Ergon - St. James, Inc. v. PRIVOCEAN M/V

Filing 476

FINDINGS OF FACT AND CONCLUSIONS OF LAW. Signed by Judge Jay C. Zainey.(Reference: all cases)(jrc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ERGON - ST. JAMES, INC., ET AL.

CIVIL ACTION

VERSUS

NO: 15-1121 and
consolidated cases

PRIVOCEAN M/V, ET AL.

SECTION: "A" (3)

FINDINGS OF FACT AND CONCLUSIONS OF LAW
This suit arises from the April 6, 2015 breakaway of the M/V PRIVOCEAN
(“PRIVOCEAN”) from the Convent Marine Terminal (“CMT”) dock located at Mile Marker
161 on the east bank of the Mississippi River. The PRIVOCEAN broke away from its
moorings at CMT, drifted and/or travelled across the river, and allided with the M/T
BRAVO (“BRAVO”), which was moored at the Ergon – St. James terminal facility and
dock.
Ergon1 initiated this action against the PRIVOCEAN in rem for all damages that
Ergon sustained as a result of the PRIVOCEAN’s breakaway and subsequent events.
The PRIVOCEAN was arrested and jurisdiction over the vessel was perfected.
Privocean Shipping Ltd. and Bariba Corp., the owner and managing owner,
respectively, of the PRIVOCEAN (jointly referred to hereinafter in the singular as
“Privocean”), filed a Petition for Exoneration from, or Alternatively, Limitation of Liability

“Ergon” comprises Ergon – St. James, Inc., Ergon, Inc., Ergon Refining, Inc., Magnolia
Marine Transport Co., and their underwriters (Certain Interested Underwriters at Lloyd’s of
London and PartnerRE Ireland Insurance).
1

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pursuant to the Shipowner’s Limitation of Liability Act, 46 U.S.C. §§ 30501, et seq. Gard
P&I (Bermuda) Ltd. (“Gard”), the P&I insurers of PRIVOCEAN, posted security in the
form of a Letter of Undertaking (“LOU”) and the arrest of the PRIVOCEAN was lifted.
The cases were consolidated into the instant action.
Ergon filed a Claim in the Limitation Action against Privocean and a Third-Party
Demand direct action against Gard for all damages that Ergon sustained as a result of
the PRIVOCEAN’s breakaway and subsequent events.2
Numerous other claims for damages were duly filed in the limitation action, and
Privocean filed third-party demands against three parties, seeking contribution or
indemnity on the grounds that the fault of those parties had caused or contributed to the
casualty. Prior to trial, all three of the third-party claims and all of the limitation claims
except one were settled. The total amount of the settlements was such that the issue of
limitation was rendered moot before trial.
Included in those settlements by Privocean was the claim of Bravo Shipping Ltd.
(“Bravo”) for damage to its vessel, the BRAVO. As part of the settlement with Bravo,
Privocean was assigned the Bravo Shipping claim, and now seeks contribution from
Ergon for certain damages that Privocean contends were caused to the BRAVO by the
negligence of Ergon in the aftermath of the allision. Privocean also claims that as
Bravo’s assignee, it is entitled to a credit from Ergon for additional damages caused to

2

Privocean points out that there is no basis for the Court to enter a judgment against Gard on
Ergon’s direct action because Ergon did not introduce a copy of the policy at trial or otherwise
prove coverage for this particular claim. Of course, Gard remains obligated under the terms of
the LOU.
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the BRAVO as a result of Ergon’s fault.
Prior to trial, Privocean stipulated that it is 100% liable for the breakaway of the
PRIVOCEAN and the initial allision with the BRAVO at the Ergon dock.
Thus, the sole claims remaining for trial were Ergon’s claim for physical damage
to its facility (lower ship dock and barge dock) and for related expenses, and
Privocean’s claim for contribution for damage to the BRAVO (lower port side damage).
Privocean has stipulated that Ergon spent $14,607,429.00 to repair its facility and
that this amount was reasonable. This stipulation was subject, however, to Privocean’s
claim that these damages should be reduced for depreciation, for specific instances of
betterment to the facility as a result of the repairs, and due to the fact that some of the
damages and corresponding repairs were necessitated by Ergon’s own fault.
Consequently, the only issues for trial were: (1) whether Ergon’s repair costs
should be reduced on account of depreciation; (2) whether the repairs effected by Ergon
resulted in specific areas of betterment or improvement of the facility in comparison to
its pre-incident design such that Ergon’s damages should be correspondingly reduced;
(3) whether Ergon’s actions after the initial allision were negligent in a way that
exacerbated its damages; (4) whether Ergon’s actions after the initial allision were
negligent in a way that exacerbated the damages to the BRAVO; and (5) whether Ergon
is entitled to pre-judgment interest and, if so, in what amount.3

