Court: United States Bankruptcy Court, M.D. Florida; July 2, 1990; Us Bankruptcy; United States Bankruptcy Court
An order has been issued regarding an objection to Claim No. 1010 filed by Backer Navid (doing business as Brothers Trading Firm) against Uiterwyk Corporation (the Debtor) in a confirmed Chapter 11 case. Navid's claim amounts to $1,150,256.00, alleging "civil theft" and conversion of $383,418.72, including prepetition interest and attorney fees. The Debtor disputes any indebtedness to Navid, and both parties agree that the matter can be resolved legally based on undisputed facts.
The relevant facts indicate that the Debtor acted as a general agent for Iran Express Lines (IEL), responsible for shipping goods. On February 2, 1978, Navid contracted with the Debtor to ship 19 containers of air-conditioning equipment on the IEL-operated vessel "Margitta" to Iran. The cargo was damaged during transit due to a typhoon. Navid submitted a damage claim to IEL on June 5, 1978, which was acknowledged by the Debtor's Senior Vice-President, Walter A. Rollins, who confirmed a settlement claim of $386,000.00 was received for the cargo damage.
Rollins requested a release from Navid to settle for $383,418.72. Initially, the release was unnotarized, leading to the request for a notarized version, which Navid provided. Rollins assured Navid that payment would occur once funds were received from IEL, explicitly stating that the Debtor had no liability and acted solely as IEL's agent. Subsequently, the Debtor received a total of $379,548.54 from the insurance carrier in connection with the settlement for the cargo damage.
Navid was not a named insured under IEL's insurance policy nor a third-party beneficiary of the contract between IEL and its insurer. He had no direct insurance coverage for his air-conditioning equipment in transit and did not receive settlement payments for his cargo damage claim, which were made to the Debtor as IEL's agent. After releasing his claim against IEL and its agent, Navid lacks a valid claim against them or anyone else included in the release. The Debtor contests Navid's civil theft claim, asserting it is not indebted to him because it acted solely as an agent for IEL and that the insurance proceeds were for IEL's claim, not Navid's.
The court aims to first address the agency issue, as its resolution may impact the civil theft and conversion claims. It is established that the Debtor was an agent for IEL and that Navid was aware of this agency relationship. The transportation contract for Navid’s equipment involved Sea-Man-Pak Co. Ltd. as IEL's agent. Navid submitted his damage claim to IEL, indicating he sought resolution only from IEL and not the Debtor.
According to legal principles, when a known agent acts for a disclosed principal, the agent is not personally liable unless consented. Here, Navid's knowledge of the agency relationship was evident, and he clearly understood that the Debtor was acting only on behalf of IEL. Consequently, since the Debtor acted as IEL’s disclosed agent, it cannot be held liable for claims arising from the contract with Navid. The court has thus sustained the Debtor's objection to Navid’s proof of claim, disallowing it entirely.
