Offshore Marine Contractors, Inc. v. Palm Energy Offshore, L.L.C. et al

Filing 172

ORDER AND REASONS denying 141 Motion to Dismiss for Failure to State a Claim; denying 142 Motion to Dismiss for Failure to State a Claim. Signed by Chief Judge Sarah S. Vance on 4/15/13. (Reference: ALL CASES)(jjs, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
OFFSHORE MARINE CONTRACTORS, INC.

CIVIL ACTION

VERSUS

NO: 10-4151,
consol.

PALM ENERGY OFFSHORE, L.L.C. AND
CHET MORRISON WELL SERVICES, L.L.C.

SECTION: R

ORDER AND REASONS
Before the Court are the motions to dismiss of H.C.
Resources, LLC and Palm Energy Offshore, LLC,1 which Chet
Morrison Contractors, LLC opposes. For the following reasons, the
Court DENIES the motions to dismiss.
I.

BACKGROUND
In 2010, Offshore Marine Contractors, Inc. filed suit

against Palm Energy Offshore, LLC and Chet Morrison Well
Services, LLC, seeking to recover charter fees and repair costs
owed for Offshore Marine’s vessel, the L/B Nicole Eymard.
Offshore Marine alleges that defendants chartered its vessel for
use on a job in the Gulf of Mexico. The vessel became stuck while
working on the West Delta 55 well, and its legs were removed to
free it. Offshore Marine contends that Palm Energy and/or Chet
Morrison owe charter hire for the time that the L/B Nicole Eymard
was in use, as well as the costs of repair and lost charter fees.
Palm Energy and Chet Morrison filed crossclaims seeking indemnity
and defense based on Master Service Agreements that the companies

1

R. Docs. 141, 142.

executed. Chet Morrison also filed a third-party complaint
against H.C. Resources (HCR), alleging negligence and breach of
contract due to HCR’s refusal to indemnify Chet Morrison for its
work on the West Delta 55 well.
After hearing oral argument on November 28, 2012, the Court
denied a number of motions for summary judgment filed by the
parties.2

The Court, however, granted HCR’s motion for summary

judgment on the grounds that the well at issue was not owned by
HCR, as alleged by Chet Morrison, and HCR had no contractual
obligation to indemnify Chet Morrison.3 During oral argument,
Chet Morrison asked for leave to amend its complaint, which the
Court denied.4
On December 14, 2012, Chet Morrison Contractors, LLC, as the
successor in interest to Chet Morrison Well Services, filed suit
against Palm Energy and HCR.5 The suit was consolidated with the
existing litigation initiated by Offshore Marine. Chet Morrison
claims that in the event it is found to have chartered the L/B
Nicole Eymard, Palm Energy and HCR owe the full amount of charter
hire to Chet Morrison, in addition to markup and interest.6 Palm
Energy and HCR now move to dismiss Chet Morrison’s claims on the
2

R. Doc. 100.

3

R. Doc. 113.

4

R. Doc. 100.

5

No. 12-2973, R. Doc. 1.

6

Id.
2

grounds that Chet Morrison has failed to state a claim on which
relief may be granted.7
II.

STANDARD
When a defendant attacks the complaint because it fails to

state a legally cognizable claim, Rule 12(b)(6) provides the
appropriate challenge. To survive a Rule 12(b)(6) motion to
dismiss, the plaintiff must plead enough facts “to state a claim
to relief that is plausible on its face.” Ashcroft v. Iqbal, 129
S.Ct. 1937, 1960 (2009)(quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A claim is facially plausible when the
plaintiff pleads facts that allow the court to “draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. at 1949. A court must accept all wellpleaded facts as true and must draw all reasonable inferences in
favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d
228, 239 (5th Cir. 2009); Baker v. Putnal, 75 F.3d 190, 196 (5th
Cir. 1996). But the Court is not bound to accept as true legal
conclusions couched as factual allegations. Iqbal, 129 S.Ct. at
1949.
III. DISCUSSION
A.

HCR’s Motion to Dismiss

HCR contends that Chet Morrison’s claims are barred by the
doctrine of res judicata, since Chet Morrison could have brought

7

R. Docs. 141, 142.
3

them in the third-party complaint it filed against HCR in the
earlier suit. A res judicata claim generally cannot be brought in
a motion to dismiss and instead must be pleaded as an affirmative
defense. Test Masters Educ. Serv., Inc. v. Singh, 428 F.3d 559,
570 n.2 (5th Cir. 2005). But, “when a successful affirmative
defense appears on the face of the pleadings, dismissal under
Rule 12(b)(6) may be appropriate.” Kansas Reinsurance Co., Ltd.
v. Cong. Mortg. Corp. of Texas, 20 F.3d 1362, 1366 (5th Cir.
1994); see also Fall v. Prudential-Bache Sec., Inc., No. 96-2026,
1996 WL 393241, *1 (E.D. La. July 12, 1996) (granting motion to
dismiss on the basis of res judicata). Thus, the Court will
consider whether it is evident on the face of the pleadings that
the doctrine of res judicata bars Chet Morrison’s claims against
HCR.
Under this doctrine, “a final judgment on the merits of an
action precludes the parties or their privies from relitigating
issues that were or could have been raised in that action.” Oreck
Direct, LLC v. Dyson, Inc., 560 F.3d 398, 401 (5th Cir. 2009)
(quoting Allen v. McCurry, 449 U.S. 90, 94 (1980)).

