June 24, 2013
John Doe v. Star Clippers, Ltd, Star Clippers, GSA d/b/a Star Clippers Americas, and Luxembourg Shipping Services – Part 1
Response to Motion to Dismiss
The experienced maritime attorneys at Lipcon, Margulies & Winkleman, P.A. represent injured passengers and crewmembers from all over the world. In this case, a crewmember onboard a Star Clippers cruise ship was hurt in the course of his employment. The Plaintiff filed his claims in the Southern District of Florida and the Defendants moved to dismiss his claims using a several different arguments. After taking jurisdictional discovery, Plaintiff used the information he gathered to argue that Star Clippers should not be allowed to escape liability by way of playing a corporate shell game to shield itself from claims like the Plaintiff’s.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO.: 12-CV-23768-KING/McALILEY
JOHN DOE,
Plaintiff,
v.
STAR CLIPPERS, LTD. CORP.,
STAR CLIPPERS GSA, INC., d/b/a
STAR CLIPPERS AMERICAS and
LUXEMBOURG SHIPPING SERVICES, S.A.,
d/b/a STAR CLIPPERS,
Defendants.
_____________________________/
PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS PLAINTIFF’S COMPLAINT
Plaintiff, JOHN DOE, by and through his undersigned counsel, hereby files this Response in Opposition to Defendant’s Motion to Dismiss Plaintiff’s Complaint [D.E. 24] and for good cause relies on the following Memorandum of Law:
THE DEFENDANTS’ MOTION TO DISMISS SHOULD BE DENIED BECAUSE IT IS PREDICATED UPON CORPORATE DISTINCTIONS THAT ARE NOTHING MORE THAN LEGAL FICTIONS. DEFENDANT STAR CLIPPERS LTD IS THE ENTITY THAT FINANCES AND OPERATES THE STAR CLIPPERS FAMILY. FURTHER, STAR CLIPPERS LTD IS REGISTERED TO DO BUSINESS IN FLORIDA AND HAS A SUBSTANTIAL BASE OF OPERATIONS IN FLORIDA. THE REMAINING DEFENDANTS ARE CORPORATE SHELLS. ACCORDINGLY, THE DEFENDANTS’ ARGUMENTS REGARDING JURISDICTION AND FORUM NON CONVENIENS SHOULD BE DISMISSED. FURTHER, THE DEFENDANTS’ ARGUMENTS REGARDING THE IDENTITY OF PLAINTIFF’S EMPLOYER ARE IMPROPERLY DECIDED AT THIS STAGE OF THE PROCEEDINGS. THE DEFENDANTS’ ONLY OTHER ARGUMENTS, REGARDING SERIVCE AND A FORUM SELECTION CLAUSE SHOULD BE QUICKLY DISPOSED OF AS FORUM SELECTION CLAUSES IN SEAMAN’S CONTRACTS ARE VOID AND SERVICE HAS BEEN PERFECTED PURSUANT TO THE FEDERAL RULES OF CIVIL PROCEDURe.
I.Introduction
This incident arises out of serious injuries sustained by Plaintiff JOHN DOE, while working as an electrical engineer aboard the vessel, Star Flyer. While on the vessel, Plaintiff was instructed to repair a food elevator in the galley despite this task not being within the scope of his duties. [D.E. 1, 9]. Specifically, Plaintiff was instructed to cut a metal cable suspending the food elevator. Id. When Plaintiff did as he was instructed, the food elevator crashed down onto his forearm fracturing both of the bones therein and causing nerve damage. Id.
The Defendants’ Motion to Dismiss relies heavily on the purported distinct corporate nature of each of the Defendants. Specifically, the Defendants maintain that: LUXEMBOURG SHIPPING SERVICES, S.A., (“LSS”) is the bareboat charterer of the Star Flyer and is also the Plaintiff’s employer; STAR CLIPPERS, LTD., (“LTD”) is the time charterer of the Star Flyer; and lastly STAR CLIPPERS, GSA, (“GSA”) is a sales agent responsible for selling tickets to the North and South American markets. Neither LTD or GSA have challenged jurisdiction or forum in this matter as both are registered to do business in Florida and maintain an office at 760 NW 107th Ave. Suite 100 Miami, FL 33172. LSS has challenged jurisdiction and forum.
