Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_08-cv-00691/USCOURTS-alsd-1_08-cv-00691-3/pdf.json

Nature of Suit Code: 340
Nature of Suit: Marine Personal Injury
Cause of Action: 28:1333 Marine Tort/Collision/Allision

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IN THE UNITED STATES DISTRICT COURT 

 FOR THE SOUTHERN DISTRICT OF ALABAMA 

 SOUTHERN DIVISION 

CAYTRANS BBC, LLC, )

Plaintiff, ) 

 ) 

v. ) CIVIL ACTION 08-0691-WS-B 

 ) 

EQUIPMENT RENTAL AND ) 

CONTRACTORS CORP., ) 

Defendant/Counterclaimant/ )

Third-Party Plaintiff, ) 

 ) 

v. ) 

 ) 

CAYTRANS BBC, LLC, ) 

Counterclaim Defendant, ) 

 )

and TRI-STATE MARITIME SERVICES, ) 

Third-Party Defendant. )

ORDER

This matter comes before the Court on legal memoranda (docs. 92, 95) filed by plaintiff 

C.V. Scheepvaartonderneming Aramis (“C.V.S. Aramis”) and defendants Caytrans BBC, LLC 

(“Caytrans”) and BBC Chartering & Logistic GmbH & Co. KG (“BBC Chartering”). These 

memoranda address the question of whether the stay of arbitrable claims in this case should be 

expanded to encompass nonarbitrable claims, as well. That issue is now ripe for disposition. 

I. Relevant Background.

 On August 23, 2008, an accident occurred during the loading of cargo on board the M/V 

BBC ARAMIS at the Alabama State Docks in Mobile, Alabama. In particular, a crane laden 

with cargo collapsed, as a result of which both cargo and crane boom struck and damaged the 

vessel. The crane itself was also damaged. From this incident has emerged a tangle of 

crisscrossing claims, as nearly every entity involved in or affected by the accident has sued (and 

has been sued by) every other such entity in these consolidated proceedings. Litigants include 

C.V.S. Aramis (the owner of the vessel), BBC Chartering (which had entered into a time charter 

in October 2004 to lease the vessel from C.V.S. Aramis), Caytrans (which had sub-leased the 

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vessel from BBC Chartering via time charter in June 2008), Equipment Rental and Contractors 

Corp. (which furnished the crane utilized in the cargo-loading process), and Tri-State Maritime 

Services, Inc. (which provided stevedoring services during the cargo-loading process). 

 On April 16, 2010, the undersigned entered an Order (doc. 86) finding, inter alia, that all 

of C.V.S. Aramis’s claims against BBC Chartering were subject to a mandatory arbitration 

provision in the October 2004 time charter, and that all of C.V.S. Aramis’s claims against 

Caytrans were subject to a mandatory arbitration provision in the June 2008 time charter. On 

that basis, the April 16 Order stayed C.V.S. Aramis’s claims against Caytrans and BBC 

Chartering pending arbitration. As for the many remaining nonarbitrable claims, the April 16 

Order recognized that this Court has discretion to stay them, as well. See, e.g., Klay v. All 

Defendants, 389 F.3d 1191, 1204 (11th Cir. 2004) (“When confronted with litigants advancing 

both arbitrable and nonarbitrable claims, however, courts have discretion to stay nonarbitrable 

claims.”). In light of that authority, all parties were ordered “to file memoranda of law setting 

forth their positions as to whether the Court should exercise its discretion to stay some or all of 

the nonarbitrable claims in this action, pending the outcome of the arbitral proceedings.” (Doc. 

86, at 14.) In response, C.V.S. Aramis filed a memorandum arguing that the nonarbitrable 

claims should be stayed, while Caytrans and BBC Chartering filed a memorandum championing 

the opposite result.1

II. Analysis.

 As noted, it is well established in this Circuit that, in cases where both arbitrable and 

nonarbitrable claims are present, district courts have discretion to stay the latter pending 

arbitration of the former. That said, “courts generally refuse to stay proceedings of nonarbitrable 

claims when it is feasible to proceed with the litigation.” Klay, 389 F.3d at 1204; see also Dean 

Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 225, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985) (White, 

J., concurring) (where lawsuit involves both arbitrable and nonarbitrable claims, “the heavy 

presumption should be that the arbitration and the lawsuit will each proceed in its normal 

course”); Axa Equitable Life Ins. Co. v. Infinity Financial Group, LLC, 608 F. Supp.2d 1330, 

 1

 No other parties elected to respond to the briefing directive set forth in the April 

16 Order. Accordingly, Equipment Rental and Tri-State have waived their opportunity to be 

heard on this scope-of-stay issue. 

