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Northstar Marine, Inc. v. Huffman Construction, Inc.

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

January 6, 2015



WILLIAM H. STEELE, Chief District Judge.

This matter came before the Court for non-jury trial on November 19, 2014. Pursuant to Rule 52(a)(1), Fed.R.Civ.P., the Court now finds the facts specially and states its conclusions of law separately.

I. Preliminary Matters.

A. Nature of the Dispute.

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. Plaintiff, Northstar Marine, Inc. ("Northstar"), claims that it entered into an oral agreement with defendant, Huffman Construction, Inc. ("Huffman Construction"). According to Northstar, the terms of such oral contract were that Northstar agreed to introduce Huffman Construction to the National Response Corporation ("NRC") as a direct contractor, in exchange for Huffman Construction paying Northstar a finder's fee of 10% of its gross invoices billed to and paid by NRC. Huffman Construction denies that any such deal was ever struck. For its part, Northstar alleges that Huffman Construction failed and refused to honor this agreement, even as Huffman Construction collected nearly $10 million in direct billings from an NRC contract obtained through Northstar's good graces. On this basis, Northstar asserts state-law claims against Huffman Construction for breach of contract, unjust enrichment, conversion, and fraud, negligent and/or reckless misrepresentation. Pursuant to the Joint Pretrial Document (doc. 84), Northstar demands judgment from Huffman Construction in the amount of $915, 904, plus interest and costs.

Also joined in this action is Huffman Construction's counterclaim against Northstar for money owed. Huffman Construction claims that Northstar failed and refused to pay it certain funds due and owing for oil spill response services provided under a subcontract agreement. On September 29, 2014, the undersigned entered an Order (doc. 83) granting Huffman Construction's motion for summary judgment as to liability on its counterclaim. That Order held that "Northstar is liable to Huffman Construction on said Counterclaim, with the amount of damages (and any offset against amounts that Huffman Construction may be found to owe Northstar) to be fixed by the trier of fact at trial." (Doc. 83, at 20.) Thus, the only remaining issue for trial as to the counterclaim is the amount of damages to which Huffman Construction is entitled. Huffman Construction pegs that figure at $385, 773.60, while Northstar contends that the proper sum is actually $194, 050.

B. The Record/Matters Considered.

The triable issues of law and fact joined in this matter are as delineated in the Joint Pretrial Document (doc. 84), and incorporated in the Order on Pretrial Conference (doc. 88). In resolving such triable issues, the Court has reviewed and considered the following: (i) all witness testimony and exhibits admitted into evidence at the bench trial conducted on November 19, 2014; (ii) defendant's designations from the transcript of the first Chris Eilers deposition conducted on June 3, 2014, as attached to a letter from defendant's counsel received by the undersigned's chambers on December 3, 2014, plus plaintiff's counter-designations as set forth in Section G of the Joint Pretrial Document;[1] (iii) the transcript and video recording of the entire deposition of Johnny Slaughter, conducted on October 29, 2014, as attached to a letter from defendant's counsel received by the undersigned's chambers on December 9, 2014;[2] and (iv) the video recording of the second Chris Eilers deposition conducted on November 13, 2014, as attached to defendant's counsel's letter to chambers received on December 9, 2014.[3] By written Notices (docs. 96 & 97) submitted after trial, both sides disclaimed any intent or desire to put additional exhibits or evidence before the Court. Therefore, the above-referenced materials constitute the universe of evidence that the Court has considered for purposes of making the findings of fact and conclusions of law set forth herein.

II. Findings of Fact.

A. Northstar's Relationship with NRC.

Plaintiff, Northstar Marine, Inc., is a New Jersey-based company in the business of providing marine and environmental services, including without limitation work boats, barges and tugboats for oil spill cleanup projects. One entity for which Northstar provides such services is National Response Corporation ("NRC"), which is akin to a general contractor for oil spill cleanup. Northstar has been a part of NRC's network of contractors since the early 1990s and has responded to approximately 30 oil spill events pursuant to its NRC contracts over the years. By virtue of that extensive history of dealings, Northstar and its president, Phil Risko, have developed close working relationships with NRC officials.

At all relevant times, Northstar's compensation arrangement with NRC was that Northstar would submit a "rate sheet" each year, itemizing prices for labor, equipment, and boats that it could provide in connection with an oil spill response effort. Following NRC approval of that rate sheet, it would remain in effect for a term of one year, and would govern Northstar's compensation from NRC. To obtain response resources upon NRC request in the event of an oil spill, Northstar worked with literally dozens of subcontractors, in addition to providing certain boats, equipment and labor itself.

B. The BP Oil Spill.

In April 2010, the DEEPWATER HORIZON drilling platform exploded, causing a massive oil spill in the central Gulf of Mexico (the "BP Oil Spill"). NRC and Northstar became heavily involved in the cleanup efforts. A command center was established in the Mobile Convention Center in Mobile, Alabama to facilitate effective deployment of response resources in what became an evolving crisis of unprecedented size and scope. Phil Risko (on behalf of Northstar) and various representatives of NRC (including an assistant logistics manager named Chris Eilers) were among those stationed at the command center. As the crisis unfolded over a period of weeks, NRC would receive requests from the field for manpower, resources, vessels, equipment and the like, and would in turn look to contractors such as Northstar to fill those requests in a prompt and efficient manner. In fact, Risko was literally sitting at a table with Eilers, other NRC representatives, and other contractors, fielding requests for vessels, operators, equipment and so on as they filtered in to the command center. The atmosphere was both chaotic and ...

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