Aban Offshore Ltd. v. Covington, CIVIL ACTION NO. 1:10-CV-5
| Decision Date | 16 November 2012 |
| Docket Number | CIVIL ACTION NO. 1:10-CV-5 |
| Parties | ABAN OFFSHORE LIMITED f/k/a ABAN LOYD CHILES OFFSHORE, LTD., Plaintiff, v. GUY COVINGTON and RUSSELL COVINGTON, Defendants. |
| Court | U.S. District Court — Eastern District of Texas |
Pending before the court is Defendants Guy Covington and Russell Covington's (the "Covingtons") Motion for Summary Judgment (#52). The Covingtons move for summary judgment on Plaintiff Aban Offshore Ltd. f/k/a Aban Loyd Chiles Offshores, Ltd.'s ("Aban") causes of action based on the affirmative defense of res judicata, asserting that the facts and claims have already been decided by an arbitration panel in accordance with a contract executed between Beacon Maritime, Inc. ("Beacon"), the Covingtons' employer, and Aban.
This case arises from a contractual dispute between Beacon and Aban. On or about September 13, 2005, Aban entered into a contract ("the Contract") with Beacon, a marine construction and engineering corporation headquartered in Orange, Texas, to refurbish a self-elevating offshore drilling rig. At the time the Contract was executed, Russell and Guy were, respectively, President and Vice-President of Beacon, but neither was a signatory to the Contract.
Subsequently, a dispute arose regarding the cost and quality of Beacon's work, and on March 7, 2008, Aban filed a lawsuit against Beacon in the Southern District of Texas. See Aban Offshore Ltd. v. Beacon Maritime, Inc. ("Beacon litigation"), No. H-08-761 (S.D. Tex.). In that case, Beacon filed a motion to dismiss Aban's complaint and to compel arbitration, which United States District Judge Vanessa D. Gilmore granted on June 20, 2008. On June 5, 2009, Aban served its first amended arbitration complaint ("arbitration complaint") on Beacon ("Beacon arbitration"), naming both Beacon and the Covingtons as Respondents and asserting causes of action against Beacon, individually, for claims arising under the Contract and against Beacon and the Covingtons for negligent misrepresentation, common law fraud, and fraud in the inducement.
On November 23, 2009, the Covingtons filed their original petition in the 128th Judicial District Court of Orange County, Texas, seeking a declaration that they were not required to arbitrate their dispute with Aban. Aban removed the case to federal court and filed a motion to compel the Covingtons to arbitrate, which this court granted on March 15, 2010. Ultimately, the United States Court of Appeals for the Fifth Circuit reversed this court's decision and determined that the Covingtons could not be compelled to arbitrate their claims asserted against them by Aban. On January 22, 2010, Aban filed a counterclaim against the Covingtons, asserting causes of action for negligent misrepresentation, fraudulent misrepresentation, and fraudulent inducement. In response, the Covingtons pled the affirmative defense of res judicata. On January 6, 2012, the court realigned the parties and designated Aban Offshore Limited f/k/a Aban Loyd Chiles Offshore, Ltd. as Plaintiff and the Covingtons as Defendants.
On June 29, 2012, the arbitration panel issued its ruling ("Beacon Arbitration award") in the Beacon arbitration, denying Aban's negligent misrepresentation and fraud claims. On October2, 2012, Judge Gilmore confirmed the arbitration award and entered judgment consistent with the Beacon Arbitration award.
On August 15, 2012, the Covingtons filed the instant motion seeking summary judgment on Aban's claims, asserting that the ruling rendered in the Beacon arbitration precludes Aban's instant suit.1
Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment shall be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). The parties seeking summary judgment bear the initial burden of informing the court of the basis for their motion and identifying those portions of the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any, which they believe demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); QBE Ins. Corp. v. Brown & Mitchell, Inc., 591 F.3d 439, 442 (5th Cir. 2009); Warfield v. Byron, 436 F.3d 551, 557 (5th Cir. 2006); Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir. 2005). Where a defendant moves for summary judgment on the basis of an affirmative defense and, thus, bears the ultimate burden of persuasion, "evidence must be adduced supporting each element of the defense and demonstrating the lack of any genuine issue of material fact with regard thereto." TerreboneParish Sch. Bd. v. Mobil Oil Corp., 310 F.3d 870, 877 (5th Cir. 2002); see Exxon Corp. v. Oxxford Clothes, Inc., 109 F.3d 1070, 1074 (5th Cir.), cert. denied, 522 U.S. 915 (1997); Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). To warrant judgment in its favor, the movant "'"must establish beyond peradventure all of the essential elements of the defense."'" Martin v. Alamo Cmty. Coll. Dist., 353 F.3d 409, 412 (5th Cir. 2003) (emphasis in original) (quoting Chaplin v. NationsCredit Corp., 307 F.3d 368, 372 (5th Cir. 2002) (quoting Fontenot, 780 F.2d at 1194)); accord Addicks Servs., Inc. v. GGP-Bridgeland, LP, 596 F.3d 286, 293 (5th Cir. 2010).
