Bollinger Marine Fabricators, LLC v. Marine Travelift, Inc.

• Court: U.S. District Court — Eastern District of Louisiana
• Writing for the Court: SARAH S. VANCE UNITED STATES DISTRICT JUDGE
• Decision Date: 18 August 2015
• Docket Number: CIVIL ACTION NO: 14-1743 SECTION: R(2)
• Citation: Bollinger Marine Fabricators, LLC v. Marine Travelift, Inc., CIVIL ACTION NO: 14-1743 SECTION: R(2) (E.D. La. Aug 18, 2015)
• Parties: BOLLINGER MARINE FABRICATORS, LLC AND BOLLINGER SHIPYARDS LOCKPORT LLC v. MARINE TRAVELIFT, INC.

BOLLINGER MARINE FABRICATORS, LLCAND BOLLINGER SHIPYARDS LOCKPORT LLC v. MARINE TRAVELIFT, INC.

CIVIL ACTION NO: 14-1743 SECTION: R(2)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

August 18, 2015

ORDER AND REASONS

The Court conducted a trial on the stipulated record of the claim of plaintiff Bollinger Marine Fabricators, LLC and Bollinger Shipyards Lockport, LLC for attorneys' fees and defense costs against defendant Marine Travelift, Inc.¹ The Court has diversity jurisdiction under 28 U.S.C. § 1332. After reviewing all of the evidence, the Court rules as follows. To the extent a finding of fact constitutes a conclusion of law, the Court adopts it as such. To the extent a conclusion of law constitutes a finding of fact, the Court adopts it as such.

I. BACKGROUND

This dispute arises out of Bollinger's indemnity claim for attorneys' fees and defense costs incurred in defending against a personal injury lawsuit brought by Inosencio Paz in the United States District Court for the Southern District of Texas (the "Paz litigation").

In 2005, Bollinger built a barge, the "MONTVILLE," for Moran Towing Company. The specifications for the barge required a hatch cover crane. Under Purchase Order BMF 224357, Bollinger purchased a HTC600D hatch crane from Marine Travelift to install on the barge. Purchase Order BMF 224357 is governed by the Purchase Order Terms and Conditions available on Bollinger's website. The terms include an indemnity provision providing

Seller shall indemnify and hold Buyer harmless against all liabilities, losses, damages and expenses, including reasonable attorney's fees, for personal injuries, death or property damage incident to, arising out of, [sic] resulting from the activities of Seller, its employees and agents, or its subcontractors and their agents and employees, or in connection with the work to be performed, services to be rendered, or materials to be furnished, under any Purchase Order, except in those instances where such liability, losses, damages or expenses are caused solely and directly by Buyer's negligence.

In February 2013, Inosencio Paz, an employee of Moran Towing, was injured by the crane while working as a member of the United States Maritime Service cleaning crew aboard the MONTVILLE barge. The injury occurred when a Moran Towing crane operator caused the crane to move forward and strike Paz as he stood on the crane's dedicated track. Paz sued the barge owner, Moran Towing, claimingthe accident resulted solely from its employee's negligent operation of the crane, particularly the failure to use a required signalmen or spotter to ensure the safe movement of the crane. Paz made no claim against either Marine Travelift, the crane manufacturer, or Bollinger, the barge manufacturer.

Moran Towing filed a third-party complaint against Bollinger and Marine Travelift claiming a right of contribution for any amounts it may be required to pay Paz "as a result of any allegations related to the crane, warning lights and/or audible alarm." Moran Towing later filed an amended third-party complaint in which it reiterated this allegation.² Paz then filed a first amended complaint against Moran Towing, Bollinger, and Marine Travelift, asserting the same allegations as did Moran Towing against Bollinger and Marine Travelift as to the crane, warning lights, and/or audible alarm. Specifically, Paz alleged negligence by Bollinger and Marine Travelift "in the manufacturing, design, marketing and subsequent handling, inspection and/or servicing of the . . . crane and its warning light and audible alarm;" "breach of contract including breach of implied warranties for the crane,warning light and audible alarm;" "breach of the warranty of workmanlike performance for the crane, warning light and audible alarm;" and strict liability "for placing the crane, warning light and audible alarm . . . into the stream of commerce." Paz also alleged negligence based on the absence of a "placard with general operating instructions" affixed to the crane. Paz re-alleged these claims in his second amended complaint.

On February 21, 2014, Bollinger filed a counterclaim against Moran Towing in the Paz litigation seeking indemnity based upon the Vessel Construction Agreement between Moran Towing and Bollinger. In a letter dated May 7, 2014, Bollinger also sought defense and indemnity from Marine Travelift on the basis of the Purchase Order Terms and Conditions.³ Marine Travelift never provided a defense or indemnity based on this request. On June 16, 2014, while the Paz litigation was still pending, Bollinger filed this indemnity action against Marine Travelift in the 17th Judicial District Court for the Parish of Lafourche, State of Louisiana. Marine Travelift timely removed the matter to this Court on July 31, 2014.

