Argos Ports (Houston) LLC v. Kirby Inland Marine, LP et al
Filing
400
MEMORANDUM OPINION AND ORDER - For the reasons explained, the Barge Owners' 393 MOTION for Summary Judgment Seeking Dismissal of Kirby Inland Marine, LP's Third-Party Complaint is GRANTED; and the 139 First Amended Third-Party Complaint of Kirby Inland Marine, LP is DISMISSED WITH PREJUDICE as to the Barge Owners. (Signed by Judge Sim Lake) Parties notified.(sanderson, 4)
Case 4:18-cv-00327 Document 400 Filed on 04/12/22 in TXSD Page 1 of 15
United States District Court
Southern District of Texas
ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ARGOS PORTS (HOUSTON) LLC,
Plaintiff,
v.
KIRBY INLAND MARINE, LP and
GREENS BAYOU FLEETING, LLC,
et al.,
Defendants.
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April 12, 2022
Nathan Ochsner, Clerk
CIVIL ACTION NO. H-18-00327
MEMORANDUM OPINION AND ORDER
Pending before the court is Barge Owners' Motion for Summary
Judgment Seeking Dismissal of Kirby Inland Marine, LP's Third-Party
Complaint ("Barge Owners' Motion") (Docket Entry No. 3 93) .
For
reasons stated below, the Barge Owners' Motion will be GRANTED.
I.
Factual and Procedural Background
The following facts are not disputed.
On February 5, 2018,
Plaintiff, Argos Ports (Houston) LLC ("Argos") filed suit against
Kirby Inland Marine, LP ("Kirby") and Greens Bayou Fleeting, LLC
("Greens
Bayou")
(collectively,
"Defendants"),
alleging
that
certain barges under Defendants' control broke free from their
moorings during Hurricane Harvey and damaged Argos' property. 1
Kirby was acting as bailee for Marquette Transportation Company,
Complaint, Docket Entry No. 1, pp. 2-3.
For purposes of
identification, all page numbers refer to the pagination imprinted
at the top of the page by the court's Electronic Case Filing
("ECF") system.
1
4
Case 4:18-cv-00327 Document 400 Filed on 04/12/22 in TXSD Page 2 of 15
LLC ("Marquette"), Ceres Consulting L.L.C. ("Ceres"), Ingram Barge
Company
("Ingram"),
and Terral River Service,
Inc.
("Terra],")
(collectively, the "Barge Owners''.) when the hurricane struck. 2
At the time of the hurricane,
Kirby and T&T Salvage,
LLC
("T&T") were party to an agreement ("Kirby and T&T Agreement") that
designated T&T as the "Salvage and Firefighting Primary Resource
Provider to be listed in [Kirby's United States Coast Guard Vessel
Response Plan) ."3
Pursuant to the Kirby and T&T Agreement, Kirby
retained T&T to remove the barges from Greens Bayou after the
hurricane,
and
ultimately
paid
T&T
$7,696,264.79. 4
acknowledges that it has been p�id in full for its services.5
T&T
On
February 2, 2018, Kirby and T&T entered into an Assignment of
Salvage Rights Agreement
("Assignment"),
pursuant to which T&T
purported to assign to Kirby whatever salvage rights it had "for
salvage services rendered to the barges at Greens Bayou owned by
the Barge Owners. 11 6
Barge Owners' Motion, Docket Entry No. 393, p. 6; First
Amended Third-Party Complaint of Kirby Inland Marine, LP ("Amended
Complaint"), Docket Entry No. 139, p. 5 1 16 (stating that Kirby
maintained the barges).
2
Agreement of April 4, 2013, Exhibit F to Barge Owners'
Motion, Docket Entry No. 393-6, p. 1 11.0.
3
See T&T Chase Operating Account Statement for the period
February 1, 2018, through Fepruary 28, 2018, Exhibit G to Barge
Owners' Motion, Docket Entry No. 393-7.
Oral and Videotaped Deposition of Kevin Teichman, July 2,
2020, Exhibit E to Barge Owners 1 Motion, Docket Entry No. 393-5,
p. 2 lines 12-19.
5
Assignment, Exhibit H to Barge Owners' Motion, Docket Entry
No. 393-8, p. 1, Section 2.
