Delta Marine Environmental, LLC v. Phoenix Bulk Carriers US, LLC
ORDER & REASONS: ORDERED that Delta Marine Environmental, LLC's Motion for Summary Judgment (R. Doc. 19) is DENIED. FURTHER ORDERED that Phoenix Bulk Carriers U.S., LLC's request for entry of summary judgment (R. Doc. 24) pursuant to Federal Rule of Civil Procedure 56(f) is GRANTED. Delta Marine Environmental, LLC's claims against Phoenix Bulk Carriers U.S., LLC are DISMISSED WITH PREJUDICE. Signed by Judge Carl Barbier on 2/16/17. (sek)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PHOENIX BULK CARRIERS
ORDER & REASONS
Before the Court is Plaintiff, Delta Marine Environmental,
LLC’s (“Delta Marine”) Motion for Summary Judgment (R. Doc. 19),
an opposition (R. Doc. 24) thereto filed by Defendant, Phoenix
Bulk Carriers U.S., LLC (“Phoenix”), and a reply (R. Doc. 27) filed
by Delta Marine. Having considered the motion and legal memoranda,
the record, and the applicable law, the Court finds that pursuant
to Federal Rule of Civil Procedure 56(f), 1 Delta Marine’s motion
should be DENIED and that summary judgment in favor of Phoenix
should be GRANTED.
FACTS AND PROCEDURAL BACKGROUND
This litigation arises from unpaid vessel cleaning services
performed for the M/V BULK DISCOVERY. The M/V BULK DISCOVERY is
See E.C. Ernst, Inc. v. Gen. Motors Corp., 537 F.2d 105, 109 (5th Cir. 1976)
(noting that summary judgment in favor of a non-moving party is appropriate
where all material facts are before the court and the moving party has been
given a full and fair opportunity to dispute the facts alleged by his adversary).
Not only are all material facts before the Court, but Phoenix’s opposition
specifically requested that the Court construe the motion under Rule 56(f), and
Delta Marine was granted leave to file a reply to Phoenix’s opposition. (R.
owned by Bulk Discovery (Bermuda), Ltd. and at all times relevant
to this litigation was time chartered by Americas Bulk Transport
(BVI), Ltd. Phoenix was the managing agent for the M/V BULK
DISCOVERY. Phoenix provided Noranda Aluminum, LLC (“Noranda”) with
vessels that Phoenix managed in order for Noranda to ship bauxite
between the Caribbean and states along the Gulf of Mexico. In May
Noranda’s terminal facility on the Mississippi River in Gramercy,
Louisiana. The M/V BULK DISCOVERY needed to be “shovel cleaned” in
order to load coal for its next voyage. Peter Cregan, an operations
manager for Phoenix, contacted Guy Sergi, the Chief Operations
Officer of Delta Marine, to arrange for “shovel cleaning” and “hold
washing” of the vessel. Delta Marine performed the services as
Phoenix paid for the hold washing. Noranda failed to pay for the
shovel cleaning, and thereafter filed for bankruptcy. The parties
now dispute who is responsible for paying for the shovel cleaning
services. In short, Delta Marine argues that it was never informed
that the shovel cleaning was on behalf of Noranda’s account; and
cleaning. In opposition, Phoenix argues, inter alia, that Mr.
Cregan specifically informed Mr. Sergi that the shovel cleaning
was for Noranda’s account, and that Noranda is responsible for the
unpaid shovel cleaning. Delta Marine’s motion is now before the
Court on the briefs and without oral argument.
1. Delta Marine’s Arguments
Delta Marine’s argument may be summarized as follows: Phoenix
was the manager of the M/V BULK DISCOVERY when necessaries, i.e.,
vessel cleaning services, were provided; as the manager of the
vessel, Phoenix is statutorily presumed to have authority to
procure such necessaries; Delta Marine was entitled to rely on the
credit of Phoenix in providing the shovel cleaning services;
accordingly, Phoenix is liable, in personam, to Delta Marine for
payment of the unpaid shovel cleaning services. See (R. Doc. 19-1
responsible for shovel cleaning services, Delta Marine asserts
that this does not preclude Delta Marine from looking to Phoenix
for payment. Id. at 6. Further, to the extent that any such
indemnity from Noranda.
