Celtic Marine Corporation v. James C. Justice Companies, Inc.
Filing
104
ORDER & REASONS: granting in part & denying in part Plaintiff Celtic Marine Corporation's Motion for Entry of Judgment (Rec. Doc. 68) as set forth in document. Signed by Judge Carl Barbier on 9/18/13.(sek, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CELTIC MARINE CORPORATION
CIVIL ACTION
VERSUS
NO: 11-3005
JAMES C. JUSTICE COMPANIES,
INC.
SECTION: "J”(2)
ORDER AND REASONS
Before
the
Court
is
Plaintiff
Celtic
Marine
Corporation
("Celtic Marine")'s Motion for Entry of Judgment (Rec. Doc. 68),
Defendant
James
C.
Justice
Companies,
Inc.
("Justice
Co.")'s
opposition thereto (Rec. Doc. 93), and Plaintiff's reply and
Defendant's surreply to the same (Rec. Docs. 94, 98). Plaintiff's
motion was set for submission on August 14, 2013, on the briefs.
The
Court,
having
considered
the
motions
and
memoranda
of
counsel, the record, and the applicable law, now finds that
Plaintiff's motion should be GRANTED in part and DENIED in part
for the reasons set forth more fully below.
1
PROCEDURAL HISTORY AND BACKGROUND FACTS
This action arises out of a maritime contract dispute. On
December 7, 2011, Plaintiff Celtic Marine filed suit against
Justice Co. for breach of Guarantor's Agreements. Specifically,
Celtic Marine alleges that Justice Co. guaranteed all obligations
owed to it by Kentucky Fuels Corporation ("KFC"). Celtic Marine
asserts that KFC failed to fulfill its obligations under a 2011
Service Agreement and a 2011 Spot Contract and, therefore, by
virtue of the Guarantor's Agreements, Justice Co. is responsible
for
past
due
freight,
shortfall
and
liquidated
damages,
demurrage, and other costs owed to Celtic Marine.
On January 27, 2012, the parties advised this Court that
they had reached a settlement agreement. Therefore, on February
7, 2012, the Court issued an order of dismissal, allowing the
parties to seek enforcement of the compromise upon a showing of
good cause if the compromise was not consummated within 120 days.
Under the terms of the February 1, 2012 Settlement Agreement
("February Settlement Agreement"): (a) Justice Co. agreed to pay
a sum of $ 4,687,215.00, (b) KFC agreed to pay Celtic Marine for
all
demurrage
incurred
while
KFC's
cargo
remained
on
Celtic
Marine's barges for transport, and (c) KFC entered into a 2012
Annual
Service
Agreement
with
2
Celtic
Marine.
Justice
Co.
guaranteed
all
accruing
demurrage
payments
as
well
as
KFC's
obligations under the 2012 Service Agreement. The terms of this
agreement stated that, upon receipt of all sums listed above, and
upon
receipt
of
the
executed
2012
Annual
Service
Agreement,
Celtic Marine would release Justice Co. and KFC from all claims
brought in or relating to the present litigation. Additionally,
in connection with the movement of KFC's cargo, KFC and Celtic
Marine
also
entered
into
a
2012
Spot
Contract.
Justice
Co.
guaranteed the 2012 Spot Contract as well.
On May 24, 2012, Celtic Marine requested that the Court
extend its deadlines to enforce the settlement. In its request,
Celtic Marine explained to the Court that from the date of the
settlement until the date of filing, KFC's cargo had remained on
the barges incurring demurrage charges which remained unpaid.
Celtic Marine explained that because the charges remained unpaid,
and because it would take time to unload the cargo from Celtic
Marine's barges, it was seeking an extension of the enforcement
deadline. The Court granted Celtic Marine's request on May 30,
2012,
extending
the
deadline
to
enforce
the
settlement
an
additional 120 days until October 4, 2012.
