Operaciones Tecnicas Marinas S.A.S. v. Diversified Marine Services, LLC et al

Filing 120

ORDER & REASONS denying 71 Motion to Dismiss as sanctions; granting 77 Motion for Summary Judgment; denying as moot 69 Motion for Partial Summary Judgment & 76 Motion for Leave to File amended witness and exhibit list. Thecase is DISMISSED. Signed by Judge Martin L.C. Feldman on 8/31/2015. (caa)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

OPERACIONES TECNICAS MARINAS S.A.S.

CIVIL ACTION

v.

NO. 12-1979

DIVERSIFIED MARINE SERVICES, LLC, ET AL.

SECTION "F"

ORDER AND REASONS
Before the Court are four motions: (1) Diversified's motion to
dismiss as sanctions for witness tampering, for which the Court
granted

oral

argument;

(2)

Diversified's

motion

for

summary

judgment; (3) Diversified's motion for partial summary judgment to
dismiss

gross

negligence,

recklessness,

and

punitive

damages

claims; and (4) OTM's motion to amend its witness and exhibit list.
For the reasons that follow, the motion to dismiss is DENIED; the
motion for summary judgment is GRANTED; the motions for partial
summary judgment and to amend the witness and exhibit list are
DENIED AS MOOT.
Background
The facts of this case, which arises from a failed maritime
voyage, have been recounted in detail in previous Orders and
Reasons.1 Operaciones Técnicas Marinas, a Colombian company, hired
a Louisiana company, Diversified Marine Services, LLC, to make some

1

See, for example, Order and Reasons, dated February 20, 2013.
1

repairs on two old sister vessels, M/V MARY TIDE and M/V THOMAS
TIDE, that OTM had bought and planned to transport to Colombia.
Diversified worked on the vessels for several months under the
supervision of OTM personnel.

OTM's principal, Gonzalo Martínez,

who is an experienced Master Pilot himself, inspected the vessels
on the day they were ready and made final payment to Diversified.
Martínez took possession of the vessels, loaded them up, and began
the voyage to Colombia.

But the vessels did not make it to

Colombia by their own power.
The

parties

agree

that

the

vessels

were

not

completely

overhauled, but they disagree as to the extent of the repairs
performed. OTM brought suit against Diversified alleging breach of
contract, negligent and intentional misrepresentation, negligence,
gross negligence, recklessness, breach of warranty of workmanlike
performance,
dismissed.

and

fraud.

The

fraud

claim

Order and Reasons, dated 2/20/13.

was

subsequently

OTM asserts two

alternative theories of liability: either Diversified did not make
repairs

to

the

vessels,

or

the

repairs

that

they

made

were

substandard.
As this case approached trial two years ago, the Court was
made aware of allegations of witness tampering by OTM personnel in
Colombia.

Diversified contended that the owner of OTM had made

inappropriate contact with Diversified's expert witness, Captain
Francisco Espitia, and had paid him 6,000,000 pesos in an attempt

2

to get him to change his deposition testimony. This Court referred
the matter to the United States Attorney's Office for investigation
and administratively closed the case.
reopened

after

an

investigation

Recently, the case was

concluded

that

there

was

insufficient evidence of witness tampering, and the matter is once
again set for trial.
Diversified

seeks

to

dismiss

the

plaintiff's

sanctions for the alleged witness tampering.
argument on this motion.

claim

as

The Court heard

Diversified also moves for summary

judgment and partial summary judgment as to the gross negligence,
recklessness, and punitive damages claims.
As well as opposing Diversified's motions, OTM moves for leave
to amend its witness and exhibit list because of its discovery of
a

lawsuit

against

Diversified's

sister

company

for

allegedly

misrepresenting the condition of vessels and engines marketed and
sold to their customers, allegations similar to those of OTM here.
I. Motion to Dismiss as Sanctions for Witness Tampering
A.
It is within the power of a district court to dismiss a suit
when a litigant's conduct abuses the judicial process.

Pope v.

Fed. Exp. Corp., 974 F.2d 982, 984 (8th Cir. 1992); Chambers v.
NASCO, Inc., 501 U.S. 32, 43 (1991).

But before the Court imposes

a dismissal sanction, the party seeking dismissal must prove by
clear and convincing evidence that the conduct was committed in bad

3

faith and that no lesser sanction would adequately punish and deter
the violation.

See, e.g., Quiroz v. Superior Bldg. Maint., Inc.,

No. 06-21594, 2008 WL 3540599 (S.D. Fl. Aug. 12, 2008).
B.
If the allegations against OTM personnel regarding Espitia's
deposition were proven true, dismissal would likely be merited. On
this record, however, the Court does not find clear and convincing
evidence that the conduct of OTM personnel was committed in bad
faith.
Diversified contends that the following facts are clear: (1)
OTM, through its general manager Gonzalo Martínez, reached out to
Espitia on its own initiative and agreed to pay him to testify; (2)
various high-ranking employees of OTM made at least seven telephone
calls to Espitia in the days immediately prior to his deposition;
(3) OTM paid Espitia six million pesos in connection with his
deposition (about $3,000 at the time); (4) Espitia accepted the
money; (5) Espitia believed, based on his conversations with OTM,
that OTM expected that he would change his testimony in exchange
for

the

money;

and

(6)

counsel

for

Diversified

was

not

contemporaneously advised on these communications, invoicing, and
payment.2

2

The Court finds troubling that counsel for OTM knew the night
before the deposition that Espitia had invoiced OTM and yet did not
immediately relay this information to counsel for Diversified.
This unprofessional conduct, however, does not amount to clear and
convincing evidence of witness tampering.
4

Espitia, a witness located in Colombia and an expert hired by
Diversified, was to have his perpetuation deposition testimony
taken.

