Natures Way Marine, LLC v. EverClear of Ohio, Ltd. et al
ORDER DENYING Dfts' 108 Motion for Partial Summary Judgment as set out. Signed by Judge Callie V. S. Granade on 8/12/2014. (tot)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
NATURES WAY MARINE, LLC,
EVERCLEAR OF OHIO, LTD.,
and NIRK MAGNATE HOLDING
Civil Action No. 12-0316-CG-M
This matter is before the court on Defendants’ joint motion for partial
summary judgment (Docs. 108, 109, 110, 112), Plaintiff’s response in
opposition (Docs. 116, 119), and Defendants’ joint reply (Doc. 120). For
reasons explained below, the court finds that Defendants’ partial motion for
summary judgment is due to be denied.
I. PROCEDURAL HISTORY
Natures Way Marine, LLC (“Plaintiff”) filed a breach of contract
lawsuit regarding its charter agreement with Everclear of Ohio, LTD.
(“Everclear”) and Nirk Magnate Holding Corp. (“Nirk Magnate”) (collectively,
“Defendants”) (Doc. 1). In its complaint, Plaintiff alleged that Defendants
breached the charter agreement when they stopped paying charter hire and
demurrage (Doc. 1, p. 4). Defendants answered and raised breach of contract
counterclaims against Plaintiff (Doc. 23; Doc. 67; Doc. 68). Defendants
subsequently filed a joint motion for partial summary judgment, now before
the court, seeking to dismiss Natures Way’s complaint with prejudice, grant
all counterclaims, and provide additional relief to which they are entitled
(Doc. 109, p. 30). Defendants also “request the opportunity to submit
additional evidence concerning the specific nature and amount of their
respective damages” once liability is determined (Doc. 109, p. 24). Plaintiff
opposes Defendants’ joint motion for partial summary judgment, and claims
that there are substantial issues of material fact that make it inappropriate
to dispose of each claim at this stage (Doc. 116, p. 1). Defendants reply that
each breach of contract committed by Plaintiff, standing alone, is sufficient to
support summary judgment in favor of Defendants (Doc. 120, p. 1).
The contract, a one-year charter agreement, required Plaintiff to
transport for Defendants 30,000 barrels of spent lubes (recycled fuel oils)
each month from East Liverpool, Ohio to Avondale, Louisiana (Doc. 1, Exh. 1,
p. 1). Defendants agreed to pay Plaintiff per barrel actually transported (Doc.
1, Exh. 1, p. 1). The parties entered this agreement on August 9, 2011, and
Plaintiff cancelled it around February 12, 2012 (Doc. 1, pp. 3 - 4). At that time
Plaintiff had completed three shipments for Defendants, and Defendants had
stopped paying Plaintiff demurrage (Doc. 110, pp. 11 – 13).
Defendants assert five breach of contract counterclaims in their motion
for summary judgment. Because Defendants contend that each individual
breach is sufficient for summary judgment as a matter of law, the relevant
facts for each counterclaim are parsed out below.
A. Cargo Capacity
First, Defendants argue Plaintiff breached the contract when it
delivered barges that did not load 30,000 barrels as contemplated in the
agreement (Doc. 67, p. 13; Doc. 68, p. 14; Doc. 109, p. 9). The charter
agreement includes an equipment provision, specifying that “the Owner lets
and Charterer hires” a “NWM 3009 tank barge (24,600bbl calibrated), one
tank barge (TBD) calibrated at 10,500bbl capacity, and adequate HP as found
suitable by NWM.” (Doc. 1, Exh. 1, p. 1). The charter agreement further
provides that cargo will include “a minimum of 30,000 BBL’s of Spent Lubes
per month” (Doc. 1, Exh. 1, p. 1).
Plaintiff provided two vessels for the first shipment, the NWM 3009
and the NWM 900 (initially called the MRT 16) (Doc. 110, p. 9). The NWM
900 had a carrying capacity of roughly 9,000 barrels, less than the amount
specified in the contract (Doc. 110, p. 9; Doc. 116, pp. 17 - 18). Sara Shipman
Myers (“Myers”), a broker working with the parties (Doc. 109, Exh. 7, pp. 11 13), informed Plaintiff that the first shipment would load at approximately
92% capacity (Doc. 116, p. 17; Doc. 119, Exh. 6). In actuality the first
shipment loaded at 81% capacity and contained only 27,215 barrels. (Doc.
