The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SHALLOW WATER EQUIPMENT L.L.C. ET AL CIVIL ACTION
VERSUS NO. 21-949
PONTCHARTRAIN PARTNERS, L.L.C. SECTION "L" (4)
ORDER AND REASONS
Pending before the Court is a motion for partial summary judgment filed by Defendant
Pontchartrain Partners, LLC. R. Doc. 62. Plaintiffs TK Boat Rentals, L.L.C. and Shallow Water
Equipment, L.L.C. oppose the motion. R. Doc. 65. Ponchartrain Partners, LLC filed a reply, R.
Doc. 66, and Plaintiffs field a sur-reply, R. Doc. 71. Having considered the parties’ memoranda,
the record, and the applicable law, the Court rule as follows.
I. BACKGROUND
This suit arises out of the charter and subcharter of the spud barge GRANT. R. Doc. 20 at
1.1 Plaintiffs are TK Boat Rentals, LLC (TK), which owns the GRANT, and Shallow Water
Equipment, LLC (Shallow Water), which chartered the GRANT from TK on or around February
24, 2020. Shortly thereafter, Shallow Water subchartered the barge to Pontchartrain Partners,
LLC (Pontchartrain). Id. at 1-2.
Plaintiffs allege that Ponchartrain used the GRANT to perform work for the Army Corps
of Engineers (Army Corps). In order to work for the Army Corps, Ponchartrain allegedly
obtained and had in effect a bond pursuant to the Miller Act, 40 U.S.C. § 3131 et seq. (the Miller
1 Jurisdiction is proper because this case concerns maritime contracts.
Act Bond) issued by Defendant Continental Casualty Company (Continental). Id. at 5.
Additionally, Plaintiffs allege that five months into its subcharter, Ponchartrain obtained a hull
and machinery insurance policy (the Policy) issued by Defendant Great American Insurance
Company (Great American). Id. at 2.
Plaintiffs further allege that the subcharter required Pontchartrain to pay Shallow Water
for the “on-hire and off-hire survey,” plus $475/day. Shallow Water, in turn, is required to pay
TK $400/day of charter hire. Id. at 3.
According to Plaintiffs, Pontchartrain stopped paying charter hire on the barge in January
2021. Id. at 3-4. Invoices allegedly show Pontchartrain Partners owed Shallow Water over
$65,000 in charter hire—an amount that continues to accumulate and is subject to interest. Id. at
4.2
Additionally, Plaintiffs allege that, around November 2020, while the GRANT was on-
hire to Pontchartrain, the barge sustained substantial damage, rendering the vessel “significantly
less operable and profitable until repairs can be completed.” Id. 4. Plaintiffs claim that
“effectively identical” barges owned by TK are chartered for $800/day. Ponchartrain eventually
returned the barge to TK.
TK seeks damages against Pontchartrain for (1) unpaid charter hire, (2) the total
constructive loss of the grant (3) consequential damages resulting from failure to return the
GRANT in its original condition, and (4) costs and interests. Id. at 4. Shallow Water seeks
damages against Pontchartrain for (1) unpaid charter hire and (2) costs and interests. Id. at 5.
2 Per the written charter party, interest accrues at a rate of 1.5% per month, compounded daily, on any
invoice amounts that are not paid within 60 days of the due date. R. Doc. 20 at 4.
Plaintiffs also claims Pontchartrain’s failure both to pay both charter hire and for
damages to the GRANT “is a breach of the Miller Act [B]ond issued by Continental.” Id. at 5.
As a “first-tier subcontractor,” Shallow Water alleges that it can recover against Continental
pursuant to the Miller Act Bond. Id. at 5-6.3
Last, Plaintiffs allege that the Policy with Great American covered the damage to the
GRANT but that Great American has refused to pay for the barge repairs. Id. At 6-7. Plaintiffs
thus claim that Great American has violated La. R.S. §§ 22:1973 & 1892, by, among other
things, failing to pay a claim within 30 days of satisfactory proof of loss and failing to make a
written offer to settle a property damage claim within 30 days. Id. at 7. Plaintiffs make claims
against Great American for the damages to the GRANT and lost charter hire to due to Great
American’s failure to timely pay for repairs. Id.
Defendant Pontchartrain generally denies liability. R. Doc. 10. Defendant Great
American admits that it issued the Policy to Pontchartrain that covered the period of July 15,
2020 to July 15, 2021. R. Doc. 34 at 3. However, Great American alleges a number of defenses,
including that there is no coverage under the Policy to the extent Pontchartrain failed to exercise
due diligence to maintain the GRANT in a seaworthy condition. Id. at 1, 7, 8. Last, Defendant
Continental also generally denies liability. R. Doc. 58.