6
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On March 9, 2018, Kirby filed a Third-Party Complaint against
the Barge Owners,
seeking to recover expenses incurred for the
salvage work that T&T performed.7
Each of the Barge Owners
responded by filing Counterclaims against Kirby for damages to
their individual barges, alleging that Kirby's negligence caused or
contributed to the Breakaway, 8
On April 12, 2019, Kirby filed its
Amended Complaint, seeking to "recover the cost of salvage of the
barges from Ceres, Ingram, Marquette, and Terral River under the
law of marine salvage as well as the Salvage Convention of 1989
because it successfully rescued the barges from marine peril." 9
On May 2, 2019, the court denied Third Party Defendant Terral
River Service,
Inc.'s Brief Supporting Rule 12 (b) ( 6) Motion to
Dismiss ("Terral's Motion")
(Docket Entry No. 112) , holding that
"[b) ecause there was no contractual relationship among Terral
River, Kirby, and/or T&T Salvage that would give rise to a claim
for contractual salvage under general maritime law, Kirby does not
have a claim for contractual salvage against Terral River, 1110 but
also holding that Kirby had stated a claim for voluntary salvage. 11
Original Third-Party Complaint of Kirby Inland Marine, LP,
Docket Entry No. 9, p. 10 1 34.
7
8
9
See Barge Owners' Motion, Docket Entry No. 393, p. 8.
Amended Complaint, Docket Entry No. 139, p. 10
10
Memorandum Opinion and Order, Docket Entry No.
11
Id. at 13.
-3-
1
155,
36.
pp.
10-11.
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On February 2,
2022,
the Barge Owners filed their Barge
Owners' Motion (Docket Entry No. 393).
Kirby filed a response on
February 16, 2022. 12 The Barge Owners filed a reply on February 23,
2022. 13
II.
Legal Standard
Summary judgment is proper if the pleadings,
interrogatory
answers,
and
admissions,
depositions,
together
with
any
affidavits, show there is no genuine issue as to any material fact
and therefore the mover is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 106 S. Ct. 2548, 2553
(1986).
The party moving for summary judgment does not need to
offer evidence disproving the non-moving party's claim - it only
needs to show that there is an absence of evidence to support the
nonmoving party's case.
Celotex, 106
s. Ct. at 2554.
Summary
judgment is mandated \\after adequate time for discovery and upon
motion, against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party's
case, and on which that party will bear the burden of proof at
trial."
Id. at 2552.
Defendant Kirby Inland Marine's Brief in Response to
Plaintiff's (Amended) Motion for Summary Judgment ("Kirby's
Response"), Docket Entry No. 395.
12
Memorandum in Reply to Kirby Inland Marine's Brief in
Response to Barge Owners' Motion for Summary Judgment Seeking
Dismissal of Kirby Inland Marine, LP's Third-Party Complaint,
Docket Entry No. 399.
13
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When
summary
judgment
is
sought
by
a
defendant
on
a
plaintiff's claim, the plaintiff must present more than a "mere
scintilla" of evidence in support of his position
that is, the
plaintiff must present "evidence on which the jury could reasonably
find for the plaintiff."
Anderson v. Liberty Lobby, Inc., 106
S. Ct. 2505, 2512 (1986).
In response to a properly supported motion for summary
judgment, the nonmovant must identify specific evidence
in the record and articulate the manner in which that
and such
evidence supports that party's claim,
evidence must be sufficient to sustain a finding in favor
of the nonmovant on all issues as to which the nonmovant
would bear the burden of proof at trial.
Johnson v. Deep East Texas Regional Narcotics Trafficking Task
Force, 379 F.3d 293, 301 (5th Cir. 2004).
III.
A.
Analysis
Kirby Is Not a Voluntary Salvor
Kirby seeks compensation for the salvage costs it incurred
when it hired T&T to recover barges that broke away while under
Kirby's exclusive control."
Kirby requests a warrant for the
attachment of the barges so that they may be condemned and sold. 15
The Barge Owners argue that "Kirby's actions were not voluntary
Amended Complaint, Docket Entry No. 139, p. 5 1 16 (stating
that Kirby maintained the barges); p. 6 1 21 (recounting the
breakaway); p. 8 1 28 (describing Kirby's engagement of T&T) ;
p. 10 1 36 (seeking to recover from Barge Owners the cost of
salvaging the barges).
14
15
Id. at 11
1 36 (d) (2) .
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based on the bailment relationship that existed with the Barge
Owners and Kirby's obligation to exercise reasonable care for the
barges in its control. 1116
Kirby argues that its claim is not
foreclosed because "when the barges broke away from the moorings
through the negligence of a third party,
Kirby ceased being a
bailee, and any salvage efforts undertaken after that point were
voluntary.1117
"[A] dmiralty recognizes two methods of creating a lien for
salvage services, by pure salvage and by contract."
Veverica v.