109, Exh. 15; Doc. 116, p. 17). Defendants knew about the shortage when the
first shipment loaded, and later accepted delivery in Avondale (Doc. 109, p.
11, Exhs. 13, 15). The second shipment, using the same two barges, loaded
more than 30,000 barrels (Doc. 118, Exh. 1, p. 7). Plaintiff added a third
barge for the third shipment, and delivered more than 37,000 barrels to
Avondale (Doc. 118, Exh. 1, p. 7).
B. Delayed First Shipment
Second, Defendants argue Plaintiff failed to perform under the terms
of the contract when it did not timely deliver the barges to East Liverpool for
the first shipment (Doc. 67, p. 13; Doc. 68, p. 14; Doc. 109, p. 6). Plaintiff first
arrived at the East Liverpool loading port on September 16, 2011, twenty-two
days after the August 25, 2011 date set forth in the charter agreement (Doc.
116, p. 2). While Plaintiff and Defendants worked through this initial delay,
Myers continued to work as a broker between the parties (Doc. 119, Exhs. 6,
7, 8, 13). Myers did not inform Plaintiff about any specific delivery deadline
in Avondale, but she stressed that the shipments needed to “get going” (Doc.
119, Exh. 4, pp. 4 – 5; Doc. 119, Exh. 5). Plaintiff and Defendants continued
communicating about the first shipment through September and October
(Doc. 109, pp. 10 – 12, Exhs. 11, 15; Doc. 116, pp. 5, 11, 15). Defendants
accepted and paid for the first shipment after it reached Avondale at the end
of October (Doc. 110, p. 11).
C. Insurance Coverage
Third, Defendants argue that Plaintiff breached the contract when it
failed to obtain sufficient Protection and Indemnity (“P & I”) Insurance (Doc.
67, p. 13; Doc. 68, p. 14, Doc. 109, p. 7), delaying the first shipment further
(Doc. 23, p. 15; Doc. 109, p. 10). When the parties entered the charter
agreement Plaintiff had $50,000,000 of P&I Insurance coverage in place,
which satisfied the insurance requirement at other terminals (Doc. 109, p. 7;
Doc. 116, pp. 6, 12-13; Doc. 118, Exh. 1, pp. 8 – 9). On September 2, 2011,
Myers first told Plaintiff about the specific terminal for delivery in East
Liverpool (Doc. 116, p. 13). Plaintiff then learned that this terminal required
$300,000,000 of P & I insurance coverage (Doc. 116, p. 13). This created an
“unexpected” problem for Plaintiff and Defendants (Doc. 119, Exh. 7, Exh. 8,
The charter agreement, drafted by Plaintiff (Doc. 110, p. 4), included
an insurance provision that states in part “Hull and Protection and
Indemnity coverage shall be carried with first class underwriter by Owner for
Owner’s account, with Charterer named as additional assured.” (Doc. 1, Exh.
1, p. 3).1 Despite the insurance provision, Plaintiff and Defendants decided to
split the additional insurance coverage cost after learning about it (Doc. 116,
pp. 14 - 15; Doc. 119, Exh. 8, p. 4). That additional cost amounted to
$210,000; Defendants paid 65% of the additional cost, and Plaintiff paid for
35% (Doc. 109, p. 8, n. 3).
D. The Leaking Barge
Fourth, Defendants argue Plaintiff supplied an unseaworthy vessel,
The agreement refers to Plaintiff as “Owner and/or Chartered Owner” and
Defendants as “Charterer” (Doc. 1, Exh. 1, p. 1).
resulting in more delays (Doc. 67, pp. 13 – 14; Doc. 68, p. 15, Doc. 109, p. 8).
