Turnkey Offshore Project Services, LLC v. Morrison Engergy Group, LLC et al

Filing 11

ORDER AND REASONS granting 5 Motion to Dismiss plaintiff's claims for damages and attorneys' fees under Louisiana open account statute pursuant to Federal Rule of Civil Procedure 12(b)(6). Signed by Judge Ivan L.R. Lemelle on 02/17/2021. (ko)

Case 2:20-cv-00858-ILRL-MBN Document 11 Filed 02/18/21 Page 1 of 5

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
TURNKEY OFFSHORE PROJECT SERVICES, LLC

CIVIL ACTION

VERSUS

NO. 20-858

MORRISON ENERGY GROUP, LLC AND
CHET MORRISON CONTRACTORS

SECTION: “B” (5)

ORDER & REASONS
Defendants filed a motion to dismiss plaintiff’s claims for damages and attorneys’ fees under
Louisiana open account statute pursuant to Federal Rule of Civil Procedure 12(b)(6). Rec. Doc. 5. Plaintiff
timely filed an opposition. Rec. Doc. 7. Defendants then sought and were granted leave to file a reply. Rec.
Doc. 10.
For the reasons discussed below, it is ordered that the motion to dismiss the open account claims
are GRANTED.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
On March 12, 2020, plaintiff Turnkey Offshore Project Services LLC (“Turnkey”) filed suit against
Morrison Energy Group LLC and Chet Morrison Contractors (collectively “Morrison”) asserting admiralty
and maritime jurisdiction pursuant to 28 U.S.C. § 1333(1), and within the meaning of the Federal Rules of
Civil Procedure 9(h). Rec. Doc. 1. Turnkey alleges the cause of action arises out of a breach of maritime
contracts for the removal of offshore platforms in the Gulf of Mexico. Id.
In August 2018, Morrison and Turnkey entered into a Master Work Contract (“MWC”) whereby
Turnkey was to provide marine services to Morrison subject to work orders. Rec. Doc. 1-1. On or around
March 27, 2019, Morrison entered into a work order agreement with Turnkey for the removal of platforms
at HI-A494 A, HIA494 B and HI-A494 C. Rec. Doc. 1-2. Under the contract, it was agreed between the
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parties that Turnkey would cover all weather costs, except those costs associated with named tropical
storms. Id. at 35.
According to Turnkey, during the removal of the platforms, Turnkey encountered unexpected
delays associated with two named tropical storms, Imelda and Fernand. Rec. Doc. 1 at 3. Turnkey also
alleges that it encountered difficulties with “placing cutting methods” on platform piles for which it incurred
additional delays and costs associated with hiring a third-party dive service. Id. Turnkey alleges Morrison
was invoiced for the completed work as contracted.
Turnkey alleges that on January 13, 2020, demand was made on Morrison for payment of all past
due amounts. Id. at 5. According to Turnkey, to-date, despite the deadlines for payment having passed, and
amicable demand having been made multiple times, Turnkey’s invoices to Morrison , which total one
million four hundred and ten thousand nine hundred and sixty one dollars and 50/100 ($1,410,961.50)
remain entirely outstanding. Id.
LAW AND ANALYSIS
a. Standard for Federal Rule of Civil Procedure 12(b)(6)
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a plaintiff’s
complaint “must contain ‘enough facts to state a claim to relief that is plausible on its face.’” Varela v.
Gonzalez, 773 F.3d 704, 707 (5th Cir. 2014) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
A claim is facially plausible when the plaintiff pleads facts that allow the court to “draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id. A court must accept all well-pleaded
facts as true and must draw all reasonable inferences in favor of the plaintiff. Lormand v. U.S. Unwired,
Inc., 565 F.3d 228, 232 (5th Cir. 2009); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). However, the
court is not bound to accept as true legal conclusions couched as factual allegations. Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). “[C]onclusory allegations or legal conclusions masquerading as factual conclusions
will not suffice to prevent a motion to dismiss.” Taylor v. Books A Million, Inc., 296 F.3d 376, 378 (5th
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Cir. 2002). When deciding whether a plaintiff has met her burden, a court “accept[s] all well-pleaded factual
allegations as true and interpret[s] the complaint in the light most favorable to the plaintiff, but ‘[t]hreadbare
recitals of the elements of a cause of action, supported by mere conclusory statements’ cannot establish
facial plausibility.” Snow Ingredients, Inc. v. SnoWizard, Inc., 833 F.3d 512, 520 (5th Cir. 2016) (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
b.

Louisiana Open Account Statute

Louisiana’s “open account” statute. This statute provides in part:
When any person fails to pay an open account within thirty days after the claimant sends written
demand therefor correctly setting forth the amount owed, that person shall be liable to the claimant
for reasonable attorney fees for the prosecution and collection of such claim.
LA. REV. STAT. § 9:2781 (A).