What this Court will see is that these purported distinctions are purely legal fiction. LTD is the one parent corporation behind the entire Star Clippers operation and the other two Defendants are simply alter-egos of LTD. Accordingly, since LTD is registered to do business in Florida and maintains an office in Florida, suit can be maintained against its alter-ego, LSS, in Florida. Further, the issues raised by GSA and LTD that they claim warrant dismissal actually present factual issues not properly decided at a the motion to dismiss stage.
II. LSS’s arguments regarding service of process should be denied by this Honorable Court as it is clear from these proceedings that LSS has been notified of the present lawsuit and been given an opportunity to respond. In fact, LSS has obtained counsel and sat for deposition to facilitate jurisdictional discovery. Clearly, the purpose of service has been effectuated.
The starting point for an analysis of amenability of service of process in federal court is Federal Rule of Civil Procedure 4. Rule 4 allows for two types of service: personal and substituted. Personal service has not in all circumstances been regarded as indispensable to the process due to residents, and has more often been held unnecessary as to nonresidents. See Silvious v. Pharaon, 54 F. 3d 697 (11th Cir. 1995) (citing Mulane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950)).
a.First Method of Service: By mailing a copy of the Complaint and summons to the Defendant via certified mail and through the Clerk of the Court via Federal Express, service was proper pursuant to Federal Rule of Civil Procedure 4(f).
Federal Rule of Civil Procedure 4(f) provides that an individual in a foreign country may be served by, “using any form of mail that the clerk addresses and sends to the individual and that requires a signed receipt.” Fed. R. Civ. P. 4(f)(2)(C)(ii). Article 10 subparagraph (a) of the Hague Convention states in relevant part that “[p]rovided the State of destination does not object, the present Convention shall not interfere with (a) the freedom to send judicial documents, by postal channels, directly to persons abroad” 20 U.S.T. 361, T.I.A.S. No. 6638.
Based on Article 10(a), this Honorable Court recently observed that “this district, along with several district courts within the Eleventh Circuit and many other federal circuit courts and district courts, have held that ‘Article 10(a) permits service by mail unless the country has objected to this method.’” TracFone Wireless, Inc. v. Pak China Group Co. Ltd., 843 F. Supp. 2d 1284, 1293 (S.D. Fla. 2012) (citing TracFone Wireless, Inc. v. Bequator Corp., Ltd., 717 F.Supp.2d 1307, 1309 (S.D. Fla. 2010); Curcuruto v. Cheshire, 864 F.Supp. 1410, 1411 (S.D. Ga. 1994); Conax Fla. Corp. v. Astrium Ltd., 499 F.Supp.2d 1287, 1293 (M.D. Fla. 2007)[1] (authorizing service by mail upon finding that “Article 10(a) is applicable to service of process.”); Lestrade v. United States, 945 F.Supp. 1557 (S.D. Fla. 1996) (holding that service of IRS petition by mail satisfied Hague Service Convention); see also Brockmeyer v. May, 383 F.3d 798, 802 (9th Cir. 2004) (holding that Article 10(a) does include service of process by mail, reasoning that “send judicial documents” encompasses “service of process,” and that such method is “consistent with the purpose of the Convention to facilitate international service of judicial documents.”); Research Sys. Corp. v. IPSOS Publicite, 276 F.3d 914, 926 (7th Cir. 2002), cert. denied, 537 U.S. 878, (2002); Ackermann v. Levine, 788 F.2d 830, 838–40 (2d Cir. 1986).
