RG Steel Sparrows Point, LLC v. Kinder Morgan Bulk Terminal

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 1:09-cv-01668-WMN. Copies to all parties and the district court/agency. [999572880]. [14-1245]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1245

RG STEEL SPARROWS
Point, LLC,

POINT,

LLC,

f/k/a

Severstal

Sparrows

Plaintiff – Appellee,
and
SEVERSTAL SPARROWS POINT, LLC,
Plaintiff,
v.
KINDER MORGAN BULK TERMINALS,
Chesapeake Bulk Stevedores,

INC.,

d/b/a

Kinder

Morgan

Defendant – Appellant.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.
William M. Nickerson, Senior District
Judge. (1:09-cv-01668-WMN)

Argued:

January 28, 2015

Before TRAXLER,
Judges.

Chief

Judge,

Decided:

and

DIAZ

and

Affirmed by unpublished per curiam opinion.
separate concurring opinion.

April 28, 2015

THACKER,

Circuit

Judge Diaz wrote a

ARGUED: Thomas M. Wolf, LECLAIRRYAN, PC, Richmond, Virginia, for
Appellant.
Denise A. Lazar, BARNES & THORNBURG, LLP, Chicago,

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Illinois, for Appellee.
ON BRIEF:
Joseph M. Rainsbury,
LECLAIRRYAN, PC, Roanoke, Virginia, for Appellant.
L. Rachel
Lerman, BARNES & THORNBURG, LLP, Los Angeles, California; Linda
S. Woolf, GOODELL DEVRIES LEECH & DANN, LLP, Baltimore,
Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
This case arose in the aftermath of the catastrophic
collapse of a bridge crane used by Kinder Morgan Bulk Terminals
Inc. (“Appellant”) to unload coke used to fuel a steel mill
located near Baltimore, Maryland.
and

the

history.

bridge

crane

changed

Ownership of the steel mill

hands

several

times

in

recent

The appellee in this case, RG Steel Sparrows Point LLC

(“RG Steel”), 1 acquired the company that owned the steel mill and
the bridge crane through a stock purchase on March 31, 2011.
Following the bridge crane collapse, Appellee sued Appellant for
negligence.

Appellee also claimed its right to indemnification

for losses pursuant to a lease and service contract governing
Appellant’s use of the bridge crane (“Lease”).
Appellant

maintained

that

it

was

that it had no duty to indemnify Appellee.

not

negligent

and

It argued that the

limitation-of-liability provision of a purchase order that was
in force at the time of the crane accident applied instead of
the Lease’s indemnity clause.

After a bench trial, the district

court entered judgment in Appellee’s favor.

The district court

found that the parties renewed the Lease by an implied-in-fact
contract and concluded that the purchase order did not supersede
1

For ease of reference, we refer to RG Steel and the
companies that previously owned the steel mill and the bridge
crane collectively as “Appellee.”

3

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the

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Lease’s

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indemnity

Lease

defined

crane

and

matter.

the

the

clause

parties’

purchase

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under

Maryland

relationship

order

governed

law

with
a

because

respect

different

to

the
the

subject

The district court held Appellant liable for over $15.5

million,

awarding

Appellee’s

compensatory

property

and

damages

consequential

for

destruction

damages

for

of

Appellee’s

resulting business losses.
In the instant action, Appellant does not challenge
the district court’s award of compensatory damages, nor does it
dispute

the

operating
Instead,

court’s

under
it

finding

an

that

the

implied-in-fact

argues

the

district

parties
renewal

court

were
of

erred

generally

the

in

Lease.

concluding

Appellant was liable for consequential damages pursuant to the
Lease’s indemnity clause.

Appellant claims the district court

should have applied the limitation-of-liability provision of a
purchase order agreement that was in force at the time the crane
collapsed -- a provision that Appellant contends superseded the
Lease’s

indemnity

damages award.
if

the

Lease’s

clause

and

foreclosed

any

consequential

In the alternative, Appellant avers that, even

district
indemnity

court

was

clause,

correct
the

to

hold

district

Appellant

court

erred

to
when

the
it

qualified Appellee’s damages expert to testify and relied on the
expert’s

calculation

in

ordering

damages.
4

its

award

for

consequential

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We

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affirm

the

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district

court’s

entirety, albeit on different grounds.

rulings

in

their

See Hutto v. S.C. Ret.

Sys., 773 F.3d 536, 549-50 (4th Cir. 2014) (affirming “for a
reason supported by the record but not relied on by the district
court”).

Appellant is liable for consequential damages even

under the express terms of the purchase order it wishes us to
apply.

Furthermore,

the

district

court

did

not

abuse

its

discretion by permitting Appellee’s damages expert to testify,
and

it

did

not

clearly

err

in

determining

the

amount

of

Appellee’s damages award.
I.
A.
The Lease at issue originated in 1992, although both
parties

acquired

their

interests

relationship at a much later date.
leased

the

bridge

crane

to

mill’s

services

for

the

steel

undertook

to

keep

the

in

bridge

crane

contractual

Under the Lease, Appellee

companies
“A

this

stevedoring 2

providing

Yard.”
in

good

The

stevedores

repair

and

to

maintain an insurance policy on it.
The Lease contained an indemnity provision, which read
as follows:

2

Stevedores load and unload cargo from ships.
Law Dictionary 1549 (9th ed. 2009).

