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IN THE UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

PAYCARGO FINANCE LP,

Plaintiff,

v. 

ASPEN AMERICAN INSURANCE 

COMPANY, 

Defendant, 

BAY MARITIMES INC., 

Nominal Defendant.

_____________________________________/

Case No. 1:22-cv-22707-KMW

DEFENDANT ASPEN AMERICAN INSURANCE COMPANY’S 

MOTION TO DISMISS AND INCORPORATED MEMORANDUM OF LAW

COMES NOW, Defendant, Aspen American Insurance Company (“Aspen”), by and 

through its undersigned counsel and pursuant to Rule 12(b)(6) of the Federal Rules of Civil 

Procedure, files this Motion to Dismiss the Complaint (ECF No. 1) filed by Plaintiff, PayCargo 

Finance LP (“PayCargo Finance”), with prejudice, and in support states: 

PayCargo Finance has filed a one-count Complaint against Aspen based on an alleged 

Federal Maritime Commission (“FMC”) bond in the form attached to the Complaint (“Bond”). To 

have a valid claim under the alleged Bond, the principal on the alleged Bond, Nominal Defendant, 

Bay Maritimes Inc. (“Bay Maritimes”), must have acted as a non-vessel-operating common carrier 

(“NVOCC”) in the transactions giving rise to the claim. The allegations of the Complaint establish, 

however, that Bay Maritimes was not acting as an NVOCC in its transactions with PayCargo 

Finance. As such, pursuant to 46 U.S.C. § 40902 and AEL Asia Express (H.K.), Ltd. v. American 

Bankers Insurance Co., 5 Fed. App’x 106 (4th Cir. 2001), PayCargo Finance’s purported claim is 

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beyond the scope of the alleged coverage of the Bond, and the Complaint should be dismissed for 

failure to state a cause of action upon which relief may be granted. 

BACKGROUND

1. PayCargo Finance commenced this action on August 25, 2022, when it filed its 

one-count Complaint seeking relief for an alleged breach of contract. See generally Complaint. 

2. In the Complaint, PayCargo Finance describes itself as a provider of “short term 

financing in the form of credit”. Id. at ¶ 6. 

3. PayCargo Finance alleges that pursuant to a credit agreement, PayCargo Finance

extended credit to Bay Maritimes that was used to pay vendors. Id. at ¶¶ 8-9. 

4. Bay Maritimes allegedly failed to repay PayCargo Finance for the credit extended. 

Id. at ¶ 10. 

5. PayCargo Finance filed suit against Bay Maritimes in the Eleventh Judicial Circuit 

Court of Florida to recover the allegedly unpaid debt and obtained a Default Final Judgment

(“Judgment”) in the amount of $150,548.54. Id. at ¶ 11. 

6. PayCargo Finance further alleges that “[d]uring the relevant timeframe,” Bay 

Maritimes was licensed as an NVOCC, an entity “that performs the services of an ocean carrier 

except without operating the vessels themselves by buying services from ocean carriers.” Id. at ¶ 

14. 

7. PayCargo Finance has alleged that NVOCC’s are required to obtain a surety bond 

to pay “any claim against an ocean transportation intermediary arising from its transportationrelated activities” and “any judgment for damages against an ocean transportation intermediary 

arising from its transportation-related activities.” Id. at ¶ 15. 

8. Bay Maritimes allegedly obtained the Bond from Aspen. Id. at ¶ 16. 

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9. PayCargo Finance alleges that it made a claim against the Bond on or about June 

1, 2021, which was renewed after the Judgment, and that Aspen denied the claim. Id. at ¶ 17.

10. PayCargo Finance further alleges that “[b]ecause Plaintiff was both affected by the 

actions [of Bay Maritimes’s] transportation-related activities and also obtained a judgment against 

Bay Maritimes arising from [Bay Maritimes’s] transportation-related activities, Plaintiff is an 

intended third-party beneficiary of the [Bond].” Id. at ¶ 25. 

11. Moreover, PayCargo Finance alleges that because Aspen denied PayCargo 

Finance’s claim under the Bond, “[Aspen] breached its obligations to Plaintiff.” Id. at ¶ 26. 

GROUNDS FOR THE MOTION

12. On the face of the Bond form attached to the Complaint, the Bond would apply to 

“claim[s] against an [NVOCC] arising from its transportation-related activities.” See Complaint, 

Ex. C. Therefore, for a valid claim to exist against the Bond, Bay Maritimes must have been acting 

as an NVOCC in the transactions that gave rise to PayCargo Finance’s alleged claim. See AEL, 5 

Fed. App’x at 107-110. 

13. Based on the allegations of the Complaint, however, Bay Maritimes was not acting 

as an NVOCC in its transactions with PayCargo Finance. Instead, Bay Maritimes was acting only

as a debtor that received financing from a creditor, PayCargo Finance. See Complaint at ¶¶ 6-9. 

