UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 22-22707-Civ-Williams/Sanchez

PAYCARGO FINANCE LP, 

Plaintiff, 

v. 

ASPEN AMERICAN INSURANCE

COMPANY, 

 Defendant, 

and 

BAY MARITIMES INC.,

Nominal Defendant. 

_________________________________________/ 

REPORT AND RECOMMENDATION ON

DEFENDANT ASPEN AMERICAN INSURANCE COMPANY’S MOTION TO DISMISS

This matter is before the Court on a motion to dismiss (ECF No. 15) filed by defendant 

Aspen American Insurance Company (“Aspen”). In its motion, Aspen seeks dismissal of the

single-count complaint filed by the plaintiff, Pay Cargo Finance LP (“PCF”), in which PCF seeks 

damages for breach of contract. For the reasons set forth below, the undersigned recommends that 

Aspen’s motion to dismiss be DENIED. 

I. FACTUAL AND PROCEDURAL BACKGROUND

In this action, PCF seeks damages against Aspen for breach of contract for Aspen’s 

nonpayment of a claim that PCF made against a maritime surety bond that Aspen had issued to 

Bay Maritimes, Inc. ECF No. 1. 

According to the Complaint, during the relevant timeframe, Bay Maritimes was licensed 

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as a Non-Vessel Operating Common Carrier (“NVOCC”) with the Federal Maritime Commission. 

ECF No. 1 at ¶ 13. Bay Maritimes accordingly obtained a maritime surety bond as an NVOCC 

from Aspen.1 ECF No. 1 at ¶ 16; see also id. at ¶¶ 13-15. According to the Complaint, PCF is an 

intended third-party beneficiary of that surety bond. Id. at ¶ 25. PCF additionally alleges that it 

suffered damages and obtained a default judgment against Bay Maritimes “arising from Bay 

Maritimes’ transportation-related activities,” ECF No. 1 at ¶ 25; see also id. at ¶¶ 9-12, but that 

Aspen thereafter breached its obligations to PCF under the surety bond when it improperly denied 

PCF’s claims against the surety bond based on those damages, id. at ¶¶ 17-18, 26-27. 

Aspen has moved to dismiss PCF’s Complaint under Federal Rule of Civil Procedure 

12(b)(6), arguing that PCF has failed to state a claim because the Complaint establishes that Bay 

Maritimes was not acting as an NVOCC in the pertinent transactions and that PCF’s claims are 

therefore not covered by the bond issued by Aspen. ECF No. 15. 

II. LEGAL STANDARD

To state a claim for relief under Rule 8(a) of the Federal Rules of Civil Procedure, a 

complaint must contain a short and plain statement of the claim showing that the pleader is entitled 

to relief. Fed. R. Civ. P. 8(a)(2). To survive a motion to dismiss pursuant to Federal Rule of Civil 

Procedure 12(b)(6), the plaintiff must allege facts that make out a facially plausible claim and raise 

the right to relief beyond a speculative level. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 

(2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the 

1 The surety bond, which is at the center of PCF’s Complaint and Aspen’s motion to dismiss, is 

not included with the Complaint. Although the Complaint alleges that the surety bond “would 

presumably follow Form FMC-48” issued by the Federal Maritime Commission, which form is 

attached as Exhibit C to the Complaint, ECF No. 1-3, ECF No. 1 at ¶ 24, the actual bond is not 

part of the Complaint because PCF had not yet obtained a copy of the bond when it filed the 

Complaint, ECF No. 1 at ¶ 22. 

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court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). When evaluating a motion to dismiss, the court must 

accept the allegations in the complaint as true and construe them in the light most favorable to the 

plaintiff, drawing all reasonable inferences in favor of the plaintiff. See, e.g., Hunt v. Aimco 

Properties, L.P., 814 F.3d 1213, 1221 (11th Cir. 2016); St. George v. Pinellas Cnty., 285 F.3d

1134, 1337 (11th Cir. 2002). The court must also limit its consideration to the four corners of the 

complaint and any attached exhibits. See, e.g., Grossman v. Nationsbank, N.A., 225 F.3d 1228, 

1231 (11th Cir. 2000). 

III. ANALYSIS

In its motion to dismiss, Aspen argues that PCF’s claims fall outside the scope of the 

applicable NVOCC bond because Bay Maritimes was not acting as an NVOCC in its transactions 

with PCF. ECF No. 15 at 1, 6-7. Relying on AEL Asia Express (H.K.) Ltd. v. Am. Bankers Ins. 

Co. of Fla., 5 F. App’x 106 (4th Cir. 2001), Aspen essentially argues that the NVOCC bond that 

it issued only provides coverage for transactions in which the principal on the bond (here, Bay 

Maritimes) furnished transportation-related services as an NVOCC to the claimant on the bond 

(here, PCF), and that “the only services Bay Maritimes was supposed to provide in its transactions 

with [PCF] were those of a debtor toward a creditor.” See ECF No. 15 at 1, 7. Aspen accordingly 

contends that the Complaint establishes that PCF’s claims do not fall within the scope of the bond’s 

coverage. Id. at 1-2, 7.

