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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

PAYCARGO FINANCE LP,

CASE NO.: 1:22-cv-22707-KMW

Plaintiff,

vs.

ASPEN AMERICAN INSURANCE 

COMPANY,

Defendant,

and 

BAY MARITIMES INC.,

Nominal Defendant.

/

PLAINTIFF’S PAYCARGO FINANCE LP’S MOTION FOR SUMMARY JUDGMENT

Plaintiff PayCargo Finance LP (“Plaintiff”), pursuant to Federal Rule of Civil Procedure 

56, hereby files this Motion for Summary Judgment, and states:

INTRODUCTION

The Shipping Act requires NVOCCs1 to obtain a surety bond to pay, among other things, 

“any claim against an ocean transportation intermediary arising from its transportation-related 

activities” and “any judgment for damages against an ocean transportation intermediary arising 

from its transportation-related activities...” 46 U.S.C. § 40902. Plaintiff’s claim against Bay 

Maritimes, an NVOCC, arises from its failure to reimburse Plaintiff for making ocean freight 

payments on its behalf through a payment platform specific to the cargo industry that allows for 

the expedited release of cargo. Yet Aspen has somehow determined that Plaintiff’s payment of 

1 NVOCCs or “non-vessel-operating common carriers” are a type of intermediary in the ocean 

transportation industry who do not operate their own vessel but nonetheless facilitate the shipment 

of freight. (SMF ¶1).

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Bay Maritimes’ freight is not a “transportation-related” activity and has denied any payment of 

Plaintiff’s claim from the NVOCC bond. Aspen is mistaken, and summary judgment is appropriate 

on this core legal dispute between the parties about the scope of NVOCC bonds.

The Complaint alleges a single count for breach of contract based on a failure by Defendant 

Aspen American Insurance Company (“Aspen”) to pay Plaintiff PayCargo Finance LP (“PCF”) in 

connection with a an NVOCC surety bond Aspen issued for Nominal Defendant Bay Maritimes 

Inc. pursuant to the Shipping Act. As PCF’s Statement of Material Facts (“SMF”) makes plain, 

there is no dispute that such a surety bond was in effect at the relevant time. (SMF ¶¶2-4, 16). 

There is no dispute that Aspen has not paid PCF out of that surety bond. (SMF ¶28). Instead, the 

central dispute in this case is whether PCF’s claim against Bay Maritimes Inc. arises from Bay 

Maritimes Inc.’s “transportation-related activities” and thus falls within the scope of the NVOCC 

bond. Determining the scope of the surety bond is a legal question which makes this case ripe for 

summary judgment.

LEGAL STANDARD

A party is entitled to summary judgment if “there is no genuine dispute as to any material 

fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “The party 

seeking summary judgment bears the initial burden of demonstrating the absence of a genuine 

issue of material fact.” Francis v. MSC Cruises, S.A., 546 F. Supp. 3d 1258, 1261 (S.D. Fla. 2021), 

citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). 

“The party opposing the motion for summary judgment may not simply rest upon mere 

allegations or denials of the pleadings; the non-moving party must establish the essential elements 

of its case on which it will bear the burden of proof at trial.” Francis, 546 F. Supp. 3d at 1261, 

citing Celotex Corp. v. Catrett, 477 U.S. 317 (1986). “The non-movant must present more than a 

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scintilla of evidence in support of the non-movant's position. A jury must be able reasonably to 

find for the non-movant.” Francis, 546 F. Supp. 3d at 1261, citing Anderson v. Liberty Lobby, Inc., 

477 U.S. 242, 254 (1986).

“‘[A]n issue [of material fact] is not ‘genuine’ if it is unsupported by the evidence or is 

created by evidence that is ‘merely colorable’ or ‘not significantly probative.’’” Medeiros v. NCL 

(Bahamas) LTD., 19-CV-20957, 2020 WL 1308728, at *3 (S.D. Fla. Mar. 5, 2020), quoting 

Flamingo S. Beach I Condo. Ass'n, Inc. v. Selective Ins. Co. of Southeast, 492 F. App'x 16, 26 

(11th Cir. 2013). “If the moving party shows ‘that, on all the essential elements of its case on which 

it bears the burden of proof at trial, no reasonable jury could find for the nonmoving party’ then 

‘it is entitled to summary judgment unless the nonmoving party, in response, comes forward with 

significant, probative evidence demonstrating the existence of a triable issue of fact.’” Id., quoting 

Rich v. Sec'y, Fla. Dept. of Corr., 716 F.3d 525, 530 (11th Cir. 2013).

