Bits & Pieces

Burdette v. Miller

Court of Appeals of Oregon.

Kenneth BURDETTE, Plaintiff–Respondent,


Glen Eric MILLER, Defendant–Appellant,


DB Trucking Too, Inc., fka DB Trucking, Inc., Defendant.


070506126, A141666.

Argued and Submitted Aug. 06, 2010.

Decided June 15, 2011.


Multnomah County Circuit Court.

Jerry B. Hodson, Judge.

Jay D. Enloe argued the cause for appellant. With him on the briefs were Flavio A. Ortiz and Lachenmeier Enloe Rall & Heinson.


Michael H. Bloom argued the cause for respondent. With him on the brief was Michael H. Bloom, P.C.


Before HASELTON, Presiding Judge, and ARMSTRONG, Judge, and DUNCAN, Judge.



Defendant Miller appeals from a judgment for plaintiff entered following a jury trial for personal injury damages arising from a motor vehicle accident.  Miller advances three interlocking assignments of error. Miller contends that the trial court erred in (1) striking, under ORCP 46 D, his defenses pertaining to liability as a sanction for his failure to appear at noticed depositions; (2) denying his motion to amend his answer to assert an affirmative defense under ORS 31.715; and (3) granting plaintiff’s motion in limine to exclude evidence of plaintiff’s purported intoxication at the time of the accident as it pertained to his future earning capacity. We reject the second and third assignments of error without discussion and write only to address Miller’s first assignment of error. For the reasons explained below, we affirm.


On February 27, 2006, Miller, while driving a dump truck for DB Trucking Too, Inc. (DB Trucking), struck plaintiff’s vehicle, injuring plaintiff. Plaintiff brought this personal injury action against Miller and DB Trucking in May 2007. Miller was personally served with notice of the action on June 11, 2007, at his sister’s residence, which was the address that he had provided at the scene of the accident and to the Oregon Department of Motor Vehicles. In October 2007, plaintiff sent Miller a notice of deposition for November 12, 2007. That same month, defense counsel, who had been unsuccessfully trying to contact Miller by letter and by telephone throughout August, September, and October, learned from Miller’s sister, Jenda, that “she had not seen Miller for three to four months and did not know how to reach him.” Defense counsel then hired an investigator to locate Miller. That effort, too, proved unsuccessful.


According to defense counsel, plaintiff agreed to reschedule the November 12 deposition because of defense counsel’s inability to locate Miller. On November 12, 2007, plaintiff sent a second notice of deposition for Miller to appear on December 17, 2007. Defense counsel, still unable to locate Miller or confirm his appearance for the December 17 deposition, attempted, twice, to subpoena Jenda for the purpose of inquiring as to Miller’s whereabouts. Those efforts were unsuccessful, and the subpoenas were withdrawn. Plaintiff contends that he then notified defense counsel that he would seek sanctions against Miller, including striking Miller’s defenses, if Miller were not made available for a deposition within 30 days.


On December 19, 2007, defense counsel again sought to subpoena Jenda to a deposition, this one scheduled for January 8, 2008. The process server encountered Miller when attempting to serve that subpoena at Jenda’s residence and spoke with Miller about the subpoena. On January 2, 2008, defense counsel filed a third notice of deposition for Miller for January 8, but was unable to personally serve Miller with the notice. On January 7, defense counsel filed a fourth notice of deposition for Miller for January 16, 2008.


Defense counsel spoke to Miller on January 8 and advised him that plaintiff had sent him two notices of deposition and that defense counsel had also sent Miller two notices of deposition. According to defense counsel, Miller explained that he had been in Alaska for the preceding few months and had not visited or spoken with Jenda until the holidays. Miller asked counsel to cancel Jenda’s deposition and said that the earliest that he could be available for a deposition was January 26, 2008, because he had just started a new job as a long-haul trucker. Plaintiff’s counsel agreed to reschedule the January 16 deposition for January 26, the fifth attempt by the parties’ attorneys to depose Miller.


Between January 8 and January 25, 2008, defense counsel spoke with Miller on four occasions, confirming his deposition for January 26, 2008. Defense counsel also sent Miller letters confirming the January 26 deposition.


Around 7:20 a.m. on January 26, 2008, defense counsel received a voice mail from Miller stating that he would be unable to attend the deposition because he was “stuck outside of Coos Bay” and had a problem with his truck. Defense counsel called Miller twice, but was unable to reach him before 10:30 a.m., the time the deposition was scheduled to begin. According to defense counsel, plaintiff’s counsel agreed to discuss rescheduling the deposition the following Monday, January 28, but, on January 29, informed defense counsel that plaintiff would seek sanctions instead.


