Cruickshank & Co. v. Dutchess Shipping Co.

112 F.R.D. 4, 1986 U.S. Dist. LEXIS 27855
CourtDistrict Court, S.D. New York
DecidedMarch 21, 1986
DocketNo. 82 Civ. 4026 (MJL)
StatusPublished
Cited by2 cases

This text of 112 F.R.D. 4 (Cruickshank & Co. v. Dutchess Shipping Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cruickshank & Co. v. Dutchess Shipping Co., 112 F.R.D. 4, 1986 U.S. Dist. LEXIS 27855 (S.D.N.Y. 1986).

Opinion

MEMORANDUM OPINION AND ORDER

LOWE, District Judge.

The case at bar is, in the words of the Second Circuit, a “strange admiralty case.” The facts of the case are stated in the opinion of the Second Circuit, Cruickshank & Co., Ltd. v. Sorros, 765 F.2d 20 (1985), but will be repeated here in brief detail. While familiarity with the Second Circuit’s opinion is assumed, we add what we believe is the appropriate light in which to view those facts.

The plaintiffs are Indian stevedors. Defendant Dutchess Shipping Co. (“Dutch-ess”) was the owner of the ship, the M/T IRINIO (“IRINIO”). Codefendant International Ship Management, Inc. (“ISM”) (hereinafter Dutchess and ISM will sometimes be collectively referred to as “the corporate defendants”) acted as operation manager of the IRINIO. The third defendant Stavros K. Sorros (“Sorros”) is a Captain and an employee of ISM.

The dispute centers around the voyage of the IRINIO to India. The plaintiffs were to act as agents for ISM in India. By way of a chain of events which need not be repeated IRINIO incurred over $140,000 in so-called “pull-back” charges. There is considerable dispute as to who ultimately should bear these costs. Suffice to say that plaintiffs were instructed by the Indian port authorities not to allow the IRINIO to sail until these charges were settled. The plaintiffs then sought an order of arrest against the IRINIO. The defendants were undoubtedly aware of this and Sorros was warned not to “try any funny tricks, otherwise you let put us into trouble, [sic]” Tr. 37.

Defendants’ reaction was among the most egregious conduct this Court has ever encountered. The defendants caused the IRINIO to slip out of port under cover of darkness (4:00 a.m.), without port clearance and in direct contravention of the Indian authorities. A few hours later without knowing that the ship had left, the Indian court issued a formal injunction ordering the master not to leave port.1

The ship then bypassed its next port of call — Singapore—because instructions had been sent to arrest the vessel. Instead the IRINIO sailed to Taiwan where it was precipitately scrapped.

As a result of defendants’ conduct the plaintiff’s stevedoring license was lifted for a year and he was forced to post a bond for the pull-back charges. The defendants were undoubtedly aware that their conduct put plaintiffs license and business reputation in grave jeopardy.

The corporate defendants made a considered default as to liability. After trial as to damages the court assessed the corporate defendants $1,009,619.65. The Court also found Sorros liable jointly and severally for the judgment. Sorros appealed while the corporate defendants chose not to appeal.

The Second Circuit reversed the judgment against Sorros, holding that there were no grounds for holding him liable for the corporations’ actions. The Court of [6]*6Appeals explicitly did not reach the question of the “propriety of the judgment entered against” the corporate defendants. 765 F.2d at 26.

A group of directors and officers of Dutchess and/or ISM now seek relief from judgment pursuant to Fed.R.Civ.P. 60(b). They are represented by two law firms which did not previously represent the corporate defendants. For the reasons stated below we deny the motion for relief from judgment.2

Discussion

(a) The Motion pursuant to Fed.R.Civ.P. 60(b)

(1) Standing

As an initial matter the plaintiffs challenge the standing of the various officers and directors of Dutchess and/or ISM to make such a motion. The officers and directors assert that they have standing to prosecute the 60(b) motion because, pursuant to a pending state court proceeding, they may be held personally liable for the debts of the corporate, defendants. They argue that the state court will give full faith and credit to this court’s judgment, thus they should be allowed to assert the 60(b) motion.

In support of their argument, the officers and directors rely on Dunlop v. Pan American World Airways, Inc., 672 F.2d 1044 (2d Cir.1982). In that case non-party movants sought to have a stipulation of settlement between the Secretary of Labor and the movant’s employer amended to make clear that the settlement did not prejudice the rights of the individual employees to pursue their own actions. The Second Circuit reversed the district court’s holding that the movants did not have standing under Rule 60(b). The Second Circuit held that “[ajlthough, Rule 60(b)(6) would not ordinarily be available to non-parties to modify final judgments, we hold that on the facts of this case appellants were sufficiently connected and identified with the Secretary’s suit to entitle them to standing to invoke Rule 60(b)(6).” 672 F.2d at 1052. However, in reaching its holding, the Court of Appeals stressed the limited nature of the relief sought by the movants and inferred that broader relief would not be available to non-parties under Rule 60(b). Id. at n. 8.

In the instant case the movants have asserted a strong interest in the outcome of this litigation. While Dunlop may not dictate that movants have standing, we do not believe it is necessary to reach a holding on this question since as discussed fully below, there are no grounds for the requested relief. Accordingly, we will reach the merits of the motion.

(2) Relief Under Rule 60(b)(5)

The movants seek relief under Rule 60(b)(5) and 60(b)(6). As an initial matter it should be noted that relief under Rule 60(b)(5) and Rule 60(b)(6) are mutually exclusive. In re ASUSA, 47 B.R. 928, (S.D.N.Y.1985). Rule 60(b)(5) provides relief from a judgment when “a prior judgment on which it is based has been reversed or otherwise vacated.” Movants claim that 60(b)(5) should be interpreted to allow vacature of the judgment against the corporate defendants. In support of their argument they rely heavily on Werner v. Carbo, 731 F.2d 204 (4th Cir.1984).

In Werner, the plaintiff sued his doctor Ralph Carbo, Jr., M.D., and the doctor’s Professional Corporation, Ralph J. Carbo, Jr., M.D., P.A., for medical malpractice. From an adverse judgment the doctor appealed, but he failed to name his professional corporation as an appellant. The Court of Appeals reversed. The plaintiff then attempted to enforce the judgment against the professional corporation. The corporation moved for relief under 60(b)(5), but the district court denied the motion. The Court of Appeals again reversed. The court noted the nearly perfect identity of interest between Carbo and his corporation and quoted from the jury charge that “[ijf [7]*7you find that Dr. Carbo is liable to the Plaintiff, then I instruct you to find that the corporation is also liable to the plaintiff to the same extent as Dr. Carbo”. 731 F.2d at 206 [emphasis added]. The court went on to state:

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Related

Cruickshank & Co. v. Dutchess Shipping Co.
805 F.2d 465 (Second Circuit, 1986)

Cite This Page — Counsel Stack

Bluebook (online)
112 F.R.D. 4, 1986 U.S. Dist. LEXIS 27855, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cruickshank-co-v-dutchess-shipping-co-nysd-1986.