Pilot Enterprises, Inc. v. Brodosplit, Inc.

10-0056-cv
Pilot Enterprises, Inc. v. B rodosplit, Inc. et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMM ARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUM M ARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERM ITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUM M ARY ORDER IN A DOCUM ENT FILED W ITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (W ITH THE NOTATION
“SUMM ARY ORDER”). A PARTY CITING TO A SUMM ARY ORDER M UST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New
York, on the 3 rd day of September, two thousand ten.
PRESENT: REENA RAGGI,
GERARD E. LYNCH,
Circuit Judges,
JED S. RAKOFF,
District Judge.*
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PILOT ENTERPRISES, INC.,
Plaintiff-Appellant,
v. No. 10-0056-cv
BRODOSPLIT INC., BRODOSPLIT PLIVIDBA
d.o.o., BRODOSPLIT SHIPPING LTD.,
BRODOGRADJEVNA INDUSTRIJA SPLIT d.d.,
BRODOSPLIT BRODOGRADILISTE d.o.o.,
Defendants-Appellees.
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APPEARING FOR APPELLANT: GEORGE M. CHALOS, Chalos & Co., P.C.,
Oyster Bay, New York.
*
District Judge Jed S. Rakoff of the United States District Court for the Southern
District of New York, sitting by designation.
APPEARING FOR APPELLEE: GARTH S. WOLFSON, Mahoney & Keane,
LLP, New York, New York.
Appeal from a judgment of the United States District Court for the Southern District
of New York (Harold Baer, Judge).
UPON DUE CONSIDERATION IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the December 28, 2010 order of the district court is AFFIRMED.
Plaintiff Pilot Enterprises Inc. (“Pilot”) appeals from the district court’s vacatur of an
order of attachment issued pursuant to Rule B of the Supplemental Rules for Certain
Admiralty and Maritime Claims. We review the district court’s decision for abuse of
discretion, which we will identify if the “decision rests on an error of law or a clearly
erroneous finding of fact.” See Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460
F.3d 434, 439 (2d Cir. 2006). We assume the parties’ familiarity with the facts and
procedural history of this case, which we reference only as necessary to explain our decision
to affirm.
The parties agree that the attachment in this case restrained both (1) electronic funds
transfers (“EFTs”) in the hands of one or more intermediary banks, and (2) a letter of
undertaking (“LOU”) issued on behalf of BS Sun Shipping Monrovia (“BS Sun”) to Citgo
Petroleum Corp. (“Citgo”) by BS Sun’s protection and indemnity (“P&I”) club in
consideration for the Citgo not attempting to arrest the M/T Stinice, a vessel operated by
Pilot and owned by BS Sun and its alleged alter-ego defendants Brodosplit Inc., Brodosplit
Plividba d.o.o., Brodosplit Shipping Ltd., Brodogradjevna Industrija Split d.d., and
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Brodosplit Brodogradiliste d.o.o. (collectively, “Brodosplit defendants”). The parties also
agree that the district court’s order vacating the attachment released the attachment of both
the EFTs and the LOU.
Pilot does not challenge the district court’s order insofar as it releases from restraint
the Brodosplit defendants’ EFTs. See Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte
Ltd. (“Shipping Corp. of India”), 585 F.3d 58 (2d Cir. 2009). Rather, Pilot challenges the
district court’s order to the extent it releases the LOU. It argues that the district court should
have allowed discovery and invited briefing “as to the proprietary and/or beneficial
ownership of the rights conveyed in the LOU.” Appellant’s Br. at 18. We disagree.
The district court explained that it released the LOU from restraint because it was
“‘worthless as to Pilot.’” Endorsed Chalos Letter at 2, Pilot Enterprises Inc. v. Brodosplit
Inc., et al., No. 07 Civ. 8520 (S.D.N.Y. Dec. 28, 2009). This conclusion finds support in the
terms of the LOU, which was “restricted” to P&I club’s satisfaction of any judgment
rendered in Citgo’s favor on its in rem claim against the M/T Stinice under bills of lading
issued to Citgo. Pilot does not dispute that Citgo has filed no such claim and that the time
for doing so has since passed. Under these circumstances, the district court acted well within
its discretion in concluding that the LOU was worthless and properly released from restraint.
We have considered the parties’ other arguments and find them to be without merit.
Accordingly, the December 28, 2010 order of the district court is AFFIRMED.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, Clerk of Court
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