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Northstar Marine, Inc. v. Huffman

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

September 29, 2014

MICHAEL HUFFMAN, et al., Defendants.


WILLIAM H. STEELE, Chief District Judge.

This matter comes before the Court on defendants' Motion for Summary Judgment (doc. 52). The Motion has been briefed and is now ripe for disposition.

I. Factual Background.

This action arises from a commercial dispute between two entities that were involved in the lucrative business of cleaning up the Gulf of Mexico oil spill caused by the explosion of the DEEPWATER HORIZON drilling platform in April 2010.[1]

Everyone agrees that non-party National Recovery Corporation ("NRC") entered into a contract with BP Oil Corporation to provide boats, operators, equipment, and manpower for the massive oil-spill remediation project. (Doc. 66, at 1; doc. 73, at 2.) In turn, NRC entered into direct written contracts with a number of vendors to provide vessels, materials and labor for the job. (Doc. 66, at 2; doc. 73, at 2.) One such company that contracted directly with NRC to provide boats and services for the clean-up effort was plaintiff, Northstar Marine, Inc. ("Northstar"). (Eilers Dep., at 4.) Northstar's arrangement with NRC was that it "would provide any labor, services and equipment that they requested in accordance with [Northstar's] time and material rate sheet." (Risko Dep., at 5.)[2] To help meet NRC's vast needs for the remediation project in the Gulf of Mexico, Northstar deployed approximately 20 of its own boats (all or substantially all of Northstar's fleet) and 20 of its approximately 40 employees to the Gulf for this job. ( Id. at 6-7.)

Notwithstanding these activities, NRC's requests for boats, equipment and personnel to assist with the oil-spill clean-up far outstripped Northstar's finite resources; indeed, Northstar "had been continually requested by NRC to add more boats and more manpower." ( Id. at 8.) To accommodate this insatiable demand, Northstar retained an estimated 50 subcontractors to provide labor, boats, and specific equipment to go on the boats for the oil spill project. ( Id. at 7-8.) One such subcontractor that Northstar hired was defendant Huffman Construction, Inc. On May 26, 2010, Northstar and Huffman Construction entered into a written "Agreement to Provide Response Resources, " which specified that Huffman Construction would furnish personnel, equipment, supplies and other response resources to Northstar in exchange for compensation at 85% of Northstar's published rates on the accompanying rate sheet. (Doc. 81, Exh A. at 1-8.)[3] The May 26 Agreement expressly provided that "[n]o additional compensation or commission will be provided to contractor." ( Id. at 7.)[4] On its face, the May 26 Agreement was made in, and governed by the law of, the State of New Jersey, where Northstar is headquartered. ( Id. at 3.)

What happened next is a subject of vehement disagreement by the parties, and lies at the heart of this lawsuit. In the light most favorable to Northstar (as the non-movant on summary judgment), the sequence of events was as follows: "NRC called [Northstar] in or around the middle of June and requested even more manpower and boats." (Risko Dep., at 8.) Unfortunately, Northstar's office was "maxed out" in its ability to process subcontractors at that time, and was simply unable to provide the additional resources to NRC. ( Id. at 8-9.)

Northstar's solution to this dilemma was to recommend one of its subcontractors to enter into a direct contract relationship with NRC. Within 24 hours of NRC's request for additional resources, Northstar's president and owner, Phil Risko, contacted Huffman Construction's president, defendant Michael Huffman ("Huffman"), via cell phone. (Risko Dep., at 21.)[5] Risko informed Huffman that he was calling about the possibility of Huffman Construction "doing work directly for NRC." ( Id. ) "And then [Risko] spoke to NRC and... they were very interested to move forward with hiring Huffman directly so long as he could provide the suitable insurance and sign the contract that they would require." ( Id. ) Risko explained to Huffman that this arrangement "would just be something separate to our original agreement... and that as compensation for getting him the work directly and recommending him for it, that... Northstar would be requesting 10 percent of the gross amount that was billed and paid." ( Id. at 21-22.) Huffman responded, "That would be fine." ( Id. at 22.)[6] Risko proposed to NRC that they contract directly with Huffman Construction, and touted Huffman Construction to NRC as "a provider who's doing a good job and they have more resources they can bring in." ( Id. at 10.) Risko then put NRC in contact with Huffman to finalize their arrangements, and spoke to both NRC and Huffman "throughout the process... to make sure everybody was on the same page, that the arrangement was going to be beneficial to everybody and everybody was okay with it." ( Id. )