The parties do not dispute that on October 4, 2011, the U.S. Coast Guard
stopped the NWM 3009 from loading cargo at East Liverpool because it
leaked (Doc. 110, p. 8; Doc. 116, p. 15). The NWM 3009 could not complete
loading until the leak was repaired (Doc. 110, p. 8; Doc. 116, p. 15). This
delay lasted approximately nine days (Doc. 110, p. 8; Doc. 116, p. 15).
Plaintiff admits that NWM 3009 leaked upon loading, but
argues that it was not for want of due diligence (Doc. 116, pp. 15 – 16).
Marine engineers certified the barge in May 2011, and the U.S. Coast
Guard inspected and approved the NWM 3009 for use on June 6, 2011
(Doc. 116, p. 16; Doc. 117, Exh. 1, p. 5). Plaintiff used the NWM 3009
twice before loading the cargo for Defendants on October 4, 2011 (Doc.
116, p. 16; Doc. 117, Exh. 1, p. 5).
In addition to these facts, Plaintiff further argues that the
charter agreement relieves it from liability based on the force majeure
clause (Doc. 116, p. 16). That clause states in relevant part that:
The tow, its captain and Owner shall not, unless otherwise in
this charter expressly provided, be responsible for any loss or
damage arising or resulting from: . . . unseaworthiness of the
tow unless caused by want of due diligence on the part of Owner
to make the tow seaworthy or to have it properly manned,
equipped and supplied; or from any other cause of whatsoever
kind arising without the actual fault or privity of the Owner.”
(Doc. 1, Exh. 1, p. 2).
Because it exercised due diligence to make its barges seaworthy (Doc.
116, p. 16), Plaintiff argues there is a genuine dispute about a material
fact for this claim.
E. Monthly Deliveries
Fifth, Defendants argue Plaintiff failed to complete the round-trip
between East Liverpool and Avondale within the required time (Doc. 109, p.
10).2 Before entering the agreement, Plaintiff informed Myers that a roundtrip between East Liverpool and Avondale would take twenty-six to twentyeight days (Doc. 109, Exh. 7, p. 13). Defendants believed this would allow for
twelve round-trips per year (Doc. 109, p. 11), and the charter agreement
references monthly deliveries (Doc. 1, Exh. 1, p. 1). The charter agreement
states that the “date of deliver[ing]” the barges to East Liverpool for loading
was “on or about August 25, 2011,” but the agreement did not list other
delivery dates (Doc. 1, Exh. 1, p. 1; Doc. 109, p. 5).
After the delays and issues described above, Plaintiff loaded the barges
in East Liverpool on October 14, 2011. From beginning to end and with the
aforementioned delays, the first round-trip took eighty-eight days (Doc. 109,
p. 11). Plaintiff transported two more oil shipments for Defendants; the
second trip took roughly forty-five days and the third trip took roughly fortythree days (Doc. 109, p. 12). Plaintiff did not complete the third round-trip as
the business relationship with Defendants unraveled (Doc. 109, p. 13; Doc.
116, p. 8).
Defendants first articulate this breach of contract counterclaim in their
motion for partial summary judgment (Doc. 109, p. 10).
In response to this counterclaim Plaintiff asserts that on more than
one occasion Defendants asked the barges to slow down (Doc. 116, p. 11; Doc.
118, Exh. 1, p. 9). Additionally, Plaintiff argues that Defendants were aware
of the shipping delays, but never communicated to Plaintiff that it considered
the delays a breach of contract (Doc. 116, pp. 5 – 6).
F. Plaintiff’s Breach of Contract Claim
Approximately two weeks after delivering the third shipment to
Avondale, Plaintiff cancelled the charter agreement on February 12, 2012,
and put the towing vessel into service for another party (Doc. 109, p. 13; Doc.
109, Exh. 13, pp. 38 - 39). Plaintiff argues that Defendants breached the
agreement by refusing to pay demurrage fees and ending communication
with Plaintiff after it delivered the third shipment (Doc. 109, p. 13; Doc. 109,
Exh. 13, pp. 38 – 39; Doc. 118, Exh. 1, p. 7; Doc. 119, Exh. 10). In turn,
Defendants argue that Plaintiff breached the agreement as a result of the
delays discussed above, and seek dismissal of Plaintiff’s claims (Doc. 109, pp.