On February 1, 2008, plaintiff filed a motion for sanctions, requesting that the court strike Miller’s affirmative defenses of comparative fault. See ORCP 46 D. In support of the motion for sanctions, plaintiff’s counsel submitted an affidavit, detailing his efforts to schedule a deposition. In addition, plaintiff proffered evidence that Miller was in Oregon on September 26, 2007, to obtain a duplicate commercial driver’s license, contradicting Miller’s assertions to his defense counsel that he was in Alaska during that time. Invoking Pamplin v. Victoria, 319 Or. 429, 877 P.2d 1196 (1994), plaintiff argued in his written memorandum that Miller’s repeated failures to appear for deposition supported findings that Miller’s conduct was “willful” and that plaintiff’s requested sanction was “just” under the circumstances.


In opposing the motion, defendants argued that Miller had not acted willfully or in bad faith in failing to appear. That was so, defendants asserted, because Miller did not have “actual knowledge” of the November 12, 2007, and December 17, 2007, depositions and was unable to appear for the January 26, 2008, deposition “due to circumstances beyond his control.” Defendants further argued that, if the trial court concluded that Miller’s conduct was willful, then lesser sanctions, such as imposing costs and fees, or ordering Miller to appear for deposition, were more appropriate. Finally, defendants contended that plaintiff’s proposed sanctions would unfairly cause prejudice to DB Trucking, which had not acted with willful or conscious indifference to the lawsuit.


A hearing on plaintiff’s motion for sanctions was held on March 18, 2008. At that time, trial was scheduled for May 6, 2008. In addition to the evidence recounted above, Jenda testified. According to Jenda, Miller did not live at her residence, but “dropped in” sporadically. Jenda confirmed that Miller had received letters addressed from his defense counsel and slips from the post office notifying Miller that he had registered letters to pick up; however, she did not know if he ever read his mail or collected the registered letters. Jenda further confirmed that Miller was “aware of all [the] dates he was supposed to be at,” but commented that Miller “d[id] his own thing.” Miller was not present for the sanction hearing and did not submit an affidavit or any other evidence explaining, or substantiating, the circumstances surrounding his failure to appear at the noticed depositions or the sanction hearing.


After hearing argument from the parties, the trial court granted plaintiff’s motion and, on April 14, 2008, entered an order striking Miller’s defenses and adjudging him “liable for Plaintiff’s injuries as a matter of law.” Neither party commented on, or objected to, the trial court’s failure to render findings either at the hearing or afterwards, when the parties cooperated on drafting the order that the trial court adopted. Eventually, plaintiff dismissed DB Trucking from the case and, on February 25, 2009, after a jury trial regarding the amount of damages that plaintiff had incurred in the accident, judgment was entered against Miller.


On appeal, Miller makes two arguments with respect to his first assignment of error. First, Miller contends that, as a procedural matter, the trial court erred in not making special findings that Miller’s failure to attend his deposition was willful or in bad faith. Second, as a substantive matter, Miller argues that the sanction imposed by the trial court was an abuse of discretion. Specifically, Miller contends that the record does not support a finding that he acted willfully or in bad faith, which was a necessary factual predicate for the trial court’s order, and that dismissal of his defenses, as opposed to a lesser sanction, was not warranted under the circumstances.


Plaintiff counters that Miller’s procedural contention—viz., that the sanction must be reversed because the trial court failed to make special findings—is unpreserved. As to the merits, plaintiff contends that the evidence supports a finding that Miller willfully evaded being deposed and, given that evidence, the sanction was not an abuse of discretion. We agree with plaintiff in both respects.


We begin with Miller’s contention that the trial court erred in granting plaintiff’s motion for sanctions without making specific findings that Miller willfully failed to appear for his depositions. As noted, ORCP 46 D provides, in part, that if a party fails to appear for a deposition, “the court in which the action is pending on motion may make such orders in regard to the failure as are just,” including imposing sanctions authorized under ORCP 46 B(2)(a) to (c). As pertinent here, ORCP 46 B(2) provides that, if a party


“fails to obey an order to provide or permit discovery * * *, the court in which the action is pending may make such orders in regard to the failure as are just, including among others, the following:


“B(2)(a) An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;


“B(2)(b) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting the disobedient party from introducing designated matters in evidence;


“B(2)(c) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or any part thereof, or rendering a judgment by default against the disobedient party[.]”


In Pamplin, the Oregon Supreme Court held that a court that dismisses a case under ORCP 46 B(2)(c) “must make findings of fact and must explain why that sanction is ‘just’; that a finding of willfulness, bad faith, or fault of a similar degree on the part of the disobedient party is required; and that a finding of prejudice to the party seeking discovery is not required.” 319 Or. at 437, 877 P.2d 1196. More recently, in Peeples v. Lampert, 345 Or. 209, 216 n. 4, 191 P.3d 637 (2008), the Oregon Supreme Court further concluded that, because the operative wording in ORCP 46 B (which was at issue in Pamplin ) and ORCP 46 D are the same, the findings required in Pamplin “appl[y] equally to a trial court’s dismissal authority under ORCP 46 D.”


