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Natures Way Marine, LLC v. Everclear of Ohio, Ltd.

United States District Court, S.D. Alabama, Southern Division

August 12, 2014

NATURES WAY MARINE, LLC, Plaintiff,
v.
EVERCLEAR OF OHIO, LTD., and NIRK MAGNATE HOLDING CORP., Defendants

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[Copyrighted Material Omitted]

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For Natures Way Marine, LLC, Plaintiff: Frank J. Dantone, LEAD ATTORNEY, PRO HAC VICE, Henderson Danton, P.A., Greenville, MS.

For EverClear of Ohio, Ltd., Defendant, Counter Claimant: Christopher G. Hume , III, LEAD ATTORNEY, M. Kathleen Miller, Mark Brannon Roberts, Armbrecht Jackson LLP, Mobile, AL.

For Nirk Magnate Holding Corp., Defendant: Brian P. McCarthy, LEAD ATTORNEY, Frederick George Helmsing , Jr., McDowell Knight Roedder & Sledge, L.L.C., Mobile, AL.

For Natures Way Marine, LLC, Counter Defendant: Frank J. Dantone, LEAD ATTORNEY, Henderson Danton, P.A., Greenville, MS.

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ORDER

Callie V. S. Granade, UNITED STATES DISTRICT JUDGE.

This matter is before the court on Defendants' joint motion for partial summary judgment (Docs. 108, 109, 110, 112), Plaintiff's response in opposition (Docs. 116, 119), and Defendants' joint reply (Doc. 120). For reasons explained below, the court finds that Defendants' partial motion for summary judgment is due to be denied.

I. PROCEDURAL HISTORY

Natures Way Marine, LLC (" Plaintiff" ) filed a breach of contract lawsuit regarding its charter agreement with Everclear of Ohio, LTD. (" Everclear" ) and Nirk Magnate Holding Corp. (" Nirk Magnate" ) (collectively, " Defendants" ) (Doc. 1). In its complaint, Plaintiff alleged that Defendants breached the charter agreement when they stopped paying charter hire and demurrage (Doc. 1, p. 4). Defendants answered and raised breach of contract counterclaims against Plaintiff (Doc. 23; Doc. 67; Doc. 68). Defendants subsequently filed a joint motion for partial summary judgment, now before the court, seeking to dismiss Natures Way's complaint with prejudice, grant all counterclaims, and provide additional relief to which they are entitled (Doc. 109, p. 30). Defendants also " request the opportunity to submit additional evidence concerning the specific nature and amount of their respective damages" once liability is determined (Doc. 109, p. 24). Plaintiff opposes Defendants' joint motion for partial summary judgment, and claims that there are substantial issues of material fact that make it inappropriate to dispose of each claim at this stage (Doc. 116, p. 1). Defendants reply that each breach of contract committed by Plaintiff, standing alone, is sufficient to support summary judgment in favor of Defendants (Doc. 120, p. 1).

II. FACTS

The contract, a one-year charter agreement, required Plaintiff to transport for Defendants 30,000 barrels of spent lubes (recycled fuel oils) each month from East Liverpool, Ohio to Avondale, Louisiana (Doc. 1, Exh. 1, p. 1). Defendants agreed to pay Plaintiff per barrel actually transported (Doc. 1, Exh. 1, p. 1). The parties entered this agreement on August 9, 2011, and Plaintiff cancelled it around February 12, 2012 (Doc. 1, pp. 3 - 4). At that time Plaintiff had completed three shipments for Defendants, and Defendants had stopped paying Plaintiff demurrage (Doc. 110, pp. 11 - 13).

Defendants assert five breach of contract counterclaims in their motion for summary judgment. Because Defendants contend that each individual breach is sufficient for summary judgment as a matter of law, the relevant facts for each counterclaim are parsed out below.

