United States District Court, E.D. Louisiana
FINDINGS OF FACT AND CONCLUSIONS OF LAW
action arises out of a time charter agreement (“the
Charter”) between Reel Pipe, LLC (“Reel
Pipe”) and USA Comserv, Inc. (“USA
Comserv”). USA Comserv builds, maintains, inspects, and
repairs cell phone towers. After Hurricane Maria struck
Puerto Rico in September 2017, USA Comserv was contacted by
several cell phone tower owners and operators to perform
repairs and provide fuel for generators and other backup
Comserv claims it chartered Reel Pipe's vessel, the M/V
Carol Chouest (“the Vessel”), to transport
equipment and 850, 000 gallons diesel fuel to Puerto Rico for
the generators. The Vessel went on charter hire to USA
Comserv beginning on October 2, 2017 and went off charter on
October 30, 2017. Reel Pipe subsequently invoiced USA Comserv
for a total of $303, 008.33 for daily charter hire and other
costs and expenses under the Charter, but has not been paid.
Accordingly, Reel Pipe sued USA Comserv for breach of the
Charter and under Louisiana's open account statute.
answer, USA Comserv alleges that Reel Pipe breached the
Charter by delivering a vessel that was unfit for its
intended voyage and was incapable of transporting the amount
of fuel required by USA Comserv. Furthermore, USA Comserv
claims that Reel Pipe breached its contractual obligations to
obtain necessary certifications and regulatory permitting for
the Vessel so that she could successfully complete her voyage
to Puerto Rico. Specifically, USA Comserv alleges that Reel
Pipe represented that the Vessel was capable of transporting
the desired 850, 000 gallons of fuel by storing additional
fuel in her liquid mud tanks, but to do so, Reel Pipe needed
United States Coast Guard approval. USA Comserv alleges that
Reel Pipe and C-Logistics, LLC (“C-Logistics”),
an affiliate of Reel Pipe, represented that the Vessel's
liquid mud tanks had already been inspected and that the
Vessel would easily obtain regulatory approval. Even after
the Charter was executed, USA Comserv claims that Reel Pipe
and C-Logistics continued to represent that the Coast Guard
permit was merely a formality. USA Comserv claims it had
little to no past experience chartering vessels and relied on
Reel Pipe and C-Logistics as experienced vessel owners and
Comserv claims that Reel Pipe and C-Logistics did not secure
Coast Guard approval to transport the fuel in the
Vessel's liquid mud tanks. Furthermore, USA Comserv
contends that the Vessel could not receive the approval
because she was not a double-hulled vessel as required by
regulations, a requirement Reel Pipe knew or should have
known. USA Comserv states the Vessel departed for Puerto Rico
with fuel stored only in the Vessel's fuel tanks,
limiting the amount of fuel that could be transported. Upon
arrival in Puerto Rico, the Coast Guard did not allow the
Vessel to offload any fuel on the mainland because the Vessel
lacked the required certificates. This allegedly forced USA
Comserv to sell the excess fuel to another vessel offshore at
Comserv further alleges that it entered into a separate
agreement with C-Logistics, in which C-Logistics agreed to
coordinate all logistics and related services under the
Charter. USA Comserv claims that C-Logistics failed to
perform its contractual duties and that Reel Pipe has
attempted to double-bill USA Comserv, once through
C-Logistics for the $1, 200 per day logistics fee, and again
by seeking an additional 10 percent surcharge on services
that should have been performed by C-Logistics. Additionally,
USA Comserv avers that C-Logistics owed it a duty to obtain
all necessary permits and certificates for the Vessel's
voyage to Puerto Rico and for unloading and discharging fuel
in Puerto Rico, which C-Logistics failed to do. Finally, USA
Comserv alleges that C-Logistics owed it a duty to use
commercially reasonable efforts to contract with suppliers of
goods and services at competitive market rates, but instead
engaged in self-dealing and contracted with affiliates of
Reel Pipe and C-Logistics at rates that were higher than
other non-affiliated suppliers.
USA Comserv brings counterclaims against Reel Pipe and
C-Logistics for breach of the Charter, breach of contract,
negligent misrepresentation, and unfair trade practices.
matter came before the Court without a jury on October 21,
2019. The Court has carefully considered the testimony of all
the witnesses, the exhibits entered into evidence during
trial, and the record. Pursuant to Rule 52(a) of the Federal
Rules of Civil Procedure, the Court hereby enters the
following findings of fact and conclusions of law. To the
extent that any findings of fact may be construed as
conclusions of law, the Court adopts them as such. To the
extent that any conclusions of law constitute findings of
fact, the Court adopts them as such.