3

A separate issue that was not tried, and therefore forms no part of these findings, is whether
Ergon and its non-settling underwriters are entitled to recover 100% of the subrogated damage
claim. Before trial Privocean settled a separate claim (Rec. Doc. 112) filed by certain of Ergon’s
other underwriters, and Privocean maintains that those settling underwriters owned 45.5% of
the claim.
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This matter was tried to the Court sitting without a jury on April 23-27, 2018. The
parties filed their proposed Findings of Fact and Conclusions of Law on June 15, 2018.
(Rec. Docs. 466 & 467). A motion to strike followed, and the Court disposed of that
motion on July 30, 2018. (Rec. Doc. 475).
Having considered the testimony and evidence at trial, the depositions submitted
in lieu of live testimony, the arguments of counsel, and applicable law, the Court now
enters the following Findings of Fact and Conclusions of Law in accordance with
Federal Rule of Civil Procedure 52(a). To the extent that any finding of fact may be
construed as a conclusion of law, the Court hereby adopts it as such. To the extent that
any conclusion of law constitutes a finding of fact, the Court adopts it as such.
I.
FINDINGS OF FACT
Ergon is a crude oil storage facility that receives and stores crude oil from tank
ships at its ship dock. The Ergon dock was built in 1980. In the 35 years prior to this
incident, the Ergon dock had only experienced one other allision, which occurred in
2008 by a downstream tug and barge.
The Ergon facility is comprised of two parallel structures—an outer ship dock and
an inboard barge dock. The two docks are separated by over 200 feet. As the name
implies, the Ergon ship dock receives ocean-going vessels to discharge their cargoes of
crude oil. The ship dock has an upper and a lower end, demarcated roughly in the
middle by the ship wharf breasting dolphins against which ships rest while discharging
and where cargo pipelines run from a vessel’s manifold to storage tanks ashore.
These pipelines are covered by a steel walkway. At the breasting dolphin location in the
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middle of the ship dock are located three loading arms or “chicksans” which are used to
connect the shore piping to the ship’s manifold.
When cargo is discharged from a vessel, it is piped ashore and stored in tanks at
the Ergon facility until it is ready to be transported by barge to upriver locations. The
parallel barge dock, located closer to the river bank, receives the river barges into which
the crude oil is loaded for transportation. Unlike certain portions of the ship dock, the
barge dock is not designed or constructed to withstand the weight of ocean-going ships.
The ship dock structure comprises a series of dolphins constructed of steel
pilings driven into the river bed with interconnecting steel bracing and either steel or
concrete caps. Some of these dolphins, namely the ones in the middle of the ship dock,
are called breasting dolphins (“BD”) because they have fenders against which
discharging vessels rest. Breasting dolphins are reinforced to withstand the weight of
large ocean-going vessels. The fenders of the breasting dolphins at Ergon’s ship dock
and the center main fendered wharf face, extended outward into the river to create an
imaginary “fender line” (nearly perpendicular to the steel walkway) and a properly
moored vessel at Ergon’s ship dock would sit nearly parallel to that line along the
breasting dolphins and would not have occasion to move laterally beyond that fender
line toward the river bank. The breasting dolphin sitting furthest downriver at Ergon was
BD-3.
Behind that imaginary fender line were the non-reinforced structures of the Ergon
ship dock, including other upstream and downstream dolphins called mooring dolphins
(“MD”). Mooring dolphins are fenderless and are designed only to secure a ship’s

