CGBM 100 LLC et al v. FLOWSERVE US INC. et al

Filing 87

OPINION AND ORDER granting in part and denying in part 62 Motion for Summary Judgment of Defendant Sterling Shipyard, L.P. - Plaintiffs breach of contract claim against Sterling is, therefore, DISMISSED; Sterlings Motion for Summary Judgment is DENIED as to the breach of express warranty claim. Plaintiff has abandoned all other claims previously asserted against Sterling and they are, therefore, DISMISSED. (Signed by Magistrate Judge John R Froeschner) Parties notified.(sanderson, 3)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT

December 29, 2016
David J. Bradley, Clerk

FOR THE SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
CGBM 100, LLC
and ACCUTRANS, INC.
V.
FLOWSERVE US, INC.,
FLOWSERVE CORPORATION
and STERLING SHIPYARD, LP.

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CIVIL ACTION NO. G-15-026

OPINION AND ORDER
Before the Court is the Motion for Summary Judgment of Defendant Sterling
Shipyard, L.P. (Sterling); the Motion seeks the dismissal of all claims asserted against it
by Plaintiff, CGBM 100, LLC. The Motion (Instrument no. 62) is GRANTED IN PART
AND DENIED IN PART.
At the outset the Court finds Plaintiff’s theory of its claims against Sterling not only
weak, but almost disingenuous. Plaintiff negotiated with Flowserve for adequate pumps,
it relied upon Flowserve’s promises that the pumps would perform adequately, it decided
to have Flowserve pumps installed in its barges, it ordered Sterling to purchase
Flowserve’s pumps and install them on the barges, Sterling followed Plaintiff’s instructions
by purchasing and installing the pumps Plaintiff wanted and then Plaintiff sued Sterling for
the deficiency of the barges to perform as required because of the pumps that Plaintiff
itself selected for use in its cargo transfer system. It is difficult to understand how that

progression of events could create much of a viable case against Sterling. That aside, the
Court will briefly address what it perceives Plaintiff’s remaining claims to be at this time.
Breach of Contract Claim
Plaintiff argues that it never issued the contractually required Protocol of Delivery
and Acceptance, which was withheld due to the change order dispute that was ultimately
settled. It also claims that the Protocol was withheld due to the inadequacy of the
Flowserve pumps it ordered Sterling to purchase and install. However, the Court cannot
find that the withholding of the Protocol, alone, establishes Plaintiff’s non-acceptance of
the barges; therefore, the case turns, as it seems the Parties truly believe, on whether
Plaintiff revoked its acceptance. The Court finds it did not. Plaintiff never gave notice
of revocation of its acceptance as required by Section 2.608(b) and it has not alleged any
cause of action for that remedy. In addition, since taking delivery of the barges, Plaintiff,
as prohibited by Section 2.608(b), has had substantial modifications made to the Flowserve
pumps, which are, arguably, the only “goods” still in dispute in this case. Finally, the
Court finds Plaintiff’s reliance on Deere & Co. v. Johnson, 271 F.3d 613 (5th Cir. 2001),
unpersuasive. Plaintiff has not only continued to use the barges “to mitigate” its damages,
it has pledged them as collateral for loans and insured them against casualty losses and
liability for damages, actions which are indicative of exercising ownership of the barges
and the pumps. In the absence of a proper revocation of the barges, Plaintiff cannot now
assert a viable claim against Sterling for breach of contract.
2

Luig v. North Bay

Enterprises, 817 F.3d 901, 906 (5th Cir. 2016). Plaintiff’s breach of contract claim against
Sterling is, therefore, DISMISSED.
Breach of Express Warranty Claim
Plaintiff’s argument here is simply prophylactic: it believes Sterling properly
installed the pumps or, at least, corrected any installation problems Flowserve imagined
or demanded, but just in case the jury somehow rules that installation problems persisted
after April 10, 2014, it wants to recover those damages from Sterling. Sterling argues that
Plaintiff has not sued it for faulty installation, but as attractive as that argument appears,
this Court agrees with Plaintiff’s present assertion that its initial allegation of “each barge’s
inability to pump cargo without excessive vibration” is sufficient to allege faulty
installation and to support a potential breach of express warranty claim and the recovery
of resultant damages pursuant to Article 12.1 of the Barge Construction Contract.
It is, therefore, ORDERED that Sterling’s Motion for Summary Judgment
(Instrument no. 62) is DENIED as to this claim.
Other Claims
Plaintiff has abandoned all other claims previously asserted against Sterling and they
are, therefore, DISMISSED.
DONE at Galveston, Texas, this

29th

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day of December, 2016.