The party

asserting the defense of res judicata must demonstrate that: (1)
the parties in the actions are identical or in privity; (2) the
earlier judgment was rendered by a court of competent
jurisdiction; (3) there was a final judgment on the merits; and
(4) the same claim or cause of action is involved. See Oreck
Direct, LLC, 560 F.3d at 401.
4

Chet Morrison does not dispute that this Court’s grant of
summary judgment qualifies as a judgment rendered by a court of
competent jurisdiction, but it contests the other three necessary
elements of a res judicata defense. First, Chet Morrison argues
that the parties are not identical, because it filed a claim here
as Chet Morrison Contractors, LLC, whereas an entity entitled
Chet Morrison Well Services, Inc. filed the first suit. The Court
finds this contention to be without merit. The new complaint
states that Chet Morrison Well Services merged into the survivor
entity Chet Morrison Contractors, LLC, which is the successor in
interest to Chet Morrison Well Services' contracts.8 See Meza v.
Gen. Battery Corp., 908 F.2d 1262, 1266 (5th Cir. 1990) (privity
of interest exists where the non-party is the successor in
interest to a party’s interest in property). Chet Morrison cannot
simultaneously distinguish itself from the entity that originally
sued HRC and assert claims on behalf of that entity as its
successor. The Court therefore Court finds that the requirement
that the parties be identical or in privity has been satisfied.
Chet Morrison next challenges whether the Court’s grant of
summary judgment to HCR constituted a final judgment, since
claims remain to be litigated in the suit. The Court granted
HCR’s motion for summary judgment and dismissed it from the

8

R. Doc. 1 at 1-2.
5

suit.9 Federal Rule of Civil Procedure 54(b) states:
When an action presents more than one claim for reliefwhether as a claim, counterclaim, crossclaim, or thirdparty claim-or when multiple parties are involved, the
court may direct entry of a final judgment as to one or
more, but fewer than all, claims or parties only if the
court expressly determines that there is no just reason
for delay. Otherwise, any order or other decision, however
designated, that adjudicates fewer than all the claims or
the rights and liabilities of fewer than all the parties
does not end the action as to any of the claims or
parties and may be revised at any time before the entry
of a judgment adjudicating all the claims and all the
parties' rights and liabilities.
In dismissing HCR from the suit, the Court did not make an
express determination that a final judgment without delay was
warranted. The Court therefore did not issue a final judgment in
the manner required by Rule 58. See Fed. R. Civ. Pro. 58 ("Every
judgment and amended judgment must be set out in a separate
document.").

Accordingly, Chet Morrison has not had the

opportunity to appeal the Court's grant of summary judgment. See
Calmaquip Eng'g West Hemisphere Corp. v. West Coast Carriers,
Ltd., 650 F.2d 633, 635 (5th Cir. 1981) ("This Court has held
previously that a ruling which grants a motion for summary
judgment by itself is not an appealable order.”). HCR cites the
Fifth Circuit Court of Appeals' holding that a case pending
appeal is res judicata until reversed on appeal. See Fidelity
Standard Life Ins., Co. v. First Nat'l Bank & Trust Co., 510 F.2d
272, 273 (5th Cir. 1975). But, that case concerned the period

9

R. Doc. 113.
6

after a final judgment and before an appellate decision. It does
not follow, as HCR contends, that the doctrine of res judicata
may bar a claim without an appeal ever having been possible due
to the lack of a final judgment. Accordingly, the Court finds
that its dismissal of HCR did not constitute a final judgment
such that Chet Morrison's claims against HCR are barred by res
judicata.
HCR also contends that Chet Morrison's claims should be
dismissed under the law of the case doctrine. During the oral
argument held on November 28, 2012, the Court informed the
parties that HCR's motion for summary judgment on Chet Morrison's
third-party claims would be granted and HCR dismissed from the
suit.10 At that time, Chet Morrison requested leave to amend its
complaint, which the Court denied.11 HCR argues that Chet
Morrison's new suit constitutes an attempt to amend its complaint
despite the Court's denial of leave and that the Court's denial
represents the law of the case.
The law of the case doctrine is intended to maintain
consistency and avoid needless reconsideration of matters once
decided during the course of a single lawsuit. Society of the
Roman Catholic Church v. Interstate Fire & Casulty Co., 126 F.3d
727, 735 (5th Cir. 1997). But, the Court is not bound to the