7 – 9). Plaintiff did not move for summary judgment on this claim.
G. Defendants’ damages from losing a third-party contract
In their motion for partial summary judgment, Defendants ask the
Court to determine liability before deciding damages (Doc. 109, p. 24). A
particular point of contention, however, are damages resulting from business
that Defendants lost with a third party, ALBA, as a result of the shipment
delays (Doc. 109, pp. 2 - 3). Defendant Everclear and Defendant Nirk
Magnate entered into a joint venture agreement on June 22, 2011, to “acquire
and blend physical commodities products for the purpose of resale” (Doc. 109,
Exh. 1, p. 2). In furtherance of this joint venture, Defendant Nirk Magnate
entered into a separate contract with ALBA dated August 21, 2011, twelve
days after it entered the charter agreement with Plaintiff (Doc. 109, Exh. 3).
Pursuant to the ALBA contract, Defendant Nirk Magnate agreed to deliver a
fuel oil blend to ALBA by October 2011 in exchange for $14,490,000.00 (Doc.
109, p. 3; Doc. 109, Exh. 3, p 8). The fuel oil blend would have included the
spent lubes being shipped by Plaintiff (Doc. 109, p. 3). ALBA, however,
terminated its agreement with Defendants on October 10, 2011 because it
had not yet received the first shipment of the blended fuel product (Doc. 109,
Exh. 16). Defendants did not convey information about the ALBA contract to
Plaintiff (Doc. 116, p. 4).
III. STANDARD OF REVIEW
The court may grant summary judgment “if the movant shows that
there is no genuine dispute as to any material fact and that the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The
substantive law applicable to the case determines what is material. Lofton v.
Sec’y of Dep’t of Children & Family Servs., 358 F.3d 804, 809 (11th Cir.
2004), cert. den., 534 U.S. 1081 (2005). If the nonmoving party fails to make
“a sufficient showing on an essential element of her case with respect to
which she has the burden of proof,” the moving party is entitled to summary
judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
In evaluating the movant’s arguments, the court must view all
evidence and resolve all doubts in the light most favorable to the nonmovant.
Burton v. City of Belle Glade, 178 F.3d 1175, 1187 (11th Cir. 1999). “If
reasonable minds might differ on the inferences arising from undisputed
facts, then [the court] should deny summary judgment.” Hinesville Bank v.
Pony Exp. Courier Corp., 868 F.2d 1532, 1535 (11th Cir. 1989). The basic
issue before the court then is “whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so one-sided
that one party must prevail as a matter of law.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 251–52 (1986). The mere existence of any factual dispute
will not automatically necessitate denial of a motion for summary judgment;
rather, only factual disputes that are material preclude entry of summary
judgment. Lofton, 358 F.3d at 809.
A. General Maritime Law
This case falls under admiralty jurisdiction, thus the court must
navigate the seas of maritime law and apply it to the facts presented here.3
“Drawn from state and federal sources, the general maritime law is an
amalgam of traditional common-law rules, modifications of those rules, and
A breach of contract action will not support admiralty jurisdiction unless
the underlying contract is wholly maritime in nature. Rea v. The Eclipse, 135
U.S. 599, 608 (1890).
newly created rules.” E. River S.S. Corp. v. Transamerica Delaval, Inc., 476
U.S. 858, 864-65 (1986) (citations omitted). In the absence of controlling
statutory or judicially created maritime principles, courts may apply state
law provided that the law does not thwart national interests in having
uniform admiralty law. Coastal Fuels Mktg., Inc. v. Florida Exp. Ship. Co.,
Inc., 207 F.3d 1247, 1251 (11th Cir. 2000).
