Genesis Marine, LLC of Delaware v. Hornbeck Offshore Services, LLC
Filing
108
ORDER AND REASONS DENYING 72 Motion for Attorney Fees, as set forth in document. Signed by Judge Ivan L.R. Lemelle on 03/22/2019. (am)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
GENESIS MARINE, LLC
OF DELAWARE
CIVIL ACTION
VERSUS
NO. 17-6763
HORNBECK OFFSHORE SERVICES, LLC
SECTION: “B”(4)
ORDER AND REASONS
Before
the
Court
are
Plaintiff/Counter-Defendant
Genesis
Marine, LLC of Delaware’s (“Genesis”) Motion for Attorneys’ Fees
and
Costs
(Rec.
Doc.
72),
Defendant/Counter-Claimant
Horneck
Offshore Services, LLC’s (“Hornbeck”) Response Memorandum (Rec.
Doc. 73), and Genesis’ Supplemental Memorandum (Rec. Doc. 104).
The Court also takes into consideration Hornbeck’s Memorandum in
Response to the Court’s August 3, 2018 Order (Rec. Doc. 71) and
Genesis’ Response to Hornbeck’s Memorandum (Rec. Doc. 74). For the
reasons below,
IT IS ORDERED that the motion for attorneys’ fees and costs
is DENIED.
FACTS AND PROCEDURAL HISTORY
Genesis is a Delaware limited liability company with its
principal place of business in Texas. See Rec. Doc. 1 at 1.
Hornbeck is a foreign limited liability company with its principal
place of business in Covington, Louisiana. See id.
1
Over several years, Genesis chartered its vessels to Hornbeck
at an agreed upon price according to written agreements. 1 See id.
In accordance with the written agreements, Genesis issued several
invoices to Hornbeck. See id. at 2. Hornbeck was obligated to remit
to Genesis all payments made to Hornbeck by customers within ten
days. Genesis alleged that Hornbeck breached its obligation by
wrongfully withholding and converting funds remitted to Hornbeck
by customers and tendered to Genesis only $121,311.73 as full
payment of all amounts due and owing to Genesis. See id.
Genesis brought an action against Hornbeck, claiming breach
of contract, conversion, unjust enrichment, detrimental reliance,
all sums due to it by Hornbeck with interest, and attorneys’ fees
and costs. See Rec. Doc. 1. Hornbeck, citing to an asset purchase
agreement between the two businesses for tug and tank barges,
brought
several
counterclaims.
See
Rec.
Doc.
8
at
7-14.
Specifcally, Hornbeck alleged suit on open account, breach of
contract, unjust enrichment, and quantum merit. See id. at 14-17.
On June 18, 2018, trial began. 2 After Hornbeck rested its
case, the parties were ordered to submit post-trial memoranda and
joint
stipulations.
See
Rec.
Doc.
56.
The
parties
were
also
informed that closing arguments would take place on July 25, 2018.
The written agreements included the parties’ Master Time Charter Agreement,
Back to Back Vessel In-Charter Agreement, Time Charter Work Order, First
Amendment to the Vessel In-Charter Agreement, and Second Amendment to the Vessel
In-Charter Agreement. See Rec. Doc. 1 at 2.
2 It was a non-jury trial.
1
2
See id. On August 3, 2018, after considering trial evidence,
parties’ memoranda, and the law, this Court ordered “that there be
a judgment in favor of [Genesis] and against [Hornbeck] in the
[stipulated] amount of [$722, 356.35], plus interest at [the]
federal rate and reasonable [attorneys’] fees.” See Rec. Doc. 70
at 2. The Court also ordered “that [Hornbeck’s] counterclaims [be]
dismissed
with
prejudice,
except
for
stipulated
services.
[Genesis’] awarded sum [was] to be reduced by stipulated amount of
[$117, 284.54].” See id.
Furthermore, as to attorneys’ fees, the Court ordered that
the parties submit briefing on the following issues:
1. To what extent Hornbeck is entitled to fees for successful
result in seeking payment for shore services, lube and oil,
etc. Including to the extent they might have waived such
claim; and
2. Amount of fees being sought, including the rate and hours
for legal services.
The parties were to brief only for fees on successful claims and
entitlement
thereto.
See
at
id.
3.
Parties
submitted
said
briefings. See Rec. Doc. Nos. 71, 74. On August 10, 2018, Genesis
filed a motion for attorneys’ fee and costs. See Rec. Doc. 72. On
August 17, 2018, Hornbeck responded in opposition. See Rec.
Doc. Nos. 73.
LAW AND ANALYSIS
In this Country, the prevailing party of a cause of action is
usually not entitled to recover attorneys’ fees and costs from the
3
non-prevailing party. See Galveston County Navigation Dist. No. 1
v. Hopson Towing Co., 92 F. 3d 353, 356 (5th Cir. 1996). This
general rule is known as the “American Rule” and applies in both
maritime and admiralty causes of action. See id. Pursuant to the
American Rule, parties must pay their own attorneys’ fees and costs
unless an applicable statute or enforceable contract exists. See
id.
