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WORLDWIDE MARINE TRADING CORP. v. MARINE TRANSP. S

July 2, 1982

WORLDWIDE MARINE TRADING CORP., et al.
v.
MARINE TRANSPORT SERVICES, INC., et al.; T & L LEASING, INC. AND OCEAN SYSTEMS, INC. a/k/a CARGO SYSTEMS, INC. v. MARINE TRANSPORT SERVICES, INC., et al.



The opinion of the court was delivered by: NEWCOMER

 Newcomer, District Judge.

 Defendants Paul Semack ("Semack"), John Kavula ("Kavula") and MTS Agencies, Inc. ("Agencies") move for summary judgment in this antitrust, malicious prosecution, and intentional interference with contractual relations case.

 I have recounted the underlying story of this case on numerous occasions, *fn1" and yet another recitation of all the facts alleged and the causes of action averred would be an unnecessary task. *fn2" Nevertheless, in the interests of clarity I will restate briefly the allegations. Plaintiffs Worldwide Marine Trading Corporation ("Worldwide") and Gloucester Shipping Corporation ("Gloucester") allege that the moving defendants conspired with certain Finish shipowners ("the Finnowners") to harm Gloucester and Worldwide in violation of section one of the Sherman Act, 15 U.S.C. § 1 (1976), (Counts I and III); tortiously interfered with Gloucester and Worldwide's contracts to charter two ships (Count II); and tortiously interfered with Gloucester, Worldwide and other plaintiff's contractual relationship with the First Pennsylvania Bank (Count IV). I will consider first the effect of the releases allegedly given by defendants.

 1. The Releases.

 Defendants argue that certain releases, executed May 6, 1977 bar plaintiffs' prosecution of all claims in this case. The release agreement (D.Exh. 46) is an elaborate document, attached to which are form releases from B.H. Sobelman & Co., Inc., Holt Motor Express, Inc., Holt Hauling and Warehousing Systems, Inc., Holt Marine Terminal, Inc., Waterside Ocean Navigation, Inc. of Pennsylvania, Marine Transport, Inc., Gloucester Shipping Corporation, Worldwide Marine Trading Corporation, and Thomas J. Holt to, among others, Paul Semack, John Kavula and MTS Agencies, Inc. The releases are

 
"from all actions, causes of actions, suits, debts . . . claims and demands whatsoever, in law, admiralty or equity, which against the RELEASE, the RELEASOR . . . ever had, now have or hereafter can shall or may, have for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this RELEASE."

 Typed in each of the releases after that broad, boilerplate language is the following language:

 
except for the obligations of Releasee to the Releasor under a certain agreement dated May 6, 1977, among [the parties] and if, and only if an arbitration award or court judgment shall find Thomas J. Holt personally liable . . . to pay damages for breach [of certain charter parties] . . . and Thomas J. Holt shall pay such award or judgment, then this release shall not bar a suit by Thomas J. Holt against Paul Semack or John Kavula for the damages paid which are attributable to a breach wrongfully caused by Paul Semack or John Kavula, and except for claims for return of funds of Marine Transport Service, Inc. diverted in bad faith and not used in the business of Marine Transport Service, Inc.

 (D.Exh. 46). Without question, the language of these releases is broad enough to embrace the claims asserted here: Counts I, III (antitrust) and IV (tortious interference with banking relationships) are clearly within the terms of the release. Count II seeks damages for an interference with the charter-parties, a claim which can be asserted by the terms of the release only if Thomas J. Holt is found "personally liable" for damages for breach of the charter-parties and he "shall pay such award or judgment." No such award or judgment exists, so Count II is also a "released" claim.

 Plaintiffs argue first that defendants behaved in a manner that breached the release agreements, rendering them void, and second that the releases should have no effect because they were obtained through fraudulent inducement and were therefore never effective.