5

See Black’s

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[The stevedores] shall . . . indemnify and
save harmless [Appellee] from and against
all loss or liability for or on account of
any injury (including death) or damages
received or sustained by any person or
persons
(including
[Appellee]
and
any
employee, agent, or invitee thereof) by
reason of any act or omission, whether
negligent or otherwise, on the part of [the
stevedores]
or
any
employee,
agent,
subcontractor, representative, invitee, or
business
visitor
of
[the
stevedores],
including any breach or alleged breach of
any statutory duty which is to be performed
by [the stevedores] hereunder but which is
or may be the duty of [Appellee] under
applicable provisions of law.
J.A. 692-93 (emphasis supplied). 3

The stevedores also “assume[d]

the entire risk of loss, theft, or destruction of the [bridge
crane]

resulting

from

any

cause

whatsoever.”

Id.

at

690.

During the life of the Lease, Appellee entered into purchase
order

contracts

with

the

stevedores

to

unload

coke-carrying

vessels in the port.
In December 2002, Appellant, a company that provides
stevedoring

services,

purchased

liabilities under the Lease.
terminate

at

the

end

of

its

predecessor’s

rights

and

Although the Lease was set to

July

2003,

Appellant

and

Appellee

entered into a separate short-term interim agreement to extend
the Lease.

Initially, this interim agreement was set to expire

3

Citations to the “J.A.” refer to the Joint Appendix filed
by the parties in this appeal.

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when

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Appellee

and

Appellant

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executed

a

long-term

agreement

governing the use of the bridge crane or on December 31, 2003,
whichever

occurred

sooner.

However,

Appellant

extended the interim period several times.

and

Appellee

When they ultimately

were unable to reach a long-term agreement, the Lease finally
expired at the end of 2005.
Although Appellant never expressly renewed the Lease
after

2005,

it

continued

to

conduct

business

with

Appellee

“largely in the same manner as [it] had under the Lease.”
600.

J.A.

For example, Appellant “repeatedly referenced the Lease”

in its communications with Appellee and it “maintain[ed] the
[b]ridge [c]rane at its own expense,” in accord with the terms
of the Lease.

Id. at 600–01.

Appellant also continued to use

the bridge crane to unload ships pursuant to various purchase
order contracts.
B.
1.
On June 4, 2008, the National Weather Service issued a
tornado watch for the central Maryland area.

By 3:35 p.m. that

day, wind speeds measured over 90 miles per hour.
own

procedures

preventative

and

measures

federal
during

regulations

high

winds,

Despite its

which

Appellant

require
did

not

deploy hurricane tie downs, and the bridge crane’s automatic

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rail clamps had been removed at some point in the mid-1990s. 4
Without the benefit of these safety measures, the wind toppled
one the bridge crane’s A-frame legs, and the crane fell.
2.
As an immediate result of the crane collapse, Appellee
closed

the

A

facilities.

Yard

and

paid

for

emergency

repairs

to

its

Appellee also suffered other consequential losses

arising from delays and increased handling charges attributable
to the loss of the crane.

Without a crane to unload coke for

the steel mill’s blast furnace, cargo ships carrying coke were
required to unload their cargo at another terminal farther away
from the blast furnace: the New Ore Pier.

Because the New Ore

Pier already serviced a number of ships on a regular basis, it
struggled

to

accommodate

the

additional

traffic.

To

make

matters worse, in order to keep the blast furnace lit, Appellee
was required to schedule the coke-carrying ships before other
non-coke-carrying vessels also waiting to unload at the New Ore
Pier.

This rescheduling, coupled with port congestion caused by

4

Appellant does not dispute the fact that its own standard
operating procedures “instructed [Appellant] to employ hurricane
tie downs [on the crane to secure it] in the event of strong
winds.” J.A. 603. Additionally, Occupational Safety and Health
Administration regulations require bridge cranes to be equipped
with automatic rail clamps “that prevent cranes from moving
during high wind events.”
Id. at 614-15; see also 29 C.F.R.
§ 1910.179(b)(4).

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re-routing the coke-carrying ship traffic to the New Ore Pier,
resulted

in

transit

delays.

As

a

result,

Appellee

paid

demurrage 5 fees pursuant to its contracts with these ships.
When the A Yard reopened in the latter half of 2008,
Appellant

used

floating

cranes

to

unload

placed the coke in piles near the mill.

coke

ships

and

it

Because the floating

cranes unloaded cargo at a rate significantly slower than the
bridge crane, Appellee faced the possibility of future demurrage
fees.

To

mitigate

its

losses,

Appellee

renegotiated

its

contracts with cargo ships and agreed to pay increased fees to
offset the delays.

Appellee also needed to restore and modify a

conveyor in order to move the coke from piles in the A Yard to
the

blast

furnace.

Mill

operations

did

not

normalize

until

approximately three years later, in August 2011, when Appellant
purchased and installed its own crane at the A Yard.
3.
At the time of the bridge crane’s collapse on June 4,
2008, Appellee and Appellant were bound by a February 21, 2008
purchase

order

(“Purchase

Order”)

that

required

Appellee

to

“unload[] up to 500,000 [tons] of coke from ships with bridge

5

In maritime law, the term “demurrage” applies to
“[l]iquidated damages owned by a charterer to a shipowner for
the charterer’s failure to load or unload cargo by the agreed
time.” Black’s Law Dictionary 498 (9th ed. 2009).