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1332 (S.D. Fla. 2009) (declining to stay nonarbitrable claims where “it is entirely feasible to 

proceed with parallel litigation against the insured and trust defendants while arbitration is 

pending with respect to the broker defendants” and “it would be inefficient to stay the outcome 

of the non-arbitrable rescission claims pending arbitration of the claims against the brokers”). 

“Crucial to this determination is whether arbitrable claims predominate or whether the outcome 

of the nonarbitrable claims will depend upon the arbitrator’s decision.” Klay, 389 F.3d at 1204.2

 In applying the Klay standard, C.V.S. Aramis and Caytrans / BBC Chartering reach 

markedly divergent conclusions. C.V.S. Aramis asserts that “[n]umerous issues that the 

arbitrators will decide ... pre-dominate all parties’ claims, would be duplicative, and could result 

in inconsistent rulings.” (Doc. 95, at 4.) By contrast, Caytrans and BBC Chartering insist that 

the various nonarbitrable claims (including those involving Equipment Rental and Tri-State) are 

not dependent on the outcome of arbitration, but that the reverse is true, at least as a practical 

matter. According to Caytrans and BBC Chartering, “there is no benefit to staying the 

nonarbitrable claims,” and proceeding with the nonarbitrable claims “will likely resolve the 

arbitrable claims, and obviate the need for additional and expensive litigation.” (Doc. 92, at 5.) 

 2

 See also Chelsea Family Pharmacy, PLLC v. Medco Health Solutions, Inc., 567 

F.3d 1191, 1200 (10th Cir. 2009) (“Stay of the entire proceeding is appropriate when resolution 

of the arbitrable claim will have a preclusive effect on the nonarbitrable claim or when the 

arbitrable claims predominate the lawsuit and the nonarbitrable claims are of questionable 

merit.”) (citation and internal quotation marks omitted); Volkswagen of America, Inc. v. Sud’s of 

Peoria, Inc., 474 F.3d 966, 972 (7th Cir. 2007) (pointing out that “district courts actually may 

prefer to stay the balance of the case in the hope that the arbitration might help resolve, or at least 

shed some light on, the issues remaining in federal court”); Narragansett Elec. Co. v. 

Constellation Energy Commodities Group, Inc., 563 F. Supp.2d 325, 331 (D.R.I. 2008) (failure 

to stay entire proceeding may be error where partial stay risks inconsistent rulings because 

arbitration is likely to resolve issues material to lawsuit); Neely v. Bechtel Corp., 2008 WL 

2120085, *5 (M.D. Ala. May 20, 2008) (denying request to stay nonarbitrable claims where 

“plaintiff is not predominantly advancing arbitrable claims” and plaintiff’s nonarbitrable claims 

“do not depend upon the outcome of” the others); Petrik v. Reliant Pharmaceuticals, Inc., 2007 

WL 3283170, *3 (M.D. Fla. Nov. 5, 2007) (staying entire case where Swiss arbitrators were 

better equipped than court to interpret license agreement under Swiss law, and where arbitration 

ruling might lead to conclusion that nonarbitrable claims “would necessarily fail”); International 

Fidelity Ins. Co. v. BMC Contractors, Inc., 2007 WL 128813, *3 (M.D. Ga. Jan. 12, 2007) 

(refusing to stay nonarbitrable claims because arbitration “will not result in duplicative 

proceedings and will not permit a decision in either proceeding to have preclusive effect in the 

other” inasmuch as the claims were separate and distinct). 

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 After careful review, the Court is of the opinion that Caytrans and BBC Chartering have 

the better argument. Of paramount importance to this determination is the relationship between 

the arbitrable and nonarbitrable claims. The matters that have been referred to arbitration 

include C.V.S. Aramis’s claims against the vessel’s time charterers, Caytrans and BBC 

Chartering, wherein C.V.S. Aramis alleges, in part, the following: (a) BBC Chartering and 

Caytrans signed contracts promising to pay for “any and all damages to the Vessel caused solely 

by the stevedores” and for “damages done to the vessel caused by stevedores or other Charterers’ 

servants,” then breached those promises by failing to pay C.V.S. Aramis for the damage to the 

vessel; and (b) BBC Chartering and Caytrans negligently hired Equipment Rental and Tri-State, 

negligently failed to supervise loading operations, and engaged in “other acts of negligence” that 

caused damage to the vessel. (Doc. 74, at 5-7.) By contrast, the claims that have not been 

referred to arbitration include, among others, the following: (a) Caytrans’ claims that Equipment 

