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D'Amico Dry d.a.c. v. Nikka Finance, Inc.

United States District Court, S.D. Alabama, Southern Division

March 1, 2019

d'Amico Dry d.a.c., Plaintiff,
Nikka Finance, Inc., as owner of M/V SEA GLASS II, Defendant.



         The Court conducted a bench trial to determine whether Defendant Nikka Finance, Inc. was Primera Maritime Limited's alter ego and therefore liable for a $1, 766, 278.54 judgment the English High Court of Justice entered against Primera on June 19, 2009. The English judgment was based on Primera's breach of a forward freight agreement (“FFA”) with Plaintiff d'Amico Dry Limited d.a.c. As the Court will explain, Nikka was an alter ego of Primera, rendering it liable for the English judgment.

         Much judicial ink has been spent during d'Amico's attempt to have the English judgment recognized and enforced. My colleague, the Honorable John G. Judge Koeltl of the Southern District of New York, has diligently considered d'Amico's case against Primera and multiple alleged Primera alter egos (“the New York action”) for more than nine years. During that period, parties appealed to the Second Circuit twice.[1] Moreover, creditors besides d'Amico have sought, unsuccessfully, to pierce other alleged Primera alter egos.[2] What has brought the parties to this district is the presence of the vessel M/V SEA GLASS II, owned by Nikka, which d'Amico attached on June 22, 2018.

         I. BACKGROUND[3]

         A. Relevant Entities and Undisputed Facts

         D'Amico is a dry bulk vessel owning and operating company incorporated in Ireland. Primera was at all material times a Liberian entity incorporated on June 22, 1990 and was engaged in the business of ship management with a registered address at 80 Broad Street, Monrovia, Liberia. Nicholas Coronis (a/k/a Nikolaos or Nikolas) served as the Greek Law 89 company representative of Primera from 1990 to 2008, and as General Manager, Director, President, Treasurer and Secretary of Primera. Nicholas Coronis' son, Paul Coronis, served as a Director of Primera from 2002 until November 15, 2008. From October 2008 until April 2009, Primera was the managing agent for the SEA GLASS II. In March 2010, Primera commenced dissolution and liquidation proceedings in Liberia. Primebulk Shipmanagement Ltd. was incorporated on February 25, 2009. Primebulk replaced Primera as the SEA GLASS II's manager in May 2009.

         Nikka is a single-purpose ship-owning company that was incorporated in the Marshall Islands on September 5, 2007. Nikka owns the SEA GLASS II. Prior to its incorporation, an unidentified investor or investors provided $5.25 million, pursuant to a memorandum of agreement (MOA), [4] as an initial payment for construction of the SEA GLASS II. The remainder of the construction costs was financed through a $204 million Facility Agreement between HSH Nordbank and various “Joint and Several Borrowers” dated May 21, 2008. Primera was the corporate guarantor under the Facility Agreement. Paul and Nicholas Coronis provided limited personal guarantees under the Facility Agreement. Until October 16, 2009, Paul Coronis served as Nikka's sole director. On October 16, 2009, Paul Coronis resigned as Nikka's director. On September 25, 2008, Bulknav, Inc. became the holder of 100% of the shares of Nikka. Shelley Ventures owns 69% of Bulknav. Shelly Ventures is owned by the Coronis family.

         B. The FFA and English Judgment

         “An FFA is a contract for the difference between a contract rate and a settlement rate. The contract rate is a rate agreed upon by the parties. The settlement rate is the market rate for freight carried by a certain type of vessel, traveling a certain route (or group of routes), during a certain time period in the future.” d'Amico II, 886 F.3d at 218-19. The Second Circuit, which addressed whether the underlying FFA constituted a maritime contract and therefore invoked federal courts' admiralty jurisdiction, described the disputed FFA as follows:

The d'Amico-Primera FFA covered forty-five days in the first quarter of 2009. The contract rate was $55, 750 per day. The FFA was to be settled monthly; the settlement rate was the mean of the daily published Baltic Panamax Index (“BPI”) for all days of the pertinent month. The BPI is one of several indices published daily by the Baltic Exchange, a London-based organization that provides maritime market information. The BPI, which is based on reports from independent freight brokers about the freight market's performance, incorporates rates for shipping on standard routes travelled by Panamax carriers. For each month that the settlement rate exceeded the contract rate, d'Amico, as seller, was obligated to pay Primera, as buyer, the difference between the two rates. If instead the contract rate exceeded the settlement rate, Primera would have to pay the difference to d'Amico.

