Falco Lime, Inc. v. Tide Towing Co., 93-2923

• Decision Date: 29 August 1994
• Docket Number: No. 93-2923,93-2923
• Parties: FALCO LIME, INC., Appellant, v. TIDE TOWING COMPANY; Marine Office of America Corporation, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 362

29 F.3d 362

29 Fed.R.Serv.3d 575

FALCO LIME, INC., Appellant, v. TIDE TOWING COMPANY; Marine Office of America Corporation, Appellees.

No. 93-2923.

United States Court of Appeals,

Eighth Circuit.

Submitted Feb. 14, 1994.

Decided July 6, 1994.

Rehearing and Suggestion for Rehearing En Banc Aug. 29, 1994.

Frank S. Thackston, Jr., Greenville, MS, argued (C.W. Walker, III, Gary D. McConnell, St. Louis, MO, on the brief), for appellant.

Alan K. Goldstein, St. Louis, MO, argued and on brief for appellee Tide Towing Co.; Ronald E. Fox and Rodney M. Sharp, St. Louis, MO, for appellee Marine Office of America Corp.

Before BOWMAN, HANSEN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

BOWMAN, Circuit Judge.

Falco Lime, Inc., appeals the District Court's ¹ judgments in favor of Tide Towing Company and Marine Office of America Corporation (MOAC). We affirm.

At the times relevant to this case, Falco owned numerous barges that it used to move lime along the Mississippi River from its supplier in Ste. Genevieve, Missouri, to its facilities in Vicksburg, Mississippi, and Baton Rouge, Louisiana. Falco and Tide had entered into a contract whereby Falco chartered the M/V Senator Sam, a towboat owned and operated by Tide, to move its barges on the river. During the summer of 1988, the lower Mississippi River was experiencing extremely low water conditions, so the Coast Guard limited navigation on the river to one-way traffic. On July 25, 1988, the Senator Sam, northbound on the river with twelve empty barges in tow, seven of which belonged to Falco, stopped at Memphis to allow downriver traffic to pass. The towboat then found itself unable to move the barges, as they had become grounded on a sandbar. The barges remained stranded for some time until a commercial salvor began salvage operations in September, with all seven barges returned to service by October 14, 1988.

In May 1990 Falco filed suit against Tide seeking damages for the stranding. In February 1992 Falco filed an amended complaint, adding causes of action against MOAC. As discussed in greater detail in Part II, only the action for damages against Tide went to jury trial in December 1992, judgment having been entered for MOAC on the basis of the District Court's pretrial rulings.

Falco's first witness at the trial was Fred Farrell, president and co-owner of Falco. On cross-examination, Farrell testified that Falco's towing contract with Tide was negotiated by Falco's marine broker and that he, Farrell, had reviewed it point by point before signing it. Farrell testified that the Senator Sam had a mechanical problem before the grounding and that, as a consequence, the Falco barges were stranded and delayed, resulting in consequential damages to Falco. Counsel for Tide asked Farrell to read a provision of the charter agreement between Falco and Tide for the services of the Senator Sam, and then moved for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50. After hearing arguments from counsel, the District Court granted the motion and entered judgment as a matter of law for Tide. Trial Transcript at 255-76.

I.

On appeal as to Tide, Falco challenges the judgment and also argues that the court erred in some of its evidentiary rulings and in holding, as a matter of law, that Falco could not sue for punitive damages in these circumstances. Because the judgment was made as a matter of law, we review the District Court's decision de novo. See Fed.R.Civ.P. 50.

The relevant portion of the charter agreement that served as grounds for the judgment as a matter of law reads as follows:

Owner will not be liable to Charterer for lost income or profits or any incidental or consequential damages caused by any delay in transportation of barges by the vessel's condition.

Agreement for Charter of Fully Found Motor Vessel (hereinafter Charter Agreement) at p 5. We agree with the District Court that Farrell admitted all of the necessary facts to invoke this unambiguous contract provision. Any questions of fact that remained at the start of the trial were resolved by his unequivocal admissions. On appeal, however, Falco proposes several reasons why the court erred in granting Tide's motion.