Rental negligently operated or maintained the crane, or failed to supply a proper crane or 

competent crew; (b) Caytrans’ claims that Tri-State failed to provide reasonably safe cargoloading services and failed to exercise ordinary care and diligence in loading the cargo; (c) 

C.V.S. Aramis’s claims that Equipment Rental and Tri-State caused the accident by their 

negligence, breach of warranties of workmanlike performance, and so on; (d) Equipment 

Rental’s claims that Caytrans’ own negligence and its failure to provide assistance in the vesselloading process proximately caused the crane accident; (e) Equipment Rental’s claims that 

C.V.S. Aramis negligently caused the crane accident by improperly directing the loading of 

cargo, failing to turn over the vessel in a reasonably safe condition, and failing to warn of 

hazards; and (f) Equipment Rental and Tri-State’s claims against each other on various theories, 

including indemnity and contribution. 

 Without a doubt, the nonarbitrable claims hinge to a large degree on the question of 

whose acts or omissions caused the crane accident that damaged the M/V BBC ARAMIS. It is 

not at all clear to the Court, however, that the arbitrators will necessarily provide a definitive 

answer to that question. To the contrary, it is probable that the arbitration proceedings will focus 

not on who was at fault in the accident, but on the relevant contractual provisions in the time 

charters and whether those contracts obligate Caytrans and/or BBC Chartering to reimburse 

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C.V.S. Aramis for damage to the vessel, irrespective of who caused that damage.3

 C.V.S. 

Aramis’s position that arbitrable issues predominate apparently follows from an assumption that 

the arbitrators must decide which party or parties caused the accident; however, C.V.S. Aramis 

fails to explain why that assumption is warranted. Far from the arbitrators necessarily answering 

the question of who bears fault for the accident, as C.V.S. Aramis contends, it appears unlikely 

that they will do so, based on the particulars of the claims that have been referred to arbitration. 

In fact, given the nature of the arbitrable claims (and the primacy in those claims of C.V.S. 

Aramis’s contract-based theory of liability against Caytrans and BBC Chartering), the Court is 

hard-pressed to foresee a likely scenario in which the arbitrators would make an absolute 

determination of which party or parties caused the accident and to what degree, apportioning 

fault between or among them. Simply put, it appears most likely that arbitration will resolve 

only questions of contract-based liability for Caytrans and BBC Chartering, leaving unanswered 

the critical issues joined in the nonarbitrable claims of whether Equipment Rental, Tri-State, a 

combination of both, neither, or some third party is at fault for the accident, and if so the degree 

of each culpable party’s fault. Therefore, the central issue joined by the nonarbitrable claims 

(i.e., who caused the accident) would likely remain in play for judicial resolution regardless of 

the outcome of arbitration.4

 More fundamentally, Caytrans and BBC Chartering make the compelling point that the 

nonarbitrable claims may prove to be the tail that wags the dog in this case. As they put it, “a 

resolution to the claims against Equipment Rental and Tri-State will likely render moot the 

Plaintiff’s claims, and the arbitration proceeding will no longer be necessary.” (Doc. 92, at 4.) 

The reasoning appears to be that, if the nonarbitrable claims culminate in a determination that 

 3

 Caytrans and BBC Chartering emphasize this point in their memorandum, where 

they explain that “Caytrans and BBC Chartering’s alleged liability is based on a contract 

provision contained in the Time Charter,” rather than their alleged tortious acts or omissions at 

the time of the accident. (Doc. 92, at 4.) 

4

 The point that nonarbitrable claims would not be fully decided by the arbitration 

is reinforced by C.V.S. Aramis’s frank (and correct) admission that the arbitrators would not 

have occasion to consider various issues joined in this litigation, such as (a) Equipment Rental’s 

alleged damages for harm to its crane and the loss of use of said crane, (b) Caytrans’ claims for 

loss of use of the vessel, (c) Equipment Rental’s claim on open account, and (d) contractual 

indemnity claims asserted by and between various litigants. (Doc. 95, at 5-6.) 

