Justia Contracts Opinion Summaries

The case involves a dispute between the municipality of Anchorage and the United States regarding two agreements related to the improvement of the Port of Alaska. In 2003, Anchorage and the United States, through the Maritime Administration (MARAD), signed a Memorandum of Understanding (2003 Memorandum) to upgrade and expand the port. In 2011, they signed a Memorandum of Agreement (2011 Memorandum) to address issues that arose during the project, including large-scale damage discovered in 2010.The United States Court of Federal Claims held that the United States breached the 2003 Memorandum by failing to deliver a defect-free port and the 2011 Memorandum by settling subcontractor claims without consulting Anchorage. The court awarded Anchorage $367,446,809 in damages, including $11,279,059 related to the settlement of subcontractor claims.The United States Court of Appeals for the Federal Circuit reviewed the case. The court found that the 2003 Memorandum did not require the United States to deliver a defect-free port, as it lacked specific terms such as what was to be built, where, dimensions, deadlines, and costs. The court vacated the Court of Federal Claims' decision regarding the 2003 Memorandum and remanded for further proceedings.However, the Federal Circuit affirmed the Court of Federal Claims' decision that the United States breached the 2011 Memorandum by settling subcontractor claims without conferring with Anchorage. The court upheld the award of $11,279,059 in damages to Anchorage for this breach. The case was vacated in part, affirmed in part, and remanded for further consideration consistent with the Federal Circuit's opinion. View "ANCHORAGE v. US " on Justia Law

Jon Willis, an employee of Shamrock Management, L.L.C., was injured while working on an offshore oil platform operated by Fieldwood Energy, L.L.C. The injury occurred when a tag line slipped off a grocery box being delivered by a vessel operated by Barry Graham Oil Service, L.L.C. Willis sued Barry Graham for negligence. Barry Graham then sought indemnification, defense, and insurance coverage from Shamrock and its insurer, Aspen, based on a series of contracts linking the parties.The United States District Court for the Western District of Louisiana denied Barry Graham's motion for summary judgment and granted Shamrock and Aspen's motion, ruling that Barry Graham was not covered under the defense, indemnification, and insurance provisions of the Shamrock-Fieldwood Master Services Contract (MSC). Willis's case was settled, and Barry Graham appealed the district court's decision on its third-party complaint.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The court concluded that the MSC required Shamrock to defend, indemnify, and insure Barry Graham because Barry Graham was part of a "Third Party Contractor Group" under the MSC. The court also determined that the cross-indemnification provisions in the contracts were satisfied, and that the Louisiana Oilfield Anti-Indemnity Act (LOAIA) did not void Shamrock's obligations because Fieldwood had paid the insurance premium to cover Shamrock's indemnities, thus meeting the Marcel exception.The Fifth Circuit reversed the district court's judgment and remanded the case for further proceedings consistent with its opinion. View "Barry Graham Oil v. Shamrock Mgmt" on Justia Law

Centaur, L.L.C. entered into a Master Services Contract (MSC) with United Bulk Terminals Davant, L.L.C. (UBT) in 2015 to build a concrete containment wall at UBT's dock facility. River Ventures, L.L.C. provided vessel transportation for Centaur’s employees working on the project. Centaur employee Devin Barrios was injured while transferring a generator from a River Ventures vessel to a barge leased by Centaur. The district court found River Ventures 100% at fault for the accident and imposed a $3.3 million judgment. River Ventures and its insurer, XL Specialty Insurance Company, satisfied the judgment and subsequently brought breach of contract claims against Centaur under the MSC.The United States District Court for the Eastern District of Louisiana held a bench trial on the breach of contract claims. The court dismissed the claims, finding an ambiguity in the MSC regarding Centaur’s insurance procurement obligations. Specifically, the court found that requiring Centaur to procure a Protection & Indemnity (P&I) policy with crew/employee coverage would result in an absurd consequence due to potential duplicative coverage with the Worker’s Compensation policy.The United States Court of Appeals for the Fifth Circuit reviewed the case. The appellate court found that the MSC unambiguously required Centaur to procure a P&I policy that included crew/employee coverage. The court disagreed with the district court’s finding of absurdity, noting that mutually repugnant escape clauses in the Worker’s Compensation and P&I policies would result in both policies being liable on a pro rata basis. The appellate court also reversed the district court’s dismissal of the excess/bumbershoot breach of contract claim, as it was contingent on the P&I claim. The Fifth Circuit reversed the district court’s judgment and remanded the case for further proceedings consistent with its opinion. View "Centaur v. River Ventures" on Justia Law

