Platina Bulk Carriers Pte Ltd. v. Praxis Energy Agents DMCC

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PLATINA BULK CARRIERS PTE LTD, Plaintiff, v. PRAXIS ENERGY AGENTS DMCC, PRAXIS ENERGY AGENTS LLC, and PRAXIS ENERGY AGENTS PTE LTD, Defendants.

No. 20 Civ. 4892 (NRB)

United States District Court, S.D. New York

March 20, 2024

MEMORANDUM AND ORDER

NAOMI REICE BUCHWALD UNITED STATES DISTRICT JUDGE

Presently before the Court are cross-motions for summary judgment filed by plaintiff Platina Bulk Carriers Pte Ltd. (“plaintiff” or “Platina”) and defendant Praxis Energy Agents LLC (“Praxis U.S.” or “defendant”) addressing plaintiff's veil piercing claims, which seek to hold Praxis U.S. and Praxis Energy Agents Pte Ltd. (“Praxis Singapore”) liable for damages owed by Praxis Energy Agents DMCC (“Praxis Dubai”).^[1]As the Court made clear at the motion to dismiss stage, although Praxis Dubai consented to jurisdiction in the Southern District of New York pursuant to a contract between plaintiff and Praxis Dubai, jurisdiction over Praxis U.S. and Praxis Singapore hinges on whether plaintiff can pierce the corporate veil. See ECF No 59 at 7-8. For the reasons outlined below, the Court finds that plaintiff cannot prove that the corporate veil should be pierced. Accordingly, the Court denies plaintiff's motion and having done so, need not reach defendant's motion. However, even assuming that defendant's motion was the only motion before the Court, it would have been granted for lack of personal jurisdiction.

BACKGROUND

The events that led to this dispute have been summarized twice first in our October 15, 2020 Memorandum and Order granting plaintiff's motion for alternative service, ECF No. 28 and later in our September 10, 2021 Memorandum and Order denying Praxis U.S. and Praxis Singapore's motion to dismiss, ECF No. 59. The Court assumes familiarity with the straightforward facts of this case, but provides a brief summary below.

A. Factual Background^[2]

On October 1, 2019, Platina ordered bunker fuel from Praxis Dubai for its chartered bulk carrier vessel, the OCEANMASTER, and two weeks later ordered bunker fuel or its other chartered bulk carrier vessel, the OCEANBEAUTY.^[3]Pl. 56.1 ¶ 58; Praxis U.S. 56.1 Counterstatement ¶ 58; ECF No. 26 at 9. The bunker fuel was supplied by Al Arabia Bunkering Company LLC (“Al Arabia”) to the two vessels on October 19 and October 24, 2019, as evidenced by Bunkers Delivery Receipts addressed to Praxis Dubai. ECF No. 26 at 11, 14. Platina paid Praxis Dubai for the bunker fuel. Praxis U.S. 56.1 ¶ 27; Pl. 56.1 ¶¶ 60, 65. However, Praxis Dubai did not pay Al Arabia.^[4]Pl. 56.1 ¶ 61.

On November 27, 2019, before the OCEANMASTER departed the United Arab Emirates, the vessel was arrested due to Praxis Dubai's failure to pay Al Arabia. Pl. 56.1 ¶ 61; Praxis U.S. 56.1 Counterstatement ¶ 61. To free the vessel from arrest, Platina paid Al Arabia $148,472 and incurred running costs of $89,585.90 while the vessel was under arrest, which Platina seeks to recover. Pl. 56.1 ¶¶ 61-62; Praxis U.S. 56.1 Counterstatement ¶¶ 61-62. The OCEANBEAUTY has not been arrested. Praxis U.S. 56.1 ¶ 104; Pl. 56.1 Counterstatement ¶ 104.

B. Procedural Background

On June 25, 2020, plaintiff filed this action requesting indemnification from Praxis Dubai for damages it incurred after Praxis Dubai failed to pay Al Arabia and seeking to hold Praxis Singapore and Praxis U.S. liable as the alter egos of Praxis Dubai. See ECF No. 1 (“Compl.”) . On July 7, 2020, plaintiff filed an Amended Complaint. See ECF No. 13 (“Am. Compl.”). After at least fifteen attempts to serve Praxis U.S., plaintiff moved for authorization to use alternative methods of service on Praxis U.S., asserting that service on Praxis U.S. would be effective as to all three defendants on an alter ego theory. See ECF Nos. 24-25, 27. On October 15, 2020, this Court granted plaintiff's motion for alternative service but stated that it took no view on its alter ego theory. See ECF No. 28. Five days later, J. Stephen Simms, moved to appear pro hac vice for all three defendants, which application this Court granted. See ECF Nos. 31, 33.