On November 20, 2012, Plaintiff sent LSS, via registered certified mail, a copy of the Complaint and Summons to LSS’s address in Luxembourg. [D.E. 13]. This Honorable Court has held that this form of service is proper under the Federal Rules of Civil Procedure. See Balachader v. NCL (Bahamas), Ltd., 11-21064 [D.E. 25] (S.D. Fla. 2011) (King, J.):
The docket sheet reflects that a summons for service abroad was returned executed on May 11, 2011. The Affidavit of service states that the summons and complaint were mailed directly to Defendant Ponteras at his last known address in the Philippines by Plaintiff’s counsel on May 11, 2011. In addition, Plaintiff filed a copy of the stamped and addressed registered mail sent to Defendant Ponteras. The filing reflects that a signature is required by the recipient. Defendant Ponteras does not dispute that the materials were mailed or that the mailing address is correct. This is a valid method of service under the Federal Rules of Civil Procedure. Rule 4(f) provides that an individual in a foreign country may be served by, “using any form of mail that the clerk addresses and sends to the individual and that requires a signed receipt.” Fed. R. Civ. P. 4[f](2)(C)(2).
Id. ,at pg. 3.
Here, like in Balachander: a) the docket sheet reflects that a summons for service abroad was returned executed [D.E. 13-2]; b) the affidavit of service states that the summons and complaint were mailed directly to LSS [D.E. 13]; c) Plaintiff filed a copy of the stamped and addressed registered mail sent to LSS [D.E. 13-2]; d) the filing reflects that a signature is required by the recipient [D.E. 13-2].
It is clear that the service over LSS is virtually identical to service over the foreign Defendant in Balanchader. Therefore, as this Honorable Court held in Balanchander, sending the Complaint and summons directly to Defendant’s place of business via certified mail, is valid service pursuant to Fed. R. Civ. P. 4(f)(2)(C)(ii).[2]
Further, pursuant to Fed. R. Civ. P. 4(f)(2)(C)(ii), Plaintiff also directed the clerk to serve a summons and complaint directly to LSS via Federal Express. The docket also reflects that LSS received and signed for this Complaint and Summons as well. [D.E. 20-2].
b.Second Method of Service:Alternatively, Plaintiff’s substituted service through the Florida Secretary of State satisfied the elements of Federal Rule 4(e)(2)(C).
Federal Rule of Civil Procedure 4(e) provides, in part:
(e) Serving an individual within a Judicial District of the United States an individual [] may be served in a judicial district of the United States by:
(1)following state law for serving summons in an action brought in courts of general jurisdiction in the state where the district court is located or where the service is made; or
(2)doing any of the following:
..
(C) delivering a copy to an agent authorized by appointment or by law to receive service of process.
Id.(Emphasis added). As shown above, “Rule 4(e) permits personal service upon a Defendant to be made by delivering a copy of the summons and complaint to a person deemed by the general law, federal and state, to be authorized to accept service of process on behalf of the defendant.” Silvious v. Pharaon, 54 F. 3d 697, 701 (11th Cir. 1995), citing 2 James W. Moore et. al., Moore’s Federal Practice §4.10., at 4-183..
Florida law, particularly statute § 48.181, permits the Florida Secretary of State to accept service on behalf of nonresidents who engage in or carry a business or business venture in the state. See Fla. Stat. section 48.181.[3] See also Pelycado Onroerend Goed B.V. v. Ruthenberg, 635 So. 2d 1001, 1003 (Fla. 5th DCA 1994). Therefore, the Florida substitute service statute, 48.181 constitutes an exception to the general rule that a defendant must be personally served by providing that any resident of a foreign country operat[ing], conduct[ing], engag[ing] in, or carry[ing] on a business or business venture in Florida is deemed to appoint Florida’s Secretary of State to accept service of process on its behalf. See Cantley v. Ducharme, 2010 WL 2382912 (S.D. Fla. 2010) (citing Monaco v. Nealon, 810 So. 2d 1084, 1085 (Fla. 4th DCA 2002)).