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mooring lines. Mooring dolphins are not reinforced to withstand the weight of oceangoing vessels pushing against them. The dolphins are connected by a series of
walkways, or “catwalks,” supported by vertical pile structures called “bents.” Bents are
not designed to withstand the weight of a ship at the berth but serve merely to support
the metal catwalks between mooring dolphins, breasting dolphins and other structures.
These non-reinforced structures and the walkways that connect them are canted away
from the fender line to ensure that moored vessels do not contact them. The Ergon ship
dock terminated at MD-4, which was the structure furthest downriver along the ship
dock.
The pipelines running to and from Ergon’s ship dock and barge dock contain
approximately 10,000 barrels of oil. The storage tanks contain approximately 2,000,000
barrels of oil. When the valves on the ship dock are closed, the valves prevent the oil
from flowing outward into the loading arm, but the oil remains in the lines. If the lines are
punctured, there is still potential for an oil spill.
Although the great majority of the Ergon terminal was constructed 35 years prior
to the casualty, the Ergon dock was in excellent condition prior to April 6, 2015. It had
been well-maintained, was recently re-coated (2013) and there was no significant
damage, corrosion or deterioration to the structures. The facility, as a whole, was not
heavily used and only received on average a vessel per month.
The PRIVOCEAN is a large bulk carrier built in 2013. Her dimensions are 751
feet in length and 105 feet in breadth. At the time of this incident, she was only two
years old, was well-maintained, and her officers and crew all were properly licensed and

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certificated.
Immediately prior to the events leading up to the casualty, the PRIVOCEAN was
about to complete the loading of a cargo of coal at the CMT facility on the east bank of
the river near Convent, Louisiana. PRIVOCEAN was being held in place at CMT by two
hold-in tugs, the TEXAS and the NED FERRY.
The BRAVO is a crude oil tank vessel with dimensions of 816 feet in length and
144 feet in breadth. Immediately prior to the events leading up to the casualty, the
BRAVO had been securely berthed port side to the Ergon ship dock with its bow
pointing upriver. BRAVO was completing discharge of its oil cargo at the Ergon facility,
and was in the process of “stripping” its tanks to remove the small residue of cargo
remaining on board. Because it was almost empty, with a forward draft of 12 feet and an
aft draft of 28 feet, the BRAVO sat very high in the water with a freeboard of
approximately 45 feet. There were no problems or abnormalities with the operation
involving the BRAVO at the Ergon dock before the breakaway of the PRIVOCEAN and
its subsequent allision with the BRAVO.
Sometime around 3:55 p.m. on April 6, 2015, during exceptionally high river
conditions, PRIVOCEAN broke free from its moorings and drifted across the river.
Despite the efforts of the tugs TEXAS and NED FERRY, PRIVOCEAN travelled across
the river toward Ergon’s facility, and it did so without any motive power because her
crew did not keep the vessel’s engines on standby.
It is undisputed that Ergon had nothing to do with the mooring of the
PRIVOCEAN or its cargo operations at the CMT dock.

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The PRIVOCEAN allided with the moored BRAVO’s starboard bow and the
Ergon upriver wharf located on the right descending (west) bank of the river.4 The initial
allision with the BRAVO occurred at approximately 4:00 p.m. (land-based local time).
This contact caused the BRAVO’s mooring lines to break.5 At about 4:10 p.m. BRAVO
began to slowly drift downriver away from the Ergon dock. BRAVO’s crew was on board
at the time but the bridge was unmanned. PRIVOCEAN lay on the BRAVO, and in an
attempt to keep the BRAVO in place at the Ergon dock, the PRIVOCEAN’s captain kept
alongside the BRAVO’s starboard side. PRIVOCEAN’S movement upriver and
downriver against BRAVO was reminiscent of a “grinding” sort of action.
Again, Privocean has stipulated that it is 100% liable for the breakaway of the
PRIVOCEAN, and the damages pertaining to the foreseeable consequences of the
breakaway. Privocean does not dispute that the damage to BRAVO’s starboard side (as
well as port side above the waterline just forward of her midship section where
BRAVO’s bow initially impacted the Ergon dock) and the damage to the upriver portion
of Ergon’s facility were foreseeable consequences of the breakaway. Those damages
are therefore not in dispute except as to depreciation and betterment regarding the
Ergon damages.

In particular, the TEXAS on PRIVOCEAN’s port bow was the actual point of initial contact
between PRIVOCEAN and BRAVO.
4

Two of BRAVO’s lines held following the initial impact. But when PRIVOCEAN turned to port
to free BRAVO’s hold-in tug G. SHELBY FREDRICHS, which was wedged between
PRIVOCEAN and BRAVO, the remaining mooring lines broke and additional damage was
caused to Ergon’s upriver facility. Privocean does not dispute that it is responsible for this
damage.
5