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crane [sic].”

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J.A. 992.

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The Purchase Order also incorporated

the terms of another document entitled “AMUSA-100.”
The

AMUSA-100

defined

the

parties’

liabilities with respect to the Purchase Order.
the

AMUSA-100

contained

the

following

See id.
rights

and

Section 7.6 of

limitation-of-liability

provision:
In no event shall either party be liable to
the
other
under
this
order
for
consequential, indirect or special damages,
including without limitation lost profits,
revenues, production or business . . . .
J.A. at 1000.
“specific

However, per section 1.4 of the AMUSA-100, other

terms

agreed

in

writing”

that

“contradict[]”

“corresponding” terms in the AMUSA-100 “shall prevail.”

Id. at

997.
C.
Appellee filed suit against Appellant in the District
Court for the District of Maryland on June 24, 2009.

In its

amended complaint, Appellee claimed that Appellant was negligent
for failing to secure the bridge crane from the impending storm,
and that it was liable in contract for breaching the Lease by
refusing to indemnify Appellee for losses arising from the crane
collapse.
The parties fought this dispute at a seven-day bench
trial in November and December 2013.

At trial, Appellee offered

the testimony of its Corporate Controller, Jeffrey Gennuso, who
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testified

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about

the

general

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effect

of

the

crane

collapse

on

steel mill operations and Appellee’s contractual relationships.
Jeffrey Cohen, an economist, provided expert testimony about the
calculation of consequential damages Appellee suffered.
The

district

court

reached

a

verdict

in

favor

of

Appellee on both its negligence and breach of contract claims.
The district court awarded a total of $15,555,884 6 to Appellee,
which covered the following categories of damages:
•

compensatory damages
bridge crane;

•

compensatory
damages
for
emergency
repairs to Appellee’s facilities and
for restoration and modification of the
conveyor,
all
of
which
Appellant
conceded at trial; and

•

consequential
damages
for
demurrage
fees, changes in commercial terms, and
increased handling costs. 7

for

loss

of

the

Appellant does not appeal any part of the district
court’s award of compensatory damages.

Instead, it argues only

6

The court’s original damages award was approximately $13
million, but it increased this amount after correcting a
clerical error.
This adjustment only affected the district
court’s calculation of Appellee’s compensatory damages for loss
of the bridge crane. See Order Granting Motion to Amend/Correct
Clerical Error, Severstal Sparrows Point, LLC v. Kinder Morgan
Bulk Terminals, Inc., No. 1:09-cv-01668 (D. Md. Jun. 24, 2009;
filed May 6, 2014), ECF No. 183.
7

At trial, Appellant conceded it was liable for damages due
to Appellee’s increased handling costs.

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that the district court erred in ordering consequential damages
for demurrage fees and changes in commercial terms.
II.
A.
Contract Interpretation
1.
The threshold question is whether the district court
correctly

concluded

that

Appellant

should

be

required

to

indemnify Appellee, or whether an agreement between the parties
prohibits such an award.
Interpretation

of

a

contract

renders

a

legal

conclusion, and we review the district court’s legal conclusions
de novo.

See FTC v. Ross, 743 F.3d 886, 894 (4th Cir. 2014);

Perini/Tompkins Joint Venture v. Ace Am. Ins. Co., 738 F.3d 95,
101 (4th Cir. 2013).

We apply substantive state law to resolve

appeals

court

of

district

rulings

that

rest

on

state

law,

including those involving interpretation of private contracts.
See James v. Circuit City Stores, Inc., 370 F.3d 417, 421-22
(4th Cir. 2004).
The district court found that the parties renewed the
Lease

by

an

implied-in-fact

agreement

and

therefore

“the

Lease . . . [and] its terms and conditions were in effect” at
the time of the crane collapse.
district

court

found

that

this
12

J.A. 612.

In essence, the

implied-in-fact

contract

was

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nothing more than an agreement to renew the Lease and to amend
its duration term.
was

renewed

required

But Appellant argued that, even if the Lease

by

that

an

the

implied-in-fact

later-in-time

precedence over the Lease.

contract,

written

Maryland

Purchase

Order

law
took

Cf. Cnty. Comm’rs of Caroline Cnty.

v. J. Roland Dashiell & Sons Inc., 747 A.2d 600, 607 (Md. 2000)
(holding

that

a

contract

implied

in

law

cannot

express contract governing the same subject).

supplant

an

It argued that

under the AMUSA-100, which was incorporated into the Purchase
Order, Appellant was not required to indemnify Appellee.
district court
the

Purchase

rejected

did

not

Appellant’s

govern

the

argument,

same

concluding

subject

and

The
that

that

the

Lease’s indemnity clause therefore applied.
Appellant does not appeal the district court’s finding
that it renewed the Lease through an implied-in-fact contract.
Nor

does

would

be

indemnity

it

dispute

liable

the

for

provision

district

court’s

consequential

applied.

conclusion

damages

Instead,

if

Appellant

the

that

it

Lease’s

renews

its

argument that the Lease did not apply and that Appellant should
prevail by virtue of the AMUSA-100.

We disagree, and conclude

that Appellant would be liable pursuant to the AMUSA-100’s plain
terms in any event.