The Florida Supreme Court has held that engaging in a single act for profit can amount to a business venture. Labbee v. Harrington, 913 So. 2d 679 (Fla. 3d DCA 2005) (citing Wm. E. Strasser Contra. Linn, 97 So. 2d 458, 459 (Fla. 1957)). Doing business could be as simple as “doing a series of similar acts for the purpose of thereby realizing a pecuniary benefit, or otherwise accomplishing an object, or doing a single act for such purpose with the intention of thereby initiating a series of such acts.” Labbee, at 682 (citing Webber v. Register, 67 So. 2d 619, 623 (Fla. 1953). See also Poston v. American President Lines, Ltd., 452 F. Supp. 568 (S.D. Fla. 1978):
The intent of the Florida legislature in enacting Florida Statute 48.181 (was) that any individual or corporation who has exercised the privilege of practicing a profession or otherwise dealing in goods, services or property, whether in a professional or nonprofessional capacity within the State in anticipation of economic gain, be regarded as operating a business or business venture for purposes of service of process under Florida statute 48.181 Id.
Herein, as alleged in the Complaint[4] at all times material, LSS, was engaged in substantial activity within this state [D.E. 1 ¶ 2] and had an ongoing business relationship with LTD and GSA in Florida for the purposes of economic gain. In fact, discovery has born out that there are no distinctions whatsoever between the three Defendants and that they are in fact one entity. As such, LSS is operating a business venture in Florida. Further, jurisdictional discovery has revealed that at all times material 1) LSS signed multiple contracts with LTD, which is registered to do business in Florida and maintains an office in Miami, Florida, and 2) LSS carried out functions pertaining to a cruise line that operates partially out of an office in Florida.
These allegations must be accepted as true. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41 (1957) (“ when ruling on a motion to dismiss, a judge must accept as true all of the factual allegations in the Complaint”).
Moreover, these allegations are sufficient to establish proper substituted service through the secretary of state for purposes of §48.181. See Labbee v. Harrington, 913 So. 2d 679 (Fla. 3d DCA 2005); Venetian Salami Co. v. Parthenais, 554 So. 2d 573, 574 (Fla. 1st DCA 2003) (to determine whether long-arm jurisdiction is appropriate for substitute service, the complaint must either plead a basis for jurisdiction pursuant to the language of section 48.181 or allege sufficient jurisdictional facts to satisfy the statute).
Therefore, Plaintiff’s service on the Florida Secretary of State, as Defendant’s agent to accept service of process by operation of law, was proper.
c. Plaintiff’s Service Complies with Due Process Requirements.
Long-standing jurisprudence, particularly United States Supreme Court decisions following Mullane v. Central Bank & Trust Co, 339 U.S. 306 (1950), establish that although the U.S. Constitution does not require any particular means of service of process, the method selected must be reasonably calculated to provide notice and an opportunity to respond. See Mullane, 339 U.S. at 314:
An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all circumstances, to appraise interested parties of the pendency of the action and afford them an opportunity to be heard to present their objections. The reasonableness and hence the constitutional validity of any chosen method may be defended on the grounds that it is in itself reasonably to inform those affected. Id.
In proper circumstances, this broad constitutional principle unshackles the federal courts from anachronistic methods of service. See Rio Props. v. Rio Int’l Interlink, 284 F. 3d 1007(9th Cir. 2002). Herein, Plaintiff’s 1) service via registered mail to LSS at its corporate address, 2) service through the Florida Secretary of State, and 3) Service via The Clerk of the Court Notice of International Service sent federal Express should be deemed proper, because these three forms of service have done exactly what they were reasonably calculated to do and exactly what the Constitution requires, i.e. give LSS notice of this lawsuit and provide an opportunity to respond.
Plaintiff’s service conforms with procedural due process in accordance with the parameters set forth by the United States Supreme Court. Indeed, the fact that LSS has retained counsel, filed a motion to dismiss for insufficient service of process, and appeared for deposition, shows that it has been notified and has not only had an opportunity to respond, but indeed has responded. No further service is or should be required.
III.The Defendants cannot escape liability at this stage of proceedings by arguing they are not the Plaintiff’s employer. Long standing maritime jurisprudence allows a Plaintiff-seafarer to sue multiple parties ‘as potential employers.’ Under the borrowed servant doctrine, the identity of the Jones Act Defendant is question of fact not appropriately decided in a motion to dismiss.
