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Kristensons Petroleum, Inc. v. Explorer Maritime Cruises, LLC

United States District Court, D. New Jersey

January 22, 2018




         Before this Court are: (1) Defendant Travel Dynamics International, LTD's (“TDI”) Motion for Summary Judgment (ECF No. 47) and (2) Plaintiff Kristensons Petroleum, Inc.'s (“KPI”) Cross-Motion for Summary Judgment (ECF No. 48). Both motions are opposed. (ECF Nos. 48, 49, and 50.) Pursuant to Federal Rule of Civil Procedure 78(b), the Court did not hear oral argument. For the reasons set forth below, both Motions for Summary Judgment are DENIED.

         I. Background

         A. The Charter Agreement

         Aquarius Cruises (“Aquarius”) was a Delaware LLC formed in March 2011 to purchase and own the vessel M/V Yorktown (“Yorktown”). (TDI's Statement of Facts (ECF No. 47-1) ¶ 1 and KPI's Response to TDI's Statement of Facts (ECF No. 48-16) ¶ 1.) In August 2011, Aquarius purchased the Yorktown. (ECF No. 47-1 ¶ 1 and ECF No. 48-16 ¶ 1.) On November 16, 2011, Aquarius was renamed Explorer Maritime Cruises LLC (“EMC”). (ECF No. 47-1 ¶ 2 and ECF No. 48-16 ¶ 2.) Explorer was formed by brothers George and Vasos Papagapitos, both of whom have a 25% interest in the company. (KPI's Counter Statement of Facts (ECF No. 48-17) ¶ 19 and TDI's Response to KPI's Counter Statement of Facts (ECF No. 49-1) ¶ 19.) Their children own the remaining 50%. (ECF No. 48-17 ¶ 19 and ECF No. 49-1 ¶ 19.)

         TDI is a New York corporation also formed by the brothers in 1969. (ECF No. 47-1 ¶ 3 and ECF No. 48-16 ¶ 3.) George is the President of TDI and Vasos is the Vice-President of TDI. (ECF No. 47-1 ¶ 3 and ECF No. 48-16 ¶ 3.) From 1969 to 2014, TDI organized, marketed and operated educational cruises aboard small passenger vessels. (ECF No. 47-1 ¶ 4 and ECF No. 48-16 ¶ 4.)[1] In December 2011, TDI chartered the Yorktown from EMC on a time charter basis pursuant to a Cruise Charter Agreement (“Charter Agreement”). (ECF No. 47-1 ¶ 5; ECF No. 48-16 ¶ 5; and Charter Agreement (ECF No. 47-31) at 1 of 10.) The Charter Agreement stated, in relevant part:

c) The following operational costs and expenses shall be borne by the Owner:
(i) A full complement of officers and crewmembers, as to the Vessel's Technical Management and Hotel Management services.
(ii) All port charges and embarkation taxes related fees.
(iii) All insurance premiums for the policies and coverage required of Owner under the terms of this Charter Agreement.
(iv) All of the Vessel's operational expenses including, but not limited to, crew wages and overtime, fuels, costs for repairs and maintenance, all stores, provisions and other consumables, and other items incidental to the efficient management and operation of a ship of Vessel's sixe and classification.

         (ECF No. 47-1 ¶ 6; ECF No. 48-16 ¶ 6; and ECF No. 47-31 at 3 of 10 to 4 of 10.)[2] During the term of the Charter Agreement period, TDI, as the charterer, was required “to pay the Owner for the hiring of the Vessel the sum of Twenty-Eight Thousand Five Hundred ($28, 500.00) per day.”[3](ECF No. 47-1 ¶ 7; ECF No. 48-16 ¶ 7; ECF No. 47-31 at 3 of 10.) The Charter Agreement does not mention KPI or create any relationship between KPI and either or both EMC and/or TDI. (ECF No. 48-16 ¶¶ 5-7.) The Charter Agreement was entered into after the inception of KPI's business relationship with the Yorktown. (ECF No. 48-17 ¶ 17 and ECF No. 49-1 ¶ 17.) KPI was never provided a copy of the Charter Agreement until the inception of this lawsuit. (ECF No. 48-17 ¶ 20 and ECF No. 49-1 ¶ 20.) The Charter Agreement was modified on April 12, 2012. (Amended Charter Agreement (ECF No. 48-5).)[4]

         B. KPI Supplies Fuel to the Yorktown

         KPI is a worldwide fuel bunkering service company, which buys and sells marine fuels to masters, owners, charterers, operators, and managers of vessels and barges. (ECF No. 47-1 ¶ 10; ECF No. 48-16 ¶ 10; and ECF No. 48-17 ¶ 1.) In 2011, Marissa McGuire (“McGuire”), a trader at KPI, contacted Vasos, the Vice President of TDI and Co-President of EMC, to offer KPI's services to the Yorktown. (ECF No. 47-1 ¶ 11 and ECF No. 48-16 ¶ 11.) A Google search for “vessels and companies” produced TDI, and therefore, McGuire contacted TDI to attempt to get their business. (Marissa McGuire Dep. (ECF No. 47-6) at 31:9-18.) TDI put her in contact with Vasos, who stated he was the person responsible for making decisions regarding the fueling of the Yorktown. (Id.)According to McGuire, when she contacted Vasos, she knew he was the owner of TDI and that he owned the Yorktown under “a different legal entity, but [] thought it was all under Vasos.” (Id. at 30:4-6.) She was also aware Vasos was the owner of EMC and that EMC owned the Yorktown. (Id. at 35:25-36:4, 29:10-13.) McGuire knew EMC and TDI were separate entities but believed Vasos was the one behind it all and that all entities were under the care of TDI. (Id. at 36:6-9, 69:12-16.) Ian Sharpe, the former Director of Finance and current Chief Accountant of KPI, also knew EMC was the owner of the Yorktown and that EMC and TDI were separate entities. (ECF No. 47-1 ¶ 13 and Ian Sharpe Dep. (ECF No. 47-12) at 19:17-23, 25:23-26:4, 29:18-30:2.)

         Typically, KPI performs due diligence before providing bunkering services to a vessel to ensure the companies with which it is dealing are financial sound. (ECF No. 47-12 at 34:22-35:6.)Because KPI grants unsecured credit and only has a lien against the vessel, it tries to find out what it can about a company and does not “grant[] credit lightly.” (Id. at 35:1-6.) Therefore, KPI “cull[s] vessel[] reports from the Lloyd's List, usually off some registry, so [it] would find out who owns the vessel, . . . and try to do some research to make sure [it] can tie the companies together.” (Id. ECF No. 47-12 at 33:11-16.) In addition, KPI

would ask for financial statements, we would ask for any background information they would give us. We would do typical internet searches. We would search-there are number of industry related services, Lloyd's List is one of them.
You know, we try to find out as much as we can, you know, any news articles, any marketing materials. We talk to the client, find out, you know, who they are, what they know. We would try to find ...

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