On October 1, 2012, Celtic Marine again requested that the
Court extend the deadline to enforce the settlement. In its
3
motion, Celtic Marine explained that the parties had reached a
new, tentative agreement for the payment of outstanding demurrage
and other costs. It also explained
the
process
of
being
that KFC's cargo was still in
unloaded.
Therefore,
Celtic
Marine
requested additional time to ensure that the agreement was paid
in full. The Court granted Celtic Marine's request and extended
the
deadline
for
the
parties
to
seek
enforcement
of
the
settlement by an additional 100 days until January 12, 2013.
Under the terms of the October 1, 2012 Settlement Agreement
("October Settlement Agreement"), Justice Co. and KFC agreed to
pay Celtic Marine a total sum of $2,200,00.00 divided into four
installment payments. The installment payments were to be made in
one
installment
of
$1,925,000.00
and
three
installments
of
$91,666.66. The first payment was to be paid upon execution of
the October Settlement Agreement, and the remaining three were to
be paid on October 12, 2012, November 1, 2012, and December 3,
2012. The October Settlement Agreement provided a full release
from the February Settlement Agreement in the event that all
installments
Settlement
were
paid
Agreement
in
also
full
and
professed
to
on
time.
"embod[y]
The
the
October
entire
understanding and agreement of the parties." Pl.'s Mot. for Summ.
J., Exh. 15, Rec. Doc. 20-3, p. 60 ¶ 13. As part of the October
4
Settlement
Agreement,
Justice
Co.
and
KFC
also
executed
Guaranties in consideration for the agreement. The Guaranties
were
incorporated
specifically
prompt
into
govern
payment
the
and
the
agreement
settlement
performance
of
as
attachments.
payments
the
and
They
provide
October
for
Settlement
Agreement.
The record shows that Justice Co. paid the full amount of
$2.2
million,
but
did
not
follow
the
installment
schedule
contemplated in the October Settlement Agreement. Pl.'s Motion
for Sum. Judg., Rec. Doc. 20-3, Exh. 16, pp. 68-70 Instead,
Justice Co. tendered payments of $1,000,000 on October 26, 2012,
$1,108,333.34 on November 12, 2012, and $91,666.66 on January 10,
2013.
On January 11, 2013, Celtic Marine filed a
motion to reopen
litigation and a motion for summary judgment. The Court granted
the motions, finding that, under the express terms of the October
Settlement
Agreement,
Justice
Co.'s
failure
to
make
timely
installment payments gave Celtic Marine the right to invoke the
acceleration clause in the October Settlement Agreement, allowing
Celtic Marine to demand the remaining amount owed under the
February Settlement Agreement. (Rec. Doc. 46). The Court also
determined that it was in the interest of justice to reopen the
5
case to (1) enforce the settlement agreement, (2) allow Celtic
Marine to assert new claims that arose as a result of the breach
of the settlement agreement, but still arising from the original
Complaint, and (3) to determine the sum owed under the February
Settlement Agreement. The Court noted that, though it was clear
that the October Settlement Agreement was breached, which allows
Celtic
Marine
to
demand
amounts
owed
under
the
February
Settlement Agreement, it was unclear what amount was owed under
the February Settlement Agreement and that reopening the matter
was the best way to determine the amount owed.
Justice Co. filed a motion for reconsideration that was
denied on May 30, 2013. (Rec. Docs 53, 67) On the same day,
Celtic Marine filed the instant motion for entry of judgment,
which was originally set for hearing on June 19, 2013 (Rec. Doc.
68-3). Following a contested motion to continue the hearing date,
filed by Justice Co., the Court continued the submission date to
August 14, 2013. Justice Co. filed its opposition memorandum on
August 13, 2013 and Celtic Marine filed its reply memorandum on
August 15, 2013. Pursuant to the Court's order (Rec. Doc. 101),
Celtic Marine filed an amended interest calculation on September
16, 2013. (Rec. Doc. 102)
6
PARTIES' ARGUMENTS
Celtic Marine moves the Court for an entry of judgment,
pursuant to Federal Rules of Civil Procedure 54 and 58, as well
as
pursuant
Celtic
to
Marine
the
Court's
contends
that
order
KFC
granting
owes
summary
judgment.