Given the allegations in PCF’s Complaint and the standards governing Rule 12(b)(6) 

motions to dismiss, however, Aspen’s motion to dismiss must be denied.

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A. Statutory Provisions Governing NVOCC Bonds 

Under federal law, a “non-vessel-operating common carrier” (NVOCC) is “a common 

carrier that -- (A) does not operate the vessels by which the ocean transportation is provided; and

(B) is a shipper in its relationship with an ocean common carrier.” 46 U.S.C. § 40102(17). Federal 

law imposes a variety of obligations on an NVOCC, including, for purposes pertinent to this case,

the requirement that an NVOCC “furnish[] a bond, proof of insurance, or other surety” that meets 

certain statutory and regulatory criteria. 46 U.S.C. § 40902(a). Such bonds “may be available to 

pay any claim against an ocean transportation intermediary[2] arising from its transportation-related 

activities” and “shall be available to pay any judgment for damages against an ocean transportation 

intermediary arising from its transportation-related activities.” 46 U.S.C. § 40902(b)(2), (3).

B. The Allegations in the Complaint

Here, Aspen contends that Bay Maritimes was only acting as a debtor in the transactions 

that gave rise to PCF’s claims and was not acting as an NVOCC. ECF No. 15 at 3 (arguing that 

“the Complaint establishes that Bay Maritimes was acting only as a debtor and not as an NVOCC 

in the transactions giving rise to [PCF’s] alleged claim”); see also id. at 7 (arguing that “the only 

services Bay Maritimes was supposed to provide in its transactions with [PCF] were those of a 

debtor toward a creditor”). 

The Complaint in this case, however, alleges that Bay Maritimes was at all relevant times 

a licensed NVOCC and that Bay Maritimes was involved in freight shipment activities. ECF No. 

1 at ¶¶ 9-10, 13. Indeed, the Complaint mentions no other role played by Bay Maritimes in its 

freight shipments besides that of an NVOCC. ECF No. 1. Construing those allegations in the light 

2

 “The term ‘ocean transportation intermediary’ means an ocean freight forwarder or a non-vesseloperating common carrier.” 46 U.S.C. § 40102(20). 

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most favorable to the plaintiff and drawing all reasonable inferences in favor of the plaintiff, see, 

e.g., Hunt, 814 F.3d at 1221; St. George, 285 F.3d at 1337, the Complaint establishes for Rule 

12(b)(6) purposes that Bay Maritimes was acting as an NVOCC in its freight shipment activities.

Furthermore, while Aspen argues that the Complaint establishes nothing more than a 

simple debtor-creditor relationship between Bay Maritimes and PCF, the Complaint alleges that 

PCF was much more than a general creditor that loaned funds to Bay Maritimes for general 

purposes untethered to Bay Maritimes’ specific shipping (i.e., transportation-related) activities. 

On the contrary, the Complaint alleges that the transactions giving rise to PCF’s claims are specific 

freight shipping activities of Bay Maritimes which PCF facilitated through the services that it 

provided to Bay Maritimes. Indeed, according to the Complaint, PCF provided short-term 

financing to Bay Maritimes “in connection with specific freight shipments,” and Bay Maritimes 

provided PCF with bills of lading documenting that the financing that PCF provided was 

“specifically for Bay Maritimes freight shipment related activities.” ECF No. 1 at ¶ 9; see also id.

at ¶¶ 6-7. PCF’s services, moreover, did not simply involve loaning funds to Bay Maritimes to 

finance its general shipping activities. According to the Complaint, PCF would pay vendors of 

transportation and logistics services on Bay Maritimes’ behalf and “guarantee[] payment on the 

freight shipment[s]” to facilitate the expeditious release of the cargo that Bay Maritimes was 

transporting. ECF No. 1 at ¶¶ 6-9. 

C. Coverage Under the NVOCC Bond Issued by Aspen

Aspen contends that dismissal of PCF’s complaint is required because the NVOCC bond 

that it issued only provides coverage if Bay Maritimes furnished transportation-related services as 

an NVOCC to PCF in its transaction with PCF and because the PCF-Bay Maritimes transaction 

was supposedly limited to a creditor-debtor relationship between PCF and Bay Maritimes. See, 

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e.g., ECF No. 15 at 6-7. In support of its argument, Aspen relies on AEL Asia Express (H.K.) Ltd. 

v. Am. Bankers Ins. Co. of Fla., 5 F. App’x 106 (4th Cir. 2001). The AEL decision, however, does 

not support Aspen’s argument concerning the particular transaction that must be examined to 

determine whether an NVOCC bond applies.