On December 23, 2020, Praxis Singapore and Praxis U.S. moved to dismiss the Amended Complaint for lack of personal jurisdiction, improper venue, and failure to state a claim upon which relief can be granted, arguing that they were not parties to the contract between plaintiff and Praxis Dubai and they could not be held liable on an alter ego theory.^[5]See ECF Nos. 44-45. As it must at that stage, the Court accepted the allegations in the Amended Complaint and the materials incorporated by reference therein as true. See ECF No. 59 at 4. The Court denied the motion, finding that plaintiff had pled its prima facie case, but did not reach the ultimate issue of alter ego liability, which this opinion will address. Id. at 14. Praxis U.S. subsequently answered the Amended Complaint. See ECF No. 60. Shortly thereafter, the parties began discovery.^[6]See ECF No. 64.

During the course of discovery, Mr. Simms moved to withdraw as counsel for Praxis Dubai and Praxis Singapore, explaining that the two defendants “have ceased operation and are not in the position to pay counsel for further work.” See ECF No. 92. The Court granted the motion on September 22, 2022. See ECF No.

On July 18, 2023, the Court granted defendant Praxis U.S. leave to file a motion for summary judgment. See ECF No. 115. Praxis U.S. filed its motion for summary judgment on August 18, 2023. See ECF No. 119 (“Mot.”). On September 18, 2023, plaintiff sought leave to file a cross-motion for summary judgment, which was granted. See ECF Nos. 126-28. On September 29, 2023, plaintiff filed its cross-motion for summary judgment and opposition to defendant's motion. See ECF No. 131 (“Cross Mot.”) . On December 1, 2023, defendant filed its reply on its motion for summary judgment and its opposition to plaintiff's cross-motion.

See ECF No. 146 (“Def.'s Reply”). Plaintiff filed its reply on its cross-motion on December 22, 2023.^[7] See ECF No. 153 (“Pl.

Reply”).

LEGAL STANDARD

Under Federal Rule of Civil Procedure 56(a), summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A genuine issue of material fact exists if ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Nick's Garage, Inc. v. Progressive Cas. Ins. Co., 875 F.3d 107, 113-14 (2d Cir. 2017) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). “Factual disputes that are irrelevant or unnecessary will not be counted.” Anderson, 477 U.S. at 248.

“The burden of showing that no genuine factual dispute exists rests on the party seeking summary judgment.” Sec. Ins. Co. of Hartford v. Old Dominion Freight Line Inc., 391 F.3d 77, 83 (2d Cir. 2004). “[I]n assessing the record to determine whether there is a genuine issue as to a material fact, the court is required to resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought.” Id. at 83.

Once the moving party has satisfied their burden, to defeat the motion, “the party opposing summary judgment . . . must set forth ‘specific facts' demonstrating that there is ‘a genuine issue for trial.'” Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009) (quoting Fed.R.Civ.P. 56(e)). “Conclusory allegations will not suffice to create a genuine issue.” Delaware & Hudson Ry. Co. v. Consol. Rail Corp., 902 F.2d 174, 178 (2d Cir. 1990). There must be more than a “scintilla of evidence in support of the [nonmovant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-movant].” Anderson, 477 U.S. at 252. In other words, the non-movant “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). “If no rational fact finder could find in the non-movant's favor, there is no genuine issue of material fact, and summary judgment is appropriate.” Citizens Bank of Clearwater, 927 F.2d at 710.

“The same standard[s] . . . appl[y] when,” as here, “the court is faced with cross-motions for summary judgment. Each party's motion must be reviewed on its own merits, and the Court must draw all reasonable inferences against the party whose motion is under consideration.” Bell v. Pham, No. 09 Civ. 1699 (PAC), 2011 WL 1142857, at *2 (S.D.N.Y. Mar. 24, 2011) (citing Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir. 2001)).

DISCUSSION

At the threshold, Praxis U.S. continues to contest whether the Court may properly exercise personal jurisdiction over it. Indeed as the Court noted in our September 10, 2021 Memorandum and Order, while Praxis Dubai consented to jurisdiction by virtue of the forum selection clause in section 22.02 of the Contract, this Court's jurisdiction over any other Praxis entity depends on whether they are alter egos of Praxis Dubai. See Wm. Passalacqua Builders, Inc. v. Resnick Devs. S., Inc., 933 F.2d 131, 142-43 (2d Cir. 1991). Accordingly, the Court now turns to this threshold question.

A. Alter Ego Liability Under Federal Common Law

“Under federal common law, courts are reluctant to pierce a corporate veil and impose liability on a separate, related entity, but may do so under extraordinary circumstances.”^[8]Clipper Wonsild Tankers Holding A/S v Biodiesel Ventures, LLC, 851 F.Supp.2d 504, 509 (S.D.N.Y. 2012). The corporate veil may be pierced “where (1) a corporation uses its alter ego to perpetrate a fraud or (2) where it so dominates and disregards its alter ego's corporate form that the alter ego was actually carrying on the controlling corporation's...