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In re Kingstate Oil

filed: April 3, 1987.

IN THE MATTER OF: KINGSTATE OIL
v.
M/V GREEN STAR (CIVIL NO. 86-2965); DREW AMEROID INTERNATIONAL, CORP. V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC., IN REM, AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3023); B.P. OIL INTERNATIONAL LIMITED V. KUK-JE SHIPPING CO., LTD. (CIVIL NO. 86-3053); ATLANTIC STEAMERS SUPPLY CO. (N.J.) INCORPORATED V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC. IN REM AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 3128); MCALLISTER BROTHERS, INC., V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC. IN REM, AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3240); OVERSEAS SHIPPING, INC. V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC., IN REM, AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3252); M. J. RUDOLPH CORP. V. M/V. GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC. IN REM, AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3253); KINGSTATE OIL AND BANK OF PUSAN PLAINTIFF IN INTERVENTION V. KUK JE SHIPPING COMPANY LIMITED, IN PERSONAM AND M/V GREEN STAR IN REM DEFENDANTS IN INTERVENTION (CIVIL NO. 86-2965); WITTE CHASE CORPORATION V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC., IN REM, AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM; KINGSTATE OIL & JUNG JIN PARK, YOUNG HO KIM, BAG MYEONG IN, BONG HUN JEONG, NAM SUNG HYUN, GYO SEOB GIM, I SEUNG DAE, PARK HONG MIN, HONG SAMYOUNG, GU YEONG HUND, BYUM SUNG DUK, KIM JUNG KEI, KIM TAE OK, KIM HAENG SAM, KIM JUNG BOK, KANG MAI MOOK, LEE GAB YEOL, LEE KIM MUN, JUNG GWEON PARK, JEON DAE YUN, BYEN TTO SIK, JEON SU SAENG, LEE HYEONG JO AND KIM SU HAN PLTFS. IN INTERVENTION V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, APPURTENANCES, CARGO, ETC., IN REM AND KUKJE SHIPPING COMPANY LTD., IN PERSONAM (CIVIL NO. 86-2965); DREW AMEROID INTERNATIONAL CORP. & EKLOF MARINE CORP. INTERVENING PLTF. V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC., IN REM AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM; DREW AMEROID INTERNATIONAL CORP. & KOREAN DEVELOPMENT BANK INTERVENING PLTF. V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC., IN REM AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3023); KINGSTATE OIL & NISSHO IWAI AMERICAN CORP. PLTF. IN INTERVENTION V. KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM AND M/V GREEN STAR, IN REM (CIVIL NO. 86-2965); KINGSTATE OIL AND KIM HYUN JIN, KIM SU HWAN, NAM GUNGGGYU, KIM TAE GYU, KIM BYEONG HO, MUN JEONG SOOK, HAN BONG CHIL, SEO JAE GWAN, CHANG KI CHANG, LEE CHUN KIL, KANG BYEONG JUN, BARK JONG CHEOL, KIM SANG YUL, O YONG-HWAN, LEE HONG SIK, LEE MYEONG DEUK, DEO IMGYO, PARK YONG SUN, KIM SANG HWAN, KIM UK KON, CHAE PIL KWEN, CHOI YONG HWA, JUNG YONG GWAN, CHOI HAE WEON, CHUN JIN SIK, CHA YONG JIN, JO YONG SU, CHOW SUNG YONG, KIM WEON JOON, CHUNG CHUNG HAK, LEE SEI HYANG, KIM CHANG SEA, LEE NAM YONG, LEE BONG IL, LEE MUN YONG, JIN JAE CHUL, KIM SUNG HONG, KO YONG BO, LEE JAE GU, KIM DAE JEON, HONG SOUN BAEK, LEE SANG IK, IM MAN DAE, LEE SANG CHUN, AND KIM BUM QYU INTERVENING PLAINTIFFS V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE APPURTENANCES, CARGO, ETC., IN REM, AND KUKJE SHIPPING COMPANY, LTD., IN PERSONAM (CIVIL NO. 86-2965); GREAT OCEAN SUPPLY CO., INC. V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC., IN REM AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3411); BANK