Opinion
Civil Action No: 00-2913, Section: "R"(4)
July 9, 2001.
ORDER AND REASONS
Before the Court is the motion of defendant Barwil (N.A.) Inc. to dismiss on the grounds of laches, or in the alternative, to bring in Cargill, Inc. as a third party defendant. For the following reasons, the Court grants defendant's motion to dismiss.
I. Background
The M/V CAPTAIN VENIAMIS is owned by plaintiff, Gaddesden Shipping Corporation, a one ship company managed by Golden Union Shipping. Golden Union has a long standing business relationship with Cargill, Inc., which chartered the M/V CAPTAIN VENIAMIS on a fairly regular basis. The standard charter used by Golden Union and Cargill allowed Cargill to nominate the port agent to act on behalf of the shipowner. For the voyage in issue, Cargill nominated defendant Barwil Agencies (N.A.) Inc. as port agent for Gaddesden.
Under the charter between Golden Union and Cargill, the M/V CAPTAIN VENIAMIS was to arrive in New Orleans between December 1st and 20th to load cargo for a voyage to Europe, the first of three voyages. The charter gave Cargill the right to cancel it, unless the vessel was ready to load, cleared by customs, had the necessary certificates from the independent surveyors and the U.S. Department of Agriculture, and presented those certificates to the charterer's office by noon on December 20, 1995.
The M/V CAPTAIN VENIAMIS arrived in New Orleans very late on December 19, 1995, and anchored by early morning on December 20. Barwil arranged for custom clearances and set up the necessary hold inspections for 7:00 that morning. However, other vehicles were in line for inspection that morning, and the USDA inspection was not completed until after the noon deadline had passed. As a result, Cargill cancelled the charter. At this point, Golden Union and Cargill renegotiated the charter, resulting in Cargill's paying a lower freight on the subsequent two voyages.
In May 1996, Gaddesden's London solicitors demanded approximately $450,000 from Cargill, the alleged loss from the reduction in freight rates for the second and third voyages. Arbitration of this claim began between Gaddesden and Cargill in October 1996 and is ongoing.
Four years later, in September 2000, Gaddesden filed this suit against Barwil, alleging that it acted negligently as port agent, resulting in the missed deadline and subsequent charter cancellation. Gaddesden asserts that Barwil failed to inform it that it had arranged for three other vessels to be inspected at 7:00 A.M. on December 20 and that the M/V CAPTAIN VENIAMIS could have proceeded to a layberth for USDA inspection at any time of day or night. Gaddesden argues that Barwil therefore prevented the ship from receiving a timely inspection. Gaddesden also contends that Barwil sent communications about the vessel's status to Cargill without relaying the information to Gaddesden.
Barwil argues that the charter was cancelled because of an underlying conflict between Gaddesden and Cargill and that Barwil had no knowledge or control over their dispute. Barwil alleges that Cargill knew that the vessel might be late and subsequently attempted to engineer a delay to prevent the ship from meeting its deadline. Barwil maintains that it simply performed its duties as usual in ignorance of this plot.
Barwil now moves to dismiss Gaddesden's action against it on the grounds of laches, or alternatively, to bring Cargill into this action.
II. Discussion
A. Standard of Review
The Court will treat defendant's motion as one for summary judgment because matters outside of the pleadings have been presented to and not excluded by the Court. See FED. R. CIV. P. 12(b)(6). Summary judgment is appropriate when there are no genuine issues as to any material facts, and the moving party is entitled to judgment as a matter of law. See FED R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552 (1986). A court must be satisfied that no reasonable trier of fact could find for the nonmoving party or, in other words, "that the evidence favoring the nonmoving party is insufficient to enable a reasonable jury to return a verdict in her favor." Lavespere v. Niagra Mach. Tool Works, Inc., 910 F.2d 167, 178 (5th Cir. 1990) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511 (1986)). The moving party bears the burden of establishing that these are no genuine issues of material fact.
The Court's acceptance of materials and information from both parties outside the pleadings for consideration was sufficient in itself to notify the parties that the Court might treat this motion as one for summary judgement. See Isquith v. Middle South Utilities, Inc., 847 F.2d 186, 195-96 (5th Cir. 1988) (citing Clark v. Tarrant County, Texas, 798 F.2d 736, 746 (5th Cir. 1986)).