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Ergon’s dock operator, Kevin Labat, was the person in charge of the Ergon
facility when the allision occurred. Labat’s duties included monitoring the unloading
process when ships were berthed at the facility. Labat had worked for Ergon for less
than three years when the incident occurred and he had no marine training or
experience with vessels and tugs.
Ergon kept two radios in the dock operator’s shack: a company radio (whose
mate was given to the BRAVO), used to communicate with berthed vessels, and a
marine radio, used to communicate with hold-in tugs. Labat had not used the marine
radio prior to this incident because it was not part of his ordinary job duties to give
instructions to tug boats.
Labat first became aware of the allision when he noticed the BRAVO moving
downriver from the Ergon dock. He then observed the PRIVOCEAN lying on the
BRAVO. For safety reasons, Labat closed the dock valves and moved off the dock and
up on the levee on the west side of the river. Labat called the facility manager, Shane
Rougee, who had left for the day. Rougee immediately returned to Ergon but he did not
go to the dock area. Rougee stayed in Ergon’s land-based office during the entire
incident and turned his marine radio down so that he could make all necessary
notifications. Labat therefore remained in charge of the response on Ergon’s behalf.
Labat became concerned about the BRAVO’s movement downriver away from
Ergon’s dock. Without first attempting to contact the BRAVO on the ship radio to
determine whether she had the ability to stay on station without assistance, such as by
dropping her anchors, Labat began calling for assistance from other vessels on the

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marine radio.
Two “Good Samaritan” tugs, the BECKY S and the ELIZABETH B, responded to
Labat’s call and came to the scene shortly after 4:25 p.m. Even though he had no basis
for understanding how the tugs could best be utilized or what effect their pushing on
BRAVO would have, at about 4:27 p.m., Labat asked the BECKY S to “please push the
BRAVO forward—it cannot go any more back.” Labat reiterated, “I need you to push the
BRAVO up and forward—it cannot go any more back.” BECKY replied (Trent Taylor),
“All right, I’m pushing up and on I got the ship . . . I’m pushing hard in the ship trying to
keep it along the dock and I’ll try to keep it up as far as possible. You got another tug
coming along side to help you keep you on the dock.” A few seconds later, Labat
advised that the BRAVO was still falling back. Labat reiterated, “Please push forward
with the tugs, please.” BECKY S confirmed that she was pushing as far forward as she
could given that BRAVO had another ship lying on her.
ELIZABETH B came along shortly thereafter (4:28 p.m.), and her captain testified
that the PRIVOCEAN already had her engines going and was preparing to pull away as
he was arriving. Both tugs pushed on the BRAVO, just astern of her midship section.
Therefore, the tugs began to assert their combined full force on the BRAVO very close
in time to when the PRIVOCEAN was beginning to pull away.
The ELIZABETH was positioned almost parallel to the BECKY. The tugs were
pushing with 100 percent of their force. Even though the tugs were trying to push the
BRAVO forward, the tugs were pushing at an 80 to 90 degree angle (nearly
perpendicular) to the hull because neither tug had lines running to the BRAVO.
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BECKY S is 100 feet in length and 36 feet in breadth, with engines generating
4,480 horsepower. ELIZABETH B is 98 feet in length and 35 feet in breadth, with
engines generating 4,000 horsepower. Each tug had an effective bollard pull rating of
55 tons, meaning that they had a total pushing power of 55 tons. This is equivalent to
110,000 pounds per tug in thrust, or 220,000 pounds total thrust for both tugs together.
Eventually, BRAVO drifted back to the point where its bow was just at or below
BD-3, the last breasting dolphin in the series of breasting dolphins that created the
fender line. This meant that there was no structure in place to prevent the port side of
the BRAVO from contacting the portions of the Ergon ship dock below BD-3, which
were not reinforced to withstand the weight of a vessel.
The BRAVO was pushed completely over the unfendered downriver end of the
Ergon ship dock, totally destroying the downstream mooring dolphin MD-4. Mooring
dolphin MD-4 had to be completely replaced along with associated sections of the
connecting gangways and bents that formed the lower ship dock. When the BRAVO
was pushed over MD-4 this caused substantial damage to the bottom edge port bilge
strake and keel of her hull.
When BRAVO’s bow began to move to port through the lower ship dock,
PRIVOCEAN was alongside BRAVO in the process of finally pulling away. The damage
to the structures downriver of BD-3 was caused by PRIVOCEAN and the tugs acting
together, even though the combined strength of the tugs would have been powerful
enough to topple the lower ship dock even without PRIVOCEAN’s contribution to this
part of the casualty.
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Several experts testified as to the cause of this aspect of the casualty. All of the
experts concur in that the PRIVOCEAN’s presence alongside the BRAVO contributed in
one manner or another to push BRAVO’s bow through the catwalk and bents of the
lower ship dock downriver of BD-3. PRIVOCEAN’s expert, Jason Fernandes, believed
that it was the tugs acting alone that toppled MD-4, which is the structure furthest
downriver on the lower ship dock. The Court found Mr. Fernandes to be credible and his
opinions well-supported but as to the damage to the lower ship dock structures, no line
of demarcation can be drawn where the damage from the PRIVOCEAN and the tugs
acting together ends and the damage attributable to the tugs alone begins.
The cost to repair the lower ship dock was $4,580,000.00.
The PRIVOCEAN pulled clear of the BRAVO sometime after 4:35 p.m., and
when she did so the Ergon barge dock tripod mooring dolphin, which was several
hundred feet away from the ship dock, was still intact. The damage to the barge dock
structure occurred several minutes after the damage to the downriver ship dock. The
footage from Ergon’s dock cam and the Caddo video establish without a doubt that
PRIVOCEAN was not alongside BRAVO after she passed over MD-4 and moved
laterally toward the barge dock. Clearly, the damage to the barge dock tripod mooring
dolphin and the barge dock gangway was caused solely by the tugs. The cost to repair
the damage to the barge dock was $600,000.00.
Although the damage to the lower ship dock (including MD-4) is attributable to
PRIVOCEAN acting in concert with the tugs, the BRAVO overcame the resistance of
MD-4 and moved laterally over that dolphin (and the remains of the rest of the lower
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ship dock) causing significant below water-line damage to the hull solely because the
powerful tugs were pushing on her starboard side. Before BRAVO began to move
laterally toward the shore and over MD-4 her bow moved slightly outward toward the
river and that could only have happened if PRIVOCEAN had already pulled away from
the BRAVO and cleared her. PRIVOCEAN did not contribute to pushing the BRAVO
laterally over the remains of the lower ship dock and MD-4.6
The experts who opined that BRAVO would have moved over the lower ship
dock with or without the tugs—in other words that PRIVOCEAN alone caused the
BRAVO to move over MD-4 toward the barge dock—were simply not persuasive. The
objective evidence such as PRIVOCEAN’S VDR data, and the circumstantial evidence
such as the lack of significant damage to BRAVO’s starboard bow, and the fact that
PRIVOCEAN was already either lying on the BRAVO or in very close proximity to her
when she pulled away, did not support the proposition that PRIVOCEAN struck the
BRAVO’s bow with so much force as to cause enough residual momentum to not only
push BRAVO into the lower ship dock but to then proceed to move her laterally over the
collapsed ship dock and MD-4, even after her bow came back out toward the river. MD4, while not reinforced like a breasting dolphin, was far stronger than the catwalks and