Previously, this Court granted Defendant Continental’s motion to dismiss for failure to
state a claim as to TK’s claims under the Miller Act because they were untimely under the Act
and denied the motion as to Shallow Water’s claims under the statute, as they are not time-barred
by the Act. R. Doc. 56.
3 TK also alleged that, as a “second-tier contractor,” it could recover against Continental under the Miller
Act, but TK eventually conceded this claim was time-barred under the Miller Act, and the Court dismissed it with
prejudice. R. Doc. 56.
In addition, Shallow Water and Ponchartrain filed cross-motions for summary judgment.
Id. Shallow Water argued that, under the parties’ written contract, it was entitled to judgment
holding that Ponchartrain is liable for lost charter because it returned the GRANT in a damaged
condition. For its part, Ponchartrain contended that it did not breach the contract by returning the
barge in a damaged condition and that, even if it did breach the contract, the terms of the written
charter limited its liability to the costs of repair and interest thereon. The Court denied both
motions, determining that fact issues precluded summary judgment. Id.
II. PRESENT MOTION
Defendant Pontchartrain again moves for partial summary judgment. R. Doc. 62. First,
Ponchartrain asserts that, under the written charter agreement, it only owes rent to Shallow Water
up to January 10, 2021—the date that the off-charter survey was completed. Id. at 2, 6-7.
Second, Pontchartrain contends that its failure to repair the GRANT before returning the
vessel did not breach the terms of the written charter. And even if its failure to repair did breach
the contract, Ponchartrain claims that its liability is limited by a liquidated damages provision to
the cost of repairing the vessel. Id. at 5-6. In other words, Ponchartrain maintains that it is only
liable to Shallow Water for the cost to repair the GRANT and has no liability for consequential
damages—i.e., lost charter hire—resulting from it returning the barge in a damaged condition.
Last, Pontchartrain argues that it has no liability to TK. This is so, according to
Ponchartrain, because the subcharter agreement is solely between it and Shallow Water and
because TK is not a third-party beneficiary to the subcharter. Id. at 3-4.
In sum, Ponchartrain seeks partial summary judgment (1) limiting its liability to Shallow
Water to only (a) the cost of repairing the spud barge and (b) to any unpaid rent that accrued
prior to the off-charter survey that concluded on January 10, 2021, and (2) dismissing TK’s
claims against it.
Plaintiffs TK and Shallow Water oppose the motion. R. Doc. 65. They argue that Shallow
Water and Ponchartrain were operating under an oral bareboat charter—not a written charter
agreement. Id. at 2-6. And under the ordinary terms of an oral bareboat charter, Ponchartrain is
liable both for damage to the vessel and consequential damages. Id. at 6. Plaintiffs also contend
that, even though TK did not have a direct contractual relationship with Ponchartrain, TK has a
maritime tort or quasi-contract claim against Ponchartrain because Ponchartrain negligently
damaged its vessel. Id. at 6-9.
III. LAW & ANALYSIS
A. Summary Judgment Standard
Summary judgment is proper “if the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if any, show that there is no genuine issue as
to any material fact and that the moving party is entitled to a judgment as a matter of law.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R. Civ. P. 56(c)). “Rule 56(c)
mandates the entry of summary judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to establish the existence of an element
essential to that party’s case, and on which the party will bear the burden of proof at trial.” Id. A
party moving for summary judgment bears the initial burden of demonstrating the basis for
summary judgment and identifying those portions of the record, discovery, and any affidavits
supporting the conclusion that there is no genuine issue of material fact. Id. at 323. If the moving
party meets that burden, then the nonmoving party must use evidence cognizable under Rule 56
to demonstrate the existence of a genuine issue of material fact. Id. at 324.
A genuine issue of material fact exists if a reasonable jury could return a verdict for the
nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1996).
“[U]nsubstantiated assertions,” “conclusory allegations,” and merely colorable factual bases are
insufficient to defeat a motion for summary judgment. See Hopper v. Frank, 16 F.3d 92, 97 (5th
Cir. 1994); Anderson, 477 U.S. at 249–50. In ruling on a summary judgment motion, a court may
not resolve credibility issues or weigh evidence. See Int’l Shortstop, Inc. v. Rally’s Inc., 939 F.2d
1257, 1263 (5th Cir. 1991). Furthermore, a court must assess the evidence, review the facts and
draw any appropriate inferences based on the evidence in the light most favorable to the party
opposing summary judgment. See Daniels v. City of Arlington, 246 F.3d 500, 502 (5th Cir.
