United States District Court,

S.D. New York.

COUTINHO & FERROSTAAL, INC., Plaintiff,

v.

M/V SPAR TAURUS, her engines, boilers, tackle, etc., Hyundai Merchant Marine Co., Ltd., Fleet Management Ltd., Spar Shipholding AS, Defendants.

No. 09 Civ. 9672(BSJ)(THK).

 

Aug. 16, 2010.

 

OPINION AND ORDER

 

BARBARA S. JONES, District Judge.

 

On November 20, 2009, Coutinho & Ferrostaal, Inc. (“Plaintiff”) filed a complaint against Hyundai Merchant Marine Co., Ltd. (“HMM”), M/V Spar Taurus, Spar Shipholding Association (“Spar”), and Fleet Management Ltd. (“Fleet”) (collectively, “Defendants”), for lost and damaged cargo. On March 26, 2010, HMM moved to dismiss the complaint on the basis of foreign forum selection clauses in the bills of lading that Plaintiff sued under. On March 31, 2010, Spar and Fleet moved to dismiss the complaint largely on the same grounds as HMM. For the following reasons, Defendants’ motions are GRANTED.

 

BACKGROUND

 

Plaintiff is the owner or representative of the owners, underwriters, or subrogated underwriters of cargo that was allegedly damaged on board the M/V Spar Taurus vessel. (Compl.¶ 2.) Defendants Spar and Fleet were the vessel owner and manager, respectively. Defendant HMM was the time charterer and the party who issued the two bills of lading that Plaintiff is suing under. Both bills of lading contain a foreign forum selection clause that provides:

 

Spar filed a Claim of Owner for the vessel and is representing its interests in this case.

 

The claims arising from or in connection with or relating to this Bill of Lading shall be exclusively governed by the law of Korea except otherwise provided in this Bill of Lading. Any and all action concerning custody or carriage under this Bill of Lading whether based on breach of contract, tort or otherwise shall be brought before the Seoul Civil District Court in Korea.

(Kim Decl. Ex. 2 ¶ 25.)

 

In its memorandum in support of its motion to dismiss, HMM argues that the foreign forum selection clauses are presumptively enforceable and should be given full effect. Spar and Fleet also argue that the foreign forum selection clauses are presumptively enforceable. Fleet argues separately that it is entitled to the benefit of the foreign forum selection clauses by virtue of the bills of lading’s “Himalaya Clauses.” The Himalaya Clauses define “Subcontractors” to include “any person, corporation, or other legal entity that performs any of the Ocean Carrier’s obligations under this Bill of Lading, and includes the Subcontractor’s own Subcontractor.” (Kim Decl. Ex. 2 ¶ 4(A).) The clauses further provide that in regard to “handling, storage or carriage of the Goods, every such Subcontractor shall have the benefit of all provisions in this Bill of Lading as if such provisions were expressly for the Subcontractor’s benefit.” (Id. ¶ 4(D).)

 

In its opposition, Plaintiff argues that the Defendants cannot rely on the foreign forum selection clauses in the bills of lading because Plaintiff’s fixture note with Dalian CTUI International Logistics Co. (“CTUI”), a non-party to this case, provides that “claims for cargo loss or damage … shall be litigated in the United States District Court for the Southern District of New York.” (Calkins Decl. Ex. 1 ¶ 21.) CTUI, according to Plaintiff, was an “intermediary,” who arranged for Plaintiff’s cargo to be carried from China to Texas. Plaintiff also argues that Fleet, the vessel manager, was neither a “carrier” nor “subcontractor” under the Himalaya Clauses. Thus, Plaintiff argues, Fleet is liable for its own negligence.

 

DISCUSSION

 

The Court reviews Defendants’ motions to dismiss under Rule 12(b)(3) of the Federal Rules of Civil Procedure. See, e.g., Kelso Enters. Ltd. v. M/V Diadema, No. 08 Civ. 8226(SAS), 2009 WL 1788110, atn. 24 (S.D.N.Y. June 23, 2009) (explaining that while “[c]ourts in this circuit have considered dismissals pursuant to forum selection clauses under Rules 12(b)(1), 12(b)(3), and 12(b)(6) [,]” “Second Circuit courts ‘appear to prefer Rule 12(b) (3)’ “ (citations omitted)).