$7,156,787.27,
which
calculation includes:
1) all demurrage incurred since the execution of the
February Settlement Agreement, 2) the amount by which
Celtic Marine discounted the totals owed by KFC and
Justice in reaching the February Settlement Agreement,
3) freight charges for the movement of cargo ordered by
KFC, 4) shortfall and liquidated damages owed as a
result of KFC's failure to ship any new cargo under the
2012 Service Agreement, 5) cover handling, barge
cleaning, and other miscellaneous charges incurred for
the barges on which KFC's cargo has been loaded, 6) and
interest on the unpaid shortfall and liquidated
damages.
Pl.'s Mot. Entry of Jmt., Rec. Doc. 68-1, p. 10. Subtracting the
amounts that Justice already paid under the October Settlement
Agreement, Celtic Marine contends that the amount due, as of
April 30, 2013, is $4,956,787.27, plus attorney's fees in the
amount of $26,546.82; however, Celtic avers that this amount may
change
once
all
cargo
is
unloaded
and
the
sum
owed
can
be
finalized. Celtic Marine contends that Justice guaranteed the
entirety of this amount, and therefore should be ordered to pay
Celtic Marine.
7
Justice Co. contends that Celtic Marine's motion is really
one for summary judgment as to quantum. Moreover, Justice Co.
disputes several of Celtic Marine's calculations; but, as Celtic
Marine indicates in its reply, Justice Co. does not offer an
accounting of what it believes is owed.
In its surreply, Justice
Co. argues that it need not provide an exact accounting because
there are several issues of material fact that cannot be resolved
in a brief, but rather must be resolved by a jury. The parties'
arguments as to the specific amounts owed are set out below.
A. Demurrage
Celtic
Marine
contends
that
the
February
Settlement
Agreement bound KFC, and its guarantor, Justice Co., to pay all
demurrage incurred while KFC's cargo remains on barges arranged
for by Celtic Marine. Celtic Marine contends that demurrage has
accrued, and continues to accrue, at a rate of $300 per day, per
barge. Celtic Marine avers that it sent invoices to Justice Co.
and KFC from the time of the February Settlement Agreement until
July 31, 2012, but that it stopped sending invoices "in an effort
to resolve the ongoing dispute." Rec. Doc. 68-1. p. 3. Prior to
July
31,
2012,
Celtic
Marine
calculates
8
that
it
was
owed
$1,025,700.00
another
in
$672,600
demurrage,
in
and
demurrage
that
was
after
accrued,
July
for
31,
a
20121,
total
of
$1,698,300 in demurrage as of May 17, 2013.
Justice Co. does not dispute that cargo remains on the
barge, but it does disputes whether Justice Co. should have to
pay demurrage at this time.
Justice Co. asserts that the delay
in unloading the cargo is at least partially attributable to
water damage to the barges that is currently the subject matter
of lawsuit by KFC against Celtic Marine that is pending in the
Eastern District of Kentucky.2 Justice Co. maintains that this
creates
an
issue
of
material
fact
as
to
whether
KFC
owes
demurrage, and if so, in what amount.
In its reply, Celtic Marine clarifies that it only owed
$672,600. Celtic Marine states that the payments made on the
October
Settlement
agreement
were
applied
to
the
demurrage
incurred prior to July 31, 2012; therefore, Celtic Marine does
not demand the full $1,698,300.00, but rather only $672,600 in
demurrage.
Celtic
Marine
further
argues
that
Justice
Co.'s
argument that it is only required to pay "net losses," meaning
1
Celtic Marine states that, though they did not send invoices after
this date, they continued to track the amounts owed in the event that Justice
Co. and KFC did not comply with the February Settlement Agreement.
