JAB Energy Solutions II, LLC v. Servicio Marina Superior, L.L.C. et al

Filing 36

ORDER AND REASONS denying 21 Motion for Summary Judgment. Signed by Judge Ivan L.R. Lemelle. (ijg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JAB ENERGY SOLUTIONS II, LLC

CIVIL ACTION

VERSUS

NO. 13-556

SERVICIO MARINA SUPERIOR, LLC, ET AL.

SECTION "B"(4)

ORDER AND REASONS
Cause of Action and Facts of Case
This case arises out of two contracts, one between JAB
Energy Solutions II, LLC, (JAB) and Servicio Marina Superior, LLC
(SMS), and the other between JAB and Cashman Equipment Corp.
(Cashman). Both contracts concerned JAB's transport of the D-21
platform from Louisiana to Malaysia.
The first contract, entitled the Contract of Affreightment
("COA") was between JAB and SMS. JAB contracted for the use of
SMS's tug, the Atlas, to transport the D-21 platform. Pursuant to
the terms of the COA, JAB's equipment was to be secured to
Cashman's JMC-3330 barge ("JMC-3330") for the voyage. During the
course of the voyage, JAB became dissatisfied with the progress
and condition of the Atlas. JAB subsequently indicated it was
terminating the COA. JAB then entered into a second contract entitled the Barge Bareboat Charter - with Cashman on July 23,
2012. That agreement provided for the continued use of the JMC3330, pulled by a different tug. The agreement also set forth the
terms upon which the parties agreed to terminate the COA.
1

JAB filed the instant suit against SMS and Cashman, claiming
breach of the COA. SMS and Cashman counterclaimed for delinquent
payments under the Barge Bareboat Charter.
Nature of Motion and Relief Sought
In the instant motion, Defendants seek summary judgement in
three respects:(1) dismissal of JAB claims against SMS and
Cashman; (2) judgement in favor of Cashman on Cashman's
counterclaim for $275,640.39 plus contractual interest,
reasonable attorney’s fees, and costs; and (3) judgement in favor
of SMS for reasonable attorney’s fees and costs.
Accordingly, and for the reasons articulated below IT IS
ORDERED that Defendants' Motion for Summary Judgement (Rec. Doc.
No. 21) is DENIED.
Law and Analysis
I. Summary Judgement
Summary judgment is proper if the record evidence shows 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; Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).
A genuine issue exists if the evidence would allow a reasonable
trier of fact to return a verdict for the nonmovant.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

Anderson v.

Although the

Court must consider the evidence with all reasonable inferences
in the light most favorable to the nonmoving party, the nonmovant
2

must produce specific facts to demonstrate that a genuine issue
exists for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith
Radio Corp., 475 U.S. 574, 586 (1986). "[T]he issue of material
fact required by Rule 56 to be present to entitle a party to
proceed to trial is not required to be resolved conclusively in
favor of the party asserting its existence; rather, all that is
required is that sufficient evidence supporting the claimed
factual dispute be shown to require a jury or judge to resolve
the parties’ differing versions of the truth at trial." First
National Bank of Arizona v. Cities Service Co., 391 U.S. 253,
288-89 (1968).
In cases were a motion for summary judgement is filed
preceding a bench trial, as is the case here, the presiding judge
"has the limited discretion to decide that the same evidence,
presented to him or her as trier of fact in a plenary trial,
could not possibly lead to a different result." U.S. Fid. & Guar.
Co. v. Planters Bank & Trust Co., 77 F.3d 863, 866 (5th Cir.
1996).
II. Analysis
The Court finds genuine issues of material fact on all three
of the issues submitted by Defendants for summary judgement.
Accordingly, summary judgement must be denied.
A. Issue 1 - JAB's Claims Against SMS and Cashman
Defendants argue that JAB's claims are barred by the
3

parties' contractual agreements. Specifically, Defendants argue
(1) that by signing the Barge Bareboat Charter, JAB gave up all
rights it previously had under the COA; and (2) even if the COA
controls, its term do not allow JAB to recover damages. The Court
disagrees.
Defendants contend that the signing of the Barge Bareboat
Charter constituted a novation of the prior agreement under
Louisiana law. A novation "is the extinguishment of an existing
obligation by the substitution of a new one." La. Civ. Code Ann.
art. 1879. "[T]he burden of establishing a novation rests with
the party asserting novation." KeyBank Nat. Ass'n v. Perkins Rowe
Associates, LLC, 823 F. Supp. 2d 399, 408 (M.D. La. 2011) aff'd
sub nom. KeyBank Nat. Ass'n v. Perkins Rowe Assoc., L.L.C., 502
F. App'x 407 (5th Cir. 2012). Determining whether a second
contract actually produced a novation, and not a second separate
agreement, is a fact intensive inquiry - as the court must
determine whether "the intent of the parties, the character of
the transaction, the facts and circumstances surrounding the
transaction and the terms of the agreement itself reveal a desire
to effect a novation." Wainer v. A.J. Equities, Ltd., 150 B.R.
916, 920 (E.D. La. 1992) (quoting Pike Burden Printing, Inc. v.
Pike Burden, Inc., 396 So. 2d 361, 365 (La. Ct. App. 1981))
aff'd, 984 F.2d 679 (5th Cir. 1993).
Nowhere in the Barge Bareboat Charter does JAB consent to

