Villar v. Crowley Maritime Corp.

• Decision Date: 07 January 1992
• Docket Number: Civ. A. No. H-91-0743.
• Citation: 780 F. Supp. 1467
• Parties: Nenita S. VILLAR, Individually and as Personal Representative of Renerio Z. Villar, Deceased; Josephine Villar; Gerardo Villar; Reynaldo Villar, and Renerio Villar Jr., Plaintiffs, v. CROWLEY MARITIME CORPORATION; Crowley Maritime International, S.A.; Crowley Maritime International, S.A., d/b/a GTO Corporation, k/n/a WTO Corporation; Genstar Ltd., k/n/a Genstar Corporation; Fednav Ltd., successor in interest to Federal Commerce & Navigation; Ross Insurance Ltd., successor in interest to Genstar Overseas Ltd.; Ross Insurance Ltd., successor in interest to Genstar Overseas Ltd., d/b/a GTO Corporation, k/n/a WTO Corporation; Federal Pacific Ltd.; Federal Pacific Ltd., d/b/a GTO Corporation, k/n/a WTO Corporation; Saudia Arabian Transport Organization Ltd., Defendants.
• Court: U.S. District Court — Southern District of Texas

780 F. Supp. 1467

Nenita S. VILLAR, Individually and as Personal Representative of Renerio Z. Villar, Deceased; Josephine Villar; Gerardo Villar; Reynaldo Villar, and Renerio Villar Jr., Plaintiffs, v. CROWLEY MARITIME CORPORATION; Crowley Maritime International, S.A.; Crowley Maritime International, S.A., d/b/a GTO Corporation, k/n/a WTO Corporation; Genstar Ltd., k/n/a Genstar Corporation; Fednav Ltd., successor in interest to Federal Commerce & Navigation; Ross Insurance Ltd., successor in interest to Genstar Overseas Ltd.; Ross Insurance Ltd., successor in interest to Genstar Overseas Ltd., d/b/a GTO Corporation, k/n/a WTO Corporation; Federal Pacific Ltd.; Federal Pacific Ltd., d/b/a GTO Corporation, k/n/a WTO Corporation; Saudia Arabian Transport Organization Ltd., Defendants.

Civ. A. No. H-91-0743.

United States District Court, S.D. Texas, Houston Division.

January 7, 1992.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Gary M. Riebschlager, O'Quinn, Kerensky & McAninch, Houston, Tex., for plaintiffs.

Jack L. Allbritton, Fulbright & Jaworski, Houston, Tex., for defendants.

ORDER

KENT, District Judge.

This matter is before the Court on the basis of three Motions: 1) the Joint Motion, brought by all Defendants save Crowley Maritime Corporation, to Dismiss for Want of Personal Jurisdiction; 2) the Motion of Crowley Maritime Corporation to Dismiss for Res Judicata and Forum Non Conveniens; and 3) Plaintiffs' Motion to Remand.

PARTIES

This action arises out of the death of Renerio Z. Villar ("Villar"), a citizen of the Philippines. Mr. Villar drowned on or about March 5, 1977 while in the course of his employment as a crew member of the vessel Bannock. Plaintiffs allege that Defendants' negligence was the legal and proximate cause of Villar's death.

Plaintiff Nenita S. Villar is Villar's widow and personal representative. Plaintiffs Josephine Villar, Gerardo Villar, Reynaldo Villar and Renerio Villar Jr. are Villar's children. All Plaintiffs¹ are citizens of the Philippines.

Plaintiffs commenced this action against Crowley Maritime Corporation; Crowley Maritime International, S.A.; Crowley Maritime International, S.A. d/b/a GTO Corporation; Genstar Ltd.; Federal Commerce & Navigation; Genstar Overseas Ltd.; Genstar Overseas Ltd., d/b/a GTO Corporation; Federal Pacific Ltd.; Federal Pacific Ltd., d/b/a GTO Corporation; and Saudia Arabian Transport Organization Ltd.

Crowley Maritime Corporation ("CMC") is a Delaware Corporation with principal place of business in California.

Defendants assert by affidavit, and Plaintiffs do not contest, that:

1) Crowley Maritime International, S.A. ("CMI") is an inactive Panamanian corporation, and is also a wholly owned subsidiary of CMC.

2) As of the date of Villar's death, Genstar Ltd. was a Canadian Corporation. Subsequently, it became Genstar Corporation. In March, 1986, Genstar Corporation was acquired by Imasco Enterprises, Inc. following a public tender offer. Genstar Corporation has been in voluntary dissolution and wind up since December, 1986.

3) As of the date of Villar's death, Genstar Overseas Ltd. ("Genstar Overseas") was a Bermuda Corporation and was wholly owned by Genstar International, S.A., a Luxembourg corporation. Genstar International, S.A., was subsequently wound up and merged with Ross Insurance Ltd. ("Ross"), a Bermuda Corporation. Ross is the successor in interest to Genstar Overseas.

4) Federal Pacific Ltd. ("Federal Pacific") is a Bermuda Corporation.

5) As of the date of Villar's death, GTO Corporation ("GTO") was a Liberian corporation. GTO's stock was owned in equal percentages by CMC, Genstar Overseas, and Federal Pacific. In 1979 CMC acquired all of the stock in GTO and changed its name to WTO Corporation ("WTO").

6) As of the date of Villar's death, GTO owned 60% of the stock of Saudi Arabian Transport Organization, Ltd. ("SATOL"), a Saudi Arabian corporation. The other 40% was owned by Yusuf Bin Ahmed Kanoo ("Kanoo"), a Saudia Arabian Corporation.