ARGUMENT

I. THE SURETY BOND APPLIES TO PCF’S CLAIM

A. Introduction

The Shipping Act requires NVOCCs to obtain a surety bond to pay, among other things, 

“any claim against an ocean transportation intermediary arising from its transportation-related 

activities” and “any judgment for damages against an ocean transportation intermediary arising 

from its transportation-related activities...” 46 U.S.C. § 40902. As an NVOCC, Bay Maritimes 

obtained such a surety bond from Aspen. (SMF ¶2). Plaintiff’s claim to recover money it advanced 

for the payment of freight is precisely such a claim.

B. PCF’S Judgment Against Bay Maritimes

PayCargo is a payment platform which allows payments to be made to a network of 

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transportation and logistics vendors. (SMF ¶¶5-6). Based on its reputation in the industry and 

ability to tie electronic payment directly to a cargo shipment, payment through PayCargo allows 

for the prompt release of cargo. (SMF ¶¶5-6). PCF provides 30-day financing to certain users of 

the PayCargo system. (SMF ¶7). This can be especially helpful to NVOCCs who often wait 30 

days themselves to receive payment in connection with their own customers. (SMF ¶¶7-9). Bay 

Maritimes obtained this financing in the form of a $500,000.00 line of credit from PCF. (SMF 

¶10). However, it failed to make timely repayment in connection with the funds it caused PCF to 

advance on its behalf in connection with a number of freight shipments. (SMF ¶¶18, 22-29).

These non-payments led to a state court proceeding in the Florida Eleventh Judicial Circuit 

Court in and for Miami-Dade County, Florida, in which Bay Maritimes defaulted and a Default 

Final Judgment was entered against Bay Maritimes in the amount of $150,548.54 plus interest. 

(SMF ¶¶22-24). Despite the default, Bay Maritimes’ principal represented to the court in those 

proceedings that it was a “legit amount which I owe to PayCargo...” (SMF ¶26). Bay Maritimes 

has also defaulted in the instant proceedings. (D.E. 13).

Aspen cannot relitigate what Bay Maritimes has already admitted to, both expressly and 

by default, as well as what is confirmed by a state court judgment. “[A] a default admits all wellpleaded allegations of a complaint.” Cellular Warehouse, Inc. v. GH Cellular, LLC, 957 So. 2d 

662, 665 (Fla. 3d DCA 2007); PetMed Express, Inc. v. MedPets.Com, Inc., 336 F. Supp. 2d 1213, 

1217 (S.D. Fla. 2004) (“In defaulting, Defendants ‘admit the plaintiff's well-pleaded allegations 

of fact.’” (quoting Buchanan v. Bowman, 820 F.2d 359 (11th Cir.1987)); see also MacSteel Intern. 

USA Corp. v. M/V MING PROPITIOUS, 00 CV 279, 2003 WL 21371846, at *4 (E.D.N.Y. Apr. 

2, 2003) (Court analyzing judgment bond non-payment “is not at liberty to reexamine or disturb 

the decision granting the default judgment or the issues adjudicated therein.”)

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Additionally, Aspen’s ability to dispute this claim is confined by regulation to inquiring

“into the extent to which the judgment for damages arises from the ocean transportation 

intermediary's transportation-related activities.” See 46 CFR § 515.23(b).

C. The Scope of the NVOCC Surety Bond

The Shipping Act requires NVOCCs to obtain a surety bond to pay, among other things, 

“any claim against an ocean transportation intermediary arising from its transportation-related 

activities” and “any judgment for damages against an ocean transportation intermediary arising 

from its transportation-related activities...” 46 U.S.C. § 40902.

