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Price v. Atlantic Ro-Ro Carriers, Inc.

United States District Court, D. Maryland

July 7, 2017




         Third-party defendant The Rukert Terminals Corporation ("Rukert") has filed a motion for summary judgment in this long-running litigation, alleging that Mos Shipping Co., Ltd., ("Mos") is barred by the Longshore and Harbor Workers' Compensation Act ("LHWCA"), 33 U.S.C. §§ 901 et seq., from pursuing a claim for indemnity or contribution against Rukert. No oral argument is necessary. See Local Rule 105.6 (D. Md. 2016). For the reasons stated below, the motion for summary judgment will be granted.


         This action arises out of an injury suffered by plaintiff Troy D. Price, Jr. ("Price) while helping to unload freight aboard a cargo vessel owned and/or operated by Mos. At the time of his injury, Price was employed as a longshoreman by Beacon Stevedoring Corporation ("Beacon") and worked on a vessel moored at a pier in one of Rukert's terminals.

         Rukert is a privately owned Maryland corporation that operated a marine terminal on South Clinton Street in Canton, Maryland. (John L. Coulter Affi ¶ 2, ECF No. 140-2.) Beacon is a privately owned Maryland corporation that provides stevedoring services exclusively for ships loading and unloading at Rukert's South Clinton Street Terminal. (Id. at ¶ 2.) Rukert and Beacon are owned by the same two families and share a Board of Directors. (Id. at ¶¶ 9-10.) The CEO and President of Rukert are the President and Executive Vice President, respectively, of Beacon. (Id. at ¶¶ 7-8.) The Boards of Directors for the two companies meet on the same day in immediate succession, (id. at ¶ 11), although there is a separate agenda for each company's business, (John L. Coulter Dep., pp. 54:13-20, ECF No. 173-1).

         The two companies operate out of the same offices in Baltimore, Maryland, and share the same post office box and fax number. (John L. Coulter Affi at ¶¶ 4-6.) All management positions at Beacon are on the payroll at Rukert. (John L. Coulter Dep., pp. 34.) Beacon pays Rukert a monthly fee of $13, 900 for administrative and management services it receives from Rukert. (Id. at 35:9-19.) Rukert and Beacon are both insured for LHWCA and Maryland Workers' Compensation Act claims under the same policy, written in Rukert's name, which is currently making payments to Price for compensation and medical expenses. (John L. Coulter Affi at ¶ 13; Reply in Supp. of Mot. Summ. J. 5, ECF No. 182.) Beacon's employees pay into Rukert's retirement plan and are covered under Rukert's healthcare plan, although Beacon pays for its employees' shares in those plans. (John L. Coulter Dep., pp.8:13-9:2, pp. 50.)

         The companies maintain separate bank accounts and separate financial statements. (Mem. in Opp'nto Summ. J. Mot. 12, ECF No. 173; Beacon Bank Statement, ECF No. 173-5; Rukert Bank Statement, ECF No. 173-6.) At various times, Rukert will loan money to Beacon and Beacon will loan money to Rukert. (John L. Coulter Dep., pp. 20-25.) The loans carry interest and are paid off "usually pretty quickly." (Id. at pp. 20.) While paid on a separate payroll, Beacon's employees work exclusively at Rukert's terminal and work within the terminal for Rukert when there are no loading or unloading tasks to complete. (John L. Coulter Affi at ¶ 5, ECF No. 182-1.)

         Price seeks compensation under the LHWCA, which "establishes a comprehensive federal workers' compensation program" that provides longshoremen with medical benefits for work-related injuries. Howlett v. Birkdale Shipping Co., S.A., 512 U.S. 92, 96 (1994). An injured longshoreman's employer must pay the statutory benefits regardless of fault, but the employer is shielded from further liability. Id. Price filed a complaint against Mos under Section 905(b) of the LHWCA, which permits a longshoreman to "seek damages in a third-party negligence action against the owner of the vessel on which he was injured" even though he has received benefits from his employer as mandated by the LHWCA. Id.

         In October 2011, Mos filed a third-party complaint against Rukert, alleging negligence in maintaining forklifts operated by Beacon employees and failure in properly training and certifying Beacon employees in the operation of forklifts. (Third Party Compl. ¶¶ 13-16, ECF No. 16.) In February 2017, Rukert filed a motion for summary judgment, claiming to operate as a single enterprise with Beacon and therefore denying further liability under the LHWCA. (Mot. for Summ. J., ECF No. 140). Mos responded, arguing Rukert was precluded from raising the affirmative defense due to waiver or collateral estoppel, and that further discovery was necessary to determine the level of integration between Rukert and Beacon. (Opp'n to Mot. for Summ. J., ECF No. 144). After limited additional discovery relating to the corporate and financial structure of Rukert and Beacon, the parties submitted supplemental briefings. (See ECF Nos. 155, 173, 182).


         I. Waiver

         Mos argues that Rukert waived its statutory immunity defense by failing to raise it as an affirmative defense in its answer to the complaint. As "it is well established that an affirmative defense is not waived absent unfair surprise or prejudice, " Mos asserts that its inability to conduct discovery into the financial relationship between Rukert and Beacon resulted in unfair surprise and prejudice. Patten Grading & Paving, Inc. v. Skanska USA Bldg., Inc., 380 F.3d 200, 205 n. 3 (4th Cir. 2004). Courts have found, however, that "affirmative defenses raised for the first time in summary judgment motions may provide the required notice." Grunley Walsh U.S., LLC v. Raap, 386 F.App'x 455, 459 (4th Cir. 2010)[1]; see, e.g., Brinkley v. Harbour Recreation Club, 180 F.3d 598, 612-13 (4th Cir. 1999) (noting that plaintiff had "ample opportunity to respond" to affirmative defense first raised in defendant's summary judgment motion).

         To be sure, Rukert allowed more than five years to lapse before raising the statutory immunity issue in its motion for summary judgment. Mos, however, had ample opportunity to respond to Rukert's arguments. The parties were allowed to conduct additional limited discovery related to the financial relationship between Rukert and Beacon and fully briefed the motion. (See April 2017 Scheduling Ltr, ...

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