10-0056-cv
Pilot Enterprises, Inc. v. B rodosplit, Inc. et al.


                                        UNITED STATES COURT OF APPEALS
                                            FOR THE SECOND CIRCUIT

                                                      SUMMARY ORDER

RULINGS BY SUMM ARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUM M ARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERM ITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUM M ARY ORDER IN A DOCUM ENT FILED W ITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (W ITH THE NOTATION
“SUMM ARY ORDER”). A PARTY CITING TO A SUMM ARY ORDER M UST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.


      At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New
York, on the 3 rd day of September, two thousand ten.

PRESENT:         REENA RAGGI,
                 GERARD E. LYNCH,
                         Circuit Judges,
                 JED S. RAKOFF,
                         District Judge.*
---------------------------------------------------------------
PILOT ENTERPRISES, INC.,

                                     Plaintiff-Appellant,

                         v.                                              No. 10-0056-cv

BRODOSPLIT INC., BRODOSPLIT PLIVIDBA
d.o.o., BRODOSPLIT SHIPPING LTD.,
BRODOGRADJEVNA INDUSTRIJA SPLIT d.d.,
BRODOSPLIT BRODOGRADILISTE d.o.o.,

                         Defendants-Appellees.
---------------------------------------------------------------
APPEARING FOR APPELLANT:                          GEORGE M. CHALOS, Chalos & Co., P.C.,
                                                  Oyster Bay, New York.


            *
         District Judge Jed S. Rakoff of the United States District Court for the Southern
District of New York, sitting by designation.
APPEARING FOR APPELLEE:                     GARTH S. WOLFSON, Mahoney & Keane,
                                            LLP, New York, New York.

       Appeal from a judgment of the United States District Court for the Southern District

of New York (Harold Baer, Judge).

       UPON DUE CONSIDERATION IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the December 28, 2010 order of the district court is AFFIRMED.

       Plaintiff Pilot Enterprises Inc. (“Pilot”) appeals from the district court’s vacatur of an

order of attachment issued pursuant to Rule B of the Supplemental Rules for Certain

Admiralty and Maritime Claims. We review the district court’s decision for abuse of

discretion, which we will identify if the “decision rests on an error of law or a clearly

erroneous finding of fact.” See Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 

, 439 (2d Cir. 2006). We assume the parties’ familiarity with the facts and

procedural history of this case, which we reference only as necessary to explain our decision

to affirm.

       The parties agree that the attachment in this case restrained both (1) electronic funds

transfers (“EFTs”) in the hands of one or more intermediary banks, and (2) a letter of

undertaking (“LOU”) issued on behalf of BS Sun Shipping Monrovia (“BS Sun”) to Citgo

Petroleum Corp. (“Citgo”) by BS Sun’s protection and indemnity (“P&I”) club in

consideration for the Citgo not attempting to arrest the M/T Stinice, a vessel operated by

Pilot and owned by BS Sun and its alleged alter-ego defendants Brodosplit Inc., Brodosplit

Plividba d.o.o., Brodosplit Shipping Ltd., Brodogradjevna Industrija Split d.d., and

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Brodosplit Brodogradiliste d.o.o. (collectively, “Brodosplit defendants”). The parties also

agree that the district court’s order vacating the attachment released the attachment of both

the EFTs and the LOU.

       Pilot does not challenge the district court’s order insofar as it releases from restraint

the Brodosplit defendants’ EFTs. See Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte

Ltd. (“Shipping Corp. of India”), 

(2d Cir. 2009). Rather, Pilot challenges the

district court’s order to the extent it releases the LOU. It argues that the district court should

have allowed discovery and invited briefing “as to the proprietary and/or beneficial

ownership of the rights conveyed in the LOU.” Appellant’s Br. at 18. We disagree.

       The district court explained that it released the LOU from restraint because it was

“‘worthless as to Pilot.’” Endorsed Chalos Letter at 2, Pilot Enterprises Inc. v. Brodosplit

Inc., et al., No. 07 Civ. 8520 (S.D.N.Y. Dec. 28, 2009). This conclusion finds support in the

terms of the LOU, which was “restricted” to P&I club’s satisfaction of any judgment

rendered in Citgo’s favor on its in rem claim against the M/T Stinice under bills of lading

issued to Citgo. Pilot does not dispute that Citgo has filed no such claim and that the time

for doing so has since passed. Under these circumstances, the district court acted well within

its discretion in concluding that the LOU was worthless and properly released from restraint.

       We have considered the parties’ other arguments and find them to be without merit.

Accordingly, the December 28, 2010 order of the district court is AFFIRMED.

                                     FOR THE COURT:
                                     CATHERINE O’HAGAN WOLFE, Clerk of Court




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