When Diversified managed to get in touch with Espitia

through an interpreter to inform him of the date and time of the
deposition, they learned that he already had that information.
Then, at the deposition, counsel for OTM questioned Espitia about
a payment he had received from OTM personnel.

Espitia testified

that he was paid 6,000,000 pesos by OTM personnel because they
thought that he could "help" them, and Espitia took the money out
of necessity.

Nonetheless, Espitia did not alter his testimony

from what was contained in his report.

Espitia has also indicated

that OTM personnel told him to arrive early at the deposition
because the lawyers wanted to speak with him beforehand.
These facts, however, do not amount to clear and convincing
evidence of witness tampering. First, because Diversified is based
in

the

United

States

and

had

lawyers

also

from

the

States,

coordination with Colombian witnesses was accomplished via OTM.
Emails show that Diversified's counsel was aware of this practice.
It is thus unremarkable that Espitia already knew about his
deposition from OTM before he spoke with an agent of Diversified's
counsel.
had

Second, as to the payment Espitia received, although he

already

been

paid

his

deposition

fee

and

expenses

by

Diversified, emails make clear that Espitia demanded money from OTM
and threatened not to attend the deposition unless he was paid.

5

OTM requested an invoice from Espitia to the company and then wired
the money to him; the payment was not transferred clandestinely.
Espitia has stated that he thought that this payment was made
because OTM personnel wanted "help" from him, but this statement
has never been clarified and is unsupported by objective evidence.
Finally, as to the request that he arrive early, when Espitia
arrived, OTM's counsel did nothing more than greet him.

OTM

personnel had been instructed that in general witnesses should
arrive early to meet with counsel, and it seems likely that the
instruction

in

miscommunication.

this

instance

Given

the

was

dearth

nothing
of

more

evidence

of

than

a

witness

tampering, the Court finds that sanctions are not warranted.3
II. Motion for Summary Judgment
A.
Federal Rule of Civil Procedure 56 instructs that summary
judgment is proper if the record discloses no genuine dispute as to
any material fact such that the moving party is entitled to
judgment as a matter of law.

No genuine dispute 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).

3

A genuine dispute of

If anyone was taken advantage of, it seems Mr. Espitia was
interested in getting paid by both sides for one-sided testimony.
But this record does not meet the clear and convincing threshold to
justify the sanction of dismissal.
6

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.
477 U.S. 317, 322-23 (1986).

See Celotex Corp. v. Catrett,

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 claim. Id. Hearsay evidence and unsworn documents that cannot
be presented in a form that would be admissible in evidence at
trial do not qualify as competent opposing evidence.

Martin v.

John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir.
1987); FED. R. CIV. P. 56(c)(2).

Finally, in evaluating the summary

judgment motion, the Court must read the facts in the light most
favorable to the non-moving party.

7

Anderson, 477 U.S. at 255.

B.
OTM contends either that Diversified did not overhaul its
vessels as it claims it did, or that the repairs were substandard.
i.
In

Colombia,

OTM

hired

Stewart

&

Register to inspect the failed vessels.

Stevenson and Lloyd's

At this stage, the Court

has before it the perpetuation deposition testimony of OTM's three
principal

experts:

Óscar

Guerrero,

a

Stewart

&

Stevenson

technician; Luis Santamaría, a Stewart & Stevenson consultant; and
Francisco Hoyos of Lloyd's Register.
from

a

more

recent

expert

for

The Court also has testimony
OTM,

David

Merrion,

whose

qualifications are being challenged in a separate motion in limine.
The experts testify that the vessels were in poor condition when
they examined them, but that they were never asked to determine
what caused the engines to fail or whether they showed signs of
recent overhaul.

Guerrero testified that to determine whether the

engines were damaged or whether they had been overhauled recently,
he would need to disassemble the vessels to examine them more
thoroughly.

This type of examination was not requested by OTM.

Hoyos agreed that his report did not state that the engines were
not overhauled because he would need another type of analysis to
make that determination.

OTM's most recent expert, Merrion,

testified that some work was certainly done on the vessels,
that he could not tell how much.

8

but

Like the other experts, he too

requires a more thorough inspection before he can draw that
conclusion. OTM's allegation that Diversified performed no work on
the engines is unsupported by the sworn testimony of its own
experts.
ii.
As to whether repairs were performed inadequately, OTM alleges
claims for negligence and breach of the implied warranty of
workmanlike performance.