4

giving up any rights maintained under the COA. While the parties
agreed to "terminate" the COA at the time of the Charter's
signing, (Rec. Doc. No. 21-4), the termination does not indicate
that the parties were giving up any right to sue for breach under
the COA. The only fact clear from the Charter is that the Atlas
was no longer the tug, and that the barge JMC-3330 would continue
on the voyage. The Court cannot conclude on these facts alone
that Defendants have met their burden in establishing that the
parties intended to effect a novation. If anything, the contract
is ambiguous as to whether it sought a novation or a separate
agreement. This presents an issue of fact as to the parties'
intentions, which is not properly resolved at the summary
judgement stage. Ham Marine, Inc. v. Dresser Indus., Inc., 72
F.3d 454, 458-59 (5th Cir. 1995) ("[O]nce the contract is found
to be ambiguous, the determination of the parties' intent through
the extrinsic evidence is a question of fact."); D.E.W., Inc. v.
Local 93, Laborers' Int'l Union of N. Am., 957 F.2d 196, 199 (5th
Cir. 1992) ("[I]f the contract is ambiguous, summary judgment is
deemed inappropriate because its interpretation becomes a
question of fact.").
The same is true of Defendants' argument that a compromise
occurred pursuant to La. Civ. Code art. 3071. That provision
states "[a] compromise is a contract whereby the parties, through
concessions made by one or more of them, settle a dispute or an

5

uncertainty concerning an obligation or other legal
relationship." Id. However, "[a] compromise settles only those
differences that the parties clearly intended to settle,
including the necessary consequences of what they express." La.
Civ. Code Ann. art. 3076. Again, the Court points to the fact
that the Charter contained no explicit language indicating that
JAB gave up rights under the COA. Regardless, "the intent to
compromise is usually, under Louisiana's transaction
jurisprudence, an issue of fact that is not appropriate for
summary judgment." Copeland v. Wasserstein, Perella & Co., Inc.,
278 F.3d 472, 482 (5th Cir. 2002). The Court does not find reason
to deviate from the general rule in this case, and instead finds
there are indeed material disputes as to whether the parties
intended to compromise.
The Court similarly cannot accept Defendants' arguments that
no disputed issues of material fact exist on JAB's claims under
the COA. While Defendants vigorously argue that they made no
warranties as to the time the voyage would be completed, the COA
did provide that the "[c]arrier shall perform transportation
service with due dispatch." (Rec. Doc. No. 21-3 at ¶ 3A). While
the Court understands that Defendants made "no warranty as to
speeds or arrival/departure times", see id., there still, at the
very least, remains a question of fact as to whether the "due
dispatch" requirement was met. See Concise Oil & Gas P'ship v.

6

Louisiana Intrastate Gas Corp., 986 F.2d 1463, 1469 (5th Cir.
1993)("[W]hether the parties' conduct constitutes a breach
'presents a pure question of fact that the trier of fact alone
may decide.'") (quoting Turrill v. Life Ins. Co. of North
America, 753 F.2d 1322, 1326 (5th Cir.1985)).1
B. Issue 2 - Money Owed Cashman
There are further disputed issues of material fact regarding
Cashman's counterclaim. Specifically, an indemnification
provision was included in the COA, holding harmless JAB for
certain costs or claims incurred on the voyage. Section
5(A)(1)(C) of the COA provides:
[SMS] shall be responsible for and shall defend, indemnify
and hold harmless [JAB] form [sic] and against any and all
claims, demands or causes of action for damage or loss or
expense to the Vessels during transit while under the
custody and/or control of [SMS], howsoever caused, and even
if caused by the negligence or other legal fault of [JAB],
except however those liabilities and responsibilities
assumed by [JAB] . . .
(Rec. Doc. No. 21-3)
Whether or not this provision may serve to indemnify JAB for
costs incurred as a result of the Barge Bareboat Charter turns on
whether the fees incurred in signing the Barge Bareboat Charter
are properly construed as "claims, demands or causes of action
for damage or loss or expense to the Vessels", and whether any

1
Because the Court finds a disputed issue of material fact regarding
this contract provision, sufficient for the case to proceed to trial, it does
not reach the question here as to whether other provisions of the COA may
additionally permit recovery or, instead, are barred as a matter of law.

7

such expenses were incurred "during transit while under the
custody and/or control of [SMS]." These are questions of fact not
properly resolved at the summary judgement stage.2
C. Issue 3 - SMS Attorney's Fees
The Court, having determined there are issues of material
fact at issue, does not decide SMS's claim for attorney's fees
here - as they depend on the final resolution of the case.
Accordingly, and for the reasons enumerated above IT IS
ORDERED that Defendants' Motion for Summary Judgement (Rec. Doc.
No. 21) is DENIED.

New Orleans, Louisiana, this 19th day of March, 2014.

_______________________________
UNITED STATES DISTRICT JUDGE

2

Because the Court finds a disputed issue of material fact on the
indemnity issue, sufficient to permit the counterclaim to proceed to trial,
the Court does not resolve at this time whether or not JAB's claim of duress
is additionally a disputed issue of material fact or can be decided as a
matter of law.

8