The Court recognizes that while MD-4 was certainly damaged when the BRAVO’s bow took
out the lower ship dock, it is not beyond possibility that the need to completely replace that
structure (in lieu of less expensive repairs) might be attributable to the BRAVO’s hull passing
over MD-4, an act which the Court attributes solely to the tugs. Because the evidence does not
adequately answer this question, the Court places full responsibility for the replacement cost of
MD-4 on Privocean.
6

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bents that are built to withstand only wind and river current. PRIVOCEAN had already
pulled away and was well clear of BRAVO when the lateral movement stopped.
The PRIVOCEAN did not push the BRAVO, which was 816 feet long, laterally
over MD-4 thereby damaging the port bilge strake and keel of BRAVO’s hull. The two
tugs BECKY S and ELIZABETH B had sufficient combined thrust to push BRAVO,
which was empty of her cargo and sitting high in the river, over MD-4 without any help
from PRIVOCEAN. Again, the steady and near perfect lateral movement of the BRAVO
can only have been attributable to the continued force delivered by the tugs pushing at
full force nearly parallel to the hull and just astern of the midship area.
The Court credits the methodology used by Privocean’s expert, Jason
Fernandes, to apportion the repair costs for the BRAVO. The additional cost to the
BRAVO for the damages that resulted from pushing the vessel over the lower ship dock
and MD-4 was $1,856,926.00.
When the BRAVO finally dropped her starboard anchor the vessel stopped
moving.
Because BRAVO was nearly empty, its freeboard was much higher than the
bridge of the tugs, meaning that the operators of the BECKY S and ELIZABETH B could
not see what was on the other (port) side of BRAVO, and in particular could not see that
BRAVO had drifted back and therefore was pressing on the unfendered portions of the
lower ship dock, which again was not built to withstand the weight of a ship. They had to
operate blindly, and their only option was to rely on instructions from Labat as to what
they were to do.
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Similarly, the crew that was on the bridge of the BRAVO at the time couldn’t see
the tugs. BRAVO’s captain did not know that the tugs were pushing on his vessel until
almost 5:00 p.m. So, Labat was the only one who had a clear and unobstructed view of
the BRAVO; the only one who knew that he had ordered two powerful tugs to push hard
on its starboard side; and the only one who could see that the BRAVO was being
pushed over the ship dock and toward the barge dock, which it eventually struck and
destroyed.
Only Labat knew that the BRAVO was no longer resting on the reinforced
breasting dolphins yet he watched, and calmly took pictures, as the BRAVO was
pushed over the downriver portions of the Ergon ship dock and the barge dock. He
never attempted to communicate with the tug operators to tell them to stop pushing.
Had he done so, significant additional damage to the hull of the BRAVO and the
damage to the barge dock could have been avoided.
II.
CONCLUSIONS OF LAW
The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §
1333, which confers on federal courts original jurisdiction over admiralty and maritime
claims. Venue is proper in this district because the casualty involved in the litigation
occurred in this district. Jurisdiction and venue are not contested.
A.