2. Phoenix’s Arguments
Phoenix argues that Delta Marine cannot prove the existence
of a contract between Phoenix and Delta Marine for the shovel
cleaning services. (R. Doc. 24 at 8.) Phoenix argues that Peter
arranged on Noranda’s behalf and for its account, and that the
hold cleaning/washing was for the disponent owner’s account.” Id.
Thus, Phoenix asserts that Delta Marine knew that the shovel
cleaning was for Noranda’s account. Further, Phoenix argues that
it was acting on behalf of a disclosed agent, Noranda, and as such,
cannot be held liable for the unpaid shovel cleaning invoice. Id.
at 10. Furthermore, Phoenix asserts that pursuant to Federal Rule
of Civil Procedure 56(f), summary judgment should be entered in
its favor and against Delta Marine. Id. at 12.
Summary judgment is appropriate when “the pleadings, the
discovery and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R.
Civ. P. 56); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th
Cir. 1994). When assessing whether a dispute as to any material
fact exists, a court considers “all of the evidence in the record
but refrains from making credibility determinations or weighing
the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness
Ins. Co., 530 F.3d 395, 398 (5th Cir. 2008). All reasonable
inferences are drawn in favor of the nonmoving party, but a party
cannot defeat summary judgment with conclusory allegations or
unsubstantiated assertions. Little, 37 F.3d at 1075. A court
ultimately must be satisfied that “a reasonable jury could not
return a verdict for the nonmoving party.” Delta, 530 F.3d at 399.
If the dispositive issue is one on which the moving party
will bear the burden of proof at trial, the moving party “must
come forward with evidence which would ‘entitle it to a directed
verdict if the evidence went uncontroverted at trial.’” Int’l
Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1264-65 (5th Cir.
1991). The nonmoving party can then defeat the motion by either
countering with sufficient evidence of its own, or “showing that
the moving party’s evidence is so sheer that it may not persuade
the reasonable fact-finder to return a verdict in favor of the
moving party.” Id. at 1265.
If the dispositive issue is one on which the nonmoving party
will bear the burden of proof at trial, the moving party may
satisfy its burden by merely pointing out that the evidence in the
record is insufficient with respect to an essential element of the
nonmoving party’s claim. See Celotex, 477 U.S. at 325. The burden
then shifts to the nonmoving party, who must, by submitting or
referring to evidence, set out specific facts showing that a
genuine issue exists. See id. at 324. The nonmovant may not rest
upon the pleadings, but must identify specific facts that establish
a genuine issue for trial. See, e.g., id. at 325; Little, 37 F.3d
First, it must be noted that Delta Marine brought this action
against Phoenix in personam. This is significant in light of Delta
Marine’s arguments. Specifically, Delta Marine argues that because
Phoenix is statutorily presumed to have authority to procure
necessaries for the M/V BULK DISCOVERY, Phoenix is also liable in
personam for the unpaid shovel cleaning. However, Delta Marine has
conflated an important distinction recognized in maritime law. The
Federal Maritime Lien Act makes clear that “a person providing
necessaries to a vessel on the order of the owner or a person
authorized by the owner (1) has a maritime lien on the vessel; may
bring a civil action in rem to enforce the lien; and is not required
to allege or prove in the action that credit was given to the
vessel.” 46 U.S.C. § 31342(a) (emphasis added); Cmty. Bank of
Lafourche v. M/V MARY ANN VIZIER, No. 11-630, 2012 WL 1672618, at
*4 (E.D. La. May 14, 2012) (“A person providing necessaries to a
vessel on the order of the owner or a person authorized by the
owner has a maritime lien on the vessel.”). In other words, while
Phoenix may have had authority under the Federal Maritime Lien Act
to bind the M/V BULK DISCOVERY, in rem, for unpaid necessaries, it
does not necessarily follow that Phoenix is also liable in personam
to Delta Marine for these services. Thus, Delta Marine’s argument
that it is entitled to recovery against Phoenix in personam is
misplaced. See Equi-lease Corp. v. M/V SAMPSON, 793 F.2d 598, 602
(5th Cir. 1986) (en banc) (“A maritime lien is a remedy separate
from an in personam action against the owner or operator.”).