However—and critically for present purposes—in Peeples, the Oregon Supreme Court emphasized that “the usual rules of preservation apply to a challenge to a trial court’s failure to make express special findings required by Pamplin.” 345 Or. at 223, 191 P.3d 637. Preservation is required, the court concluded, to “permit[ ] the trial court to avoid making an error or to correct an error already made,” ensure fairness to the opposing party, and “facilitate meaningful review” of the trial court’s decision. Id. at 222–23, 191 P.3d 637. See also ORAP 5.45(1) (“No matter claimed as error will be considered on appeal unless the claim of error was preserved in the lower court * * *.”). Accordingly, to preserve the issue for appellate review, the party claiming error must “alert [the] trial court to its failure to make special findings that are material to the decision,” before raising that issue on appeal. Peeples, 345 Or. at 222, 191 P.3d 637.


Here, defense counsel did nothing to “alert [the] trial court to its failure to make special findings,” id., as to whether Miller acted willfully or in bad faith when he failed to attend his noticed depositions. That is, defense counsel did not so alert the trial court during the hearing, after the court granted plaintiff’s motion for sanctions from the bench, or before it entered its written order, nearly a month later. Consequently, Miller’s argument is unpreserved. See id. at 223–24, 191 P.3d 637 (concluding, in analogous circumstances, that the petitioner failed to preserve his challenge to the trial court’s failure to make express special findings).


Turning to the merits of the court’s imposition of sanctions under ORCP 46 D, we review the trial court’s decision in that regard for abuse of discretion. Peeples v. Lampert, 209 Or.App. 17, 26, 146 P.3d 352 (2006), aff’d, 345 Or. 209, 191 P.3d 637 (2008). Discretion “refers to the authority of a trial court to choose among several legally correct outcomes.” State v. Rogers, 330 Or. 282, 312, 4 P.3d 1261 (2000). “If the trial court’s decision was within the range of legally correct discretionary choices and produced a permissible, legally correct outcome, then the trial court did not abuse its discretion.” Id.


Here, there was ample evidence from which the trial court could infer that Miller repeatedly, and willfully, refused to cooperate with plaintiff’s and his own counsel’s efforts to depose him. Although Miller was personally put on notice that he was a defendant in a lawsuit, he failed to maintain contact with his defense counsel and either did not read his mail or ignored the letters his counsel sent to him. The few explanations that Miller did give for not appearing at his noticed depositions—e.g., being in Alaska for a few months, and having his truck break down in Coos Bay the morning of his scheduled deposition at 10:30 a.m. in Lake Oswego, on January 26, 2008—were entirely unsubstantiated and, with respect to his time in Alaska, contradicted by other documentary evidence in the record. Miller’s sister testified that Miller “d [id] his own thing,” despite being aware of his attorneys’ repeated efforts to contact him. Moreover—even after Miller had been expressly advised of his attorneys’ and opposing counsel’s efforts to notice his deposition and had, nonetheless, missed his January 26 deposition—he failed to sustain contact with his defense counsel, appear at the sanction hearing, or submit an affidavit explaining the circumstances of his absences. In short, the trial court could infer from the totality of those circumstances that Miller’s persistent nonappearance at his depositions was willful.


Given that conduct and the procedural posture of the case, the trial court’s decision to strike Miller’s defenses was not an abuse of discretion. On March 18, 2008, when the sanction hearing was held, the scheduled trial date, May 6, was drawing near. Plaintiff’s and defendants’ counsel had repeatedly attempted to secure Miller’s attendance for depositions, and, as explained above, he had demonstrated a persistent pattern of thwarting those efforts. Moreover, because Miller failed to maintain contact with his attorneys or appear at the sanction hearing, his defense counsel could provide no assurance that Miller would be available for deposition before the May 6 trial date. Miller’s persistent frustration of plaintiff’s efforts to secure his sworn testimony about what he remembered from the day of the accident subverted the fundamental purposes of pretrial discovery, putting plaintiff in the position of “shadowboxing” with respect to defendants’ defenses to liability. Accordingly, the trial court’s decision to strike Miller’s defenses was not an abuse of discretion.




As explained later in this opinion, plaintiff brought this lawsuit against two defendants, Miller and DB Trucking Too, Inc. However, plaintiff dismissed his claims against DB Trucking Too, Inc ., before trial. See ––– Or.App. at –––– (slip op at 5). For clarity and convenience, we refer to defendant Miller by name. For the period relevant to defendant’s first assignment of error, Miller and DB Trucking Too, Inc., were jointly represented by defense counsel.