 

A. Defendants Are Not Parties To The Fixture Note.

 

In spite of the significance Plaintiff attributes to it, the Fixture Note binds only two parties: Plaintiff and CTUI. Plaintiff has not argued and the fixture note itself contains nothing to suggest that Defendants were parties to the fixture note. Because Defendants are strangers to the fixture note, its terms, including the Southern District of New York forum selection clause, have no bearing on Defendants. See, e.g., Asoma Corp. v. SK Shipping Co., Ltd., 467 F.3d 817, 827 (2d Cir.2006) (finding that vessel owner and vessel manager, who were not parties to the contract of charter, were not bound by its forum selection clause).

 

B. Plaintiff Is Bound By The HMM Bills Of Lading.

 

Foreign forum selection clauses are presumptively valid. See, e.g., Silgan Plastics Corp. v. M/V Nedlloyd Holland, No. 96 Civ. 6188(JSM), 1998 WL 193079, at(S.D.N.Y. Apr. 22, 1998). As a result, “the party seeking to avoid its enforcement has the burden of establishing the lessening of carrier’s liability to a cargo owner under foreign law.” Id. (citing Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 538 (1995)). Here, Plaintiff has made no showing to this effect.

 

Instead, Plaintiff is listed as a consignee on the front of both bills of lading issued by HMM. (Kim Decl. Ex. 2.) In addition to being a named party on both bills of lading, Plaintiff endorsed the back of both bills of lading. (Id.) There has also been no suggestion that the bills of lading were the product of fraud, overreaching, mistake, or coercion. See, e.g., 3 P.P.D. Int’l Corp. v. M/V Cast Muskox, No. 95 Civ. 4184(RPP), 1995 WL 728463, at(S.D.N.Y. Dec. 7, 1995) (citations omitted). Further, by suing under the bills of lading, Plaintiff has accepted their terms, including the foreign forum selection clauses. See, e.g., Farrell Lines Inc. v. Columbus Cello-Poly Corp., 32 F.Supp.2d 118, 125 (S.D.N.Y.1997) (“defendants have filed suit on the Bill of Lading, and thereby accepted its terms” (citation omitted)). Under these circumstances, there is no reason the foreign forum selection clauses should not be enforced.

 

Plaintiff attempts to disregard the bills of lading based on its characterization of CTUI as its “intermediary.” Plaintiff cites Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14 (2004), for the proposition that an intermediary may only bind a cargo owner with respect to liability limitations. Because Kirby did not provide that an intermediary may bind a cargo owner with respect to a forum selection clause, Plaintiff argues that the fixture note provides the forum for its claims. Plaintiff’s reliance on Kirby is misplaced, however, as CTUI had no involvement with the issuance of the HMM bills of lading, which list Plaintiff as a named party and which Plaintiff endorsed. (Kim Decl. Ex. 2.)

 

Plaintiff also cites Bax Global, Inc. v. Ocean World Lines, Inc ., No. 07 Civ. 10457(NRB), 2009 WL 3001816 (S.D.N.Y. Sept. 18, 2009), and Royal & Sun Alliance Insurance PLC v. Ocean World Lines, Inc., 572 F.Supp.2d 379 (S.D.N.Y.2008), for the proposition that a non-vessel owning common carrier (i.e., an intermediary), who issues its own bill of lading to the shipper, may not bind the shipper to the foreign forum selection clause in the non-vessel owning common carrier’s separate bill of lading with an ocean carrier. These cases, however, like Kirby, are inapplicable because no intermediary impermissibly bound Plaintiff to the bills of lading issued by HMM. As explained earlier, Plaintiff is a named party on both bills of lading and endorsed both bills of lading itself. (Kim Decl. Ex. 2.)

 

C. The Bills Of Lading Cover Spar.

 

In Asoma Corp., the Second Circuit specifically recognized that a bill of lading protects a vessel owner. 467 F.3d at 827-28 n. 8 (noting that the bills of lading at issue in that case “include a ‘Himalaya Clause,’ which protects agents … to the same extent that the owner is protected” (citations omitted)). Here, both bills of lading issued by HMM define the “[v]essel” as the “vessel on the face of this Bill of Lading.” (Kim Decl. Ex. 2. ¶ 1(E).) The cover page of both bills of lading list “Spar Taurus” as the “Ocean Vessel.” (Id. at Ex. 2.) Both bills of lading also define “[c]arrier” as “the ship” and “her owner.” (Id. ¶ 1(A).) It is undisputed that M/V Spar Taurus was the ship and that her owner was Spar. For these reasons, the Court finds that Spar is protected by the foreign forum selection clauses in the bills of lading.

