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Bouchard Ocean Services, Inc v. Mid States Oil Refining LLC

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND


May 14, 2013

BOUCHARD OCEAN SERVICES, INC PLAINTIFF,
v.
MID STATES OIL REFINING LLC,
DEFENDANT.

The opinion of the court was delivered by: Stephanie A. Gallagher United States Magistrate Judge

MEMORANDUM

Plaintiff Bouchard Ocean Services, Inc. ("Bouchard") filed this action against Defendant Mid States Oil Refining LLC ("Mid States"), alleging that Mid States had not paid Bouchard pursuant to a Charter Party. Mid States has filed a motion for summary judgment. [ECF No. 5]. I have reviewed this motion, Bouchard's opposition [ECF No. 12], and the reply thereto [ECF No. 17]. No hearing is deemed necessary. See Local Rule 105.6 (D. Md. 2011). For the reasons stated below, Mid States's motion is granted in part and denied in part.

I.Facts

On or about June 29, 2012, Mid States entered into a Charter Party with Bouchard to transport recycled lube oil from Baltimore, MD to Wilmington, DE. Def. Mot., Bock Aff.; Pl. Opp'n Ex. 1. Mid States used Bouchard's barge on or about July 6, 2012. Def. Mot. Ex. C; Pl. Opp'n Ex. 1. On that same day, Bouchard invoiced Mid States for freight charges of $75,000.00 and a fuel surcharge of $4,500.00. Def. Mot. Ex. B; Pl. Opp'n Ex. 1. On July 9, 2012, Bouchard invoiced Mid States for a demurrage charge of $11,062.50. Def. Mot. Ex. C; Pl. Opp'n Ex. 1.

On August 1, 2012, Mid States sent Bouchard a check for $75,000.00 as payment for the freight charge. Def. Mot. Ex. D; Pl. Opp'n Ex. 1. On August 16, 2012, Mid States sent Bouchard a check for $11,062.50 as payment for the demurrage charge. Def. Mot. Ex. E; Pl. Opp'n Ex. 1. Bouchard received, but did not cash, these checks (collectively, "the first payment"). Pl. Opp'n Ex. 1. On October 24, 2012, Bouchard contacted Mid States regarding the status of the invoices. Def. Mot. Ex. F. Mid States responded on November 5, 2012, stating that the fuel surcharge was greater than the amount that the parties had agreed to. Id. Bouchard responded by email, noting that there was supposed to be a fuel surcharge of 1% for every $0.02 over the base price of $2.86. Id. In the email, Bouchard admitted that Mid States had been overcharged pursuant to a base price of $2.74, leading to a fuel surcharge of $4,500.00 instead of $3,375.00. Id. Bouchard also asked Mid States if it agreed, and if so, Bouchard would send a revised invoice. Id. No revised invoice was sent.

On November 19, 2012, Bouchard contacted Mid States and told Mid States that it would "take appropiate [sic] legal steps to secure payment . . . as per Bouchard [sic] Charter Party and Litigation Clause." Def. Reply Ex. A. Bouchard listed the charges as $79,500.00 for freight, which includes the $75,000.00 charge for freight and $4,500.00 fuel surcharge, and $11,062.50 for demurrage. Id. Mid States then asked Bouchard to check its accounting, and noted that there was a dispute regarding the fuel surcharge. Id. Bouchard responded, stating that the fuel surcharge was invoiced properly, and asking Mid States for full payment. Id. Counsel for Bouchard and counsel for Mid States spoke again on the afternoon of Wednesday, November 21, 2012, immediately prior to the Thanksgiving holiday. Def. Mot. 4. At that time, Bouchard was waiting for Mid States to provide further information, which Mid States was still in the process of searching for, to resolve the dispute. Id.

Immediately following the Thanksgiving holiday, while Mid States was searching for information to resolve the dispute informally, Bouchard filed the instant lawsuit. See ECF No. 1.