ORCP 46 D provides, in material part:


“If a party * * * fails (1) to appear before the officer who is to take the deposition of that party or person, after being served with a proper notice * * * the court in which the action is pending on motion may make such orders in regard to the failure as are just, including among others it may take any action authorized under subsection B(2)(a), (b), and (c) of this rule.”


ORCP 46 B(2) lists some of the sanctions that the court may impose, which include, pursuant to ORCP 46 B(2)(b), “[a]n order refusing to allow the disobedient party to support or oppose designated claims or defenses[.]”


Stolt Tankers BV v. Allianz Seguros, S.A.

United States District Court,

S.D. New York.



ALLIANZ SEGUROS, S.A. and ACE SeguradorA S.A., Respondents.


No. 11 Civ. 2331(SAS).

June 16, 2011.


Manuel A. Molina, Esq., Freehill Hogan & Mahar LLP, New York, NY, for Petitioner.


Lawrence Caruso Glynn, Esq., Caruso Glynn, LLC, Fresh Meadow, NY, for Respondents.



SHIRA A. SCHEINDLIN, District Judge.


Stolt Tankers BV (“Stolt”) petitions to compel Allianz Seguros S.A. (“Allianz”) and Ace Seguradora S.A. (“Ace”) (collectively, “Respondents”) to proceed with arbitration and to enjoin Respondents from proceeding with a lawsuit in the courts of Brazil. For the reasons discussed below, the petition to compel arbitration and enjoin Respondents from proceeding with their suit is granted.



On January 19, 2009, Stolt, as “Owner” of the M/V STOLT EXCELLENCE, and Tricon Shipping Inc. (“Tricon”), as “Charterer,” entered into a voyage “Charter Party” on an amended “ASBATANKVOY Charter Party form” (“Asbatankvoy Form”). Specifically, through the Charter’s “Fixture Recap,”  Stolt and Tricon agreed to the following provisions: (a) application of “U.S. Law;” (b) “Arbitration in New York;” (c) use of the “C/P [charter party] Asbatankvoy” form as the basis for their contractual arrangements; and (d) the inclusion of the “Tricon Shipping Inc. Shipping Clauses” as part and parcel of the Charter.


Tricon Shipping Clauses, Ex. B to Petition to Compel Arbitration Pursuant to 9 U.S.C. §§ 1–307 and for an Anti–Suit Injunction (“Petition”).


Broker’s Fixture Confirmation Email (“Fixture Recap”), Ex. A to Petition. A “fixture recap” is the communication, usually between the parties’ brokers, that contains or “fixes” the parties’ agreement to “main terms” which usually include “the name of the charterer, name of owner, ship and its characteristics, time and place of delivery, duration of charter, place of redelivery, hire rate, printed form upon which the contract is based, and any other term that a party deems important.” Great Circle Lines Ltd. v. Matheson & Co., 681 F.2d 121, 125 (2d Cir.1992) (emphasis added). “A ‘recap’ communication, or ‘fixture,’ is recognized throughout the shipping industry as an agreement to a charter party’s essential terms.” U.S. Titan, Inc. v. Guangzhou Zhen Hua Shipping Co., 241 F.3d 135, 148 (2d Cir.2001).


See Fixture Recap.


Part II, Clause 24 of the Asbatankvoy Form, in turn, provides as follows:


24. ARBITRATION. Any and all differences and disputes of whatsoever nature arising out of this Charter shall be put to arbitration in the City of New York or in the City of London whichever place is specified in Part I of this charter ….


ASBATANKVOY Charter Party Form (“Asbatankvoy Form”), Ex. C to Petition, at 57 (emphasis added). Section K of Part I of the Asbatankvoy Form in turn sets “[t]he place of General Average and arbitration proceedings to be London/New York (strike one out).” Id. at 52.


On February 11, 2009, Tricon loaded onboard the M/V STOLT EXCELLENCE several quantities of “caustic soda.” Stolt then issued “Tanker bills of lading” Nos. 482A, 482B, and 482C, expressly identifying Klabin S.A. (“Klabin”) as “Consignee” to bill Nos. 482A and 482B, and identifying Suzano Papel e Celolose S.A. (“Suzano”) as “Consignee” to bill No. 482C. Each of the Stolt bills of lading contains the following clause:


Bills of Lading, Ex. D to Petition.


This shipment is carried under and pursuant to the terms of the Charter 01 19 2009 at Houston, Texas between STOLT TANKERS, BV and TRICON SHIPPING as Charterer, and all the terms whatsoever of the said Charter, including the arbitration clause, except the rate and payment of freight specified therein, apply to and govern the rights of the parties concerned in this shipment.


Id. (emphasis added).


