Diversified Group, LLC v. Louisiana Carriers, Inc.
Filing
33
ORDER & REASONS denying 24 Motion for Summary Judgment. Signed by Judge Martin L.C. Feldman on 5/15/2013. (caa, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DIVERSIFIED GROUP, LLC
CIVIL ACTION
VERSUS
NO. 12-1161
LOUISIANA CARRIERS, INC. et al.
SECTION “F”
ORDER AND REASONS
Before the Court is defendants' motion for summary judgment.
For the reasons that follow, the motion is DENIED.
Background
This case arises out of an alleged allision between a vessel
and a wharf.
On or about March 29, 2012, the M/V TRISTEN, a vessel owned
and operated by LA Carriers, LLC,1 attempted to moor alongside
the Andry Street Wharf in New Orleans.
In doing so, the vessel
allegedly caused damage to the wharf.
It is claimed it chipped
concrete, caused a broken pedestal and a missing bollard.
On May
9, 2012, Diversified Group, LLC sued LA Carriers and the M/V
TRISTEN, in rem, invoking the Court's admiralty jurisdiction, and
alleging claims of negligence.
On May 22, 2012, Dixie Marine,
Inc. filed a first amended complaint, identifying itself as the
proper plaintiff.
Among other things, Dixie Marine seeks to
1
Initially, plaintiff incorrectly identified LA Carriers, LLC as
Louisiana Carriers, Inc.
1
recover the cost of damages to the wharf, dock fees, loss of use,
and punitive damages.
Defendants, LA Carriers and the M/V TRISTEN, now move for
summary judgment, asserting that Dixie Marine has no cause of
action because it was not the owner or the lessee of the wharf at
the time of the accident.
Legal Standard
Federal Rule of Civil Procedure 56 instructs that summary
judgment is proper if the record discloses no genuine issue as to
any material fact such that the moving party is entitled to
judgment as a matter of law.
No genuine issue of fact exists if
the record taken as a whole could not lead a rational trier of
fact to find for the non-moving party.
See Matsushita Elec.
Indus. Co. v. Zenith Radio., 475 U.S. 574, 586 (1986).
A genuine
issue of fact exists only "if the evidence is such that a
reasonable jury could return a verdict for the non-moving party."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The Court emphasizes that the mere argued existence of a
factual dispute does not defeat an otherwise properly supported
motion.
See id.
Therefore, "[i]f the evidence is merely
colorable, or is not significantly probative," summary judgment
is appropriate.
Id. at 249-50 (citations omitted).
Summary
judgment is also proper if the party opposing the motion fails to
establish an essential element of his case.
2
See Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986).
In this regard, the non-
moving party must do more than simply deny the allegations raised
by the moving party.
See Donaghey v. Ocean Drilling &
Exploration Co., 974 F.2d 646, 649 (5th Cir. 1992).
Rather, he
must come forward with competent evidence, such as affidavits or
depositions, to buttress his claims.
Id.
Hearsay evidence and
unsworn documents do not qualify as competent opposing evidence.
Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549
(5th Cir. 1987).
Finally, in evaluating the summary judgment
motion, the Court must read the facts in the light most favorable
to the non-moving party.
Anderson, 477 U.S. at 255.
I. Discussion
Defendants contend that summary judgment is appropriate
because no genuine issue of material fact exists as to whether
plaintiff was owner or lessee of the Andry Street Wharf, and,
therefore, plaintiff cannot recover damages.
The Court does not
agree.
A.
The U.S. Supreme Court, in Robins Drydock & Repair Co. v.
Flint, established the basic maritime tort principle that a
contracting party must have a proprietary interest to sue an
injuring party for unintentional tortious conduct.
308-09 (1927).
275 U.S. 303,
"[A] tort to the . . . property of one man does
not make the tort-feasor liable to another merely because the
3
injured person was under a contract with that other unknown . . .
."
Id. at 309.
Guided by the U.S. Supreme Court, the Fifth
Circuit has underscored the significance of Robins in State of
Louisiana ex rel. Guste v. M/V Testbank, noting that the
proprietary interest requirement is a "a pragmatic limitation
imposed by the Court upon the tort doctrine of foreseeability."
752 F.2d 1019, 1022 (5th Cir. 1985).
"Thus," the Fifth Circuit
has said, "Robins and Testbank preclude a party whose rights
derive from a contractual, business arrangement from suing in
tort a party with whom it has no such relationship if it cannot
show the requisite level of interest in the damaged property
itself."
Tex. E. Transmission Corp. v. McMoran Offshore
Exploration Co., 877 F.2d 1214, 1224 (5th Cir. 1989).
The Fifth
Circuit has employed three criteria to evaluate whether a party
has a proprietary interest:
(1) actual possession or control,
(2) responsibility for repair, and (3) responsibility for
maintenance.
Id. at 1225; see also Louisville & Nashville R. Co.
v. M/V Bayou Lacombe, 597 F.2d 469, 474 (5th Cir. 1979).
B.