FINDINGS OF FACT
September 24, 2017, USA Comserv, through its chief executive
officer, Mr. Jim Goff, contacted Mr. Dino Chouest and Reel
Pipe concerning the rental of a vessel to carry diesel fuel
and other cargo to Puerto Rico to aid USA Comserv's cell
phone tower customers following Hurricane Maria. See
Tr. Ex. 101; Tr. at 245 ll. 13-25; Tr. at 285 ll. 7-18.
During the initial email exchange between Jim Goff and Dino
Chouest, Jim Goff asked about “transferable gas and
diesel capacities.” Tr. Ex. 101; Tr. at 246 ll. 11-15;
Tr. at 284 l. 25, 285 ll. 1-3.
response to Jim Goff's request, on September 25, 2017,
Dino Chouest recommended the M/V ALYSSA CHOUEST
(“ALYSSA”) to USA Comserv. Tr. Ex. 102 at 1; Tr.
at 285 ll. 19-23.
response to Dino Chouest's recommendation, Jim Goff
inquired about the ALYSSA's gasoline storage capacity.
Tr. Ex. 103; Tr. at 286 ll. 9-14.
September 25, 2017, Dino Chouest suggested that USA Comserv
retain C-Logistics to assist USA Comserv with coordinating
its shipments to Puerto Rico. Tr. Ex. 1; Tr. at 260 ll.
14-25, 261 ll. 1-3; Tr. at 38 ll. 3-10; Tr. at 287 ll. 2-10.
6. In a
separate email chain from September 25, 2017 negotiating the
Charter, Matthew Van Hoesen of USA Comserv inserted a comment
to the PDF under subsection “17. Compliance with
Applicable Laws” that asked, “Any reason for us
to think that Puerto Rico would have any additional
requirements that you are not aware of? I know that they are
a U.S. territory, but I am not aware if the shipping
regulations are the same.” Tr. Ex. 105 at 15; Tr. at
458 ll. 4-14.
response to Matthew Van Hoesen's email attaching his
comments to the draft Charter, Tracee Cloutier sent an email
on behalf of Edison Chouest Offshore,  stating, in
relevant part, “[t]o our knowledge, there should be no
additional regulations for Puerto Rico since the vessel will
be sailing as a U.S. flagged vessel.” Tr. Ex. 7 at 4;
Tr. at 458 ll. 15-21.
the same email chain, Matthew Van Hoesen asked if the 15
percent administrative fee for third-party costs was
negotiable down to 10 percent, which is what another company
had quoted. Tr. Ex. 105 at 9; Tr. at 483 ll. 10-25, 484 ll.
Tracee Cloutier responded on behalf of Edison Chouest
Offshore that the 10 percent rate was acceptable. Tr. Ex. 7
at 4; Tr. at 484 ll. 5-10.
a September 26, 2017 email, Dino Chouest stated that
“Dane and his team could help with any logistics needs
[USA Comserv] may have and they are [a] great asset to imbed
with [USA Comserv's] teams.” Tr. Ex. 158 at 1.
Goff then began to email Mr. Dane Vizier of C-Logistics,
which included a September 26, 2017 email asking about
gasoline storage on the ALYSSA. Tr. Ex. 2 at 2; Tr. at 288
ll. 21-25, 289 ll. 1-11.
response, Dane Vizier responded that the ALYSSA could carry
550 gallon tote tanks and that he would need to order them.
Tr. Ex. 2 at 2; see Tr. at 99 ll. 10-20.
During the September 26, 2017 email exchange between Dane
Vizier and Jim Goff, Dane Vizier requested that USA Comserv
send C-Logistics a Purchase Order for $1, 200/day. Tr. Ex. 2
at 1; see Tr. at 41 ll. 1-23.
September 26, 2017, Mr. Ken Goff, on behalf of USA Comserv,
sent an email to the Coast Guard advising them that USA
Comserv would be chartering the LIAM MCCALL (a fast boat for
which USA Comserv contracted with a separate entity, Seacor
Marine, LLC) and ALYSSA, and on arrival of the ALYSSA, USA
Comserv would have approximately 150, 000 gallons of
transferable diesel available. Tr. Ex. 93 at 1; Depo. Kenneth
Goff at 15 ll. 18-25, 16 ll. 1-19.