2
KFC filed suit against Celtic Marine in the Eastern District of
Kentucky on March 5, 2013, civil action 13-0033.
9
that they must only pay the amounts owed after any possible award
of damages in the ongoing negligence suit against Celtic Marine,
is incorrect. Celtic Marine notes that (a) Justice Co. and KFC
have decided at this late point in litigation to bring up their
dissatisfaction with the shipping services for the first time,
(b) that Justice Co. and KFC have always promised to pay such
costs, and (c) that regardless of any negligence found, KFC and
Justice Co. agreed to pay demurrage at a rate of $300 per day per
barge as part of the February Settlement Agreement, and that
there has been no change to that agreement.
B. Freight
Celtic Marine asserts that they are owed $965,317.76 in
freight charges traceable to KFC's multiple orders to move the
cargo. Celtic Marine argues that these charges were invoiced
under the 2012 Service Agreement, which was incorporated into the
February Settlement Agreement. Celtic Marine further asserts that
Justice owes this amount under its Guaranty from January 25, 2012
wherein it agreed to "pay to Celtic Marine all damages, costs,
and expenses [...including] but not limited to all sums owed
[...] for freight." Rec. Doc, 68-1, p. 5. Justice. Co. does not
dispute this calculation.
10
C. Shortfall and Liquidated Damages
Celtic
Marine
asserts
that
they
are
owed
$2,625,000
in
shortfall and liquidated damages due to KFC's failure to ship any
new coal as required in the 2012 Service Agreement. Celtic Marine
states that, as was the case with demurrage, it sent invoices
from the time of the February Settlement Agreement until July 31,
2012, but then stopped sending invoices. Celtic Marine asserts
that $625,000 of the above amount is owed from before July 31,
2012, and that another $2.0 million in shortfall and damages
accrued after Celtic Marine stopped sending invoices on July 31,
2012. Justice. Co. does not dispute this calculation in its
opposition to the instant motion.
D. Cover Handling, Barge Cleaning, and Other Miscellaneous
Charges
Celtic Marine asserts that they are owed $848.75 in cover
handling, barge cleaning, and other miscellaneous charges from
before July 31, 2012 and another $10,544.74 that accrued after
July 31, when it stopped invoicing Justice Co. and KFC. Celtic
Marine alleges that these charges arise from an incident wherein
the cargo became inundated with water, causing damage to the
barge and the cargo. Justice Co. disputes this amount for the
same reasons that it disputes the demurrage calculations.
11
E. February Settlement Agreement Discount
Celtic
Marine
avers
that,
in
reaching
the
February
Settlement Agreement, it allowed a discount of $1,550,398.00 when
it accepted $4,687,215.00 to settle all of its claims against KFC
and Justice Co.. Celtic Marine now argues, however, that Justice
Co. must pay the discounted amount as a result of its untimely
payments under the October Settlement Agreement.
Justice Co. disputes this amount, arguing that Celtic Marine
cannot "claw back" the discounted amount. Justice Co. asserts
that the October Settlement Agreement contains a "claw back"
provision that allows the parties to revert back to the February
Agreement if the October Settlement Agreement was breached, but
the
February
Rather,
Settlement
Justice
Agreement
only
Co.
called
Agreement
asserts
for
that
the
contains
the
no
such
February
$4,687,215.00
clause.
Settlement
payment
and
for
payment of demurrage, making no mention of allowing Celtic Marine
to seek payment on the $1.5 million discount. Moreover, Justice
Co. claims that its guaranty only covers the October Settlement
Agreement.
In its reply, Celtic Marine argues that even if the February
Settlement Agreement does not contain the exact timeliness clause
of the October Settlement Agreement, that fact does not relieve
12
Justice Co. or KFC from its obligation to pay the discounted
amount because (a) the Defendant is still bound by the February
Settlement Agreement, and (b) the October Settlement Agreement
provides for collection of the discounted amount.
