Opinion
Civ. No. 98-1765 c/w 99-1590, SECTION "N".
February 29, 2000.
ORDER AND REASONS
These two consolidated cases were tried before this Court on February 16, 2000, without a jury. Having thoroughly considered the parties' pleadings and stipulations, the trial and deposition testimony, the exhibits, and the law, the Court issues the following Findings of Fact and Conclusions of Law.
A. THE SITE HAZARD SURVEY
As reflected in the Pre-Trial Order and discussed at the outset of the trial, the facts of this case are largely undisputed. Accordingly, the Court shall provide the following, abbreviated description of the background facts.
In early 1998, Amoco Energy Company of Trinidad and Tobago ("Amoco Trinidad") determined that it would begin drilling operations offshore of Trinidad. To determine whether the location selected for placement of the drilling rig would be safe and feasible, Amoco Trinidad selected Marine Technical Services, Inc. ("MTS") as its third-party contractor to perform a site hazard survey. Amoco Trinidad and MTS entered into an oral agreement which was subsequently reduced to writing and signed by Peter Kane, President of MTS, on April 4, 1998, and Larry Tiezzi, Amoco Trinidad's Vice President of Exploration, on April 7, 1998. See Exhibit 2 ("1998 Site Hazard Survey Agreement").
In order to conduct the site hazard survey, MTS entered into agreements with two subcontractors, Global Towing, L.L.C. ("Global") and Alpine Ocean Seismic Survey, Inc. ("Alpine"). On March 3, 1998, MTS and Global Towing signed a charter agreement for the M/V SOVEREIGN to survey four grids in Trinidad. Also in March of 1998, MTS and Alpine entered into a maritime contract, whereby Alpine agreed to furnish precision navigation equipment for use in the site hazard survey. Amoco Trinidad was not party to either of these subcontracts.
Amoco Trinidad made various payments to MTS for the survey work, but only some of this money was paid to Global and Alpine before MTS went bankrupt. Amoco Trinidad withheld $183,478.60 otherwise due MTS as part of a settlement agreement with MTS. Global and Alpine brought suit against MTS and Amoco Trinidad to recover the money owed to them. The claims against MTS have been stayed due to its bankruptcy.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1333.
B. GLOBAL'S CLAIM AGAINST AMOCO TRINIDAD: THE AUTHORITY OF TONY AMING
Global and Amoco Trinidad agree that Global's claim against Amoco Trinidad turns on the resolution of one issue: whether Amoco Trinidad's employee, Tony Aming, had the authority to sign a letter agreement which purported to obligate Amoco to "ensure that MTS pays all monies due to Global" by withholding payments from MTS "until Global . . . has been fully satisfied and has communicated to [Amoco] in writing that all monies have been paid." See Exhibit 11.
See Global's and Amoco Trinidad's Issues to be Resolved at Trial and the transcript generally.
Despite Aming's obvious importance to resolution of this issue, he was not available to testify at trial. It is the Court's understanding that Aming is being investigated for suspected criminal activities. The parties submitted Aming's deposition testimony for the Court's consideration.
1. THE GUARANTEE LETTER
Michael Blake, Global's Managing Member, testified that he became concerned when MTS failed to make payments after receiving invoices from Global. Blake contacted Peter Kane of MTS and told him that he would "pull the boat" from the site hazard survey job unless he was paid. Blake also told Kane that he wanted a "guarantee" from Amoco Trinidad that Amoco would make the payments if MTS did not. Kane told Blake to contact Tony Aming of Amoco Trinidad to secure the guarantee.Shortly after his conversation with Kane, Blake contacted Aming and demanded that Amoco Trinidad guarantee MTS's payments. On April 3, 1998, Blake faxed a "letter agreement" to Aming's hotel in Trinidad. In pertinent part, the letter stated:
Exhibit 11.
Dear Mr. Aming:
As per our phone conversation this AM, April 3, 1998, this letter will serve as ATOC's commitment to ensure that MTS pays all monies due to Global Towing, L.L.C. These funds are to be withheld from MTS until Global Towing, L.L.C. has been fully satisfied and has communicated to ATOC in writing that all monies have been paid.
