BP Exploration & Prod. Inc. v. Cashman Equip. Corp.

• Decision Date: 22 September 2015
• Docket Number: No. Civ. A. H–13–3046.,Civ. A. H–13–3046.
• Citation: 132 F.Supp.3d 876
• Parties: BP EXPLORATION & PRODUCTION INC., Plaintiff, v. CASHMAN EQUIPMENT CORPORATION, LAD Services of Louisiana, LLC, and Cashman Equipment Corp. and LAD Services, A Joint Venture, Defendant.
• Court: U.S. District Court — Southern District of Texas

132 F.Supp.3d 876

BP EXPLORATION & PRODUCTION INC., Plaintiff,

v.CASHMAN EQUIPMENT CORPORATION, LAD Services of Louisiana, LLC, and Cashman Equipment Corp. and LAD Services, A Joint Venture, Defendant.

No. Civ. A. H–13–3046.

United States District Court, S.D. Texas, Houston Division.

Signed Sept. 22, 2015.

Christopher Esbrook, Ryan Scott Babiuch, R. Allan Pixton, Kirkland & Ellis LLP, Chicago, IL, Thomas W. Taylor, Andrews and Kurth, Houston, TX, for Plaintiff.

Jonathan Percy Lemann, Robert E. Couhig, Jr., Couhig Partners LLC, New Orleans, LA, Kyle A. Ferachi, Stephanie Laird Tolson, John L. Verner, McGlinchey Stafford PLLC, Houston, TX, for Defendant.

OPINION AND ORDER

MELINDA HARMON, District Judge.

The Amended Original Complaint (instrument # 12) in above referenced cause alleges (1) breach of a Master Services Contract ("MSC"), and of Work Releases pursuant to it, to provide barges, tug boats, and other equipment to separate crude oil from water in Plaintiff BP Exploration & Production Inc.'s ("BP's") clean-up response to the Deepwater Horizon oil spill, (2) money had and received, and (3) unjust enrichment and seeks to recover approximately $12,000,000 in overpayments made to Defendants Cashman Equipment Corporation ("Cashman"), LAD Services of Louisiana, LLC ("LAD"), and Cashman Equipment Corp. & LAD Services, a Joint Venture (the "Joint Venture").¹ Pending before the Court is Defendant Cashman's motion for summary judgment (# 86).

Specifically BP complains that the Joint Venture invoiced and received overpayments for work authorized in the July Work Releases (numbers 14–21, signed by Cashman through its General Counsel, Andrew Saunders),² involving the chartering of the Joint Venture's skimming barges. Under the MSC,³ BP retained the right to pay invoices when they were received and to dispute or "contest the correctness of the amount and seek reimbursement" later. Art. 904 ("[P]ayment of any amount, including any disputed amount, by Company will not waive Company's right subsequently to contest the correctness of the amount and seek reimbursement from Contractor."). The MSC further gave BP the right to audit Defendants, which were required to maintain "complete and correct Documentation" related to all work done for BP. Arts. 23.01, 23.03. After paying Defendants more that $68 million based on Defendants' invoices, BP notified Defendants on November 1, 2011 that it would conduct an audit of the charges. That audit, according to BP, revealed millions of dollars of overcharges.

Standard of Review

Summary judgment under Federal Rule of Civil Procedure 56(c)is appropriate when, viewing the evidence in the light most favorable to the nonmovant, the court determines that "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." A dispute of material fact is "genuine" if the evidence would allow a reasonable jury to find in favor of the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Where the nonmovant bears the burden of proof at trial, the movant must offer evidence that undermines the nonmovant's claim or point out the absence of evidence supporting essential elements of the nonmovant's claim; "the movant may, but does not have to, negate the elements of the nonmovant's case to prevail on summary judgment." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Lujan v. National Wildlife Federation, 497 U.S. 871, 885, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990); Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5th Cir.1998).

If the movant meets its burden and points out an absence of evidence to prove an essential element of the nonmovant's case on which the nonmovant bears the burden of proof at trial, the nonmovant must then present competent summary judgment evidence to support the essential elements of its claim and to demonstrate that there is a genuine issue of material fact for trial. National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d 698, 712 (5th Cir.1994). "[A] complete failure of proof concerning an essential element of the nonmoving party's case renders all other facts immaterial." Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The nonmovant may not rely merely on allegations, denials in a pleading or unsubstantiated assertions that a fact issue exists, but must set forth specific facts showing the existence of a genuine issue of material fact concerning every element of its cause(s) of action. Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir.1998).