Id. at 219.

Primera and d'Amico, through a third-party broker, entered into a Forward Freight Agreement (the “FFA”) dated September 2, 2008, whereby Primera agreed to buy and d'Amico agreed to sell freight futures for forty-five days within the months of January, February and March 2009 respectively, with settlement monthly. The freight rate for Panamax bulk carriers had dropped significantly so that by early 2009 Primera was obligated under the FFA to pay d'Amico the difference starting in late-January 2009. D'Amico demanded payment and Primera failed to remit same, breaching the FFA in January 2009. On February 23, 2009, d'Amico terminated the FFA with Primera. Pursuant to Clause 15 of the FFA, d'Amico commenced proceedings against Primera in the English High Court in England with English law to apply (High Court of Justice Queen's Bench Division, Commercial Court under Claim No. 2009, Folio 218).

(Joint Pretrial Doc. Agreed Facts/Doc. 149 at 15-16, ¶¶ 29-33).

         C. The New York Action

         In September 2009, d'Amico initiated litigation against Primera in the Southern District of New York to recognize and enforce the foreign judgment. (1:09-cv-07840-JGK d'Amico Dry d.a.c. v. Primera Maritime (Hellas) Limited). In 2010, d'Amico amended its complaint in that case to add Nikka as a defendant. (Id. at ECF # 64). The parties vigorously litigated the case there, including years of discovery, numerous motions to dismiss, and a May 2016 bench trial on all issues (including d'Amico's alter ego claims against numerous defendants, one of which was Nikka). More recently, various alleged alter ego defendants filed motions to dismiss claiming a lack of personal jurisdiction. On November 14, 2018, Judge Koeltl granted Nikka Finance Inc.'s unopposed motion to dismiss for lack of personal jurisdiction, dismissing Nikka without prejudice. (Id. at ECF # 349).

         On December 22, 2018, Judge Koeltl recognized the English judgment and enforced it against Primera in the amount of $1, 794, 334.93 plus interest and attorneys' fees. D'Amico Dry D.A.C. v. Primera Mar. (Hellas) Ltd., 348 F.Supp.3d 365 (S.D.N.Y. 2018); Docs. 188 & 188-1. The court also entered judgment against Primera's successors-in-interest and/or alter egos of the Coronis family and Primera, including Primebulk Shipmanagement Ltd. and Bulknav Inc. Default judgment was entered against Paul Coronis, Nicholas Coronis, Primera Ocean Services and J.P.C. Investments. (1:09-cv-07840-JGK d'Amico Dry d.a.c. v. Primera Maritime (Hellas) Limited at ECF # 351/Doc. 188-1).

         D. Present Litigation

         D'Amico initiated the admiralty action in this Court on June 22, 2018, seeking $4, 698, 225.20, by filing a verified complaint against Nikka with a motion for Rule B Attachment of the vessel M/V SEA GLASS II (and supporting Affidavit) (Docs. 1-3, 6-7). D'Amico's original verified complaint alleged three counts against Nikka: (1) alter ego liability; (2) Rule B attachment as security for the New York action;[5] and (3) Rule B attachment and alter ego determination (in the event the District Court for the Southern District of New York determines it lacks personal jurisdiction over Nikka). (Doc. 1).

         In support of its motion for a Rule B attachment, d'Amico asserted (including via Affidavit) that Nikka is Primera's alter ego and from that, attachment is proper because: (1) Nikka is the owner of the vessel; (2) Nikka is indebted to d'Amico in excess of $4, 698, 225.20 based on a foreign judgment; (3) Nikka cannot be found in this district; and (4) Nikka's property, the vessel M/V SEA GLASS II, is or will be located in the district. (Docs. 3 & 7).

         The Rule B writ of attachment for vessel M/V SEA GLASS II issued on June 22, 2018. (Doc. 10). Nikka moved to vacate the Rule B attachment. (Doc. 13). The Court held a Rule E evidentiary hearing on June 27, 2018. (Doc. 18).

