Realco Serv., Inc. v. Holt

• Decision Date: 19 November 1980
• Docket Number: 79-728.,Civ. A. No. 77-4097
• Citation: 513 F. Supp. 435
• Parties: REALCO SERVICES, INC., et al. v. Thomas J. HOLT et al. v. MTS AGENCIES, INC. GIL-FLEX RENTAL, a Division of Flexi-Van Leasing, Inc. v. Thomas J. HOLT et al.
• Court: U.S. District Court — Eastern District of Pennsylvania

513 F. Supp. 435

REALCO SERVICES, INC., et al. v. Thomas J. HOLT et al. v. MTS AGENCIES, INC.

GIL-FLEX RENTAL, a Division of Flexi-Van Leasing, Inc. v. Thomas J. HOLT et al.

Civ. A. Nos. 77-4097, 79-728.

United States District Court, E. D. Pennsylvania.

November 19, 1980.

Andrew C. Hecker, Jr., Philadelphia, Pa., for Realco.

Arnold Levin, Philadelphia, Pa., John Gross, New York City, for defendants, Barry E. Ungar, Philadelphia, Pa., for third party defendants.

MEMORANDUM AND ORDER

NEWCOMER, District Judge.

Defendants move for dismissal at the close of plaintiffs' case under Rule 41(b) of the Federal Rules of Civil Procedure. For reasons set out below defendants' motion will be granted and judgment will be entered for defendants and against plaintiffs. The following recitation of facts comprises findings made in a light most favorable to plaintiffs and, where supported by the record, after making all inferences necessary to sustain plaintiffs theories of recovery.

I. Findings of Fact

1. Plaintiff Realco Services, Inc. ("Realco") is a corporation organized under the laws of the state of Delaware with its principal place of business in the state of Illinois. Realco is engaged in the business of leasing trailers.

2. Plaintiff Integrated Container Services, Inc. ("ICS") is a corporation with its principal place of business in the state of New York. ICS is engaged in the business of leasing trailers and container equipment.

3. Plaintiff Interpool is a corporation organized under the laws of the Bahamas with its principal place of business in the state of New York. Interpool is engaged in the business of leasing containers and equipment.

4. Plaintiff SSI Container Corporation International B. V. ("SSI") is a corporation organized in the Netherlands with an office in the United States at 2 Embarcadero, San Francisco, California. SSI is engaged in the business of leasing containers and equipment.

5. Plaintiff Ideal Container di Alfonso Donati ("Ideal") is a corporation organized under the laws of Italy with its principal place of business in Genoa, Italy. Ideal is engaged in the business of leasing containers and equipment.

6. Plaintiff Nippon International Container Service Co., Ltd. ("NIC") is a company organized under the laws of Japan with its principal place of business in Tokyo, Japan. NIC is engaged in the business of leasing containers and equipment.

7. Plaintiff CTI Container Leasing Corporation ("CTI") is a corporation organized under the laws of the state of Delaware with its principal place of business in the State of New York. CTI is engaged in the business of leasing containers and equipment.

8. Plaintiff Gil-Flex Rental ("Gil-Flex"), a division of Flexi-Van Leasing, Inc., is a corporation organized under the laws of Delaware with its principal place of business in the State of New York. Gil-Flex is engaged in the business of leasing containers and equipment.

9. Holt Hauling & Warehousing System, Inc. ("Holt Hauling") was incorporated in the Commonwealth of Pennsylvania in 1964. At all relevant times, Holt Hauling was located at 701 North Broadway, Gloucester City, New Jersey. Leo Holt owned 43% of the stock, Thomas Holt owned 43% of the stock and Edna White owned the remaining stock. Holt Hauling was engaged in the business of warehousing.

10. Holt Marine Terminal, Inc. ("Holt Marine") was incorporated in the state of New Jersey in 1969. At all relevant times, Holt Marine was located at 701 North Broadway, Gloucester City, New Jersey. Holt Marine was a wholly-owned subsidiary of Holt Hauling and its business was stevedoring.

11. B. H. Sobelman & Co., Inc. ("Sobelman") was incorporated in the Commonwealth of Pennsylvania in 1946. At all relevant times, Sobelman was located at 248 Bourse Building, Philadelphia, Pennsylvania. Sobelman was a wholly-owned subsidiary of Holt Marine and it acted as a shipping agent. Sobelman also acted as the general agent for MTS.

12. T & L Leasing ("T & L") was incorporated in New Jersey on February 13, 1974. Thomas Holt owned 40% of its stock, Leo Holt 25%, Bernard Gelman 17½%, Lorraine Robins 12½% and Thomas A. White 5%. T & L Leasing was engaged in the business of leasing and selling equipment.

13. Holt Motor Express, Inc., ("Holt Motor") was incorporated in Delaware on January 4, 1965. Leo Holt owned 43% of its stock, Thomas J. Holt owned 43%, and Edna White owned 14%. Holt Motor was engaged in the trucking business.

14. Camden Refrigerating Terminal ("Camden") was incorporated in the state of New Jersey in 1939. Thomas A. White owned 80% of the stock, Lorraine Robins owned 15% and Bernard Gelman owned 5%. Camden Refrigeration was involved in refrigeration of perishable goods.

