Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-01-07016/USCOURTS-caDC-01-07016-0/pdf.json

Nature of Suit Code: 120
Nature of Suit: Marine Contract Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 18, 2002 Decided July 2, 2002

No. 01-7016

Ned Chartering & Trading, Inc.,

Appellee

v.

Republic of Pakistan and

Ministry of Food and Agriculture,

Appellants

Appeal from the United States District Court

for the District of Columbia

(No. 98cv02626)

Nicholas H. Cobbs argued the cause and filed the briefs for

appellants.

Paul M. Tschirhart argued the cause for appellee. With

him on the brief was Heather M. Spring.

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Before: Edwards, Henderson and Garland, Circuit

Judges.

Opinion for the Court filed by Circuit Judge Garland.

Garland, Circuit Judge: Plaintiff Ned Chartering & Trading, Inc. brought this case against the Republic of Pakistan

and its Ministry of Food and Agriculture, contending that

Pakistan was required to pay it the proceeds of wheat shipments to which plaintiff was entitled as assignee of a maritime contract. The district court granted summary judgment

against Pakistan for $268,000 plus interest that Pakistan had

instead paid to the assignor of the contract. Pakistan contends that the district court erred in not delaying its ruling on

the motion for summary judgment in order to give it an

opportunity to take further discovery. Because the district

court did not abuse its discretion in ruling without extending

the discovery period, we affirm.

I

In 1993, the Republic of Pakistan entered into a maritime

contract, known as a "charter party," with Horsebridge Enterprises, Ltd. of Gibraltar for the shipment of wheat from

Turkey to Pakistan. Ned Chartering, a Washington, D.C.

corporation, acted as shipbroker and loaned Horsebridge the

money to charter the vessels that were to transport the

wheat. The loan agreement contained an assignment, whereby in exchange for the loan it received from Ned Chartering,

Horsebridge assigned its right to the proceeds of the charter

party to Ned. Pakistan was to make its charter party

payments through a letter of credit drawn in favor of Ned.

Pursuant to the charter party and assignment, as the wheat

arrived Pakistan paid 90% of the amount it owed Horsebridge

directly to Ned Chartering. Pakistan retained 10%, pending

"necessary adjustment" for demurrage and additional freight

charges. Rider Clauses to Charter Party at 6 (J.A. at 55).

Before final payment was made, disputes arose between

Pakistan and Horsebridge concerning the amount of the

adjustments, and between Horsebridge and Ned Chartering

concerning the amounts due between them. Both Ned Chartering and Horsebridge pressed Pakistan for payment, and

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Horsebridge assured Pakistan that it would indemnify the

Republic against any claims made by Ned. Ultimately, Horsebridge persuaded Pakistan to pay it the amount still owed

for the final delivery of the wheat, which totaled $268,000.

By the time Pakistan paid Horsebridge, on or about October

31, 1995, the letter of credit had expired.

Ned Chartering initially sued Horsebridge, contending that

the latter owed it for payment due under the loan agreement.

Although Ned prevailed, Horsebridge turned out to be judgment proof. Ned then turned to Pakistan. On October 29,

1998, it sued Pakistan and its Ministry of Food and Agriculture for failing to pay it the final installment under the

assignment agreement. Pakistan, in turn, filed a third-party

complaint against Horsebridge. Pakistan, however, was unable to serve process on Horsebridge, and the district court

struck the third-party complaint on March 21, 2000. In the

meantime, the parties conducted some discovery, including

the exchange of interrogatories and document requests.

On May 11, 2000, Ned Chartering filed a motion for

summary judgment against Pakistan. Pakistan opposed summary judgment on two grounds: (1) that by the time the final

proceeds were paid, the assignment was void because the

letter of credit had expired; and (2) that it needed time to

conduct further discovery. The district court rejected the

first contention because, under the unambiguous language of

the assignment agreement, Pakistan's obligation to pay was

continuing and the letter of credit was only one means of

making payment. The court rejected the second contention

for two reasons: Pakistan had "already had sufficient discovery," and had "failed to demonstrate how the further discovery [it] request[ed] would produce any issues of material

fact." Ned Chartering & Trading, Inc. v. Republic of Pakistan, No. 98-CV-2626, mem. op. at 8 (J.A. at 176) (D.D.C.

Dec. 4, 2000). Accordingly, the court granted summary judgment in favor of Ned Chartering.