OF PUSAN, PLAINTIFF IN INTERVENTION, APPELLANT; IN THE MATTER OF: KINGSTATE OIL V. M/V GREEN STAR (CIVIL NO. 86-2965); DREW AMEROID INTERNATIONAL CORP. V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC., IN REM, AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3023); B.P. OIL INTERNATIONAL LIMITED V. KUK-JE SHIPPING CO., LTD. (CIVIL NO. 86-3053); ATLANTIC STEAMERS SUPPLY CO. (N.J.) INCORPORATED V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC. IN REM AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 3128); MCALLISTER BROTHERS, INC., V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC. IN REM, AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3240); OVERSEAS SHIPPING, INC. V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC. IN REM, AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3252); M. J. RUDOLPH CORP. V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC. IN REM, AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3253); KINGSTATE OIL AND BANK OF PUSAN PLAINTIFF IN INTERVENTION V. KUK JE SHIPPING COMPANY LIMITED, IN PERSONAM AND M/V GREEN STAR IN REM DEFENDANTS IN INTERVENTION (CIVIL NO. 86-2965); WITTE CHASE CORPORATION V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC., IN REM, AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM; KINGSTATE OIL & JUNG JIN PARK, YOUNG HO KIM, BAG MYEONG IN, BONG HUN JEONG, NAM SUNG HYUN, GYO SEOB GIM, I SEUNG DAE, PARK HONG MIN, HONG SAMYOUNG, GU YEONG HUND, BYUM SUNG DUK, DIM JUNG KEI, KIM TAE OK, KIM HAENG SAM, KIM JUNG BOK, KANG MAI MOOK, LEE GAB YEOL, LEE KIM MUN, JUNG GWEON PARK, JEON DAE YUN, BYEN TTO SIK, JEON SU SAENG, LEE HYEONG JO AND KIM SU HAN PLTFS. IN INTERVENTION V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, APPURTENANCES, CARGO, ETC., IN REM AND KUKJE SHIPPING COMPANY LTD., IN PERSONAM (CIVIL NO. 86-2965); DREW AMEROID INTERNATIONAL CORP. & EKLOF MARINE CORP. INTERVENING PLTF. V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC., IN REM AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM; DREW AMEROID INTERNATIONAL CORP. & KOREAN DEVELOPMENT BANK INTERVENING PLTF. V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC., IN REM AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3023); KINGSTATE OIL & NISSHO IWAI AMERICAN CORP. PLTF. IN INTERVENTION V. KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM AND M/V GREEN STAR, IN REM (CIVIL NO. 86-2965); KINGSTATE OIL AND KIM HYUN JIN, KIM SU HWAN, NAM GUNGGYU, KIM TAE GYU, KIM BYEONG HO, MUN JEON SOOK, HAN BONG CHIL, SEO JAE GWAN CHANG, KI CHANG, LEE CHUN KIL, KANG BYEONG JUN, BARK JONG CHEOL, KIM SANG YUL, O YONG-HWAN, LEE HONG SIK, LEE MYEONG DEUK, DEO IMGYO, PARK YONG SUN, KIM SANG HWAN, KIM UK KON, CHAE PIL KWEN, CHOI YONG HWA, JUNG YONG GWAN, CHOI HAE WEON, CHUN JIN SIK, CHA YONG JIN, JO YONG SU, CHOW SUNG YONG, KIM WEON JOON, CHUNG CHUNG HAK, LEE SEI HYANG, KIM CHANG SEA, LEE NAM YONG, LEE BONG IL, LEE MUN YONG, JIN JAE CHUL, KIM SUNG HONG, KO YONG BO, LEE JAE GU, KIM DAE JEON, HONG SOUN BAEK, LEE SANG IK, IM MAN DAE, LEE SANG CHUN, AND KIM BUM QYU INTERVENING PLAINTIFFS V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE APPURTENANCES, CARGO, ETC., IN REM, AND KUKJE SHIPPING COMPANY, LTD., IN PERSONAM (CIVIL NO. 86-2965); GREAT OCEAN SUPPLY CO., INC. V. M/V GREEN STAR, HER ENGINES, BOILERS, TACKLE, ETC., IN REM AND KUKJE SHIPPING COMPANY LIMITED, IN PERSONAM (CIVIL NO. 86-3411); NISSHO IWAI AMERICAN CORPORATION, APPELLANT