Celtic Marine contends that Justice Co. and KFC have not
paid all demurrage incurred, thus have not been released from the
February
Settlement
litigation.
untimely
Agreement
and
amounts
owed
due
to
this
Celtic Marine further argues that KFC and Justice's
payment
on
the
October
Settlement
Agreement
allows
Celtic Marine the right to demand "payment in full for the total
amounts
owed
Agreement,
Contract
it
Service
No.
omitted).
to
2."
by
KFC
and
Agreement,
Pl.'s
Justice
Spot
Reply,
under
Contract
Rec.
Doc.
the
No.
94,
1,
p.
8
Settlement
and
Spot
(emphasis
Celtic Marine contends that the $1,550,398.00 reflects
the "shortfall owed on three invoices incurred under the 2011
Service Agreement," thus the amount is collectible. Pl.'s Reply,
Rec. Doc. 94, p. 8
Finally, Celtic Marine disputes Justice Co.'s contention
that it only guaranteed the October Settlement Agreement. Celtic
Marine
points
to
the
Guaranty
that
Justice
Co.
signed
in
connection with the October Settlement Agreement and argues that
the agreement covers "any obligation owed to Celtic Marine" and
13
"all of Kentucky Fuel Corporation's contractual obligations and
liabilities to Celtic Marine." Pl.'s Reply, Rec. Doc. 94, p. 9
(emphasis
language
omitted).
limiting
Celtic
the
Marine
Guaranty
argues
to
the
that
there
October
is
no
Settlement
Agreement.
In its surreply, Justice Co. argues that its Guaranty only
obligates
Justice
Co.
to
pay
Celtic
Marine
for
the
damages
incurred as a result of the breach. Justice Co. further argues
that a breach of the October Settlement Agreement only permits
Celtic Marine to enforce the February Settlement Agreement, the
2012
Service
Agreement,
the
Spot
Contract
No.
1,
and
Spot
Contract No. 2. Accordingly, the "discount" that Celtic Marine
claims it is owed is not recoverable because it arises from the
2011 Service Agreement, which is not included in the foregoing
list. Justice Co. asserts that it has paid everything under the
February
Settlement
Agreement
except
for
the
continuing
demurrage, thus once that is paid, the terms of the February
Settlement Agreement are satisfied and Justice Co. should be
released.
F. Interest
Celtic Marine contends that Justice Co. owes interest on
certain sums owed at a rate of 1.5% per month, as was agreed upon
14
in their contracts, even though interest is generally restricted
to less than 12% per annum. Celtic Marine contends that Louisiana
Civil Code Article 2924 and Louisiana Revised Statute § 9:3500
create an exception to the general rule when "deferring payments
of an obligation for commercial or business purposes." La. R.S. §
9:3500(D); La. Civ. Code. Art. 2924(d); see Jefferson Door Co.,
Inc. v. Lewis, 98-26 (La. App. 5 Cir. 5/27/98) 713 So.2d 835.
Using the 1.5% per month interest rate, Celtic Marine alleges
that it is owed interest on the unpaid shortfall and liquidated
damages accrued under the 2012 Service Agreement in the amount of
$308,378.02, as of May 17, 2013.
Justice. Co. argues that the interest is not calculated
correctly because Celtic Marine charged interest on sums before
they accrued and on non-invoiced sums. Moreover, Justice Co.
argues that Celtic Marine is not entitled to interest on sums
deemed paid as part of the October Settlement Agreement. Justice
Co. argues that any amount paid must go towards interest bearing
debts, pursuant to Louisiana Civil Code Article 1868, and that
the amounts it paid should cover this amount.
