp., entered into a Bareboat Charter Agreement (the "Bareboat Charter") with OSK Marketing. (See Compl. Ex. 1.) Under the charter, Hannah Marine agreed to provide OSK Marketing with an all-steel deck barge, the "Exiderdome 1," for an indefinite period beginning on June 26, 2008. (Bareboat Charter ¶ 4.) In exchange, OSK Marketing agreed to pay Hannah Marine $2,500 per day. (Id. ¶ 4(a).) The parties later amended the charter to substitute Hannah for Hannah Marine Corp. (See Amendment to Bareboat Charter Agreement, Compl. Ex. 1.) Aside from OSK Marketing, none of the defendants named in this action is a party to the charter.
After the charter was executed, the Exiderdome 1 was outfitted with the Exiderdome exhibition at the Ironhead Shipyard in Toledo, Ohio. (Compl.¶ 8.) The "Exiderdome" is a modular exhibition hall, which has traveled throughout the world by various means of transport. (See Hannah Decl. Ex. 8.) It provides visitors with the opportunity to experience the latest in automation technology, as well as a forum for exchanging ideas about business opportunities. (See Siemens Announces U.S. Tour of exiderdome, http://www2.sea.siemens.com/News/Corporate/exiderdome-announcement.htm (last visited Apr. 7, 2009).) The exhibition consists of multiple shipping containers, which are arranged in a two-story structure that is about fifty feet long. (Id.)
After visiting several North American cities, the floating Exiderdome arrived at Pier 90 in New York City on November 3, 2008. (Compl.¶¶ 10, 13.) On November 7, 2008, Hannah apparently learned that defendants were planning to send the Exiderdome to Albany, New York without a working anchor. (See id. ¶¶ 12-13.) Hannah maintains that defendants thus breached the Bareboat Charter, which in turn entitled it to immediately repossess the Exiderdome 1. (Compl.¶ 12; see Bareboat Charter ¶¶ 15(a)(iv) and 15(b) ().)
At some point on Friday, November 7, Hannah informed defendants that the Exiderdome 1 could not leave Pier 90 without a working anchor. (Compl.¶ 12.) Defendants responded by booking a "renegade" tug—one Hannah had not approved of—to pull the barge to Albany. (Id. ¶ 13.) At about 1:00 a.m. on Saturday, November 8, Hannah reiterated to defendants that the Exiderdome 1 was not allowed to make any voyages without a working anchor. (Id. ¶ 16.) Defendants, however, continued to take steps to mobilize the barge using their "renegade" tug. (Id.)
What happened next is not entirely clear, but at some point Hannah repossessed the barge and towed it to Brooklyn. (Id. ¶ 18.) Hannah eventually towed the barge to New Jersey, where it was arrested by the Ironhead Shipyard. The barge remains there to this day, the subject of ongoing disputes between the parties to this action and the Ironhead Shipyard. (See Tr. of Oral Arg. 4, Apr. 3, 2009; Compl., Hannah Brothers v. OSK Marketing & Communications, Inc., No. 08 Civ. 6164(WJM)(MF) (D.N.J. Dec. 17, 2008).)
The November 2008 dispute over control of the Exiderdome 1 provoked a flurry of legal activity. On November 9, 2008, Hannah sent defendants notice of its intent to arbitrate certain contractual disputes under paragraph 24 of the Bareboat Charter. (Compl.Ex.5.) Three days later, all but one of the defendants in this action filed suit against Hannah in this Court, seeking to enjoin Hannah from terminating the charter, interfering with the Exiderdome 1, or repossessing the barge. For reasons that are not clear from the current record, that action was voluntarily dismissed on January 15, 2009.
Seven days later, on January 22, 2009, Hannah filed this action. In its complaint, Hannah alleged that OSK Marketing breached the Bareboat Charter. (See Compl. ¶¶ 17-22.) The complaint additionally alleged that OSK, OSK PM, and Siemens were jointly and severally liable for OSK Marketing's breach of the Bareboat Charter by virtue of their participation in a "maritime joint venture" with OSK Marketing. (See id. ¶ 30.) As already noted, OSK, OSK PM, and Siemens are not parties to the Bareboat Charter.