Please sign and return to the undersigned via fax at 504-391-7447.
The letter was signed by Michael Blake and contained a block for Aming to fill in his signature and his title. On April 5, 1998, Aming signed the letter agreement and faxed it back to Blake. Significantly, Aming listed his title as "Chief Geophysicist".
2. AUTHORITY IN GENERAL
Generally, there are two classes of authority, actual and apparent, and actual authority is further broken down into two sub-classes, express and implied. The Court notes two general principles which apply to both actual and apparent authority. First, the burden is on Global, as the party relying on the agency, to demonstrate the existence of the agency relationship. See, e.g., Cartinez v. Reliable Amusement Co., Inc., 746 So.2d 246, 251 (La.Ct.App. 3d Cir. 1999). Second, in the admiralty and maritime context, agency is a matter of federal common law, and the Court should look first to "general principles of agency" and then to instructive state law, especially where no on-point federal rule exists. See MTO Maritime Transport Overseas, Inc. v. McLendon Forwarding Co., 837 F.2d 215, 218 (5th Cir. 1988) ("Federal maritime law incorporates basic principles of agency law."); Atlantic and Gulf Stevedores v. Revelle Shipping Agency, Inc., 750 F.2d 457 (5th Cir. 1985) (applying the RESTATEMENT (SECOND) OF AGENCY); Richard A. Cheramie Enterprises. Inc. v. Mt. Airy Refining Co., 708 F.2d 156, 158 (5th Cir. 1983) (considering both Louisiana law and "general principles" of agency);Ost-West-Handel Bruno Bischoff GmBH v. Project Asia Line, Inc., 160 F.3d 170, 174 (4th Cir. 1998) ("in an admiralty case, a court applies federal common law and can look to state law in situations where there is no admiralty rule on point").
Global cites only Louisiana law, which is generally in accord with the "general principles" of agency.
3. AMING DID NOT HAVE ACTUAL AUTHORITY TO SIGN THE GUARANTEE
As described more fully below, the Court finds that Aming did not have actual authority to sign the guarantee agreement on Amoco Trinidad's behalf.There are two types of actual authority: express and implied. Defined quite simply, "[a]n express agency is an actual agency created as a result of the oral or written agreement of the parties, and an implied agency is also an actual agency, the existence of which as a fact is proved by deductions or inferences from the other facts and circumstances of the particular case, including the words and conduct of the parties."Esso Intern., Inc. v. S. S. Captain John, 443 F.2d 1144, 1146 (5th Cir. 1971) (quoting 3 AM. JUR. 2d Agency § 18 (1962)).
a. AMING DID NOT HAVE EXPRESS AUTHORITY TO SIGN THE GUARANTEE
Global presented three lines of evidence in support of its argument that Aming had express authority to sign the guarantee. First, Global presented Exhibit 23, a February 23, 1998 e-mail from John Owusu of Amoco to Diana Friedhoff-Miller, a corporate executive of Amoco, in which Owusu states that
Tony and I had a short meeting today and mutually agreed that he be responsible for the survey from this point on. Tony will therefore contact you to arrange a review of the bids.
Second, Global pointed to several pieces of evidence in which Aming is referred to as a "project manager". See, e.g., Exhibit 19. Within the Amoco corporate hierarchy, "project managers" have the authority to sign certain contracts and authorize certain expenditures. See Exhibit 58. Third, Global pointed out that Aming is listed as the "contact" person in the 1998 Site Hazard Survey Agreement.
The Court finds that Global's evidence of Aming's actual authority was conclusively refuted by the testimony of Stephen Brady. Brady was assigned to Amoco Trinidad's Houston satellite office at the time of the disputed events as a business analyst and, in this position, was intimately familiar with the Amoco corporate hierarchy. Brady testified, and the evidence confirms, that Diana Friedhoff-Miller, not Tony Aming, was the project manager in charge of the site hazard survey. Brady testified, and the evidence again confirms, that Aming's position was actually "staff geophysicist, senior grade", a position which entails authority over only certain "operational" aspects of an exploration and which clearly does not entail the authority to sign contracts. Brady testified that Owusu's e-mail referred to Aming's "responsibility" over only these limited aspects of the exploration. Brady also testified that Amoco does not have a position known as "Chief Geophysicist". Finally, Brady testified that Aming's designation as contact person simply meant that invoices were to be channeled through him, not approved by him.