It is undisputed here that Dixie Marine is not the owner of
the Andry Street Wharf.
Therefore, the question becomes whether
Dixie Marine's lease with the Port of New Orleans is sufficient
to provide Dixie Marine with a proprietary interest in the wharf
to state a claim for property and economic damages.
4
As a threshold matter, defendants contend that Dixie Marine
is not the lessee of the Andry Street Wharf, because the only
lease provided to them is a 2007 lease that lists Dixie Machine
Welding & Metal Works, Inc. as the lessee.
Defendants are
correct in that Dixie Marine and Dixie Machine are separate and
distinct entities; however, a 2009 lease entered into between
Dixie Marine and the Port of New Orleans specifically mentions
the 2007 lease between Dixie Machine and the Port of New Orleans,
indicating that the 2007 lease "shall terminate . . . the month
of October 2009."2
The 2009 lease, in which Dixie Marine is the
lessee, commenced November 1, 2009, and ended midnight on October
31, 2010 (the primary term).
Pursuant to the terms of the lease,
Dixie Marine had the option to extend the lease for two
additional one-year periods, which would result in a lease
termination date of October 31, 2012 (the extended term).
2
After
It is unclear as to why plaintiff has failed to provide
defendants with a copy of the 2009 lease before now. Defendants
contend that they were forced to subpoena the Port of New Orleans
to produce a copy of the lease because plaintiff refused to do
so. In response, the Port turned over a copy of the 2007 lease
only, which, based on the language of the 2007 lease, prompted
defendants to file the current motion for summary judgment. The
Court reminds plaintiff's counsel of 28 U.S.C. § 1927, which
states:
Any attorney or other person admitted to conduct cases in
any court in the United States or any Territory thereof
who so multiples the proceedings in any case unreasonably
and vexatiously may be required by the court to satisfy
personally the excess costs, expenses, and attorneys'
fees reasonably incurred because of such conduct.
28 U.S.C § 1927.
5
the primary and extended terms, Dixie Marine also had the option
to extend the lease for an additional five-year period, or, until
November 2017.
Defendants assert that Dixie Marine has failed to provide
evidence that it was the lessee on March 29, 2012, because there
is no proof that Dixie Marine opted to enter the extended term.
Dixie Marine, however, provides the affidavit of Thomas
Kronenberger, Vice-President of Dixie Marine, who states that the
2009 lease agreement was "the lease agreement in place between
Dixie Marine and the Port of New Orleans on the date that M/V
TRISTEN and her barge caused damage to the wharf."
See Donaghey,
974 F.2d at 649 (noting that competent summary judgment evidence
includes affidavits); see also Fed. R. Civ. P. 56(c).
In
addition, Dixie Marine provides a copy of the 2012 amendment to
the 2009 lease that purports to elect the five-year extension,
which, based on the language of the 2009 lease, appears to be
available only after the lessee has exhausted the primary and
extended terms.
Based on the record before it, the Court cannot
find that Dixie Marine was not the lessee at the time of the
alleged allision.
The Court now examines the three factors
articulated by the Fifth Circuit in Texas Eastern to determine
whether this lease provides Dixie Marine with the requisite
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proprietary interest.3
The first Texas Eastern factor addresses actual possession
or control.
Plaintiff points to paragraph 8(B) of the 2009
3
Defendants also contend that the standing requirement is
stricter to state a claim for property damages as opposed to
economic damages: only the wharf owner can state a claim for
property damage, whereas a lessee with a proprietary interest can
state a claim for economic damages. For support, defendants cite
Standard Oil Co. v. Southern Pacific Co., in which the U.S.
Supreme Court stated: "Where property is destroyed by wrongful
act, the owner is entitled to its money equivalent, and thereby
to be put in as good position pecuniarily as if his property had
not been destroyed." 268 U.S. 146, 155 (1924) (emphasis added).
The Court does not disagree with this basic premise; however, the
Port of New Orleans, as owner of the wharf, entered into a lease
with Dixie Marine, in which it agreed that the lease would govern
the responsibilities and rights of the participants, and that
Dixie Marine "shall . . . repair, replace, or restore any and all
of the Leased Premises which may become the subject of loss,
damage or destruction." Further, the lease mandates:
In the event of any loss, damage, or destruction to the
Leased Premises caused by third parties, whether partial
or not, it shall be the obligation of Lessee to take the
necessary legal steps immediately to protect the rights
of Lessee and Board against such third parties for the
recovery of damages.
The Court is unpersuaded by defendants' argument that a lessee is
precluded from asserting a claim for property damages, because
Dixie Marine is obligated to restore the Port of New Orleans to
"as good position pecuniarily as if his property had not been
destroyed." Standard Oil Co., 268 U.S. at 155.
Assuming a lessee can state a claim for property damages,
the defendants contend that the lessee must actually pay for the
damages before suing the alleged tortfeasor. This assertion is
again without merit; plaintiff will have the burden of proving
its damages with reasonable certainty at trial, which can be done
through various forms of evidence. According to the plaintiff's
answers to defendants' interrogatories, plaintiff has provided
defendants with an estimate that was prepared by Durward Dunn.