 

D. The Himalaya Clauses Cover Fleet.

 

The Himalaya Clauses in the bills of lading issued by HMM broadly define “Subcontractors” to include any person, corporation, or other legal entity that performs any of the Ocean Carrier’s obligations under this Bill of Lading, and includes the Subcontractor’s own Subcontractor.” (Kim Decl. Ex. 2 ¶ 4(A) (emphasis added).) In Kirby, the Supreme Court explained that “ ‘any’ has an expansive meaning.’ “ 543 U.S. at 32 (internal citation and quotation marks omitted). Thus, although a “vessel manager,” such as Fleet, is not specifically identified in the Himalaya Clauses, its terms are broad enough to cover Fleet.

 

Plaintiff’s suggestion that Fleet’s motion to dismiss is premature because Fleet’s managerial duties and responsibilities have not been established is irrelevant to the issue of whether Fleet, who Plaintiff concedes was the “manager [ ]” (Compl.¶ 3), is covered by the Himalaya Clauses.

 

Plaintiff argues that Fortis Corporate Insurance, SA v. Viken Ship Management AS, 597 F.3d 784 (6th Cir.2010), established that a “vessel manager” is not a “carrier” within the meaning of the Carriage of Goods by Sea Act, 46 U.S.C. § 30701 (“COGSA”), and thus that Fleet remains liable for its own negligence. Although the Sixth Circuit found that a ship manager is not a “carrier” within the meaning of COGSA, the court went on to add that shipping parties are free to extend COGSA’s coverage to “any and all agents or independent contractors who participate in the shipment of goods under a particular contract” through “ ‘Himalaya clauses.’ “ Id. at 792 (citations omitted). By extending coverage to “any person, corporation, or other legal entity that performs any of the Ocean Carrier’s obligations,” that is precisely what the bills of lading did here.

 

CONCLUSION

 

For the reasons provided above, Defendants’ motions to dismiss are GRANTED. Because Plaintiff’s complaint is dismissed, Spar’s and Fleet’s crossclaim for indemnification or contribution from HMM is also dismissed as moot. The Clerk of the Court is directed to close this case.

 

SO ORDERED.

orney fees. If unable to come to an agreement, the Defendant Lucky shall file an appropriate motion for the same; the Clerk of Court shall enter Judgment for Defendant, Lucky Entertainment, LLC. and against the Plaintiff. The case will be closed upon the resolution of the issue of attorney fees.

 

 

DONE and ORDERED.

United States District Court, M.D. Florida,

Tampa Division.

PENN-AMERICA INSURANCE COMPANY, Plaintiff,

v.

LUCKY ENTERTAINMENT, LLC and Ice Cream 4 You International, LLC, Defendants.

No. 8:08-cv-02538-EAK-AEP.

 

July 30, 2010.

 

Bruce A. Aebel, Banker Lopez Gassler, Tampa, FL, Michele G. Johnson, Banker Lopez Gassler, Orlando, FL, for Plaintiff.

 

Mark Paul Buell, Shirley Thompson Faircloth, Buell & Elligett, PA, Stephen E. Walker, Sivyer, Barlow & Watson, PA, Tampa, FL, for Defendants.

 

ORDER

 

ELIZABETH A. KOVACHEVICH, District Judge.

 

This cause is before the Court on the following: Defendant, Lucky Entertainment, LLC’s, Motion to Modify or Clarify Order of Entry Judgment and Judgment in a Civil Case (Doc. 37); Plaintiff, Penn-America Insurance Company’s Motion to Strike and Memorandum of Law in Opposition to Defendant’s Notice of Settlement (Doc. 38); Defendant, Lucky Entertainment, LLC’s, Opposition to Plaintiff’s Motion to Strike Notice of Settlement (Doc. 39); Plaintiff, Penn-America Insurance Company’s, Motion to Strike Defendant’s Opposition to Plaintiff’s Motion to Strike and Memorandum of Law in Opposition to Defendant’s Motion to Modify or Clarify (Doc. 42); Plaintiff, Penn-America Insurance Company’s, Notice of Filing Amended Citation to Authority in Plaintiff’s Motion to Strike and Memorandum of Law in Opposition to Defendant’s Notice of Settlement (Doc. 43); Defendant, Lucky Entertainment, LLC’s, Response in Opposition to Plaintiff’s Motion to Strike Defendant’s Opposition to Plaintiff’s Motion to Strike (Doc. 44). Based on the following discussion, the Court finds that Plaintiff’s motions are denied and Lucky’s motions are granted.

