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Frontenac International, Sa v. Global Marketing Systems, Jlt

United States District Court, Fourth Circuit

June 11, 2013

FRONTENAC INTERNATIONAL, S.A., Plaintiff,
v.
GLOBAL MARKETING SYSTEMS, JLT, GLOBAL MARKETING SYSTEMS, INC., PROVIDENCE SHIPPING CORP. Defendants.

MEMORANDUM OPINION

RICHARD D. BENNETT, District Judge.

Plaintiff Frontenac International, S.A. ("Frontenac") has brought this action against Defendant Providence Shipping Corporation ("Providence") seeking the recognition, confirmation and enforcement of the Final Award As To Costs ("Costs Award") issued in its favor against Providence by the London Maritime Arbitrators' Association ("LMAA") on November 28, 2012.[1] Plaintiff also petitions the enforcement of the Costs Award against Defendants Global Marketing Systems, JLT ("GMS JLT") and Global Marketing Systems, Inc. ("GMS Inc.") as trade names, aliases, alter egos, paying agents, receiving agents or joint venturers of Defendant Providence. Specifically, Frontenac seeks to recover approximately $63, 330 in costs assessed in its favor by the arbitrator.[2] Essentially, Plaintiff contends in this action that this award for costs against the Defendant Providence should also be assessed by this Court against Defendants GMS JLT and GMS Inc. Plaintiff further contends that service of process of this Petition upon Global Marketing Systems, Inc. ("GMS Inc."), a Maryland corporation, is sufficient process upon GMS JLT and Providence, neither of which have filed an Answer or responded to this action.[3]

Pending before this Court is Defendant GMS Inc.'s Motion to Dismiss Plaintiff's Petition to Recognize, Confirm and Enforce Foreign Arbitral Award (ECF No. 8) pursuant to Rules 12(b)(6) and 12(b)(2) of the Federal Rules of Civil Procedure. Also pending is Plaintiff Frontenac's Motion for Leave to Amend Petition to Enforce the Award (ECF No. 15). This Court has jurisdiction over this matter pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16, and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention"), 9 U.S.C. §§ 201-208.[4] The parties' submissions have been reviewed and no hearing is necessary. See Local Rule 105.6 (D. Md. 2011). For the reasons that follow, Defendant GMS Inc.'s Motion to Dismiss (ECF No. 8) is GRANTED. Plaintiff's Motion for Leave to Amend Petition (ECF No. 15) is DENIED.

BACKGROUND

In the context of a motion to dismiss pursuant to Rule 12(b)(6), this Court accepts as true the facts alleged in the plaintiff's' complaint. See Aziz v. Alcolac, Inc., 658 F.3d 388, 390 (4th Cir. 2011). According to the Petition, Plaintiff Frontenac International S.A. ("Frontenac") and Defendant Providence Shipping Corporation ("Providence") are both corporations organized under the laws of a foreign country and with their principal places of business in Panama. Pl.'s Pet. ¶¶ 7-8, ECF No. 1. Defendant Global Marketing Systems, JLT ("GMS JLT") is a corporation allegedly organized under the laws of a foreign country with its principal place of business in the United Arab Emirates. Id. ¶ 9. Frontenac alleges that Defendant Global Marketing Systems, Inc. ("GMS Inc."), a corporation organized under the laws of Maryland with its principal place of business in Cumberland, Maryland, is the parent or affiliate of respondent GMS JLT. Id. ¶ 10; Pl.'s Pet., Ex. 1. Frontenac further alleges that Defendants Providence and GMS JLT "are trade names, aliases, alter egos, paying agents, receiving agents, and/or joint venturers of respondent GMS INC." Pl.'s Pet. ¶ 11.

Plaintiff Frontenac was the owner of a vessel known as the M/V Atlantic Leader ("Atlantic Leader"). Id. ¶ 7. On September 15, 2011, Frontenac and Defendant Providence entered into a Memorandum of Agreement ("MOA") for the purchase of the Atlantic Leader. Id. ¶ 8. A couple of days later, Defendant GMS JLT issued a guarantee of Providence's performance under the MOA. Id. ¶¶ 9-15. Shortly thereafter, a dispute arose under the MOA concerning the value of the Atlantic Leader. Id. ¶ 18. Clause 18 of the MOA specified that "any dispute or differences arising out of or in connection with this Agreement... shall be referred to arbitration in London... [and] conducted in accordance with the London Maritime Arbitrators' Association ("LMAA") Terms." Id. ¶ 17; MOA ¶ 18, ECF No. 14-6. Accordingly, Frontenac and Providence commenced arbitration proceedings in London before a mutually elected arbitrator of the LMAA. Id. On August 20, 2012, the arbitrator issued a Final Award in favor of Frontenac in the amount of $475, 000. Id. ¶ 20; Final Award, ECF No. 1-5. Subsequently, on November 28, 2012, the arbitrator issued a Final Award As To Costs ("Costs Award") in favor of Frontenac in the amount of £38, 000 in arbitration costs and £1, 485 in award costs, which allegedly represents approximately $63, 330. Pl.'s Pet. ¶¶ 21-22; Costs Award ¶¶ 1-2; ECF No. 1-6. Frontenac has since been able to recover the $475, 000 due under the Final Award as the awarded amount had been placed in escrow in anticipation of arbitration. Pl.'s Mem. in Opp. of Mot. to Dismiss 9, ECF No. 14.