Conclusory allegations unsupported by evidence will not preclude summary judgment. National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d at 713; Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir.1996). " '[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment....' " State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir.1990), quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Nor is the 'mere scintilla of evidence' sufficient; 'there must be evidence on which the jury could reasonably find for the plaintiff.' " Id., quoting Liberty Lobby, 477 U.S. at 252, 106 S.Ct. 2505. The Fifth Circuit requires the nonmovant to submit " 'significant probative evidence.' " Id., quoting In re Municipal Bond Reporting Antitrust Litig., 672 F.2d 436, 440 (5th Cir.1982), and citing Fischbach & Moore, Inc. v. Cajun Electric Power Co-op., 799 F.2d 194, 197 (5th Cir.1986). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Thomas v. Barton Lodge II, Ltd., 174 F.3d 636, 644 (5th Cir.1999), citing Celotex, 477 U.S. at 322, 106 S.Ct. 2548, and Liberty Lobby, 477 U.S. at 249–50, 106 S.Ct. 2505.

Allegations in a plaintiff's complaint are not evidence. Wallace v. Texas Tech Univ., 80 F.3d 1042, 1047 (5th Cir.1996)("[P]leadings are not summary judgment evidence."); Johnston v. City of Houston, Tex., 14 F.3d 1056, 1060 (5th Cir.1995)(for the party opposing the motion for summary judgment, "only evidence—not argument, not facts in the complaint—will satisfy' the burden."), citing Solo Serve Corp. v. Westowne Assoc., 929 F.2d 160, 164 (5th Cir.1991). The nonmovant must "go beyond the pleadings and by [his] own affidavits, or by depositions, answers to interrogatories and admissions on file, designate specific facts showing that there is a genuine issue of material fact for trial." Giles v. General Elec. Co., 245 F.3d 474, 493 (5th Cir.2001), citing Celotex, 477 U.S. at 324, 106 S.Ct. 2548.

The court must consider all evidence and draw all inferences from the factual record in the light most favorable to the nonmovant. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d at 712–13. The Court may not make credibility determinations. Deville v. Marcantel, 567 F.3d 156, 164 (5th Cir.2009), citingTurner v. Baylor Richardson Medical Center, 476 F.3d 337, 343 (5th Cir.2007).

Relevant Law

MSC and Work Releases

The MSC is a "blanket contract" that constitutes the first stage of the contractual relationship, while the work orders for performance of specific work issued subsequently constitute the second stage. "When the parties agreement consists of two parts—the blanket agreement and a subsequent work order—the two must be interpreted together when determining whether maritime law governs the contractual dispute." Dominion Exploration & Production, Inc. v. Delmar Systems, Inc., No. Civ.A. 07–9492, 2012 WL 6020121, at *5 n. 6 (E.D.La.2012), citing Grand Isle Shipyard v. Seacor Marine, LLC, 589 F.3d 778, 787 n. 6 (5th Cir.2009), and Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313, 315–16 (5th Cir.1990)("If, as in this case, the contract consists of two parts, a blanket contract followed by later work orders, the two must be interpreted together in evaluating whether maritime or land law is applicable to the interpretation and enforceability of the contract's provisions. The blanket contract is not of itself complete and calls for no specific work. The actual contract between the parties therefore consists of the blanket agreement as modified by the later work order.").

General Maritime Law

The MSC at issue here provides that "to the maximum extent permissible" any dispute related to the contract "shall be governed by the general maritime laws of the United States"; where maritime law is held inapplicable by a court of competent jurisdiction, ... "the laws of the State of Texas shall apply...." # 86–1, Ex. A, arts. 24.01 and 24.03.

If an action falls within admiralty jurisdiction, federal courts apply substantive admiralty law to claims that sound in admiralty, regardless of whether jurisdiction is also based upon diversity, as is the case here. See, e.g., Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 410–11, 74 S.Ct. 202, 98 L.Ed. 143 (1953)("While states may sometimes supplement federal maritime policies, a state may not deprive a person of any substantial admiralty rights as defined on controlling acts of Congress or by interpretive decisions of this Court."); Thibodaux v. Atlantic Richfield Co., 580 F.2d 841, 846 (5th Cir.1978)(discussing Pope at pp. 409–10, 74 S.Ct. 202: "The Constitution provides that Judicial Power shall extend 'to all cases of admiralty and maritime jurisdiction.' This constitutional grant of jurisdiction has been construed to mean that general maritime law is to be placed under national control in 'its substantive as well as its procedural features....' ... It is settled ... that state law must yield to the needs of a uniform federal maritime system when...