 

I. Relevant Procedural Background

 

1. On July 9, 2008, Defendant, Ice Cream 4 You International, LLC (IC4U) filed its complaint against Lucky Entertainment, LLC. (Lucky) in the Circuit Court of the Thirteenth Judicial District in and for Hillsborough County, Florida, Civil Division. (Doc. 1).

 

2. Lucky “was a warehouseman” engaged in the business of storing goods for hire pursuant to Florida Statutes § 677.102. Case No. 08-CA-015316, and leased property, located at 7102 Interbay Blvd ., Tampa, Florida 33618, to John Lehmkuhle. (Doc. 1).

 

3. IC4U’s alleges that: (a) it paid Lehmkuhle to store its personal property at said location; (b) its personal property was “improperly removed, stolen, destroyed, or otherwise disposed”; (c) Lucky terminated its storage agreement with Lehmkuhle without its knowledge and “made no effort to protect or secure” its property or to notify IC4U “regarding the disposition of” its property; and (d) Lucky failed to return its personal property or to pay the reasonable value of its missing property. (Doc. 1) As a result, IC4U claims against Lucky: Negligence (Count I), Violation of Fla. Stat. § 677.204 (Count II) and Violation of Fla. Stat. § 677 .206 (Count III). Id.

 

4. Penn-America issued an insurance policy, No. PAC6676760, to Lucky that provided $1,000,000.00 in liability coverage, effective from April 16, 2007 to April 16, 2008. (Doc. 1).

 

5. On December 22, 2009, Penn-America sought a declaration from this Court regarding its rights and duties to Lucky for the claims alleged by IC4U. (Doc. 1).

 

6. Penn-America and IC4U settled the underlying case, styled as ICE CREAM 4 YOU INTERNATIONAL, LLC, Plaintiff v. LUCKY ENTERTAINMENT, LLC, Defendant, Case No. 08-CA-015316, Division F. On or about May 10, 2010, it was voluntarily dismissed with prejudice.

 

 

7. On May 17, 2010, Lucky filed its Notice of Settlement of Underlying Action Rendering Coverage Dispute Moot Except to As to Amount of Fees. (Doc. 30).

 

8. On May 18, 2010, this Court entered an order requiring Penn-America to respond to the Notice of Settlement. (Doc. 31).

 

9. On May 25, 2010, IC4U filed its Stipulation of Judgment in which IC4U: a) stipulates that judgment should be entered in favor of Penn-America declaring that there is no coverage under Penn-America’s policy for its allegations against Lucky; and b) withdraws its opposition to PennAmerica’s Motion for Summary Judgment. (Doc. 32).

 

10. On June 1, 2010, this Court entered its Order for Entry of Judgment directing the Clerk of Court to enter judgment in accordance with IC4U’s Stipulation of Judgment. (Doc. 35). The Clerk of Court entered Judgment accordingly. (Doc. 36).

 

11. On June 4, 2010, Lucky filed its Motion to Modify or Clarify Order of Entry of Judgment and Judgment in a Civil Case. (Doc. 37).

 

12. On June 4, 2010, Penn-America filed its Motion to Strike and Memorandum of Law in Opposition to Lucky’s Notice of Settlement. (Doc. 3 8).

 

13. On June 9, 2010, Lucky filed its Opposition to Plaintiff’s Motion to Strike Notice of Settlement. (Doc. 39).

 

14. On June 21, 2010, Penn-America filed its Motion to Strike Defendant’s Opposition to Plaintiff’s Motion to Strike Defendant’s Opposition to Plaintiff’s Motion to Strike and Memorandum of Law in Opposition to Defendant’s Motion to Modify or Clarify. (Doc. 42).

 

15. On June 22, 2010, Lucky filed its Response in Opposition to Plaintiff’s Motion to Strike Defendant’s Opposition to Plaintiff’s Motion to Strike. (Doc. 44).