Count I of the Complaint alleges Negligence under the Jones Act against all Defendants. In their Motion to Dismiss, Defendants, allege as follows: “Plaintiff fails to state a claim upon which relief can be granted with respect to the Defendants, Star Clippers, Ltd. and Star Clippers GSA, because the entities do not occupy a status to the Plaintiff upon which substantive liability can arise.”
Defendants make these allegations based on an employment contract and upon affidavits submitted with their Motion. However, just because LTD and GSA say they are not Plaintiff’s employer, does not mean they are not in fact Plaintiff’s employer and this Court cannot and should not take the Defendants’ word in making this determination.
The Jones Act, 46 U.S.C. §30104, grants seamen who suffered personal injury in the course of their employment the right to seek damages in a jury trial against their employers. The employer under the Jones Act is liable in damages for injury resulting in whole or in part from the negligence of its officers. Jacob v. New York, 315 U.S. 752, 755 (1942); Wilburn v. Maritrans GP Inc., 139 F. 3d 350 (3d Cir. 1998). Thus, under the Jones Act, the employer has a fundamental duty to provide seamen with a reasonably safe place to work. Davis v. Hill Engineering, Inc., 549 F. 2d 314 (5th Cir. 1977). This duty is absolute and non-delegable. See Sanford v. Caswell, 200 F.2d 830, 832 (5th Cir. 1953)
As the Defendants correctly point out, “[a] Jones Act claim also requires proof of an employment relationship either with the owner of the vessel or with some other employer who assigns the worker to a task creating a vessel connection” Guidry v. S. Louisiana Contractors, Inc., 614 F.2d 447, 452 (5th Cir. 1980). However, the employer need not be the owner or the operator of the vessel. See Barrios v. Louisiana Construction Materials Co., 465 F.2d 1157 (5th Cir. 1972). Independent contractors may be liable under the Act, and a third person who borrows a worker may become his employer if the borrowing employer assumes enough control over the worker. Id; see also Ruiz v. Shell Oil Co., 413 F.2d 310 (5th Cir. 1969). “[E]ven if a seaman is deemed to be a borrowed servant of one employer, this does not automatically mean that he ceases to be his immediate employer’s servant for Jones Act purposes.” Guidry, 614 F.2d 447 (5th Cir. 1980) citing Spinks v. Chevron Oil Co., 507 F.2d 216, 224 (5th Cir. 1975). “It may also be possible for a seaman to have more than one Jones Act employer.” Id.
What GSA and LTD fail to recognize, is that determining who is the proper Jones Act employer is a mixed question of law and fact, within the province of the jury upon instructions by the trial court. Thomas J. Schoenbaum, Admiralty and Maritime Law, Fourth Edition, §4-23, p. 282. These questions of fact include ascertaining: 1) who had the power to engage the seaman; 2) who determined the wage to be paid; 3) who had the power of dismissal; and 4) who had the right to control the seaman’s on-the-job conduct. Health v. American Sail Training Association, 644 F. Supp. 1459 (D.R.I. 1986).
These questions cannot be answered at this juncture without the benefit of discovery. Their resolution at a motion to dismiss is premature. Instead, as shown below, long-standing maritime jurisprudence requires that they be submitted to the jury.
The borrowed servant doctrine. Under the borrowed servant doctrine, courts are required to carefully scrutinize the employment relationship of seamen to determine who is the real employer so that a Jones Act employer may not escape liability by delegating authority or using a third party. For example, in Hall v. Diamond M Co., 635 F. Supp. 362 (E.D. La. 1986), the seaman plaintiff was an anchor handler who was employed by a subcontractor of an oil and gas drilling company. In determining that the plaintiff’s true employer was the subcontractor and not the drilling company, the court carefully considered the issue of whether the seaman was the “borrowed servant” of the drilling company, stating as follows:
The borrowed servant doctrine is a venerable one in maritime law, having been around since at least 1909. The purpose of the rule is to place the risk of a workers injury on his actual rather than his nominal employer by permitting the injured worker to recover from the company that was actually directing his work. The rule therefore allows plaintiffs like Mr. Hall to sue a number of “employers”, forcing them to argue their respective culpability to the jury.