"To establish maritime negligence, a

plaintiff must 'demonstrate that there was a duty owed by the
defendant to the plaintiff, breach of that duty, injury sustained
by [the] plaintiff, and a causal connection between the defendant's
conduct and the plaintiff's injury.'"

Canal Barge Co., Inc. v.

Torco Oil Co., 220 F.3d 370, 376 (5th Cir. 2000) (quoting In re
Cooper/T. Smith, 929 F.2d 1073, 1077 (5 th Cir. 1991)). "Those who
repair a vessel or the equipment aboard it make a warranty, the
implied warranty of workmanlike performance." Houston-New Orleans,
Inc. v. Page Eng'g Co., 353 F.Supp. 890, 898 (E.D. La. 1972).

To

succeed for breach of implied warranty, a shipowner must show that
the contractor breached the warranty and that this proximately
caused the shipowner's injury. Butterfly Transp. Corp. v. Bertucci
Indus. Servs. LLC, 351 F. App'x 855, 858 (5th Cir. 2009).

In

practice, the standard for the warranty of workmanlike performance
need not differ from the test for ordinary maritime negligence.
Id. at n.10.

9

OTM has the burden of proof on all of its claims by a
preponderance of the evidence. Offshore Specialty Fabricators, LLC
v. Dumas Int'l, Inc., 982 F.Supp.2d 695, 700 (E.D. La. 2013).
Circumstantial evidence may help the plaintiff meet this burden,
but "where only circumstances are relied upon, they must permit a
strong inference on the required elements of the plaintiff's
claim."

Penn Maritime v. Rhodes Elec. Servs., 41 F.Supp.3d 507,

517 (E.D. La. 2014) (citing Offshore Specialty Fabricators, LLC,
982 F.Supp.2d at 700).

"[T]he circumstances must exclude other

reasonable hypotheses with a fair degree of certainty, showing that
the defendant's liability for negligence is more likely than not."
Id.

The identity of the party in control or possession at the time

of the incident is a factor to consider.

Offshore Specialty

Fabricators, LLC, 982 F.Supp.2d at 700.
On this record, OTM has not shown that any allegedly faulty
repairs done by Diversified caused the vessels' failure.

In fact,

OTM contends that it need not establish causation, stating, without
citation to a treatise, rule, or case:
OTM does not carry that burden [to show causation]. OTM
has not pled any cause of action that requires a
determination of precisely why the engines failed. OTM
does not have to prove precisely why the engines failed
because the evidence is sufficient to show either: (1)
Diversified did not perform an overhaul at all, or (2)
Diversified performed the overhaul so incompetently that
the condition of the engines showed no evidence of a
recent overhaul.
The plaintiff misstates its burden.

10

OTM has brought claims of

negligence and breach of the implied warranty of workmanlike
performance. Such claims require the central element of causation.
If Diversified's repairs were negligently done, OTM would be
required to demonstrate how those negligent repairs, as opposed to
the vessels' other deteriorating parts or operator error, caused
the vessels to fail in their journey to Colombia while in OTM's
custody and control.

OTM has made no effort to do so.

Diversified, on the other hand, has offered evidence of the
many other challenges facing the vessels.

Although OTM cites the

deposition of its principal Gonzalo Martínez–and nothing more–to
submit that OTM allowed Diversified to make all of the repairs that
it

recommended,

work

tickets

show

that

certain

repairs

that

Diversified recommended were rejected by OTM. Invoices reflect the
following repairs by OTM:
1.
2.
3.
4.
5.
6.
7.
8.
9.

Out-of-frame overhauls of two of three main engines
(center and starboard) of the MARY TIDE;
An in-frame overhaul of one of three main engines
(center) of the THOMAS TIDE;
Service for propulsion drive shafts, journals
propellers, and cutlass bearings;
Hull painting;
Replacement of lifesaving equipment;
Air compressor replacement;
Installation of A/C compressors with the limited
ductwork necessary for the installation;
Bilge pump replacement (no bilge piping); and
Limited generator servicing and minor electrical
repairs.

Relying on the vessels' logs, Diversified contends that several of
the parts that it was not permitted to repair or replace began
causing

problems

for

the

vessels
11

soon

after

possession

was

transferred to OTM.

Robert Boudreaux, Sr., testified that OTM

loaded the vessels with so much cargo that they were weighed down
to such an extent that the exhaust ports were dangerously close to
the waterline, even in calm waters.

OTM merely responds by

repeating the generic testimony of its expert witnesses that
several parts of the vessels looked like they had not been replaced
recently. Many of OTM's attempts to refute the evidence offered by
Diversified do not cite evidence in the record.
On this record, where the Court has before it the perpetuation
depositions of the major experts and key portions of the testimony
of OTM's most recent expert (who relied on the reports of the
others), it is apparent that OTM's submissions fail to create any
material fact issue.

Quite simply, the tests that needed to be

performed to call attention to causation were not.
Accordingly, for the foregoing reasons, IT IS ORDERED that the
motion to dismiss as sanctions is DENIED, the motion for summary
judgment is GRANTED, and the motions for partial summary judgment
and to amend the witness and exhibit list are DENIED AS MOOT.

The

case is DISMISSED.

New Orleans, Louisiana, August 31, 2015

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

12