Opinion · Court of Appeals for the Fifth Circuit
Terral River Svc v. S C F Mrne
20 F.4th 1015
- Type
- Opinion
- Court
- Court of Appeals for the Fifth Circuit
- Jurisdiction
- Federal
- Date
- 2021-12-15
- Topic
- bankruptcy
Case: 21-30047 Document: 00516132408 Page: 1 Date Filed: 12/15/2021 United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit FILED December 15, 2021 No. 21-30047 Lyle W. Cayce Clerk Terral River Service, Incorporated; Navigators Insurance Company, Plaintiffs—Appellants, versus SCF Marine Incorporated; Vessel Holdings 7, L.L.C., Defendants—Appellees. Appeal from the United States District Court for the Western District of Louisiana 3:19-CV-406 Before Higginbotham, Stewart, and Wilson, Circuit Judges. Patrick E. Higginbotham, Circuit Judge: As provided in their contract, SCF Marine Inc.
Citator
- Cited by
- 49 opinions
Case: 21-30047 Document: 00516132408 Page: 1 Date Filed: 12/15/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
December 15, 2021
No. 21-30047
Lyle W. Cayce
Clerk
Terral River Service, Incorporated; Navigators
Insurance Company,
Plaintiffs—Appellants,
versus
SCF Marine Incorporated; Vessel Holdings 7, L.L.C.,
Defendants—Appellees.
Appeal from the United States District Court for the
Western District of Louisiana
3:19-CV-406
Before Higginbotham, Stewart, and Wilson, Circuit Judges.
Patrick E. Higginbotham, Circuit Judge:
As provided in their contract, SCF Marine Inc. (“SCF”) delivered its
Barge SCF 14023 to a loading facility operated by Terral River Service, Inc.
(“Terral”). The barge sank while secured at Terral’s facility. Terral then
sued SCF. The district court granted summary judgment to SCF on all of
Terral’s claims. Under our jurisdiction pursuant to 28 U.S.C. § 1292
(a)(3),
we affirm.
Case: 21-30047 Document: 00516132408 Page: 2 Date Filed: 12/15/2021
No. 21-30047
I.
Prior to delivering the barge to Terral, SCF had the barge cleaned and
inspected by C&M Marine, Inc on May 2, 2018. A C&M employee inspected
the barge. He reported no leaks and only trace amounts of water within the
void tanks, but not an amount warranting his concern.
Following the inspection, a towing company took the barge from the
C&M facility up the Mississippi River to the Terral facility as part of a fleet
of other barges. A Terral harbor boat there took custody of the barge, towing
it into the Terral facility. Cory Pemberton, a Terral employee, inspected the
barge and completed a Barge Inspection Report upon the barge’s delivery on
May 7, 2018. Pemberton reported that he inspected the barge’s knuckles and
void tanks but saw no water or sunlight in the void tanks, which would have
indicated a fracture.
The Terral harbor boat crew then moored the barge at a dock for
loading. Over the following two days, the barge was partially loaded with rice.
On May 11, 2018, the Terral harbor boat crew checked the barge at 5:30 a.m.
and saw no issues. When the harbor boat crew checked the barge again at 5:50
a.m., the barge had partially sunk.
Terral hired a salvor who raised the barge. Surveyors hired by Terral
and SCF examined the barge and found a fracture measuring twelve inches
long and three quarters of an inch wide on the port bow rake knuckle, an area
of the hull covering a void tank. Green witness marks around the fracture
were identified following the salvage.
Terral sued SCF for general maritime negligence, unseaworthiness,
breach of contract, and indemnity. Underlying all of these claims is the
allegation that “[t]he fracture preexisted delivery of the [b]arge to Terral and
is estimated to have been two (2) to four (4) weeks old as of May 11, 2018.”
In its Second Amended Complaint Terral added contribution and salvage
2
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No. 21-30047
claims. The contribution claim was based upon the same factual allegation as
the four other claims presented in Terral’s initial complaint. The salvage
claim sought recovery as a salvor of SCF’s barge. SCF counterclaimed
against Terral for negligence and breach of duty and moved for summary
judgment on Terral’s claims. 1
SCF also filed Daubert motions to exclude the testimony of two of
Terral’s expert witnesses, Frank Budwine and Bob Bartlett. 2 The district
court granted SCF’s motion to exclude Budwine’s testimony regarding the
age of the hull fracture and granted in part SCF’s motion to exclude the
testimony of Bob Bartlett. The district court excluded Bartlett’s testimony
that the fracture likely occurred before the barge was delivered, but allowed
Bartlett to testify that the green witness marks indicated the fracture was
likely caused by a collision between the gray barge and a green object. After
ruling on the Daubert motions, the district court granted SCF’s motion for
summary judgment and dismissed all of Terral’s claims with prejudice.