Meanwhile, on September 27, 2017, Dane Vizier emailed
quotations for ten empty diesel tote tanks and five filled
gas tanks to Jim Goff. Tr. Ex. 6; Tr. at 100 ll. 8-18, 101
ll. 1-5; Tr. at 289 ll. 1-7.
Also on September 27, 2017, the president of USA Comserv sent
an email to Sprint stating that it would have two ships
arriving in Puerto Rico carrying diesel fuel, the second of
which would be carrying 200, 000 gallons of diesel fuel for
purchase at $3.00 per gallon. Tr. Ex. 63 at 3; Tr. at 290 ll.
14-21, 291 ll. 7-12.
the email exchange negotiating the terms of the Charter,
Matthew Van Hoesen sent an email on September 28, 2017 on
behalf of USA Comserv asking what day should be written as
the execution date. He also wrote, “I would think it
would be whatever day you have voyage approval from the USCG,
please advise.” Tr. Ex. 107 at 1; Tr. at 459 ll. 10-25,
460 ll. 1-2.
Dino Chouest responded the same day, “USCG does not
approve our voyages. Once we start to take on Fuel for this
charter is the on-hire time. We will sail to Tampa and then
on to PR as directed.” Tr. Ex. 107 at 1; Tr. at 250 ll.
17-22; Tr. at 460 ll. 3-10.
However, in an internal email involving Reel Pipe and its
affiliates dated the same day, Dino Chouest mentioned
“need[ing] a solution to Load our boats with Fuel
including [Liquid Mud] tanks and go pump off shoreside in
PR.” Tr. Ex. 45 at 6; see Tr. at 254 ll.
Dino Chouest also specified, “Issue is USCG
approvals.” Tr. Ex. 45 at 5; Tr. at 266 ll. 20- 21.
Also on September 28, 2017, the Coast Guard said in an email
to Ken Goff that “the M/V Alyssa COI does not has [sic]
the ability to carry passengers but can carry cargo e.i.
[sic] fuel in deck tanks.” Tr. Ex. 95.
response, Ken Goff emailed the Coast Guard on September 28,
2017 and stated that the “Alyssa would be transporting
additional vehicle, construction supplies, and a large
quantity of fuel in the vessel's below deck tanks.”
Tr. Ex. 96 at 1.
Separately, on September 29, 2017, Mr. Pat Flood of Edison
Chouest Offshore sent an email to the Coast Guard which read,
in relevant part:
Edison Chouest Offshore would like to request a waiver to
allow the U.S. flagged vessels . . . Carol Chouest . . . to
bring diesel fuel in their cargo / liquid mud tanks to Puerto
Rico for aid relief . . . If the vessels were to carry diesel
fuel from Port Fourchon, LA to San Juan, PR this would be
outside the scope of their COI and would require them to be
inspected as tank ships. We would like to request a waiver to
allow them to bring diesel fuel carried in their cargo tanks
to the island while acting as an OSV in accordance with their
Tr. Ex. 9; Tr. at 168 ll. 13-25, 169 ll. 1-20.
response to Pat Flood's email, Lt. Jennifer Proctor of
the USCG acknowledged receipt of the waiver request.
Specifically, she wrote that “[d]ue to the surge in
requests, we will get back to you on what the Coast Guard
intends to do regarding Waivers for your vessels.” Tr.
Ex. 126; Tr. at 172 ll. 18-24.
Flood then replied to Lt. Proctor asking her if she had a
timeframe on when to expect an answer to the waiver request.
Tr. Ex. 129; Tr. at 173 ll. 1-5.
next day, on September 30, 2017, Pat Flood again asked Lt.
Proctor if there was any update on his waiver request. Tr.
Ex. 130; Tr. at 173 ll. 13-21.
Meanwhile, on September 29, 2017, Jim Goff sent an email to
Dane Vizier and Dino Chouest following up on a conversation
that Jim Goff and Dane Vizier had the previous day regarding
“a substitute for the Alyssa that had more fuel
capacity.” Tr. Ex. 17; Tr. at 43 ll. 14-19; Tr. at 104
ll. 24-25, 105 ll. 1-8; see Tr. at 268 ll. 22-25,
269 ll. 1-8; Tr. at 293 ll. 10-23.
the same email, Jim Goff also mentioned that the Coast Guard
had informed USA Comserv that the “certificate for the
vessel only allows it to operate in the Gulf and a waiver
would have to be obtained” and while he did not know if
the waiver would be difficult to obtain, he guessed “it
needs to be obtained if [USA Comserv] stay[ed] with the
Alyssa.” Tr. Ex. 17; see Tr. at 110 ll. 11-23;
see Tr. at 292 ll. 14-24.
