Fortis Corp Ins v. Viken Ship Mngmt

CourtCourt of Appeals for the Sixth Circuit
DecidedJune 8, 2006
Docket05-3792
StatusPublished

This text of Fortis Corp Ins v. Viken Ship Mngmt (Fortis Corp Ins v. Viken Ship Mngmt) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fortis Corp Ins v. Viken Ship Mngmt, (6th Cir. 2006).

Opinion

RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 File Name: 06a0192p.06

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT _________________

X Plaintiff-Appellant, - FORTIS CORPORATE INSURANCE, - - - No. 05-3792 v. , > VIKEN SHIP MANAGEMENT, et al., - Defendants-Appellees. - N Appeal from the United States District Court for the Northern District of Ohio at Toledo. No. 04-07048—James G. Carr, Chief District Judge. Argued: March 7, 2006 Decided and Filed: June 8, 2006 Before: SUTTON and GRIFFIN, Circuit Judges; OBERDORFER, District Judge.* _________________ COUNSEL ARGUED: David T. Maloof, MALOOF, BROWNE & EAGAN, Rye, New York, for Appellant. Henry E. Billingsley, II, TUCKER, ELLIS & WEST, Cleveland, Ohio, for Appellee. ON BRIEF: David T. Maloof, MALOOF, BROWNE & EAGAN, Rye, New York, for Appellant. Henry E. Billingsley, II, TUCKER, ELLIS & WEST, Cleveland, Ohio, for Appellee. _________________ OPINION _________________ OBERDORFER, District Judge. In this maritime shipping case, we consider whether the district court properly ruled that it lacked personal jurisdiction over defendants-appellants Viken Lakers A/S and Viken Ship Management A/S (“VSM”). These two Norwegian companies own and manage a fleet of ocean-going cargo vessels. In 1998, defendants entered a Time Charter Agreement with FedNav International (a Canadian company). The agreement chartered to FedNav a fleet of vessels, including the M/V Inviken, for a period of several years1 to transport cargo on an as-needed basis. FedNav subchartered the M/V Inviken to Metallia LLC (a U.S. company) to carry

* The Honorable Louis F. Oberdorfer, United States District Judge for the District of Columbia, sitting by designation. 1 Fortis states that the agreement was for a term of five years (see Appellant Br. 1), but the Charter Agreement appears on its face to be for nine years. See JA 108 (Charter Agreement).

1 No. 05-3792 Fortis Corp. Ins. v. Viken Ship Management, et al. Page 2

a specific cargo of steel coils from Szczecin, Poland to Toledo, Ohio. En route seawater entered the cargo hold of the M/V Inviken, causing severe rust damage to the coils. Plaintiff-Appellant Fortis Corporate Insurance, a Belgian company, is a surrogate insurance underwriter of Metallia. Fortis paid $375,000 to resolve Metallia’s insurance claim. On February 2, 2004, Fortis sued defendants in the U.S. District Court for the Northern District of Ohio, which district2 includes Toledo, for damages allegedly caused by negligence and breach of bailment obligations. In their answer, defendants maintained that the district court lacked personal jurisdiction over them. However, the court allowed Fortis to conduct discovery to demonstrate, if it could, that jurisdiction existed. On October 15, 2004, defendants moved for summary judgment dismissing the suit on the theory that the federal court in Toledo lacked personal jurisdiction over defendants. On March 16, 2005, the district court granted this motion. See Fortis Corporate Ins. v. M/V Inviken, et al., 2005 WL 646092 (N.D. Ohio Mar. 16, 2005). The court then granted Fortis’ motion for voluntary dismissal of its amended complaint. On May 17, 2005, the district court entered an Order of Final Judgment. On June 6, 2005, Fortis filed its timely Notice of Appeal. On appeal we review de novo the district court’s dismissal of the case for lack of personal jurisdiction, see Southerland v. Wofford, 894 F.2d 408 (6th Cir. 1990), and we reverse. I. Facts The undisputed evidence generates the following undisputed facts: A. FedNav Third party FedNav, based in Montreal, Canada, is a well-known steel commodity carrier in the Great Lakes region. According to a declaration by Donald Frost, a marine transportation consultant: It is a matter of widespread general knowledge within the maritime chartering industry that Fednav[’s] primary business is the carriage of international cargoes to and from the Great Lakes, including numerous United States ports, via the St. Lawrence Seaway. Fednav is also known for calling especially at Great Lake ports that receive steel cargoes, such as the port of Toledo, Ohio. In fact, according to the Fednav website, a link to which is contained on the website of Defendant Viken Ship Management, Fednav International Ltd. is the largest international user of the St. Lawrence Seaway system. The St. Lawrence Seaway is, of course, the only direct access to the Great Lakes by ship. Frost Decl. ¶¶ 5-6 (JA 158). Defendants did not offer any evidence in rebuttal. B. The Viken Defendants Undisputed facts confirm Frost’s declaration; defendants’ vessels called at U.S. ports (including Toledo) frequently: • According to a listing of port calls, defendants’ vessels called at U.S. ports 172 times between January 1999 and March 2004, or nearly three times a month. Two-thirds