Id. (emphasis added).
Therefore, here, pursuant to the borrowed servant doctrine, Plaintiff properly sued multiple potential employers (LTD, GSA, and LSS). Determination of whether one or all of these Defendants are the real Jones Act employer(s), is a question of fact for the jury. Interestingly, jurisdictional discovery has already demonstrated that the lines between the Defendants are blurry at best. Accordingly, the Defendants’ assertions that they are not the Plaintiffs employer fail, and their Motion to Dismiss on this ground should be denied.
IV.LSS should not be dismissed from this case because it is nothing more than a shell corporation that has been liquidated by LTD. In reality, LSS is just an alter-ego of LTD, a corporation registered to do business in Florida. Florida law holds that personal jurisdiction over a parent or another related subsidiary is warranted, when the resident corporation acts on behalf of those foreign affiliates.
Star Clippers (referring Colloquially to the Defendants as a whole) is playing the classic corporate shell game. As explained below, this shell game subjects LSS to jurisdiction in Florida.
The “reach of the [Florida long-arm] statute is a question of Florida law.” Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 257 (11th Cir.1996). “[F]ederal courts are required to construe [such law] as would the Florida Supreme Court.” Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir.1990). “Absent some indication that the Florida Supreme Court would hold otherwise, [federal courts] are bound to adhere to decisions of its intermediate courts.” Sculptchair, Inc., v. Century Arts, Ltd., 94 F.3d 623, 627 (11th Cir.1996) (citing Polskie Linie Oceaniczne v. Seasafe Transp. A/S, 795 F.2d 968, 970 (11th Cir.1986)).
Under Florida law, this Honorable Court may exercise personal jurisdiction over any foreign corporation where the affiliated domestic corporation “manifests no separate corporate interests of its own and functions solely to achieve the purpose of the dominant corporation.” Meier ex rel. Meier v. Sun Int’l Hotels, Ltd. , 288 F.3d 1264, 1271 (11th Cir. 2002) citing State v. Am. Tobacco Co., 707 So.2d 851, 855 (Fla. 4th DCA 1998) (citations omitted).
LSS will undoubtedly argue that jurisdiction does not exist over it by way of the Florida contacts of its parent, LTD, and affiliated corporation, GSA. However, Florida law is perfectly clear that agency is not limited to a parent-subsidiary relationship. “Personal jurisdiction over affiliated parties, whether a parent or another related subsidiary, is warranted when the resident corporation acts on behalf of those foreign affiliates.” Id citing United Elec. Radio and Mach. Workers of Am. v. 163 Pleasant St. Corp., 987 F.2d 39, 45, 48 (1st Cir.1993) (asserting jurisdiction over Scottish parent and co-subsidiary based on business relationship with and activities of Massachusetts subsidiary). In the present case, all of these corporations exist for one purpose, to operate Star Clippers Cruises and each are acting solely on the others behalf in order to run that business.
In an almost factually identical scenario (regarding the corporate structure in the present case), the Florida Fourth District Court of Appeal found that agency was warranted when there was no meaningful distinction between corporate entities. Pappalardo v. Richfield Hospitality Servs., Inc., 790 So.2d 1226, 1228 (Fla. 4th DCA) (finding agency based on evidence that the various parent and subsidiary defendants were “a confusing conglomerate, and were essentially one and the same company both financially and structurally.”).
This is precisely the scenario the Court is dealing with herein. GSA, LTD, and LSS are truly one corporation that is registered to do business in Florida and has an office a few miles from this Courthouse. To summarize for the Court, jurisdictional discovery has uncovered the following facts[5]:
LSS operates out of LTD’s office in Monaco, with the exception of approximately one trip every two months to Luxembourg. Shamim, pg. 6, L: 3-13 and pg. 27, L: 5-8. Exhibit 1.