Drill Barge Buccaneer No. 7, 488 F.2d 880, 883 (5th Cir. 1974).
The court has already held that Kirby does not have a contractual
salvage claim.18
A claim for pure salvage has three elements:
(1) the existence of a
marine peril,
(2) services that are
voluntarily rendered when not required by an existing duty or
special contract, and (3) success in whole or in part. The SABINE,
101 U.S. 384, 384 (1879); West Coast Shipping Brokers Corp., M/V
"Cebu 1" v. Ferry "CHUCHEQUERO", 582 F.2d 959, 960 (5th Cir. 1978).
The parties do not dispute that a maritime peril existed or that
the salvage operation was successful - the only dispute is whether
the salvage services rendered by Kirby and T&T were rendered
voluntarily.
16
Barge Owners' Motion, Docket Entry No. 393, pp. 10-11.
17
Kirby's Response, Docket Entry No. 395, p. 5.
18
Memorandum Opinion and Order, Docket Entry No. 155, p. 10.
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Once
the
barges
were
delivered
to
Kirby,
a
bailment
relationship was established, and Kirby as bailee had a duty to
exercise reasonable care of the barges and keep them adequately
moored at all times.
See Dow Chemical Co. v. Barge UM-23B, 424
F.2d 307, 311 {5th Cir. 1970) {"As a wharfinger, Cargo Carriers was
not an insurer of the barges
it was, however, a bailee for
hire and was required to see to it that the barges were adequately
moored at all times.") ;
Conagra,
Inc. v. Weber Marine,
Inc.,
Nos. Civ. A. 97-1019, Civ. A. 98-3829, 2000 WL 943198, at *5 (E.D.
La. July 7, 2000) ("A fleeter is responsible for the care of barges
in its custody, and that includes a duty to ensure that the barges
are adequately moored.").
In the context of salvage, a party that has a pre-existing
duty to a vessel is generally not considered a volunteer and not
allowed to recover in salvage based on actions encompassed by those
duties.
1969)
See In re American Oil Co., 417 F.2d 164, 167 (5th Cir.
("[T]he salver's act must be voluntary, that is, he must be
under no official or legal duty to render the assistance.")
(internal quotations and citation omitted).
The Fifth Circuit has
held that the bailee of a vessel cannot engage in a pure salvage of
that vessel because such a salvage would not be voluntary.
See
Terral River Service, Incorporated v. SCF Marine Incorporated, 20
F.4th 1015, 1020 (5th Cir. 2021) ("Terral fails as to the second
element [voluntariness] because it had a preexisting duty as the
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barge's bailee,
a
duty of
ordinary care
forecloses its salvage claim.").
owed
to
SCF,
that
Like the bailee in Terral River,
Kirby owed a preexisting duty to the vessels it salvaged, and
therefore Kirby's $alvage efforts - including its hiring T&T - were
not voluntary and cannot support a pure salvage claim.
Kirby argues that Terral River is different from this case
because the barges in Terral River sank while they were in Terral's
control, 19 while in this case "the barges broke away from the
moorings through the negligence of a third party [.] " 20
The court
is not persuaded that a breakaway terminates the duty of a barge's
bailee, given
that
one of a bailee's duties is to prevent
breakaways from happening in the first place.
See Dow Chemical,
424 F.2d at 311 (holding that a bailee for hire had a duty to "see
to it that the barges were adequately moored at all times").
To
support its argument, Kirby cites The Gulfport, 250 F. 577, 580
(5th Cir. 1918), in which the Fifth Circuit held that a bailee that
lost control of a tug due to an act of God, a hurricane, was not
"under a duty to regain possession of bailed property so taken from
it," and that "the bailor
[was therefore]
chargeable with the
expense necessarily incurred to accomplish this result." 21
Kirby
omits that the bailee in Gulfport was performing its salvage
19
Kirby's Response, Docket Entry No. 395, p. 12.
20
Id. at 5.
21
Id. at 20.
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pursuant to a contract with the bailer, and thus the Fifth Circuit
did not inquire into whether the salvage was voluntary.
See id.
("It is not necessary to determine whether the service in question
would have had all the elements of a salvage one if it had been
rendered voluntarily and not under a contract.").
The dispute in
Gulfport was whether the contract at issue was a maritime contract,
not whether the salvage was performed voluntarily.
Gulfport
therefore is not relevant to the issue in this case - the question
of voluntariness.
Terral River, however, directly addresses that question:
The
bailee of a barge has a preexisting duty that forecloses any
salvage claims it might make as to that barge as a matter of law,
regardless of who was at fault for the sinking of the vessel.