2001); Reid v. State Farm Mut. Auto. Ins. Co., 784 F.2d 577, 578 (5th Cir. 1986).
B. Discussion
Pontchartrain seeks a partial summary judgment holding that (1) it is not liable for
consequential damages, (2) rent for the vessel stopped accruing following the conclusion of the
off-charter survey on January 10, 2021, and (3) it has no liability to TK. R. Doc. 62. The Court
will address these issues in turn. There is, however, a threshold matter that is central to the first
two issues: whether the parties’ agreement is governed by an oral or written charter. This issue is
particularly significant because Ponchartrain’s arguments all rest on the premise that the written
charter constitutes the parties’ operative agreement, while Plaintiffs aver that the oral agreement
controls. Accordingly, the Court begins with this question.
Whether the Oral or Written Agreement Controls
A. Judicial Admission
As a preliminary matter, Ponchartrain argues that Plaintiffs have judicially admitted that
the written charter party applies and therefore are proscribed from now arguing that the oral
agreement controls. R. Doc. 69 at 1-2. Ponchartrain points out that Plaintiffs’ pleadings cite the
written agreement and that the Statement of Uncontested Facts that Plaintiffs appended to their
prior motion for summary judgment includes as an uncontested fact that the written charter party
for the GRANT forms the “effective barge charter party” between the parties. R. Doc. 36-2 at 1.
“A judicial admission is a formal concession in the pleadings or stipulations by a party or
counsel that is binding on the party making them.” Martinez v. Bally's Louisiana, Inc., 244 F.3d
474, 476 (5th Cir. 2001). A judicial admission ‘has the effect of withdrawing a fact from
contention.’” Blankenship v. Buenger, 653 F. App'x 330, 335 (5th Cir. 2016) (quoting Martinez,
244 F.3d at 476). “By contrast, an ordinary evidentiary admission is ‘merely a statement of
assertion or concession made for some independent purpose,’ and it may be controverted or
explained by the party who made it.” Martinez, 244 F.3d at 476-77 (quoting McNamara v.
Miller, 269 F.2d 511, 515 (D.C. Cir. 1959)). “‘A judicial admission is conclusive, unless the
court allows it to be withdrawn; ordinary evidentiary admissions, in contrast, may be
controverted or explained by the party.’” Id. (quoting Keller v. United States, 58 F.3d 1194, 1199
n. 8 (7th Cir. 1995)). It is “‘well-established” that courts retain “broad discretion to relieve
parties from the consequences of judicial admissions in appropriate cases.’” Kiln Underwriting
Ltd. v. Jesuit High Sch. of New Orleans, No. Civ.A. 06-4350, 2008 WL 4724390, at *12 (E.D.
La. Oct. 24, 2008) (quoting Electric Mobility Corp. v. Bourns Sensors/Controls, Inc., 87
F.Supp.2d 394, 406 (D.N.J. 2000); accord Coral v. Gonse, 330 F.2d 997, 998 n. 1 (4th Cir.
1964)).
To qualify as a judicial admission, a statement must be “(1) made in a judicial
proceeding; (2) contrary to a fact essential to the theory of recovery; (3) deliberate, clear, and
unequivocal; (4) such that giving it conclusive effect meets with public policy; and (5) about a
fact on which a judgment for the opposing party can be based.” In re TK Boat Rentals, LLC, 411
F. Supp. 3d 351, 368 (E.D. La. 2019).
In this case, the statements by Plaintiffs that Ponchartrain cites do not rise to the level of a
judicial admission. It is true that Plaintiffs alleged in successive complaints and represented in a
document supporting their summary judgment motion that the written charter party governed.
But this was based on Plaintiffs’ counsel’s understanding of the facts at the time these documents
were filed. Only after undertaking further discovery—specifically, Ponchartrain’s corporate
deposition—did Plaintiffs’ counsel become aware that there was an oral agreement to charter the
GRANT and that the written charter was not delivered until more than seven months after the
oral agreement. At this point, Plaintiffs changed their position, contending in their present
submissions that the oral agreement controls.