The parties appear to agree that there was an agreement 2
between Phoenix and Delta Marine. However, the parties dispute
whether, during the formation of such agreement, Phoenix ordered
the shovel cleaning services on Noranda’s behalf. Phoenix argues
that it was acting as an agent on behalf of a disclosed principal—
admissible evidence of its status as Noranda’s agent.
Principles of agency apply in Louisiana and maritime law. See
La. Civ. Code art. 3018; Cactus Pipe & Supply Co., Inc. v. M/V
MONTMARTRE, 756 F.2d 1103 (5th Cir. 1985). It is Phoenix’s burden
to establish the existence of an agency agreement. Indus. Mar.
Carriers, Inc. v. Japan Heavy Lift, No. 03-1041, 2006 WL 860979,
Thornburgh, 39 F.3d 1273, 1296 (5th Cir. 1994)); see also George
v. White, 12-101, p. 13 (La. App. 5 Cir. 10/30/12); 101 So. 3d
1036, 1043 (citing J.T. Doiron, Inc. v. Lundin, 385 So. 2d 450,
452-53 (La. App. 1 Cir. 1980)).
To prove an agency relationship,
Phoenix must demonstrate that: (1) Noranda indicated Phoenix was
acting on its behalf, (2) Phoenix acted or agreed to act on the
2 See Nat’l Marine, Inc. v. Glencore, Ltd., No. 95-2682, 1998 WL 118087, at *3
(E.D. La. Mar. 16, 1998) (citing Alamo Barge Lines, Inc. v. RIM Mar. Co., Ltd.,
596 F. Supp. 1026 (E.D. La. 1984) (noting that oral contracts are permitted
under general maritime law); La. Civ. Code art. 1927 (permitting oral contracts
in certain circumstances under Louisiana law).
Noranda’s behalf, and (3) Phoenix was subject to Noranda’s control.
Butcher v. Superior Offshore Int’l, LLC, 754 F. Supp. 2d 829, 835
(E.D. La. 2010) (citing Aetna Ins. Co. v. Glens Falls Ins. Co.,
453 F.2d 687, 690–91 (5th Cir. 1972)). “[T]he essential element of
an agency relationship is the right of control.” Id. (quoting In
re Carolin Paxson Advert., Inc., 938 F.2d 595, 598 (5th Cir.
1991)). “Express notice of the agent’s status and the principal’s
identity is unnecessary if facts and circumstances surrounding the
transaction, combined with the general knowledge that persons in
that type of business are usually acting as agents, demonstrate
affirmatively that the third person should be charged with notice
of the relationship.” George, 101 So. 3d at 1044-45 (quoting
Lundin, 385 So. 2d at 452-53); see also Port Ship Serv., Inc. v.
Int’l Ship Mgmt. & Agencies Serv., Inc., 800 F.2d 1418, 1421 (5th
Cir. 1986) (citing Restatement (Second) of Agency § 4(2), cmt. (a)
(Am. Law Inst. 1958)) (“[T]he identity of the principal can be
sufficiently disclosed even when the third party has no actual
knowledge of it; the third party has notice of the existence or
identity of the principal if he knows, has reason to know, or
alterations omitted); Restatement (Third) of Agency § 6.01 cmt.
(c) (Am. Law Inst. 2006) (“[A] principal may be disclosed even
though the contract does not name or identify the principal; it is
sufficient that the third party has notice of the principal’s
identity.”); Restatement (Third) of Agency § 1.04(4) (Am. Law Inst.
2006) (“Notice. A person has notice of a fact if the person knows
the fact, has reason to know the fact, has received an effective
notification of the fact, or should know the fact to fulfill a
duty owed to another person.”).
