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Agribusiness United DMCC v. Blue Water Shipping Co., Inc.

United States District Court, E.D. Louisiana

December 17, 2018

AGRIBUSINESS UNITED DMCC, et al.
v.
BLUE WATER SHIPPING CO., INC.

         SECTION: “G” (1)

          ORDER

          NANNETTE JOLIVETTE BROWN, UNITED STATES DISTRICT COURT CHIEF JUDGE

         Pending before this Court is Defendant Blue Water Shipping Company, Inc.'s (“Defendant”) “Motion for Partial Summary Judgment Dismissing Claims of Agribusiness United North America Corp.”[1] In this litigation, Plaintiffs Agribusiness United DMCC (“AU Dubai”) and Agribusiness United North America Corp. (“AU North America”) (collectively, “Plaintiffs”), who were charterers/shippers of a vessel, allege that Defendant, a company Plaintiffs hired to arrange services for cargo to be loaded onto the vessel, failed to obtain certain necessary certificates and documents, causing a 10-day delay in the vessel's schedule.[2] Accordingly, Plaintiffs brought claims against Defendant for (1) breach of contract; (2) fraudulent misrepresentation; (3) negligence; and (4) gross negligence.[3] This Court subsequently dismissed the fraudulent misrepresentation, negligence, and gross negligence claims.[4] In the instant motion, Defendant argues that AU North America has not sustained any damages. Having considered the motion, the memoranda in support and opposition, and the applicable law, the Court will grant the motion.

         I. Background

         A. Factual Background

         In the complaint, Plaintiffs allege that in or about October 2012, Plaintiffs were charterers/shippers of the M.V. FENGLI 11 (the “Vessel”).[5] Plaintiffs allege that they hired Defendant as a Freight Forwarder to arrange services for cargo to be loaded onto the Vessel at Savannah, Georgia, and Myrtle Grove, Louisiana.[6] Plaintiffs aver that in connection with those services, Plaintiffs provided Documentary Instructions to the Defendant on or about November 1, 2012, requiring Defendant to arrange for, inter alia, issuance of bills of lading, phytosanitary certificates, fumigation certificates, and numerous other documents.[7]

         On or about December 5, 2012, Plaintiffs aver, the Vessel arrived at Savannah, Georgia, and began loading operations the following day.[8] However, according to Plaintiffs, Defendant did not arrange for a Federal Grain Inspection Service (“FGIS”) inspection of the holds.[9] According to Plaintiffs, Defendant also failed to obtain a phytosanitary certification prior to loading and did not arrange for the FGIS surveyor to be present at commencement of loading.[10]

         Plaintiffs aver that loading operations commenced without the needed surveyor.[11]According to Plaintiffs, “when nearly two Vessel holds were already loaded, ” they learned that no one from USDA/FGIS was present, and, therefore, no official phytosanitary certificate would be issued.[12] As a result, Plaintiffs aver, they had to order that the cargo be unloaded, and then reloaded in the presence of the surveyor, and cargo already loaded had to be shifted.[13] According to Plaintiffs, this caused a ten day delay in the Vessel's schedule.[14]

         Plaintiffs allege that as a result, Plaintiffs sustained losses in Vessel demurrage, extra costs incurred for failure to timely inspect holds, shortages of cargos, and extension penalties incurred at the second loading port.[15] Plaintiffs aver that on or about June 2, 2014, Plaintiffs demanded Defendant pay $636, 234.61 in damages plus interest and costs.[16] According to Plaintiffs, Defendant rejected the claim, and, to date, has failed to pay Plaintiffs any amount for their losses.[17]

