North Pacific S. S. Co. v. Pyramid Bulkcarriers, Inc.

• Decision Date: 30 June 1975
• Docket Number: No. 74-3293,74-3293
• Citation: 515 F.2d 426
• Parties: NORTH PACIFIC STEAMSHIP COMPANY, Plaintiff-Appellant, v. PYRAMID BULKCARRIERS, INC., etc., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 426

515 F.2d 426

NORTH PACIFIC STEAMSHIP COMPANY, Plaintiff-Appellant, v. PYRAMID BULKCARRIERS, INC., etc., Defendant-Appellee.

No. 74-3293.

United States Court of Appeals Fifth Circuit.

June 30, 1975.

Donald L. King, Edward J. Koehl, Jr., New Orleans, La., for plaintiff-appellant.

Charles Kohlmeyer, Jr., Earl S. Eichin, Jr., New Orleans, La., for defendant-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before CLARK, Associate Justice, ^* and GOLDBERG and AINSWORTH, Circuit Judges.

PER CURIAM:

On June 10, 1971, North Pacific Steamship Company (North Pacific) brought suit against the original defendant herein, Pyramid Bulkcarriers, Inc. (Pyramid), to recover the unpaid charter hire due from Pyramid on two of North Pacific's ships. North Pacific won a final judgment for $842,350.67 together with legal interest and court costs against Pyramid on May 18, 1973. A credit of $113,260.00 was entered on the judgment from the proceeds of a bond originally issued for the release of certain sub-freights of Pyramid that were seized at the outset of the proceeding, and another credit of $4,280.82 was realized from a garnishment against Pyramid. However, additional procedures to effect payment were futile.

On February 21, 1974, North Pacific filed a verified motion in district court against various parties four corporations not named theretofore, Pyramid Ventures, Group, Inc.; Pyramid Bulkhandling, Inc.; Creole Lines, Ltd.; and Hellenic, Inc.; as well as two individuals, Donald C. Scafidi and Peter V. Guarisco seeking an order to show cause why they should not be included as judgment debtors in the earlier judgment and be held liable "jointly, severally and in solido" with Pyramid. The motion alleged the following:

Based on the facts revealed by the testimony of Donald C. Scafidi, taken pursuant to the judgment debtor rule procedure, it is clear that Pyramid Bulkcarriers, Inc. existed as a phantom corporation and was merely an instrumentality of Pyramid Ventures Group, Inc. and Donald C. Scafidi and Peter V. Guarisco. It is furthermore demonstrated that Pyramid Bulkcarriers, Inc. did not maintain the separate identity of a corporate entity due to the manner of its operation and control by Pyramid Ventures Group, Inc. and that an inequitable result would follow plaintiff would be unable to recover the judgment awarded him by the Court unless Pyramid Ventures Group, Inc., its related corporations, Donald Scafidi and Peter Guarisco are made additional judgment debtors herein.

In regular course, an Order to Show Cause was issued by the district court and served. The appellees timely moved to set it aside on the grounds that the proceeding was not provided for under any known rule of law or found in any statute or in the Federal Rules of Civil Procedure. After hearing and argument, the district court recalled the Show Cause Order and set it aside. This appeal followed. ¹

North Pacific relies on several admiralty cases in which an "alter ego" or "piercing the corporate veil" theory was employed to disregard a corporate fiction and...