The scope of coverage of these bonds is very broad. “The plain words of the Shipping Act 

indicate that the only limitation on a surety's liability under an NVOCC bond is that the judgment 

against an NVOCC arise from an NVOCC's ‘transportation-related activities.’” Trans Ocean 

Container Corp. v. Intercargo Ins. Co., C 95-2187 FMS, 1996 WL 390323, at *4 (N.D. Cal. July 

3, 1996). And “[t]he legislative history of the 1990 amendments to the Shipping Act indicates that 

Congress intended that the phrase [transportation-related activities] be interpreted broadly.” Axess 

Intern., Ltd. v. Intercargo Ins. Co., 183 F.3d 935, 941 (9th Cir. 1999). As the Axess court noted, 

the FMC rejected attempts to limit the scope of these bonds, stating: “Nor do we believe that we 

can limit the bond to only judgments obtained in the United States. The bond is available to ‘pay 

any judgment for damages' against an NVOCC, and is not limited to only conduct by an NVOCC 

in this country.” Id.

The failure to make payments in connection with Bills of Lading fallsis the classic example 

of a “transportation-related activity” that NVOCC bonds were designed to cover. See MacSteel

Intern. USA Corp. v. M/V MING PROPITIOUS, 00 CV 279, 2003 WL 21371846, at *3 (E.D.N.Y. 

Apr. 2, 2003), judgment vacated on other grounds, 2003 WL 21665128 (E.D.N.Y. June 11, 2003)

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(“Since Congress clearly ‘intended § 1721 to be a broad, prophylactic protection for all entities 

that dealt with NVOCCs,’ ... this court must read the phrase “transportation-related activities” 

expansively to include all claims based on bills of lading for shipments between foreign ports and 

U.S. ports.”); Michael P. O'Connor, Collecting on NVOCC Bonds, 69–Oct N.Y. St. B.J. 38, 39 

(1997) (“Obviously, claims based on bills of lading that evidence shipments between a foreign 

port and a U.S. port are considered ‘transportation related.’”

Likewise, the Northern District of California held that “[t]he plain words of the Shipping 

Act indicate that the statute protects any party that obtains a judgment against an NVOCC from its 

‘transportation-related’ activities” and further found “no proof of legislative intent to limit a

Surety’s liability to particular parties.” Trans Ocean Container Corp., 1996 WL 390323, at *5 

(N.D. Cal. July 3, 1996). In Trans Ocean, the plaintiff rented ocean cargo containers to Jeuro, Inc., 

an NVOCC, and made a claim on Jeuro’s NVOCC bond when Jeuro failed to return those 

containers. Id. at *1. “According to the rules of statutory construction, the statutory command is 

unambiguous: a bond purchased pursuant to the Shipping Act is available to pay any judgment 

against an NVOCC as long as it arises from the NVOCC's transportation-related activities.” Id.

The court granted summary judgment in favor of the plaintiff, reasoning:

According to the default judgment, Jeuro Inc. failed to pay the rental value or replace the 

ocean cargo containers it leased. The evidence presented by the cross-motions for summary 

judgment establishes that Jeuro Inc. was an NVOCC, that the leasing of ocean cargo 

containers was a transportation-related activity, and that the NVOCC bond provided by the 

defendant was meant to inure to the benefit of third-party vendors such as plaintiff.

Id. at *5.

Similarly, the Southern District of New York explained that “everything about the 

legislative history supports a broad, expansive interpretation of [the Shipping Act]” P & O 

Containers Ltd. v. Am. Motorists Ins. Co., 96 CIV. 8244 (JFK), 1998 WL 146229, at *3 (S.D.N.Y. 

Mar. 25, 1998). There, the court was considering whether enforcement of the liquidated damages 

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provision in a contract between an NVOCC and an ocean carrier arose from the NVOCC’s 

“transportation related activities.” Id. at *2. It ultimately determined that reading this language to

prohibit the recovery of liquidated damages would be at odds with the Shipping Act. Id. at *3.