         The Court denied Nikka's motion to vacate. (Doc. 40). In doing so, the Court emphasized that d'Amico only needed to show the attachment was supported by “probable cause” to successfully defend against Nikka's motion to vacate. (Id. at 21 (quoting Barna Conshipping, S.L. v. 1, 800 Metric Tons, more or less, of Abandoned Steel, 2009 WL 1203923, at *3 (S.D. Ala. Apr. 29, 2009)). In addition, the Court noted that although d'Amico and Primera (along with alleged Primera alter egos) had engaged in extensive discovery throughout the litigation in the New York action, the focus of that discovery had not focused specifically on Nikka's relationship with Primera.

         The Court began trial on November 27, 2018.[6] After it became apparent that d'Amico's case, and this Court's ability to determine the facts, had been impeded by Nikka's failure to produce basic documents, the Court recessed for two months to allow for additional discovery. The trial was completed on January 24, 2019.


         Throughout the proceedings, Nikka has urged the court to vacate the Rule B attachment because the filing was untimely under English law. Specifically, Nikka points to Section 24(a) of the English Limitation Act 1980 which provides that “[a]n action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable.” Nikka argues that since the English judgment became enforceable in England on June 19, 2009, the Rule B attachment of June 22, 2018 is clearly time barred. As support, Nikka consistently directs the Court to Soc'y of Lloyd's v. Shell, 2005 U.S. Dist. LEXIS 22104 (S.D. Ohio Sept. 30, 2005). In Soc'y of Lloyd's the court found that the action to recognize and enforce the English Judgment was untimely because it was not filed within six years of when it was rendered and therefore, as required under Ohio's Foreign Money Judgment Recognition Act, it was not “enforceable where rendered.” Id. at *31. However, Soc'y of Lloyd's fails to provide support for Nikka's untimeliness argument for the simple fact that the action before this Court is not to recognize the English judgment against Primera. The action to recognize (confirm) the English judgment against Primera has been successfully, and timely, litigated in the New York action. The District Court for the Southern District of New York issued a money judgment against Primera on December 22, 2018.

         The complaint in this case seeks a determination that Nikka should be liable for the English judgment, that has now been recognized by and converted to a judgment of the Southern District of New York, as an alter ego of Primera. If the claim is successful, the asset that was found in this district (now represented by a security bond) would be available to satisfy the money judgment entered in the New York action against Primera. The life of the money judgment entered by the District Court of the Southern District of New York is not governed by English law.


         D'Amico has repeatedly urged this court to impose sanctions on Nikka for failing to produce basic documents that are important to this case. (See Docs. 154 & 181). After unsuccessfully petitioning Magistrate Judge P. Bradley Murray via a motion to compel on this issue, d'Amico failed to appeal Judge Murray's order denying the motion. Instead, in preparation of trial, d'Amico urged this court to either enter judgment in its favor or disallow certain evidence in response to Nikka's failure to produce documents. The request was denied, and the trial began.[7] During the trial, the significance and extent of the lack of production of basic documents became clear to the Court. But unconvinced that Nikka (or more precisely its 30(b)(6) representative Paul Coronis) would blatantly flout the Court's discovery rulings, as d'Amico alleged, the Court recessed and issued three limited orders for specific documents. Specifically, the Court ordered Nikka to contact its bank, Piraeus Bank A.E., to retrieve its bank records for 2008, 2009, and 2010.

         The Court also ordered Nikka to contact HSH Nordbank, Hamburg to request financial statements, the MOA regarding the initial financing of the SEA GLASS II, and a copy of Primera's guarantee of the Facility Agreement. Paul Coronis previously requested the documents from HSH Nordbank in Athens. The relationship manager in Athens, Loukas Lagaras, earlier responded that the Athens branch did not possess the documents requested due to the age of the records. D'Amico suggested that the records were more likely maintained in headquarters in Germany. Thus, the Court ordered that the request be made to the Hamburg office.

         D'Amico has renewed its motion for sanctions citing Nikka's response to the Court's orders. (Doc. 181). The Court agrees that Nikka's execution of the Court's discovery orders is disingenuous. Regarding HSH Nordbank, Hamburg, Nikka presented an email from Lagaras that impatiently and summarily states that HSH Nordbank, Hamburg does not have the requested documents. In a case of an amazing coincidence, Paul Coronis (on behalf of Nikka) asserts that Lagaras is now stationed in the Hamburg office of HSH Nordbank. While the Court has reservations about the truthfulness of the response from Lagaras (and Paul Coronis), the Court declines to sanction Nikka on this basis. The reason being that the Court does not have sufficient evidence that Nikka violated the Court's order. It appears that a request was made of HSH Nordbank, Hamburg and an employee purporting to represent HSH Nordbank, Hamburg responded that it does not have the requested documents.