15. Waterside Ocean Navigation, Inc., ("Waterside-Pennsylvania") was incorporated in the Commonwealth of Pennsylvania on August 11, 1975. Waterside-Pennsylvania chartered the vessel Laurentian Forest. Thomas J. Holt owned 100% of its stock. The Laurentian Forest was operated by Marine Transport Service, Inc 16. Worldwide Marine Trading Corp. ("Worldwide") was incorporated in Liberia on December 3, 1975. Thomas J. Holt owned 100% of its stock. Worldwide chartered the vessel Finn-Builder. The Finn-Builder was operated by MTS.

17. Gloucester Shipping Corporation ("Gloucester") was incorporated in Liberia on December 3, 1975. Thomas J. Holt owned 100% of its stock. Gloucester chartered the vessel Finn-Amer. The Finn-Amer was operated by MTS.

18. At all relevant times Thomas J. Holt was an individual residing at 10710 Ellicott Road, Philadelphia, Pennsylvania. He was a minority stockholder in T & L, Holt Motor, and Holt Hauling.

19. Marine Transport Service, Inc., ("MTS") was incorporated in New Jersey on October 1, 1975. MTS was incorporated to operate and charter vessels. MTS was incorporated by Harry D. Ambrose, Jr., at the direction of Bernard Gelman, an employee of Thomas Holt.

20. At all relevant times, Paul Semack ("Semack") was an individual residing in the state of New Jersey. Semack was the president of MTS at the time of MTS's contracting with plaintiffs. John Kavula ("Kavula") was an individual, who was vice-president of MTS.

21. Semack asked Marvin Robinson, vice-president and operations manager of B. H. Sobelman to act as general agent for MTS and Sobelman performed agency services for MTS.

22. The initial allocation of shares in MTS was that Semack, Thomas Holt, and Kavula were each 33% shareholders in MTS. The understanding of the initial allocation of responsibilities for MTS was that Thomas Holt would provide financing enabling MTS to engage in business. Thomas Holt's responsibility was "the chartering of vessels, the start-up financing, the insurancing of vessels, the accounting and financial records." Tr. 457. Semack and Kavula were to devote themselves full-time to the "selling of freight, the traffic of the freight, the maintenance of tariffs, the filing of rates, the hiring and firing of people that were involved in the day-to-day operation, the appointment of overseas agents, and the appointment of out-port agents in the United States." Tr. 457.

23. Bernard Gelman ("Gelman") was initially the secretary of MTS. Gelman was treasurer of several defendant companies and is Thomas Holt's accountant.

24. Semack never received stock certificates representing his interest in MTS, although he repeatedly requested that they be delivered.

25. Thomas Holt directed employees of his companies to prepare payrolls, financial statements, and computer services for MTS.

26. Thomas Holt arranged insurance for MTS and kept the insurance policies at his offices at 701 North Broadway, Gloucester City, New Jersey.

27. Semack wrote a letter dated November 7, 1975, explaining to James S. Klein of Aramco that MTS was a steamship company and not an agent (P-81). Semack represented in that letter that MTS, as a steamship company was owned by himself, "Jack Kavula", and Waterside Ocean Navigation of Pennsylvania. Semack did not mention Thomas Holt's name because Holt wished to hide his entry into the steamship business as a competitor of customers of his other companies.

28. On April 1, 1976 an accounts receivable financing agreement between First Pennsylvania Bank and MTS was executed by Semack, as president of and on behalf of MTS, (P-74). The note representing the agreement was guaranteed by certain companies owned and controlled by Holt. (P-194).

29. Sobelman, T & L, Camden, and Holt Marine advanced funds to MTS at the direction of Thomas Holt, Lorraine Robins, Bernard Gelman and John Evans.

30. On several occasions, Sobelman made disbursements in its capacity as agent for MTS without receiving bills. These activities were a departure from its usual practice. MTS was the only account for which Sobelman paid bunker charges and charter hire.

31. MTS officers leased automobiles from T & L without formal lease agreements.

32. While out of the country Semack and Kavula left signed blank checks on MTS accounts to be used by Gelman to pay MTS bills.

33. The controller of Holt Hauling, John Evans, ("Evans") visited the MTS offices in New York on a weekly basis. Evans supervised MTS's accounts receivable and payable and assisted MTS in setting up accounting records. Evans took MTS accounts receivable freight checks and delivered them to First Pennsylvania Bank.

34. Employees of MTS were told by Thomas Holt not to communicate with the First Pennsylvania Bank regarding financing.

35. Evans prepared MTS's 1975 Federal Corporate Income Tax Return, as well as a formal request for an extension of time to file MTS's return. In doing so he signed his name as "controller" of MTS.

36. MTS's tax records, including various state income and city wage tax records, were kept at 701 North Broadway, Gloucester City, New Jersey, offices of Thomas Holt and some of the Holt corporate defendants.

37. Thomas J. Holt, Holt Cargo, Sobelman, T & L, and Waterside-Pennsylvania all maintained...