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2.
Appellant argues that the district court erred because
it permitted an implied-in-fact agreement to renew the Lease to
supersede an express contract on the same subject matter -- the
Purchase Order -- in contravention of Maryland law.
the

Lease

and

the

Purchase

Order

address

the

Although

same

matter, Appellant’s argument is nonetheless flawed.

subject
For one,

the Maryland courts have not adopted the rule Appellant pushes;
they

have

only

held

that

a

contract

implied

in

law

cannot

supplant an express contract governing the same subject.
Cnty. Comm’rs of Caroline Cnty., 747 A.2d at 607.

See

And even

assuming Appellant’s interpretation of Maryland law is correct,
the

AMUSA-100’s

plain

text

and

Appellant’s

implied-in-fact

agreement to renew the Lease compel us to reach the same result
as the district court: Appellant is liable to indemnify Appellee
for consequential damages.
3.
When a contract is unambiguous, Maryland courts give
full effect to the plain meaning of its terms.

See Wells v.

Chevy Chase Bank, F.S.B., 768 A.2d 620, 630 (Md. 2001).

Per

section 1.4 of the AMUSA-100, “specific terms agreed in writing”
by the parties that contradict “corresponding . . . provisions”
of the AMUSA-100 “shall prevail.”

J.A. 997.

The effect of this

safety valve provision is unambiguous: the AMUSA-100 bows to
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similar, yet contradicting, terms of a written agreement between
the parties.
There is no question that the Lease’s indemnity clause
is a “specific term[] in writing” that “correspond[s]” to the
AMUSA-100’s

limitation-of-liability

provision.

J.A.

997.

Appellant instead argues that the implied-in-fact renewal of the
Lease is not a term agreed to in writing and section 1.4 “does
not prevent the Purchase Order from trumping any prior impliedin-fact

agreement.”

implied-in-fact

Appellant’s

agreement

is

Reply

Br.

necessarily

13.

not

in

Although
writing,

an
the

implied-in-fact agreement in this case only amended the Lease
term

and

does

not

“contradict[]”

provision of the AMUSA-100.
“corresponding”

temporal

clause,

other

on

the

the

the

J.A. 997.

limitation.

hand,

is

an

limitation-of-liability
The AMUSA-100 has no
The

Lease’s

agreement

AMUSA-100’s

in

indemnity

writing

that

conflicts

with

provision.

Therefore, the AMUSA-100 unambiguously requires that

Appellant be held to the Lease.

limitation-of-liability

The Lease states that the crane

operator “assumes the entire risk of loss of the . . . [b]ridge
[c]rane resulting from any cause whatsoever.”

Id. at 690.

Therefore, we affirm the district court’s conclusion
that

Appellant

was

required

to

indemnify

Appellee

for

consequential damages it incurred as a result of the crane’s
collapse.
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B.
Damages
We now turn to whether the district court’s awards for
demurrage

and

support.

changes

in

commercial

terms

have

evidentiary

The evidence upon which the district court principally

relied when ordering these awards was the calculation provided
by Cohen; Appellant asserts Cohen was unqualified to testify as
an expert on such matters.

Accordingly, Appellant claims the

district court lacked sufficient evidence to order damages for
demurrage and changes in commercial terms.
1.
Admissibility of Expert Testimony
A district court’s decision to qualify and admit the
testimony of an expert witness is one that we review for abuse
of discretion.

“A court abuses its discretion if its decision

is guided by erroneous legal principles or rests upon a clearly
erroneous factual finding.”

United States v. Garcia, 752 F.3d

382, 390 (4th Cir. 2014) (internal quotation marks omitted).
Appellant claims that the district court abused its
discretion by qualifying Cohen as an expert to testify about
Appellee’s
terms.

damages

Appellant

for

demurrage

concentrates

on

experience with maritime contracts.

16

and

changes

Cohen’s

in

commercial

admitted

lack

of

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Rule

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702

of

the

Pg: 17 of 33

Federal

Rules

of

Evidence

permits

expert witnesses to testify if their “scientific, technical, or
other

special

knowledge

will

help

the

trier

of

fact

to

understand the evidence or to determine a fact in issue,” such
as the amount of damages due.

Fed. R. Evid. 702.

The question

of whether a witness is qualified to testify is context-driven
and “can only be determined by the nature of the opinion he
offers.”

Gladhill v. Gen. Motors Corp., 743 F.2d 1049, 1052

(4th Cir. 1984).

Because our general preference is to admit

evidence that will aid the trier of fact, the expert need only
have

“sufficient

specialized

knowledge

to

assist

deciding the particular issues in the case.”

jurors

in

Belk, Inc. v.