Before analyzing the individual claims, general maritime law and
contract principles set forth the legal framework for this case. Under
maritime and contract law, an injured party is not required to repudiate the
contract in order to preserve its right to sue the other for breach of the
contract. Aaby v. States Marine Corp., 181 F.2d 383, 385 (2d Cir. 1950). If a
charterer does not object to defects promptly, however, it may waive its
breach of contract claims. U.S. Gypsum Transp. Co. v. Dampskibs
Aktieselskabet Karmoy, 48 F.2d 376, 378 (E.D.N.Y. 1930) aff’d, 54 F.2d 1086
(2d Cir. 1931). Additionally, any ambiguous provision in a maritime contract
is interpreted against the drafter. Edward Leasing Corp., v. Uhlig & Assoc.
Inc., et al., 785 F.2d 877, 889 (11th Cir. 1986).
B. Counterclaim I: Insufficient Cargo Capacity
Under a charter agreement the owner is obligated to provide the vessel
described in the contract. Aaby, 181 F.2d at 385. Failure to comply with the
terms describing the vessel can be considered a misrepresentation or a breach
of the contract. In that event, the charterer may repudiate the contract prior
to acceptance of the vessel or sue for damages. Horn v. Cia de Navegacion
Fruco, 404 F.2d 422, 429 (5th Cir. 1968) (citations omitted). After the vessel
is accepted, however, the charterer can repudiate the contract and seek
damages when the purported breach frustrates the purpose of the contract.
See Aaby, 181 F.2d at 386 - 87; cf. Watts v. Camors, 115 U.S. 353, 362 (1885)
(court affirmed damages for owner where charterers refused to accept the
ship the day after owner tendered it because it did not meet contract
specifications, and parties continued negotiating).
Here, the parties do not dispute that Plaintiff supplied a vessel with a
carrying capacity smaller than specified in the contract. When Plaintiff first
delivered the vessel, Defendants could have repudiated the contract or sued
for damages, but they elected to do neither. Instead, Defendants allowed
Plaintiff to use the same barge for two more shipments that included 30,000
barrels or more without objection. Under these facts, Defendants accepted the
barge and waived their objection to the smaller cargo capacity. The continued
use of the barge also shows that its smaller size did not frustrate the
commercial purpose of the contract. Because Defendants accepted the barge
and continued using it for subsequent shipments, the facts are in dispute and
thus do not support granting summary judgment for this claim. Defendants’
request for summary judgment based on insufficient cargo capacity is denied.
C. Counterclaim II: First Shipment Delayed
Shipping delays and late delivery of a vessel may result in a breach of
contract. The Maggie Hammond, 76 U.S. 435, 460 (1869). In that event, the
charterer can accept the barge and sue to recover damages, or waive late
delivery. U.S. Gypsum Transp. Co., 48 F.2d at 378. Here, Plaintiff does not
dispute that it failed to deliver the barges to Defendants in East Liverpool by
August 25. At that time, Defendants could have either rejected the late
barges, or accepted the late barges and sued to recover damages. Horn, 404
F.2d at 429. But Defendants accepted the barges continued using Plaintiff’s
services for over four months without raising an objection. Accordingly, the
court finds that Defendants waived their objection based on the initial late
delivery when they accepted the barges and paid for the first shipment.
Defendants’ request for summary judgment based on this shipping delay is
On a related issue, the record reflects that Defendants failed to tell
Plaintiff about its October 2011 deadline with ALBA. While Defendants and
Plaintiff continued communicating about other shipping matters, ALBA
cancelled its contract with Defendants on October 10. Defendants never
conveyed that information to Plaintiff, nor does the record reflect that
Plaintiff knew about this third-party contract. Instead, Defendants proceeded
with a second and third shipment of spent lubes.
For this point of the dispute the court finds Wood v. Hubbard
instructive. 62 F. 753 (3d. Cir. 1894). In that case, bad weather delayed an
iron pipe shipment, which caused the charterer to lose a contract with a
third-party. Notably, the court acknowledged the considerable
correspondence between the owner and charterer, but found the charterer
provided “no notice of the necessity of a delivery” by a certain date. Wood, 62
F. at 757 – 58. For this and other reasons, the court concluded that the owner
could not be charged with frustration of the charterer’s third-party venture.