Courts have consistently held that an “inadvertent misstatement” by counsel is not
“conclusively binding” on his clients. Hub Floral Corp. v. Royal Brass Corp., 454 F.2d 1226,
1228 (2d Cir. 1972) (citing Taylor v. The Allis-Chalmers Mfg. Co., 320 F.Supp. 1381, 1385
(E.D.Pa. 1969), aff’d, 436 F.2d 416 (3d Cir. 1970)); see also Coral, 330 F.2d at 998 n.1
(observing that courts are disinclined to find that an “honest mistake” by counsel qualifies as a
judicial admission). This is especially so when the opposing party suffers no prejudice from the
Court declining to find a judicial admission. See, e.g., Kiln Underwriting Ltd., No. CIV.A. 06-
4350, 2008 WL 4724390, at *7. Here, Plaintiffs’ counsel made early accidental misstatements of
facts that were understandable given his knowledge at the time of the misstatements. Through
the tools of discovery, counsel realized his error and promptly corrected it. This sort of
development occurs not infrequently in litigation. Furthermore, there is no unfairness to
Ponchartrain from permitting Plaintiffs’ counsel to rely upon newly-discovered facts—facts that
were known to, and indeed, obtained from Ponchartrain itself. Thus, to bar counsel now from
using this information obtained through discovery and instead to give binding effect to counsel’s
honest mistake would be contrary to public policy. Accordingly, the doctrine of judicial
admission is inapplicable, and even if its requirements were met, the Court would exercise its
discretion not to apply it as doing so would be manifestly unjust. See Kiln Underwriting Ltd. v.
Jesuit High Sch. of New Orleans, No. Civ.A. 06-4350, 2008 WL 4724390, at *12; In re TK Boat
Rentals, LLC, 411 F. Supp. 3d at 368.
B. Formation of Oral and Written Charters
The existence and interpretation of a maritime contract involves both questions of fact
and law. Ham Marine, Inc. v. Dresser Indus., Inc., 72 F.3d 454. Under admiralty law, “oral
contracts are generally regarded as valid.” Kossick v. United Fruit Co., 365 U.S. 731, 734
(1961). But the terms of an oral agreement may be supplemented by provisions in a
subsequently-issued written agreement. One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648
F.3d 258, 265 (5th Cir. 2011). This supplementation by a later writing is permissible where a
prior course of dealing between the parties establishes that they “were aware of consented to
those additional contractual terms.” Id. (first citing Restatement (Second) of Contracts
[hereinafter “Restatement of Contracts”] § 223(1) (1981) (defining “course of dealing” as “a
sequence of previous conduct between the parties to an agreement which is fairly to be regarded
as establishing a common basis of understanding for interpreting their expressions and other
conduct”); then citing Restatement of Contracts § 223(2) (“Unless otherwise agreed, a course of
dealing between the parties gives meaning to or supplements or qualifies their agreement.”).4
4 Federal maritime law incorporates general principles of contract construction, which “can be found in
treatises or restatements of the law.” Int'l Marine, L.L.C. v. FDT, L.L.C., 619 F. App'x 342, 349 (5th Cir. 2015)
(internal quotations marks omitted).
The burden of establishing a course of dealing rests upon the party seeking to benefit from
it. Kunststoffwerk Alfred Huber v. R.J. Dick, Inc., 621 F.2d 560, 564 (3d Cir. 1980).
For example, in Hudson Waterways Corp. v. Coastal Marine Serv., Inc., a court
concluded that limitation of liability terms contained in a ship repair contract were binding, even
though “the written document which constitute[d] the contract for repair was not sent to the
Plaintiff until some time after the repair work was completed.” Hudson Waterways Corp. v.
Coastal Marine Serv., Inc., 436 F. Supp. 597, 604–05 (E.D. Tex. 1977). In that case, the parties
had a course of dealing of 102 separate repair jobs over a 5-year period. And, in each of these
jobs, a contract containing a limitation of liability clause was sent to the plaintiff after the work
was completed. Id. at 604-05. The court thus found a limitation of liability clause was implied in
“every repair contract” between the parties. Id. at 605.
Indeed, “courts have found a course of dealing between parties to a maritime contract
based on a party's receipt of as few as three or four bills of lading containing the same . . . terms,
and upon a party's approval of only nine invoices containing identical . . . clauses.” One Beacon
Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d at 266 (first citing Royal Ins. Co. v. Sea–Land
Serv. Inc., 50 F.3d 723, 727 (9th Cir. 1995); then citing Lykes Bros. S.S. Co. v. Waukesha
Bearings Corp., 502 F. Supp. 1163, 1172–73 (E.D. La. 1980)). On the other hand, a single prior
transaction has been held insufficient to constitute a course of dealing. Offshore Specialty
Fabricators, LLC v. Dumas Int'l, Inc., 982 F. Supp. 2d 695, 706 (E.D. La. 2013).