Meyer Corp., U.S., 679 F.3d 146, 162 (4th Cir. 2012) (internal
quotation marks omitted); see Westberry v. Gislaved Gummi AB,
178 F.3d 257, 261 (4th Cir. 1999) (“Rule 702 was intended to
liberalize

the

introduction

of

relevant

expert

evidence.”);

Thomas J. Kline, Inc. v. Lorillard, Inc., 878 F.2d 791, 799 (4th
Cir. 1989) (“Generally, the test for exclusion is a strict one,
and

the

purported

knowledge,

skill,

expert

experience,

must

have

training

neither
nor

issue for which the opinion is offered.”).
opinion,

“one . . . need

not

be

precisely

satisfactory

education

on

the

In order to offer an
informed

about

all

details of the issues raised” or even have prior experience with
the particular subject the testimony concerns.
17

Lorillard, 878

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F.3d at 799; see Fed. R. Evid. 703 (providing that “[a]n expert
may base an opinion on facts or data in the case that the expert
has been made aware of [at trial] or personally observed”).
In

this

case,

Appellant

requirement far too narrowly.”
Cohen

had

no

prior

“reads

this

Belk, 679 F.3d at 162.

experience

with

maritime

opinion did not call for such expertise.
was

to

calculate

economics.

Appellee’s

[qualification]

damages. 8

Although

contracts,

his

Rather, his function
Cohen

has

an

MBA

in

reviewing

He created mathematical formulas for this case after
information

that

he

obtained

before

trial

by

personally interviewing Appellee’s employees and reading their
deposition

testimony.

Cohen

then

formed

his

opinion

on

the

extent of Appellee’s losses by applying his formulas.
The fact that Cohen had not previously analyzed issues
that

are

specific

to

maritime

contracts

does

not

mean

the

district court abused its discretion in admitting Cohen’s expert
testimony.
Meyer

Corp.,

Here, similar to the appellant in Belk, Inc. v.
U.S.,

Appellant

“provide[d]

no

support

for

its

argument” that the economics of maritime contracts and steel
mill operations “is so sui generis such that an expert’s lack of
8

Cohen testified at trial as to his limited role: “I mean,
as an economist, looking at the data, the best I can do is make
a comparison between two conditions and the result of that
analysis attributes only the incremental effect to that
condition.” J.A. 325.

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expertise

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in . . . these

Pg: 19 of 33

specific

[areas]

disqualifies him from giving an expert opinion.”
at 162.
steel

necessarily
Belk, 679 F.3d

Background issues that required special knowledge of

mills

and

maritime

commerce

witnesses at trial, including Gennuso. 9

were

addressed

by

other

Although Cohen relied on

information provided by other witnesses at trial to devise his
formula, the Federal Rules of Evidence specifically authorized
him to do so.
Thus,

See Fed. R. Evid. 703.

abuse

its

testimony

we

conclude

discretion
as

to

his

by

that

the

permitting

calculation

of

district
Cohen

court

to

Appellee’s

offer

did

not

expert

damages

for

demurrage and changes in commercial terms.

9

Gennuso’s testimony drew a relationship between lower
discharge rates and the higher prices Appellee paid on coke
contracts after the accident:
So when we entered into new coke
contracts, that portion that determined the
delivery cost of the material required a
discharge rate in order for them to properly
calculate the freight.
The discharge rate of 5,000 tons a day
[using
the
floating
cranes,
which
is
approximately 3,000 tons per day slower than
rates achieved using the bridge crane] was
provided to us from Kinder Morgan. . . .
. . . So we used the 5,000 tons per day
[discharge
rate
in
the
renegotiated
contracts], which again was provided by
Kinder Morgan . . . .
J.A. 485.

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2.
Sufficiency of Evidence for Damages Award
a.
When considering an appeal after a bench trial, we
review the district court’s factual findings for clear error and
its legal conclusions de novo.

See Universal Furniture Int’l,

Inc. v. Collezione Europa USA, Inc., 618 F.3d 417, 427 (4th Cir.
2010).

“A court’s calculation of damages is a finding of fact

and is therefore reviewable only for clear error . . . .”
(internal

quotation

marks

omitted).

Furthermore,

when

Id.
“a

district court’s factual findings turn on . . . the weighing of
conflicting evidence during a bench trial, such findings are
entitled to even greater deference.”

Ross, 743 F.3d at 894

(internal quotation marks omitted); see also F.C. Wheat Mar.
Corp. v. United States, 663 F.3d 714, 723 (4th Cir. 2011).
A

court

sitting

in

diversity

must

apply

state

law

governing the threshold of proof necessary for a damages award
and the amount of that award.

See Defender Indus., Inc. v. Nw.

Mut. Life Ins. Co., 938 F.2d 502, 504-05 (4th Cir. 1991) (en
banc).

According to Maryland law, “if the fact of damage is

proven with certainty, the extent of amount thereof may be left
to

reasonable

inference.”

David

Sloane,

Inc.

v.

Stanley

G.

House & Assocs. Inc., 532 A.2d 694, 696 (Md. 1987) (internal
quotation marks omitted).
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b.
Our task is to determine whether the district court
had sufficient evidence to conclude that Appellee proved, to a
reasonable certainty, that it suffered damages for demurrage and
change in commercial conditions.

We must also decide if the

amount the district court awarded was supported by a reasonable
inference from the record.
During
damages

and

approximately
million

in

trial,

Cohen

concluded
$2.7

that

million

damages

for

presented

in

his

Appellant
demurrage

changes

in

calculation

was

fees

liable

and

commercial

of
for

about

$1.5

terms.

The

district court agreed with Cohen on his demurrage calculations
and

awarded

damages

to

Appellee

accordingly.

However,

the

district court disagreed, in part, with Cohen’s calculation of
Appellee’s damages for changes in commercial terms.

