Justia Contracts Opinion Summaries

In 2011, Catlin (Syndicate 2003) at Lloyd’s (“Catlin”) issued to San Juan Towing and Marine Services (SJT), a ship repair company based on San Jan, Puerto Rico, a marine insurance policy to cover SJT’s floating drydock. After the drydock was damaged and sold for scrap, the SJT filed a claim with Catlin, alleging the total loss of the drydock in the amount of $1,750,000. Catlin denied this claim. Catlin then filed a declaratory judgment complaint against SJT, alleging eight admiralty or maritime claims and seeking to void the policy. SJT filed a separate diversity suit against Catlin seeking recovery for the full insured value under the policy for the loss of the drydock. At trial, the district court concluded that the insurance policy was void ab initio pursuant to the doctrine of uberrimae fidei. The First Circuit affirmed as modified, holding (1) the contract was voidable, not void ab initio; and (2) SJT violated the doctrine of uberrimae fidei in its procurement of the policy, and thus, Catlin was entitled to void the policy. View "Catlin (Syndicate 2003) at Lloyd’s v. San Juan Towing & Marine Servs., Inc." on Justia Law

Celtic Marine filed suit against Justice in this maritime dispute for breach of contract. After the parties reached two settlements and both were not fulfilled, Celtic Marine moved for summary judgment to enforce an acceleration clause contained in the second agreement for all payments due under the first settlement agreement. Celtic Marine also moved to reopen the case under Rule 60(b)(6). The district court granted both motions, granting leave for Celtic Marine to amend its complaint and then denied Justice's motion to reconsider. The court concluded that 28 U.S.C. 1292(a)(3) does not grant the court jurisdiction over the district court's Rule 60(b) order and, therefore, the court dismissed Justice's appeal for want of jurisdiction. In regards to summary judgment, the court concluded that there was no genuine dispute that the email exchange did not amend the October Settlement Agreement and Celtic Marine did not waive its right to exercise the acceleration clause. Accordingly, the court affirmed the district court's grant of summary judgment. View "Celtic Marine Corp. v. James C. Justice Co., Inc." on Justia Law

The Club is a non-profit provider of protection and indemnity insurance. The Club's Rules include a choice-of-law provision selecting New York law and a two-year statute of limitations for claims against the Club. The Club filed a civil action against defendant alleging that it breached the insurance contract by failing to reimburse the Club for a shortfall and by failing to pay the overdue insurance premiums. The court agreed with the district court, and precedent, that an otherwise valid choice-of-law provision in a maritime contract is enforceable and may require application of a jurisdiction's statute of limitations, in lieu of the doctrine of laches, to govern issues regarding the timeliness of claims asserted under that agreement. Accordingly, the court held that the district court correctly applied New York's six-year statute of limitations to the Club's claims arising under its maritime insurance contract with plaintiff. Therefore, the court affirmed the judgment of the district court. View "American Steamship Owners v. Dann Ocean Towing, Inc." on Justia Law

Plaintiff, a Honduran citizen who suffered a back injury while employed as a mason aboard one of Carnival's ships, filed suit against Carnival in state court asserting claims of Jones Act, 46 U.S.C. 30104, negligence, unseaworthiness, and failure to provide adequate maintenance and cure. Plaintiff alleged that the physician chosen and paid by Carnival negligently performed his back surgery. Carnival removed to federal court. On appeal, plaintiff appealed the district court's order compelling arbitration of his claims under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (CREFAA), 9 U.S.C. 201-208. Plaintiff argued that his Jones Act claim did not fall within his employment contract ("Seafarer's Agreement") with Carnival and, therefore, was not within the scope of the contract's arbitration clause. The court concluded that the order compelling plaintiff to arbitrate his claims was "a final decision with respect to arbitration," and the court had appellate jurisdiction. The court also concluded that plaintiff's dispute with Carnival clearly arose out of or in connection with the Seafarer's Agreement and was subject to arbitration. Accordingly, the court affirmed the district court's order. View "Martinez v. Carnival Corp." on Justia Law

The 19th-century steamship S.S. Central America, the “Ship of Gold,” sank in the Atlantic Ocean in 1857, taking many tons of gold with her. The wreckage was discovered more than 130 years later by explorers led by Thompson, in one of the most significant finds in maritime history. Thompson is a fugitive from the law. Those who assisted Thompson in locating the wreckage signed non-disclosure agreements in exchange for a percentage of the net recovery, but none have received payment. In their suit, Thompson’s business entities asserted a two-year statute of limitations for actions in salvage and three counterclaims. The district court rejected the time-bar argument and granted summary judgment against all counterclaims. While an interlocutory appeal was pending, the district court granted prejudgment attachment and an injunction against one of the entities and Thompson, forbidding them from divesting certain assets. The Sixth Circuit agreed that the time bar does not apply, affirmed summary judgment against the counterclaims for failure to raise an issue of fact material to the disposition of the case, and upheld the injunction. View "Williamson v. Recovery Ltd. P'ship" on Justia Law