If the dispositive issue is one for which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record contains insufficient proof concerning an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. at 2554; see also Lavespere, 910 F.2d at 178. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. The nonmovant may not rest upon the pleadings, but must identify specific facts to establish that a genuine issue exists for trial. See id. at 325, 106 S.Ct. 2553- 54; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1996).
This case is set for a bench trial on August 27, 2001. The Fifth Circuit has "arguably articulated an even more lenient standard for summary judgment in certain nonjury cases." Phillips Oil Co. V. OKC Corp., 812 F.2d 265, 273 n. 15 (5th Cir. 1987). In Nunez v. Superior Oil Co., 572 F.2d 1119, 1123 (5th Cir. 1978), the Fifth Circuit explained:
There is no litmus test that infallibly distinguishes those issues that are "factual" from those that are "legal" or "mixed.". . . as we approach the point where facts and the application of legal rule to them blend, appraising evidentiary facts in terms of their legal consequences and "applying" law to fact become inseparable processes.
Therefore, in a nonjury case the court is encouraged to draw inferences, even when they appear to be factual, if a "trial on the merits would reveal no additional data." Id. at 1124.
B. Legal Standard
1. Doctrine of Laches
The doctrine of laches is an affirmative defense barring actions when plaintiff's delay in asserting a claim results in prejudice to the other party. See Esso Int'l, Inc. v. SS CAPTAIN JOHN, 443 F.2d 1144, 1150 (5th Cir. 1971) (citations omitted) "The existence of laches is a question of fact to be decided by the court after weighing the equities as they appear from the facts of each case." Id. In maritime or admiralty actions, the Fifth Circuit uses a three-part test to analyze the validity of a laches defense: 1) whether there was delay in asserting a right or claim; 2) whether or not the delay was excusable; 3) whether the delay resulted in undue prejudice to the party against whom the claim is asserted. See West Wind Africa Line, Ltd. v. Corpus Christi Marine Services, Co., 834 F.2d 1232, 1234 (5th Cir. 1988) (citing Mecom v. Levingston Shipbuilding Co., 622 F.2d 1209 (5th Cir. 1980)).
The Court must first determine whether there was delay in asserting the claim under the prescriptive period or statute of limitations for the most analogous statute. See Mecom, 622 F.2d at 1215; Watz V. Zapata Off-Shore Co., 500 F.2d 628, 632-633 (5th Cir. 1974); Robert B. Miller Associates, Inc. v. M/V RENEE, No. CIV.A.00-3808, 2001 WL 515249, *2 (E.D. La. 2001) If the analogous statute of limitations has run, a presumption of laches arises and the burden shifts to the plaintiff to demonstrate that the delay was excusable or that the defendant was not prejudiced by the lapse of time. See Albertson v. T.J. Stevenson Co., 749 F.2d 223, 233 (5th Cir. 1984)
The second element to be considered in evaluating a laches defense is whether or not the delay is excusable. See Watz, 500 F.2d at 632 (citations omitted). Delay in and of itself is not sufficient to bar suit. Delay may be excused when "a plaintiff gives defendants notice of the claim and the opportunity to protect their interests within a reasonable time, notwithstanding the fact that the analogous state statute of limitations may have expired." Robert B. Miller, 2001 WL 515249, at *2 (citing West Wind Africa Line, 834 F.2d at 1234).