II

In this court, Pakistan has abandoned its argument based

on the expiration of the letter of credit, and relies instead on

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its second contention, that the district court should not have

ruled against it without permitting time for further discovery.1 We review such claims solely for abuse of discretion by

the district court. See, e.g., Carey Canada, Inc. v. Columbia

Cas. Co., 940 F.2d 1548, 1559 (D.C. Cir. 1991). We conclude

that either of the two reasons given by the district court for

denying further discovery was sufficient to justify its decision,

and that neither represents an abuse of discretion.

A

The district court concluded that the more than eighteen

months that passed between the date Ned Chartering filed its

complaint and the date it filed its motion for summary

judgment were sufficient for the parties to complete discovery. Although summary judgment should only be entered

"after adequate time for discovery," Celotex Corp. v. Catrett,

477 U.S. 317, 322 (1986), we grant district courts great

latitude in determining how much time is adequate, and would

be hard pressed to find that limiting discovery to eighteen

months was an abuse of discretion in this case. Pakistan

sought an extension of time "in order to identify any defenses

Horsebridge may have had against" Ned Chartering. Ned

Chartering, mem. op. at 8 (J.A. at 176). "Specifically," Pakistan "asserted a need to depose the president of [Ned Chartering], Nadeem Ikramullah." Appellants' Br. at 14. Pakistan offers no reason to believe that it should have taken

more than eighteen months to accomplish that kind of discovery. See Naartex Consulting Corp. v. Watt, 722 F.2d 779,

788 (D.C. Cir. 1983) (holding that a district court does not

abuse its discretion in denying permission to conduct additional discovery when the party has had ample opportunity to

take discovery).

__________

1 Pakistan also contends that the district court should not have

decided the summary judgment motion without holding an oral

hearing. The decision to hold an oral hearing is committed to "the

discretion of the court," D.D.C. Local Rule 7.1(f); see United States

v. BCCI Holdings (Luxembourg), S.A., 961 F. Supp. 287, 292 n.7

(D.D.C. 1997), and we discern no abuse of discretion here.

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Pakistan does note that, at the time Ned Chartering moved

for summary judgment, the court had not yet set a discovery

deadline. The absence of a deadline, however, was not a

license to delay completion until one was set. Moreover, on

April 20, 2000--weeks before the filing of the motion for

summary judgment--the parties filed a joint report pursuant

to Local Rule 16.3, which requires counsel to meet and

discuss "a date for completion of all discovery." That joint

report established a schedule for the filing of the summary

judgment motion: Ned Chartering was to file for summary

judgment within the next two weeks, Pakistan was to have

thirty days to file an opposition, and Ned was to have fifteen

days in which to reply. See Joint Rep. of the Parties,

Appellee's Br. app. 2 at 2. The report declared that "[t]hese

dates are mutually acceptable to the parties," and recited that

"both parties have already taken some discovery and ... no

material facts remain in dispute." Id. at 2-3. The court

adhered to this schedule, and Pakistan therefore has no cause

for complaint.

On appeal, Pakistan contends that, because "attorneys are

not clairvoyant," it could not foresee the discovery it would

need until it saw Ned Chartering's summary judgment motion. Appellants' Reply Br. at 10. But Pakistan did not

mention the limits of its attorneys' predictive powers when it

agreed to the schedule of the joint report, does not now cite

anything in Ned's motion that its attorneys did not anticipate,

and suggests no reason why the relevance of "any defenses

that Horsebridge may have had against the plaintiff" was not

as apparent before Ned filed as it was afterwards.

Pakistan also notes that the district court did not strike its

third-party complaint against Horsebridge until March 21,

2000, and contends that "[i]t made no sense for Pakistan to

conduct discovery concerning [Ned Chartering's] transactions

with Horsebridge while there remained a prospect that Horsebridge would become a party to the action." Appellants'

Br. at 15. Pakistan does not explain why it "made no sense"

to conduct that discovery before learning whether it would be

able to join Horsebridge. If Ned Chartering's transactions

with Horsebridge afforded Pakistan a defense to Ned's action

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on the assignment, presumably they did so regardless of

whether Horsebridge was a third-party defendant. And even

if conducting discovery before the court ruled on the thirdparty complaint did not make sense, Pakistan does not explain why it did not initiate discovery during the six weeks

that passed between the time the court struck the third-party

complaint and the date Ned Chartering filed for summary

judgment--nor why it failed to seek more time in the joint

report.

For the foregoing reasons, we conclude that the district

court did not abuse its discretion in concluding that Pakistan

had already had sufficient time to complete the discovery it

needed to defend against plaintiff's summary judgment motion.