14. Because the Complaint establishes that Bay Maritimes was acting only as a debtor 

and not as an NVOCC in the transactions giving rise to PayCargo Finance’s alleged claim, 

PayCargo Finance’s Complaint fails to state a claim upon which relief may be granted and, 

accordingly, must be dismissed. Fed. R. Civ. P. 12(b)(6).

WHEREFORE, for the foregoing reasons and those more fully set forth in the 

Incorporated Memorandum of Law, Defendant, Aspen American Insurance Company, respectfully 

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requests that the Court enter judgment in its favor dismissing the Complaint with prejudice; 

ordering that Plaintiff, PayCargo Finance LP, take nothing in this action; awarding Aspen 

American Insurance Company its costs and reasonable attorney’s fees incurred in this action; and, 

granting Aspen American Insurance Company such other further relief as the Court deems just 

and proper. 

INCORPORATED MEMORANDUM OF LAW 

I. For a valid bond claim to exist, the bonded principal must have acted as an NVOCC 

in the transaction giving rise to the claim. 

Section 40902 of Chapter 46 of the United States Code governs the FMC bonds of the form 

attached to the Complaint which are issued to NVOCC’s and ocean freight forwarders.

1 That 

section provides, in pertinent part: 

(b) Scope of financial responsibility. A bond, insurance, or other surety obtained 

under this section— 

. . . 

(2) may be available to pay any claim against an [NVOCC] arising from its 

transportation-related activities— 

(A) with the consent of the insured ocean transportation intermediary and 

subject to review by the surety company; or 

(B) when the claim is deemed valid by the surety company after the ocean 

transportation intermediary has failed to respond to adequate notice to 

address the validity of the claim; and

(3) shall be available to pay any judgment for damages against an [NVOCC]

arising from its transportation-related activities, if the claimant has first attempted 

1

 46 U.S.C. § 40902 applies to bond claims where the principal is an ocean transportation 

intermediary, a term which, per 46 U.S.C. § 40102, is defined as either an NVOCC or an ocean 

freight forwarder. An ocean freight forwarder is defined by 46 U.S.C. § 40102 as a person that “in 

the United States, dispatches shipments from the United States via a common carrier and books or 

otherwise arranges space for those shipments on behalf of shippers” and “processes the 

documentation or performs related activities incident to those shipments.” PayCargo Finance does 

not allege that Bay Maritimes acted as an ocean freight forwarder in any capacity related to this 

litigation. Even if PayCargo Finance had suggested as much, however, Bay Maritimes was not 

acting as an ocean freight forwarder in its transactions with PayCargo Finance for the same reason 

it was not acting as an NVOCC: Bay Maritimes was acting only as a debtor in those transactions. 

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to resolve the claim under paragraph (2) and the claim has not been resolved within 

a reasonable period of time.

(emphasis added). For a valid claim to be brought under a bond pursuant to this section, the 

principal must have acted as an NVOCC in the specific transaction giving rise to the claim. See

AEL Asia Express (H.K.), Ltd. v. American Bankers Ins. Co., 5 Fed. App’x 106, 107-110 (4th Cir. 

2001). 

In AEL, the Fourth Circuit was tasked with interpreting 46 U.S.C. § 1721, which was an 

earlier codification of the current 46 U.S.C. § 40902. Id. at 107. Section 1721 provided, in pertinent 

part:

A bond, insurance, or other surety obtained pursuant to this section shall be 

available to pay any judgment for damages against a [NVOCC] arising from its 

transportation-related activities under this chapter . . . .

Id. (emphasis added). The claimant in AEL argued that it was not required to show that the bonded

principal was acting as an NVOCC in the specific transaction that gave rise to its bond claim to 

pursue the claim under § 1721. Id. at 108. The Fourth Circuit disagreed. Id. at 110. In construing 

the meaning of § 1721, the court held that to bring a bond claim under § 1721, the bonded principal 

must have been acting as an NVOCC in the transaction that gave rise to the claim. Id. at 108-111

(“The bond . . . applies only when the principal acts as an NVOCC.”). 

The basis of the court’s conclusion was twofold. Id. First, the court reviewed the legislative 

history of § 1721 and noted that the statute was intended to apply specifically to companies in the 

performance of NVOCC services, not other services those companies may also provide. Id. at 109. 

Second, the court considered the FMC’s interpretation of § 1721. Id. The FMC had specifically 

noted, “the bond covers the transportation-related activities of an NVOCC when acting as an 

NVOCC. . . . To the extent that someone who operates as an NVOCC also provides non-NVOCC 

services, those services would not be covered by the bond.” Id. (citation omitted). Following this 

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analysis, the court stated, “[W]e conclude the [principal] must serve as the NVOCC in the relevant 

transaction for the bond to apply. . . To hold otherwise would transform the bond into a general 

insurance policy.” Id. at 110. 