         However, the Court reaches a different conclusion as to Nikka's obligation to obtain its own records from Piraeus Bank. According to Nikka's counsel, in response to the Court's order, Paul Coronis and a friend walked into Piraeus Bank and orally requested the records and was told that the bank did not have them.[8] The Court finds this response lacking in veracity and, even if it did occur in this manner, a clear disregard of the Court's order. It is implausible that if Paul Coronis was attempting to execute the discovery order in good faith, he would have requested the documents in this manner. Moreover, as circumstantial evidence of the implausibility of Nikka's response, d'Amico submitted an affidavit from another customer of Piraeus Bank that indicated when she contacted Piraeus Bank, she was told records (albeit for a different bank customer) for the time period in question were available. (Doc. 181-3).

         Pursuant to Fed.R.Civ.P. 37(b)(2)(A), where a party fails to obey an order to provide discovery the court may direct “that the matters embraced in the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims[.]” After consideration, the Court finds that based on Paul Coronis' clear disregard (acting on Nikka's behalf) of this Court's order to retrieve records from Piraeus Bank warrants sanctions. Thus, the Court will assume any missing bank records regarding Nikka's reimbursement of funds expended by Primera (as the managing agent of SEA GLASS II) would be adverse to Nikka. Accordingly, d'Amico's motion for sanctions (Doc. 181) is GRANTED IN PART.


         Nikka argues the Court lacks subject matter jurisdiction for two reasons. First, it argues that because an English statutory bar prevents this Court from recognizing the 2009 English judgment against Primera, the SEA GLASS II's attachment is invalid. Second, Nikka argues the current action is a post-judgment enforcement action and not a maritime claim subject to Supplemental Rule B attachment.

         Both issues involve whether the attachment of the SEA GLASS II is valid. Malin Int'l Ship Repair & Drydock, Inc. v. Oceanografia, S.A. de C.V., 817 F.3d 241, 244 (5th Cir. 2016) (“The propriety of the attachment of [a vessel] goes to the district court's jurisdiction over [the vessel], so we begin there.”). For a valid Rule B writ of attachment, a plaintiff must establish four requirements: (1) the plaintiff has a valid prima facie maritime claim against the defendant; (2) the defendant cannot be found within the district where the action is commenced; (3) property belonging to the defendant is present, or soon will be present, within the district; and (4) there is no statutory or general maritime law proscription to the attachment. Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434, 445 (2nd Cir. 2006) overruled on other grounds by The Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2nd Cir. 2009).

         Nikka first argues the attachment is invalid because the English judgment is time barred and thus there is a statutory bar to the attachment. This argument has been addressed and rejected supra.

         Second, Nikka asserts that a “judgment enforcement is not a valid maritime claim” (Doc. 171 at 8) and that Judge Koeltl's order recognizing the English judgment against Primera obviates the maritime nature of the underlying 2009 English judgment. In order for the attachment to be valid, the underlying claim must invoke admiralty jurisdiction. Nikka argues “that once a district court judgment is entered on a maritime claim, any subsequent action to impose liability under the judgment against a third party is neither an action to enforce the underlying claim nor one to enforce the judgment, but is actually a separate action seeking to ‘impose, for the first time, primary liability upon the respondents themselves for the prior judgment.'” (Doc. 171 at 9 (quoting Dunsink Trading, Ltd. v. Pitsburg Financial Inc. and Vilis Cargo Ltd., 2009 U.S. Dist. LEXIS 71609 *9 (S.D.N.Y. August 4, 2009)).[9]

         Nikka's reliance on Dunsink for the proposition that this Court lacks admiralty jurisdiction is unpersuasive. First, the language cited from Dunsink by Nikka, see supra, related to whether the court in Dunsink had ancillary jurisdiction over the new and separate action which asserted alter ego liability. Ancillary jurisdiction is not the issue in this case. Second, to the extent Nikka relies on Dunsink for the proposition that admiralty jurisdiction is lacking and the attachment pursuant to Rule B is improper, the Court rejects the reasoning of Dunsink as applied to the facts of this case.