Therefore,

the court awarded $1.06 million for these damages according to
its own calculation.
Appellant claims the district court clearly erred in
ordering damages awards for demurrage and changes in commercial
terms.
suffered

Regarding demurrage, Appellant concedes that Appellee
demurrage

damages,

but

21

it

disagrees

with

Cohen’s

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conclusions regarding the amount of such damages. 10

Relating to

changes in commercial terms, Appellant argues that the evidence
failed

to

reasonable

establish
certainty,

the
and

extent
thus

of
no

Appellee’s
damages

losses

should

have

to

a

been

awarded in this category.
i.
Demurrage
Because Appellant only challenges the amount of the
district court’s award for demurrage, our inquiry focuses on
whether the district court had substantial evidence to find that
Cohen’s

demurrage

calculation

--

which

the

district

accepted -- was a reasonable inference from the record.

court
See

Universal Furniture Int’l, Inc., 618 F.3d at 427; David Sloane,
Inc., 532 A.2d at 696.

Appellant has failed to demonstrate that

the district court’s award for demurrage was not supported by
reasonable inferences from the record.
Cohen’s $2.7 million figure represented the amount in
demurrage fees that Appellee paid to ships bringing materials to
the steel mill as a result of the crane collapse, regardless of
whether their cargo was coke.

To arrive at this number, Cohen

found a “baseline” demurrage figure by averaging the amounts of
10

Appellant concedes it is liable for only approximately
$400,000 in demurrage damages, as opposed to the $2.7 million
the district court awarded.

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demurrage Appellee paid, per ton of cargo, for several months
before the crane collapse.
Appellee

paid

in

To determine the incremental amount

demurrage

due

to

the

accident,

Cohen

then

considered the difference between the baseline figure and the
average demurrage amount that Appellee paid over the two months
following the accident.
Cohen

asked

Appellee’s

accounting

personnel

if

any

factors other than the crane collapse (e.g., changes in labor
relations,
inflationary

commercial

terms,

components)

prices,

could

have

interest

caused

increase in its payment of demurrage fees.

the

rates

or

pronounced

After reviewing the

evidence and discussing the subject with Appellee’s accountants,
Cohen concluded that these other factors were not responsible
for the increase in demurrage.
safely

attribute

collapse.”

the

J.A.

He “was satisfied that one could

[incremental

327.

As

demurrage]

the

to

district

the

court

bridge
noted,

“no . . . [other] data quantifying the [demurrage] loss directly
attributable to the [b]ridge [c]rane [loss] was available.”
at 627-28.

Id.

The district court also had access to Gennuso’s

testimony that one of Appellee’s employees worked with a member
of

Appellant’s

staff

to

“determine[]

that

[the

increased]

demurrage charges were directly a result of not being able to
unload those ships at the A Pier.”

23

Id. at 217.

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Nonetheless, Appellant assails Cohen’s methodology for
failing “to account for factors that could have affected his
demurrage
other

computation”

causes

bridge

of

crane

equipment,

the

and

in

him

incremental

accident,

delays

faults

such

tugs,

for

demurrage

as

“problems

problems

shortages, scheduling issues, etc.”

with

not

investigating

unrelated
with
the

to

the

shore-side

ships,

labor

Appellant’s Br. 55-56, 58.

Yet Appellant offered no evidence to support its speculative
claim

that

other

potential

factors

that

“could

have

significantly affected the amount of demurrage charges” actually
had such an effect.

Id. at 56.

In light of the considerable deference we afford to
district

court

findings

during

bench

trials,

the

record’s

surplus of support for the court’s factual findings, and the
wholly speculative nature of Appellant’s argument, we conclude
the

district

court’s

damages

award

for

demurrage

was

a

reasonable inference from the record.
ii.
Changes in Commercial Terms
After losing the bridge crane, Appellee renegotiated
several of its contracts with coke-carrying vessels to account
for the increased unload time and to avoid further demurrage.
Gennuso testified that unloading delays increased transportation
costs and, in turn, drove up the price Appellee paid for coke.
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Cohen

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relied

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on

this

Pg: 25 of 33

assumption

to

calculate

an

approximate

damages amount for changes in commercial terms.
The district court did not take issue with Cohen’s
method, but it found that his calculation of the discharge rate
in

the

post-collapse

concluded

that

period

Cohen’s

was

not

analysis

entirely

failed

to

reliable.
recognize

It
that

Appellant built a new crane in the A Yard in the second half of
2011, which dramatically increased discharge rates above those
measured soon after the bridge crane collapsed.

Accordingly,

the district court awarded Appellee approximately $1.06 million
for changes in commercial terms, which was substantially less
than the approximately $1.5 million Appellee sought.
But Appellant argues that the district court should
not have awarded damages for changes in commercial terms at all.
In

this

committed

regard,
three

Appellant
errors

in

argues
relying

that
on

the

Cohen’s

district

court

calculation

of

damages for changes in commercial terms: (1) Cohen only reviewed
two shipping contracts in assessing the incremental discharge
rate, which was an unreliably small sample size; (2) Cohen did
not examine certain other potential causes for the change in
contract terms, such as market fluctuations in the price of coke
and Appellee’s credit history; and (3) Cohen lacked a basis to
assume a positive correlation between a decreased discharge rate
and the price of coke.