The third prong necessary to support a laches defense is prejudice to the other party. Esso, 443 F.2d at 1150. To establish prejudicial harm, the party "must show a delay which has subjected him to a disadvantage in asserting and establishing his claimed right to defense." Id. (citing Point Landing Inc. v. Alabama Dry Dock Shipbuilding Co., 261 F.2d 861 (5th Cir. 1958)). Defense prejudice including the "loss of records, destruction of evidence, fading memories, or unavailability of witnesses, " may be sufficient to bar a claim under laches. Cornetta v. United States, 851 F.2d 1372, 1378 (Fed. Cir. 1988)
C. Application
The Court must first determine whether there was actual delay in bringing the claim by applying the prescriptive period for the most analogous statute. See Watz, 500 F.2d at 632-633. Barwil asserts that this is essentially a negligence action for which the Louisiana prescriptive period is one year. LA. CIV. CODE ANN. art. 3492 (West 2001). Gaddesden argues that this case concerns a breach of fiduciary duty and is therefore subject to a prescriptive period of ten years. LA. Civ. CODE ANN. art. 3499 (West 2001). While an agent or mandatary has been held to be a fiduciary, "it does not necessarily follow that every action against a mandatary is subject to the ten-year prescriptive period." Gerdes v. Estate of Cush, 953 F.2d 201, 205 (5th Cir. 1992). Negligence is a breach of the duty of care, but "unless it is coupled with fraud, a breach of trust or other ill acts, it does not constitute a breach of fiduciary duty." Barton, 96 F.2d at 133-134. The Court finds that Gaddesden's claim against Barwil is based on its negligence as an agent and is therefore subject to a one-year prescriptive period. Gaddesden does not allege fraud or that it reposed any particular trust or confidence in Barwil that was breached. Indeed, Barwil was designated by Cargill, not Gaddesden, and Gaddesden even hired Maritime Endeavors as its own "local protective agent." Further, the facts recited by Gaddesden in support of its claim against Barwil are not the stuff of a breach of fiduciary duty claim. Gaddesden claims that Barwil did not advise it of a possible option of being inspected at another location, and Barwil did not try to have its vessel moved up ahead of others that were scheduled to be inspected at the same time. It also asserts that Barwil told Cargill but not Gaddesden that Gaddesden "might" miss its deadline. Gaddesden's Oppo. Mem. at 3. It is not even clear that these facts, if proved, would amount to negligence, much less a breach of a fiduciary duty. At most, Gaddesden's claims are for negligence. Gaddesden filed suit in September 2000, almost four years after the one-year prescriptive period had run. Accordingly, Gaddeeden's filing of this action is not timely, which raises a presumption of laches and shifts the burden to the plaintiff.
Gaddesden has not presented any arguments to satisfy its burden in showing that the delay was excusable. Gaddesden attempts to employ the doctrine of contra non valen tern agere non currit, literally "no prescription runs against a person unable to bring action, " which suspends the prescriptive period for plaintiffs who are unable to bring suit. FDIC V. Barton, 96 F.3d 128, 134 (5th Cir. 1996). Under Louisiana law, this doctrine may suspend the running of the prescriptive period when: "1) there was some legal cause that prevented the courts or their officers from taking cognizance of or action on the plaintiff's action; 2) there was some condition coupled with the contract or connected with the proceedings that prevented the creditor from suing or acting; 3) the debtor himself has done some act effectively to prevent the creditor from availing himself of his cause of action; or 4) the cause of action is not known or reasonably knowable to the plaintiff, even though his ignorance is not induced by the defendant." Id. Even if Gaddesden could avail itself of this doctrine in the context of an analysis of laches, Gaddesden cites no facts to support the application of the doctrine to this case. It offers no explanation why it waited four years after filing a claim against Cargill to sue Barwil. The running of the prescriptive period was therefore not interrupted under contra non valentem.
Third, the Court looks to factors which may prejudice the defendant's ability to mount a defense. See Watz, 500 F.2d at 632-633. Barwil asserts that the deposition of its primary witness, Mr. Daryl Ricard, reveals that the lapse of time has rendered him unable to recall facts and circumstances relating to the events subject to this litigation. The Court finds that Barwil has demonstrated prejudice. Gaddesden asserts that one of the disputed issues in this litigation is whether Barwil could have asked the USDA to inspect the CAPTAIN VENIAMIS ahead of the other vessels it had scheduled to be inspected at the same time. [Gaddeeden's Statement of Contested Facts]. When Mr. Ricard was asked whether Barwil requested that the USDA inspect the VENIAMIS first and whether Barwil considered making such a request, his answer to both questions was that he could not remember. Further, he could not recall the identity of the other vessels that Barwil. scheduled at the anchorage, and Barwil no longer retains the files on those vessels. While Gaddesden points out that Mr. Ricard did not suffer from total amnesia and that Barwil did maintain its file on the VENIAMIS, this does not negate that Barwil suffered prejudice to its defense. Accordingly, summary judgment on the basis of laches is granted.
III. Conclusion
For the foregoing reasons, the Court dismisses plaintiff's action against Barwil.
New Orleans, Louisiana, this 9th day of July, 2001.