Author: Aldisert

Before: GIBBONS, Chief Judge, SEITZ and ALDISERT, Circuit Judges.

Opinion OF THE COURT

ALDISERT, Circuit Judge:

This appeal from a district court's order confirming the judicial sale of a cargo ship requires us to decide if the costs of unloading the vessel after the sale should be treated as administrative costs. The vessel's charterer and the consignee of the cargo contend that the court abused its discretion in refusing to treat unloading expenses as administrative expenses. A preliminary question is whether we have jurisdiction to entertain this appeal. We hold that we do have jurisdiction and conclude that the district court did not abuse its discretion.

I.

On July 29, 1986, the cargo ship M/V GREEN STAR was arrested in Port Newark, New Jersey on behalf of Kingstate Oil, which had in rem claims against the ship and in personam claims against Kuk Je Shipping, her owner. At the time of the arrest, the GREEN STAR was under charter to appellant Nissho Iwai American Corporation, and scrap metal bound for Korea was being loaded on board. Nissho Iwai completed loading after the arrest, apparently in response to assurances from Kuk Je, and issued a bill of lading for the cargo to appellant Bank of Pusan.

On August 13, 1986, the district court ordered the interlocutory sale of the GREEN STAR, the proceeds to be deposited with the court to satisfy claims against the vessel or her owner. Bank of Pusan filed an application to have the costs of unloading the scrap, estimated to be about $250,000, treated as an administrative expense charged against the proceeds of the sale. The GREEN STAR was sold at auction with the cargo on board on August 28, 1986 for $540,000. In the course of proceedings to confirm the sale, the district court granted motions to intervene by Nissho Iwai, Bank of Pusan, Kingstate Oil and other creditors (appellees), the GREEN STAR's crew (appellees Park, et al.), and its mortgagee (appellee Korean Development Bank). The district court also denied Bank of Pusan's application for administrative expenses. Bank of Pusan and Nissho Iwai appeal from the denial for the application of administrative expenses.

II.

Appellants contend that jurisdiction on appeal is proper pursuant to 28 U.S.C. § 1292(a)(3). That section vests courts of appeals with jurisdiction of appeals from "interlocutory decrees of . . . district courts . . . determining the rights and liabilities of the parties to admiralty cases . . . ." 28 U.S.C. § 1292(a)(3). Appellants concede that the district court did not determine the merits of their claims against Kuk Je Shipping or the GREEN STAR.*fn1 Br. for appellant Bank of Pusan at 8, 14. They maintain, however, that "as a practical matter" the court's denial of the application to treat the expenses of unloading the steel as an administrative cost constitutes "a very real and final determination" of their rights to a share of the proceeds from the sale of the GREEN STAR sufficient for interlocutory appeal under section 1292(a)(3). Br. for appellant Bank of Pusan at 14. They say that the financial realities of this experience support their contention of finality: the sale realized only $540,000; the cost of unloading amounted to some $250,000; and, although theoretically they have a right to have their claims ultimately processed in due course, unless they succeed in declaring the unloading costs as an administrative expense, their claims will be worthless because of the priority of liens of the mortgagee and the ship's crew. Accordingly, they argue, under the peculiar facts of this case, the determination of the administrative expense question is in reality a final determination of the merits of their claims, and hence is appealable. We are impressed by this appealability argument.

A.

To be appealable under section 1292(a)(3), an order in admiralty need not determine all rights and liabilities of all parties. Bankers Trust Co. v. Bethlehem Steel Corp., 761 F.2d 943, 945 n.1 (3d Cir. 1985); see, e.g., Jones & Laughlin Steel, Inc. v. Mon River Towing, Inc., 772 F.2d 62, 64 n.1 (3d Cir. 1985) (where plaintiff brought suit against two defendants, dismissal of suit against one was appealable under section 1292(a)(3)). Case law indicates, however, that the order appealed from must conclusively determine the merits of a claim or defense. See Todd Shipyards Corp. v. Auto Transportation, S.A., 763 F.2d 745, 751 (5th Cir. 1985) (order appealable under section 1292(a)(3) where it determined rights and liabilities of the parties and calculated recoverable damages except for attorney's fees and costs); Bankers Trust Co., 761 F.2d at 945 n.1 (order appealable under section 1292(a)(3) where it denied motion to vacate earlier order entering judgment in favor of claimants and assessing damages, interest, etc.); Gulf Towing Co. v. Steam Tanker, Amoco New York, 648 F.2d 242, 244 (5th Cir. 1981) (order appealable under section 1292(a)(3) where it entered final judgment on plaintiff's claims but no on defendants' cross-claims).

Older cases from this court are more explicit. In In Re Bave, 314 F.2d 335, 336 (3d Cir. 1963), for example, we said that we lacked jurisdiction of an appeal from the district court's denial of a motion to discontinue a limitation proceeding because "neither the merits of the petition nor of appellant's defenses has been determined by the Order from which th[e] appeal is taken." See also Cummings v. Redeeriaktieb Transatlantic, 242 F.2d 275, 276 (3d Cir. 1957); United States v. The Lake George, 224 F.2d 117, 119 (3d Cir. 1955).

B.

As noted above, appellants concede that the district court did not adjudicate the precise merits of the underlying claim. Bank of Pusan, for example, states that it will pursue its damages claims against the GREEN STAR and Kuk Je Shipping in the pending district court proceedings, and "will seek its place in line" along with the other claimants. Br. for appellant Bank of Pusan at 14. But here we must pierce theory and look at reality. For although, in the abstract, appellants may ...


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