Depreciation
The repairs to the Ergon dock are subject to depreciation. See Pizani v.

M/V Cotton Blossom, 737 F.2d 1334 (5th Cir. 1984).

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The useful life of a structure measures how long the structure is usable for its
intended purpose. The average useful life for a structure on the river, such as Ergon’s
facility, is 50 to 60 years. A structure may be fully functional but that does not mean that
none of its useful life has been depleted.
Even though some of the structures at Ergon’s facility had been repaired or
replaced over the years, most of the replaced structures were 35 to 36 years old. Some
of the structures at the facility were depreciated by 60 percent, some by 43 percent, and
some by 14 percent, depending upon the age of the structure.
Even though Ergon’s facility had been well-maintained, the useful life of the
structures (parts of which are below the water line or underground) still decreases with
time. Even the most diligent maintenance will not make the structures last past their
useful life.
The Court found unpersuasive Ergon’s contention that the useful life of the facility
was not extended by the extensive repairs following the incident. Ergon’s contention
that the useful life of the facility was 50 years both before and after the incident was not
plausible. It is clear that the extensive repairs to Ergon’s facility extended its useful life.
Privocean’s expert Bill Thomassie did not apply depreciation on a structure by
structure basis but instead posited the very conservative estimate of 20 percent
depreciation across the board, assuming a generous useful life of 60 years. The 20
percent factor is very conservative considering that most of the affected structures were
over 30 years old. The Court will adopt this factor but only to Ergon’s “hard” or
“permanent” repair costs of $7,853,992.00.

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B.

Betterment

With respect to upriver components MD-1 and MD-1A Privocean seeks to reduce
Ergon’s recovery by $700,000 due to betterment.
The replaced structures had to be rebuilt to current code standards. Some of the
admitted improvements to MD-1 and MD-1A were attributable to replacing them with a
design similar to that used for MD-4, because doing so was more cost efficient.
The Court credits the testimony of Ergon’s expert/fact witness, Jeff Mazzanti,
who testified that all of the replacements were in kind. The Court also found Mr.
Mazzanti to be credible as to the reasons that MD-1A was ultimately replaced instead of
being repaired.
The Court will not reduce Ergon’s recovery due to betterment beyond what the
Court has already credited for depreciation, which in this case is sufficient to
encompass any betterment.
C.

Ergon’s Negligence

Privocean contends that Labat’s decision to employ the tugs and then fail to
properly monitor their actions exacerbated Ergon’s damages beyond those that were
foreseeable as a result of the initial allision. Privocean raises a separate contention that
Ergon was negligent for failing to train Labat and for failing to have an emergency
procedure in place to address a situation like this one. Relying on the doctrine of
superseding cause, Privocean contends that its liability for the breakaway should end
where Ergon’s own negligence began to cause damage beyond what was foreseeable