The evidence which indicated that Aming was a project manager appears to have been based on inaccurate information. For example, Exhibit 19 is an internal report by an Amoco employee who was investigating various improprieties in Aming's conduct. Although the investigator states that Aming was "project Manager [sic]" of the Site Hazard Survey, Brady testified that the investigator probably was not concerned with Aming's actual title and did not take time to investigate the accuracy of this description. In light of the overwhelming evidence that Aming was not a project manager, the Court finds this explanation persuasive.
At trial and in Aming's deposition, Global's counsel seemed to have seized on the word "responsible" as a linguistic smoking gun. The vagueness of this term, however, is self-evident: obviously, Aming was "responsible" for certain aspects of the site hazard survey; the crucial question, and the question not answered by mere use of the word "responsible", is for what was Aming responsible. Clearly, counsel believed that "responsible" included responsibility for signing guarantees. The evidence did not bear this belief out.
Based on this evidence, the Court finds that Aming was a "staff geophysicist, senior grade", and therefore did not have express authority to sign the guarantee.
b. AMING DID NOT HAVE IMPLIED AUTHORITY TO SIGN THE GUARANTEE
The Court's finding that Aming was a "staff geophysicist, senior grade" also compels a finding that Aming did not have implied authority to sign the guarantee. Implied authority is "actual authority, which, while not expressed in the agency agreement, is inferred from the circumstances, purposes, and nature of the agency itself. An agent is vested with the implied authority to do all of those things necessary or incidental to the agency assignment." Broadway v. Allstar Ins. Co., 285 So.2d 536, 538 (La. 1973). See also RESTATEMENT (SECOND) OF AGENCY § 34 for a list of factors to consider in determining whether an agent had implied authority. As described above, Amoco's delegation of authority is clearly set out in its internal corporate documents, and "staff geophysicists, senior grade" are not given the authority to sign contracts. Thus, signing contracts was neither "necessary" nor "incidental" to Aming's assignment as "staff geophysicist, senior grade", and Aming could not have thought that it was.
Global points out that, at his deposition, Aming testified that he did believe that he had authority to sign the guarantee. According to Aming, he did not feel that he needed to get approval to sign the guarantee from his superiors because he "was in charge of the project." However, the Court finds that this testimony was obviously self-serving and concludes that the rest of the evidence belies Aming's assertion. First, Brady's testimony indicates that Aming knew that he could recommend to his superiors that Amoco enter into certain contracts but that his superiors had to approve the contracts. For example, Brady testified that Aming reported to Friedhoff-Miller, who, in turn, reported to Larry Tiezzi. Together, Brady, Aming, and Friedhoff-Miller participated in telephone conferences with Tiezzi, who made the ultimate decisions. Second, it is undisputed that Aming never communicated to anyone else at Amoco Trinidad that he had signed the guarantee, but instead hid it away in his office. The guarantee did not surface until Brady searched Aming's office in connection with an investigation of Aming's alleged improprieties. Squirreling away a contract is not the action of an agent who knows that he has the authority to sign the contract, but rather the action of an unwise (at best) or unscrupulous (at worst) individual who knows he does not.
4. AMING DID NOT HAVE APPARENT AUTHORITY TO SIGN THE GUARANTEE
Even if Aming did not have the actual authority to sign the guarantee, Global argues that Aming appeared to have such authority. The Court rejects Global's argument.