(The Court notes that the record indicates that plaintiff
attached this estimate to its answers to defendants'
interrogatories, however, the estimate was not provided to the
Court.)
7
lease, which states:
Lessee, from the time of its occupancy and until the
Leased Premises are vacated by Lessee, shall assume sole
liability for the condition of the Leased Premises as
well as of any constructions, utilities and other
improvements which may be built or placed on the Leased
Premises during the term of this Lease. Lessee
acknowledges that, during the term of this Lease, it
shall exercise complete control or “GARDE” over the
Leased Premises.
See Rec. Doc. 26-1 at 5 (emphasis added).
Although the cited
provision does establish that Dixie Marine has control over the
conditions of the wharf, the Court notes that Dixie Marine "shall
use the Leased Premises solely for the purpose of ship repair,
maintenance, berthing and associated activities. . . . Lessee
shall not use the Leased Premises for any other purpose without
first obtaining the written approval of the Board acting through
its President and Chief Executive Officer in his discretion."
See Rec Doc. 26-1 at 3-4.
Therefore, the Port of New Orleans
retains the authority to instruct Dixie Marine on the wharf's
acceptable uses, and Dixie Marine's control appears more limited
to the condition of the property.
The fact that Dixie Marine does not have complete control
over the premises is not dispositive, because the Court finds the
second and third Texas Eastern factors—responsibility for repair
and maintenance—weigh in favor of a proprietary interest.
lease states:
8
The
7.
MAINTENANCE AND REPAIRS; DREDGING
(A) Lessee shall be responsible for and shall at its
own cost, risk and expense perform and pay all costs of
maintenance and repairs of the Leased Premises, including
but not limited to the wharf, wharf substructure, the
fender system and any facilities and equipment situated
or to be situated thereon . . . . During the term of the
Lease, Board shall have no responsibility whatsoever to
perform any maintenance or repair work on the Leased
Premises.
. . . .
8.
CONDITION OF LEASED PREMISES
. . . .
(B) Lessee, from the time of its occupancy and until
the Leased Premises are vacated by Lessee, shall assume
sole liability for the condition of the Leased Premises
as well as of any constructions, utilities and other
improvements which may be built or placed on the Leased
Premises during the term of this Lease. Lessee
acknowledges that, during the term of this Lease, it
shall exercise complete control or “GARDE” over the
Leased Premises.
9.
LOSS, DAMAGE AND DESTRUCTION
. . . .
(B) . . . . Lessee agrees that it shall at its own
cost, risk and expense promptly and with due diligence
repair, replace, or restore any and all of the Leased
Premises which may become the subject of loss, damage or
destruction . . . .
. . . .
(E) In the event of any loss, damage, or destruction
to the Leased Premises caused by third parties, whether
partial or not, it shall be the obligation of Lessee to
take the necessary legal steps immediately to protect the
rights of Lessee and Board against such third parties for
the recovery of damages. . . .
See Rec. Doc. 26-1 at 4-6.
In sum, these provisions establish
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that Dixie Marine is obliged to pay for "all costs of maintenance
and repairs" and that the Board of Commissions for the Port of
New Orleans "shall have no responsibility whatsoever to perform
maintenance or repair work."
Dixie Marine assumes "sole
liability" for the conditions of the property and must "at its
own cost, risk and expense" repair, replace, or restore "any and
all" of the leased property.
The lease also mandates that in the
event of any damage to the wharf caused by third parties, it
"shall be the obligation" of Dixie Marine to take the necessary
legal steps to protect the rights of Dixie Marine and the Port of
New Orleans.
The plain language of the lease expressly allocates
responsibility for both repair and maintenance to Dixie Marine,
supporting the Court's finding that Dixie Marine has a
proprietary interest in the wharf.
Cf.
IMTT-Gretna v. Robert E.
Lee SS, 993 F.2d 1193, 1194 (5th Cir. 1993) (upholding the
district court's finding that the lessee did not have a
proprietary interest because the lessee did not have the
responsibility to repair any damage); Tex. E., 877 F.2d at 1225
(noting that the lessee did not have a proprietary interest
because the lease stated that the lessor was "fully responsible"
for the maintenance and repair of the leased pipeline).
Accordingly, the Court finds that Dixie Marine has the
requisite proprietary interest to state a claim, and summary
10
judgment is inappropriate.4
IT IS HEREBY ORDERED that
defendants' motion for summary judgment is DENIED.
New Orleans, Louisiana, May 15, 2013
______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE
4
Defendants also contend that plaintiff cannot state a claim for
docking fees, because "plaintiff has produced no evidence that it
is entitled to collect such [docking] fees. No evidence of
plaintiff's ownership or lawful possession of the Wharf has ever
been produced by plaintiff." Again, for reasons unknown to the
Court, plaintiff has failed to provide defendants with a copy of
the 2009 lease before the filing of this motion.
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