World Wide Supply OU v. Quail Cruises Ship Management
802 F.3d 1255
| 11th Cir. | 2015Background
- World Wide Supply OÜ (Plaintiff) sought a prejudgment Rule B attachment for €123,122.28 from funds Viagens agreed to pay Quail pursuant to a settlement; those funds were part of a larger $5,000,000 secret settlement.
- Quail had previously agreed that recoveries from Viagens (up to €3,395,519.45) would be paid to Jewel; Quail and Quail Travel asserted interests in the Viagens settlement proceeds amid overlapping claims by Jewel, Hainan, and Quail Travel (Chapter 15).
- The bankruptcy court/dividing order allocated an undivided 50% interest to Quail (subject to Jewel’s constructive trust and Hainan’s prior Rule B attachment) and 50% to Quail Travel. Viagens agreed to transfer Quail’s $2.5M share to Holland & Knight for staged disbursement to Hainan and Jewel.
- Hainan had an earlier Rule B garnishment on the same funds; after the first installment was paid and disbursed, Plaintiff filed an emergency Rule B attachment seeking the second installment while the funds sat at Holland & Knight.
- The district court vacated Plaintiff’s attachment, concluding Plaintiff’s narrow reading of Rule B(3)(a) was incorrect, Plaintiff’s emergency was manufactured (counsel had knowledge of the transfers), and the funds were no longer Quail’s property at the time of Plaintiff’s attachment. Plaintiff appealed.
- The Eleventh Circuit denied appellees’ motion to dismiss as moot, held that loss of physical control over the res does not automatically moot Rule B appeals, and affirmed the vacatur because the funds were subject to Hainan’s prior Rule B attachment and not available for Plaintiff’s new attachment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the appeal is moot because the funds left the district | Attachment creates in personam jurisdiction, so removal of res does not moot appeal | Removal of funds means district lacks jurisdiction and appeal is moot | Not moot: departure of res does not automatically divest jurisdiction; judgment could provide meaningful relief |
| Whether a prior Rule B attachment lapses when the res is transferred to a non-garnishee in the district for distribution | Rule B(3)(a) requires funds be held by garnishee or paid into court registry; once funds leave garnishee’s hands to a non-garnishee, prior attachment lapses and a new Rule B may be taken | Transfer to a non-garnishee pursuant to court order does not terminate prior attachment; funds remained subject to prior attachment and trust/settlement constraints | Plaintiff’s novel reading of Rule B(3)(a) rejected; transfer under court-authorized process did not void Hainan’s attachment |
| Whether the funds remained the property of Quail (and thus attachable) at the time Plaintiff sought its writ | The funds were still “property of Quail” under the settlement language and thus available for attachment | The funds were held in trust/distribution process for Hainan and Jewel and were not Quail’s property when Plaintiff moved | Court accepted finding that funds were not Quail’s property; Plaintiff failed to properly contest that factual finding |
| Standard of review—whether the district court abused its discretion in vacating the attachment | N/A (argued that attachment was wrongly vacated) | N/A | No abuse of discretion: court applied correct legal standard and relied on non–clearly erroneous factual findings |
Key Cases Cited
- Great Prize, S.A. v. Mariner Shipping Party, Ltd., 967 F.2d 157 (5th Cir.) (explains how Rule B quasi-in-rem attachments operate to confer in personam jurisdiction)
- Republic Nat’l Bank of Miami v. United States, 506 U.S. 80 (1992) (departure of the res does not necessarily deprive appellate court of jurisdiction in admiralty forfeiture context)
- Stevedoring Servs. of Am. v. Ancora Transp., N.V., 59 F.3d 879 (9th Cir.) (departure of garnished funds does not moot appeal of Rule B release)
- Vitol, S.A. v. Primerose Shipping Co., Ltd., 708 F.3d 527 (4th Cir.) (same principle applied to Rule B funds)
- Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434 (2d Cir.) (explains Rule B’s dual purposes: obtain jurisdiction and assure satisfaction)
- Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir.) (standard of review and principles governing maritime attachments)
- Dresdner Bank AG v. M/V OLYMPIA VOYAGER, 463 F.3d 1233 (11th Cir.) (summarizes Rule B requirements and procedures)
- United States v. One Lear Jet Aircraft, 836 F.2d 1571 (11th Cir. en banc) (discussed in context of jurisdiction and removal of res; later addressed by Republic National Bank)