Celtic Marine argues in its reply memorandum that the fact
that it stopped sending invoices after July 31, 2012 has no
bearing on the calculation of interest. Celtic Marine re-asserts
15
that
it
stopped
sending
invoices
to
facilitate
settlement
negotiations, but that the damages and interest continued to
accrue and are now due as a result of Justice Co. and KFC's
failure to abide by the October Settlement Agreement. As to
Justice Co's argument regarding advance interest, Celtic Marine
argues that it was proper to calculate interest that would be
owed under the 2012 Service Agreement once KFC and Justice Co.
informed
Celtic
that
it
would
not
ship
anything
under
the
agreement.
Celtic
Marine
submits
that
calculating
interest
on
the
shortfall damages as each invoice would have become due, as is
suggested by Justice Co, would (a) be improper, and (b) result in
more interest being due that is due under Justice Co,'s one-time
interest calculation. Celtic Marine further contends that all of
the amounts owed–-including freight, shortfall, demurrage, or
cleaning costs–-incur interest at the same rate. Because Justice
and KFC did not specify which debts their payments were intended
to satisfy, Celtic Marine applied payments received to the oldest
invoices, which it argues is proper under Louisiana Civil Code
Article 1868 and is in accordance with Justice Co.'s argument
that payments must be applied to interest bearing debt first.
To counter Justice Co.'s argument that the 1.5% interest
16
rate is illegal, Celtic Marine refers the Court to its reply
memorandum submitted in connection with its motion for summary
judgment
wherein
it
made
the
same
argument.
Pl.'s
Reply
in
Support of MSJ, Rec. Doc. 38, p. 9-10. In that memorandum, which
is repeated in Celtic Marine's instant motion, Celtic Marine
contended that Louisiana Civile Code Article 2924 and Louisiana
Revised Statute § 9:3500 create an exception to the general rule
regarding interest rates when the transaction is commercial in
nature, as is the current transaction.
Finally,
Justice
Co.
argues
in
its
surreply
that
all
contracts between the parties indicated that interest would due
after
the
invoicing
invoice,
Justice
thus
Co.
when
and
interest at the 1.5% rate.
Celtic
KFC,
they
Marine
could
decided
no
longer
to
stop
charge
Moreover, Justice Co. contends that
any interest that has accrued has only done so until October
2012, not May 2013 as Celtic argues it does, because the October
Settlement Agreement encompassed those interest payments. Justice
Co. avers that Celtic Marine misconstrues Louisiana Civil Code
Article 1868 because the article never says that payments must be
applied to the oldest debt, but rather to the most burdensome
debt. Justice Co. urges that, under Article 1868, Celtic Marine
was required to apply payment to any debts bearing interest
17
first. Justice Co. further contends that, beyond invoiced sums,
prejudgment
interest,
if
awarded,
and
postjudgment
interest,
should be awarded at the current federal rate rather than the
1.5% conventional rate.
G. Attorney's Fees
Celtic
Marine
asserts
that
it
is
owed
$26,546.82
in
attorney's fees. Justice Co. disputes this amount, alleging that
Celtic Marine includes charges that do not arise from enforcement
of the October Settlement Agreement. Celtic Marine opposes this
argument
in
its
reply
memorandum,
noting
that
it
has
only
included fees associated with the enforcement of both settlement
agreements and the Guaranties executed by Justice, all of which
include clauses requiring the payment of attorney's fees when a
party must seek legal action to enforce the agreement.
DISCUSSION
A. Undisputed Amounts
The amounts that Celtic Marine asserts that it is owed for
freight charges and for shortfall and liquidated damages are
undisputed by Justice Co., thus must be awarded to Celtic Marine.
These amounts are: (a) $965,317.76 in freight charges traceable
to KFC's multiple orders to move the cargo, and (b) $2,625,000 in
shortfall and liquidated damages due to KFC's failure to ship any
18
new coal as required in the 2012 Service Agreement.