This case stemmed from a maritime contract entered into by Blue Whale and Development. Blue Whale filed a complaint in district seeking to attach property belonging to Development's alleged alter ego, HNA, in anticipation of a future arbitration award against Development pursuant to Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims. The court concluded that the district court properly applied federal maritime law to the procedural question of whether Blue Whale's claim sounded in admiralty, and the claim did sound in admiralty because it arose out of a maritime contract; the issue of the claim's prima facie validity was a substantive inquiry; however, the district court's application of English law to this question was improper because the charter's party's choice-of-law provision did not govern Blue Whale's collateral alter-ego claim against HNA; and drawing on maritime choice-of-law principles, the court held that although federal common law did not govern every claim of this nature, federal common law did apply here, primarily because of the collateral claim's close ties to the United States. Accordingly, the court remanded for reconsideration of the prima facie validity of Blue Whale's alter-ego claim under federal common law. View "Blue Whale Corp. v. Grand China Shipping Dev. Co., Ltd., et al." on Justia Law

This appeal arose out of an allision between a vessel owned by Settoon and an oil well. On appeal, Settoon challenged the district court's grant of summary judgment in favor of the umbrella insurers. The court concluded that the umbrella insurers were not liable for damages resulting from the allision because Settoon failed to provide them notice within 30 days; SNIC was liable to Settoon because delayed delivery prevented SNIC from relying on the exclusions in the policy and the conditions precedent of the exceptions to the exclusions; and prejudgment interest should be calculated from the date Settoon paid for the allision. Accordingly, the court reversed and remanded for calculation of prejudgment interest and affirmed the district court's judgment in all other respects. View "In Re: Settoon Towing, L.L.C." on Justia Law

Clevo appealed the district court's grant of summary judgment in favor of Hecny. Clevo, a Taiwan-based manufacturer of computer parts and accessories, and Amazon, a Brazilian entity, agreed that Clevo would manufacture and sell, and Amazon would buy, millions of dollars' worth of Clevo computer parts. Under Clevo and Amazon's negotiated terms, the Hecny Group was designated to handle all of the contract shipments. More than a year after the initial misdelivery to Amazon, Clevo sued numerous Hecny Group entities for the unpaid remainder of the goods' purchase price. The court concluded that the Guarantee was initially effective to place Clevo and Hecny Transportation in direct contractual privity, without any contractually-created statute of limitations. But that initial relationship was modified when the Bills of Lading issued. By operation of the Himalaya Clause, the benefit of the one-year statue of limitations in the Bills of Lading extended beyond Hecny Shipping to Hecny Transportation as well. Because Hecny Transportation had asserted that provision in defense to suit, Clevo's claims were time-barred. Accordingly, the court affirmed the judgment. View "Clevo Co. v. Hecny Transp., Inc." on Justia Law

Plaintiff appealed the district court's entry of an order declaring enforceable under general maritime law a liquidated damages provision (LD Provision) in a contract between defendant and plaintiff. The parties entered into a Vessel Sales Agreement (VSA), which included the LD Provision, that provided for a $250,000 payment for each violation of the non-competition clause. The court followed Farmers Exp. Co. v. M/V Georgis Prois in finding persuasive the district court's careful factual findings as to whether the LD Provision was a reasonable forecast of damages. The court held that looking at the contract at the time it was made, ex ante breach, the court could not bicker with the $250,000 per occurrence forecast. Plaintiff had not met its burden to prove that the LD Provision was a penalty. Therefore, the court concluded that the district court properly held that the LD Provision was enforceable and affirmed the judgment. View "International Marine, L.L.C., et al v. Delta Towing, L.L.C." on Justia Law

Appellants, the M/V Akili, its owner, and manager, appealed from the district court's judgment holding that it was liable in rem for damage to cargo shipped aboard the vessel. Ferrostaal cross-appealed from the holding that the owner and manager were not liable in personam under a bailment theory. At issue was whether (1) an in rem proceeding rendering the Akili liable for damage to, or loss of, cargo was unavailable in this matter because a vessel was not a "carrier" within the meaning of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. 30701, and (ii) the free-in-and-out provision in the Voyage Charter Party purportedly absolving the Akili of in rem liability was enforceable. The court held that the first issue was essentially irrelevant because a vessel's in rem liability for damage to cargo existed under maritime common law, not COGSA, for a violation of a carrier's contractual or statutory obligations. The court resolved the second issue against enforcement of the free-in-and-out provision so far as it might be construed to prevent in rem liability of the vessel. In doing so, the court did not decide whether COGSA applied as a matter of law to this voyage because, even if it did not, the Voyage Charter Party's Clause Paramount contractually incorporated the Hague-Visby rules prohibiting a carrier from contracting for a waiver of its obligations regarding damage to cargo. The court also held that there was no in personam liability for the owner and manager where the carriers remained responsible for delivery of the goods and maintained exclusive control and custody over the cargos through agents they hired directly. View "Man Ferrostaal, Inc. v. M/V Akili" on Justia Law