Terral River, 20 F.4th at 1020.
See
It is not a question of whether
Kirby is under a duty to "regain possession of bailed property"
taken from it by an act of God - the duty that forecloses Kirby's
voluntary salvage claim is its duty to prevent the loss of the
property in the first place.
This conclusion is consistent with earlier cases holding that
duties similar to those of a bailee preclude voluntary salvage
claims.
For example, like a ship's bailee, a ship's crew must
exercise reasonable care for the vessel in their custody and
control; both are bound to keep the vessel in their custody free
from harm, including insuring the vessel is moored properly; and
both can be held responsible for damage caused by the vessel within
their control.
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It is a longstanding rule of salvage law that crewmembers are
not entitled to a salvage award for saving a ship on which they are
crewmembers because it is within their duty to the ship.
�,
Bertel v. Panama Transport Co.,
109 F. Supp. 795,
797
(S.D.N.Y. 1952) (holding that seamen are not considered volunteers
entitled to salvage for services rendered in saving their own ship
unless the services are rendered after their employment has been
terminated by an unmistakable discharge or by a final abandonment
of the ship without hope of return or expectation of recovery);
Drevas v. United States, 58 F. Supp. 1008,
1010
(D. Md. 1945)
("Members of the crew of a vessel are not permitted to participate
in salvage awards unless their ship has been abandoned without hope
of recovery, or the crew has been legally discharged from further
services by the master.").
The reason for this rule is that "it is within the duty of the
crew in case of danger to the ship to exert themselves to save the
ship."
tempt
Drevas, 58 F. Supp. at 1010.
[the crew]
" [I] t would be unwise to
to get the ship and cargo into a position of
danger in order that by extreme .exertion they might claim salvage
compensation.
11
Elrod v. Luckenbach S.S. Co. • Inc., 62 F. Supp.
935, 93.6 (S.D.N.Y. 1945). This same rationale supports the Terral
River court's holding that a barge's bailee is not entitled to
salvage - it would be "unwise" to "tempt" bailees to place the
vessels in their care in a position of danger by which they may
profit.
Kirby argues that its relationship to the barges is more
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like the relationship between the crew of one vessel and another
vessel, but this argument is premised on the same reasoning that
the court rejected, i.e., that once the barges broke looser Kirby
was under no duty ro "regain" them.22
The court concludes that
Kirby's salvage claim against the Barge Owners is foreclosed by
Kirby's duties as bailee.
B.
T&T Had No Salvage Rights to Assign to Kirby
The
Barge
Owners
argue
that
even
if
Kirby
had
acted
voluntarily in salvaging the barges, Kirby would still have no
claim against the Barge Owners for the money it paid to T&T,
because (1) such claim would be predicated on salvage rights that.
T&T assigned to Kirby;
(2)
T&T never had a salvage claim against
the Barge Owners; and
(3)
any salvage claim T&T might have had
against the Barge Owners was extinguished· when Kirby paid T&T for
its salvage services.
Kirby's claim to recover T&T's salvage costs is predicated on
the Assignment, 23 which provided that T&T's salvage claims against
the Barge Owners would be assigned to Kirby.24
The court already
found when it ruled on Terral's Motion that T&T was not a volunteer
22
Id. at 21.
See id. at 5 ( "Kirby has produced evidence sufficient to
raise an issue of material fact as to its ability to recover its
agent's salvage costs as a result of the assignment agreement.").
23
See Assignment, Exhibit H to Barge Owners' Motion, Docket
Entry No. 393-8, p. 1 Section 2.
24
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and thus would have no right to pure salvage. 25
The court also
found that because T&T had no contract with the Barge Owners, it
had no claim for contractual salvage against the Barge Owners.
Because T&T had no salvage claim against the Barge Owners, it had
no claim to assign to Kirby.
Health Care Service Corp. ,
See Quality Infusion Care, Inc. v.
628 F.3d 725,
729
(5th Cir. 2010)
(holding that "an assignee takes all the rights of an assignor, no
greater and no less" and "an assignee stands in the same position
as its assignor stood")
(internal quotations,
citations,
and
alterations omitted); 6A Corpus Juris Secundum Assignments § 88
(2016) ("[A] n assignment does not confer upon the assignee any
greater right or interest than that possessed by the assignor, as
the assignee can stand in no better position than the assignor.").
Because Kirby's claim to recover T&T's salvage costs is based on
T&T's purported assignment of a claim that T&T never had, Kirby's
claim fails as a matter of law.
Kirby does not dispute the Barge Owners' argument that T&T had
no salvage claim to assign to Kirby.