B. Disputed Amounts
The
following
issues
are
disputed:
(1)
the
amount
of
demurrage owed, (2) the amount owed for barge cleaning and cover
charges,
(3)
whether
Justice
Co.
owes
the
amount
discounted
during the negotiation of the February Settlement Agreement, and
(4) the amount of interest owed. These issues present substantive
questions that the Court cannot entirely resolve in the instant
motion for entry of judgment wherein the focus of the motion and
its accompanying briefs was concentrated on the dollar amount
owed, and not whether the amount is owed as a matter of law.
Therefore, the Court must deny Celtic Marine's request for entry
of judgment as it relates to demurrage, cover charges, barge
cleaning,
interest,
and
the
February
Settlement
Agreement
Discount for the reason more fully discussed below. Upon further
litigation and briefing, either party is free to re-urge these
issues at a later time in the instant proceeding.
1. Demurrage/Barge Cleaning and Cover Charges
The parties do not dispute that a sum is owed, but they do
dispute how much is owed and when it is owed in light of pending
litigation
in
the
Eastern
District
of
Kentucky
wherein
KFC
alleges that the cargo at issue in this proceeding was damaged
19
due to Celtic Marine's negligence. Thus, the main issue before
the Court is whether the possibility of a finding of negligence
should
temporarily
demurrage,
cover
relieve
charges,
Justice
and
Co.'s
barge
obligation
cleaning
fees
to
to
pay
Celtic
Marine. The Court finds that this is a substantive question of
law that is not amenable to resolution in the instant motion for
entry
of
judgment,
which
focuses
on
the
amount
owed
under
existing contracts, not on whether anything is owed at all. Thus,
Celtic
Marine's
motion
must
be
denied
as
to
its
claims
for
demurrage and barge cleaning fees.
2. February Discount Amount
In its Order and Reasons dated March 26, 2013, the Court
determined
that
Justice
Agreement,
thereby
Co.
breached
triggering
the
the
October
Agreement's
Settlement
acceleration
clause. This acceleration clause expressly provides that, in the
event of an untimely payment, Celtic Marine has the right to
demand
payment in full for the total amounts owed to it
by KFC and Justice under the Settlement Agreement,
Service Agreement, Spot Contract No. 1, and Spot
Contract No. 2, as of the date of that particular
late installment was due (collectively, the
"Settlement/Service/Spot Balance") and unpaid. For
the avoidance of doubt, if, and only if, all
installments set forth in Section 1 are paid in
full and in a timely manner, the full and
irrevocable payments shall supersede, satisfy,
20
release and discharge the Settlement/Service/Spot
Balance in its entirety.
October Settlement Agreement, Exh. to
Pl's Reply, Rec. Doc. 94-1
p. 100.
The Court is inclined to decide that, by virtue of the fact
that Celtic Marine seeks enforcement of the February Settlement
Agreement,
it
is
not
allowed
to
reach
beyond
the
February
Settlement Agreement. However, the parties dispute the proper
interpretation of the acceleration clause; and, finding that both
parties presented plausible interpretations, the Court defers
ruling on this issue until such time that the parties submit a
substantive motion and fully brief their positions. Thus, Celtic
Marine's
motion
must
be
denied
as
to
its
claim
for
this
discounted amount.
3. Interest
Initially, it must be noted that the Court finds that the
1.5% interest rate is an appropriate rate and that Celtic Marine
properly imputed payments received by Justice Co.. Louisiana's
prohibition of interest rates which exceed 12% per annum does not
apply to business and/or commercial transactions, as stated in
Louisiana Revised Statute § 9:3500. As there is no evidence that
this anything but a commercial transaction, the Court finds that
the parties were free to contract for an interest rate in excess
21
of 12% per annum.
As to the imputation of payment, without further designation
by Justice Co., Celtic Marine had to apply payments to the debts
that came due first under Louisiana Civil Code Article 1868.
Though Justice Co. takes issue with Celtic Marine's phrasing, the
Court finds that the codal provision "debts that became due
first" is synonymous with "the oldest debt" in this instance.
