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Horizon Navigation Ltd. v. Progressive Barge Line, Inc.

United States District Court, E.D. Louisiana

February 5, 2019


         SECTION “L” (3)

          ORDER & REASONS

          Eldon E. Fallon U.S. District Court Judge

         Before the Court is a motion to dismiss filed by Third-Party Defendant Ausca Shipping Limited (“Ausca”). R. Doc. 34. Defendant and Third-Party Plaintiff Progressive Barge Line Inc. (“Progressive”) opposes the motion. R. Doc. 43. Ausca has filed a reply, R. Doc. 50, to which Progressive has filed a surreply, R. Doc. 54. The Court heard oral argument on the motion on December 19, 2018. R. Doc. 51. Having considered the parties' arguments and reviewed the applicable law, the Court is ready to rule.

         I. BACKGROUND

         This case arises out of an oil spill in the Mississippi River that occurred during the refueling of the M/V VITAHORIZON, for which the vessel's owner, Plaintiff Horizon Navigation Ltd. (“Horizon”), seeks to recover “fines, penalties, response costs and/or damages exceeding $1.1 million” from Defendant Progressive. R. Doc. 1 at ¶ 14. According to Horizon's complaint, Progressive overfilled the M/V VITAHORIZON's fuel tanks after allegedly failing to inform those aboard the vessel that the amount of the original fuel order had been increased from 1600 metric tons to 1650 metric tons. Id. at ¶¶ 6-12.

         Prior to the spill, Ausca entered into a time charter with Horizon for the M/V VITAHORIZON. R. Doc. 28 at ¶ 11.[1] According to Progressive's third-party complaint, the time charter “obligates Charterer, Ausca, to provide and pay for all fuel (also known as bunkers) for the M/V VITAHORIZON.” Id. at ¶ 12. Pursuant to this obligation, Progressive alleges, “Ausca contracted with [non-party Glander International Bunkering (Norway) AS (“Glander”)] . . . to arrange for purchase of, and delivery to, M/V VITAHORIZON a quantity of bunkers.” Id. at ¶ 15. In turn, Glander, allegedly acting as Ausca's agent, contracted with non-party Chevron Marine Products LLC (“Chevron”) to purchase fuel for the VITAHORIZON. Id. at ¶ 17. On August 30, 2017, Chevron contracted with Progressive to deliver fuel to the M/V VITAHORIZON. R. Doc. 1 at ¶ 6. The next day, Chevron instructed Progressive to increase the amount of fuel to be delivered to the VITAHORIZON from 1, 600 metric tons to 1, 650 metric tons. Id. at ¶ 7.

         Horizon alleges that, “[d]espite the increased order amount, on or about September 2, 2017, Progressive informed the VITAHORIZON that it would be delivering 1, 600 metric tons of [heavy fuel oil (“HFO”)] to the ship. Progressive never informed the VITAHORIZON that the amount of HFO ordered for delivery had been increased to 1, 650 metric tons, or that it would pump more than 1, 600 metric tons to the VITAHORIZON.” Id. at ¶ 8. As a result, on September 3, 2017, “Progressive's crew overfilled the VITAHORIZON's bunker tanks causing HFO to spill onto the ship's deck, down her side, onto one or more of Progressive's vessels and into the Mississippi River.” Id. at ¶ 12.

         On May 1, 2018, Horizon filed suit against Progressive for “damages, expenses, costs and all other losses resulting from the incident, ” alleging the damage was caused by Progressive's negligence and its vessels' unseaworthiness. Id. at ¶ 15.[2] On August 30, 2018, Progressive filed a counterclaim against Horizon. R. Doc. 21. On September 21, 2018, Progressive filed a third-party complaint against Ausca and tendered to Ausca Horizon's complaint against Progressive, pursuant to Federal Rule of Civil Procedure 14(c). R. Doc. 28 at ¶ 1. Progressive alleges Ausca, as the charterer, had the legal duty and contractual obligation to purchase fuel for the vessel, provide orders and directions to the M/V VITAHORIZON's captain, and to advise Horizon of the number of bunkers to be delivered. Id. at ¶¶ 23-24. Progressive contends the damages sustained by both Progressive and Horizon were caused by Ausca's fault, negligence, want of due care, and breach of contractual obligations. Id. at ¶¶ 25-26.


         In its motion, Ausca seeks dismissal or a stay of Progressive's claims against it, including both Progressive's direct claims and Progressive's Rule 14(c) tender of Horizon's compliant. First, Ausca argues Progressive's direct claims sound in negligence; thus, Ausca contends, because Progressive's complaint does not allege Ausca owed any duties to Progressive, Progressive has failed to state a claim for negligence upon which relief may be granted. R. Doc. 34-1 at 2, 10. Second, with respect to Progressive's Rule 14(c) tendering of Horizon's complaint to Ausca and its claim seeking contribution, Ausca contends this claim turns on whether Ausca may be held directly liable to Horizon for its claimed losses. Id. at 2, 7-9. According to Ausca, its time charter with Horizon for the M/V VITAHORIZON contains an arbitration clause, calling for any disputes between Horizon and Ausca to be resolved through binding arbitration in London pursuant to English law. Thus, according to Ausca, because Progressive's tender and contribution claims would require Ausca to directly or derivatively defend itself against Horizon, any such claims must be submitted to arbitration. Id. at 8. As a result, Ausca contends the Rule 14 tender should be dismissed or stayed pending the outcome of arbitration between Ausca and Horizon. Id. Relevant to the instant motion, aside from Progressive's Rule 14(c) tender of Horizon's complaint to Ausca, at this juncture, Horizon has not brought any claims against Ausca, nor has Horizon entered into arbitration proceedings with Ausca.

         In opposition, Progressive contends that, as there currently is not arbitration pending between those entities and it does not appear either party intends to engage in arbitration, granting a stay pending arbitration between Horizon and Ausca would serve only to prevent any recovery from Ausca in this case and “is nothing more than an attempted ‘end run' around Progressive's Rule 14(c) rights.” R. Doc. 43 at 3, 9-12. With respect to its direct claims against Ausca, Progressive points out that, “[u]nder general maritime law, . . . ‘[w]hether a defendant owes a plaintiff a legal duty is a question of law.'” R. Doc. 54 at 4 (quoting Canal Barge Co., Inc. v. Torco Oil Co., 220 F.3d 370, 376 (5th Cir. 2000)). Thus, according to Progressive, because “an allegation that is simply couched as a legal conclusion (such as ‘Ausca owed Progressive a duty under general maritime law') is not considered to be true for purposes of determining whether a claim for relief has been properly stated, . . . . it has pled sufficient facts to not only state a claim for relief against Ausca that is plausible on its face, but also to place Ausca on fair notice of the claims that it is directly liable to Horizon and to Progressive.” Id. at 4-5.

         III. LAW & ANALYSIS

         In its motion, Ausca moves to stay or dismiss Progressive's direct claims for failure to state a claim. Ausca also seeks dismissal of Progressive's Rule 14(c) tender of Horizon's complaint or a stay of those claims pending arbitration between Ausca and Horizon. The Court considers each issue in turn.

         A. Horizon's Direct ...

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