         “Maritime attachment is available whenever the plaintiff has an in personam claim against the defendant which is cognizable in admiralty. In other words, the plaintiff's claim must be one which will support a finding of admiralty jurisdiction under 28 U.S.C. § 1333.'” Winter Storm Shipping, Ltd., 310 F.3d 263, 268 (2d Cir. 2002) (internal ellipsis omitted) (quoting Robert M. Jarvis, An Introduction to Maritime Attachment Practice Under Rule B, 20 Journal of Maritime Law and Commerce, No 4 (October 1989) at 526 & n.20).

         The Court finds persuasive the holding in Flame SA. v. Freight Bulk Pte. Ltd., 807 F.3d 572 (4th Cir. 2015), which involved facts very similar to this case. In Flame an English judgment had been recognized in the Southern District of New York against a defaulting party to an FFA contract. The creditor sought to enforce the recognized judgment by registering it in the Eastern District of Virginia and attaching a vessel belonging to an alleged alter ego (Freight Bulk) of the judgment debtor. Freight Bulk challenged that court's subject matter jurisdiction. On appeal the Fourth Circuit distinguished between federal question jurisdiction and admiralty jurisdiction when bringing suit to enforce a judgment. Id. at 581. The Fourth Circuit concluded that “Flame's claim to enforce its English Judgment by means of a Supplemental Rule B attachment was cognizable under the district court's admiralty jurisdiction” and that the district court also had admiralty jurisdiction to consider the question of alter ego. Id. at 581.

         In Victrix S.S. Co., S.A. v. Salen Dry Cargo A.B., 825 F.2d 709, 713 (2d Cir. 1987), the Second Circuit relied on a Fifth Circuit case, International Sea Food, for the proposition that “[t]he additional claim for enforcement of the British judgment asserted a maritime claim since an admiralty court has jurisdiction of a claim to enforce a foreign judgment that is itself based on a maritime claim.” Victrix S.S. Co., S.A., 825 F.2d at 713 (citing Int'l Sea Food Ltd. v. M/V Campeche, 566 F.2d 482 (5th Cir. 1978)). In International Sea Food, the Fifth Circuit considered “whether a United States district court has subject matter jurisdiction in admiralty to enforce a foreign maritime decree which awarded money damages to the plaintiff on a claim for collision.” Int'l Sea Food Ltd., 566 F.2d at 483. The judgment debtor in International Sea Food asserted a similar argument to one Nikka raises here: “maritime aspects of this case vanished once the judgment was rendered and that there is no valid reason for permitting enforcement of a simple money judgment in an admiralty court.” Int'l Sea Food Ltd., 566 F.2d at 484. The Fifth Circuit rejected this line of reasoning, holding that a court of admiralty “has jurisdiction to enforce any judgment of another admiralty court regardless of its lack of maritime flavor.” Int'l Sea Food Ltd., 566 F.2d at 485.

         Both the Second and Fourth Circuits have determined that an FFA is a maritime contract that invokes admiralty jurisdiction. See d'Amico II, 886 F.3d at 218 (“Because the FFA's principal objective was maritime commerce, it is a maritime contract and claims arising from it fall within our admiralty jurisdiction.”); Flame S.A., 807 F.3d at 577 (holding that FFAs are maritime contracts under federal admiralty law). And the undersigned agrees. That the English judgment has been recognized and converted to a federal court money judgment in the Southern District of New York does not change the maritime flavor. See Vitol, S.A. v. Primerose Shipping Co., 708 F.3d 527, 535 (4th Cir. 2013) (citing Int'l Sea Food Ltd., 566 F.2d 482) (“We also reject S & P's separate contention on appeal that because the English Judgment has been reduced to a monetary award it now lacks the maritime character necessary to being considered an admiralty judgment which would deprive the district court of jurisdiction in this proceeding.”). Thus, d'Amico's claim against Nikka, that it should be held liable for the breach of the FFA as an alter ego of Primera, is a maritime claim.