Justice Co. errs in urging the Court to impute payments to the
debts that bear interest, because "all freight, demurrage, and
other charges shall be subject to an interest charge of 1-1/2%
per month beginning on the first day after the due date of
invoice." Rec. Doc. 93-1, Exh. F, p. 35. Because Justice Co. has
"the same interest in paying all the debts, payment must be
imputed to the debt that became due first." La. Civ. Code. Art.
1868. As it appears that Celtic Marine did just that, the Court
finds no error in Celtic Marine's imputation of payment.
The Court finds, however, that (a) Justice Co.'s contention
that the 1.5% interest rate may only be applied to invoiced sums,
as per the terms of the contracts,3 and (b) the issue of whether
3
Invoices sent by Celtic Marine to KFC contained the statement that
"invoices not paid within the stated terms will be charged 1.5% per month."
Rec. Doc. 93-1, Exh. G, p. 35. The 2012 Service Agreement states that "all
freight, demurrage, and other charges shall be subject to an interest charge
of 1-1/2% per month beginning on the first day after the due date of invoice."
Rec. Doc. 93-1, Exh. F, p. 35.
22
interest must be calculated through October 2012 rather than May
2013
merit
instant
further
motion.
attention
Thus,
and
despite
cannot
the
be
Court's
resolved
in
determination
the
that
Justice Co. owes some interest, the Court was not able to accept
the interest calculation included by Celtic Marine in the instant
motion. As such, and in an attempt to fashion the most complete
relief possible, the Court ordered Celtic Marine to submit a new
calculation of interest which would encompass only the amounts
that the Court can definitively determine are due at this time.4
Celtic Marine submitted their calculation on September 16,
2013. After considering the calculations provided, the Court will
award
interest
in
the
amount
of
$296,209.10,
which
amount
represents the interest owed invoiced shortfall amounts through
October
1,
2012
at
a
rate
of
1.5%
per
month.5
Upon further
litigation and briefing, either party is free to re-urge the
issue
of
interest
as
to
any
sums
not
included
in
the
aforementioned amount.
4
Celtic Marine was ordered to calculate interest on all invoiced sums
at the contracted for interest rate (1.5%) through October 2012.
5
In its recalculation of the interest owed, Celtic Marine included
interest calculations on all overdue sums rather than a calculation of
interest on shortfall. However, because Celtic Marine only requested entry of
judgment as to interest on shortfall in its initial motion, and because the
Court's order to recalculate interest was not intended to expand the reach of
the instant motion, the Court declines to include interest calculations
traceable to any debts other than shortfall.
23
C.
Attorney's Fees
The Court agrees with Celtic Marine's argument that it only
seeks payment for enforcement of the parties' agreements and that
every agreement signed by Justice Co. contemplates the payment of
attorney's fees.
Therefore, finding that the amount requested is
reasonable,
Court
the
will
enter
a
judgment
awarding
Celtic
Marine attorney's fees in the amount of $26,546.82.
Accordingly,
Celtic Marine Corporation's Motion for Entry of Judgment
(Rec. Doc. 68) is GRANTED in part and DENIED in part. The Court
will enter a partial final judgment pursuant to Federal Rule of
Civil Procedure 54(b) in the amount of $3,913,073.68, which sum
represents amounts owed for shortfall and liquidated damages,
freight charges, interest on invoiced shortfall through October
1, 2012, and attorney's fees.
Any sums claimed to be owed that
are not included in the subsequent partial final judgment, such
as
sums
owed
under
the
October
Settlement
Agreement's
acceleration clause, or sums owed for demurrage, cover charges,
barge cleaning, and interest, will be treated upon further motion
of the parties. The court further finds, and will include in its
judgment, that Celtic Marine is entitled to legal interest on the
award from the date of entry of judgment, as well as costs
24
associated with this litigation.
New Orleans, Louisiana, this 18th day of September, 2013.
____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
25
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