Heko Services, Inc. v. ChemTrack Alaska, Inc., No. 2:2018cv01587 - Document 36 (W.D. Wash. 2019)
Court Description: ORDER granting in part and denying in part Plaintiff's 15 Motion for Summary Judgment. Signed by Judge Richard A. Jones.(MW)
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Inc., 847 F.2d 15 1432 (9th Cir. 1988), this unambiguous contract language makes clear that failing to 16 provide the entire deck space is not a material breach. The argument also fails given the 17 testimony from ChemTrack’s on site supervisor, who stated that the presence of the cranes 18 reduced the expected available space from 15,000 square feet to 13,000 square feet. Dkt. 19 # 18, ¶¶ 8, 9. The plain language of the time charter also precludes ChemTrack’s ex post 20 argument about the barge size. Section 4.B states that, “[u]pon [ChemTrack’s] acceptance 21 of the Vessels or upon the commencement of first loading of cargoes, whichever shall first 22 occur, it shall be deemed acknowledged by [ChemTrack] that the Vessels, including their 23 fittings, gear, and equipment, are in all respects suitable and fit for the intended services.” 24 Dkt. # 16-1. ChemTrack has produced no evidence to otherwise preclude summary 25 judgment on this issue. Accordingly, the motion is granted. Demurrage costs 26 B. 27 Demurrage is the amount of liquidated damages owed by a charterer to a shipowner 28 ORDER – 6 1 to load or unload cargo within an agreed time. See Teras Chartering, LLC v. Hyupjin 2 Shipping Co., Ltd., 2017 WL 2363632, at *1 (W.D. Wash. May 31, 2017) (citing Thomas 3 J. Schoenbaum & Jessica L. McClellan, Admiralty & Mar. Law § 11-15 (5th ed. 2012)). 4 Here, the time charter specified two days, or 48 consecutive hours, for ChemTrack to load 5 its cargo in Naknek before a $750 per hour rate applied. Dkt. # 16-1 at 13. It also specified 6 that ChemTrack would have 3 days, or 72 consecutive hours, to offload the cargo in Elliot’s 7 Bay before a $200 per rate applied. Id. Heko claims that ChemTrack owes demurrage in 8 the amount of $28,500 related to cargo loading in Naknek and $39,000 related to cargo 9 offloading in Elliot’s Bay. Heko also claims that ChemTrack is liable for demurrage in the 10 amount of $268,000 due to reloading in Sand Point. 11 “Despite the existence of a demurrage clause, however, such penalty can only be 12 claimed if the shipowner can demonstrate that he has suffered actual damage as a result of 13 the charterer’s delay.” See 2A Benedict on Admiralty, § 201, at 18-1 (2019); D’Amico v. 14 Mediterranean Pacific Line, Ltd., 1975 A.M.C. 98 (N.D. Cal. 1974) (rejecting argument 15 that plaintiff shipowner was entitled to demurrage regardless of whether or not actual 16 damages are shown. The burden is upon the shipowner to prove the extent of damages 17 sustained by him. See id. (citing cases). As evidence, Heko only offers invoices that 18 illustrate the amount of time ChemTrack spent loading and unloading the barge, but 19 otherwise fails to demonstrate actual damages. See, e.g., Dkt. # 16-2 at 2, 6-7. Because 20 this is insufficient to carry the burden on summary judgment, Heko’s motion on this issue 21 is denied. 22 C. 23 Section 2.B of the time charter states: “Fuel and lubricating oils are deemed included 24 within the lump sum hire amounts, subject to increases to a baseline fuel cost/gallon of 25 $1.80. An adjustment will be made for increases to cost/gallon based upon the average 26 cost/gallon of the actual quantity consumed, which will be invoiced upon completion of 27 the voyage.” Dkt. # 16-1 at 14. 28 ORDER – 7 Fuel costs 1 Heko claims that this section entitles it to fuel costs from ChemTrack, including fuel 2 costs stemming from the diversion. However, ChemTrack argues that summary judgment 3 is inappropriate since facts are in dispute related to the cause of the diversion. Ultimately, 4 it is unclear to the Court whether the parties contemplated section 2.B. would apply in all 5 situations, including where diversion of the barge occurs. See Starrag, 486 F.3d at 616 6 (affirming judgment where plain language made clear that clause in charter applied to 7 circumstances at issue). Indeed, the parties could have reasonably intended for situations 8 like diversions to fall under section 6.A.(2), which states that, “as to any matter not 9 specifically addressed in this agreement, each party shall be responsible for all loss, 10 damage, expense, liability, claim and/or suit to the extent of its proportionate degree of 11 fault or legal liability.” Dkt. # 16-1 at 16. Because the time charter could reasonably be 12 interpreted each way, the Court finds that there is a factual controversy regarding the 13 parties’ intent and that summary judgment is inappropriate. 14 D. Costs and expenses 15 Section 2.D of time charter states that, “Charterer shall be responsible for all charges 16 and expenses accruing during the charter term and relating to the Vessels, the cargoes 17 and/or the services being provided pursuant to this agreement, including, without 18 limitation, all customs, port, harbor entrance, dockage, wharfage, pilotage, assist towage, 19 loading/unloading and similar charges.” Dkt. # 16-1 at 14. However, as ChemTrack points 20 out, a separate section of the time charter states that wharfage and dockage in Naknek is 21 included as part of the lump sum hire. Id. at 13 22 Because only one interpretation renders effect to all provisions, the time charter is 23 not ambiguous regarding liability for these costs and expenses. Cf. 11 Williston on 24 Contracts § 32:5 (4th ed. 2015) (“An interpretation which gives effect to all provisions of 25 the contract is preferred to one which renders part of the writing superfluous, useless or 26 inexplicable.”). The time charter allocates responsibility for all charges and expenses 27 accruing during the charter term and relating to the Vessels, the cargoes and/or the services 28 ORDER – 8 1 being provided to ChemTrack, except for wharfing and docking at Neknek. Unlike the 2 section 2.B of the time charter (regarding fuel costs), section 2.D. contains the specific 3 language of “accruing during the charter term.” 4 However, Heko has failed to affirmatively demonstrate that no reasonable trier of 5 fact could find for ChemTrack on the amount of damages sought. Heko presents a lone 6 invoice on the costs and expenses for which it seeks damages. Dkt. # 16-2 at 13. 