Appellant claims that these alleged
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deficiencies

rendered

unreasonably

uncertain;

sufficient

evidence

changes

commercial

in

Pg: 26 of 33

Cohen’s

calculation
the

therefore,

to

conclude
terms.

of
court

district

Appellee

Each

of

proved

these

damages
lacked

damages

arguments

for

lacks

merit.
First,
that

it

was

Appellant’s
fatally

attack

uncertain

on

Cohen’s

because

it

methodology

--

relied

an

on

impermissibly small sample size for calculating the incremental
discharge rate -- is plainly inconsistent with the evidence.
Cohen viewed the two charter contracts merely to confirm that
the pre- and post-accident discharge rates were accurate.

As

the district court noted, “Mr. Cohen testified that he did not
rely on the contracts to glean the prices charged for coke, but
instead sought verification of the discharge rates.”

J.A. 633.

In any event, as we discussed with respect to the demurrage
award, Cohen bolstered his conclusion by ruling out other causes
for the delays that precipitated Appellee’s renegotiation of the
coke shipping contracts.
We likewise reject Appellant’s two remaining arguments
because

Appellant

evidence.

The

failed

district

to

support

court’s

decision

testimony was not clearly erroneous.
district
inference”

court’s
from

conclusion
Cohen’s

was

challenges

to

credit

with

Cohen’s

No evidence suggests the

not

testimony
26

these

and

a

“legally
the

justifiable

entirety

of

the

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Miller v. Mercy Hosp., Inc., 720 F.2d 356, 365 (4th

Cir. 1983).
Appellant
possible

offered

alternative

calculations.

no

evidence

causes

indicating

actually

that

impacted

the

Cohen’s

In fact, Appellant argued to the district court

“that coke prices did not appreciably change from prices before
the

[b]ridge

[c]rane

collapse.”

J.A.

632.

Furthermore,

a

district court’s decision on how much weight to give testimony
at a bench trial is one that we afford great deference.
Ross, 743 F.3d at 894.

See

This principle applies to the district

court’s determination of whether Cohen sufficiently ruled out
possible alternative causes for the increase in the contract
prices

Appellee

paid

for

coke

after

the

accident.

See

Westberry, 178 F.3d at 265 (providing that, unless a plaintiff’s
expert provides “no explanation” for why a defendant’s suggested
alternative causes are not plausible, these alternative causes
“affect

the

testimony

weight

and

not

that

the

jury

should

the

admissibility

of

give
that

the

expert’s

testimony”).

Without question, Gennuso logically linked the crane accident to
actual changes in the contract price for coke.

Here, whether

Cohen sufficiently ruled out other causes is only a question of
how much weight to give Cohen’s opinion, and so we defer to the
district court’s conclusion.

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Further,

although

Pg: 28 of 33

Appellant

argues

Cohen

improperly

assumed a positive correlation between decreased discharge rates
and the price of coke, Appellant again failed to point to any
evidence

in

the

record

showing

that

the

district

court’s

decision to credit this assumption was clear error.
reasoning
which

that

then

discharge

impact

the

rates

cost

of

affect
coke,

Cohen’s

transportation

was

built

on

costs,

Gennuso’s

testimony that Appellee renegotiated coke shipping contracts at
a higher rate to account for slower discharge rates caused by
the crane collapse.
Mindful that district court findings in a bench trial
should be given the “highest degree of appellate deference,” we
find

no

reason

to

upset

the

district

court’s

determination.

F.C. Wheat Mar. Corp., 663 F.3d at 723 (internal quotation marks
omitted).

The district court had a sufficient basis to conclude

that Cohen proved Appellee’s damages for changes in commercial
terms to a reasonable certainty.
III.
For

the

foregoing

reasons,

the

judgment

of

the

district court is
AFFIRMED.

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DIAZ, Circuit Judge, concurring:
Although I share the majority’s view of the outcome of this
case, I diverge slightly in my understanding of the nature of
the relationship between the parties after the expiration of the
Interim Agreement in 2005.

I would find that Kinder Morgan was

bound by the Lease terms as a holdover tenant, and that the
later purchase orders do not supersede the Lease terms in this
case because they cover a different subject matter.
The record before the court does not support the conclusion
that Kinder Morgan objectively intended to be bound by the terms
of the 1992 Lease after the expiration of the final Interim
Agreement in 2005.
suggests

that

To the contrary, the undisputed evidence

Kinder

Morgan

specifically

did

not

wish

to

be

bound by the original lease terms because it wanted to negotiate
a

new

long-term

improvements

to

agreement
the

“A”

in

order

Pier.

In

to

invest

fact,

when

in

capital

RG

Steel’s

predecessor proposed a new contract that would have extended the
interim period through March 2006, Kinder Morgan refused to sign
it.

Kinder

Morgan’s

occasional

post-2005

references

to

the

expired Lease do not alter this conclusion, and indeed, some of
the

references

support

Kinder

Morgan’s

assertion

longer considered itself bound by the Lease.

that

it

no

See, e.g., J.A.

888 (in which Kinder Morgan references “the previous contractual
relationship” under the Lease) (emphasis added).
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Nonetheless,

Kinder

Pg: 30 of 33

Morgan’s

consistent with a holdover tenancy.

actions

are

entirely

Importantly, a holdover

tenancy under Maryland law is not based on objective assent or
intent to be bound by a lease.