Finally, some confusion exists regarding the status of Federal Commerce & Navigation Ltd. and its relationship to Federal Pacific Ltd. Plaintiffs allege that Federal Pacific Ltd. was at all times a wholly owned subsidiary of Federal Commerce and Navigation Ltd. Defendants, however, assert through affidavit that, as of the date of Villar's death, Federal Commerce & Navigation Ltd. was a Canadian Corporation. Subsequently it was merged with Fednav Ltd., a Canadian Corporation. Fednav Corporation is now doing business as Federal Commerce & Navigation, a Division of Fednav Ltd. Federal Pacific Ltd. was, at all times, a wholly owned subsidiary of Fednav Ltd., not Federal Commerce & Navigation. In other words, Federal Pacific had no relationship of any kind with Federal Commerce & Navigation Ltd. until the latter was acquired by Fednav Ltd. This confusion, however, does not affect the outcome of the Court's decision.

CMC is doing business in Texas and maintains an agent for service of process. None of the other Defendants² maintains an agent for service of process in Texas.

PROCEDURAL HISTORY

At the time of his death, Villar was employed by SATOL under an employment contract executed in the Philippines. Under this contract, in the event that Villar was injured in the course of his employment, he could choose to receive compensation under either Philippine worker's compensation law or the law of the country of registry of the vessel he was assigned to. On the date of his death, Villar was working in Saudi Arabia as a crew member of the vessel Bannock, which was conducting a lighterage operation. The Bannock was registered under and flying the flag of Panama, and was in the service of SATOL. Villar drowned while attempting to secure Barge 204, which had broken loose from its mooring. See Villar v. Crowley Maritime Corp., 782 F.2d 1478, 1479 (9th Cir.1986); Villar v. Crowley Maritime Corp., No. A046664, 1, 2 (Cal.Ct.App. Dec. 17, 1990).³

The Plaintiffs filed suit against CMC, GTO, SATOL, and several other corporations in the United States District Court for the Northern District of California. The court held that Philippine law was controlling and dismissed the action for forum non conveniens. The court, however, conditioned its dismissal on the Defendants' agreement to waive all jurisdiction, venue, and statute of limitations defenses as to any action brought by the Plaintiffs based on Villar's death and commenced in the Philippines within one year. The Ninth Circuit Court of Appeals affirmed.⁴ Villar v. Crowley Maritime Corp., supra, 782 F.2d at 1479-83.

Plaintiffs, however, did not file suit in the Philippines. Instead, they filed an identical suit in California State Superior Court. That court dismissed based on the California doctrine of forum non conveniens, and the California Court of Appeals affirmed. Villar v. Crowley Maritime Corp., supra, No. A0446664 at 2.

Plaintiffs subsequently commenced this action, the third arising out of Mr. Villar's death, in the State District Court of Harris County, Texas. CMC removed to this Court alleging jurisdiction under 28 U.S.C. § 1332(a)(2). The Codefendants joined in this removal subject to any other defenses they may possess. CMC now moves to dismiss for res judicata and forum non conveniens. The Codefendants jointly move to dismiss on the ground that they are not subject to personal jurisdiction. Plaintiffs move to remand to state court on the ground that complete diversity is lacking and therefore removal was improper.

DISCUSSION

I. ORDER OF CONSIDERATION.

Plaintiffs argue that the Court must first address their Motion to Remand before considering Defendants' motions. Plaintiffs agree, however, that "the first order of business for the federal court is to determine its own jurisdiction." Jones Store Co. v. Hammons, 424 F.Supp. 494, 499 (W.D.Mo.1977) (quoting 1A Moore, Moore's Federal Practice, para. 0.1691, at 557). To do this, however, the Court must consider at least the substance of the Codefendants' Motion to Dismiss.

Defendants removed to this Court pursuant to 28 U.S.C.A. § 1441(a) (West Supp.1991), on the ground that this Court could have exercised original diversity jurisdiction pursuant to 28 U.S.C.A. § 1332(a)(2) (West 1991 Supp.). However, complete diversity is not present in a suit between an alien and an alien corporation. Chick Kam Choo v. Exxon Corp., 764 F.2d 1148, 1153 (5th Cir.1985). It is undisputed that Plaintiffs are citizens of the Philippines and that Codefendants are alien corporations. Thus, at first blush, this Court appears to lack subject matter jurisdiction.

Plaintiffs argue that this ends the Court's inquiry; Chick Kam Choo requires remand. In Chick Kam Choo, however, the plaintiffs were citizens of Singapore and one of the defendants was a Liberian corporation with its principal place of business in New Jersey. The defendants successfully argued that diversity does not exist in a suit between aliens. In the instant case, however, the Defendants do not argue that jurisdiction is proper because complete diversity exists between Plaintiffs and all Defendants. Rather, they allege that complete diversity exists between Plaintiffs and CMC, and only CMC is subject to personal jurisdiction in Texas. Therefore, removal was proper because the Codefendants were fraudulently joined in an attempt to defeat diversity, an issue not addressed in Chick Kam Choo.

In general, the fraudulent joinder of a nondiverse party will not defeat removal if the removing party can prove "that there is `absolutely no possibility' that the nondiverse defendant will be liable to plaintiff in state court." Robinson v. National Cash Register Co., 808 F.2d 1119, 1123 (5th Cir.1987) (quoting Green v. Amerada Hess Corp., 707 F.2d 201, 205 (5th Cir.1983), cert. denied, 464 U.S. 1039, 104 S.Ct. 701, 79 L.Ed.2d 166 (1984)). Normally, however, the removing party bears the burden of establishing federal jurisdiction. The court must...