"Apparent authority is created as to a third person by conduct of the principal which, reasonably interpreted, causes the third person to believe that the principal consents to the act done on his behalf by the person purporting to act for him." Cactus Pipe Supply Co., Inc. v. W/V Montmartre, 756 F.2d 1103, 1111-12 (5th Cir. 1985) (citing RESTATEMENT (SECOND) OF AGENCY § 27). Thus, for the doctrine of apparent authority to apply, the principal must first act to manifest the alleged agent's authority to an innocent third party. Second, the third party must rely reasonably on the manifested authority of the agent. See Boulos v. Morrison, 503 So.2d 1, 3 (La. 1987). "The manifestation of the principal may be made directly to a third person, or may be made to the community, by signs, by advertising, by authorizing the agent to state that he is authorized, or by continuously employing the agent." RESTATEMENT (SECOND) OF AGENCY § 8 cmt. b. However, under general agency principles the statements of the agent cannot establish the existence of the relationship, and, under Louisiana law, a third party seeking to benefit from the doctrine of apparent authority may not blindly rely upon the assertions of an agent, but instead has a duty to inquire into the nature and extent of the agent's power. See Richard A. Cheramie Enterprises, Inc. v. Mt. Airy Refining Co., 708 F.2d 156, 158 (5th Cir. 1983).
The Court finds that Amoco Trinidad did not manifest that Aming had authority to enter into contracts on Amoco Trinidad's behalf. First, Aming's mere statements that he was the project manager or that he was "Chief Geophysicist" are insufficient as a matter of law to establish the existence of the relationship. Second, Global relied heavily on the fact that MTS dealt only with Aming in the early stages of the site hazard survey. Brady admitted that Aming was MTS's contact person and that MTS began work before the 1998 Site Hazard Survey Agreement was reduced to writing. However, Brady stated several times that Aming was simply the Amoco Trinidad person "on the boat", and even Blake admitted that placing someone on a boat is not a manifestation of that person's ability to enter into contracts. Thus, the Court finds that Amoco did not manifest that Aming had contractual authority when it designated him as the contact person and technical overseer of the project.
During cross-examination, Blake admitted that the captain of his boat did not have authority to enter into contracts on Global's behalf.
More important, however, the Court finds that Global's reliance on Aming's purported authority was not reasonable. First, the Court finds that, under the circumstances of this case, Global failed to take the necessary steps to confirm the scope of Aming's authority. See Employers Ins. of Wausau v. Suwannee River Spa Lines, Inc., 866 F.2d 752, 774 (5th Cir. 1989). Although Aming represented himself to Blake as the "Chief Geophysicist", Blake admitted that he did not know what the title "Chief Geophysicist" meant. This should have been a clear indication that he needed to investigate whether Aming had the authority to sign contracts on Amoco Trinidad's behalf. Indeed, Blake clearly recognized that not every employee — not even the sole employee stationed on a boat — has the authority to sign contracts. Yet he never investigated the contours of Aming's authority. Indeed, Aming testified at his deposition that Blake never even asked Aming whether he had the authority to sign the agreement. Blake also admitted that his knowledge of Aming's very existence came solely through Peter Kane of MTS, who was not an employee of Amoco Trinidad. Even if Peter Kane honestly believed that Aming had the authority to sign the guarantee, Blake should have independently confirmed that Aming had the authority, which could have been accomplished by contacting people within Amoco Trinidad.
Second, the Court finds that the course of Blake's dealings with MTS indicates that he did not reasonably rely on Aming's guarantee. Exhibit 5 is a list of invoices submitted by Global to MTS. The vast majority of these invoices were sent to MTS after Aming signed the guarantee and most are marked "void". When questioned about this, Blake testified that, after receiving the invoices, Kane asked Blake to rebill him so that he could pay at a later date. This should have suggested to Blake that MTS was going to have some difficulty paying its bills. Yet, rather than seeking payment from Amoco Trinidad in reliance on the guarantee, Blake agreed to rebill MTS and to extend the payment date. Moreover, when some of the payments finally were made, they came directly from MTS, not from Amoco. Thus, although Blake claims now to have been relying on Aming's guarantee, the Court finds that Global did not expect the guarantee to have any effect.
This finding is also based on an evaluation of Blake's testimony and demeanor. The Court was left with the distinct impression that Blake did not really believe that he had received an effective guarantee from Amoco Trinidad.
In summary, the Court finds that Aming did not have the apparent authority to bind Amoco Trinidad to the guarantee.
C. ALPINE'S CLAIM AGAINST AMOCO TRINIDAD
Alpine claims that Amoco Trinidad was "unjustly enriched" in that it received the benefits of work performed by Alpine for which Alpine was not paid. As described more fully below, the Court finds that Amoco Trinidad has not been unjustly enriched and Alpine's claims against Amoco Trinidad therefore fail.