When evidence establishes a course of dealing in which a written contract follows an oral
argument, an offeree’s silence in response to a written contract “may be reasonably interpreted as
assent to the terms and conditions.” In Complaint of Moran Philadelphia, 175 F. Supp. 3d 508,
522 (E.D. Pa. 2016); see also Celtic Marine Corp. v. Basin Com., Inc., No. 18-8370, 2019 WL
3253966 (E.D. La. July 19, 2019) (holding that the terms contained in a written instrument
drafted subsequent to an oral agreement were “enforceable in the absence of both parties'
signatures because Defendant had reasonable notice of the terms at issue given their inclusion in
[a prior contract] and manifested assent to those terms by failing to object to any provisions in
the contract and continuing to communicate with Plaintiff about the barges”); Sea–Land Serv.,
Inc. v. Landis, No. Civ. A. 94–6153, 1996 WL 4120, *3 n. 8 (E.D. Pa. Jan 3, 1996) (citing the
Restatement (Second) of Contracts for the rule that an “offeree's silence or inaction is valid
acceptance of a contract where because of previous dealings or otherwise, it is reasonable that
the offeree should notify the offeror if he does not intend to accept”).
Here, there is clear evidence that, at least initially, the parties struck an oral agreement. In
Ponchartrain’s corporate deposition, its operations manager, Matt Booker, testified that “there[
wa]s not a charter agreement” for the GRANT at the time it was chartered in February 2020;
rather, “it was a handshake deal.” R. Doc. 65-2 at 3. The oral contract, Booker stated, “was a
bareboat charter.” Id. at 7.5 Under its terms, Shallow Water would invoice Ponchartrain at the
agreed-upon rate of $550/day, and Ponchartrain paid that amount. Id. at 7.
In September 2020, more than seven months after the oral contract was formed,
Ponchartrain received the written charter from Shallow Water. Id. at 4. But they “never signed
it.” Id. at 7. Thus, as Ponchartrain’s representative testified, the company was “probably just still
working under the oral” agreement, even after it received the written charter party. Id.
5 A “bareboat” or “demise” charter agreement is characterized by a “complete transfer of possession,
command, and navigation of the vessel from owner to the charter.” Gaspard v. Diamond M. Drilling Co., 593 F.2d
605, 606 (5th Cir.1979). The vessel is chartered without equipment or a crew. See Winn v. C.I.R, 595 F .2d 1060,
1062 (5th Cir. 1979).
Notwithstanding this testimony, Ponchartrain argues that the parties’ course of dealing
manifests an understanding that the oral agreement would be followed by the charter party whose
terms control. R. Doc. 64 at 2-4.6 Ponchartrain points to testimony from Booker, its corporate
designee, who stated that Ponchartrain did not “charter” the barge but instead “order[ed]” it. R.
Doc. 77 at 4. Booker distinguished the two methods of arranging for the lease of a vessel, stating
that: “Typically when you order, it’s just like when you order a piece of rental equipment. You
can call in and order it. And then you need to follow up with, you know, the charter agreement.”
Booker said that when he was looking to rent a vessel, he would call a vessel charterer and ask
for a quote on the vessel he sought. Usually, “at that time they will send me their terms and
they’ll send me their quote sheet, and I will have to sign their charter agreement.” Id. In his
experience, other than the “ordering” of the GRANT, Booker had never rented a barge or marine
equipment “without having some kind of quote or some kind of charter agreement.” Id.
Booker also provided some testimony on business transactions between Ponchartrain and
Shallow Water. He stated that, in addition to the GRANT, Ponchartrain chartered two other
barges from Shallow Water: the MISSY and the H. GRAHAM BROWN. Booker did not,
however, specify when these other charters occurred.
In his testimony, Booker noted that the MISSY was chartered pursuant to a written
contract. Id. at 5. The agreement to charter the H. GRAHAM BROWN, meanwhile, was reached
in the same manner as the GRANT—over a handshake. Id. at 3. But unlike the GRANT,
Ponchartrain “got a [written] charter agreement from day one.” Id. at 5.
6 Although Ponchartrain argues that there was an existing course of dealing between the parties, the
company does not specifically argue that any industry-wide custom permitted written contracts to follow oral
agreement, nor does it cite any caselaw that would support engrafting the terms of an unexecuted written charter
onto an oral agreement based on maritime custom alone.