Rather, it exists automatically

when a lessee overstays the term of a leasehold.
Ann.,

Real

Prop.

§ 8-402(c)

(West

2015)

See Md. Code

(“Unless

stated

otherwise in the written lease . . . when a landlord consents to
a holdover tenant remaining on the premises, the holdover tenant
becomes . . . a periodic month-to-month tenant . . . .”).

When

a tenant holds over, the tenancy remains “on all the terms and
conditions of the original lease.”

Straley v. Osborne, 278 A.2d

64, 68 (Md. 1971).
Despite
terms

of

demonstrating

the

predecessors,
Point

after

district

Lease
Kinder

the

court

in

an
its

Morgan

final

intent

undoubtedly

it

to

negotiations

Interim

observed,

not

bound

with

remained

Agreement
also

be

by

RG

Steel’s

at

Sparrows

expired.

continued

to

the

As
pay

the
rent,

utilities, and wharfage fees to the owners of the property, and
it continued to operate and maintain the Bridge Crane.

Kinder

Morgan also failed to take any of the actions that would have
been

required

upon

the

expiration

of

the

Lease,

including

surrendering the property and conducting a final inspection of
the Bridge Crane.

Based on Kinder Morgan’s behavior, I agree

with the district court’s conclusion that the purchase orders
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alone could not possibly be construed to govern the parties’
relationship.

And

although

Kinder

Morgan

did

not

consider

itself bound by any agreement with RG Steel’s predecessors, its
continued presence at the site and “good faith” adherence to the
terms of the Lease is consistent with a holdover tenancy.
Due to the holdover tenancy, the Lease terms remained in
force beginning on January 1, 2006, to the extent the parties
did not replace those terms with express, written agreements.
Among the Lease terms was an entire section dedicated to the
Bridge Crane wherein Kinder Morgan and its predecessors agreed
to assume “the entire risk of loss, theft, or destruction of the
No. 4 Bridge Crane resulting from any cause whatsoever.”
690.

J.A.

The Lease’s indemnity provision further clarified Kinder

Morgan’s liability, stating that it would “indemnify and save
harmless” the crane’s owner from any loss or liability resulting
from any damages sustained by the owner as a result of any act
or omission of Kinder Morgan, “whether negligent or otherwise.”
J.A. 692.

Undoubtedly, the terms of the Lease directly covered

the subject matter of Kinder Morgan’s liability in the event of
damage

to

the

Bridge

Crane,

and

did

not

provide

for

any

limitation on consequential damages.
In February 2008, the parties entered into a purchase order
under which Kinder Morgan agreed to unload “up to 500,000 nton
of coke from ships with Bridge Crane.”
31

J.A. 992.

Delivery of

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the coke was promised approximately four months later, and the
purchase order provided for a delivery location, a unit price,
and a total price.

The purchase order also made reference to

the buyer’s terms and conditions, contained in a document called
the

AMUSA-100

“General

Goods or Services.”

Purchasing

Conditions

for

Purchase

of

The first sentence of the AMUSA-100 clearly

states its scope: “These General Purchasing Conditions (“GPC”)
shall

apply

to

the

products . . . and

any

purchase
related

of

services

provided by suppliers (‘Seller’).”
The

terms

of

the

procurement

of

topics

price

as

AMUSA-100

specific

any

and

adjustments,

(“Goods”)

items,

offered

or

J.A. 997 (emphasis added).

thus

goods

materials,

explicitly
services,

delivery,

apply

to

addressing

inspection

of

the
such
the

product, and warranties on the goods exchanged.
Although the “Warranty – Liability” portion of the terms
states

that

neither

party

will

be

liable

for

consequential

damages “under this order,” that language is preceded by five
sections referring to the nature of the goods delivered under
the purchase order, including their quality, performance, and
timely delivery.

The limitation on liability under the purchase

order is narrow in scope: it only covers liability resulting
directly from Kinder Morgan’s delivery of goods and services to
RG

Steel

and

its

predecessors.

The

purchase

order

and

its

accompanying terms do not address Kinder Morgan’s liability in
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the event that it fails to maintain and protect the Bridge Crane
itself, despite the fact that Kinder Morgan was unloading coke
at

the

time

of

the

accident.

I

would

therefore

find

that

because the terms of the Lease were the only manifestation of
the parties’ intent with respect to the damages caused by the
accident, those terms apply and there is no limitation on Kinder
Morgan’s liability. *
Ultimately, I agree with the majority’s view that the terms
of

the

Lease

remained

in

force

and

continued

to

parties’ relationship at the time of the accident.

govern

the

Although the

parties subsequently entered into written purchase orders, those
orders (and their accompanying terms and conditions) addressed a
subject matter distinct from the events of this case and thus do
not

supersede

majority’s

the

Lease

conclusion

terms.

that

Kinder

I

therefore
Morgan

is

join

in

liable

the
for

consequential damages, and that the district court did not err
in relying on Appellee’s expert in calculating those damages.

*

The majority applies the Lease terms indirectly through
the AMUSA-100’s “safety valve provision.” But because I do not
agree that the limitation on liability in the purchase order and
the
indemnity
clause
in
the
Lease
are
“corresponding . . . provisions” “in contradiction with” each
other, J.A. 997, I conclude that Kinder Morgan’s liability for
the accident is governed only by the Lease.

33