While AEL does “conclude that the [principal on the NVOCC bond] must serve as the

NVOCC in the relevant transaction for the bond to apply,” 5 F. App’x as 110, AEL does not 

examine that relevant transaction in the manner argued by Aspen. On the contrary, AEL

determined that the relevant transaction in which a bond’s principal must be acting as an NVOCC

is the shipment from which the claims against the bond arise. AEL, 5 F. App’x at 110 (“[W]e must 

decide whether the [the bond principal] was serving as an NVOCC for the shipment of pottery.”). 

In AEL, moreover, the NVOCC in the shipment at issue was not the principal on the bond, but was 

instead the claimant. The principal on the bond, on the other hand, had a role that “was limited to 

collection and distribution of funds,” and the AEL Court determined it “could not have served as 

the NVOCC” in the shipment from which the claim on the bond arose. Id. The facts alleged by 

PCF in this case are markedly different from those that led the AEL Court to conclude that the

NVOCC bond did not apply in that case because the bond’s principal was not the NVOCC in the 

relevant shipping transaction.

Construing the facts alleged in the Complaint in the light most favorable to PCF and 

drawing all reasonable inferences in its favor, the Complaint’s allegations establish that Bay 

Maritimes was engaged in shipping freight as an NVOCC and that PCF participated in and 

facilitated those transportation-related activities of Bay Maritimes by providing short-term 

financing to Bay Maritimes for specific freight shipments, paying vendors on Bay Maritimes’ 

behalf who were providing Bay Maritimes with transportation and logistics services for those 

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shipments, and guaranteeing payment on those freight shipments to expedite release of the cargo 

that Bay Maritimes was transporting. See ECF No. 1 at ¶¶ 6-9. Under this factual scenario, Bay 

Maritimes, the principal on the bond, was the party acting as an NVOCC in the transportationrelated freight shipment activities from which PCF’s claims arose—claims arising from Bay 

Maritimes’ non-payment for services that were provided by PCF to facilitate specific shipments

of freight by Bay Maritimes as an NVOCC. The reasoning of the AEL opinion, which focused on 

whether the principal on the bond was an NVOCC in the pertinent shipment, would simply not 

preclude bond coverage under these alleged facts in which Bay Maritimes was an NVOCC in the 

relevant shipping transactions, that is, the freight shipments, from which PCF’s claims arise.

The parties also dispute whether the bond requires that Bay Maritimes, as the principal on 

the bond, be acting as an NVOCC in the pertinent transportation-related activities or whether the 

bond instead just requires that Bay Maritimes be an NVOCC that was engaging in the pertinent 

transportation-related activities. Compare, e.g., ECF No. 15 at 5-6 (relying on AEL, 5 F. App’x 

106) with ECF No. 18 at 3-7 (relying on Trans Ocean Container Corp. v. Intercargo Ins. Co., No. 

C 95-2187 FMS, 1996 WL 390323 (N.D. Cal. July 3, 1996), and P & O Containers Ltd. v. Am. 

Motorists Ins. Co., No. 96 CIV. 8244 (JFK), 1998 WL 146229 (S.D.N.Y. Mar. 25, 1998)). While 

this question may potentially require resolution at later stages of these proceedings, it is irrelevant 

to the present disposition of Aspen’s motion to dismiss. As already discussed, when the allegations 

of the Complaint are viewed in the light most favorable to PCF, drawing all reasonable inferences 

in PCF’s favor, the Complaint alleges that Bay Maritimes was acting as an NVOCC in the pertinent 

transportation-related activities, that is, the freight shipments that give rise to PCF’s claims against 

the bond. Accordingly, the Complaint survives dismissal under either party’s argument on this 

disputed legal issue. Moreover, to the extent that Aspen may dispute that Bay Maritimes was

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actually acting as an NVOCC in the pertinent freight shipments, that presents a question of fact 

which cannot be decided on a motion to dismiss pursuant to Rule 12(b)(6).

IV. CONCLUSION AND RECOMMENDATION

Based on the foregoing, the undersigned RESPECTFULLY RECOMMENDS that 

defendant Aspen American Insurance Company’s Motion to Dismiss (ECF No. 15) be DENIED.

No later than fourteen days from the date of this Report and Recommendation the 

parties may file any written objections to this Report and Recommendation with the Honorable 

Kathleen M. Williams, who is obligated to make a de novo review of only those factual findings 

and legal conclusions that are the subject of objections. Only those objected-to factual findings 

and legal conclusions may be reviewed on appeal. See Thomas v. Arn, 474 U.S. 140 (1985);

Henley v. Johnson, 885 F.2d 790, 794 (11th Cir. 1989); 28 U.S.C. § 636(b)(1); 11th Cir. R. 3-1.

RESPECTFULLY RECOMMENDED on this 5th day of August, 2023.

___________________________________

EDUARDO I. SANCHEZ

UNITED STATES MAGISTRATE JUDGE

cc: Hon. Kathleen M. Williams

Counsel of Record

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