         B. Procedural Background

         On October 28, 2016, Plaintiffs filed a complaint in this Court.[18] On May 23, 2017, Defendant filed a motion to dismiss.[19] On June 27, 2017, Plaintiffs filed an opposition.[20] On July 7, 2017, with leave of Court, Defendant filed a reply.[21] On March 26, 2018, the Court issued an order denying the motion to dismiss and granting Plaintiffs leave to amend their complaint within fourteen days to address deficiencies in regards to their claims for fraudulent misrepresentation, negligence, and gross negligence.[22] On April 19, 2018, Defendant filed a motion to dismiss the claims for fraudulent misrepresentation, negligence, and gross negligence, as Plaintiffs had still not amended the complaint.[23] On April 24, 2018, the Court granted Defendant's motion and dismissed Plaintiffs claims for fraudulent misrepresentation, negligence, and gross negligence.[24]On November 6, 2018, Defendant filed the instant motion for summary judgment.[25] On November 29, 2018, Plaintiffs filed an opposition.[26] On December 12, 2018, with leave of Court, Defendant filed a reply.[27]

         II. Parties' Arguments

         A. Defendant's Arguments in Support of the Motion for Summary Judgment

         In the motion, Defendant argues that AU North America “has not sustained damages as a result of any alleged breach of contract by [Defendant], ” and thus AU North America's breach of contract claim should be dismissed with prejudice.[28] Defendant argues that after conducting discovery it became clear that “all of the damages alleged were admittedly borne by AU Dubai, ” not AU North America.[29] In support of this argument, Defendant relies on the deposition testimony of Plaintiffs' owner, managing director and primary witness, Mr. Abderrahim Abou El Ouafa, during which the following exchange occurred:

Q. Who suffered the damages claimed in this lawsuit?
A. [AU Dubai].
Q. So North America didn't suffer any damages?
A. Well, North America Corporation was providing the services to Agribusiness United DMCC, but also were acting as agent to Agribusiness United DMCC, so one or the other of them.
Q. But for the 780-odd thousand dollars that is being claimed, best I can tell from looking at the invoices and the payment slips, every invoice was directed at DMCC, not North America. Is that fair?
A. Yes, that is fair. And -- go ahead.
Q. I don't want to cut you off. Go ahead.
A. And even if it was sent to Agribusiness United North America Corporation, it was paid on behalf of DMCC.
Q. Well, I haven't seen anything that says Agribusiness United North America paid any of the invoices or any of awards or anything like that. Is that accurate?
A. It is.
Q. But even if they had, then DMCC would ultimately be responsible, correct?
A. Yes.[30]

         Based on these statements, Defendant argues there is no dispute as to whether AU North America suffered any damages and thus the claim against AU North America should be dismissed.[31]

         B. Plaintiffs' Arguments in Opposition to the Motion for Summary Judgment

         In opposition, Plaintiffs' argue that AU North America acted as an agent for AU Dubai and made arrangements on AU Dubai's behalf.[32] Plaintiffs recognize that the damages were ultimately suffered by AU Dubai, but they assert that AU North America “was added to this suit to eliminate any arguments regarding proper party plaintiffs.”[33] For instance, Plaintiffs note that certain invoices may have been sent to AU North America yet paid by AU Dubai.[34] Therefore, Plaintiffs state that they simply want to preserve all rights to claim these damages and not be met with an objection that an invoice directed to AU North America was not incurred by AU Dubai.[35]

         Plaintiff then states that “North America offers this limited opposition only noting that the Declaration of El Ouafa, and the cited testimony by Defendant in its motion, establish that North America was acting for and providing services to [AU Dubai]. As such, communications between North America and Blue Water, and other parties, are communications on behalf of [AU Dubai].”[36]Plaintiffs request that instead of dismissal, the Court enters a stipulation that AU North America was acting for and providing services to AU Dubai.[37]

         C. Defendant's Arguments in Further Support of the Motion for Summary Judgment

         In reply, Defendant argues that “AU North America, acting as agent for the disclosed principal AU Dubai, has no claim for damages against [Defendant] and has presented no evidence they are entitled to make any such claim.”[38] Defendant claims that AU North America, which is admittedly an agent acting on the behalf of AU Dubai in this transaction, cannot point to any evidence that it suffered damages.[39] Further, Defendant argues that despite a proposal of a stipulation by the Plaintiffs, they have not submitted any such stipulation on the record.[40]

         III. Legal Standard

         A. Legal Standard ...


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