Maricultura Del Norte, S. De R.L. De C.V. v. Worldbusiness Capital, Inc.

Background

The case arose from a 2005 credit agreement under which WorldBusiness Capital, Inc. loaned Marnor $9.9 million and received mortgages on Marnor’s fishing vessels. After Marnor defaulted, WorldBusiness began foreclosure proceedings in Mexico. The court previously found WorldBusiness and Umami Sustainable Seafood, Inc. liable for breaches of contract and entered an amended judgment awarding the plaintiffs approximately $3.1 million. The Second Circuit affirmed the judgment.

After the appeal, Marnor assigned its interest in the judgment to Servax Bleu, S. de R.L. de C.V. Marnor and Servax settled with WorldBusiness for $750,000. Umami later obtained an interest judgment and an attorneys’ fee award against Marnor in the Mexican foreclosure proceeding. Separately, a Mexican administrative court vacated a $750,000 customs assessment that had been included in the damages award, although the opinion states that it was unclear whether the assessment could be imposed again.

Umami’s Rule 60 Motion

Umami moved under Federal Rule of Civil Procedure 60(b), which permits relief from a judgment in specified circumstances, to reduce the amended judgment by the settlement amount, the Mexican interest judgment, the customs assessment, and related interest. The court held that the motion was timely because it sought equitable relief based on post-judgment developments rather than a reconsideration of the original ruling.

The court granted in part and denied in part Umami’s motion. It granted the requested $750,000 reduction for the settlement with WorldBusiness and ordered a corresponding reduction of the supersedeas bond, which secured the judgment during the appeal.

The court denied Umami’s request to set off the Mexican interest judgment against the amended judgment. It reasoned that New York’s foreign-judgment recognition law did not permit recognition of that judgment through this Rule 60 motion. The court also stated that, even if the request had been procedurally proper, it would not have allowed the setoff because the Mexican interest award arose from foreclosure proceedings that the court had previously found were conducted in bad faith and in breach of the credit agreement.

The court held Umami’s request concerning the customs assessment in abeyance for ten days. It directed the parties to provide evidence showing either that the assessment was being reimposed or that it had been permanently vacated and could not be reimposed under Mexican law. The opinion did not finally decide that portion of the motion.

Servax’s Rule 60 Motion

Servax moved to increase the amended judgment by $1,638,833.32 for the attorneys’ fees and costs that Umami obtained from the Mexican Court against Marnor after entry of the amended judgment. The court denied the motion. It questioned whether Rule 60 was the proper procedure for recovering amounts based on alleged later breaches of the agreement and noted that the Mexican fee award had not been litigated in this court.

Turnover Order and Writ of Execution

Servax also sought a turnover order and a writ of execution against Umami and Atlantic Specialty Insurance Company, the surety on Umami’s supersedeas bond. A turnover order allows a judgment creditor to obtain property belonging to a judgment debtor when that property is held by a third party. A writ of execution authorizes an enforcement officer to levy on nonexempt property belonging to the judgment debtor.

The court held that Umami had an interest in the bond and that Servax, as Marnor’s assignee, had superior rights to the relevant portion of it, apart from the settlement amount. The court therefore granted Servax’s writ motion in part and authorized a turnover order and writ of execution for the portion of the judgment remaining due. The exact amount was left to be determined after the court resolved the customs-fee issue.

Disposition

The court’s conclusion states that Umami’s Rule 60 motion was granted in part as to the WorldBusiness settlement, denied as to the Mexican interest judgment, and held in abeyance for ten days as to the customs assessment. Servax’s Rule 60 motion was denied. Servax’s writ motion was granted, with the exact amount to be determined in ten days. The court also denied Umami’s motion to strike. Judge McMahon directed the Clerk of Court to close the listed motions.