The P & O court elaborated on the legislative history of the Shipping Act:

[I]n response to growing dissatisfaction with the business conduct of NVOCCs, 

Congress enacted § 1721 of the Shipping Act. The offending NVOCC practices 

included: failure to deliver cargo, failure to honor loss and damage claims, and 

abandonment of cargo.... Congress also recognized that the problems posed by 

NVOCCs were exacerbated by the fact that many NVOCCs lack tangible assets, 

and, as a result, many parties injured by NVOCC actions were unable to recoup 

their losses.... To remedy the problems presented by NVOCCs, Congress ...

required NVOCCs to post a bond with the FMC of not less than $50,000.

Id. The court explained that “[a]lthough Congress never directly discussed the scope of the term 

‘transportation-related activities,’ the legislative history demonstrates that the bond in question in 

the instant case would cover the liquidated damages owed to P & O.” Id. at *3. “Clearly, Congress 

intended § 1721 to be a broad, prophylactic protection for all entities that dealt with NVOCCs.” 

Id. (emphasis added).

Here, Bay Maritimes was engaging in the paradigmatic example of NVOCC 

transportation-related activities – paying common carriers for the movement of freight. By funding 

those “transportation-related activities” and providing the accounting reconciliation tools and 

relationships that allowed for the expedient the release of Bay Maritimes’ cargo, PCF’s claim 

“ar[ose]” from those “transportation-related activities.” See 46 U.S.C. § 40902. The NVOCC bond 

thus applies to PCF’s judgment.

II. THE REMAINING ELEMENTS ARE UNDISPUTED

The Complaint alleges a breach of contract because of a failure by Aspen to pay on the 

NVOCC surety bond. “The elements of a breach of contract claim under federal common law are: 

(1) a valid contract between the parties, (2) an obligation or duty arising out of the contract, (3) a 

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breach of that duty, and (4) damages caused by the breach.” Express Damage Restoration, LLC v. 

Wright Nat'l Flood Ins. Co., 1:19-CV-24127-JLK, 2019 WL 6699702, at *1 (S.D. Fla. Dec. 9, 

2019) (internal citation omitted). Moreover, “‘[a] party can enforce a third-party contract only if it 

reflects an express or implied intention of the parties to the contract to benefit the third party’”

Interface Kanner, LLC v. JPMorgan Chase Bank, N.A., 704 F.3d 927, 932 (11th Cir. 2013) 

(internal citation omitted). 

There is no genuine dispute that an agreement existed here in the form of the NVOCC 

surety bond. (SMF ¶2). There is no genuine dispute that this surety bond was intended to benefit 

third parties who obtain judgments arising from the transportation-related activities of the 

principal. (SMF ¶4). As explained in the Section I.B., PCF obtained such a judgment against Bay 

Maritimes. There can be no dispute that Aspen has not made any payment from the surety bond 

in connection with that judgment. (SMF ¶¶28-29). Thus, for the reasons explained in Section I.B. 

above, that non-payment amounts to a breach. This non-payment caused PCF damages. 

(SMF ¶29). 

XANDER LAW GROUP, P.A.

One N.E. 2nd Avenue, Suite 200

Miami, Florida 33132

Tel: (305) 767-2001

Fax: (855) 926-3370

wayne@xanderlaw.com

marcus@xanderlaw.com

jose@xanderlaw.com

By: /s/Jose Teurbe-Tolon

JOSE TEURBE-TOLON

Fla. Bar No. 87791

WAYNE R. ATKINS

Fla. Bar No. 84000

MARCUS TAN

Fla. Bar No. 38616

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that, on August 23, 2023, a copy of this Plaintiff PayCargo Finance 

LP’s Motion for Summary Judgment was served upon:

Served by mail:

Bay Maritimes Inc.

1290 Eglinton Ave E #05

Mississauga, ON L4W 1K8

Canada

Served via CM/ECF:

David E. Gurley

Michael A. Fant

Christopher C. Fiore

Gurley & Associates

601 South Osprey Avenue

Sarasota, Florida 34236

eservice@gurleyassociates.com

/s/Jose Teurbe-Tolon

JOSE TEURBE-TOLON

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