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Equipment Rental and/or Tri-State is liable (i.e., a finding that the accident was caused by 

negligence or, alternatively, a breach of duties of workmanlike performance, on the part of one 

or both of them), then C.V.S. Aramis might be made whole by that judgment (after any 

appropriate modifications to allow for contribution and/or indemnity) without having to move 

forward as to the arbitrable claims for derivative contractual liability against Caytrans and BBC 

Chartering.5

 The essential point is this: There is at least a reasonable possibility that on-theground, direct responsibility for this accident lies with Equipment Rental and/or Tri-State, and 

that the liability of Caytrans or BBC Chartering is confined to an indirect, contract-based, passthrough theory that only comes into play if C.V.S. Aramis cannot recover from Equipment 

Rental or Tri-State.6

 If the nonarbitrable claims (including principally those involving 

Equipment Rental and Tri-State) proceed to conclusion in this District Court, that result may 

obviate the need to go forward with arbitral proceedings as to plaintiff’s claims against Caytrans 

and BBC Chartering.7

 Finally, it bears noting that, from a timing standpoint, the nonarbitrable claims are ready 

for trial now. It appears highly unlikely that arbitration (which was ordered on April 16, 2010) 

will or could occur before a trial of the nonarbitrable claims; therefore, the net effect of staying 

the nonarbitrable claims would be to delay the resolution of all claims joined in this litigation. 

Stated differently, it is likely that trial of the nonarbitrable claims can and will be completed will 

before any arbitration hearing happens as to the arbitrable claims. Thus, it would be far more 

 5

 Of course, implicit in this notion is an assumption that Equipment Rental and TriState have assets to pay any such judgment that may be entered against them, leaving no 

outstanding deficiencies that C.V.S. Aramis must collect from Caytrans or BBC Chartering via 

derivative, contract-based liability in order to be made whole. 

6

 This view appears to be shared by C.V.S. Aramis itself, given that C.V.S. Aramis 

sued Equipment Rental and Tri-State more than three months before it asserted claims against 

Caytrans and BBC Chartering. 

7

 To be clear, the Court is expressing no opinions and making no findings at this 

time as to the ultimate liability of any party or the merit of any party’s claims or defenses in this 

action, whether arbitrable or nonarbitrable. Rather, the foregoing is intended to demonstrate the 

substantial likelihood that the nonarbitrable claims may predominate over the arbitrable claims in 

this action, and to show that the fate of the arbitrable claims may depend on what happens at trial 

on the nonarbitrable claims. 

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efficient to try the nonarbitrable claims now than to stay the entire action indefinitely pending the 

conclusion of what are, at best, nascent arbitration proceedings as to the arbitrable claims. Based 

on the outcome of trial on the nonarbitrable claims, the arbitrating parties will be well equipped 

to make an appropriate assessment of whether they need to carry on with arbitration or not. 

III. Conclusion.

 For all of the foregoing reasons, the undersigned finds that it is feasible to proceed with 

litigation of the nonarbitrable claims, notwithstanding the court-ordered stay of the arbitrable 

claims. On this record, the Court cannot find that the arbitrable claims predominate over the 

nonarbitrable claims. If anything, the converse may be true, and it is a virtual certainty that 

critical legal and factual issues will remain outstanding for resolution in this litigation regardless 

of the arbitrators’ decisions. Accordingly, the Court will not disturb the “heavy presumption” 

recognized by Justice White that the arbitration and the lawsuit will each proceed in its normal 

course, but will instead exercise its discretion to decline to stay the nonarbitrable claims. 

 Based on this determination it is ordered as follows: 

1. C.V.S. Aramis’s request for a stay of this action in its entirety is denied. The 

nonarbitrable claims will proceed on their present litigation track, with the final 

pretrial conference set for July 1, 2010 at 10:30 a.m. (doc. 83) and trial to follow 

during the August 2010 civil term. 

2. Per the Order (doc. 86) entered on April 16, 2010, all of C.V.S. Aramis’s claims 

against Caytrans and BBC Chartering are stayed pending arbitration. Because 

this Court retains jurisdiction to confirm or vacate the resulting arbitration award, 

see TranSouth Financial Corp. v. Bell, 149 F.3d 1292, 1297 (11th Cir. 1998), and 

because of the potential nexus between arbitrable and nonarbitrable claims in this 

action, Caytrans and BBC Chartering (as movants and catalysts for the arbitration 

proceedings) are ordered to file, on or before the third Tuesday of every month, 

beginning in June 2010, a consolidated written report reflecting the status of their 

respective arbitration proceedings against C.V.S. Aramis. 

3. The Motion for Partial Summary Judgment (doc. 87) filed by Tri-State is now ripe 

and has been taken under submission. 

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DONE and ORDERED this 4th day of June, 2010. 

 s/ WILLIAM H. STEELE 

 CHIEF UNITED STATES DISTRICT JUDGE 

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