Terral timely appealed.
II.
We review de novo a district court’s grant of summary judgment. 3
Summary judgment is proper “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” 4 However the movant “need not negate the elements of the
1
SCF’s counterclaim was not addressed by the district court in its order granting
summary judgment and thus is not part of this appeal.
2
Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579
(1993).
3
Martin Res. Mgmt. Corp. v. AXIS Ins. Co., 803 F.3d 766, 768
(5th Cir. 2015).
4
Fed. R. Civ. P. 56(a).
3
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No. 21-30047
nonmovant’s case.” 5 “The moving party is entitled to a judgment as a matter
of law because the nonmoving party has failed to make a sufficient showing
on an essential element of her case with respect to which she has the burden
of proof.” 6 A summary judgment ruling “will be affirmed by this court when
the nonmoving party fails to meet its burden to come forward with facts and
law demonstrating a basis for recovery that would support a jury verdict,” 7
and we may affirm on any grounds supported by the record and presented to
the district court. 8
III.
Turning first to the burden of proof, Terral argues that SCF bears the
burden of proving that the barge was seaworthy at the time of delivery, an
allegation underlying all of Terral’s non-salvage claims. SCF claims that
Terral bears the burden of proving that it provided an unseaworthy vessel.
A vessel’s owner is duty bound to furnish a vessel reasonably fit for
its intended purpose. 9 “Ordinarily, when a charterer claims that a shipowner
has breached the charter party by providing an unseaworthy vessel, the
burden of proving such a breach rests upon the claimant.” 10 Although it was
5
Little v. Liquid Air Corp., 37 F.3d 1069, 1075
(5th Cir. 1994).
6
Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986) (internal quotations marks
omitted).
7
Little, 37 F.3d at 1071
.
8
Hernandez v. Velasquez, 522 F.3d 556, 560
(5th Cir. 2008).
9
Morales v. City of Galveston, 370 U.S. 165, 169
(1962); The Southwark,191 U.S. 1, 9
(1903).
10
Texaco, Inc. v. Universal Marine, Inc., 400 F. Supp. 311, 320
(E.D. La. 1975); see also Cooper v. Pinedo,212 F.2d 137
, 140–41 (5th Cir. 1954).
4
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No. 21-30047
not a charterer, Terral is here the claimant and therefore bears the burden of
proving that the barge was unseaworthy.
The parties do not dispute that the barge was the subject of a bailment
with SCF as the bailor and Terral as the bailee. Terral urges that the bailment
shifts the burden to SCF. Terral points to Richmond Sand & Gravel Corp. v.
Tidewater Const. Corp, 11 but Richmond involved the paradigmatic situation in
which a vessel’s owner-bailor sued a defendant-bailee for the bailee’s
negligence that led to the vessel’s capsizing. 12 Well enough, but under the
paradigmatic example, SCF, as the bailor, would sue Terral, the bailee. Here,
Terral is suing SCF.
The district court was correct that “[i]n the ‘somewhat unusual
situation’ of a barge loader suing a barge owner for the sinking of the owner’s
barge, it is the plaintiff barge loader who bears the burden of proving that the
barge was unseaworthy at the time the plaintiff barge loader took custody and
control of the barge.” 13 Terral bears the burden of proof for all its claims.
IV.
The district court granted summary judgment against Terral’s five
non-salvage claims: maritime negligence, unseaworthiness, indemnity,
contribution, and breach of contract. Terral argues that summary judgment
was improper as there were several issues of material fact remaining. But the
“several” are a variation on a single theme—whether the barge’s hull was
11
170 F.2d 392
(4th Cir. 1948).
12
Id. at 393
.
13
Terral River Serv., Inc. v. SCF Marine, Inc., 510 F. Supp. 3d 415
, 419 (W.D. La. 2020) (quoting Consolidation Coal Co. v. U.S. Steel Corp.,364 F. Supp. 1071, 1074
(W.D. Pa. 1973), and citing Dunkard Mining Co. v. Mon River Towing, No. 88-2181,1989 WL 121053
,
at *3 (W.D. Pa., October 3, 1989)).