B

The district court also denied Pakistan's request for a

discovery extension on the ground that it had "failed to

demonstrate how the further discovery [it] request[ed] would

produce any issues of material fact." That is certainly an

appropriate ground upon which to deny a discovery request.

See Moore v. United States, 213 F.3d 705, 710 n. 3 (D.C. Cir.

2000) (holding that "a district court may deny discovery

requests when additional facts are not necessary to resolve

the summary judgment motion"); cf. Fed. R. Civ. P. 56(f)

(providing that a court "may order a continuance to permit

... discovery to be had," if it should "appear from the

affidavits of a party opposing the motion that the party

cannot ... present by affidavit facts essential to justify the

party's opposition"). And we agree that it was applicable

here.

Under District of Columbia law, the assignment of rights

under a contract creates an interest in the assignee, and any

party that previously had an obligation to the assignor under

the contract thereafter becomes obligated to the assignee and

liable to it for failure to fulfill that obligation. See District of

Columbia v. Thomas Funding Corp., 593 A.2d 1030, 1033-34

(D.C. 1991); see also Restatement (Second) of Contracts

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s 317 (1979). Accordingly, Ned Chartering contended that,

because Pakistan was the obligor under the charter party,

Horsebridge's assignment of the proceeds of that contract to

Ned obligated Pakistan to pay it those proceeds. At issue

here is Pakistan's request for discovery related to "any

defenses Horsebridge may have had against" Ned Chartering. Ned Chartering, mem. op. at 8 (J.A. at 176). As the

district court noted, Pakistan sought this discovery on "the

assumption that [it] would be able to utilize such defenses

against" Ned as well. Id. at 8-9. But Pakistan offered the

court no grounds for concluding that this assumption was

correct. Id. at 9.

In support of the assumption that it could assert against

Ned Chartering any defenses Horsebridge had against Ned,

Pakistan cited a maxim of District of Columbia contract law:

"It is well settled that an assignee of a non-negotiable chose

in action acquires no rights superior to those held by his

assignor and is generally subject to any setoff available to the

obligor against the assignor." United States Nat'l Bank v.

Madison Nat'l Bank, 355 F. Supp. 165, 169 (D.D.C. 1973).

But as the district court concluded, while this maxim is

supported by the cases Pakistan cited,2 it "lends no support to

the defendant['s] arguments." Ned Chartering, mem. op. at 9

(J.A. at 177). That is so because in this particular play the

parties' roles are as follows: Ned Chartering is the assignee,

Horsebridge the assignor, and Pakistan the obligor. Hence,

the above maxim establishes only that Ned Chartering (the

assignee) took no rights against Pakistan (the obligor) superior to those held by Horsebridge (the assignor), which means

that Ned is generally subject to any defense available to

Pakistan against Horsebridge. See Madison Nat'l Bank, 355

F. Supp. at 169. Although this would make Pakistan's

defenses against Horsebridge relevant, Pakistan did not seek

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2 See Opp'n to Pl.'s Mot. for Summ. J. at 7 (J.A. at 121) (citing

Rittenberg v. Donohoe Const. Co., 426 A.2d 338, 341 (D.C. 1981);

General Elec. Credit Corp. v. Security Bank, 244 A.2d 920, 923

(D.C. 1968); Hudson Supply & Equip. Co. v. Home Factors Corp.,

210 A.2d 837, 838 (D.C. 1965); United States v. Griffin, 707 F.2d

1477 (D.C. Cir. 1983)).

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discovery of such defenses--presumably because it already

knew its own defenses. However, as the district court rightly

concluded, neither the maxim cited by Pakistan nor any of the

cited cases made relevant the discovery of Horsebridge's

defenses--the only discovery that Pakistan claimed to be

seeking.

On appeal, Pakistan argues that the district court erred

because it erroneously construed the assignment of the charter party as "an absolute assignment," when it actually "functioned as a security interest" for the underlying loan from

