United States District Court, E.D. Pennsylvania
For WORLD IMPORTS, LTD., WORLD IMPORTS CHICAGO, LLC, WORLD IMPORTS SOUTH, LLC, 11000 LLC, Plaintiffs: DAVID L. BRAVERMAN, JOHN E. KASKEY, LEAD ATTORNEYS, BRAVERMAN KASKEY PC, PHILADELPHIA, PA; MICHELLE S. WALKER, LEAD ATTORNEY, WALKER LAW GROUP LLC, CONSHOHOCKEN, PA.
For OEC GROUP NEW YORK, Appellant, Defendant: BRENDAN COLLINS, LEAD ATTORNEY, PRO HAC VICE, GKG LAW PC, WASHINGTON, DC; DEAN E. WEISGOLD, LEAD ATTORNEY, DEAN WEISGOLD, PC, PHILADELPHIA, PA.
For WORLD IMPORTS, LTD., Debtor-in-Possess: JOHN E. KASKEY, LEAD ATTORNEY, BRAVERMAN KASKEY PC, PHILADELPHIA, PA.
GEORGE M. CONWAY, Trustee, Pro se, PHILADELPHIA, PA.
Hon. Petrese B. Tucker, C.J.
Presently, before this Court is an appeal from a July 25, 2013 Order entered bye the Honorable Stephen Raslavich, United States Bankruptcy Judge for the Eastern District of Pennsylvania, granting the Complaint for Turnover filed by Appellees World Imports, Ltd. (" Debtors" ). Upon consideration of the parties' briefs and exhibits, this Court affirms the judgment of the Bankruptcy Court.
Appellant OEC Group New York (" OEC" ) is a non-vessel operating common carrier (" NVOCC" ) that internationally transports merchandise for the Debtors by the sea. The Debtors are wholesale purchasers of furniture. OEC arranges direct shipping to the Debtors' warehouse, pick up of goods at Debtors' warehouse by Debtors' domestic carrier, or shipment of the goods to Debtors' customers throughout the United States. (See Appellant's Br. at 3, Doc. 3).
On July 3, 2013, the Debtors petitioned for relief under Chapter 11 of the Bankruptcy Code. Upon doing so, the Debtors sought to compel the turnover of goods in OEC's possession. At that time, OEC held claims against the Debtors for freight, storage, and various shipping charges relating to the Debtors' goods in the amount of $1,452,956. Of that amount, $458,251 consisted of charges relating to goods in OEC's possession at the time of the bankruptcy petition (the " Landed Goods" ); the remaining $994,705 consisted of freight and related charges associated with goods OEC previously delivered and released to the Debtors (the " Prepetition Goods" ). OEC also held claims for goods in transit, which had not yet arrived at the time (" Goods in Transit" ). OEC claims that the value of the goods in its possession at the time of the Bankruptcy Court Order was approximately $1,926,363. (See id. at 6). The Debtors offered to pay to OEC freight charges on the Landed Goods of approximately $120,000 for OEC's turnover of the goods in its possession, but OEC refused this offer.
On July 12, 2013, OEC filed a Motion to Lift Stay in the bankruptcy action, asserting that it was a secured creditor with a possessory lien on goods. OEC claimed that it was entitled to refuse to release the Landed Goods unless and until the Debtors also paid for the Prepetition Goods. OEC argued that it had a maritime lien on the goods in its possession that extended to the Prepetition Goods because the parties agreed to extend the lien on all of the Debtors' property for all amounts due OEC. To support this proposition, OEC relied on its tariff and the terms and conditions
of its bills of lading, invoices, and credit agreement with the Debtors. The Debtors maintained that OEC held a lien on the Landed Goods and the Goods in Transit, but not the Prepetition Goods because OEC had already released the Prepetition Goods without requiring payment.
On July 18, 2013, the Debtors filed an adversary proceeding against OEC seeking, inter alia, turnover of the goods in OEC's possession. The Debtors argued that OEC did not have a maritime lien or common carrier lien on goods to secure the Prepetition Goods. On July 25, 2013, the Bankruptcy Court granted the Debtors relief and ordered OEC to turn over the goods in its possession upon the Debtors' payment of the $120,000 in freight charges for the Landed Goods. The Bankruptcy Court also held that OEC did not possess a maritime lien for the goods in its possession for the Prepetition Goods. The Bankruptcy Court issued a written Opinion on August 14, 2013 in support of its July 25, 2013 Order. In compliance with the Bankruptcy Court Order, the Debtors remitted the $120,000 freight charges to OEC and OEC subsequently released the goods in its possession to the Debtors.
On August 1, 2013, OEC appealed the Bankruptcy Court's Order to this Court requesting that this Court reverse the Bankruptcy Court's decision and order the Debtors to pay to OEC all amounts owed for transportation services. Alternatively, OEC requests that this Court enter an Order providing OEC with replacement liens on the Debtors' assets in the amount of $1,926,363, the amount at which OEC claims the goods in its possession at the time of the Bankruptcy Court Order were valued. OEC raises two issues on appeal: 1) " Whether express provisions in maritime contracts giving the transportation provider liens on goods in its possession for freight charges on those goods, as well as for unpaid charges on ...