The Court finds that this testimony is minimally sufficient to create a fact issue on
whether there was a course of dealings between the parties in which a subsequently-filed written
agreement was permitted to supplement the terms of an oral agreement. First, Booker’s
testimony evidences that Ponchartrain’s normal course of business was to place a verbal order
for a barge, with a written agreement to follow. Moreover, there is some evidence of other
transactions between the parties in which an oral agreement was followed by a written charter.
Although Ponchartrain’s own corporate representative stated that the parties were “probably just
still working under the oral” agreement even after the written agreement was sent, R. Doc. 65-2
at 7, this statement is not dispositive of the issue. Rather, the court concludes that there is
sufficient evidence for a reasonable juror to find that there was a “course of dealing between the
parties” that existed prior to the subchartering of the GRANT. One Beacon Ins. Co., 648 F.3d at
265; see also Kunststoffwerk Alfred Huber, 621 F.2d at 564. Thus, it must be for the factfinder to
determine whether the terms of the oral agreement alone govern or if they were supplemented by
the subsequent written charter.
Although there is a genuine dispute of fact as to the terms of the parties’ charter contract,
Shallow Water may still be entitled to summary judgment if its interpretation of the contract’s
terms is correct, regardless of whether it is the oral or written terms that apply. Stated differently,
if Shallow Water’s arguments—i.e, that (1) it has no liability for consequential damages and (2)
rent stopped accruing on January 10, 2021—are meritorious under both the oral and purported
written terms of the charter, then it may still prevail at summary judgment. The Court thus
considers whether Shallow Water’s arguments hold up when applied against both the oral and
written terms.
The Terms of the Oral and Purported Written Charter
i. Lost Charter Hire
The Court first considers whether Ponchartrain has liability for lost charter hire under the
terms of the oral contract. Ponchartrain’s own corporate representative, as mentioned, expressly
testified that the agreement “was a bareboat charter” and the parties agreed upon a rate of
$550/day for the barge. R. Doc. 65-2 at 7. Moreover, under a bareboat charter, the charterer’s
“‘basic obligation [is] to pay the charter hire stipulated’ . . . and to return the vessel to the owner
‘in the same condition as received excepting ordinary wear and tear.” M/V EDITH PEARL,
L.L.C. v. St. John Fleeting, Inc., No. Civ.A. 12-2962, 2014 WL 2520132, at *3 (E.D. La. June 4,
2014) (quoting 2 Thomas J. Schoenbaum, Admiralty & Mar. Law [hereinafter “Schoenbaum on
Admiralty”] § 11-3 (5th ed. 2012)). Importantly, a bareboat “charterer has liability for any and
all casualties resulting from . . . operation” of the vessel. Walker v. Braus, 995 F.2d 77, 81 (5th
Cir. 1993). This liability includes lost charter hire. Schoenbaum on Admiralty § 14:7 (6th ed.)
(citing Bouchard Transp. Co. v. Tug Ocean Prince, 691 F.2d 609 (2d Cir. 1982)); see also
LeRoy Lambert, Damages Arising from Breach of Contract, Loss of Revenue, and "Indirect"
Damages, 72 Tul. L. Rev. 759, 763–64 & n.18 (1997).7 Notably, Ponchartrain does not dispute
7 The parties refer to liability for lost charter hire or rent as being in the nature of consequential damages. In
at least one case, however, the Fifth Circuit has held that a somewhat similar type of damages—namely, the
additional cost of hiring a replacement for an unseaworthy vessel—constituted direct, not consequential, damages.
See Jab Energy Sols. II, L.L.C. v. Servicio Marina Superior, L.L.C., 640 F. App'x 373, 378 (5th Cir. 2016)
(“‘General or direct damages are damages that are recoverable for injuries that are the natural result of the breach’ or
‘losses that an ordinary person would expect to follow the breach.’ By contrast, consequential or special damages
are losses ‘suffered as a ‘consequence’ of the breach of duty, but not as a direct and immediate and foreseeable
consequence.’ SMS's argument fails because the damages awarded are not consequential damages. The damages
awarded represent the costs of hiring a tug to replace the unseaworthy and inadequate Atlas. They stem from the
direct, immediate and foreseeable consequence of the Atlas being unable to perform the voyage.” (quoting
11 Joseph M. Perillo, Corbin on Contracts § 56.6 (2005) (cleaned up)); but see Lambert, Damages Arising from
Breach of Contract, Loss of Revenue, and "Indirect" Damages, 72 Tul. L. Rev. 759 (1997) (collecting cases and
referring to damages for loss of revenue in the maritime context as constituting “indirect” damages).
