Unipessoal v. Specialty Fuels Btu, LLC
Decision Date | 04 June 2015 |
Docket Number | CA 13-00545-KD-C |
Parties | FRATELLI COSULICH UNIPESSOAL, S.A., f/k/a FRATELLI COSULICH CONSULTADORIA E PARTICIPACOES UNIPESSOAL, LDA, Plaintiff, v. SPECIALTY FUELS BTU, LLC; F. JAVIER BRITO; and BUNKERS INTERNATIONAL CORP., Defendants. |
Court | U.S. District Court — Southern District of Alabama |
This cause is before the Magistrate Judge for issuance of a report and recommendation, pursuant to 28 U.S.C. § 636(b), on the motions to dismiss filed by the Defendants, Specialty Fuels BTU, LLC, ("BTU"), F. Javier Brito ("Brito"), and Bunkers International Corp. ("BIC") (docs. 65 and 67), the response filed by the Plaintiff, Fratelli Cosulich Unipessoal, S.A., ("Fratelli") (doc. 73), and the replies filed by the Defendants (docs. 74 and 75). Upon consideration of the foregoing pleadings, the Magistrate Judge RECOMMENDS that BIC's motion to dismiss (doc. 65) be DENIED and that BTU and Brito's motion to dismiss (doc. 67) be GRANTED IN PART and DENIED IN PART, as discussed below.
As alleged by the Plaintiff in the TAC (doc. 64), this matter arises from a series of transactions involving the Plaintiff, the Defendants, and former Defendant Specialty Fuels Bunkering, LLC, ("Bunkering").1 (Id.)
(Id., ¶ 8.) BIC is a domestic corporation that served as the exclusive broker for the Plaintiff's transactions with Bunkering and BTU from 2011 onward. (Id., ¶¶ 5, 10-11.)
Prior to 2011, the Plaintiff transacted directly with Bunkering and BTU. (Id., ¶ 9.) Paul Pappaceno handled those transactions on behalf of the Plaintiff. (Id.) At the time, he was employed by the Plaintiff's agent, Asamar, Inc. (Id.) However, Pappaceno began working for BIC in late 2010. (Id., ¶ 10.)
(Id., ¶¶ 10-12, 14-15.) Specifically, in the course of the Plaintiff's dealings with BIC on transactions with Bunkering and BTU, Pappaceno sent messages to the Plaintiff stating"[y]ou can trust me" and "[d]on't worry" to assure the Plaintiff that it would receive payment from Bunkering and BTU. (Id., ¶¶ 15(a)-15(b).)
BIC further established a position of trust and confidence by informing the Plaintiff of its extensive relationship with Bunkering and BTU. (Id., ¶ 15.) Specifically, BIC disclosed to the Plaintiff that it had participated in factoring arrangements with Bunkering and BTU, including instances where it paid Bunkering and/or BTU's financial obligations to the Plaintiff. (Id., ¶ 15(c).) BIC also informed the Plaintiff that it participated in other independent transactions with Bunkering and BTU where it acted as a principal and bought and sold fuel oil on extended credit terms. (Id., ¶ 15(e).) Additionally, Pappaceno informed the Plaintiff that he invested his personal funds in Bunkering and/or BTU. (Id., ¶ 15(f).) Based on the aforesaid information conveyed by BIC, the Plaintiff reasonably inferred that BIC "was not engaged in typical broker conduct"; "was privy to detailed financial information about the business operations of Bunkering[,] BTU and Brito"; and "was by its own conduct vouching for Bunkering and BTU's reliability as financially sound and responsible business entities . . . when it solicited [the Plaintiff] to do business with those entities." (Id., ¶¶ 15(c)-15(f).)
Additionally, BIC conveyed the closeness of its relationship with Brito and "Specialty" by informing the Plaintiff of BIC's direct conversations with Brito regarding the status of payments owed to the Plaintiff. (Id., ¶ 16.) Such conduct demonstrated BIC's "apparent, if not actual, insider position with Bunkering and BTU." (Id.)
Central to this action are two agreements—"STEM 6277" and "STEM 6322"—involving the sale and repurchase of oil. The Plaintiff describes these transactions "as a close-in-time purchase (by [the Plaintiff]) and sale (by Bunkering or BTU) of oil or fuel oil by-product on the promise that "Specialty" (i.e., Bunkering or BTU, depending on the transaction), would buy the product back at a higher price." (Id., ¶ 13.) BIC brokered both agreements. (Id., ¶ 11, 29.)
Pursuant to the STEM 6277 agreement, on January 11, 2013, the Plaintiff paid BTU $2,828,322.00 for the purchase of 22,447 barrels of cutterstock,3 and BTU was obligated to purchase those barrels back in thirty days at the price of $2,857,503.10. (Id., ¶ 29(a).) Subsequently, BTU requested, and the Plaintiff agreed, to roll over the agreement four times such that the due date for BTU's payment for the repurchase of the fuel-oil was extended into August 2013 and interest was added to the outstanding payment. (Id.) On July 24, 2013, the Plaintiff received $1,500,000.00 in partial satisfaction of the outstanding debt. (Id.) However, the remainder has not been paid. Thus, the Plaintiff alleges that it is still owed $1,532,589.70, plus interest, under the STEM 6277 agreement. (Id.)
STEM 6322 involved two payments by the Plaintiff to Bunkering for the purchase of a total of 23,500 barrels of Number 2 diesel fuel, which Bunkering was required topurchase back. (Id., ¶ 29(b).) Pursuant to the STEM 6322 agreement, on April 22, 2013, the Plaintiff paid Bunkering $1,600,000.00 for a portion of the diesel fuel, and Bunkering was obligated to purchase that portion back in thirty days at the price of $1,616,377.93. (Id.) On May 21, 2013, the Plaintiff paid Bunkering $1,384,500.00 for the remainder of the diesel fuel, and Bunkering was obligated to repurchase that amount in thirty days at the price of $1,398,671.94. (Id.) As with the STEM 6277 agreement, the STEM 6322 agreement was rolled over multiple times such that the due date for Bunkering's payment was extended to August 2013 and interest was added to the balance. (Id.) However, the Plaintiff received no payments from Bunkering and, therefore, Bunkering owes the Plaintiff $3,092,527.82, plus interest, under the STEM 6322 agreement. (Id.)
Accordingly, the Plaintiff alleges that the grand total that Bunkering and/ or BTU owes the Plaintiff under the STEM agreements is $4,625,117.52, plus interest. (Id., ¶ 30.)
The Plaintiff alleges that, on April 8, 2013,...
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