MAVL Capital, Inc. v. Marine Transp. Logistics, Inc.

Decision Date02 September 2015
Docket NumberNo. 13–cv–7110 (SLT)(RLM).,13–cv–7110 (SLT)(RLM).
Citation130 F.Supp.3d 726
Parties MAVL CAPITAL, INC. et al., Plaintiffs, v. MARINE TRANSPORT LOGISTICS, INC. et al., Defendants.
CourtU.S. District Court — Eastern District of New York

Marcus A. Nussbaum, Goetz Fitzpatrick LLP, New York, NY, for Plaintiffs.

Stephen H. Vengrow, Cichanowicz Callan & Keane, Eric Chang, Cichanowicz, Callan, Keane, Vengrow & Textor, LLP, New York, NY, for Defendants.


SANDRA L. TOWNES, District Judge.

Maxim Ostrovskiy, and his companies, MAVL Capital, Inc. and IAM & AL Group Inc. (collectively, "Plaintiffs")—who are in the business of purchasing automobiles in America and selling them in Europe—bring this action against (1) Marine Transport Logistics, Inc., ("MTL"), and its director, Dimitry Alper, and (2) Aleksandr Solovyev, and his companies, Royal Finance Group, Inc. ("Royal Finance") and Car Express & Import Inc. ("Car Express") (collectively, "Defendants")—who are in the business of financing and transporting vehicles overseas—alleging that Defendants violated various state and federal laws by asserting a lien on Plaintiffs' automobiles and other property. Defendants filed their answer, and then their motion for judgment on the pleadings, styled as a motion to dismiss.1 For the following reasons, Defendants' motion for judgment on the pleadings is granted in part, and Plaintiffs are ordered to show cause within 30 days of the date of this order why their state law claims should not be dismissed for lack of jurisdiction.

Legal Standard

Federal Rule of Civil Procedure 12(c) provides that "[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." Fed.R.Civ.P. 12(c). "Judgment on the pleadings is appropriate where material facts are undisputed and where a judgment on the merits is possible merely by considering the contents of the pleadings." Sellers v. M.C. Floor Crafters, Inc., 842 F.2d 639, 642 (2d Cir.1988).

The standard applied to a motion for judgment on the pleadings is the same as that used for a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). Patel v. Contemporary Classics of Beverly Hills, 259 F.3d 123, 126 (2d Cir.2001). "In both postures, the district court must accept all allegations in the complaint as true and draw all inferences in the non-moving party's favor." Id.; see also Johnson v. Rowley, 569 F.3d 40, 44 (2d Cir.2009). A complaint should be dismissed only if it does not contain enough allegations of fact to state a claim for relief that is "plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). While a complaint "does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (alteration, citations, and internal quotation marks omitted). On a Rule 12(c) motion, the Court may consider "the complaint, the answer, any written documents attached to them, ... any matter of which the court can take judicial notice for the factual background of the case [,] ... any written instrument attached ... as an exhibit, materials incorporated ... by reference, and documents that, although not incorporated by reference, are integral" to the pleadings. L–7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir.2011) (internal quotation marks omitted).

Factual Background

With this standard in mind, the following facts, which are drawn from Plaintiffs' complaint, are deemed true for purposes of this motion.

Plaintiffs are in the business of purchasing vehicles from within the United States and from abroad, and then selling those vehicles to customers in Europe. (Compl. ¶ 2.) Defendants are in the business of financing the purchase of vehicles, storing vehicles, and shipping them to foreign ports. (Compl. ¶¶ 3–9.) MTL, of which Alper is the director, is a licensed Non–Vessel Operating Common Carrier ("NVOCC") regulated by the Federal Maritime Commission. (Compl. ¶ 3.) MTL does not itself operate a vessel, but rather arranges for cargo to be delivered to one of its United States storage facilities, where it consolidates the cargo, and then retains ocean carriers to perform the overseas carriage. (Compl. ¶ 4.) It also acts as a "logistics service company, and provides services including, but not limited to ocean freight, ground transportation, auto shipping, warehousing, tracking and tracing, and containerization." (Compl. ¶ 53). In addition to its role as shipping provider, MTL also provides financing for automobile dealerships and personal shippers who wish to purchase automobiles for shipment to various ports abroad. (Compl. ¶ 5.) Solovyev is principal of both Royal Finance and Car Express, both of which are agents of MTL. (Compl. ¶ 18.) Royal Finance issues invoices, collects payments for shipping, delivery charges, commissions and other fees from automobile dealerships and personal shippers who have used MTL's services. (Compl. ¶ 9.) Car Express is a licensed automobile dealer that purchases used and salvaged cars from auctions and dealerships for sale to its customers, and acts on behalf of MTL in coordinating the purchase and transport of those vehicles for shipment from the United States to various ports abroad. (Compl. ¶¶ 6–8.)