 The actions of defendants after May 6, 1977 were by plaintiffs' characterization part of "a plan which had already started prior to the May agreement and prior to the execution of the releases." Plaintiffs' Memorandum at 14. In order to avoid the effect of the releases on these claims on the basis of defendants' activities after May 6, 1977, plaintiffs must prove a material breach of the May 6 agreement to which the releases were appended. To that end the plaintiffs allege that defendants urged creditors of MTS, Inc. to sue defendants, they "continued to allow default judgments to be taken" against MTS, Inc. and they "did not even afford the creditors of MTS the benefit of insurance believed to be in being . . . which would cover these losses." Plaintiffs' Memorandum at 15. By contrast, the summary of defendants compliance with the May 6 agreement is a long one. An abbreviated list includes the following: Semack and Kavula honored their obligations (1) to assign to First Pennsylvania Bank all of their rights to the assets of MTS, Inc. See Exh. 46 para. 4); (2) to deliver to plaintiffs Worldwide and Gloucester a manifest and Bills of lading from the Finn Builder (See D.Exh. 46 para. 6); and (3) to deliver to Thomas Holt's attorneys certain freight monies, (See, D.Exh. 46 paras. 6, 8). Defendants have enumerated six other substantial acts of compliance, and these are unrebutted by plaintiffs.

 On this record, which is huge, I fail to see any material issue of fact warranting a trial. The May 6 Agreement and the releases formed a contract with which defendants complied. Plaintiffs argue that Semack and Kavula did not "co-operate in the collection of all contingent assets of MTS but rather frustrated the same" by sending copies of certain freight checks which they had held before May 6 to the attorney for the checks' issuers, the Finnowners. See Worldwide Marine Trading, 527 F. Supp. at 586. Apparently, plaintiffs consider this a breach of defendants' promise "to cooperate fully . . . in the collection of all claims and contingent assets of MTS, Inc. and of all the claims by or against the Charterers [Worldwide and Gloucester] used in the carriage of MTS cargo." (D.Exh. 46 para. 10). As I have noted before in this case, the Finnowners could have compelled production of the copies of the checks, but, more importantly I cannot infer from the May 6 agreement a covenant on the part of Semack and Kavula to cooperate in Worldwide and Gloucester's efforts to evade creditors. Quite clearly, Semack and Kavula were obliged to cooperate in the collection of all claims, and in transmitting the checks they fulfilled that obligation. The other allegations, that defendants directed inquiries about MTS, Inc. to plaintiffs, or that "they continued to allow default judgments to be taken against MTS," or even that they advised creditors to sue plaintiffs do not amount to a breach of any obligation express or implicit arising out of the May 6 agreement. Certainly, on this record, which shows complete performance by defendants of their explicit duties, I can see no evidence of a material breach of the May 6 agreement sufficient to avoid the effect of the releases and permit a trial.

 Plaintiffs further argue that they were fraudulently induced to execute the releases, and that the releases were therefore void ab initio. The fraud alleged is the previously mentioned "plan" to suggest that creditors of MTS, Inc. sue plaintiffs, and to frustrate plaintiff's transfer of MTS's receivable to First Pennsylvania. Defendants have demonstrated that the record shows that Thomas Holt believed that "there was a conspiracy between [defendants] and the ship owners to take the ships from Waterside before the charters matured" and that before May 6 Holt "wanted to reserve the right to sue MTS and its officers for conspiracy, breach of contract, and possible fraud and conversion." (D.Exh. 49). No such reservation was made in the releases. *fn3" Similarly, Holt has testified in court that the checks purportedly assigned to First Pennsylvania were withheld beginning in late March 1977 and that "it was obvious from the very start that the two gentlemen from Marine Transport Service were attempting to break the charter agreement that we have with the owners on this vessel and another vessel." Defendant's Memorandum at 37 (quoting Notes of Testimony, May 1977 Philadelphia Court of Common Pleas). Given this state of Holt's awareness before May 6, 1977, and absolutely no evidence of any contrary reassurances from defendants, the releases must be given their full effect as to all defendants and against all plaintiffs. *fn4" He and the corporate plaintiffs are now suing defendants on account of things defendants did before May 6, and about which plaintiffs knew. Therefore, I must conclude that all the evidence of record shows that the parties intended to release one another from all claims arising out of the MTS, Inc. misadventure. There is no evidence to the contrary suggesting a triable issue of fact. F.R.C.P. 56(e).

 In sum, the parties agreed to release one another from all claims, and there appears to be no sound reason not to give effect to that agreement. ...


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