Thyssenkrupp Materials N.A. v. W. Bulk Carriers A/S

• Decision Date: 16 June 2014
• Docket Number: No. 13–CV–1248 VSB.,13–CV–1248 VSB.
• Citation: 27 F.Supp.3d 400
• Court: U.S. District Court — Southern District of New York
• Parties: THYSSENKRUPP MATERIALS N.A., INC., Plaintiff, v. WESTERN BULK CARRIERS A/S, Defendant.

27 F.Supp.3d 400

THYSSENKRUPP MATERIALS N.A., INC., Plaintiff

v.WESTERN BULK CARRIERS A/S, Defendant.

No. 13–CV–1248 VSB.

United States District Court, S.D. New York.

Signed June 16, 2014.

Harold M. Kingsley, Kingsley Kingsley & Calkins, Hicksville, NY, for Plaintiff.

Patrick F. Lennon, Anne Casey Levasseur, Lennon, Murphy, Caulfield & Phillips, LLC, New York, NY, for Defendant.

MEMORANDUM & ORDER

VERNON S. BRODERICK, District Judge.

Plaintiff Thyssenkrupp Materials N.A., Inc. (“Thyssenkrupp”) brought this action to recover losses arising from a three-month delay in shipping cargo from Turkey to the United States due to the seizure by creditors of the vessel Defendant Western Bulk Carriers A/S (“WBC”) chartered to complete that voyage, asserting against WBC claims of financial unseaworthiness sounding in both tort and contract. WBC now moves for summary judgment as to both claims. WBC's motion concerning the tort claim of financial unseaworthiness is granted because this tort has not been recognized in this Circuit, and Plaintiff fails to allege the type of damages required under this tort. Defendant's motion directed to the contract claim is denied as premature, as discovery had not been completed at the time of the filing of the motion.

I. Background

On or about February 27, 2012, Thyssenkrupp and WBC entered a charter party contract. (Plf.'s 56.1, ¶ 5; Lennon Decl., Ex. 4.¹ ) Pursuant to the charter party, Thyssenkrupp chartered from WBC the vessel M/V Sanko Mineral (the “M/V Sanko” or “Ship”) for the purpose of carrying approximately 7,415 metric tons of steel plate from Turkey to the ports of New Orleans and Houston. (Plf.'s 56.1, ¶ 5.) The M/V Sanko was owned at all relevant times by The Sanko Steamship Company of Japan (“Sanko”). (Id. ¶ 1.) WBC chartered the Ship from Sanko and nominated it to perform the voyage under the charter party with Thyssenkrupp. (Id. ¶¶ 2, 13.) After WBC nominated the M/V Sanko, it responded to a Thyssenkrupp questionnaire, which included disclosure of the vessel's ownership. (Id. ¶ 13; see Lennon Decl., Ex. 1 at 6–22.) Thyssenkrupp accepted the M/V Sanko to perform the voyage under the charter party. (Plf.'s 56.1, ¶ 14.)

On May 7, 2012, during the course of that voyage, creditors attached the M/V Sanko pursuant to an ex parte order issued by the District Court for the District of Maryland. (Id. ¶ 10; see Lennon Decl., Ex. 6.) The Ship was held in the port of Baltimore for approximately three months, until August 2, 2012. (Plf.'s 56.1, ¶¶ 10, 15; see Lennon Decl., Ex. 8.) Upon release, the Ship completed its voyage and delivered the cargo of steel to the destination ports sometime in August 2012. (Plf.'s 56.1, ¶ 16; Kingsley Decl., Ex. 1 at 5.² )

Thyssenkrupp claims that it sold the steel at a discount. It claims that on the scheduled arrival date the steel had a market value of $6,582,176.44, but that the intended purchaser rejected the steel because of the delay. (Kingsley Decl., Ex. 1 at 5.) As a result, Thyssenkrupp sold the steel to different buyers at the discounted price of $6,004,964.44, a difference of $577,212.00. (Id.; see Plf.'s 56.1, ¶ 9.) Thyssenkrupp further alleges that four plates of steel, each with a claimed value of $10,834.20, were missing upon discharge in Houston. (Kingsley Decl., Ex. 1 at 5.) Thyssenkrupp does not allege any physical damage to the cargo. (Lennon Decl., Ex. 5 at 5; see Plf.'s 56.1, ¶ 9; Kingsley Decl., Ex. 1 at 5.)

II. Procedural History

Thyssenkrupp filed its Complaint on February 25, 2013, seeking to recover the difference between the value of the steel when it was scheduled to arrive and the price at which it was sold, the value of the four allegedly missing plates, and attorneys' fees.³ The Complaint delineates all Thyssenkrupp's claims in a single paragraph:

The cargo described in Schedule A⁴ was lost, damaged and depreciated by defendants⁵ due to the fault, neglect, deviation, unseaworthiness, maritime tort, tortious interference with contract, breach of warranty, sinking, stranding, salvage expenses, general average, delay, financial unseaworthiness, breach of contract and conversion of defendants, their agents and servants, and delivered by defendants in non-conforming and contaminated condition, mis-delivered and non-delivered.