Upon arrival of the M/T STOLT EXCELLENCE at Santos, Brazil, Klabin and Suzano alleged that a portion of the caustic soda had been damaged. Eventually, Zass Internacional Consultoria Ltda. (“Zass”) advised Stolt that it represented Ace and Allianz, the purported subrogated underwriters of Suzano and Klabin, repectively, and that it had been authorized by Ace and Allianz to seek recovery against Stolt in subrogation for the cargo claims allegedly paid to their insureds. Stolt engaged Brazilian counsel to deal directly with Zass, but ultimately the parties’ efforts to resolve Respondents’ claims proved unsuccessful, and Zass threatened to and did commence lawsuits in Brazil against Stolt. In response, Stolt retained counsel to demand that Respondents arbitrate in New York. Respondents have refused to nominate their arbitrator pursuant to the terms of the Charter and Stolt bills of lading. Stolt now moves to compel arbitration and to enjoin Respondents from continuing proceedings in Brazil.


Klabin and Suzano were originally named as Respondents in this petition, but have since been dismissed. See 5/5/11 Order of Dismissal Only as to Respondent Klabin S.A. [Docket No. 14]; 5/6/11 Order of Dismissal Only as to Respondent Suzano Papel e Celulose S.A. [Docket No. 16].




A. In Personam Jurisdiction


A party who agrees to arbitrate in New York “must be deemed to have consented to the jurisdiction of the court that could compel the arbitration proceeding in New York. To hold otherwise would be to render the arbitration clause a nullity.”  The Second Circuit has repeatedly upheld the rule that arbitration forum clauses confer personal jurisdiction by consent.  It is, therefore, “well-settled that federal courts applying New York law have personal jurisdiction over parties that agree to arbitrate their disputes in New York.” 0


Victory Transp. Inc. v. Comisaria General de Abastecimientos y Transportes, 336 F.2d 354, 363 (2d Cir.1964).


See, e.g., Merrill Lynch, Pierce, Fenner & Smith v. Lecopolus, 553 F.2d 842, 845 (2d Cir.1977).


0. American Bureau of Shipping v. Tencara Shipyard S.P.A., 170 F.3d 349, 352 (2d Cir.1999).


Because an insurer’s “right of recovery … is governed by the same terms as the insured’s right of recovery,” 1 an insurer-subrogee “is equally bound by a consent to jurisdiction.” 2 Therefore, as long as the arbitration clause “is enforceable, this court has personal jurisdiction over [Respondents] ….“ 3


1. Farrell Lines Inc. v. Columbus Cello–Poly Corp., 32 F.Supp.2d 118, 127 (S.D.N.Y.1997).


2. Novorossiyk Shipping Co. v. China Pacific Prop. Ins. Co., No. 06 Civ. 2312, 2006 WL 3055964, at(S.D.N.Y. Nov. 16, 2006). Accord American Bureau of Shipping, 170 F.3d at 352; Farrell Lines, 32 F.Supp.2d at 126–27.


3. Farrell Lines, 32 F.Supp.2d at 127.


B. Service of Process

Where a party has agreed to arbitrate and thus has consented to the jurisdiction of the courts where arbitration is to take place, “the sole function of process” is to notify the other party of the proceedings.4 In accordance with Rule 4(h)(2) of the Federal Rules of Civil Procedure, the service of process on a foreign corporation abroad must be done in accordance with Rule 4(f). Rule 4(f)(3) states that the corporation can be served “by other means not prohibited by international agreement, as the court orders.” 5


4. Victory Transp., 336 F.2d at 363.


5. Fed.R.Civ.P. 4(f)(3).


C. Arbitrability


1. Incorporation of Arbitration Clauses


Although federal policy favors arbitration, it is a matter of consent under the Federal Arbitration Act, and “a party cannot be required to submit to arbitration any dispute which [it] has not agreed so to submit.” 6 Arbitration clauses in charter parties have been invariably interpreted as being “broad” in scope and not restricted or limited to disputes solely between “owners” and “charterers.” 7 The Second Circuit


6. Louis Dreyfus Negoce S.A. v. Blystad Shipping & Trading, Inc. ., 252 F.3d 218, 224 (2d Cir.2001) (quotation marks omitted).


7. See Ibeto Petrochemicals Indus. Ltd. v. M/T BEFFEN, 475 F.3d 56, 63 (2d Cir.2007); JLM Indus., Inc. v. Stolt–Nielsen SA, 387 F.3d 163 (2d Cir.2004).


long ha[s] held that a broadly-worded arbitration clause which is not restricted to the immediate parties may be effectively incorporated by reference into another agreement. According to this rule, a charter party provision for such arbitration is binding on the parties to a Bill of Lading that incorporates the Charter Party by reference.8


8. Ibeto, 475 F.3d at 63 (citations and quotation marks omitted).


“Where terms of the charter party are … expressly incorporated into the bills of lading they are a part of the contract of carriage and are binding … just as they would be if the dispute were between the [original parties to the charter agreement].” 9 To incorporate a charter party clause effectively, “the bill of lading must specifically refer to a charter party and use unmistakable language indicating that it is incorporated.” 0


