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Federal Ins. Co. v. Maritime Shipping Agencies





APPEAL from the Circuit Court of Cook County; the Hon. RICHARD SAMUELS, Judge, presiding.


Plaintiff, Federal Insurance Company (Federal), is seeking to obtain satisfaction of a judgment against Maritime Shipping Agencies (Maritime), in this supplementary proceeding (Ill. Rev. Stat. 1977, ch. 110, par. 73) against Glacier Marine Agencies, Ltd. (Glacier), Morrie Boas, and Sheldon Shalett. The trial court granted plaintiff's motion for summary judgment, and the defendants appeal. The issues on appeal are whether summary judgment (Ill. Rev. Stat. 1977, ch. 110, par. 57) is a proper disposition of a supplementary proceeding; if so, whether the trial court properly granted summary judgment for Federal; whether the trial court erred in striking portions of an affidavit filed by defendants in support of their own motion for summary judgment and in opposition to Federal's motion for summary judgment; and whether the trial court abused its discretion in refusing defendants' request to file supplementary affidavits with their motion for rehearing. There are also numerous motions pending before this court discussed later in this opinion. The validity of Federal's judgment against Maritime is not challenged in this appeal.

Federal became obligated to pay certain penalties and duties to the United States Customs Office on behalf of defendant Maritime pursuant to a "vessel, vehicle, or aircraft" bond it executed in favor of Maritime on April 29, 1971. Federal then filed a complaint seeking indemnity against Maritime for the payments. On February 27, 1975, a default judgment was entered in favor of Federal for $7,636.13, plus costs.

On March 10, 1975, Federal issued a citation to discover assets to Maritime, Sheldon Shalett, and Morrie G. Boas. Boas was deposed on August 11, 1975, and gave the following sworn testimony.

Maritime was formed in 1966. During the first years of its existence, it engaged in the business of "vessel husbandry," arranging for dock space, supplying provisions and stevedoring services, and caring for a ship's crew while in port, for a number of shipowners. Brokerage and chartering services were also among Maritime's early business activities. In the late 1960's or early 1970's, Maritime became the general agent for a now-bankrupt Panamanian shipping corporation known as Mardina Lines, S.A., and thereafter ceased all business activities on behalf of other shipowners. Maritime handled all of Mardina's operations in the United States, which included operating Mardina's ships, "time" chartering vessels, booking cargoes, arranging for the loading and unloading of cargoes, collecting freights, and paying Mardina's bills.

Boas testified that the president of Mardina Lines was Alan Cameron. Boas and Shalett were the secretary and vice-president, respectively, of Mardina. Mardina was formed in 1969, and had a checking account at the First National Bank of Chicago on which Cameron, Boas, Shalett, William Boas (Morrie Boas's son) and Richard Forbes, who later became treasurer of Mardina, were authorized to write checks. Cameron, a British citizen, operated as the general agent of Mardina Lines in Europe through his company, Pumice Aggregates, Ltd.

Maritime owned no real estate. It leased offices at 1010 Dixie Highway in Chicago Heights, a building in which neither Maritime nor any of its principals had an interest. Maritime maintained two bank accounts at the First National Bank of Chicago Heights, one designated as the "regular" account, the other designated as the "agency" account. Boas, Shalett, and William Boas were authorized to write checks on both accounts. Boas explained that the "agency" account was used primarily to conduct Maritime's early business activities — vessel husbandry, brokering, and chartering. When Maritime became general agent for Mardina, the agency account became largely dormant, the Mardina business flowing through Maritime's "regular" bank account.

Boas testified that Glacier was formed on August 1, 1974, with Sheldon Shalett and him as principals. He described Glacier as a marine agency, engaged in the vessel husbandry business and in booking cargoes for various shipping lines. Glacier occupied the same offices as Maritime at 1010 Dixie Highway in Chicago Heights. Boas explained the reasons for which Glacier was formed:

"Q. All right. Now, what happened in August or September of '74?

A. Well, I think what you are trying to get at is why did Mr. Shalett and I set up a company called Glacier Marine?

Q. Well, I am trying to get at all the events surrounding the corporation.

A. Well, Maritime Shipping Agencies, Inc. as I stated before, an Illinois corporation, whose sole function was in the past several years as general agents for Mardina Lines.

When Mardina Lines got into financial trouble, Maritime Agencies, Inc., was not legally involved. However, there was a connotation to the shipping world and to the world in general that Maritime and Mardina were one in the same whereas while it was legally not true.

We were not interested in fighting every Tom, Dick and Harry who would make an attack against Maritime for Mardina obligations because in the steamship business you are involved with — you are more familiar with than I, but you are involved with writs of foreign attachment and it is nothing for somebody to come up and tie up a bank account.

So consequently we felt that we could not stay in business and operate through Maritime because we felt that we would be spending the best part of our lives defending Maritime, so we ceased to let Maritime function.

We have not disbanded the corporation. We are not running away saying that we don't know Maritime. The name is on the door, but we commenced our operations under the name of Glacier Marine Agencies whereby we felt we could operate without the harassment that we would be submitted to through Maritime."

At a later point in the examination, Boas stated:

"A. Well, the office is occupied by Glacier Marine. As you can see, we have ceased doing business as Maritime back in September in that area. Consequently we don't consider this as Maritime. We keep the name on the door. We are not running away from Maritime, but we are not doing any business as Maritime so from that point on it is all done as Glacier Marine. * * *"

Glacier also maintained its bank account at the First National Bank of Chicago Heights. Boas, Shalett, and William Boas were authorized to write checks on that account. When Glacier was formed, all of Maritime's employees became employed by Glacier.

Boas testified to the terms of an agreement executed between Maritime and Glacier on August 7, 1974. Under that agreement, Maritime sold its office furniture and supplies to Glacier "on behalf of funds" that Glacier had loaned to Maritime. Glacier agreed to assume those obligations of Maritime incurred on Maritime's behalf (telephone, telex, etc.). Glacier did not assume those obligations which Maritime incurred on behalf of Mardina Lines. Boas testified that the office furniture and supplies constituted virtually all of the assets of Maritime.

Boas testified that at the time Glacier was formed, Maritime had a total indebtedness of approximately $55,000. On September 3, 1974, approximately $19,000 was deposited in Maritime's regular bank account. Two days later, $19,000 ...

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