Id. at 757- 58. Similarly, Defendants in this case did not make clear that it
had a third-party contract demanding delivery by October, despite their
ongoing communication with Plaintiff on other issues. Because the facts as
presented support an interpretation that Defendants waived their objection
to late delivery, summary judgment is not appropriate on this claim, and thus
the court need not reach the issue of damages arising from this specific claim.
D. Counterclaim III: Inadequate P & I Insurance Coverage
Although an ambiguous provision in a maritime contract is interpreted
against the drafter, Edward Leasing Corp., 785 F.2d at 889, there is not a
dispute based on ambiguity here. The charter agreement states clearly that
P & I coverage “shall be carried . . . by Owner” (Doc. 1, Exh. 1, p. 3). As the
owner, Plaintiff should have acquired the requisite insurance in accordance
with the charter agreement terms.
But Defendants and Plaintiff voluntarily changed these terms when
they agreed to divide the cost of the additional P & I insurance. Parties may
modify the terms of their agreement and if the terms of a subsequent
agreement contradict the earlier agreement, the terms of the later agreement
prevail. Scurtu v. Intl. Student Exch., 523 F. Supp. 2d 1313, 1322, n. 10 (S.D.
Ala. 2007). As a result, Plaintiff and Defendants’ later agreement about
splitting the cost of insurance controls. Bringing a breach of contract
counterclaim based on the terms of the original insurance provision while
ignoring the later agreement is unfounded. Accordingly, Defendants’ request
for summary judgment on this breach of contract claim is denied.
E. Counterclaim IV: Unseaworthy Vessel
“Maritime law infers a general warranty of seaworthiness from a
charter-party agreement even where such warranty is not expressly made.”
Horn, 404 F.2d at 428. The warranty can impose a form of absolute liability
on a sea vessel, liability that is completely divorced from negligence. Mitchell
v. Trawler Racer, Inc., 362 U.S. 539, 549-50 (1960). Under a charter
agreement, only “want of due diligence on the part of the owner” can impose
liability for unseaworthiness. Hampton Roads Carriers, Inc. v. Allied Chem.
Corp., 329 F.2d 387, 391 (4th Cir. 1964). Additionally, a charter party may
modify or waive this absolute liability with clear and unambiguous language.
In re Boskalis Westminster Intern. B.V., 975 F. Supp. 2d 1238, 1247, n. 5
(S.D. Fla. 2012).
Seaworthiness generally means that the vessel is reasonably safe and
fit for its intended purpose. Marshall v. Ove Skou Rederi A/S, 378 F.2d 193,
196 (5th Cir. 1967). A vessel may be deemed unseaworthy for any number of
reasons: its gear might be defective, its cargo loaded improperly, or its crew
unfit. Morales v. City of Galveston, 370 U.S. 165, 170 (1962) (citations
omitted). As a result unseaworthiness is ordinarily a question for the jury,
and few cases find that a ship is unseaworthy as a matter of law. Johnson v.
Bryant, 671 F.2d 1276, 1279 (11th Cir. 1982) (citations omitted).
After this warranty is breached, a charterer may repudiate the
contract and seek damages. But repudiation is permissible only where the
breach of seaworthiness is so substantial that it defeats or frustrates the
commercial purpose of the charter. Aaby, 181 F.2d at 386; Hildebrand v.
Geneva Mill Co., 32 F.2d 343, 348 (M.D. Ala. 1929).
The charter agreement states that unseaworthiness is not absolute,
rather the “Owner” is not responsible for “unseaworthiness of the tow unless
caused by want of due diligence.” (Doc. 1, Exh. 1, p. 2). Plaintiff arguably
used due diligence to make its barge seaworthy because the vessel had been
surveyed twice and used on two other trips shortly before it began loading
cargo for Defendants. Cf. Hampton Roads Carriers, Inc., 329 F.2d at 391
(surveys “are not to be discarded entirely in canvassing the attention exerted
by owner to discover deficiencies” in the barge, finding owner acted with
diligence to make vessel seaworthy). Neither party disputes that the barge
leaked upon loading, but viewing the facts in the light most favorable to the
non-moving Plaintiff, the record does not clearly show that the leak occurred
for want of due diligence.