The specific evidence in this case reveals that Delta Marine
had notice that Phoenix was Noranda’s agent, acted on Noranda’s
behalf, and was subject to Noranda’s control as to ordering shovel
cleaning services. Phoenix submitted the unsworn declaration under
“specifically told Mr. Sergi that the shovel cleaning was for
Noranda’s account and that the hold cleaning was for the disponent
owner’s account.” The parites submitted two invoices that were
billed for the services provided to the M/V BULK DISCOVERY. One
invoice, produced by Delta Marine, was billed directly to Noranda
for $108,129.00. (R. Doc. 19-3 at 3.) The other invoice, produced
by Phoenix, was billed directly to Phoenix for $91,430.00. (R.
Doc. 24-2, at 15-16.) Further, Guy Sergi, the Chief Operations
Officer of Delta Marine, sent an email to Peter Cregan of Phoenix
stating that, “Noranda invoiced amount is $103,984 and Phoenix is
An unsworn declaration under penalty of perjury is proper summary judgment
evidence if executed in proper form. Nissho-Iwai Am. Corp. v. Kline, 845 F.2d
1300, 1306 (5th Cir. 1988) (citing 28 U.S.C. § 1746). Mr. Cregan’s unsworn
declaration under penalty of perjury is in proper form pursuant to 28 U.S.C. §
not much less $92,860.” 4 Id. at 11. Another email from Guy Sergi
to Peter Cregan states, “Noranda has agreed that the money owed
should be paid by Noranda. . . I am not at all asking Phoenix to
pay. Just asking for help to get Noranda to pay immediately without
any further delay. We have basically financed Noranda’s shoveling
cleaning obligations to date.” 5 Id. at 18. Yet again, Guy Sergi
sent an email to Noranda and Peter Cregan stating that Delta Marine
has “performed this task many times for Noranda handling the shovel
cleaning and then actually performing the holding cleaning for
Phoenix. It has always been kept separate, billed separately and
paid separately. I do not understand the mass confusion on this
one.” Id. at 17.
This evidence clearly demonstrates that there is no issue of
material fact that Phoenix was acting on behalf of Noranda, as it
had done “many times” before, when it ordered shovel cleaning for
the M/V BULK DISCOVERY. Under Louisiana and general maritime law,
an agent acting on behalf of a disclosed principal is not liable
for contract claims stemming from contracts the agent executes on
4 It appears that Delta Marine made a billing mistake on the original invoices,
which demonstrates why these figures differ from the final invoice. See (R.
Doc. 24-2 at 12.) Nevertheless, this is evidence that Delta Marine billed
Noranda and Phoenix separately and knew that the shovel cleaning services were
on behalf of Noranda’s account.
5 Because Mr. Sergi is the Chief Operations Officer for Delta Marine, i.e., a
representative, this email is admissible non-hearsay as a “statement offered
against an opposing party . . . made by the party in an individual or
representative capacity.” Fed. R. Evid. 801(d)(2)(A); Sealed Appellee v. Sealed
Appellant, 665 F.3d 620, 625 (5th Cir. 2011) (noting that admissions may be
written or spoken).
the principal’s behalf. Pacorini USA, Inc. v. ROSINA TOPIC, M/V,
127 F. App’x 126, 129 (5th Cir. 2005) (applying maritime law); La.
Civ. Code art. 3018 (“A mandatary who enters into a contract and
discloses his status as a mandatary, though not his principal,
binds himself personally for the performance of the contract. The
mandatary ceases to be bound when the principal is disclosed.”).
Accordingly, the Court holds that Phoenix is not liable to Delta
Marine for the unpaid shovel cleaning services.
IT IS HEREBY ORDERED that Delta Marine Environmental, LLC’s
Motion for Summary Judgment (R. Doc. 19) is DENIED.
IT IS FURTHER ORDERED that Phoenix Bulk Carriers U.S., LLC’s
request for entry of summary judgment (R. Doc. 24) pursuant to
Federal Rule of Civil Procedure 56(f) is GRANTED. Delta Marine
Environmental, LLC’s claims against Phoenix Bulk Carriers U.S.,
LLC are DISMISSED WITH PREJUDICE.
New Orleans, Louisiana this 16th day of February, 2017.
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
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