9. Son Shipping Co. v. De Fosse & Tanghe, 199 F.2d 687, 688 (2d Cir.1952).


0. Continental Ins. Co. v. Polish S.S. Co., 346 F.3d 281, 283 (2d Cir.2003).


2. Application to Subrogated Insurers

When a maritime insurer has paid a claim to the insured, who in turn has a claim of right under a contract, the insurer “becomes, in effect, the beneficial owner of those rights, entitled … to assert the right against the third party.” 1 The general rule declares that “[a]n insurer-subrogee stands in the shoes of its insured” 2 and “succeeds to whatever rights or disabilities he may have in the matter.” 3 Thus there is “no valid basis in law or equity why an arbitration clause should not be enforced against a subrogee.” 4 A petition to compel arbitration against the insured is “equally valid against the insurer …. 5 As such, “once the insurer becomes subrogated, it steps into the insured’s shoes and essentially becomes a party to the bill of lading. Its right of recovery from the carrier of the goods is governed by the same terms as the insured’s right of recovery, i.e. by the bill of lading.” 6


1. Gilmore and Black, The Law of Admiralty § 2–17 at 91 (2d ed.1975).


2. Gibbs v. Hawaiian Eugenia Corp., 966 F.2d 101, 103 (2d Cir.1992).


3. Lumbermans Mut. Cas. Co. v. Borden Co., 268 F.Supp. 303, 314 (S.D.N.Y.1967).


4. Id.


5. American Bureau of Shipping, 170 F.3d at 352.


6. Farrell Lines, 32 F.Supp.2d at 127.


D. Anti–Suit Injunction

“It is beyond question that a federal court may enjoin a party before it from pursuing litigation in a foreign forum.” 7 However, “principles of comity counsel that injunctions restraining foreign litigation be used sparingly and granted only with care and great restraint. That is because an anti-suit injunction, though directed at the litigants, effectively restricts the jurisdiction of the court of a foreign sovereign.8


7. Paramedics Electromedicina Comercial, Ltda. v. G.E. Med. Sys. Info. Techs., Inc., 369 F.3d 645, 652 (2d Cir.2004).


8. LAIF X SPRL v. Axtel, S.A. de C.V., 390 F.3d 194, 199 (2d Cir.2004) (citations and quotation marks omitted).


When determining whether to enjoin a foreign action, a court should consider the relationship between the suit at bar and the suit in the foreign jurisdiction. “An anti-suit injunction against parallel litigation may be imposed only if: (A) the parties are the same in both matters, and (B) resolution of the case before the enjoining court is dispositive of the action to be enjoined.” 9 If this threshold has been met, the court should also consider the following factors (“China Trade factors”):


9. Paramedics, 369 F.3d at 652 (citing China Trade & Dev. Corp. v. M.V. Choong Yong, 837 F.2d 33, 35 (2d Cir.1987)).


(1) frustration of a policy in the enjoining forum; (2) the foreign action would be vexatious; (3) a threat to the issuing court’s in rem or quasi in rem jurisdiction; (4) the proceedings in the other forum prejudice other equitable considerations; or (5) adjudication of the same issues in separate actions would result in delay, inconvenience, expense, inconsistency, or a race to judgment.0


0. China Trade, 837 F.2d at 35.


E. Sanctions

Under Rule 11(c) of the Federal Rules of Civil Procedure a court can, upon motion or on the court’s own initiative, and after notice and a reasonable opportunity to respond, impose monetary sanctions “on any attorney, law firm, or party that violated [Rule 11(b) ] or is responsible for its violation.” 1 Rule 11(b) states that by “presenting to the court a pleading, written motion, or other paper” the attorney certifies that to the best of the person’s belief “the claims, defenses, and other legal contentions are warranted by existing law or by a non-frivolous argument for extending, modifying, or reversing existing law or for establishing new law.” 2


1. Fed.R.Civ.P. 11(c).


2. Fed.R.Civ.P. 11(b)-(b)(2).


A party must bring a motion for sanctions “separately from other motions or requests.” 3 Alternatively, “[o]n its own initiative, the court may enter an order … directing an attorney … to show cause why [the attorney] has not violated subdivision (b).” 4


3. Fed.R.Civ.P. 11(c)(1)(A).


4. Fed.R.Civ.P. 11(c)(1)(B).




A. In Personam Jurisdiction


Respondents’ contention that an agreement to arbitrate in New York by the insured does not confer jurisdiction over the insurer is without merit. As discussed below, the arbitration clause in the Fixture Recap specifies New York as the forum for arbitration of any disputes arising out of the Charter Party. Because Klabin and Suzano are parties to the bills of lading, into which the New York arbitration clause was incorporated by reference to the Charter Party using unmistakable language, they are bound by the arbitration clause. Because Klabin and Suzano have thus effectively agreed to arbitrate any disputes arising out of the transaction in New York, they have consented to the jurisdiction of this Court.5


