McGowan v. Pierside Boatworks, Inc.

Filing 23

ORDER denying 18 Motion to Dismiss for Failure to State a Claim. Signed by Honorable Patrick Michael Duffy on February 22, 2017.(jmcg, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
Francis X. McGowan,
Plaintiff,
v.
Pierside Boatworks, Inc.,
Defendant.

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C.A. No.: 2:16-cv-3529-PMD

ORDER

This action is before the Court on Plaintiff Francis X. McGowan’s motion to dismiss
Defendant Pierside Boatworks, Inc.’s counterclaim (ECF No. 18). For the reasons stated herein,
Plaintiff’s motion is denied.
BACKGROUND
This matter arises out of repairs Defendant performed on Plaintiff’s sailboat, “True
Love.” When Plaintiff did not pay for all of the costs of the repairs, Defendant filed a maritime
lien on the True Love with the United States Coast Guard. Plaintiff filed this action in an effort
to remove the lien, and Defendant filed a counterclaim seeking the costs of the repairs performed
on Plaintiff’s vessel. Plaintiff now seeks to dismiss Defendant’s counterclaim pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure on the grounds that it is time-barred.
PROCEDURAL HISTORY
Plaintiff filed this action in the United States District Court for the District of Columbia
on April 25, 2016. Defendant successfully moved to transfer the case to this Court, and the case
was transferred on October 31. Plaintiff then moved to dismiss Defendant’s counterclaim on
December 22.

Defendant responded on January 11, 2017.

Accordingly, this matter is now ripe for consideration.

Plaintiff did not file a reply.

LEGAL STANDARD
“A complaint is subject to dismissal for failure to state a claim if the allegations, taken as
true, show the plaintiff is not entitled to relief. If the allegations, for example, show that relief is
barred by the applicable statute of limitations, the complaint is subject to dismissal . . . .” Jones
v. Bock, 549 U.S. 199, 215 (2007). The Court may consider only the facts alleged in the
complaint, which may include any documents either attached to or incorporated in the complaint,
and matters of which the Court may take judicial notice. Tellabs, Inc. v. Makor Issues & Rights,
Ltd., 551 U.S. 308, 322 (2007). “Ordinarily, a defense based on the statute of limitations must be
raised by the defendant through an affirmative defense, see Fed. R. Civ. P. 8(c), and the burden
of establishing the affirmative defense rests on the defendant.” Goodman v. Praxair, Inc., 494
F.3d 458, 464 (4th Cir. 2007). However, “where facts sufficient to rule on an affirmative
defense are alleged in the complaint, the defense may be reached by a motion to dismiss filed
under Rule 12(b)(6).” Id. “This principle only applies, however, if all facts necessary to the
affirmative defense ‘clearly appear on the face of the complaint.’” Id. (quoting Richmond,
Fredericksburg & Potomac R.R. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993)).
DISCUSSION
The outcome of Plaintiff’s motion to dismiss turns on the interpretation of the parties’
work order contract for repairs to the True Love. That contract contains two relevant provisions
for purposes of this motion. First, in a section titled “MARITIME LIEN,” the contract provides
that “[t]his Agreement is an Admiralty and Maritime Agreement under the General Maritime
Laws, Statues [sic]; and Codes of the United States of America between Pierside Boatworks, Inc.
. . . and the undersigned vessel owner.” (Def.’s Opp’n 12(b)(6) Mot., Ex. 1, Work Order
Agreement, ECF No. 22-1, at 2.) Next, in a section titled “VENUE,” the contract provides that

“[t]his Agreement shall be construed under and in accordance with the laws of the State of South
Carolina. The venue for any dispute arising hereunder shall be resolved in Charleston County,
South Carolina.” (Id.)
Plaintiff assumes that the second quoted provision is the only relevant choice-of-law
provision, and thus only South Carolina law applies. In contrast, Defendant argues that general
maritime law applies, as specified in the first provision, and is merely supplemented by South
Carolina law where applicable. The Court agrees with Defendant.
As the Second Circuit has held, the Court must first determine “whether something is a
maritime contract; then, once a contract has been deemed a maritime contract, the next step is
determining whether a specific state’s laws should be used to supplement any area of contract
law for which federal common law does not provide.” Williamson v. Recovery Ltd. P’ship, 542
F.3d 43, 49 (2d Cir. 2008). The inclusion of a choice-of-law provision “does not, by itself,
remove the contract from the scope of maritime law.” Id.
It is clear that the parties’ vessel repair contract invokes the Court’s admiralty
jurisdiction. See Diesel “Repower,” Inc. v. Islander Investments Ltd., 271 F.3d 1318, 1322–23
(11th Cir. 2001) (“A contract to repair a vessel invokes admiralty jurisdiction.”).