For the sake of consistency with the parties’ briefing and because the nomenclature used to describe the
damages at issue ultimately does not make any substantive difference, the Court will refer to Plaintiffs’ lost charter
hire as a form of consequential damages.
this understanding of the terms of a bareboat charter.8 Thus, assuming the parties’ agreement is
controlled by the terms of the oral bareboat charter, Ponchartrain’s liability extends to lost
charter hire resulting from the vessel being returned in a damaged condition. The Court must
therefore deny Ponchartrain’s request for a summary judgment holding that it is not liable for
consequential damages because Ponchartrain cannot show that it is shielded from liability for
such damages under the terms of both the oral and written agreement.
Furthermore, the Court notes that it has already explained that the terms of the written
charter do not preclude consequential damages. See R. Doc. 78 at 18 (Transcript of Motion
Hearing, Apr. 6, 2022). Ponchartrain, however, recycles the same argument it pressed in its prior
motion for summary judgment, arguing that the written agreement bars such damages. As in its
previous motion, Ponchartrain homes in on the following language in the charter agreement: “All
damages must be repaired by Charter. If not, repair charge will be added to the rental invoice.”
R. Doc. 66-3 at 1. According to Ponchartrain, this language can be construed in two ways: on
one reading, Ponchartrain has the choice whether to return the GRANT in a repaired state, and if
it chooses to return the vessel in a damaged or unrepaired condition, then Ponchartrain is
responsible only for the repair charges. Alternatively, the first sentence in the provision could be
interpreted to impose on Ponchartrain an obligation to repair the vessel prior to return. But if
8 As stated above, Ponchartrain does not disagree that, under the terms of an oral bareboat, the charterer is
responsible for all consequential damages resulting from damage it causes to the vessel it charters. Instead,
Ponchartrain takes the position that the terms of the written charter sent by Shallow Water became part of the
contract through the parties’ supposed course of dealing and that these written terms absolve it of any liability for
consequential damages. R. Doc. 69 at 2-7. Under Ponchartrain’s view, the terms of the written charter would appear
not merely to “supplement” the terms of the oral agreement, One Beacon Ins. Co., 648 F.3d at 265, but instead to
alter or amend those terms. That is, the waiver of consequential damages that Ponchartrain maintains is contained
for in the written charter does not simply add to or clarify terms already contemplated by the oral agreement; rather,
the waiver directly conflicts with those terms (regardless as to whether the terms of the oral bareboat charter were
express or implied). Nevertheless, it appears that, when parties do in fact have a course of dealing, the provisions of
a written agreement that are part of that course of dealing may permissibly conflict with and supersede the terms of a
prior oral agreement. See Restatement of Contracts at § 232 (“[N]or is it required that the course of dealing be
consistent with the meaning the agreement would have apart from the course of dealing.”).
Ponchartrain breaches this obligation, then the next sentence supplies the damages for this
breach—Ponchartrain must pay for the cost of repairs. Under either view, Ponchartrain contends,
its liability is limited to paying for the cost of repairing the GRANT.
For the same reasons the Court rejected Ponchartrain’s argument before, it must reject
Ponchartrain’s argument again. The language Ponchartrain focuses on concerns only damages
for repair; it does not address any other type of damages. Specifically, the language does not deal
with loss-of-use or consequential damages. Nor does any other provision of the written charter.
And it is beyond dispute that waivers of damages—including for loss-of-use damages, which are
implied into vessel charters, see Schoenbaum on Admiralty § 14:7 (6th ed.)—must be express
and unambiguous. See Jig the Third Corp. v. Puritan Marine Ins. Underwriters Corp., 519 F.2d
171 (5th Cir. 1975), overruled on other grounds by East River Steamship Corp. v. Transamerica
Delaval, Inc., 476 U.S. 858 (1986). It is clear, then, that Ponchartrain’s argument is beside the
point: in determining whether the terms of the contract waives loss-of-use damages, the
construction of a provision in the contract regarding damages for the vessel being returned in a
damaged condition is simply not relevant. Rather, what is salient is that the written charter
nowhere discusses consequential damages. Thus, this type of damages is not waived. See id.
Subject to the presentation of sufficient proof at trial, Ponchartrain may be liable for
consequential damages under the terms of the written charter.