Instead, Kirby argues that
"[s] alvage claims are assignable, and assignments do not extinguish
liens against salved property. " 26 This may be an accurate statement
of the law, but it is not in dispute.
The Barge Owners never
argued that salvage claims were not assignable or that T&T's
25
Memorandum Opinion and Order, Docket Entry No. 155, p. 10.
26
Kirby's Response, Docket Entry No. 395, p. 27.
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purported assignment of its salvage claim to Kirby extinguished a
lien on the barges.
The Barge Owners' argument is that T&T lacked
a valid salvage claim to assign to Kirby in the first place.
The
court is persuaded by that argument, and therefore the court will
grant the Barge Owners' Motion with respect to Kirby's claim to
recover T&T's salvage costs.
Moreover, even if T&T had a valid salvage claim and assigned
it to Kirby,
any claim T&T might have had
extinguished by payment.
would
have been
Kirby seeks a warrant for attachment of
the salvaged barges and asks that said vessels "may be condemned
and sold to pay for [salvage costs] , costs and attorneys' fees[.] "27
Kirby is therefore seeking a maritime lien, a special property
right in a vessel that "arises when the debt arises, and grants the
creditor the right to appropriate the vessel, have it sold, and be
repaid the debt from the proceeds."
MAGDALENA GREEN M/V,
World Fuel Services, Inc. v.
464 F. App'x 339,
(internal quotations and citations omitted).
341
(5th Cir. 2012)
"[After] the debt
repaid and satisfaction is acknowledged, the lien ceases to exist."
Id.
(citing Mullane v.
2006)).
Chambers,
438 F.3d 132,
138 {1st Cir.
See also Maritrend, Inc. v. M/V SEBES, Civ. A. No. 96-
3140, 1997 WL 660614, at *2 (E.D. La. Oct. 23, 1997) (stating that
"the contractor acquires a maritime lien against the vessel until
payment is satisfied") (emphasis added).
27
There is no dispute that
Amended Complaint, Docket Entry No. 139, p. 11 � 36{d) (2).
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T&T was paid in full for its services. 28
The payment was received
February 2, 2018,29 the same day that T&T and Kirby executed the
Assignment.30
The court concludes that T&T had no claim to assign to Kirby
because T&T never had a contractual or pure salvage claim to assert
against the Barge Owners and because at the time of the purported
assignment,
T&T's
claim
had
been
sat
fied
by
payment.
Accordingly, Kirby's claims fail as a matter of law to the extent
that they are based on Kirby's right to be paid for the salvage
services rendered by T&T.31
IV.
Conclusion and Order
For the reasons explained above, the Barge Owners' Motion for
Summary Judgment Seeking Dismissal of Kirby Inland Marine, LP's
T&T Chase Operating Account Statement for the period
February 1, 2018, through February 28, 2018, Exhibit G to Barge
Owners' Motion, Docket Entry No. 393-7, p. 1 {showing a payment
from Kirby to T&T for "Salvage Invoice - Greens Bayou Fleet
Response" in the amount of $7,696,264.79); Kirby's Response, Docket
Entry No. 395, p. 6 {"Kirby paid T&T for its salvage services.").
See T&T Chase Operating Account Statement for the period
February 1, 2018, through February 28, 2018, Exhibit G to Barge
Owners' Motion, Docket Entry No. 393 7, p. 2.
29
See Assignment, Exhibit H to Barge Owners' Motion, Docket
Entry No. 393-8, p. 1 � 5 (stating that Kirby had already paid T&T
for "services rendered to the barges owned by the Barge Owners.").
30
31 Kirby argues that it "has an independent salvage claim based
on its own salvage work, and thus its claims do not rest solely
upon an assignment of rights from T&T." Kirby's Response, Docket
Entry No. 395, p. 28. Accordingly, Section B addre�ses only the
part of Kirby's claim that is based on amounts it paid to T&T.
However, as the court explained in Section A, Kirby's entire claim
fails as a matter of law because Kirby is not a volunteer salvor.
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Case 4:18-cv-00327 Document 400 Filed on 04/12/22 in TXSD Page 15 of 15
Third-Party Complaint (Docket Entry No. 393) is GRANTED; and the
First Amended Third-Party Complaint of Kirby Inland Marine,
LP
(Docket Entry No. 139) is DISMISSED WITH PREJUDICE as to the Barge
Owners.
SIGNED at Houston, Texas, on this the 12th day of April, 2022.
SIM LAKE
SENIOR UNITED STATES DISTRICT JUDGE
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