On July 3, 2014, counsel for Moran Towing offered to dismiss with prejudice its claims against Bollinger and Marine Travelift in the Paz litigation in exchange for (1) a reciprocal dismissal of any claims Bollinger and Marine Travelift had against Moran Towing; (2) withdrawal of any pending discovery directed to Moran Towing by Bollinger and Marine Travelift; and (3) withdrawal of any pendingmotions asserted against Moran Towing by Bollinger and Marine Travelift.⁴ On July 8, 2014, Bollinger's counsel also asked Paz's counsel to dismiss Bollinger:

As I advised previously Moran has agreed to dismiss all claims against my client. You, on the other hand, recently informed me that you were backing-out of your previous agreement to dismiss my client if Moran would agree to do so.⁵

On July 11, 2014, Bollinger's counsel again asked Paz's counsel to dismiss Bollinger.⁶ Counsel for Paz explained the circumstances of his offer to dismiss Bollinger voluntarily as follows:

During the course of the litigation, counsel for Bollinger, Attorney Robert Reich, asked Paz to dismiss any and all claims made against Bollinger in the action. In response to this request, I verbally informed Attorney Reich that Paz would agree to dismiss Bollinger from the action if Bollinger were first able to secure a similar dismissal from the third-party claims being advanced against Bollinger by Moran Towing.⁷

He went on to explain:

Contrary to the assertions contained in the correspondence from counsel[, dated July 8, 2014], I did not "back-out" on Paz's offer to dismiss Bollinger from this action. Rather, I verbally informed Attorney Reich that, consistent with our prior discussions, Paz would agree to dismiss his claims against Bollinger following the receipt of documented proof of Bollinger's dismissal from the claims asserted by Moran Towing. The required proof of dismissal by way of a signed release or other agreement was not forthcoming from Bollinger andtherefore, Paz's claims against Bollinger were not dismissed until October 2014.⁸

On October 20, 2014, the United States District Court for the Southern District of Texas granted a Joint Motion to Dismiss filed by Moran Towing and Bollinger requesting that all claims asserted by or against them be dismissed with prejudice. On the same day, the district court entered a Final Judgment dismissing with prejudice all of Paz's claims against Moran Towing, Bollinger, and Marine Travelift. The Final Judgment indicated that the parties settled all claims. As a result, there was neither a trial on the merits in the Paz litigation nor any judgment requiring Bollinger to pay for personal injuries sustained by Paz.

On April 13, 2015, this Court granted Bollinger's motion for summary judgment, holding that Bollinger is entitled to indemnification for attorneys' fees and defense costs incurred in defending the underlying suit. At the pre-trial conference, the parties agreed to submit the issue of damages to a bench trial on a stipulated record. The issue before the Court is what attorneys' fees and defense costs Marine Travelift owes to Bollinger under the indemnity agreement.

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW

A. Legal Standard

"A fee award is governed by the same law that serves as the rule of decision for the substantive issues in the case." Mathis v. Exxon Corp., 302 F.3d 448, 461 (5th Cir. 2002) (citing Kona Tech. Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 614 (5th Cir. 2000)). "State law controls both the award of and the reasonableness of fees awarded where state law supplies the rule of decision." Id. at 461. Because this Court is sitting in diversity and Bollinger's right to attorneys' fees is set forth by contract, Louisiana law governs the claim for attorneys' fees.

Under Louisiana law, courts may exercise their inherent power to regulate the practice of law to inquire as to the reasonableness of attorneys' fees. Dep't of Transp. & Dev. v. Williamson, 597 So. 2d 439, 441-42 (La. 1992). In determining reasonableness, a court may consider (1) the ultimate result obtained; (2) the responsibility incurred; (3) the importance of the litigation; (4) amount of money involved; (5) extent and character of the work performed; (6) the attorneys' legal knowledge, attainment, and skill; (7) number of appearances made; (8) intricacies of the facts involved; (9) diligence and skill of counsel; and (10) the court's own knowledge. Id. at 442; Rivet v. Dep't of Transp. & Dev., 800 So. 2d 777, 780 n.3 (La. 2001); Fourchon Docks, Inc. v. Milchem Inc., 849 F.2d 1561, 1568 (5th Cir. 1988) (noting that these guidelines are permissive and consideration of all of them is notnecessary). In addition, the court should evaluate attorneys' fees for "billing judgment"--that is, attorneys should exclude any "excessive, redundant, or unproductive hours." Walker v. U.S. Dep't of Hous. & Urban Dev., 99 F.3d 761, 769 (5th Cir. 1996); see also Covington v. McNeese State Univ., 118 So. 3d 343, 357 (La. 2013).

These considerations derive from Rule 1.5(a) of the Rules of Professional Conduct. Williamson, 597 So. 2d at 442 n.9. Among the factors listed in Rule 1.5(a) is "[t]he fee customarily charged in the...