In sum, Ponchartrain is not entitled to summary judgment on its claim that it is immune
from liability for consequential damages.
ii. Rent Owed by Ponchartrain
The Court now considers the issue of Ponchartrain’s liability for rent. Ponchartrain
argues that it is “not liable for past due rent subsequent to the Off-Charter survey conducted on
January 9-10, 2021.” R. Doc. 62-1 at 7. Put another way, Ponchartrain asserts that rent stopped
accruing once the off-charter survey of the GRANT concluded on January 10, 2021. But under
either the oral charter or the written instrument, the Court finds that Ponchartrain may not be
awarded summary judgment on this issue.
Assuming that the oral bareboat charter supplies the relevant terms, the parties provide
no evidence as to what the terms were as to when rent ceases to accrue. Thus, if the oral
agreement governs the issue of rent, the Court is unable to determine at this time when new rent
stopped accruing. Under the written charter, “[r]ent will stop after off charter survey has been
completed.” R. Doc. 66-3 at 1. But even so, the parties previously represented to the Court that
three separate off-charter surveys have been conducted—in January, March, and September
2021. And Plaintiffs have adduced testimony from TK’s corporate representative, Todd
Kirkpatrick, suggesting that the pertinent off-charter survey has not even happened yet: the off-
charter survey of the GRANT, according to Kirkpatrick, will occur only after the repairs to the
vessel—which have not yet begun—are completed. R. Doc. 65-4 at 2.
In short, if the oral contract governs, the trier of fact must resolve what this contract’s
terms are as to when new rent stops accruing. And if the written version controls and rent stops
accruing at the time of off-charter, fact issues exist as to when the relevant off-charter occurred.
Ponchartrain’s request for a summary judgment determining that it does now owe any rent for
the GRANT that accrued after January 10, 2021 must be denied.
TK’s Claims
Last, the Court addresses Ponchartrain’s argument that TK lacks any claims against it. R.
Doc. 62-1 at 3. Ponchartrain maintains that TK has no cause of action against it because TK is
not a party to the subcharter between it and Shallow Water and because TK is not a third-party
beneficiary to the subcharter. R. Doc. 62-1 at 3-4. TK acknowledges that it is not in privity with
Ponchartrain. Nevertheless, TK is correct that, at a minimum, it may have a maritime tort claim
against Ponchartrain.
“The analysis of a maritime tort is guided by general principles of negligence law.” In re
Signal Intern., LLC, 579 F.3d 478, 491 (5th Cir.2009) (internal quotation and citation omitted).
“Under general tort principles, a tortfeasor is accountable only to those to whom a duty is
owed.” Id. “Duty is measured by the scope of the risk that negligent conduct foreseeably
entails.” Id. (internal quotation and citation omitted). “The risk [of foreseeability] is whether the
harm that does occur is within the scope of danger created by the defendant's negligent
conduct.” Id. (internal quotation and citation omitted).
Applying these principles, courts have found that a subcharterer may be liable to the
owner of a vessel when the subcharterer’s negligence causes damages to the owner’s vessel. E.g.,
The C.W. Crane, 155 F.2d 940, 943 (2d Cir. 1946) (“Since it appears that the scow was delivered
in good condition, and returned in a damaged state, the charterer is liable unless it can be shown
that the damage resulted despite due care on its part and on the part of the subcharterer. And
where, as here, it is found that the damage occurred while the scow was in the possession of
the subcharterer, the latter is primarily liable unless it can show that it has discharged its duty to
exercise due care.”); see also Seaboard Sand & Gravel Corp. v. Moran Towing Corp., 154 F.2d
399, 402 (2d Cir. 1946) (holding that subcharterer of a vessel was liable to vessel owner for
damages sustained by vessel where subcharterer entrusted vessel to another company, which
loaded the vessel in manner that caused it to capsize; subcharterer was “secondarily liable for the
negligence of” the party to whom it entrusted the vessel). Thus, based on the record, the Court
cannot say that TK, as owner of the GRANT, has no right of action against the subcharterer,
Ponchartrain. Thus, Ponchartrain’s argument for dismissing TK’s claims is unavailing. Of
course, TK will ultimately have to prove up its claims at trial.
IV. CONCLUSION
For these reasons,
IT IS ORDERED that Ponchartrain’s motion for partial summary judgment, R. Doc. 62,
is DENIED.
New Orleans, Louisiana, this 10" day of August, 2022.
UNITED STATES DISTRICT JUDGE
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