On January 11, 2013, Frontenac filed the present action seeking to recognize, confirm and enforce the Costs Award in the approximate amount of $63, 330 against Defendant Providence (Count I) as well as Defendants GMS JLT and GMS Inc. as "trade names, aliases, alter egos, paying agents, receiving agents, or joint venturers of Providence" (Count II). While Defendant GMS Inc. has filed the pending Motion to Dismiss pursuant to Rules 12(b)(6) and 12(b)(2) of the Federal Rules of Civil Procedure, Defendants GMS JLT and Providence have not acknowledged service of process, filed an answer or filed any responsive pleadings.[5]

STANDARD OF REVIEW

I. Rule 12(b)(2) Motion

When a defendant files a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of proving grounds for jurisdiction by a preponderance of the evidence. Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir. 1993). This requires the plaintiff to produce competent evidence to sustain jurisdiction. Nichols v. G.D. Searle & Co., 783 F.Supp. 233, 235 (D. Md. 1992). If the court is deciding the issue without a hearing, the plaintiff is only required to make a prima facie showing of jurisdiction. Mylan, 2 F.3d at 60. In considering "all relevant pleading allegations in the light most favorable to the plaintiff, " the court must draw all "reasonable inferences" from the proof offered by the parties in the plaintiff's favor. Id. at 60-62.

A federal district court may exercise personal jurisdiction over a nonresident defendant "if two conditions [are] satisfied: (1) the exercise of jurisdiction must be authorized under the state's long arm statute; and (2) the exercise of the jurisdiction must comport with the due process requirements of the Fourteenth Amendment." Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003) (citing Christian Sci. Bd. of Dirs. Of the First Church of Christ v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001)); see also Mackey v. Compass Mktg., 892 A.2d 479, 486 (Md. 2006). The Court of Appeals of Maryland recently reiterated that "[d]etermination of personal jurisdiction is a two-step process. First, the requirements under the long-arm statute must be satisfied, and second, the exercise of personal jurisdiction must comport with due process." Mackey, 892 A.2d at 486; see also id. at 493 n.6 (explaining that the court's prior statements that "our statutory inquiry merges with our constitutional examination" does not "mean... that it is now permissible to simply dispense with analysis under the long-arm statute"). Thus, a plaintiff must "identify a specific Maryland statutory provision authorizing jurisdiction." Ottenheimer Publishers, Inc., v. Playmore Inc., 158 F.Supp.2d 649, 652 (D. Md. 2001). Although it is preferable for a plaintiff to identify the statute authorizing jurisdiction in its complaint, a plaintiff alternatively may reference the applicable statute in its response to a defendant's motion to dismiss. Johansson Corp. v. Bowness Constr. Co., 304 F.Supp.2d 701, 7104 n. 1 (D. Md. 2004). In order for the exercise of personal jurisdiction to comport with due process, a non-resident defendant must have sufficient "minimum contacts" with the forum state that requiring it to defend itself within the forum state "does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945).

II. Rule 12(b)(6) Motion

Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes the dismissal of a complaint if it fails to state a claim upon which relief can be granted. The purpose of Rule 12(b)(6) is "to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006).

The Supreme Court's recent opinions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), "require that complaints in civil actions be alleged with greater specificity than previously was required." Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citation omitted). The Supreme Court's decision in Twombly articulated "[t]wo working principles" that courts must employ when ruling on Rule 12(b)(6) motions to dismiss. Iqbal, 556 U.S. at 678. First, while a court must accept as true all the factual allegations contained in the complaint, legal conclusions drawn from those facts are not afforded such deference. Id. (stating that "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice" to plead a claim). Second, a complaint must be dismissed if it does not allege "a plausible claim for relief." Id. at 679. Under the plausibility standard, a complaint must contain "more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555. Although the plausibility requirement does not impose a "probability requirement, " id. at 556, "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 663; see also Robertson v. Sea Pines Real Estate Cos., 679 F.3d 278, 291 (4th Cir. 2012) ("A complaint need not make a case against a ...


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