         Moreover, as the Fourth Circuit explained in Vitol, Rule B attachment is a proper mechanism to enforce a money judgment previously issued by an admiralty court. This is because “‘pre-judgment,' as it is used in the Supplemental Rule B context, must be understood to mean prior to the judgment in the particular case where a plaintiff seeks to use Supplemental Rule B.” Vitol, 708 F.3d at 537-38. And “[a]ttachment of the [vessel owned by the alleged alter ego] under Supplemental Rule B is thus clearly a prejudgment mechanism in the sense which establishes jurisdiction over [the alleged alter ego] for adjudication of the alter ego dispute.” Vitol, 708 F.3d at 538. The Fourth Circuit concluded,

[t]he district court in the case at bar had not entered any judgment against [the alleged alter ego] at the time the ex parte motion for Supplemental Rule B attachment was filed by [the judgment creditor]. What [the judgment creditor] sought was to establish jurisdiction through Supplemental Rule B in the District of Maryland so its underlying alter ego complaint could be adjudicated; not to enforce the English Judgment in the first instance, although we are not at all certain that usage is barred by the Rule. In any event, [the judgment creditor's] use of Supplemental Rule B was entirely consistent with the rule's purpose: “to permit the attachments of assets wherever they can be found and not to require the plaintiff to scour the globe to find a proper forum for suit or property of the defendant sufficient to satisfy a judgment.”

Vitol, 708 F.3d at 539 (quoting Transportes Navieros y Terrestres S.A. de C.V. v. Fairmount Heavy Transp. N.V., 572 F.3d 96, 103 (2d Cir. 2009)).

         Finally, alter ego determinations plainly fall within an admiralty court's jurisdiction. See Swift & Co. Packers v. Compania Colombiana Del Caribe, S.A., 339 U.S. 684, 689 n.4 (1950 (“The jurisdiction of a court of admiralty to determine the question of alter ego is undoubted.”); Ost-W.-Handel Bruno Bischoff GmbH v. Project Asia Line, Inc., 160 F.3d 170, 174 (4th Cir. 1998) (“It is well established that an admiralty court can review questions of fraud and alter ego.”); Pink Goose (Cayman) Ltd. v. Sunway Traders LLC, 2008 WL 4619880, at *2 (S.D.N.Y. Oct. 17, 2008) (“alter-ego theories of liability are prima facie admiralty claims so long as the underlying claim arose in admiralty.”). For all of the foregoing reasons, the Court concludes subject matter jurisdiction is present.

         V. ALTER EGO LAW

         “[A] corporate entity is liable for the acts of a separate, related entity only under extraordinary circumstances…” Vitol, 708 F.3d at 541 (emphasis added). It is only in those extraordinary circumstances where courts find alter ego and then “pierce the corporate veil and disregard the corporate entity[.]” Id. at 544. As the court explained in LIG Ins. Co. Ltd. v. Inter-Florida Container Transport, Inc., 2013 WL 4516104, *6 (S.D. Fla. Aug. 23, 2013), aff'd, 564 Fed.Appx. 495 (11th Cir. 2014) (footnote omitted) (quoting Talen's Landing Inc. v. M/V Venture II, 656 F.2d 1157, 1160 (5th Cir. 1981)), “[r]eaching the ‘alter egos' of corporations is especially valuable ‘where the separate identity of two corporations should be disregarded where one corporation becomes the conduit of another' or ‘where the near identity of two corporations should be disregarded in order to prevent manifest injustice to third parties.'”

         “In admiralty disputes, federal courts apply federal common law when analyzing corporate identity.” Hawknet Ltd. v. Overseas Shipping Agencies, 2008 WL 1944817, *3 (S.D.N.Y. Apr. 29, 2008) (citation omitted). See also Daughtry v. Jenny G. LLC, 703 Fed.Appx. 883, 886 (11th Cir. 2017) (“[t]o determine whether to disregard the corporate form in an admiralty case, we apply federal common law[]”). Guided by federal common law, the Court applies the factors set forth by the Eleventh Circuit in United Steelworkers of Am., AFL-CIO-CLC v. Connors Steel Co., 855 F.2d 1499 (11th Cir. 1988) in its analysis of domination and control. The factors, all of which need not be proven to succeed in piercing the corporate veil, include whether:

(1) the parent and the subsidiary have common stock ownership;
(2) the parent and the subsidiary have common directors or officers;
(3) the parent and the subsidiary have common business departments;
(4) the parent and the subsidiary file consolidated financial statements and tax returns;
(5) the parent finances the subsidiary;
(6) the parent caused the incorporation of the subsidiary;
(7) the subsidiary operates with grossly inadequate capital;
(8) the parent pays the salaries and other expenses of the subsidiary;
(9) the subsidiary receives no business except that given to it by the parent;
(10) the parent uses the subsidiary's property as its own;
(11) the daily operations of the two corporations are not kept separate; and
(12) the subsidiary does not observe the basic corporate formalities, such as keeping separate books and records and holding shareholder and board meetings.

