Maersk, Inc. v. NEEWRA, INC.

Decision Date17 December 2009
Docket NumberNo. 05 Civ. 4356(CM).,05 Civ. 4356(CM).
Citation687 F. Supp.2d 300
PartiesMAERSK, INC. and A.P. Moller-Maersk A/S, Plaintiffs, v. NEEWRA, INC., Rednihom, Inc., Aref Hassan Abul Inc., Arween Singh Sahni a/k/a Arween Sahni Singh a/k/a Arween Sahni a/k/a Arween Singh a/k/a Abul Sabah a/k/a Aref Hassan Abul, Mohinder Singh Sahni a/k/a Mohinder Sahni Singh a/k/a Mohinder Sahni a/k/a Mohinder Singh a/k/a Mohinder Singh Sahani a/k/a Mohinder Sahani a/k/a Mohinder Sahani Singh a/k/a Joginder Singh Sahni, Joginder Singh Sahni, a/k/a Joginder Singh Sahni a/k/a Joginder Sahni Singh a/k/a Joginder Sahni Singh a/k/a Joginder Singh a/k/a Joginder Sahni a/k/a Joginder Singh a/k/a Joginder Sahni, Sabharwal Chandra Kumar a/k/a Sabharwal K. Chandra, Mandeep Singh Sahni a/k/a Mohinder Singh Sahani, Help Line Collection Co. W.L.L., Parker Dawood Tajuddin Tajudis Ismail Parker, Sardar Traders Est., Sardar International Trading Co., and Al Tamasok Al Arabi Est., Defendants.
CourtU.S. District Court — Southern District of New York

Eric Einar Lenck, Lawrence Jay Kahn, Freehill, Hogan & Mahar, LLP, New York, NY, for Plaintiffs.

Donald Joseph Kennedy, Carter Ledyard & Milburn LLP, Raymond Aloysius Connell, Maloof, Lebowitz, Connahan & Oleske, Harry H. Wise, III, Law Office of Thomas G. Amon, New York, NY, for Defendants.

DECISION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT, AND DENYING PLAINTIFFS' MOTION TO STRIKE DEFENDANTS' JURY DEMAND

McMAHON, District Judge:

INTRODUCTION

This case arises out of a series of international shipping frauds worthy of a best-selling adventure novel. The victims of those frauds are plaintiffs A.P. Moller-Maersk A/S, a Danish conglomerate, and its New Jersey-based affiliate, Maersk, Inc. (together, "Plaintiffs" or "Maersk"). Maersk, one of the world's largest ocean shipping outfits, brought this action in 2005 against multiple corporate and individual defendants, alleging that they had conspired to defraud Maersk in connection with three separate international cargo shipments.

Three motions are now pending before the Court. The first two are cross-motions for summary judgment, one filed by Maersk, the other by the three remaining defendants: Joginder Singh Sahni ("Joginder"), Dawood Tajuddin Parker ("Parker") and Help Line Collection Co. W.L.L. ("Help Line") (collectively, the "Remaining Defendants"). Also pending before the Court is Maersk's separate motion to strike the Remaining Defendants' demand for a jury trial.

For the reasons stated below, Maersk's summary judgment motion is granted in part and denied in part; the Remaining Defendants' summary judgment motion is denied; and Maersk's motion to strike the Remaining Defendants' jury demand is denied.

For purposes of this opinion, the Court presumes familiarity with its March 27, 2008 Decision and Order in this case, in which the Court resolved various defendants' motions to dismiss. Maersk, Inc. v. Neewra, Inc., 554 F.Supp.2d 424 (S.D.N.Y. 2008) (McMahon, J.) (the "March 27, 2008 Opinion"). The reader will find it particularly helpful to refer to the March 27, 2008 Opinion for its discussion of the underlying factual allegations, for information about the named defendants no longer in the action, and for litigation history prior to March 27, 2008. Id. at 429-39.

BACKGROUND
I. Litigation History Since the March 27, 2008 Opinion
A. Default Judgments

In the March 27, 2008 Opinion, the Court dismissed the Amended Verified Complaint ("AVC") as against defendants Sardar Traders Est. and Sardar International Trading Co. (together, "Sardar") for lack of personal jurisdiction, and denied the other motions to dismiss. Maersk, 554 F.Supp.2d at 467, Since then, default judgments have been entered against defendants Neewra, Inc. ("Neewra"), Rednihom, Inc. ("Rednihom"), Aref Hassan Abul Inc. ("Aref'), Arween Singh Sahni ("Arween") and Sabharwal Chandra Kumar ("Kumar") (collectively, the "Defaulting Defendants").

On May 26, 2006. Judge Casey issued an Order for Entry of Default Judgment against defendants Neewra, Rednihom and Aref, and referred the case to Magistrate Judge Eaton to conduct an inquest into damages. (Docket No. 51.) Magistrate Eaton issued a Report and Recommendation concluding that the Court should award Maersk $14,413,687.99 plus interest, jointly and severally against Neewra, Rednihom and Aref. (Docket No. 157.) The Court modified Magistrate Eaton's Report and Recommendation, finding that Maersk was entitled to an additional $5,580,000 in damages, and adopted the Report as amended. (Docket No. 165.) On May 20, 2008, judgment was accordingly entered for Maersk jointly and severally against Neewra, Rednihom and Aref in the amount of $19,993,687.99, plus costs of $250 and interest at 9% per annum beginning December 31, 2005. (Docket No. 167.) On March 30, 2009, judgment was entered in favor of Maersk jointly and severally against additional defaulting defendants Arween and Kumar for the same amount. (Docket No. 183.)