5
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No. 21-30047
fractured prior to delivery. SCF presented evidence that the fracture was not
present when SCF transferred the barge to Terral: the C&M inspection
report and Terral’s own inspection report did not note any fracture. The
barge traveled hundreds of miles along the Mississippi River and then sat
partially loaded for two days before sinking.
Terral continues to primarily rely on the assertions of Budwine and
Bartlett, but their testimony was properly excluded under Daubert and
Federal Rule of Evidence 702. Terral does present two arguments that do not
rely on the excluded testimony. First, Terral argues that Pemberton’s
inspection from the deck of the barge would not place him at an angle to see
a fracture in the hull. However, Terral’s inspection procedures include
looking for water and sunlight within the void tank—both indicators of a
fracture—yet Pemberton did not detect either. Second, Terral argues that
there was no green object at its facility that could have collided with the barge
to explain how it received the witness marks. But neither of these arguments
satisfies Terral’s burden of proof to establish that the barge was already
damaged when it was delivered. Without the excluded testimony, Terral
lacked sufficient evidence to show that the hull was fractured prior to the
barge’s delivery.
With this weakness in its proof of an essential element of Terral’s case
for which it would bear the burden of proof at trial, the district court properly
entered summary judgment as to Terral’s maritime negligence,
unseaworthiness, indemnity, and contribution claims. We affirm the district
court’s dismissal of these claims.
While the district court did not separately address it, the district court
did not err in dismissing the breach of contract claim. Where a district court
provides little or no reasoning as to its decision to grant summary judgment,
we may still affirm the district court’s decision on any basis presented to the
6
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No. 21-30047
district court. 14 SCF argued that because Terral could not present evidence
of the fracture existing prior to delivery, none of its claims could succeed. As
the same lack of genuine issue of material fact that frustrated Terral’s other
non-salvage claims also underlies the breach of contract claim, we affirm the
grant of summary judgment and its dismissal.
V.
As Terral’s salvage claim does not depend on proof of when the
fracture occurred, the district court’s stated reasoning for granting summary
judgment does not address the salvage claim. SCF argues either that Terral
waived its salvage claim or that there is a sufficient alternative basis in the
record to affirm the dismissal.
Generally, we will not consider arguments first raised on appeal. 15 To
preserve an argument for appeal, a litigant must have presented the argument
to such a degree that the district court had an opportunity to rule on it. 16
Terral presented its salvage claim in its Second Amended Complaint and
SCF addressed and denied the salvage claim repeatedly below. Terral also
raised its salvage claim in responding to SCF’s motion for summary
judgment. Terral sufficiently presented its salvage claim to the district court.
That said, Terral’s preexisting duty of care as the barge’s bailee here
steps forward as an alternative basis for summary judgment and dismissal of
the salvage claim, which has three elements: 1) marine peril, 2) service
voluntarily rendered when not required by an existing duty or special
contract, and 3) success in whole or in part, or that the service rendered
14
LeMaire v. La. Dep’t of Transp. & Dev., 480 F.3d 383, 387
(5th Cir. 2007).
15
Est. of Duncan v. Comm’r, 890 F.3d 192, 202
(5th Cir. 2018).
16
F.D.I.C. v. Mijalis, 15 F.3d 1314, 1327
(5th Cir. 1994).
7
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No. 21-30047
contributed to such success. 17 Terral fails as to the second element because
it had a preexisting duty as the barge’s bailee, a duty of ordinary care owed to
SCF, 18 that forecloses its salvage claim. We affirm the grant of summary
judgment and the dismissal of the salvage claim.
VI.
As the non-movant at the summary judgment stage, Terral cannot
show that there is a genuine issue of material fact over an essential element
of each of its claims for which it bears the burden of proof. The district court
properly granted summary judgment to SCF on Terral’s five non-salvage
claims and its salvage claim is foreclosed by its pre-existing duty as the
barge’s bailee. We AFFIRM the ruling of the district court.
17
The Sabine, 101 U.S. 384, 384
(1879); W. Coast Shipping Brokers Corp. v. Ferry “Chuchequero”,582 F.2d 959, 960
(5th Cir. 1978).
18
Stegemann v. Mia. Beach Boat Slips, 213 F.2d 561, 564
(5th Cir. 1954).
8