American Commercial Lines LLC v. D.R.D. Towing Company, L.L.C.
Filing
69
ORDER AND REASONS denying 38 Motion for Summary Judgment filed by American Commercial Lines LLC. Signed by Judge Ivan L.R. Lemelle. (ijg, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
AMERICAN COMMERCIAL LINES, LLC
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VERSUS
D.R.D. TOWING COMPANY, LLC
CIVIL ACTION
NO. 09-4466
SECTION “B”(4)
ORDER AND REASONS
Before the Court is Plaintiff American Commercial Lines LLC’s
(“ACL”) Motion for Partial Summary Judgment. (Rec. Doc. No. 38).
For the reasons pronounced below,
IT IS ORDERED that ACL’s Motion for Partial Summary Judgment
(Rec. Doc. No. 38) be and is hereby DENIED.
I. Cause of Action and Facts of Case
This case arises from the collision of the tug MEL OLIVER
while operating under an amendment (Rec. Doc. No. 38-4) to both an
August 6, 2007 Master Bareboat Charter (Rec. Doc. No. 38-2) and an
August 6, 2007 Master Fully Found Charter (Rec. Doc. No. 38-3)
between DRD Towing Company, LLC (“DRD”) and ACL.
In the early
morning of July 23, 2008, ACL’s Barge DM-932 collided with the M/V
TINTOMARA while being pushed by the MEL OLIVER, resulting in an oil
spill of some 300,000 gallons of fuel oil.
8-9).
(Rec. Doc. No. 38-5 at
A criminal investigation regarding the operations of DRD
resulted in a guilty plea by DRD and a finding that the captain of
the M/V MEL OLIVER left the boat and turned over operation and
control to a “steersman,” licensed only to steer a vessel with a
1
properly licensed captain or mate standing watch with him in the
wheelhouse.
(Rec. Doc. No. 38-5 at 8).
For the three days, from
July 20 to July 23, 2008, the steersman was the only operator
onboard the MEL OLIVER, which required him to work 36 hours
straight; it was during this time that the collision occurred, on
July 23, 2008.
Id.
ACL now moves for Partial Summary Judgment, asking this Court
to find that both the charter agreements that ACL entered into with
DRD were void ab initio.
(Rec. Doc. No. 38).
Movant contends that the charter agreements should be declared
void ab initio as a result of DRD’s fraudulent misrepresentation
and their intent to violate material terms of the agreements.
(Rec. Doc. No 38-1 at 9).
Specifically, ACL argues that DRD
violated clause 7 of both charter agreements, (Rec. Doc. Nos. 38-2
at 4-5; 38-3 at 3-4, respectively) entitled “Compliance with Laws
and Regulations,” which mandates DRD to be in compliance with all
laws in the manning and operation of the tugs. Also, movant states
that DRD violated the “Performance Standards” clause of the Fully
Found Charter, which requires DRD to insure that the tugs are
manned by properly trained and licensed personnel.
38-3 at 12).
(Rec. Doc. No.
Movant further contends that DRD signed the charter
agreements knowing full and well that its performance would be
illegal, thus rendering the charters and their amendment void.
(Rec. Doc. No. 38-1 at 12.)
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Additionally, Movant asserts that the Court should disregard
the declaration and amended deceleration of Daniel Dantin, Jr.,
being that the declarations contradict the admissions contained in
the Factual Basis (Rec. Doc. No. 38-5) in DRD’s prior criminal
proceeding and that DRD is judicially/collaterally estopped from
taking a position that is factually contrary to the position that
it took in the criminal proceeding.1
(Rec. Doc. No. 60 at 3).
Respondent, DRD contends that there existed no intent to
defraud at the time the charters were executed and that the suit
does not make sufficient allegations of fraud, as pled (Rec. Doc.
No. 47 at 2-3).
contradiction
Defendant also asserts that there is no factual
between
the
statements
made
in
Daniel
Dantin’s
declaration in the instant case and the factual basis that he
signed as part of DRD’s guilty plea in the related criminal
proceeding.
(Rec. Doc. No. 63 at 1).
If ACL is able to sever
contractual privity with DRD, ACL would be able to pursue a claim
with the National Pollution Fund Center for the clean up expenses
that it paid.
(Rec. Doc. No. 47 at 1).
Currently, ACL is in
privity of contract with the party that caused the oil spill (DRD),
preventing them from recouping expenses from the fund.
Id. at 2.
II. Law and Analysis
A.
Summary Judgment Standard
1
The factual basis from the related prior criminal proceeding may be
found in U.S. v. DRD Towing Company, LLC, 10-191 at Rec. Doc. No. 17.
Plaintiff has attached a copy in the instant case at Rec. Doc. No. 38-5.
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Summary judgment is proper if the pleadings, depositions,
interrogatory
answers,
and
admissions,
together
with
any
affidavits, show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter
of law.
Fed. R. Civ. P. 56; see also Celotex Corp. v. Catrett, 477
U.S. 317, 327 (1986). A genuine issue exists if the evidence would
allow a reasonable jury to return a verdict for the nonmovant.
Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248, (1986).
Although the Court must consider the evidence with all reasonable
inferences in the light most favorable to the nonmoving party, the
nonmovant must produce specific facts to demonstrate that a genuine
issue exists for trial.