Thus, the

question becomes whether the choice-of-law provisions require that the Court only apply South
Carolina law instead of general maritime law. Specifically, the Court must determine whether
the parties intended for South Carolina’s three-year statute of limitations to apply in lieu of the
maritime doctrine of laches. “In assessing the timeliness of a maritime claim, the doctrine of
laches typically applies rather than any fixed statute of limitations.” Am. S.S. Owners Mut. Prot.
& Indem. Ass’n, Inc. v. Dann Ocean Towing, Inc., 756 F.3d 314, 318 (4th Cir. 2014). However,
the Fourth Circuit has stated that “an otherwise valid choice-of-law provision in a maritime

contract is enforceable and may require application of a jurisdiction’s statute of limitations, in
lieu of the doctrine of laches, to govern issues regarding the timeliness of claims asserted under
that agreement.” Id. at 315.
Here, the Court is confronted with two choice-of-law provisions that provide for
competing law on the question of whether Defendant’s counterclaim was timely. Both general
maritime law and South Carolina law require that contracts be interpreted in order to give
meaning to all of their terms. Compare Foster Wheeler Energy Corp. v. An Ning Jiang MV, 383
F.3d 349, 354 (5th Cir. 2004) (“Federal courts sitting in admiralty adhere to the axiom that ‘a
contract should be interpreted so as to give meaning to all of its terms—presuming that every
provision was intended to accomplish some purpose, and that none are deemed superfluous.’”
(quoting Mannesman Demag Corp. v. M/V CONCERT EXPRESS, 225 F.3d 587, 594 (5th Cir.
2000))), with Ecclesiastes Prod. Ministries v. Outparcel Assocs., LLC, 649 S.E.2d 494, 498 (S.C.
Ct. App. 2007) (contracts “‘will be interpreted so as to give effect to all of their provisions, if
practical.’” (quoting Reyhani v. Stone Creek Cove Condo. II Horizontal Prop. Regime, 494
S.E.2d 465, 468 (S.C. Ct. App. 1997))). In order to give effect to both choice-of-law provisions,
the Court agrees with Defendant that the parties intended for general maritime law to be
supplemented by South Carolina state law in the absence of a conflict between the two. Not only
does this reading give effect to all of the provisions of the parties’ contract, but it is also
consistent with general maritime law. See Andrews v. A W Chesterton Co., No. 2:13-cv-2055RMG, 2015 WL 12831324, at *4 (D.S.C. May 29, 2015) (“State law may be used to supplement
federal maritime law as long as state law is ‘compatible with substantive maritime policies’ and
is not ‘inconsonant with the substance of federal maritime law.’” (quoting Yamaha Motor Corp.,
U.S.A. v. Calhoun, 516 U.S. 199, 202 (1996))). Ordinarily in the statute of limitations context,

general maritime law looks to the most similar state statute of limitations to establish a
presumption of timeliness or untimeliness for purposes of the laches doctrine. See Venus Lines
Agency, Inc. v. CVG Int’l Am. Inc., 234 F.3d 1225, 1230 (11th Cir. 2000) (“In admiralty claims,
we look to the analogous statute of limitations only as a benchmark in determining whether to
apply the doctrine of laches.”).
The Court finds that it was the parties’ intent to use South Carolina law as the benchmark
statute of limitations when determining whether laches applies to Defendant’s counterclaim. In
South Carolina, the statute of limitations for a breach of contract claim is three years. S.C. Code
Ann. § 15-3-530. Applying that statute of limitations to the laches doctrine in this case, there is a
presumption that Defendant’s claims are untimely because Defendant last sent an invoice for the
repairs in 2012.

However, any ruling on whether the laches doctrine applies would be

inappropriate at this stage because the Court must still consider the remainder of the laches
factors set forth in Dann Ocean Towing, Inc. The evidence that informs the analysis of those
factors is not sufficiently present on the face of the complaint or its attachments for the Court to
rule on them at this time. Accordingly, Plaintiff’s motion to dismiss must be denied.
CONCLUSION
For the foregoing reasons, it is ORDERED that Plaintiff Francis X. McGowan’s motion
to dismiss is DENIED.
AND IT IS SO ORDERED.

February 22, 2017
Charleston, South Carolina