Id. at 1505. Nikka and Primera do not have a subsidiary-parent relationship. Instead, they are sister corporations. Therefore, the aforementioned factors will be adjusted to reflect their relationship.[10]

         No uniform standard exists, and Courts should “instead look to the totality of the circumstances.” Eitzen Chem. (Singapore) PTE, Ltd. v. Carib Petroleum, 749 Fed.Appx. 765, 770 (11th Cir. 2018) (citing United Steelworkers of Am., 855 F.2d at 1506). The burden, which is “significant[, ]” Edwards Co. v. Monogram Indus., Inc., 700 F.2d 994, 999 (5th Cir. 1983), on reh'g, 730 F.2d 977 (5th Cir. 1984), rests squarely on the party seeking to pierce the veil. Id.

         In order to pierce the corporate veil in a contract breach scenario, fraud constitutes “an essential element of an alter ego finding.” United States v. Jon-T Chemicals, Inc., 768 F.2d 686, 692 (5th Cir. 1985). The Eleventh Circuit, in an unpublished opinion, has cited to Jon-T Chemicals for this proposition with approval.[11] Eitzen Chem., 749 Fed.Appx. at 770 (quoting Jon-T Chemicals for the proposition that “in contract cases, fraud is an essential element of an alter ego finding”) (emphasis added).

         The Fifth Circuit provided a synopsis of why alter ego cases based on a breach of contract require a showing of fraud/injustice.

[I]n contract cases, fraud is an essential element of an alter ego finding. Edwards, 730 F.2d at 980-81. However, we do not require a finding of fraud in tort cases[.]…The reason for this distinction is clear. In a contract case, the creditor has willingly transacted business with the [judgment debtor]. If the creditor wants to be able to hold the [alleged alter ego] liable for the [judgment debtor's] debts, it can contract for this. Unless the [judgment debtor] misrepresents its financial condition to the creditor, the creditor should be bound by its decision to deal with the [judgment debtor]; it should not be able to complain later that the [judgment debtor] is unsound. In a tort case, by contrast, the creditor has not voluntarily chosen to deal with the subsidiary; instead, the creditor relationship is forced upon it. Thus, the question of whether the creditor relied on misrepresentations by the [judgment debtor] is irrelevant.

Jon-T Chemicals, 768 F.2d at 692-693 (emphasis added).

         The fraud analysis focuses on “whether the corporate form itself was abused and whether the misuse of the corporate form constituted the fraud or injustice complained of in the underlying suit.” Eitzen Chem., 749 Fed.Appx. at 770 (citing N.L.R.B. v. Greater Kansas City Roofing, 2 F.3d 1047, 1053 (10th Cir. 1993)). The entity sought to be held liable must be involved in the misuse of the corporate form. As the Fifth Circuit explained in Bridas S.A.P.I.C. v. Gov't of Turkmenistan, 447 F.3d 411 (5th Cir. 2006),

[t]o prevail, [the judgment creditor] had to demonstrate that the [dominant entity] used its control over [dominated entity] to commit a “fraud or injustice” against [the judgment creditor]. See [First Nat. City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611, 630 (1983)]; Edwards Co. v. Monogram Indus., Inc., 730 F.2d 977, 984 (5th Cir. 1984). …[T]he decisions acknowledge that the test may be met through an “illegal act” or “[misuse of] the corporate form.” [Matter of Sims, 994 F.2d 210, 217-18 (5th Cir. 1993)]. In this contract dispute, [the judgment creditor] thus had to connect the [dominant entity's] misuse of its [dominated entity] to the fraud or injustice against it.