Ned Chartering to Horsebridge. Appellants' Br. at 11. On

this theory, Pakistan contends that it was relevant to discover

whether Horsebridge had paid Ned in full for the loan. If

Horsebridge had paid Ned, that payment assertedly would

have redeemed Horsebridge's collateral and left Ned without

an interest in the proceeds of the charter party. Id. at 12

(citing D.C. Code s 28:9-506; Applied Cos. v. United States,

144 F.3d 1470, 1477 (Fed. Cir. 1998)).

As might be expected, Ned Chartering disputes Pakistan's

factual assertion, contending that the assignment was in fact

"an absolute transfer of property rights," rather than a mere

security interest. Appellee's Br. at 10 (quoting the assignment agreement, J.A. at 78, as transferring "all right, title

and interest" in all proceeds payable to Horsebridge under

the charter party). We need not resolve this dispute. Pakistan never asserted the "security interest" theory before the

district court or cited any precedent that mentioned it, and

"[i]t is well settled that issues and legal theories not asserted

at the District Court level ordinarily will not be heard on

appeal." United States v. TDC Mgmt. Corp., 288 F.3d 421,

425 (D.C. Cir. 2002) (quoting District of Columbia v. Air

Florida, Inc., 750 F.2d 1077, 1084-85 (D.C. Cir. 1984)). That

rule is particularly apt when reviewing a district court's

determination that the discovery sought by a party is not

relevant to the merits of the action. It can hardly be an

abuse of discretion for a court to find requested discovery

irrelevant when the only grounds upon which it might be

relevant are not asserted until long after the court rules.

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Pakistan insists that its security interest theory is not

really a new argument, but instead was implicit in the arguments it made before the district court. It notes, for example, that it described the assignment of the charter party

proceeds as "a security interest" in its opposition to Ned

Chartering's motion for summary judgment. Opp'n to Pl.'s

Mot. for Summ. J. at 3 (J.A. at 117). Although Pakistan did

include that description, it did so only in the "background"

section of the pleading. Pakistan attached no legal significance to the description, and made no argument relating to it,

in the sections devoted to explaining why the court should

deny summary judgment or at least postpone it pending

further discovery. There was no reason for the district court,

reading that description, to attach a significance to it that

Pakistan apparently did not itself discern.

While conceding that the "authorities cited to the district

court to support Pakistan's position did not directly address

the limitations that the law imposes on assignments that are

security interests," Appellants' Reply Br. at 4, Pakistan also

contends that its security interest theory is really only another way of expressing the legal theory upon which it did rely in

the district court: that an assignee "acquires no rights superior to those held by his assignor." Madison Nat'l Bank, 355

F. Supp. at 169. If discovery showed that Horsebridge had

already paid off its debt to Ned Chartering, Pakistan argues,

then granting judgment against the Republic would mean

that Ned "was entitled to be paid twice on the same debt."

And that would mean that Ned had acquired rights "that

were superior to those of its assignor." Appellants' Reply Br.

at 4.

As with the security interest theory, however, this theory

suffers from the fact that it was not raised below. Pakistan's

opposition to summary judgment contains no mention of a

claim that granting judgment for Ned Chartering would be

equivalent to holding that Ned was entitled "to be paid twice

on the same debt," and that such a holding would grant Ned

rights superior to those of Horsebridge. And even if Pakistan had made the argument, Madison's maxim would be of

no assistance to it. Madison and the other cases cited by

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Pakistan hold only that the assignee acquires no rights

against the obligor superior to those held by the assignor.

Even if Ned had previously been paid by Horsebridge, execution of the judgment in this case would not mean that it had

been "paid twice on the same debt" by Pakistan.

Finally, Pakistan cites cases that it contends support the

proposition that a court must apply the relevant law regardless of whether the parties cite it. It is true that "[w]hen an

issue or claim is properly before the court, the court is not

limited to the particular legal theories advanced by the

parties, but rather retains the independent power to identify

and apply the proposed construction of governing law."

United States Nat'l Bank v. Independent Ins. Agents, 508

U.S. 439, 446 (1993) (quoting Kamen v. Kemper Fin. Servs.,

Inc., 500 U.S. 90, 99 (1991)) (emphasis added). But while a

court may draw upon its own knowledge of applicable precedents in ruling on a motion, it is not required to unearth

theories and precedents not cited by a party in order to

determine whether that party's discovery requests are relevant. Bringing those precedents and theories to the attention of the district judge is the job of the party's attorneys.

Because Pakistan gave the district court no reason to

believe that the discovery it sought was legally relevant to its

defense, and because the only possibly relevant reason it now

offers was not presented to that court, the denial of time for

further discovery did not constitute an abuse of discretion.

III

The task of district courts is hard enough as it is. We will

not make it doubly so by second-guessing their reasonable

scheduling decisions, or requiring them to discern the relevance of parties' requests based on arguments never made

supported by precedents never cited. The judgment of the

district court, granting the plaintiff's motion for summary

judgment, is

Affirmed.

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