10

R. Doc. 100.

11

Id.
7

precedent it establishes and may revise an interlocutory order
"at any time before the entry of judgment adjudicating all the
claims and the rights and liabilities of all the parties." Gulf
South Machine, Inc. v. Am. Standard, Inc., No. 97-0065, 1999 WL
102753, at *1 (E.D. La. Feb. 22, 1999) (quoting Fed. R. Civ. Pro.
54(b)). A ruling on a motion for leave to amend is an
interlocutory order. See Suzlon Wind Energy Corp. v. Shippers
Stevedoring Co., 662 F. Supp. 2d 623, 642 (S.D. Tex. 2009).
As previously stated, the Court rejects Chet Morrison's
contention that it is a different entity than the Chet Morrison
that filed the earlier claim against HCR. Moreover, the Court
acknowledges that Chet Morrison's new lawsuit, which has been
consolidated with the original suit, functions as an amended
complaint by permitting Chet Morrison to raise new claims that it
failed to bring in its original complaint. Nevertheless, the
Court finds that it is not appropriate to dismiss Chet Morrison's
claims under the doctrine of the law of the case.
Although a ruling on a motion for leave to amend is an
interlocutory order, it is not the equivalent of a judgment on
the merits of an issue that has been litigated. See Ross v.
Houston Indep. School Dist., 699 F.2d 218, 229 (5th Cir. 1983).
The Court's order did not decide any substantive issues that will
be relitigated as a result of Chet Morrison's new complaint.
Further, in considering the effect of a district court's order
denying leave to amend, the Fifth Circuit held that while the
8

order "does not expressly preserve the plaintiffs-appellants'
right to file a new suit raising the issues asserted in the
proposed amendment, such a reservation is implicit in its
decision." Id. at 230. Here, the Court's order denying Chet
Morrison leave to amend did not bar Chet Morrison from filing a
new lawsuit. Moreover, the Court continued the trial date in the
suit from January 28, 2013 to June 24, 2013, and therefore the
inclusion of new claims will not prejudice HCR in the way that an
amended complaint two months before trial would have. The Court
therefore finds that Chet Morrison's claims against HCR should
not be dismissed under the law of the case doctrine.
B.

Palm Energy’s Motion to Dismiss

In a separate motion, Palm Energy contends that Chet
Morrison’s claims against it must be dismissed, because they
should have been asserted as compulsory counterclaims in the
original suit. Palm Energy filed a crossclaim against Chet
Morrison, in which it contended that, pursuant to a Master
Service Agreement signed by the parties on May 28, 2008, Chet
Morrison owes defense and indemnity to Palm Energy for the claims
asserted by Offshore Marine.12 In its answer, Chet Morrison
asserted a counterclaim, in which it argued that Palm Energy was
responsible for any damage to Offshore Marine’s vessel and that
the Master Service Agreement between Palm Energy and Offshore

12

R. Doc. 26.
9

Marine requires Palm Energy to indemnify, defend and insure Chet
Morrison.13
Under Federal Rule of Civil Procedure 13(g), a party may
bring a crossclaim against its coparty if the claim arises out of
the transaction or occurrence that forms the subject matter of
the original action. “The crossclaim may include a claim that the
coparty is or may be liable to the cross-claimant for all or part
of a claim asserted in the action against the cross-claimant.”
Fed. R. Civ. Pro. 13(g). A crossclaim is permissive, unlike a
counterclaim against an opposing party, which must be brought if
it arises out of the same transaction or occurrence as the
opposing party’s claim. Fed. R. Civ. Pro. 13(a).
Palm Energy argues that once it filed a crossclaim against
Chet Morrison, Chet Morrison became an opposing party and thus
was required to bring its claims against Palm Energy regarding
the use of the L/B Nicole Eymard. Palm Energy cites several cases
from other circuits in which courts treated coparties as opposing
parties after one party filed a crossclaim. See Kirkcaldy v.
Richmond Cnty. Bd. of Educ., 212 F.R.P. 289 (M.D.N.C. 2002)
(citing Paramount Aviation Corp. v. Agusta, 178 F.3d 132, 146
n.11 (3d Cir. 1999)); Rainbow Mgmt Group., Ltd. v. Atlantis
Submarines Haw., L.P., 158 F.R.D. 656, 660 (D. Haw. 1994). But,
the Court need not determine whether to follow this

13

R. Doc. 27.
10

interpretation of Rule 13, because in the cases cited by Palm
Energy, the courts stated that only substantive crossclaims, not
crossclaims for indemnity or contribution, transform coparties
into opposing parties. Id. This holding is consistent with the
language of Rule 13(g), which identifies as a type of crossclaim
liability for the causes of action brought against the crossclaimant.
Palm Energy limited its crossclaim against Chet Morrison to
a demand for indemnity and defense. The Court therefore finds
that Palm Energy’s crossclaim did not convert Chet Morrison into
an opposing party such that Chet Morrison needed to bring its
claims against Palm Energy as compulsive counterclaims. Further,
for the reasons discussed above, the Court finds that dismissal
of Chet Morrison's claims under the law of the case doctrine is
not warranted.
IV.

CONCLUSION
For the foregoing reasons, the Court DENIES the motions to

dismiss of Palm Energy and H.C. Resources.
New Orleans, Louisiana, this 15th day of April, 2013.
__
_________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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