Some contracts contain what is commonly referred to as a
prevailing party provision. “Prevailing party provisions generally
state that when a dispute over the contract arises the party who
loses in litigation must pay the legal fees of the party who
prevails in litigation.” See Malin Int’l Ship Repair & Drydock,
Inc. v. M/V Seim Swordfish, 611 F. Supp. 2d 627, 636 (E.D. La.
2009). Such provisions have the effect of law between the parties
of the contract. See Vega v. Autumnwood Homes, Inc., 2017 LEXIS
184180 *1, *6 (E.D. La. 2017). Courts are to interpret and enforce
the provision according to the common intent of the parties. See
id. Absent ambiguity, the provision shall be enforced as written.
See id. at *7.
In the instant case, an enforceable contract exists. In fact,
more than one enforceable contract exists. The contracts relevant
to the issue being analyzed by the Court are the Master Time
Charter
and
the
Ship
Management
Agreements.
While
the
Ship
Management Agreements do not provide for the recovery of attorneys’
4
fees and costs, the Master Time Charter does. Specifically, Section
1302 of the Master Time Charter states that
If the Master Agreement is placed in the hands of an
attorney on account of any dispute under the Master
Agreement, [or] if suit is brought on sample, or if sums
due under the Master Agreement are collected through
bankruptcy or probate proceedings, then the prevailing
party shall be entitled to recover reasonable attorneys’
fees and costs from the other party. Rec. Doc. 71 at 12 (emphasis added).
The parties agree that the main issue of this case was whether
Genesis improperly terminated the Ship Management Agreements and
thereby authorized Hornbeck to set off its invoices for unpaid
ship management fees. The Court, finding that this issue did not
fall under the Master Time Charter, ruled in favor of Genesis.
Genesis, calling itself the prevailing party of the main issue
of this case, argues that the Court’s finding entitles it to
attorneys’ fees and costs. Genesis’ argument is not convincing as
Genesis points to no statute or contract that would support an
award of attorneys’ fees and costs for a dispute that was not
brought under the Master Time Charter. See Vega, 2017 LEXIS 184180
at *5. Genesis contends that regardless of which contract the main
issue
is
based
upon,
Genesis’
Complaint
and
Hornbeck’s
counterclaim are based upon the same common core set of facts
making the claims intertwined. See Rec. Doc. 74 at 3. However,
being based upon common facts is not sufficient. See Vega, 2017
5
LEXIS 184180 at *5 (“Attorney's fees may only be awarded if
provided for by statute or contract.”).
The Court relies mainly on Vega v. Autumnwood Homes, Inc. In
that case, the Court denied a party’s motion for attorneys’ fees
and costs, finding that a plain reading of a prevailing party
provision
in
attorneys’
one
fees
relevant
and
costs
contract
for
contemplated
litigation
brought
recovery
under
of
that
contract, not for litigation brought under the other relevant
contract between the parties. See id. at *11 (“In conclusion, a
plain reading of the contested provision in the Purchase Agreement
shows
that
the
provision
contemplates
attorney's
fees
from
litigation pursuant to the Purchase Agreement, not other documents
between the parties like the Act of Sale. Therefore, because the
parties
in
the
instant
case
did
not
intend
to
provide
for
attorney's fees for litigation arising from their Act of Sale,
Defendant is not entitled to attorney's fees.”).
Although the instant case is not one involving a property law
issue, the legal principles applied in Vega are applicable here.
Simply put, the agreed upon main issue of this case was found to
not fall under the Master Time Charter—the only relevant contract
that provides recovery of attorneys’ fees and costs. The
Time
Charter
provides
recovery
of
reasonable
Master
attorneys’ fees
and costs from the other party for not just any dispute, but
only disputes falling under the Master Time Charter. A plain
6
reading of Section 1302 of the Master Time Charter shows that the
parties did not intend to provide for attorney's fees for the
instant
issue.
attorneys’
fees
Therefore,
and
costs
Genesis
from
is
not
Hornbeck
entitled
absent
to
recover
statutory
or
contractual authority to stray from the American Rule. In other
words, for the reasons explained above, Genesis is not entitled to
recover attorneys’ fees and costs from Hornbeck for its defense of
Hornbeck’s claims asserted under the Ship Management Agreements.
Even if, as originally found, the Master Time Charter is
applicable
by
the
in
the
current
fee
contest,
relief
is
nullified
existence of two prevailing parties on pertinent claims.
See Malin Int’l Ship Repair & Drydock, Inc., 611 F. Supp. at 636.
New Orleans, Louisiana, this 22nd day of March 2019
___________________________________
SENIOR UNITED STATES DISTRICT JUDGE
7
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