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

United States District Court, E.D. Louisiana

March 21, 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. 63. Plaintiff Horizon Navigation Ltd. (“Horizon”) and Defendant Progressive Barge Line, Inc. (“Progressive”) oppose the motion. R. Docs. 67, 69. The Court heard oral argument on the motion on March 20, 2019. R. Doc. 70. 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, 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.

         On November 12, 2018, Ausca filed a motion seeking dismissal of Progressive's claims against it, or alternatively, to stay Progressive's Rule 14(c) tender pending arbitration. R. Doc. 34. The Court denied the motion in part and granted the motion in part following oral argument on February 5, 2019. R. Doc. 59. The Court denied the motion to the extent Ausca sought dismissal of Progressive's direct claims against it, but stayed the claims against Ausca brought by Horizon via Progressive's Rule 14(c) tender pending the outcome of contractually mandated arbitration. Id. at 15.


         a. Ausca's Motion to Dismiss Progressive Barge Line Inc.'s Claims for Indemnity and Contribution

         In its motion, Ausca argues the Court should dismiss Progressive's indemnification and contribution claims against it, as it agrees with Progressive's prior suggestion that the Court treat Ausca as a settling Defendant, thereby allowing Horizon to recover from Progressive only the proportion of liability for which the Court finds Progressive responsible at the bench trial of this matter. R. Doc. 63. According to Ausca, because the Court stayed the Rule 14(c) tender, Progressive's claims for indemnification or contribution “have been vitiated or voided . . . [and] are no longer operative.” R. Doc. 63-1 at 3, 6. Further, Ausca contends, to allow Progressive to seek contribution from Ausca following trial would constitute an “end-run” of the arbitration clause between Ausca and Horizon, as litigating the contribution claim would require Ausca to defend claims that it is liable to Horizon. Id. at 4-5. Finally, Ausca points to this Court's prior order, which states “even if Horizon never brings claims against Ausca, Progressive's interests will be protected, as apportionment of liability exists whether or not Ausca is impleaded under Rule 14(c).” Id. at 7 (quoting R. Doc. 59 at 14). According to Ausca, based on this quoted sentence, the apportionment of liability approach is already the law of this case. Id.

         b. Progressive's Opposition

         Progressive opposes Ausca's motion, arguing “if Progressive and Ausca are found to be concurrently at fault for Horizon's alleged damages, and Horizon seeks to recover all of its damages from Progressive, then Progressive would have a right to seek contribution from Ausca for any amounts paid over and above Progressive's proportionate share of the damages.” R. Doc. 67 at 4. Next, Progressive argues that a judgment on the pleadings dismissing Progressive's contribution and indemnity claims would effectively operate as a dismissal of those claims on the merits. Id. at 5. Thus, Progressive argues, a premature dismissal of Progressive's contribution and indemnity claims on the ...

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