Appeal fro the United States District Court for the Southern District of Florida. D.C. Docket No. 0:10-cv-61555-CMA.
For National Maritime Services, Inc., Plaintiff - Appellee: Eyal Berger, Catherine E. Douglas, Akerman, LLP, Miami, FL; Patrick E. Novak, Horr Novak & Skipp, PA, Miami, FL.
For Glenn F. Straub, Burrell Shipping Company, LLC, Defendants - Appellants: Larry A. Zink, Zink Zink & Zink Co, LPA, Canton, OH; Craig Thomas Gallee, The Galle Law Group, PA, West Palm Beach, FL.
Before WILLIAM PRYOR and JORDAN, Circuit Judges, and WALTER,[*] District Judge. JORDAN, Circuit Judge, concurring.
WILLIAM PRYOR, Circuit Judge.
This appeal requires us to decide whether the district court had ancillary jurisdiction over a supplementary proceeding to avoid a fraudulent transfer by a judgment debtor. National Maritime Services, Inc., sued Burrell Shipping Company, LLC, for amounts owed for management and custodial
services provided for a vessel. After National Maritime obtained a judgment in its favor, it discovered that Burrell Shipping had transferred all of its assets to its owner, Glenn F. Straub. National Maritime then initiated a supplementary proceeding, Fed.R.Civ.P. 69; Fla. Stat. § 56.29(6), to void the transfer, and the district court later entered a judgment against Straub. Because the district court had ancillary jurisdiction over this supplementary proceeding and the record supports the finding of a fraudulent transfer, we affirm.
National Maritime filed a complaint in the district court against Burrell Shipping and Straub for breach of contract and unjust enrichment. The claims arose from management and custodial services that National Maritime had provided for the M/V/ Island Adventure, a vessel owned by Burrell Shipping. The district court had subject matter jurisdiction based on the maritime nature of the controversy, 28 U.S.C. § 1333. While that action was pending, Burrell Shipping sold the vessel, its only asset, to a boat scrapper for $2,249,000. Burrell Shipping then transferred the proceeds of the sale to Straub.
Straub is the sole owner of Burrell Shipping and its president, chief operating officer, and managing member. Straub is also the director and president of Burrell Industries, Inc. To facilitate the purchase of the vessel, Straub loaned Burrell Industries $3.2 million in exchange for a promissory note. Burrell Industries in turn loaned Burrell Shipping $3.2 million by a promissory note. Burrell Shipping then granted Burrell Industrials a mortgage for the vessel to secure the promissory note and purchased the vessel from the United States Marshals Service.
After a bench trial in June 2011, the district court entered a final judgment in favor of National Maritime and against Burrell Shipping in the amount of $99,660.05, plus interest. But the district court ruled that Straub was not individually liable to National Maritime. National Maritime attempted to execute on its judgment, but was unsuccessful because Burrell Shipping had no assets.
National Maritime then initiated a supplementary proceeding against Straub in " accord[ance] with the procedure of the state where the court is located." Fed.R.Civ.P. 69(a). Based on a Florida law that permits a trial court to void a transfer of property that " has been made . . . by the judgment debtor to delay, hinder, or defraud creditors," Fla. Stat. § 56.29(6)(b), National Maritime asked ...