Later that day, Mid States contacted Bouchard, again noting the dispute regarding the fuel surcharge, and explaining that the "entire matter" could be resolved if Bouchard provided documentation for the fuel surcharge. Def. Mot. Ex. H. Mid States also explained that it was willing to wire $75,000.00 freight charge, $11.062.50 demurrage charge, and $3,375.00 fuel surcharge to Bouchard. Id. The parties spoke again on November 28, 2012, and Bouchard rejected Mid States's offer. Def. Mot. 4. Bouchard indicated that it was now seeking attorneys' fees and prejudgment interest. Id. On that same day, Mid States stopped payment of its previous checks to Bouchard, and wired to Bouchard the $75,000.00 for freight, $11,062.50 for demurrage, and $3,375.00 for the fuel surcharge ("the second payment"). Def. Mot., Bock Aff. Bouchard accepted the second payment, but did not dismiss its lawsuit. Id. Mid States has now filed a Motion for Summary Judgment.

II.Legal Standard

A motion for summary judgment is granted under Rule 56 of the Federal Rules of Civil Procedure if there is no genuine issue as to any material fact and if the moving party is entitled to judgment as a matter of law. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 884 (1990). Summary judgment is precluded only when there are disputes over the facts that might affect the outcome of the proceedings under the applicable law. Factual disputes that are not relevant or not necessary will not be considered in a summary judgment motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A party seeking summary judgment bears the burden of showing that there is no evidence to support the non-moving party's case, and the moving party must only show an absence of disputed material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). In response, the non-moving party must show that there is a genuine issue for trial. A court must decide whether there is a genuine issue for trial, "not . . . weigh the evidence and determine the truth of the matter." Anderson, 477 U.S. at 242-43.

III. Analysis

Mid States argues that summary judgment is warranted as to Bouchard's claims for attorneys' fees and prejudgment interest. Bouchard argues that Mid States has made many "factual arguments," and that there are outstanding factual disputes. Each party is partially correct.

a.Attorneys' Fees

Bouchard seeks to recover attorneys' fees incurred in filing the instant lawsuit. "The general rule in maritime contract claims precludes recovery of attorney's fees unless there is a controlling statute or contractual provision that allows for such recovery." Jambon & Assocs., L.L.C. v. Seamar Divers, Inc., Civil Action No. 09-2670, 2009 WL 2175980, at *8 (E.D. La. July 20, 2009); In re Fitzgerald Marine & Repair, Inc., 619 F.3d 851, 864 (8th Cir. 2010) (both citing Tex. A & M Research Found. v. Magna Transp., Inc., 338 F.3d 394, 405 (5th Cir. 2003)). When contractual terms are implicated, summary judgment may be granted "if a court properly determines that the contract is unambiguous on the dispositive issue . . . because no interpretive facts are in genuine issue." Sheridan v. Nationwide Ret. Solutions, Inc., 313 Fed. Appx. 615, 617 (4th Cir. 2009).

Bouchard claims that its Charter Party provides for the award of attorneys' fees. The Charter Party states:

BOUCHARD CHARTER PARY [SIC] ENFORCEMENT & LITIGATION CLAUSE: IF IT BECOMES NECESSARY [SIC] BOUCHARD TRANSPORTATION CO. INC. TO SEEK ENFORCEMENT OF ALL THE TERMS OF THIS CHARTER BY LITIGATION, BOUCHARD TRANSPORTATION CO. INC. SHALL BE ENTITLED TO RECOVER FROM THE CHARTERER ALL COSTS OF SUCH LITIGATION,. [SIC] INCLUDING REASONABLE ATTORNEY FEES, WHETHER CONCLUDED BY JUDGMENT [SIC] OR BY SETTLEMENT.

Def. Mot. Ex. A. Contractual provisions for attorneys' fees must be strictly construed in admiralty cases. Triton Marine Fuels, Ltd. v. M/V Pacific Cukotka, 671 F. Supp. 2d 753, 763 (D. Md. 2009). More generally, "[t]he traditional rule of construction in admiralty cases is to 'construe the contract language most strongly against the drafter.'" Edward Leasing Corp. v. Uhlig & Assocs., Inc., 785 F.2d 877, 889 (11th Cir. 1986) (citing Navieros Oceanikos, S.A. v. S.T. Mobil Trader, 554 F.2d 43, 47 (2d Cir. 1977)).