A. Cargo Capacity

First, Defendants argue Plaintiff breached the contract when it delivered

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barges that did not load 30,000 barrels as contemplated in the agreement (Doc. 67, p. 13; Doc. 68, p. 14; Doc. 109, p. 9). The charter agreement includes an equipment provision, specifying that " the Owner lets and Charterer hires" a " NWM 3009 tank barge (24,600bbl calibrated), one tank barge (TBD) calibrated at 10,500bbl capacity, and adequate HP as found suitable by NWM." (Doc. 1, Exh. 1, p. 1). The charter agreement further provides that cargo will include " a minimum of 30,000 BBL's of Spent Lubes per month" (Doc. 1, Exh. 1, p. 1).

Plaintiff provided two vessels for the first shipment, the NWM 3009 and the NWM 900 (initially called the MRT 16) (Doc. 110, p. 9). The NWM 900 had a carrying capacity of roughly 9,000 barrels, less than the amount specified in the contract (Doc. 110, p. 9; Doc. 116, pp. 17 - 18). Sara Shipman Myers (" Myers" ), a broker working with the parties (Doc. 109, Exh. 7, pp. 11 -13), informed Plaintiff that the first shipment would load at approximately 92% capacity (Doc. 116, p. 17; Doc. 119, Exh. 6). In actuality the first shipment loaded at 81% capacity and contained only 27,215 barrels. (Doc. 109, Exh. 15; Doc. 116, p. 17). Defendants knew about the shortage when the first shipment loaded, and later accepted delivery in Avondale (Doc. 109, p. 11, Exhs. 13, 15). The second shipment, using the same two barges, loaded more than 30,000 barrels (Doc. 118, Exh. 1, p. 7). Plaintiff added a third barge for the third shipment, and delivered more than 37,000 barrels to Avondale (Doc. 118, Exh. 1, p. 7).

B. Delayed First Shipment

Second, Defendants argue Plaintiff failed to perform under the terms of the contract when it did not timely deliver the barges to East Liverpool for the first shipment (Doc. 67, p. 13; Doc. 68, p. 14; Doc. 109, p. 6). Plaintiff first arrived at the East Liverpool loading port on September 16, 2011, twenty-two days after the August 25, 2011 date set forth in the charter agreement (Doc. 116, p. 2). While Plaintiff and Defendants worked through this initial delay, Myers continued to work as a broker between the parties (Doc. 119, Exhs. 6, 7, 8, 13). Myers did not inform Plaintiff about any specific delivery deadline in Avondale, but she stressed that the shipments needed to " get going" (Doc. 119, Exh. 4, pp. 4 - 5; Doc. 119, Exh. 5). Plaintiff and Defendants continued communicating about the first shipment through September and October (Doc. 109, pp. 10 - 12, Exhs. 11, 15; Doc. 116, pp. 5, 11, 15). Defendants accepted and paid for the first shipment after it reached Avondale at the end of October (Doc. 110, p. 11).

C. Insurance Coverage

Third, Defendants argue that Plaintiff breached the contract when it failed to obtain sufficient Protection and Indemnity (" P & I" ) Insurance (Doc. 67, p. 13; Doc. 68, p. 14, Doc. 109, p. 7), delaying the first shipment further (Doc. 23, p. 15; Doc. 109, p. 10). When the parties entered the charter agreement Plaintiff had $50,000,000 of P& I Insurance coverage in place, which satisfied the insurance requirement at other terminals (Doc. 109, p. 7; Doc. 116, pp. 6, 12-13; Doc. 118, Exh. 1, pp. 8 - 9). On September 2, 2011, Myers first told Plaintiff about the specific terminal for delivery in East Liverpool (Doc. 116, p. 13). Plaintiff then learned that this terminal required $300,000,000 of P & I insurance coverage (Doc. 116, p. 13). This created an " unexpected" problem for Plaintiff and Defendants (Doc. 119, Exh. 7, Exh. 8, p. 4).

The charter agreement, drafted by Plaintiff (Doc. 110, p. 4), included an insurance provision that states in part " Hull and ...


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