799 F.2d 159 (5th Cir. 1986), 84-3830, Farmers Export Co. v. M/V Georgis Prois

Docket Nº:84-3830.
Citation:799 F.2d 159
Party Name:FARMERS EXPORT COMPANY, Plaintiff-Appellee, Cross-Appellant, v. M/V GEORGIS PROIS, Defendant, Marfo Compania S.A., in personam, Defendant-Appellant, Cross-Appellee.
Case Date:September 05, 1986
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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799 F.2d 159 (5th Cir. 1986)

FARMERS EXPORT COMPANY, Plaintiff-Appellee, Cross-Appellant,

v.

M/V GEORGIS PROIS, Defendant,

Marfo Compania S.A., in personam, Defendant-Appellant, Cross-Appellee.

No. 84-3830.

United States Court of Appeals, Fifth Circuit

September 5, 1986

Page 160

        Chaffe, McCall, Phillips, Toler & Sarpy, Harvey G. Gleason, Frank V. LeBlanc, III, New Orleans, La., for defendant-appellant, cross-appellee.

        Andre J. Mouledoux, John F. Young, Jr., New Orleans, La., for plaintiff-appellee, cross-appellant.

        Appeals from the United States District Court for the Eastern District of Louisiana.

        Before RANDALL and GARWOOD, Circuit Judges, and SCHWARTZ, [*] District Judge.

        GARWOOD, Circuit Judge:

        A shipowner appeals the district court's judgment enforcing the liquidated damages clause of a dock tariff. Appellee, a grain elevator, billed the shipowner at the rate of $5,000 per hour, as provided in the dock tariff, for the twenty-eight-hour period during which the ship remained at berth after being requested to leave. The ship was unable to leave the berth because striking crew members prevented the master from casting off his lines. When the shipowner refused to pay the bill, the grain elevator brought this suit. The district court found that the $5,000 per hour charge was reasonably related to anticipated damages and upheld the validity of the liquidated damages clause; however, the court disallowed damages for the period when inclement weather otherwise would have prevented the loading of the grain. The shipowner appeals the district court's decision, claiming

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that the $5,000 per hour charge is a penalty rather than a liquidated damages clause and therefore is not enforceable. The grain elevator cross-appeals the disallowance of time for inclement weather, claiming that under the dock tariff once the damages clause becomes effective it remains in effect regardless of intervening circumstances. We find the $5,000 per hour charge in the dock tariff is reasonably related to the forecasted damages and therefore is not a penalty and is enforceable. We also find that under the provisions of the dock tariff once the liquidated damages clause is activated it remains in effect regardless of inclement weather conditions and the elevator is entitled to damages for the entire period that the ship remained at berth after receiving orders to leave. Accordingly, the judgment below is affirmed in part and reversed in part.

Facts and Proceedings Below

        The M/V GEORGIS PROIS, a vessel owned by appellant, cross-appellee Marfo Compania S.A. (Marfo), came to general anchorage at the grain facility of appellee, cross-appellant Farmers Export Company (Farmers), at Ama, Louisiana, to receive a shipment of soybeans. The ship's agent in Louisiana had arranged for berthing privileges prior to the ship's arrival and he had signed a berthing application which included specific damage provisions for failure to leave the berth when requested to do so. Before the ship was allowed to berth, the captain was required to sign certain papers which included the provisions regarding failure to vacate the berth. The ship arrived at 05:00 hours on June 27, 1983, and the elevator began loading grain at 08:40 hours. Loading was stopped due to inclement weather at 11:20 hours. 1

        During the time of inclement weather, misfortune befell the GEORGIS PROIS. The crew of the GEORGIS PROIS included able-bodied seamen, who were represented by a union known as P.E.N.E.N., and engineers, who were represented by a union known as P.E.M.E.M. Both of these unions had instructed their members to engage in a forty-eight-hour strike while their ship was in port. At approximately 16:00 hours on June 27, eleven crew members of the GEORGIS PROIS announced that they were going on strike, leaving twenty-one crew members willing to work. Around 17:00 hours, the personnel at the Farmers grain elevator asked the ship to open her hatches so that the grain could be inspected and loading resumed. The ship's master was unable to open the hatches, however, because striking crew members had cut off the power to the hatches and prevented the nonstriking crew members from turning on the power. The ship's master informed Farmers of his plight. Later that evening, Farmers personnel informed the ship that it would have to leave berth because the striking crew members made it impossible to load the grain. The shipowner ordered tugs in an attempt to move the GEORGIS PROIS as a dead ship. However, the striking crew members threatened to injure any crew member who tried to cast off the ship's lines, thereby preventing her from being moved.

        The following morning, Farmers contacted its attorney and suit was brought to remove the striking crew members. At approximately 17:00 hours on June 28, agents of the United States Immigration and Naturalization Service and a United States Marshal boarded the M/V GEORGIS PROIS to remove the striking crew members. Loading of the grain was able to recommence several hours later in the evening of June 28 and was completed in the morning of June 29. The striking crew members had prevented the loading of the grain for approximately twenty-eight hours.

        After the grain was loaded, the GEORGIS PROIS departed the berth and continued on her way. Farmers sent an invoice to Marfo, as owner of the GEORGIS PROIS, for $140,000, which reflected the

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ship's twenty-eight-hour delay at $5,000 per hour. When Marfo did not pay the invoice, Farmers filed suit in rem in the United States District Court for the Eastern District of Louisiana, seeking to recover attorneys' fees and damages in the amount of $5,000 per hour. The GEORGIS PROIS was seized by the United States Marshal; the arrest was vacated and the vessel was subsequently released upon the posting of a release bond. Marfo filed an answer denying all the allegations. Farmers amended its original complaint to add a claim against Marfo in personam. In a bench trial, the district court upheld the $5,000 per hour charge, found that the...

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