The complaint cited several facts in support of its joint venture theory. With respect to OSK, the complaint noted that (i) OSK owned the modular components that served as the building and infrastructure for the Exiderdome (id. ¶ 37), and (ii) OSK, without consideration, provided $999,000 to OSK PM, which OSK PM later used to prepay hire for the Exiderdome 1 (id. ¶ 38). As for OSK PM, the Complaint noted that (i) OSK PM entered into a mortgage agreement with Hannah whereby OSK PM advanced $999,000 to Hannah as pre-paid hire that Hannah used to purchase the Exiderdome 1 (id. ¶ 35), and (ii) the agreement was entered into with the express purpose of procuring and arranging for the waterborne transportation of the Exiderdome (id.). Finally with respect to Siemens, the complaint noted that (i) Siemens has a lease interest in the Exiderdome (id. ¶ 39), (ii) Siemens is the owner of certain equipment displayed in the Exiderdome (id.), and (iii) Siemens was authorized to approve ports where Exiderdome 1 put in (id. ¶ 41). All of the defendants, the complaint alleged, were "integral" participants in the Exiderdome tour. (See id. ¶¶ 35-40.)
On January 26, 2009, the Court authorized process of maritime attachment and garnishment as to OSK and OSK PM. After receiving additional submissions concerning Siemens' lack of presence in the Southern District of New York, the Court authorized process of maritime attachment and garnishment as to Siemens on February 9, 2009. Hannah did not seek, nor did the Court order, process of maritime attachment as to OSK Marketing or Siemens Energy & Automation, Inc., both of whom are "present" in the Southern District of New York within the meaning of Seawind Compania, S.A. v. Crescent Line, Inc., 320 F.2d 580 (2d Cir.1963). The parties report that approximately $4,100,000 has been restrained pursuant to the Court's orders.
On March 24, 2009, OSK, OSK PM, and Siemens (collectively, the "moving defendants") moved to vacate the Court's attachment orders. Moving defendants contend that although they unquestionably were involved in the Exiderdome tour, they never entered into a joint venture with OSK Marketing. Arguing that Hannah's joint venture theory is nothing more than "a clumsy lunge for a deep pocket" (Siemens Mem. 14), Siemens additionally requests that attorneys' fees, costs, and interest on its restrained funds be assessed against Hannah (id. at 16-17). Hannah contends it has made a sufficient showing that moving defendants entered into a joint venture with OSK Marketing. (Hannah Mem. 20-24.) Relying on the strength of its position on the merits, Hannah did not respond to Siemens' request for attorneys' fees, costs, and interest. At oral argument, Hannah reiterated that its only basis for attaching moving defendants' assets is their alleged participation in a maritime joint venture with OSK Marketing. (Tr. of Oral Arg. 14.)
The Court first considers whether its prior orders of attachment and garnishment should be vacated, then turns to Siemens' request for attorneys' fees, costs, and interest.
In a proceeding under Supplemental Admiralty Rule E of the Federal Rules of Civil Procedure, "a district court must vacate an attachment if the plaintiff fails to sustain his burden of showing that he has satisfied the requirements of [Supplemental Admiralty] Rules B and E." Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434, 445 (2d Cir.2006). Among other things, Rule B requires a plaintiff to show he has "a valid prima...
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Simmons v. Ware
...analyze the factors utilizing a "totality of the circumstances" test. For example, Hannah Brothers v. OSK Marketing & Communications, Inc. (S.D.N.Y.2009) 609 F.Supp.2d 343, 348–349 ( Hannah Brothers ) explained, "A joint venture is ‘[a] business undertaking by two or more persons engaged in......
-
Simmons v. Ware
...but analyze the factors utilizing a "totality of the circumstances" test. For example, Hannah Brothers v. OSK Marketing & Communications, Inc. (S.D.N.Y. 2009) 609 F.Supp.2d 343, 348-349 (Hannah Brothers) explained, "A joint venture is '[a] business undertaking by two or more persons engaged......
-
Simmons v. Ware
...but analyze the factors utilizing a "totality of the circumstances" test. For example, Hannah Brothers v. OSK Marketing & Communications, Inc. (S.D.N.Y. 2009) 609 F.Supp.2d 343, 348-349 (Hannah Brothers) explained, "A joint venture is '[a] business undertaking by two or more persons engaged......