Between January and August of 2013, Plaintiffs contracted with MTL to, inter alia, ship cars abroad. (Compl. ¶ 45.) The financing arrangement/ownership status of each car was one of the following: (1) Plaintiffs owned some of the cars outright; (2) foreign customers had already paid Plaintiffs, in whole or in part, for some of the cars; and (3) Defendant Royal Finance Group provided financing for some of the cars and, in exchange, MTL was to be the exclusive shipping agent for those cars. (Compl. 45–48.) Plaintiffs agreed to pay for shipping and delivery, inclusive of all freight and charges. (Compl. ¶ 50.) In addition, for cars financed by Defendants, Plaintiffs agreed to pay a flat fee of 2.5% of the amount financed at the time of delivery. (Compl. ¶ 51.)

In August 2013, the parties' relationship soured after Plaintiffs worked out a more favorable arrangement with another shipping company and notified Defendants of their intent to wind down their relationship. (Compl. ¶¶ 65–70.) At that point, Defendants had five of Plaintiffs' vehicles and two replacement seats in their possession. (Complaint ¶¶ 78–109) (2006 Mercedes SL65, 2004 Bobcat S205, 2006 Bobcat S250, 2010 Bobcat S185, 2011 Porsche Panamera). Plaintiffs had retained Defendants to store two of these vehicles and the two replacement seats for shipment by a third party, and to ship the other three vehicles overseas. (Comp. 78–79, 84, 89–90, 93, 100, 102, 106–107) Instead, Defendants made demands for payment and, when Plaintiffs did not pay, refused to release the cargo and shipped some of it overseas. (Compl. 83, 86–87, 91–92, 97–98, 103–104, 108–109.) Additionally, Defendants fraudulently obtained title to three of Plaintiffs' motorcycles, which were being stored by a third party, and then used the fraudulent titles to take possession of Plaintiffs' motorcycles. (Complaint ¶¶ 110–127).

By complaint filed December 12, 2013, Plaintiffs commenced this action seeking to recover over one million dollars in compensatory and punitive damages. The complaint alleges (1) federal question jurisdiction, under the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. § 30701, and the Shipping Act of 1984, 46 U.S.C. § 40101 et seq.; (2) jurisdiction under this Court's "original jurisdiction in maritime matters," and (3) supplemental jurisdiction over Plaintiffs' state law claims. (Compl. ¶¶ 29–30). Plaintiffs assert that Defendants' failure to release their cargo violated the Shipping Act by, in effect, imposing an unlawful tariff, and amounted to extortion in violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. ("RICO"). (Compl. 128–130, 171–179.) Plaintiffs further allege claims for breach of fiduciary duties, conversion, civil conspiracy, tortious interference with business relations, breach of contract, common-law fraud and a violation of N.Y. Gen. Bus. Law § 349, and plead claims against individual defendants under a corporate veil piercing theory. (Compl. ¶¶ 131–173.) On May 14, 2014, Defendants answered, denying all of Plaintiffs' allegations and asserting a counterclaim for non-payment of outstanding freight and/or storage charges. (Ans. ¶¶ 184–188.)

A. The Shipping Act

Plaintiffs claim that MTL violated the Shipping Act, 46 U.S.C. § 40101 et seq.,"by imposing charges which were never agreed upon and never published with the [Federal Maritime Commission ("FMC") ] and by unlawfully seizing Plaintiffs' cargo, holding it as security and/or collateral for the payment of an unjust and unlawful debt." (Compl. ¶ 129.) Plaintiffs do not identify under which section or sections of the Shipping Act they purport to bring suit.

The Shipping Act, which regulates the carriage of cargo over seas, was enacted to "establish a nondiscriminatory regulatory process for the common carriage of goods by water in the foreign commerce of the United States...." 46 U.S.C. § 40101. The statute empowers the FMC, an independent federal agency, to enforce violations of the Act. Fed. Mar. Comm'n v. S. Carolina State Ports Auth., 535 U.S. 743, 773, 122 S.Ct. 1864, 152 L.Ed.2d 962 (2002) (describing the FMC as an independent federal agency "most appropriately considered to be part of the Executive Branch"); See 46 U.S.C. § 41301 (complaints...

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