Bouchard's "litigation clause" does not provide for the award of attorneys' fees because it was not necessary for Bouchard to "seek enforcement of all of the terms" in the charter. Mid States did not dispute the $75,000.00 freight rate or the demurrage charge of $11,062.50, and had sent Bouchard timely payment for both amounts. Mid States only disputed the fuel surcharge, which cannot be considered a dispute regarding "all" terms of the Charter Party. Bouchard's lawsuit does not seek to enforce the terms of the Charter Party regarding miscellaneous costs or payment schedule, among others. While the contractual language, on its face, renders it highly unlikely that Bouchard could ever recover fees and costs, Bouchard is bound by the language it drafted. Parties to a contract rely on its terms for guidance when pursuing certain courses of action. For example, if Mid States had known that it could be liable for attorneys' fees for its dispute regarding the fuel surcharge, it may have chosen to immediately pay Bouchard the amount claimed. Mid States is entitled to rely on the language in the contract it signed. Therefore, Bouchard may not collect attorneys' fees.*fn1

b.Prejudgment interest

Mid States next seeks summary judgment on Bouchard's claim for prejudgment interest. Federal courts sitting in admiralty may award prejudgment interest in their discretion. See Ameejee Valleejee & Sons v. M/V Victoria U., 661 F.2d 310, 313 (4th Cir. 1981). Prejudgment interest is awarded "as compensation for the use of funds to which the claimant was rightfully entitled." U.S. Fire Ins. Co. v. Allied Towing Corp., 966 F.2d 820, 828 (4th Cir. 1992) (quoting Noritake Co., Inc. v. M/V Hellenic Champion, 672 F.2d 724, 728 (5th Cir. 1980)). Generally, prejudgment interest should be awarded in admiralty cases unless "peculiar circumstances render such an award inequitable." Id. Examples of "peculiar circumstances" include "an unwarranted delay in bringing suit, a damages award substantially less than that sought, a genuine dispute regarding liability, complex legal and factual issues, and a bad faith claim." Id. at 828 n.14 (noting that some circuits have found that "equitable considerations which caution against an award" also constitute "peculiar circumstances.").

This Court finds that a "peculiar circumstance" exists, because awarding prejudgment interest to Bouchard would be inequitable. As noted above, prejudgment interest awards are made to compensate the claimant for the loss of use of money from the time the claim accrues until judgment is entered. See U.S. Fire Ins. Co., 966 F.2d at 828. However, Bouchard had timely possession of $86,062.50 out of the $90,562.50 it now seeks.*fn2 In addition, Bouchard did not contact Mid States about the outstanding balance for over two months, and when contacted by Bouchard, Mid States consistently indicated a willingness to resolve the dispute and pay the proper amount due.

Bouchard posits that it did not deposit Mid States's first payment because it was concerned that doing so "might have acted as an accord and satisfaction." Pl. Opp'n Ex. 1. However, Bouchard accepted Mid States's second payment as "a payment on account," apparently no longer concerned about accord and satisfaction. Bouchard provides no explanation for its differing treatment of Mid States's first and second payments.

In addition, there is no indication from the face of its checks that Mid States ever intended its first payment to cover its entire debt to Bouchard. If Bouchard was truly concerned about accord and satisfaction, it could have contacted Mid States to determine whether Mid States intended its payments to be in full satisfaction of its debts. Under the circumstances, an award of prejudgment interest would be inequitable and contrary to the purpose of such awards.*fn3

c.Fuel Surcharge

There remains a material dispute regarding the fuel surcharge. Mid States argues that the proper charge is $3,375.00, and Bouchard, after originally conceding this point via email, now argues that the proper charge is $4,500.00. Both parties have provided sufficient documentation to establish a material disputed fact as to the proper fuel surcharge. Therefore, Mid States's motion cannot be granted in full. Mid States has paid Bouchard $3,375.00, leaving the potential outstanding amount at $1,125.00. Mid States's motion for summary judgment is denied as to the disputed $1,125.00, and as to a potential prejudgment interest award on the fuel surcharge, which was not paid, in whole or in part, until on or about November 28, 2012.

IV.Conclusion

Mid States's motion for summary judgment is GRANTED as to the $89,437.50 paid by Mid States, and is DENIED as to the dispute regarding $1,125.00 of the fuel surcharge. Mid States's motion for summary judgment is GRANTED as to Bouchard's claim for attorneys' fees. Mid States's motion for summary judgment regarding prejudgment interest is GRANTED as to $86,062.50, which Mid States paid in August 2012, and is DENIED as to the remaining $4,500.00.

A separate order is entered herewith.


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