Furthermore, after learning about the leak Defendants did not
repudiate the contract, object and seek damages, or immediately reject the
vessel. Defendants accepted the barge and used it again in two subsequent
shipments without objection. Defendants could therefore be viewed as having
waived any objection to this purported breach. Additionally, any breach of
seaworthiness apparently did not defeat or frustrate the commercial purpose
of the contract because the parties continued using the same barge for other
shipments. Accordingly, Defendants’ counterclaim for breach of
seaworthiness is denied.
F. Counterclaim V: Delayed Deliveries
Defendants did not previously assert a breach of contact counterclaim
based on Plaintiff’s failure to undertake monthly voyages as specified in the
charter agreement (Doc. 109, p. 21). At the summary judgment stage, the
proper procedure for a party to assert a new claim is to amend the complaint
in accordance with Federal Rule of Civil Procedure 15(a). A counterclaim
plaintiff may not amend its complaint by raising new claims in a brief for
summary judgment. Gilmour v. Gates, McDonald and Co., 382 F.3d 1312,
1315 (11th Cir. 2004). Nevertheless, the court will review this claim.
Maritime law makes clear that shipowners must carry out the voyage
with reasonable diligence. Olsen v. Hunter-Benn & Co., 54 F. 530, 531 (S.D.
Ala. 1892). As mentioned, however, maritime and contract law recognizes
that parties can waive breach of contract claims. See, e.g., U.S. Gypsum
Transp. Co., 48 F.2d at 378. Waiver is the intentional relinquishment of a
known right, and a party’s intent to waive a right can be drawn from conduct
that is inconsistent with the assertion of that right. Olsen, 54 F. at 532
(stating acts can indicate waiver); Edwards v. Allied Home Mortg. Capital
Corp., 962 So. 2d 194, 208-09 (Ala. 2007).
Although it is questionable whether Plaintiff could complete the trip in
twenty-eight days, Defendants’ conduct waived any objection to Plaintiff’s
three late deliveries. Defendants never refused to pay Plaintiff because of
their failure to complete a trip in one month’s time, nor did they object to any
delays as Plaintiff unloaded and then re-delivered the barges. Defendants
continued to pay for shipments and demurrage through January 2012. Apart
from referencing monthly shipments and an initial delivery date of August
25, the contract detailed no other delivery deadlines. Pursuant to maritime
and contract law principles, Defendants cannot accept shipments without
objection and then belatedly claim breach of contract based on untimeliness.
See Bennett v. Lingham, 31 F. 85, 86 (E.D.N.Y. 1887). Therefore, Defendants’
request for summary judgment based on this claim is denied, and because
breach of the monthly voyage provision was not alleged in the counterclaims,
this issue will not be submitted to the jury.
G. Plaintiff’s claims are not dismissed
Defendants asked the court to dismiss Plaintiff’s claims with prejudice.
After a breach the injured party may, depending on the severity of the
breach, either repudiate the contract or continue the agreement and claim
damages from the defaulting party. See Aaby, 181 F.2d at 385; Edwards, 962
So. 2d at 207-08. An injured party is not automatically excused from
performing their remaining duties, however, if they continue the agreement
with knowledge of the default by the breaching party. Dunkin’ Donuts of Am.,
Inc. v. Minerva, Inc., 956 F.2d 1566, 1571 (11th Cir. 1992) (a breach “merely
gives the injured party the right to end the agreement; the injured party can
choose between canceling the contract and continuing it”).
The facts presented indicate that the initially injured party,
Defendants, continued the agreement with knowledge of the delays and
problems encountered by Plaintiff. Defendants were not automatically
excused from performing their remaining duties after they decided to
continue on with the commercial endeavor following the shipping delays.
Accordingly, Plaintiff’s claims are not dismissed with prejudice. Plaintiff did
not move the court for summary judgment on its claims.
Upon a thorough analysis of all matters presented, the Court concludes
that there are factual disputes regarding Defendants’ counterclaims and
Defendants’ motion for partial summary judgment is therefore DENIED.
DONE and ORDERED this 12th day of August, 2014.
/s/ Callie V. S. Granade
UNITED STATES DISTRICT JUDGE
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