Falco claims that there was no delay here, but a complete failure to deliver the barges, as the barges were not returned to service for nearly three months and Senator Sam never brought them in. We cannot agree. The unambiguous provision limits "damages caused by any delay in transportation of the barges." Id. (emphasis added). The provision does not specify that a delay that lasts beyond a certain period of time becomes a failure in transportation, nor does it require that Tide be the one that ends the delay. The court's refusal to allow Farrell to elaborate upon his own understanding of the clause was proper. Parol evidence as to the meaning of a contract is inadmissible when the contract is unambiguous, as this one is. The court properly refused to allow Farrell to attempt to create ambiguities with his proffered testimony, especially given the facts that he already had admitted. See Unigroup, Inc. v. O'Rourke Storage & Transfer Co., 980 F.2d 1217, 1222 (8th Cir.1992) (applying Missouri law).

Falco's contention that Tide was in breach of its "representation that vessel is seaworthy and in good condition," Charter Agreement at p 5, may be well-founded, but that does not require reversal of the judgment as a matter of law. It is true that, ordinarily, a breach of contract will mean that damages, if proved, may be recovered against the breaching party. Here, however, in the very same paragraph, Tide and Falco agreed to a limitation of damages. ² Parties bargaining at arm's length, as Farrell admitted were the circumstances here, surely may limit the recovery of actual damages resulting from a breach that is caused by specified circumstances. The fact that Tide may have breached the contract cannot void the damages limitation agreement. Indeed, we have here the specific kind of situation to which the limitation was intended to apply.

Falco also argues that the delay was not due to the vessel's condition, as p 5 requires, and therefore its consequential damages are recoverable. It is Falco's position that it was Tide's negligence that resulted in the grounding. But Farrell clearly agreed, under oath, that it was the mechanical condition of the Senator Sam that caused the grounding of the barges and that, as a consequence of the grounding, the barges were delayed in reaching their destination. Moreover, Falco's brief on appeal reiterated that position. According to Falco, the Senator Sam's starboard generator "ceased operating," and the backup generator "too was inoperable." Brief of Appellant at 12. Falco argues, "A vessel with one defective generator is simply unseaworthy--the M/V SENATOR SAM's condition was beyond mere garden variety unseaworthiness." Id. The brief goes on to explain how the loss of power to the tow ultimately resulted in the grounding of the barges. Falco further noted that "the vessel was inadequately manned; this also rendered her unseaworthy." Id. at 11 n. 7 (emphasis added). Falco clearly is arguing that it is the unseaworthy condition of the Senator Sam that precipitated the grounding of Falco's barges.

Falco attempts to circumvent these admissions of unseaworthiness by arguing that Tide's negligence in the maintenance of the vessel and in the hiring and supervision of its employees was the cause of the unseaworthiness of the vessel, and therefore also was the cause of the grounding and the consequent delay. Falco thus would have us read into the clause language that is not there. The damages limitation agreement does not distinguish among potential causes of unseaworthiness, allowing recovery of consequential damages if the vessel is rendered unseaworthy by Tide's negligence but precluding recovery if the tow's unseaworthy condition is the result of some other circumstance. ³ The charter agreement's language is clear: damages are limited if delay is a consequence of the vessel's condition, without regard to the manner in which the vessel came to be in the unseaworthy condition that resulted in delay.

Falco challenges the District Court's decision to grant judgment as a matter of law for Tide without permitting rebuttal evidence from Falco, or even redirect examination of Farrell. A Rule 50 motion "may be made at any time before submission of the case to the jury." Fed.R.Civ.P. 50(a)(2). If there remain no unresolved questions of fact on an issue, judgment as a matter of law is appropriate. Given Farrell's admissions under oath, we cannot say that the court erred in granting judgment as a matter of law in favor of Tide. Farrell was Falco's own witness, and as president and co-owner of the company he surely was in a position to know the facts and circumstances of the grounding and to speak for the company. His admissions were made in response to clear and straightforward questions. There was nothing to be gained by permitting him--or other Falco witnesses--to equivocate and attempt to blunt the damage done by the admissions. Even if we were to hold that the court prematurely cut off Falco's proof at trial, Falco has repeated some of the most damaging admissions to this Court, as we explained above. We therefore hold, as a matter of law, that...