 

II. Plaintiff’s Motion

 

Penn-America argues that Lucky is not entitled to attorney fees as a result of Penn-America’s settlement of the underlying state court case brought against Lucky by IC4U because Penn-America has not declined to defend its refusal of coverage to Lucky; rather, Penn-America defended Lucky pursuant to a reservation of rights that there was no insurance coverage for the claims brought against Lucky by IC4U. (Doc. 38). Moreover, Penn-America maintains that its reservation of rights to defend its coverage position against Lucky distinguishes it from other relevant case law. Id. Accordingly, Penn-America requests that this Court: (1) strike Lucky’s Notice of Settlement of Underlying Action Rendering Coverage Dispute Moot Except as To Amount of Fees as an improper request for entry of a court order; (2) enter an order stating that Lucky is not entitled to attorney fees; and (3) enter an order stating that despite the settlement between Penn-America and IC4U, PennAmerica’s declaratory action against Lucky is not moot. Id.

 

III. Defendant’s Response.

 

Lucky argues that by Penn-America’s settling the underlying lawsuit on its behalf, Penn-America has “provided the exact relief it claims in this case it is not responsible for providing;” thus, Penn-America has functionally acknowledged its duty to provide coverage for Lucky. (Doc. 39). Moreover, Lucky maintains that an insurer’s express waiver of a position is unnecessary in the face of settlement because waiver of position is automatic, and Penn America’s stipulation with IC4U, non-party to the insurance policy, that there is no coverage for attorney fees should be of no effect. Id. Accordingly, Lucky requests: (1) denial of PennAmerica’s Motion to Strike; (2) order stating that Penn-America’s declaratory action is moot, which therefore must be dismissed; and (3) award the insured, Lucky, attorney fees and costs in an amount to be determined upon appropriate motion, notice, and hearing. Id.

 

IV. Discussion

 

The myriad filings in this matter have served to complicate the factual and legal issues; thus, a reconsideration is prudent “to correct clear error or prevent manifest injustice.” See, e.g., Poe Fin. Group, LLC v. Poe (in re Poe Fin. Group, Inc.), 2010 U.S. Dist. Lexis 59616 (M.D. Fla. June 16, 2010). Each party has vigorously argued various positions. None of the confusion that has abounded can be attributed to bad faith by any party. No filings made by the parties will be stricken or rescinded from the record. All filings shall remain so that the court may review them and give them the appropriate weight, credibility, and influence. Pursuant to Fed.R.Civ.P. 59(e) and 60(b)(1) and 60(b)(6), this order amends and/or clarifies any prior order(s) not consistent with this order.

 

The remaining issue in this case is what affect does the Penn-America settlement agreement with IC4U have on the underlying case against Lucky with regard to attorney fees. Florida Statute § 627.428, Attorney Fee, provides in relevant part:

 

(1) Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of an insured or the named beneficiary under a policy or contract executed by the insurer, the trial court, or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court, shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.

 

(3) Where so awarded, compensation or fees of the attorney shall be included in the judgment or decree rendered in the case.

 

Florida courts have interpreted this law to mean that the payment of a settlement claim is the functional equivalent of a confession of judgment or a verdict in favor of the insured. See, e.g., Wollard v. Lloyd’s & Cos. Of Lloyd’s, 439 So.2d 217, 218-19 (Fla.1983). Moreover, the insured may recover attorney fees incurred in determining whether a valid settlement agreement exists at all. See, e.g., Pepper’s Steel & Alloys, Inc. v. United States, 850 So.2d 462, 465 (Fla.2003).

 

Penn-America paid IC4U to settle and resolve the claim by IC4U against Lucky. IC4U, a non-party to the subject contract between Penn-America and Lucky, can not stipulate away any rights that Lucky may have under its insurance policy with Penn-America. Although Penn-America attempts to reserve rights to defend its position that Lucky is not covered, this is not dispositive. Case law mandates that Penn-America’s settling the underlying lawsuit on behalf of Lucky resolves the coverage dispute between Lucky and Penn-America, except as to attorney fees. Penn-America must pay attorney fees in amount to be determined upon appropriate motion, notice, and hearing. Accordingly, it is

 

This notion is black letter law. The court sees no case law citation to the contrary in Penn-America’s memorandum of law.

 

ORDERED that: Plaintiff’s motions are denied (Docs.38, 42); Defendant’s motions are granted (Docs.37, 39, 44), in that all issues are resolved except attorney fees and the parties are directed to consult on the amount of attorney fees. If unable to come to an agreement, the Defendant Lucky shall file an appropriate motion for the same; the Clerk of Court shall enter Judgment for Defendant, Lucky Entertainment, LLC. and against the Plaintiff. The case will be closed upon the resolution of the issue of attorney fees.

 

DONE and ORDERED.