5. See Victory Transp., 336 F.2d at 363.


Allianz and Ace are responding to this petition and litigating in Brazil against Stolt only in their roles as subrogees of Klabin and Suzano. As such, their rights and obligations are no different from those of Klabin and Suzano. 6 And because Klabin and Suzano, as subrogors, are parties to the bills of lading and to the arbitration clause, that clause also binds Allianz and Ace as subrogees.7 Because Allianz and Ace are bound by the New York arbitration clause, this Court, which has the power to compel arbitration in accordance with the clause, may exercise jurisdiction over them.8 If any party to an arbitration could escape liability by avoiding jurisdiction through simply subrogating its rights to a third party, it would render any arbitration clause meaningless, which surely would not comport with the intention of the parties.9 The insurers cannot escape their obligations under one clause of the contract—the arbitration clause—while suing under a different one. Given these considerations, and given that Respondents stand “in the shoes of the insured,” this Court clearly has personal jurisdictions over Respondents.


6. See Gibbs, 966 F.2d at 103.


7. See American Bureau of Shipping, 170 F.3d at 352.


8. See id.; Novorossiysk, 2006 WL 3055964, at *1.


9. See Farrell Lines, 32 F.Supp.2d at 126.


B. Service of Process

As noted, the sole function of service of process is to give notice to Respondents that proceedings have commenced.0 Respondents clearly were put on notice, and indeed have defended against the Petition on the merits. Moreover, service of process was made pursuant to an order of this Court 1 in accordance with Rule 4(f)(3). The cases cited in support of Respondents’ position that service by electronic mail is insufficient did not involve arbitration proceedings, and are therefore not probative. Although service of process on Respondents would be insufficient to establish personal jurisdiction, it was clearly sufficient to put Respondents on notice. Service of process was therefore proper.


0. See Victory Transp., 336 F.2d at 363.


1. See 4/11/11 Order to Show Cause [Docket No. 4].


C. Petition to Compel Arbitration

The parties here clearly intended for any disputes arising out of the agreement to be arbitrated in New York. Part II, Clause 24 of the Asbatankvoy Form provides that


any and all differences and disputes of whatsoever nature arising out of this Charter shall be put to arbitration in the City of New York or in the City of London, whichever place is specified in Part I of this charter …. 2


2. Asbatankvoy Form at 57.


Part I, Clause K provides “[t]he place of General Average and arbitration proceedings to be London/New York (strike out one.)” 3 Although neither place is struck out in Part I, the phrase “General Average/Arbitration New York” in the Fixture Recap clearly indicates New York as the parties’ choice of forum. Respondents’ argument that this phrase refers only to arbitration of disputes concerning General Average has no merit. The plain reading of the entire contract and this Court’s prior jurisprudence dictate that the inclusion of “General Average/Arbitration New York” in the Fixture Recap indicate the parties’ unambiguous intent to arbitrate any disputes in New York.4


3. Id. at 52 (emphasis added).


4. See BS Sun Shipping Monrovia v. Citgo Petroleum Corp., 509 F. Supp 2d 334, 338 (S.D.N.Y.2007).


Even without this phrase in the Fixture Recap, however, Clause 37 of the Tricon Shipping Clauses stipulates that “[i]f no selection is made, New York shall be deemed to have been selected under Part I, Clause K.” 5 Thus the interpretation of the Fixture Recap is without consequence. Whether the parties made a deliberate choice—which they did through the Fixture Recap—or whether they made no choice at all, the parties are deemed to have selected New York as the place to arbitrate any disputes arising out of the agreement.


5. Tricon Shipping Clauses at 13.


The arbitration clause also applies to Respondents. The arbitration clause is broad in scope.6 It does not specify that only some parties are bound by it, and is not restricted to any specific issues. The bills of lading, using “unmistakable language,” 7 expressly incorporate “all the terms whatsoever of the said [Asbatankvoy] Charter, including the arbitration clause.” 8 Because the arbitration clause in the Asbatankvoy Form was specifically incorporated by reference into each bill of lading, it applies to the consignees specified on those bills of lading—Klabin and Suzano. As the subrogated insurers of Klabin and Suzano, the Respondents are equally bound to arbitrate. The Respondents “stand[ ] in the shoes of the insured,” 9 and cannot escape the arbitration clause any more than the insured.0 Stolt’s motion to compel the Respondents to arbitrate is therefore granted.