Alpine and Amoco Trinidad agree that admiralty law recognizes a cause of action for unjust enrichment but that there is a paucity of admiralty jurisprudence on point. Both parties cite to the elements of a Louisiana cause of action for unjust enrichment, which requires proof of five elements: (1) an enrichment; (2) an impoverishment; (3) a connection between the enrichment and the impoverishment; (4) an absence of justification or cause for the enrichment and the impoverishment; and (5) the lack of any other remedy at law. See, e.g., Wilhite v. Schendle, 92 F.3d 372, 377 (5th Cir. 1996) (citing Minyard v. Curtis Prod., Inc., 205 So.2d 422, 432 (La. 1967)).
Alpine also cites to the RESTATEMENT OF RESTITUTION. The Court will apply Louisiana law in the instant case because it provides a useful framework for this cause of action and because both parties cite to it.
Alpine argues that all five elements have been satisfied because, in essence, Amoco Trinidad benefitted from the surveys which Alpine helped create but for which Alpine was not paid. Amoco Trinidad argues that it has not been unjustly enriched because it has already paid MTS for most of the site hazard survey work and withheld the final $183,478.60 only to protect itself against Global's claim. Amoco Trinidad fully admits that it has no right to the $183,478.60, and states that it came to trial only for guidance as to whom to pay the money so that it could avoid paying twice for the same survey. Thus, it is willing to pay to Alpine whatever portion of the $183,478.60 the Court determines Alpine is entitled.
Thus, Amoco Trinidad opposes Alpine's claim only insofar as it would result in liability in excess of $183,478.60. Amoco Trinidad is willing to pay Alpine whatever the Court finds is appropriate.
The Court finds that the $183,478.60 belongs to MTS's bankruptcy estate and, as described in Part D below, shall order Amoco Trinidad to pay this money into the registry of the bankruptcy court. Once Amoco Trinidad relinquishes these funds, it will have upheld its side of the bargain with MTS and will have paid in full for the site hazard survey. Thus, it cannot be said that Amoco Trinidad was unjustly enriched. The fact that Alpine has not been paid for the work it put into the creation of the survey is unfortunate but does not support a claim against Amoco Trinidad. Quite simply, Amoco Trinidad paid for what it received vis-a-vis MTS — the site hazard survey — and therefore has not been unjustly enriched. Amoco Trinidad cannot be held liable for the debts of a general contractor to a sub-contractor merely because the work was performed for its benefit. To hold otherwise would open up the floodgates of litigation every time a general contractor goes bankrupt.
In summary, because Amoco Trinidad must deposit the remaining $183,478.60 it owes MTS into the registry of the bankruptcy court, the Court finds that Amoco Trinidad was not unjustly enriched and denies Alpine's claim for an equitable lien.
D. THE REMAINING $183,478.60
As stated above in Part C, the Court finds that the money Amoco Trinidad withheld from MTS rightfully belongs to the bankruptcy estate because these funds were withheld for payment to MTS' creditors. Thus, the Court orders Amoco Trinidad to pay the $183,478.60 into the registry of the bankruptcy court for ranking and payment of all of MTS's manifold creditors.
E. ALPINE'S CLAIM AGAINST THE M/V MR. DEAN f/k/a MAT SOVEREIGN
Alpine also asserts a maritime lien against Global's vessel, the M/V MR. DEAN f/k/a the MAT SOVEREIGN, in the amount of $113,910.40 plus interest, costs, and attorney's fees. Because Global has not opposed it, the Court grants Alpine's maritime lien.
F. CONCLUSION
For the reasons set forth above, with respect to Global's and Alpine's claims against Amoco Trinidad, judgment will be entered in favor of Amoco Trinidad and against Global and Alpine. With respect to Alpine's claim against the M/V MR. DEAN f/k/a M/V SOVEREIGN, judgment will be entered in favor of Alpine.
Additionally, IT IS ORDERED that Amoco Trinidad immediately deposit the remaining $183,478.60 due MTS into the registry of the bankruptcy court that is presiding over MTS's bankruptcy.
New Orleans, Louisiana, this 29 day of February, 2000.