A construction company chartered a barge and obtained insurance through a broker. Upon returning the barge, the owner discovered damage and sued the construction company in federal court. The construction company requested its insurer to defend it, but the insurer refused, citing lack of coverage. After the federal court awarded damages to the barge owner, the construction company sued the insurer and broker in state court, alleging breach of contract, insurance bad faith, and negligence.The Superior Court of Alaska denied the construction company's motion for summary judgment against the broker and insurer. The court granted summary judgment to the broker and insurer, finding that the construction company's claims were barred by the statute of limitations. The court held an evidentiary hearing and concluded that the construction company had not relied on any reassurances from the broker that would have delayed the filing of the lawsuit.The Alaska Supreme Court reviewed the case and affirmed the Superior Court's decision. The court held that the construction company's claims against the broker were time-barred, as the statute of limitations began to run when the insurer first denied coverage. The court also held that the construction company's claims against the insurer were time-barred, as the statute of limitations began to run when the insurer refused to defend the construction company in the federal lawsuit. The court concluded that the construction company's claims were untimely and affirmed the summary judgment in favor of the broker and insurer. View "Swalling Construction Company, Inc. v. Alaska USA Insurance Brokers, LLC" on Justia Law

Ultra Deep Picasso Pte. Limited (Ultra Deep) is a contractor specializing in undersea vessel operations for marine construction. Dynamic Industries Saudi Arabia Ltd. (Dynamic) subcontracted Ultra Deep for a project related to a contract with Saudi Aramco. Ultra Deep completed work worth over ten million dollars but alleged that Dynamic failed to pay, breaching their agreement. Ultra Deep filed a complaint in the Southern District of Texas, seeking breach of contract damages and a maritime attachment and garnishment of Dynamic’s funds allegedly held by Riyad Bank.The district court granted Ultra Deep an ex parte order for attachment of Dynamic’s assets at Riyad Bank. Dynamic responded with motions to dismiss for lack of personal jurisdiction, improper venue, and to compel arbitration, which were denied. Dynamic and Riyad Bank then moved to vacate the attachment order, arguing that Ultra Deep failed to show Dynamic had property in the Southern District of Texas. The magistrate judge held a hearing and found that Ultra Deep did not present evidence that Dynamic’s property was within the district. The district court adopted the magistrate judge’s recommendation, vacated the attachment order, and dismissed the case with prejudice.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that for a valid Rule B attachment, the property must be found within the district. It concluded that a bank account is located where its funds can be withdrawn. Since Ultra Deep failed to show that Dynamic’s property was within the Southern District of Texas, the court affirmed the district court’s decision to vacate the attachment order and dismiss the case. View "Ultra Deep Picasso v. Dynamic Industries Saudi Arabia Ltd." on Justia Law

In 2020, Milos Product Tanker Corporation transported approximately 40,000 tons of jet fuel belonging to Valero Marketing and Supply Company. Milos had a maritime transportation contract (Charter Party) with GP Global PTE Ltd., which arranged the voyage. Valero purchased the fuel from Koch Refining International PTE Ltd. on "cost and freight" terms, meaning Koch paid for the transportation. Upon delivery, Valero refused to pay Milos, arguing it had already paid Koch. GP Global, facing financial difficulties, also did not pay Milos, leading Milos to sue Valero for breach of contract.The United States District Court for the Central District of California granted summary judgment in favor of Milos, concluding that Valero breached an express or implied contract to pay Milos for the transportation. The court reasoned that Valero's conduct showed its consent to be bound by the Charter Party between Milos and GP Global. The court also found that Valero was alternatively liable under an implied promise to pay, based on its acceptance of the fuel.The United States Court of Appeals for the Ninth Circuit reversed the district court's decision. The appellate court held that under maritime law, the shipper (GP Global) is primarily liable for freight charges, even if a bill of lading suggests otherwise. The court found no express contract between Milos and Valero that would rebut this presumption. The Charter Party specifically stated that GP Global would pay the freight. The court also determined that Valero's conduct did not imply an agreement to be bound by the bills of lading or to pay freight. Additionally, the court found no basis for an implied obligation for Valero to pay under the principles established in States Marine International, Inc. v. Seattle-First National Bank. The court concluded that Valero was not unjustly enriched, as it had paid Koch for the freight charges. The case was remanded for further proceedings consistent with this opinion. View "MILOS PRODUCT TANKER CORPORATION V. VALERO MARKETING AND SUPPLY COMPANY" on Justia Law

A sub-subcontractor, Diamond Services Corporation, entered into a contract with Harbor Dredging, a subcontractor, to perform dredging work in the Houston Ship Channel. The prime contract for the project was awarded to RLB Contracting by the U.S. Army Corps of Engineers, and RLB obtained a surety bond from Travelers Casualty and Surety Company of America. During the project, unexpected site conditions, including the presence of tires, caused delays and increased costs. Diamond continued working based on an alleged agreement that it would be compensated through a measured-mile calculation in a request for equitable adjustment (REA) submitted by RLB to the Corps. However, RLB later settled the REA for $6,000,000 without directly involving Diamond in the negotiations and issued a joint check to Harbor and Diamond for $950,000.The United States District Court for the Southern District of Texas dismissed some of Diamond's claims, including those for unjust enrichment and express contractual claims against RLB, but allowed Diamond's quantum meruit claim to proceed. The court also denied Travelers' motion to dismiss Diamond's Miller Act claims but required Diamond to amend its complaint to include proper Miller Act notice, which Diamond failed to do timely. Subsequently, the district court granted summary judgment in favor of RLB and Harbor, dismissing Diamond's remaining claims and striking Diamond's untimely second amended complaint.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court's summary judgment against Diamond's quantum meruit claims, holding that the express sub-subcontract covered the damages Diamond sought and that Diamond failed to provide evidence of the reasonable value of the work performed. The court also affirmed the dismissal of Diamond's Miller Act claim, as the damages sought were not recoverable under the Act. The court dismissed Diamond's appeal regarding the tug-expenses claim due to untimeliness. View "Diamond Services v. RLB Contracting" on Justia Law