(Doc. 1, ¶ 6.) On May 9, 2013, WBC filed an answer to the Complaint generally denying the allegations in the Complaint and asserting various affirmative defenses, among them that WBC exercised due diligence to make the M/V Sanko seaworthy. (Doc. 6 at 4.)

A case management plan was entered on May 10, 2013 (Doc. 8), after which discovery commenced. On October 28, 2013, the case was referred to Magistrate Judge Sarah Netburn for general pretrial purposes. (Doc. 11.) Discovery was scheduled to close on March 18, 2014. (Docs. 27 & 55.)

In November 2013, Thyssenkrupp moved to compel discovery related to WBC's motives in entering into the charter party and in nominating the M/V Sanko. On November 26, 2013, Thyssenkrupp submitted a letter to Magistrate Judge Sarah Netburn outlining its arguments in favor of such discovery, and WBC submitted a response letter on December 7, 2013. (See Docs. 16 & 18.) By order dated December 18, 2013, Judge Netburn denied discovery related to WBC's motives on the grounds that such discovery would be relevant only to a tort claim for financial unseaworthiness, but that Thyssenkrupp had not adequately demonstrated the viability of such a tort. (Doc. No. 19.) Thyssenkrupp objected to that ruling. (Doc. 21.) On January 22, 2014, Judge Ronnie Abrams affirmed the denial of discovery with leave for reconsideration in the event that Thyssenkrupp demonstrated the viability of its tort claim or any other basis of entitlement to the discovery. (Doc. 28.) Judge Abrams scheduled a conference for February 11, 2014 to discuss addressing the viability of the tort claim.⁶ (Id. )

The parties appeared before me on February 11, 2014, made arguments about the viability of a maritime tort claim of financial unseaworthiness, and discussed the logistics related to briefing that issue. The parties agreed that WBC would file a motion for summary judgment as to the tort claim. On February 18, 2014, WBC filed a motion seeking summary judgment against the tort claim as well as against Thyssenkrupp's breach of contract claim of financial unseaworthiness under the charter party. (Doc. 37.) The next day, Thyssenkrupp wrote a letter asking to defer consideration of the motion because it addressed the contract claim and because discovery had not concluded. (Doc. 41.)

That request was denied (Doc. 43), and Thyssenkrupp submitted its opposition to the motion. Thyssenkrupp's opposition papers included two purported expert reports. (See Docs. 45–2 & 45–3.) WBC requested that those reports be stricken as untimely because Thyssenkrupp failed to disclose its intention to file the reports and therefore WBC could not depose the experts. (Doc. 49.) That request was granted without prejudice to Thyssenkrupp seeking to admit the reports on a later date. (Doc. 55.)

WBC filed reply papers, and, by letter dated March 12, 2014, Thyssenkrupp seeks to strike part of the reply (see Doc. 60). Thyssenkrupp claims that the reply papers improperly include certain facts and arguments not raised in WBC's moving papers. (Id. ) On April 1, 2014, WBC filed a letter citing additional case law concerning application of the Hague–Visby Rules to a charter party, noting that Thyssenkrupp had served four expert-witness disclosures, and requesting a conference to discuss a schedule for expert discovery. (Doc. 65.) In a response letter, Thyssenkrupp seeks to strike the additional case law cited by WBC, claims that its expert disclosures were made within the deadline for discovery, and states that no discovery conference should be held as the discovery deadline has passed. (Doc. 66.) By reply, WBC defends its citation to additional case law, and argues that Thyssenkrupp's interpretation of the discovery deadline would preclude Thyssenkrupp's own expert reports and that, regardless, WBC should be allowed time to submit its own expert reports and to depose Thyssenkrupp's experts. (Doc. 67.) In addition to the motion for summary judgment, these disputes are addressed below.

III. Standard of Review

Summary judgment is appropriate when “the parties' submissions show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” Fay v. Oxford Health Plan, 287 F.3d 96, 103 (2d Cir.2002) ; see Fed.R.Civ.P. 56(a). “[T]he dispute about a material fact is ‘genuine’ ... if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is “material” if it “might affect the outcome of the suit under the governing law,” and “[f]actual disputes that are irrelevant or unnecessary will not be counted.” Id.

On a motion for summary judgment, the moving party bears the initial burden of establishing that no genuine factual dispute exists, and, if satisfied, the burden shifts to the nonmoving party to “set forth specific facts showing that there is a genuine issue for trial,” id. at 256, 106 S.Ct. 2505, and to present such evidence that would allow a jury to find in his favor, see Graham v. Long Island R.R., 230 F.3d 34, 38 (2d Cir.2000).

To defeat a summary judgment motion, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). “A party asserting that a fact cannot be or is genuinely disputed must support the assertion by ... citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only),...