6. See Ibeto, 475 F.3d at 63; JLM, 387 F.3d at 172.


7. Continental Ins., 346 F.3d at 283.


8. Fixture Recap.


9. Gibbs, 966 F.2d at 103.


0. See American Bureau of Shipping, 170 F.3d at 352.


D. Petition for an Anti–Suit Injunction

Petitioner also moves to enjoin Respondents’ litigation in Brazil. While this Court has the power to issue an anti-suit injunction, as noted earlier it should only do so if “(A) the parties are the same in both matters, and (B) resolution of the case before the enjoining court is dispositive of the action to be enjoined.” 1


1. Paramedics, 369 F.3d at 652.


Respondents maintain that the parties in the Brazilian action are different from those in the action before this Court, because in the Brazilian action Stolt Brazil, Stolt’s Brazilian affiliate, is named as a defendant.2 But because Stolt Brazil was named as a defendant in the Brazilian action on the basis of its corporate relationship with Stolt, the China Trade “same party” requirement is satisfied.3


2. See Respondents’ Memorandum of Law in Opposition to Petition to Compel Arbitration Pursuant to 9 U.S.C. §§ 1–307 and for an Anti–Suit Injunction at 4–6.


3. See Paramedics, 369 F.3d at 652.


With regard to the second threshold factor, although this Court will not determine the outcome of the underlying dispute, an order by this Court compelling arbitration will result in a determination of the dispute in the arbitration. The resolution of the case before this Court is therefore clearly dispositive of the Brazilian litigation.4


4. See Ibeto, 475 F.3d at 64; Paramedics, 369 F.3d at 653.


These threshold considerations having been met, this Court must address the five China Trade factors. Several of these factors counsel in favor of enjoining the Brazilian action. First, permitting the Brazilian litigation to continue will frustrate the general federal policy of promoting arbitration. Second, the fact that the Brazilian court will not apply the principles of the Carriage of Goods by Sea Act (“COGSA”) 5 may result in widely disparate results in these two actions. Indeed, the prospect of a more favorable outcome under Brazilian law seems to be the motivation behind Respondents’ effort to litigate in Brazil. This potential disparity, and the race to judgment that it could provoke, weigh in favor of an anti-suit injunction. Third, the equitable considerations involved, such as deterring forum shopping, also compel enjoining the foreign action. Fourth, it is likely that adjudication of the same issues in two separate actions would result in inconvenience, inconsistency, and a possible race to judgement. As discussed above, given that COGSA will be applicable in the New York arbitration but not in the Brazilian action, the outcomes could be inconsistent. Moreover, because the witnesses and evidence in both actions would likely be the same, there could be considerable inconvenience in shuttling witnesses between the venues for these two actions. Furthermore, one of the purposes of including a binding arbitration clause in a contract is to avoid extensive and expensive litigation. Forcing Stolt to pursue parallel litigation in Brazil while arbitrating the same issues in New York would likely impose unreasonable and unnecessary costs. Fifth, as both courts have in personam jurisdiction over the parties, there is no particular threat to this Court’s jurisdiction. However, given that the four other China Trade factors weigh in favor of an injunction, Stolt’s petition to enjoin the Respondents’ action in Brazil is granted.


5. 46 U.S.C. § 30701. See 4/1/11 Declaration of Iwam Jaeger, Jr., Stolt’s Brazilian Counsel, in Support of Petition to Compel Arbitration Pursuant to 9 U.S.C. §§ 1–307 and for an Anti–Suit Injunction ¶¶ 8–10.


E. Sanctions

Stolt requested in its petition that this Court award Stolt “costs and attorneys’ fees for this Petition …,” 6 Although Stolt does not make explicit under what rule of law it requests relief,7 the only authority cited in support of Stolt’s request, Bartels Dental Books Co. v. Schultz, concerns Rule 11 sanctions.8 Stolt has not, however, made a motion for sanctions “separately from other motions and requests” in accordance with Rule 11(c)(1)(B).9 Although this Court has the power to issue a show cause order on its own initiative, because “show cause orders will ordinarily be issued only in situations that are akin to contempt of court …” 0, such an order is not appropriate here. Stolt is, of course, free to bring a separate motion for sanctions, but because it has not done so, I do not reach the merits of whether the conduct of Respondents or their attorney merits sanctions. Stolt’s request for imposition of costs and attorneys’ fees is therefore denied.


6. Petition at 11.


7. See 5/4/11 Stolt’s Reply to Respondents’ Letter–Brief at 9.


8. 786 F.2d 486, 491 (2d Cir.1986).


9. Fed.R.Civ.P. 11(c)(1)(B).


0. Fed. R. Civ. P. 11, 1993 AdvisoryCommittee Note.



For the reasons set forth above, the petition to compel arbitration, and to enjoin Respondents’ Brazilian action until the conclusion of arbitration, is granted. Petitioner’s request for impositon of costs and fees is denied. The Clerk of the Court is directed to close this case.




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