Maersk has not pursued its claims against defendant Al Tamasok Al Arabi Est. ("Al Tamasok"). (Pls.' Mem, in Supp. of Mot. for Summ. J., Mar. 31, 2009 ("Pls.' Mem."), at 1-2.) Maersk did not timely serve defendant Mandeep Singh Sahni ("Mandeep"). (Id. at 2.) Finally, Maersk has settled with defendant Mohinder Singh Sahni ("Mohinder"). (Docket No. 189.)

Thus, the only remaining defendants are Joginder, Parker and Help Line. On April 11, 2008, these three Remaining Defendants answered the AVC. (Docket Nos. 158-60.) On April 15, 2008, less than ten days after serving their answers, each of the three Remaining Defendants timely filed a demand for trial by jury. (Docket Nos. 161-63.)

B. Discovery

The Remaining Defendants refused to participate meaningfully in discovery, and Magistrate Eaton sanctioned them accordingly. Joginder, Parker and Help Line are prohibited from using their own affidavits or testimony in opposition to Maersk's claims, and are almost entirely precluded from introducing documentary evidence to oppose any summary judgment motion or at trial.

The Remaining Defendants sought to have their depositions taken in Kuwait, where they reside. (Mem. & Order, Sept. 17, 2008 (Docket No. 174), at 1-2.) Plaintiffs' counsel, citing security concerns, argued that the Remaining Defendants' depositions should take place in New York. (Id. at 2.) Magistrate Eaton held a telephonic oral argument, and ruled that the Remaining Defendants must travel to New York for their depositions. (Id. at 2-3.) Magistrate Eaton entertained the Remaining Defendants' letter motion for reconsideration (id. at 6), but adhered to his decision that the Remaining Defendants would be deposed in New York. (Order, Sept. 17, 2008 (Docket No. 175), at 1-2.)

Magistrate Eaton ordered that the Remaining Defendants' depositions "should be scheduled to follow closely" upon the deposition of Maersk witnesses Elvis Pinto ("Pinto") and/or Bimal Kanal ("Kanal"). (Mem. & Order, Sept. 23, 2008 (Docket No. 176), at 2.) Maersk arranged for Pinto and Kanal to travel from Kuwait and China to New York, where they were deposed on October 29 and November 13, 2008. (Mem. & Order, Mar. 6, 2009 (Docket No. 178), ¶ 6.) On October 30, 2008, Maersk served counsel for the Remaining Defendants with notices to depose his three clients in New York in quick succession beginning November 24, 2008. (Id. ¶ 7.) "The October 30 deposition notices clearly complied with Magistrate Eaton's September 23 order. These three Remaining Defendants were clearly required to appear in New York City for their depositions starting on November 24." (Id. ¶ 12.) Joginder, Parker and Help Line refused to appear for their court-ordered depositions; they never even made any travel arrangements for those depositions. (Id.) Magistrate Eaton concluded that Joginder, Parker and Help Line had "violated his orders with no good excuse." (Id. ¶ 13.) Magistrate Eaton imposed the following sanctions pursuant to Federal Rule of Civil Procedure 37(2)(A)(ii): "I prohibit the defendants from introducing any affidavit or testimony of Joginder, Parker, or any employee of Help Line in connection with any motion for summary judgment or any trial in this lawsuit." (Id.)

The Remaining Defendants not only refused to appear for their depositions, but also failed to produce certain documents requested by Maersk during discovery. (See id. ¶¶ 16-19.) As a result, Magistrate Eaton imposed further sanctions against the Remaining Defendants pursuant to Rule 37(2)(A)(ii):

I prohibit Joginder, Parker and Help Line from introducing any document into evidence in connection with any motion for summary judgment or any trial in this lawsuit if plaintiffs requested that document and (a) on or before February 20, 2009, Joginder, Parker or Help Line asserted that the document was irrelevant, or (b) on or before February 20, 2009, Joginder, Parker or Help Line asserted that the document was not in his or its possession or control (unless he or it proves to Judge McMahon that he or it did not have possession or control of the document until after February 20, 2009, and that he or it promptly provided a copy to plaintiffs).1

(Id.) Magistrate Eaton also specifically "prohibited Parker from introducing any document into evidence to explain what he did with the $1.86 million that was released to Parker by a Kuwaiti court in connection with the Neewra claim, see infra Background II.B.2, except for any document that he supplied to plaintiffs on or before February 20, 2009." (Id. ¶ 18.)

Counsel for the Remaining Defendants submits a reply declaration asserting that his clients did meaningfully participate in discovery. (Reply Decl. of Harry H. Wise, III, Apr. 20, 2009 ("Wise Reply Decl."), ¶ 2.) Annexed to the Declaration are documents produced by the Remaining Defendants that total about 200 pages. The Court does not look favorably upon the Remaining Defendants' submission:...

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