Also on September 29, 2017, Tracee Cloutier sent an email on
behalf of Edison Chouest Offshore to Matthew Van Hoesen of
USA Comserv stating that “the vessel will be changing
to the CAROL CHOUEST to meet your company's need for more
capacity.” Tr. Ex. 7 at 1; Tr. at 490 ll. 19-25;
see Tr. at 269 ll. 9-14.
Charter was thus executed by and between Reel Pipe and USA
Comserv for the CAROL on September 29, 2017. Tr. Ex. 10 at 1.
Although the Charter does not specifically identify what
cargo is being transported, it does specifically reference
the option to carry fuel as cargo in Section 2d and mentions
that the Charterer is limited to using the Vessel for
“lawful movement of supplies, equipment and other
materials incidental to its operations” in Section 10a.
Tr. Ex. 10 at 1, 3.
the same date as the Charter's execution date, September
29, 2017, Jim Goff inquired about the status of the liquid
mud tanks. Dane Vizier responded that he was
“[a]waiting ABS decision on the mud tanks.” Tr.
Ex. 8 at 1; Tr. at 108 ll. 9-21; Tr. at 299 ll. 24-25, 300
next day, on October 1, 2017, Jim Goff and Eric Pogoda sent
emails to clients stating that USA Comserv would have 200,
000 gallons of diesel fuel available for purchase in Puerto
Rico. Tr. Ex. 65 at 1; Tr. Ex. 66 at 1-2; see Tr. at
October 2, 2017, the CAROL went on hire to USA Comserv. Tr.
Pursuant to the Charter's requirement that all
“fuel carried aboard the Vessel as cargo be paid in
full by CHARTERER at the point of sale, ” Tr. Ex. 10 at
1, USA Comserv purchased 220, 000 gallons of diesel fuel from
a Chouest affiliate on October 2, 2017, Tr. Ex. 122 at 3, and
49, 750 gallons of diesel fuel on October 3, 2017, Tr. Ex.
123 at 3. See Tr. at 115 l. 25, 116 ll. 1-6.
total cost of the invoices was $510, 097.25, from which Reel
Pipe deducted USA Comserv's $115, 000 pre-payment for
fuel. Tr. Ex. 122; Tr. Ex. 123.
October 3, 2017, Pat Flood sent a follow-up email to Patrick
Grizzle of the USCG asking for an update on Reel Pipe's
request for a waiver for the CAROL. Tr. Ex. 136 at 1; Tr. at
173 ll. 22-25, 174 ll. 1-7.
That same day, USA Comserv sent an email to U.S. Senator Bill
Nelson's office to request assistance with access to
Puerto Rico for the vessels being chartered. Tr. Ex. 67 at 1.
October 4, 2017, meanwhile, Pat Flood sent an email to Pat
Grizzle at the USCG to ask: “How likely is it for us to
be able to get some type of exemption or amendment to carry
fuel in our mud tanks to PR? . . . Right now we are only
looking at the Carol Chouest but my [sic] add more vessels
depending on the time frame to get approved.” Tr. Ex.
14; Tr. at 174 ll. 19-22, 175 ll. 8-11.
a separate email exchange, Dane Vizier sent an email on
October 6, 2017 informing the Coast Guard that “[t]he
Carol is currently loading at Tampa Shipyard in Tampa
Florida. She will be sailing from Tampa to Puerto Rico on
multiple trips with relief supplies and Diesel Fuel to supply
Generators for electrical facilities.” Tr. Ex. 162 at
the same day, Lt. Proctor sent an email to vessel operators,
as well as Jim Goff and Ken Goff of USA Comserv, advising
Vessels seeking to transit to Puerto Rico/USVI must be
certificated for international voyages with the appropriate
manning as specified on the vessel's Certificate of
Inspection (COI), hold the appropriate international
certificates, and be multi-certificated as a freight vessel
(subchapter “I”) in order to carry cargo and
transit to Puerto Rico/USVI. Vessels are expected to operate