The sole purpose of creating LSS was to flag Star Clippers vessels under the Luxembourg flag because Luxembourg law required Star Clippers to have an office in Luxembourg. Shamim, pg. 10, L: 13-17. Exhibit 1.
Now that Star Clippers vessels are no longer flagged in Luxembourg, LSS is being liquidated. All of the responsibilities that used to be handled by LSS are now being handled by LTD. Shamim, pg. 9. L: 21-24 and pg. 32, L: 11-22*. Exhibit 1.
The Managing Director of LSS does not live in Luxembourg, but rather 2 kilometers outside Monaco, where LTD has its office. Shamim, pg. 6, L: 22-24. Exhibit 1.
LTD directly pays 70% of LSS’s Managing Director’s salary. Shamim, pg. 34, L: 5 to pg. 35, L: 7. Exhibit 1.
LTD directly transfers money to LSS to pay crewmembers salaries, including the plaintiff. Shamim, pg. 37, L: 6 – 19. This was the only function of LSS. Shamim, pg. 59, L: 4-7. Whenever LSS needed money, funds were provided by LTD. Shamim, pg. 60, L: 2-6. Exhibit 1.
LSS’s managing director is also the vice chairman of LTD and has held other titles under LTD. Shamim, pg. 6, L: 25 – pg. 7, L: 9. The managing director of LSS has also held other titles for other various Star Clippers entities. Shamim, pg. 47, L: 15-16. Exhibit 1.
LSS only has two employees, Captain Shamim and Raymond Van Herck. Both of those employees also work for LTD. Shamim, pg. 13, L: 1-4. Exhibit 1. Krafft, pg. 23, L: 14-18. Exhibit 2.
The operations department that was in charge of recruiting and engaging crewmembers in 2009 worked for LTD and worked out of LTD’s office in Monaco. That department helped engage and recruit the Plaintiff. Shamim, pg. 39, L: 12-21. Exhibit 1. When Star Clippers recruits its crewmembers, it tells them they will be working for Star Clippers, not LSS. Shamim, pg. 40, L: 6-20. Exhibit 1.
LSS was not in charge of day to day operation of the Star Flyer. Shamim/em>, pg. 30, L: 13 – pg. 31, L: 19*. Exhibit 1.
LTD was responsible for the maintenance of the Star Flyer. Shamim, pg. 31, L: 20-23. Exhibit 1.
The board of directors of LSS consists of two LTD employees. The board of director of LTD consists of Mikael Krafft (the owner of LSS) and LSS’s managing director, an employee of LSS. Krafft, pg. 37, L: 25 – pg. 38, L: 9. Exhibit 2.
GSA’s board of directors consists of Mikael Krafft’s son and board meetings are not held very often. Chattam, pg. 9, L: 25 – pg. 10, L: 13.[6]
Bookings from around the world are processed through Miami. GSA only provides services to LTD. Chattam, pg. 13, L: 21 – pg. 14, L: 13.
The cruise line is operated from LTD’s office. Krafft, pg. 16, L: 7-9. Exhibit 2.
All three corporations are majority owned by Mikael Krafft either directly or indirectly. When asked about the reason for incorporating one of the companies he owned, Mikael Krafft responded that there were so many corporations that he could not remember the reason for them all. Mr. Krafft also testified that GSA, like LSS, has no value. Krafft¸pg. 8, L: 3 – pg. 9, L: 22*; pg. 25, L: 1-22, pg. 26, L: 2-24. Exhibit 2.
LSS was created solely to provide services to Star Clippers. Shamim, pg. 38, L: 10-13. Exhibit 1.
LSS has no assets. Krafft, pg. 9, L: 23 – pg. 10, L: 1. Exhibit 2.
GSA has no assets to speak of, so LTD had to guarantee its office lease. Chattam, pg. 31, L: 13-17.
LTD has loaned hundreds of thousands of dollars to GSA as “working capital that kept the business going”.