The holding and reasoning of AEL apply here because the language in § 40902 at issue in 

this action is substantively identical to the language construed by the Fourth Circuit in AEL. See

Completing Codification of Title 46 United States Code, “Shipping”, as Positive Law, 151 Cong. 

Rec. H 10247, at 10312 (2005) (“[This bill, which includes § 40902] makes no substantive change 

in the law. It simply provides clarity and reorganization [of shipping laws].”). 

As the AEL court did, this Court should hold that for a valid bond claim to exist on bonds 

of the type attached to the Complaint, the principal must have been acting as an NVOCC in the 

specific transaction that gave rise to the claim. Bay Maritimes was not acting in that capacity in its 

alleged relationship with PayCargo Finance.

II. Bay Maritimes was not acting as an NVOCC in the specific transactions giving rise 

to PayCargo Finance’s alleged bond claim.

In AEL, after holding that the claimant was required to show that the bonded principal was 

acting as an NVOCC in the specific transactions giving rise to the claim, the Fourth Circuit 

evaluated whether the principal was in fact acting as an NVOCC in the relevant transactions. 5 

Fed. App’x at 110-11. To decide this question, the court reviewed the services the principal was 

providing to the claimant in the transactions and concluded that these services did not fall within 

the statutory definition of an NVOCC. Id.

The transactions that gave rise to PayCargo Finance’s alleged bond claim are described in 

the Complaint as a creditor-debtor relationship. Pursuant to a credit agreement, PayCargo Finance, 

as the creditor, allegedly “advanced substantial funds” on behalf of Bay Maritimes, the debtor. 

Complaint at ¶¶ 6-9. Bay Maritimes’s purported failure to repay these funds (i.e., its alleged default 

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and breach of the credit agreement) underlies the Default Final Judgment that PayCargo Finance

obtained. Id. at ¶¶ 10-11. Based on PayCargo Finance’s allegations, the only services Bay 

Maritimes was supposed to provide in its transactions with PayCargo Finance were those of a 

debtor toward a creditor; i.e., repayment of a debt. 

Section 40102 of Chapter 46 of the United States Code defines an NVOCC as “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.” In its transactions with PayCargo 

Finance, Bay Maritimes was not providing PayCargo Finance with the services of a common 

carrier, a shipper, or any similar entity. The only potential services rendered by Bay Maritimes to 

PayCargo Finance involved the repayment of funds borrowed from PayCargo Finance. The 

definition of an NVOCC under § 40102 does not, expressly or impliedly, encompass this type of 

activity.

Similar to the bonded principal in AEL, Bay Maritimes, although it may have acted as an 

NVOCC in other transactions, was clearly not providing services in that capacity when it 

transacted business with PayCargo Finance. Complaint at ¶¶ 6-9 (alleging a debtor-creditor 

financing relationship between Bay Maritimes and PayCargo Finance). Accordingly, PayCargo 

Finance’s alleged claim on the bond in this action must be dismissed since the alleged claim does 

not fall within the coverage of the alleged Bond.

CONCLUSION

PayCargo Finance has not and cannot state a claim upon which relief may be granted 

because Bay Maritimes was not acting as an NVOCC in its transactions with PayCargo Finance.

Therefore, the Complaint should be dismissed pursuant to Federal Rule of Civil Procedure 

12(b)(6).

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Dated: October 4, 2022 

Respectfully submitted,

GURLEY & ASSOCIATES 

/s/ David E. Gurley 

David E. Gurley (Fla. Bar No.: 0402214) 

dgurley@gurleyassociates.com

Michael A. Fant (Fla Bar No.: 0100713) 

mfant@gurleyassociates.com

601 South Osprey Avenue 

Sarasota, FL 34236 

Telephone: (941) 365-4501 

Facsimile: (941) 365-2916 

eservice@gurleyassociates.com

Counsel for Defendant, Aspen American Insurance 

Company

CERTIFICATE OF SERVICE

I hereby certify that on October 4, 2022, a copy of the foregoing was electronically filed 

with the Clerk of the Court via the Court’s CM/ECF system, which will send a notice of electronic 

filing to all counsel of record. 

GURLEY & ASSOCIATES 

/s/ David E. Gurley 

David E. Gurley (Fla. Bar No.: 0402214) 

dgurley@gurleyassociates.com 

Michael A. Fant (Fla Bar No.: 0100713) 

mfant@gurleyassociates.com

601 South Osprey Avenue 

Sarasota, FL 34236 

Telephone: (941) 365-4501 

Facsimile: (941) 365-2916 

eservice@gurleyassociates.com

Counsel for Defendant, Aspen American Insurance 

Company

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