Id. at 416-417. “[A]bsent some other wrong or injustice that would result if the corporate veil is not pierced, a creditor's inability to collect a judgment alone is insufficient to justify piercing the corporate veil.” Eitzen Chem., 749 Fed.Appx. at 773 (citing Greater Kansas City Roofing, 2 F.3d at 1053). This is because “virtually all cases in which there is an attempt to pierce the corporate veil” involves “a corporation . . . incapable of paying all its debts . . . .” Greater Kansas City Roofing, 2 F.3d at 1053.


         A. Fraud or Injustice

         D'Amico must demonstrate Primera's corporate form was misused such that fraud, illegality, wrongdoing, or injustice resulted. See Eitzen Chem., 749 Fed.Appx. at 770 (quoting Talen's Landing, 656 F.2d at 1161 n.6) (stating that once a plaintiff establishes domination and control, “it is appropriate to brush aside the corporate veil when it appears a corporation was organized for fraudulent purposes, illegality, or wrongdoing”). And d'Amico must show that the fraud or injustice involved Nikka.

         D'Amico relies on two bases to meet its burden to show fraud or injustice. First, it identifies a series of transactions, commonly called netting-off agreements, wherein $406, 457.96 owed to Primera was diverted in October 2009 to Primrose Shipping Ltd. and Seadance Maritime Inc., both Coronis family controlled entities. However, no evidence was presented that Nikka benefitted from these netting-off agreements or that Nikka was used in any way to aid these transactions. Thus, for purposes of establishing the necessary fraud or injustice, the netting-off agreements are irrelevant.

         Next, d'Amico claims generally that the Coronis family diverted assets from Primera to avoid paying debts. But since Nikka failed to produce any bank records relevant to the time period, d'Amico has relied on the evidence that money was diverted from Primera to other Coronis controlled entities. D'Amico also relies heavily on its contention, shown by circumstantial evidence, that in 2007 the initial $5.25 million payment for the SEA GLASS II was made by Primera. In response, Nikka argues that d'Amico cannot prove that any assets were diverted from Primera to Nikka.

         The issue is whether during the relevant time period, Primera used Nikka to assist in committing a fraud or injustice against d'Amico. The relevant period of time is from the time Primera entered into the FFA agreement at issue with d'Amico (September 2008) until Primera was dissolved (March 2010).

         D'Amico cannot complain or rely on evidence that Primera was unsound due to any transaction prior to September 2008, unless Primera misrepresented its financial condition to d'Amico at the time of the FFA agreement. This is because d'Amico voluntarily entered into an agreement with Primera, and d'Amico is bound to its decision to deal with Primera in Primera's September 2008 financial condition. Any diversion of funds and unreimbursed payments made by Primera prior to September 2008 are irrelevant to the fraud/injustice inquiry because there is no evidence that Primera made misrepresentations to d'Amico.

         As previously discussed, Nikka failed to produce any of its bank records for the time period that Primera managed the SEA GLASS II (October 2008 - April 2009). Nor did Nikka even attempt to have Piraeus Bank provide a written statement that the records were not available. The Court has found that Nikka, through Paul Coronis, violated the Court's order to attempt to retrieve these records. Moreover, the Court finds that it is implausible that these records no longer exist. Accordingly, the Court finds that the records would be adverse to Nikka and would show that Nikka failed to reimburse Primera for expenses paid and services rendered by Primera on behalf of the SEA GLASS II. The projected operating costs (exclusive of drydocking) for the SEA GLASS II for 2010 was $1, 800, 650.[12] (Def.'s Ex. 28/Doc. 189 at 17). Subtracting the insurance of $128, 900, which d'Amico concedes Primera did not pay, leaves an annual operating cost of $1, 671, 750 or ($139, 312 per month). The Court finds that $835, 875 is a rough estimate of what the operating costs per month would have been for the six months that Primera managed the SEA GLASS II.[13] The Court also finds that Nikka's banking records would have confirmed that Nikka did not reimburse Primera for the these expenses for the six months that Primera managed the SEA GLASS II.

         Since Primera was foregoing significant income and reimbursement from Nikka, the Court finds that Primera was diverting assets to Nikka from October 2008 to April 2009, which could have been used to fund its liability to d'Amico. This was an abuse of the corporate form which was made possible by Paul Coronis' control of both entities. See infra. Accordingly, the Court finds that d'Amico has established that Primera's diversion of assets to Nikka resulted in an injustice to d'Amico.

         B. Domination and Control

         1. Common Stock Ownership

         a. ...

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