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from the breakaway.7
As to the damage to the lower ship dock, which was caused by a combination of
the PRIVOCEAN and the tugs acting together, Privocean has not established that any
negligence on the part of Ergon or its personnel constituted a superseding cause so as
to cutoff liability for PRIVOCEAN’s fault deriving from the breakaway.
The superseding cause doctrine applies where the defendant’s fault in fact
substantially contributed to the plaintiff’s damage, but the damage was actually brought
about by a later cause of independent origin that was not foreseeable. Stolt
Achievement, Ltd. v. Dredge B.E. Lindholm, 447 F.3d 360, 367-68 (5th Cir. 2006) (citing
Schoenbaum, Admiralty and Maritime Law 165 (2d ed. 1994)). It is predicated on the
notion that “there must be a terminus somewhere, short of eternity, at which the second
party becomes responsible in lieu of the first.” Id. (quoting In re Kinsman Transit Co.,
338 F.2d 708, 722 (2nd Cir. 1964)).
The Court is persuaded that PRIVOCEAN’s fault deriving from the breakaway did

7

Ergon urges the Court to apply the presumptions of fault under the Louisiana and Oregon
rules. See Combo Maritime, Inc. v. U.S. United Bulk Terminal, LLC, 615 F.3d 599 (5th Cir. 2010)
(citing The Louisiana, 3 Wall. (70 U.S.) 164, 173 (1866); The Oregon, 158 U.S. 186 (1865)).
This case involves the application of both rules given that one applies to vessels adrift and one
applies to vessels moving under their own power. When PRIVOCEAN broke free and drifted
across the river she did so with no motive power, thereby implicating the Louisiana rule as to the
initial allision. The damage to the Ergon lower ship dock occurred while PRIVOCEAN was
pulling away under motive power thereby triggering the Oregon rule as to the damage to the
lower ship dock. The legal presumptions under both rules are similar.
Privocean has overcome the presumption of fault under both rules insofar as the
damage to the BRAVO’s hull and Ergon’s barge dock are concerned. As to those categories of
damage, none of the statutory violations that Ergon points to in its briefing were a cause in fact
of the damage, which occurred well after the initial allision and only with the action of the tugs.
See The Pennsylvania, 86 U.S. 125 (1873). As to any statutory violations that might have been
a cause in fact of the breakaway and resulting damages, Privocean has already stipulated to
liability.
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not abate until the vessel left Ergon’s facility. But even if it did abate at some point
before the PRIVOCEAN left the scene, it was surely an act of new fault to combine with
the tugs to push the BRAVO through the lower ship dock.
Further, PRIVOCEAN was completely at fault for BRAVO’s movement away from
the dock and it was certainly foreseeable that Ergon’s dock man would take some
action to keep the vessel from drifting away. In choosing a course of action, Labat was
required to exercise ordinary care, and the Court is not persuaded that Labat’s decision
to ask the tugs to push forward breached the duty of ordinary care under the
circumstances. See In re Great Lakes Dredge & Dock Co., 624 F.3d 201, 211 (5th Cir.
2010). Hindsight has revealed that Labat perhaps should have taken a different course
of action, but his fear and concerns when BRAVO began to drift away from the dock
were not unreasonable, and they were not based on a failure to train or lack of a
procedures manual. What they were based upon was a difficult and stressful situation
that was foisted upon Ergon’s personnel without warning or notice and without any fault
on their part.
It is impossible to know how much of the lower ship dock damage was
attributable to the tugs pushing on BRAVO and how much was attributable to
PRIVOCEAN pulling away from Ergon’s facility. In other words, there is no basis short
of sheer guesswork to apportion fault between the tugs and PRIVOCEAN. But given
that PRIVOCEAN was responsible for the CMT breakaway, and given that PRIVOCEAN
upon finally pulling away caused the BRAVO to destroy Ergon’s lower ship dock, any
negligence that Labat or Ergon might have committed related to summoning the tugs,

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would not be a superseding cause of the damage to the lower ship dock. PRIVOCEAN
is liable for the damage to the lower ship dock.
Where Labat’s conduct did fall below the duty of ordinary care, however, was in
in failing to countermand his order to the tugs over an extended period of time when the
BRAVO was pushed laterally over the lower end of the Ergon ship dock thereby causing
significant additional damage to the BRAVO’s hull. While Labat stood and watched, took
pictures, and even spoke with BRAVO’s chief officer, BRAVO was pushed not only over
the ship dock, but all the way into the barge dock several hundred feet away causing
another $600,000 of damage to that part of the facility. It was completely foreseeable to
Labat that absent taking action the BRAVO would continue to be pushed laterally over
the lower ship dock structures, causing significant additional damage to the BRAVO,
and then damage to the barge dock.
Labat was the only person who could see the budding consequences of his order
to the tugs and hence the only person who was in a position to avoid the damage which
ensued when, despite visual evidence that he should take action, he did nothing. Labat
could perhaps not have been faulted if he had gone across the levee and stayed there,
as his supervisor had told him to do over the phone, but when he took it upon himself,
as a non-mariner, to come back to the dock area and then direct the actions of the
Good Samaritan tugs, he assumed a duty to perform those functions with reasonable
care. This he failed to do.
Labat’s negligence in this regard cannot be excused by the in extremis doctrine.
The in extremis doctrine is typically applied to excuse errors in judgment committed in