2 Plaintiff also originally sued the vessel M/V Inviken and a predecessor ship management company, Vista Ship Management. Plaintiff subsequently dismissed M/V Inviken and Vista Ship Management as parties. No. 05-3792 Fortis Corp. Ins. v. Viken Ship Management, et al. Page 3

of these calls (114) were at U.S. Great Lake ports, and 29 of these calls were at Ohio. See Frost Decl. ¶¶ 10-11 (JA 159-160); see also JA 247-276 (listing of all port calls for Viken Laker vessels, January 1999 - March 2004). • During this same period, the Laker vessels spent a total of 62 days at Ohio ports. See Frost Decl. ¶ 13 (JA 160). The Charter Agreement provides that the rate to charter a vessel is $9,000 per day minimum. See JA 108 (Charter Agreement). As a result, defendants earned a total of at least $558,000 for the number of days spent in Ohio ports during this period. • Similarly, defendants’ vessels spent 572 days in U.S. ports. At a rate of at least $9,000 per day, defendants earned at least $5,148,100 for time spent in U.S. ports. See Frost Decl. ¶ 13 (JA 160). • The VSM website, in describing its contingency plans for any environmental disasters, states that it makes “[f]requent calls to the USA and Canada, including the Great Lakes[.]” C. The Charter Agreement The Charter Agreement between the Viken defendants and FedNav could fairly be characterized as anticipating issues and problems that would arise during the time of the charter – not simply for the shipment at issue in this case. The Agreement contains several references to the United States and Toledo specifically, including the following description of the M/V Inviken: • The “[v]essel is fully equipped with the necessary gear and equipment required for transitting St. Lawrence Seaway, the Welland Canal and Great Lakes.” JA 97. The Welland Canal runs between Lake Ontario and Lake Erie. • “When the vessel trades within the waters of the Great Lakes, her fresh water, stores, lubricating oil and constant not to exceed 350 metric tons[,] and Master to endeavour to reduce fresh water whilst trading in the Great Lakes.” Id. • “Owners confirm that the vessel is suitable for Toledo.” Id. • FedNav, as the charterers, had “the option to crop and replace mast in order to safely trade to Toledo.” Id. at 106. In addition: • The Charter Agreement contains three other references to the Great Lakes region. See id. at 99-100. • Fednav is located in Montreal. The Charter Agreement only specifies two ports: one in Montreal, and the other in Toledo. • Critically, employees of the defendants concede that the vessels were rigged in order to travel to the Great Lakes.3

3 For example, Helge Lassesen, the Quality Assurance and Safety Manager of Viken Ship Management, provided the following deposition testimony regarding the Charter Agreement: Q: [T]he charter [states] . . . “Vessel is fully equipped with the necessary gear and equipment required No. 05-3792 Fortis Corp. Ins. v. Viken Ship Management, et al. Page 4

II.

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Bluebook (online)
Fortis Corp Ins v. Viken Ship Mngmt, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fortis-corp-ins-v-viken-ship-mngmt-ca6-2006.