For better or worse, the 10% fee arrangement to which Northstar and Huffman Construction had agreed was never memorialized in writing. Plaintiff's evidence is that Northstar did not insist on a written agreement because Northstar was "so overwhelmed" with its workload at the time, because Risko trusted the person who had recommended Huffman Construction to him, and because Northstar had "done various contracts of a similar nature over the years and never had a problem." (Risko Dep., at 23-24.) This time, however, Northstar's luck ran out. Notwithstanding the oral agreement for a 10% fee, Northstar received no payments from Huffman Construction. In September 2010, Risko became concerned that no such payments had been forthcoming, so he made telephonic inquiry to Huffman. In response, Huffman acknowledged that he owed Northstar the money, but asked for a credit for the $200, 000 that Northstar owed Huffman Construction for services provided on the May 26 subcontractor agreement. ( Id. at 30.) Risko assented. ( Id. )[7] In October 2010, Risko called again, and Huffman "said he was waiting for payment from NRC." ( Id. ) Huffman reiterated that explanation in November 2010 when Risko called him a third time. ( Id. ) After that, Risko placed numerous further calls to Huffman, who neither accepted nor returned them. ( Id. ) This is so, even though Huffman Construction admittedly took in gross receipts of between $10 million and $14 million on the BP oil-spill remediation project. (Huffman Dep., at 12-13.) This lawsuit followed.

Northstar's Complaint (doc. 1) against Huffman and Huffman Construction alleges causes of action for breach of contract, unjust enrichment, conversion, and fraud, negligent and/or reckless misrepresentation. Northstar demands an award of compensatory damages of $1 million (which equates to the agreed-upon 10% finder's fee applied to $10 million in gross receipts) against both defendants, jointly and severally, plus punitive damages on the fraud/misrepresentation claim. Defendants' Answer (doc. 12) interjects the following purported affirmative defenses: (i) the Complaint fails to state claims upon which relief can be granted; (ii) the Complaint is not subject to admiralty and maritime jurisdiction;[8] (iii) lack of personal jurisdiction over defendants; and (iv) improper venue. (Doc. 12, at 1.) Defendant Huffman Construction also brought a Counterclaim (doc. 16) against Northstar, alleging a single state-law cause of action based on allegations that Northstar owes Huffman Construction money for labor and materials provided under the parties' written subcontract agreement. According to the Counterclaim, "Northstar has failed and refused to pay to Huffman Construction the due balance for its services in the amount of $408, 083.45, " plus interest, attorney's fees and costs. (Doc. 16, ΒΆ 7.)

Defendants now move for summary judgment on several aspects of this litigation. First, they challenge the existence and enforceability of the alleged oral agreement for Huffman Construction to pay a 10% finder's fee to Northstar. Second, they seek dismissal of all claims against Michael Huffman individually (as opposed to those against Huffman Construction). Third, defendant Huffman Construction moves for summary judgment as to liability on its counterclaim against Northstar. Plaintiff opposes all such grounds for Rule 56 relief. Each component of defendants' Motion for Summary Judgment will be considered in turn.

II. Summary Judgment Standard.

Summary judgment should be granted only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Rule 56(a), Fed.R.Civ.P. The party seeking summary judgment bears "the initial burden to show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial." Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). Once the moving party has satisfied its responsibility, the burden shifts to the non-movant to show the existence of a genuine issue of material fact. Id. "If the nonmoving party fails to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof, ' the moving party is entitled to summary judgment." Id. (quoting Celotex Corp. v. Catrett, 477 U.S. 317 (1986)) (footnote omitted). "In reviewing whether the nonmoving party has met its burden, the court must stop short of weighing the evidence and making credibility determinations of the truth of the matter. Instead, the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 999 (11th Cir. 1992) (internal citations and quotations omitted). "Summary judgment is justified only for those cases devoid of any need for factual determinations." Offshore Aviation v. Transcon Lines, Inc., 831 F.2d 1013, 1016 (11th Cir. 1987) (citation omitted).

III. Analysis.

A. The Alleged Oral Contract.

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