Webb v. Cardiothoracic Surgery Assocs. of
N. Texas, 139 F.3d 532, 536 (5th Cir. 1998).
The nonmovant must go
beyond the pleadings and use affidavits, depositions, interrogatory
responses, admissions, or other evidence to establish a genuine
issue. Id. Accordingly, conclusory rebuttals of the pleadings are
insufficient to avoid summary judgment.
Travelers Ins. Co. v.
Liljeberg Enter., Inc. 7 F.3d 1203, 1207 (5th Cir. 1993).
B.
Fraudulent Misrepresentation and Intent to Violate Contracts:
The standard for voiding a contract under maritime law sets
fourth five requirements:
(1)
(2)
(3)
the
deceiving
party
made
a
material
misrepresentation or nondisclosure;
the representation was false or the nondisclosure
implied that the facts were different from what the
deceived party understood them to be;
the deceiving party knew that the representation
was false or that the nondisclosure implied the
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(4)
(5)
existence of false facts;
the deceiving party intended the deceived party to
rely on the misrepresentation or nondisclosure; and
the deceived party detrimentally relied upon the
misrepresentation or nondisclosure.
Black Gold Marine Inc. v. Jackson Marine Co., Inc., 759 F.2d 466,
470 (5th Cir. 1985).
Clause 7 of both charter agreements is entitled “Compliance
with Laws and Regulations”, where DRD agreed to comply with all
applicable laws and regulations with respect to the manning and
operation of the chartered tugs or any substitute. (Rec. Doc. Nos.
38-2 at 4-5; 38-3 at 3-4).
Elements (3) and (4) of the Black Gold
Marine test require ACL to prove that DRD knew that its statements
in the contract were false, and that DRD intended to deceive ACL in
making those representations.
In Dantin’s amended declaration, he
states:
. . . there were times between January 1, 2007 and July
23, 2008 when vessels operated by DRD were not fully
manned by properly licensed individuals and that these
situations could have been prevented by DRD . . .
however, at the time I signed the agreements referenced
above, there was no belief on my part or to my knowledge
on the part of DRD as a legal entity that the
representations made in the charters regarding proper
manning of the tugs with the sufficient number of
properly licensed individuals would be breached by DRD .
. . [and] there was no intent on my part or on the part
of DRD to deceive ACL by representing that DRD would
comply with manning requirements when DRD intended not to
comply with those regulations.
(Rec. Doc. No 49-3 at 2).
This seems to preclude summary judgment
showing a genuine issue of fact regarding whether Dantin and DRD
intended to deceive ACL.
(Rec. Doc. No 49-3).
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However, movant
contends that DRD is estopped from using the affidavit to create an
issue of fact as the affidavit contradicts prior statements Dantin
made to this Court.
No. 60 at 7).
See Modica, 518 F.2d at 376-77.
(Rec. Doc.
In the factual basis for the criminal plea approved
and signed by Dantin on behalf of DRD, it was admitted that “[O]n
or about July 15, 2008, the MV MEL OLIVER, a DRD ‘trip boat’ that
operated 24 hours a day with live-aboard crew, began a designated
run with its designated barge from St. Rose, Louisiana to Port
Bienville, Mississippi.”
Dantin’s
amended
(Rec. Doc. No. 38-5 at 7).
declaration,
he
states
that
At item 11 in
it
was
his
understanding that the vessel was on a dedicated run that did not
require it to operate more than 12 hours in a given 24 hour period.
(Rec. Doc. No. 49-3 at 2).
Movant contends that this is a
“critical assertion” in the Dantin declaration that is demonstrably
false in comparison to the criminal plea that Dantin signed on
behalf of DRD, and that the Court is entitled to reject the rest of
the content of the declaration, even though not actually proven to
be false under S.A.F. (XXX-XX-XXXX) v. U.S. Com’r Social Sec.
Admin, 2010 WL 2977048, at 4 (W.D. La. July 26, 2010).
No. 60 at 8).
(Rec. Doc.
However, movant fails to address item 13 of Dantin’s
affidavit, where he states that he was unaware that the vessel was
working more than 12 hours in a 24 hour period at the time of the
oil spill, thereby clearing up any inconsistencies. (Rec. Doc. No.
49-3 at 3).
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Dantin was under the mistaken impression that the vessel was
operating less than 12 hours a day; and, since then, he has learned
that it was actually working more than 12 hours a day.
an inconsistency.
This is not
Furthermore, movant fails to demonstrate how
this allegedly inconsistent statement by Dantin amounts to a
“critical assertion” in relation to DRD’s opposition to the motion.
DRD’s opposition centers on whether Dantin, on behalf of DRD,
intended to comply with the manning requirements contained in the
charter agreements at the time of their execution, in relation to
the third and forth requirements of the Black Gold Marine test.
Being that Dantin’s affidavit states that there was no intent to
deceive ACL, along with the determination that DRD is not estopped
from setting forth that affidavit, ACL has failed their burden of
proof under the third and forth requirements of the Black Gold
Marine test. There exists a material issue of fact with respect to
knowledge of any illegality of the contract.
Thus, summary
judgment is precluded; the Court need not address the remaining
factors.
New Orleans, Louisiana, this 7TH day of 2011.
____________________________________
UNITED STATES DISTRICT JUDGE
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