Marek Matthews, a seaman and captain, filed a lawsuit against Tidewater, Inc. and Tidewater Crewing, Ltd., alleging that he was exposed to toxic chemicals during his employment, resulting in severe health issues including end-stage renal failure and stage IV cancer. Matthews, a Florida resident, claimed that the exposure occurred while working on offshore supply vessels in the Red Sea. His employment contract included a forum-selection clause mandating that any disputes be litigated in the High Court of Justice in London, England.Initially, Matthews and other plaintiffs filed the suit in Louisiana state court, asserting claims under the Jones Act and general maritime law. Tidewater removed the case to the United States District Court for the Eastern District of Louisiana and moved to dismiss it based on the forum-selection clause and, alternatively, for failure to state a claim. The district court granted the motion to dismiss on forum non conveniens grounds, finding the forum-selection clause valid and enforceable. Matthews's subsequent motion to reconsider the dismissal was denied.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court's decision, holding that the forum-selection clause was enforceable. The court applied a de novo review to the enforceability of the clause and an abuse of discretion standard to the forum non conveniens analysis. It concluded that Matthews did not meet the heavy burden of proving the clause was unreasonable under the circumstances, despite his health conditions and Louisiana's public policy against such clauses. The court emphasized the federal policy favoring the enforcement of forum-selection clauses in maritime contracts, which outweighed the conflicting state policy. View "Matthews v. Tidewater" on Justia Law

VT Halter Marine (VTHM), a shipbuilder, contracted to build a barge and a tug for a client. During construction, over a thousand steel flange plates were incorrectly bent due to the use of an improperly sized die, leading to thinning and cracking of the plates. The faulty plates were installed onto the vessels, and the cracking was discovered later. The cost of replacing and repairing the cracked flange plates amounted to approximately $3,300,000. VTHM submitted a claim to their insurer, Certain Underwriters of Lloyd’s of London (Underwriters), for the cracked flange plates.The Underwriters denied VTHM's claim, asserting that the policy excluded coverage for faulty workmanship and the cost of replacing or repairing improper or defective materials. VTHM contested the denial, leading to a lawsuit for breach of contract. Both parties filed motions for summary judgment in the trial court. The trial court granted Underwriters' motion for summary judgment, ruling that the policy unambiguously excluded coverage for faulty workmanship and the cost of repairing, replacing, or renewing any improper or defective materials.In the Supreme Court of Mississippi, VTHM appealed the trial court's decision, arguing that the flanges were part of the vessel and coverage for faulty workmanship exists if it results in cracking of the vessel. The Supreme Court, however, affirmed the trial court's judgment. The court found that the insurance policy unambiguously excluded the cost of replacing or repairing improper or defective materials. The court concluded that the faulty workmanship directly resulted in improper materials being installed, and the only resulting damage was to the improper materials themselves. Therefore, VTHM's claim for the costs of repairing and/or replacing the improper materials installed was not covered under the policy. View "VT Halter Marine, Inc. v. Certain Underwriters of Lloyd's of London" on Justia Law

The case involves Puerto Rico Fast Ferries LLC ("Fast Ferries") and Mr. Cade, LLC and SeaTran Marine, LLC ("SeaTran") (collectively, "defendants-appellees"). Fast Ferries had entered into a Master Time Charter Agreement with Mr. Cade, LLC to charter the motor vessel Mr. Cade and procure a licensed crew. The agreement contained mediation and forum-selection clauses. When the final Short Form expired, Fast Ferries returned the vessel to its home port in Louisiana. A year later, Fast Ferries filed a complaint against Mr. Cade, LLC and SeaTran alleging breach of contract and liability pursuant to culpa in contrahendo. The defendants-appellees moved to dismiss the complaint, arguing that the Master Agreement was still in effect and required a written agreement for the charter of M/V Mr. Cade.The district court granted the motion to dismiss in part, concluding that the Master Agreement did not contain a termination date and remained in effect. Therefore, the contract's mediation and forum-selection clauses were binding on the parties. However, the district court did not address Fast Ferries' argument that SeaTran was not a signatory of the agreement and, therefore, could not invoke the mediation and forum-selection clauses contained therein.On appeal, the United States Court of Appeals for the First Circuit affirmed the district court's order on the defendants-appellees' motion to dismiss. The court held that the Master Agreement was still in effect and that SeaTran, despite being a non-signatory, could enforce the Master Agreement's mediation and forum-selection clauses. The court reasoned that Fast Ferries' claims against SeaTran were necessarily intertwined with the Master Agreement, and thus, Fast Ferries was equitably estopped from avoiding the mediation and forum-selection clauses with respect to SeaTran. View "Puerto Rico Fast Ferries LLC v. SeaTran Marine, LLC" on Justia Law