7 ChemTrack argues that it does not bear responsibility for the costs of moving soil or 8 equipment belonging to other third parties. Dkt. # 17 at 22. When the nonmoving party 9 has raised a genuine issue of material fact and the evidentiary matter in support of the 10 motion for summary judgment does not establish the absence of the genuine issue, the 11 nonmoving party is not required to present opposing evidentiary material. Menhorn v. 12 Firestone Tire & Rubber Co., 738 F.2d 1496, 1508 n. 1 (9th Cir. 1984). Giving that it is 13 undisputed that the barge carried equipment and soil related to other parties, Heko’s lone 14 invoice fails to establish such an absence of a genuine issue regarding damages. Heko’s 15 motion is granted in part and denied in part. Costs related to cargo handling 16 E. 17 Section 2.C of the time charter states that, “[i]f Tug crewmembers are requested by 18 Charterer and/or required by special circumstances to assist with cargo handling and related 19 tasks, then section 5, below, shall apply and Charterer shall pay the ‘CARGO TIME’ rate 20 identified on the first page of this agreement for each such crewmember assisting with such 21 cargo handling and related tasks.” The time charter indicates the “CARGO TIME” rate as 22 $80 per man hour. This Court finds this section to be unambiguous. 23 As with its costs and expenses, Heko fails to meet its burden with respect to 24 damages. Heko submitted one invoice and concurring time entries in support of its 25 damages. Some of the entries specify that work was done “as directed by Chemtrack,” 26 while others suggest work being done for Heko. See, e.g., Dkt. # 16-2 at 15. ChemTrack 27 contends that some of the billed entries relate to crew work done for Heko, including 28 ORDER – 9 1 moving and stowing Heko’s cranes. Dkt. # 19-1 at 25. Crew members testified that they 2 did in fact complete some work on the barge at Heko’s direction. Dkt. # 19-1 at, 25, 49; 3 see also Dkt. # 23-3 at 5 (regarding work done at Sand Point moving crane parts). Viewing 4 the evidence in a light most favorable to the non-moving party, Heko fails to meet its 5 burden on damages. Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). 6 Heko’s motion is granted in part and denied in part. Costs for damages during offloading 7 F. 8 Heko also claims that ChemTrack is liable for damage to the barge during 9 unloading. Section 4.A of the time charter states that, “Charterer further warrants that the 10 loading, stowage, trimming, securing and discharging of cargoes shall be conducted 11 without any loss or damage whatsoever to the Vessels, including their fitting, gear and 12 equipment.” Dkt. # 16-1 at 15. In support of its motion, Heko submits one declaration 13 which states, “[d]uring the offload in Seattle, the barge and loader incurred damaged.” Dkt. 14 # 16-2 at 3. While relevant, this evidence is insufficient to establish the absence of the 15 genuine issue. Menhorn v. Firestone Tire & Rubber Co., 738 F.2d 1496, 1508 n. 1 (9th 16 Cir. 1984). Accordingly, the Court declines to grant summary judgment on this issue. ChemTrack’s counterclaims 17 G. 18 Heko also moves for summary judgement on ChemTrack’s counterclaims. 19 ChemTrack counterclaimed for damages against Heko for (i) providing a barge configured 20 differently than represented; (ii) carrying cargo for parties other than ChemTrack; (iii) 21 providing a barge not in seaworthy condition; and (iv) for proceeding on the voyage at a 22 time and at a speed that ensured the tug and barge would encounter predicted weather that 23 Heko and/or the Master knew or should have known was unsafe. Dkt. # 13. 24 The first three bases for ChemTrack’s breach of the charter claims are without merit. 25 As discussed above, ChemTrack acknowledged that the barge was suitable for the voyage 26 upon first loading the soil. Dkt. # 16-1 at 15. Finally, it is unclear which section of the 27 ChemTrack seeks to invoke for its claim that Heko breached the charter by knowingly 28 ORDER – 10 1 proceeding into unsafe weather. Nonetheless, as Heko points out, this claim is barred by 2 section 6.A.(2). 3 responsible for all loss, damage, expense, liability, claim and/or suit applicable to the 4 cargoes “howsoever caused and even if resulting from the negligence or other legal fault 5 of the Owner.” Id. at 16. Accordingly, the Court grants summary judgment to Heko. V. CONCLUSION 6 7 8 Specifically, section 6.A.(2) states explicitly that ChemTrack is For the reasons below, Heko’s motion is GRANTED in part and DENIED in part. Dkt. # 15. 9 10 DATED this 19th day of November, 2019. 11 A 12 13 The Honorable Richard A. Jones United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER – 11
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