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the short interval just before a collision or allision—in other words, when an emergency
suddenly arises and a peril is imminent. See, e.g., Crescent Towing & Salvage Co. v.
CHIOS BEAUTY MV, 610 F.3d 263, 268 (5th Cir. 2010); Boudoin v. J. Ray McDermott
& Co., 281 F.2d 81, 84-86 (5th Cir. 1960).
Assuming that the doctrine could apply as a matter of law to Labat’s land-based
negligence, the facts simply do not support the contention that Labat’s continued failure
to order the tugs to stop pushing, even as he observed BRAVO being pushed over the
ship dock and into the barge dock several hundred feet away, falls within the scope of
protection afforded by the in extremis doctrine. However, even if the in extremis doctrine
were to apply for some short period of time following the initial impact at 4:00 p.m., it
does not remain in effect from the time the risk to the Ergon dock was known at 4:00
p.m. until a full 30-35 minutes later. This is especially true in light of the fact that Labat
himself was taking pictures and walking back and forth on the Ergon dock main
causeway during this period of time.
Privocean has established that Ergon’s negligence was a superseding cause of
the additional damages of $1,856,926.00 that were sustained by the BRAVO as a result
of being pushed over the lower dock structures, especially MD-4, by the ELIZABETH
and the BECKY. Since these extra damages were caused by Ergon, and in light of the
assignment to Privocean of Bravo’s damage claim, the Court concludes that Privocean
is entitled to a credit in this amount against the judgment to be awarded to Ergon.
Privocean has also established that Ergon’s negligence was a superseding
cause of the damage to the barge dock, which cost $600,000.00 to repair.

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D.

Prejudgment Interest

Under maritime law, the awarding of prejudgment interest is the rule rather than
the exception, and in practice, is “well-nigh automatic.” Offshore Marine Contractors,
Inc. v. Palm Energy Offshore, L.L.C., 779 F.3d 345, 351 (5th Cir. 2015).
The Court finds that Ergon is entitled to recover pre-judgment interest from the
date this lawsuit was filed (April 9, 2015), and post-judgment interest as provided by
law.
Ergon has claimed in the Pre-Trial Order that it is entitled to recover interest
(three years post-casualty) of “nearly $1 million” on a total damage claim of $14.6
million. This equates to an annual rate of interest of approximately 2.2% per year. Since
Ergon cannot recover damages in excess of what it claimed in the Pre-Trial Order, and
because the Court finds that 2.2% per year is a reasonable rate of interest in this case,
that is the rate which will be applied to the final damage figure awarded.
E.

Conclusion
To summarize the Court’s findings of fact and conclusions of law, once all

deductions and credits are applied to Ergon’s gross damage claim, the Court finds that
the subtotal of the award in damages against Privocean Shipping Ltd. and Bariba Corp.,
is as set forth below, plus pre-judgment interest at the rate of 2.2% per year running
from April 6, 2015, to be applied to the amount awarded in the final judgment.

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Gross Damage Amount As Per Stipulation

$14,607,429.00

Less Depreciation

(-)

1,570,798.40

Less Betterment

(-)

0.00

Less Exacerbation of Ergon Damages (barge dock only)

(-)

600,000.00

Less Exacerbation of Bravo Damages

(-)

1,856,926.00

SUB TOTAL

$10,579,704.60

Privocean has contended that among the claims settled prior to trial was a
separate and distinct claim brought by other subrogated underwriters of Ergon who
collectively owned 45.5% of Ergon’s total insurance cover for this loss. According to
Privocean, the final judgment which will be entered in due course in favor of the
remaining Ergon interests should reflect this settlement by reducing the recovery of the
underwriters whose claim was the subject of the trial by 45.5% of the total subrogated
damage claim value as determined by this Court. Ergon maintains that it is entitled to
recover 100% of it subrogated losses. This issue will be resolved before entry of a final
judgment. Therefore, within fifteen (15) days of entry of these findings, Privocean shall
file its motion to limit Ergon’s recovery, to be noticed for a regularly scheduled Section A
submission date.
August 13, 2018
JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE

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