Further:
“[O]pen account” includes any account for which a part or all of the balance is past due, whether
or not the account reflects one or more transactions and whether or not at the time of contracting
the parties expected future transactions. “Open account” shall include debts incurred for
professional services, including but not limited to legal and medical services.
LA. REV. STAT. § 9:2781 (D).
Plaintiff claims the arrangement, including the MWC and work orders, between it and the
defendants qualifies as an open account under Louisiana law. Plaintiff argues that it “contracted to provide
professional marine services to Morrison” and because payment on the invoices remain due, plaintiff asserts
that a claim under La R.S. § 9:2781 is appropriate. Rec. Doc. 7 at 9.
Citing Louisiana courts, the United States Court of Appeals for the Fifth Circuit makes clear that
“[a] contract is significantly different from an open account.” Cambridge Toxicology Group, Inc. v.
Exnicios, 495 F.3d 169, 173-74 (5th Cir. 2007); see also Tyler v. Haynes, 760 So. 2d 559, 563, 1999-1921
(La. App. 3 Cir. 5/3/00). “A claim for breach of contract and a claim under the open account statute are
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considered distinct causes of action.” Cambridge Toxicology Group, Inc., 495 F.3d at 173-74. An open
account is an account in which one party has opened a line of credit that is open to future modification
because of mutual expectations of prospective business dealings. See Cambridge Toxicology Group, Inc. v.
Exnicios, 495 F.3d 169, 173-74 (5th Cir. 2007). “A contract, however, is an agreement between two or
more parties in which an offer is made by one of the parties and acceptance is made by the other party,
thereby establishing a concurrence in understanding the terms.” Tyler, 760 So. 2d at 563. The Louisiana
Supreme Court has warned that the open account statute should be strictly construed, “because the award
of attorney fees is exceptional and penal in nature.” Frank L. Beier Radio, Inc. v. Black Gold Marine, Inc.,
No. 83-2141, 449 So.2d 1014, 1015 (La. 4/2/84).
“In determining whether a contract falls under the open account statute, courts in Louisiana
consider whether the “total cost or price [is] ... left open or undetermined.” Factor King, LLC v. Block
Builders, LLC, 193 F. Supp. 3d 651, 658 (M.D. La. 2016) (quoting Tri–Par. Elec. Supply, Inc. v. Cypress
Bend Investments, LLC, 105 So.3d 1036, 1039 (La. App. 3 Cir. 2012)). Louisiana courts also analyze certain
factors when determining whether a course of dealings constitutes an open account: “(1) whether there were
other business transactions between the parties; (2) whether a line of credit was extended by one party to
the other; (3) whether there are running or current dealings; and (4) whether there are expectations of other
dealings.” Ormet Primary Aluminum Corp. v. Ballast Techs., Inc., 436 Fed.Appx. 297, 301 (5th Cir. 2011).
A hallmark of an open account is that “[t]he total cost, unlike a contract, is generally left open or
undetermined, although the rate for specific services may be fixed, such as an hourly rate.” Ormet Primary
Aluminum Corp. v. Ballast Techs., Inc., 436 Fed.Appx. 297, 301 (5th Cir. 2011).
Plaintiff argues that the MWC between plaintiff and defendants “contemplated ongoing debit
entries by” plaintiff “for various unfixed costs”, which defendant “requested be documented and submitted
daily via “tickets” for reimbursement.” Rec. Doc. 7 at 9. Additionally, plaintiff asserts that “the Work Order
also contemplated various other possible costs that might arise, including debits incurred for “extra work”
performed by [Turnkey] that could likewise be submitted via “tickets.”” Id. Plaintiff contends that its
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relationship with defendants fits within the definition of an open account because the relationship between
plaintiff and defendants was ongoing, the contract called for the plaintiff to keep “a “running” account of
debits and credits”, and there was not a fixed total cost of the contract. Id. at 10.
However, upon review of the MWC and the work order, neither the MWC nor the work order
qualify as an open account, because the MWC and work order leaves nothing open. While the MWC
confirms that the plaintiff is “in the business of providing marine and related services” to the defendants,
the MWC states defendants shall pay the plaintiff contractor for the “work and/or equipment or material
furnished by the contractor at the rate stipulated in the work orders”. Rec. Doc. 1-1 at 1 and 2¶6. Further
review of the work order indicates that the payment for HI-A494A was $850,000 for abrasive with $150,000
credit for salvage. Rec. Doc. 1-2 at 2. Payment for HI-A494B was $395,000 for abrasive with $150,000
credit for salvage while payment for HI-A494C was $818,000 for abrasive with $20,000 credit for salvage.
Id. Although the MWC and work order provides for ongoing dealings between the parties, it also includes
strict provisions for the parties' financial obligations. There was no open line of credit between the parties,
subject to future adjustment. Rather, the parties, through the MWC, established specific terms for the
provision of services by plaintiff and the subsequent compensation by the defendants. Therefore, the state
law based open account claims are dismissed.
New Orleans, Louisiana this 17th day of February 2021

_______________________________________
SENIOR UNITED STATES DISTRICT JUDGE

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