"A fact is material only if its resolution would affect the outcome of the action . . . ." Wiley v. State Farm Fire & Cas. Co., 585 F.3d 206, 210 (5th Cir. 2009); accord Cooper Tire & Rubber Co. v. Fa 261 F.3d 466, 47rese, 423 F.3d 446, 454 (5th Cir. 2005); Harken Exploration Co. v. Sphere Drake Ins. PLC,1 (5th Cir. 2001). "Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "An issue is 'genuine' if it is real and substantial, as opposed to merely formal, pretended, or a sham." Bazan ex rel. Bazan v. Hidalgo Cnty., 246 F.3d 481, 489 (5th Cir. 2001) (emphasis in original). Thus, a genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248; accord Bayle v. Allstate Ins. Co., 615 F.3d 350, 355 (5th Cir. 2010); Wiley, 585 F.3d at 210; EMCASCO Ins. Co. v. Am. Int'l Specialty Lines Ins. Co., 438 F.3d 519, 523 (5th Cir. 2006); Cooper Tire & Rubber Co. , 423 F.3d at 454. The moving parties, however, need not negate the elements of the nonmovant's case. See Bayle, 615 F.3d at 355; Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005) (citing Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994));Millennium Petrochemicals, Inc. v. Brown & Root Holdings, Inc. , 390 F.3d 336, 339 (5th Cir. 2004).
Once a proper motion has been made, the nonmoving party may not rest upon mere allegations or denials in the pleadings but must present affirmative evidence, setting forth specific facts, to show the existence of a genuine issue for trial. Celotex Corp. , 477 U.S. at 322 n.3 (quoting FED. R. CIV. P. 56(e)); Anderson, 477 U.S. at 256; Bayle, 615 F.3d at 355; EMCASCO Ins. Co., 438 F.3d at 523; Smith ex rel. Estate of Smith v. United States, 391 F.3d 621, 625 (5th Cir. 2004). "[T]he court must review the record 'taken as a whole.'" Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)); see Riverwood Int'l Corp. v. Emp'rs Ins. of Wausau, 420 F.3d 378, 382 (5th Cir. 2005). All the evidence must be construed in the light most favorable to the nonmoving party, and the court will not weigh the evidence or evaluate its credibility. Reeves, 530 U.S. at 150; EEOC v. Chevron Phillips Chem. Co., LP, 570 F.3d 606, 615 (5th Cir. 2009); Lincoln Gen. Ins. Co., 401 F.3d at 350; Smith, 391 F.3d at 624; Brown v. City of Houston, 337 F.3d 539, 541 (5th Cir. 2003). The evidence of the nonmovant is to be believed, with all justifiable inferences drawn and all reasonable doubts resolved in its favor. Groh v. Ramirez, 540 U.S. 551, 562 (2004) (citing Anderson, 477 U.S. at 255); Tradewinds Envtl. Restoration, Inc. v. St. Tammany Park, LLC, 578 F.3d 255, 258 (5th Cir. 2009); Shields v. Twiss, 389 F.3d 142, 150 (5th Cir. 2004); Martin, 353 F.3d at 412.
Furthermore, "only reasonable inferences in favor of the nonmoving party can be drawn from the evidence." Mills v. Warner-Lambert Co., 581 F. Supp. 2d 772, 779 (E.D. Tex. 2008) (citing Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 469 n.14 (1992)). "Ifthe [nonmoving party's] theory is . . . senseless, no reasonable jury could find in its favor, and summary judgment should be granted." Eastman Kodak Co., 504 U.S. at 468-69; accord Shelter Mut. Ins. Co. v. Simmons, 543 F. Supp. 2d 582, 584-85 (S.D. Miss.), aff'd, 293 F. App'x 273 (5th Cir. 2008). The nonmovant's burden is not satisfied by "'some metaphysical doubt as to the material facts,' by 'conclusory allegations,' by 'unsubstantiated assertions,'" by speculation, by the mere existence of some alleged factual dispute, or "by only a 'scintilla' of evidence." Little, 37 F.3d at 1075 (quoting Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990); Matsushita Elec. Indus. Co., 475 U.S. at 586; Hopper v. Frank, 16 F.3d 92, 97 (5th Cir. 1994); Davis v. Chevron U.S.A., Inc., 14 F.3d 1082, 1086 (5th Cir. 1994)); accord Thibodeaux v. Vamos Oil & Gas Co., 487 F.3d 288, 294-95 (5th Cir. 2007); Warfield, 436 F.3d at 557; Boudreaux, 402 F.3d at 540. "Unsubstantiated assertions, improbable inferences, and unsupported speculation are not sufficient to defeat a motion for summary judgment." Brown, 337 F.3d at 541; accord RSR Corp. v. Int'l Ins. Co., 612 F.3d 851, 857 (5th Cir. 2010); Hugh Symons Grp., plc v. Motorola, Inc., 292 F.3d 466, 468 (5th Cir.), cert. denied, 537 U.S. 950 (2002); see Hockman v. Westward Commc'ns,...
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