Misener Marine Const. v. Norfolk Dredging Co.

• Decision Date: 21 January 2010
• Docket Number: No. 09-10083.,09-10083.
• Citation: 594 F.3d 832
• Parties: MISENER MARINE CONSTRUCTION, INC., Plaintiff-Counter-Defendant-Counter-Claimant-Appellee, v. NORFOLK DREDGING COMPANY, Defendant-Counter-Claimant-Cross-Defendant-Cross-Claimant-Appellant, Travelers Casualty and Surety Company of America, Defendant-Counter-Defendant-Appellee, General Gas Carrier Corporation, Defendant-Cross-Claimant-Cross-Defendant-Counter-Defendant, LPG/C STEVEN N, Defendant-Cross-Claimant-Counter-Defendant, PCS Phosphate Company, Inc., PCS Nitrogen Fertilizer, L.P., Defendants-Counter-Claimants-Third-Party Plaintiffs, Georgia Ports Authority, Third-Party Defendant-Counter-Claimant-Counter-Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

594 F.3d 832

MISENER MARINE CONSTRUCTION, INC., Plaintiff-Counter-Defendant-Counter-Claimant-Appellee, v. NORFOLK DREDGING COMPANY, Defendant-Counter-Claimant-Cross-Defendant-Cross-Claimant-Appellant Travelers Casualty and Surety Company of America, Defendant-Counter-Defendant-Appellee General Gas Carrier Corporation, Defendant-Cross-Claimant-Cross-Defendant-Counter-Defendant LPG/C STEVEN N, Defendant-Cross-Claimant-Counter-Defendant PCS Phosphate Company, Inc., PCS Nitrogen Fertilizer, L.P., Defendants-Counter-Claimants-Third-Party Plaintiffs, Georgia Ports Authority, Third-Party Defendant-Counter-Claimant-Counter-Defendant-Appellee.

No. 09-10083.

United States Court of Appeals, Eleventh Circuit.

January 21, 2010.

James L. Chapman, IV, William Ryan Snow, Crenshaw, Ware & Martin, Norfolk, VA, Edwin D. Robb, Jr., Bouhan Williams & Levy, Savannah, GA, for Norfolk Dredging Co.

Daniel D. Pipitone, Godwin Gruber, LLP, Matthew Z. Hawthorne, Chamberlain, Hrdlicka, White, Williams & Martin, Houston, TX, T. Langston Bass, Jr., Brennan, Harris & Rominger, LLP, Savannah, GA, for Appellees.

Before BLACK, WILSON and COX, Circuit Judges.

WILSON, Circuit Judge:

This case concerns whether the prevailing party in a dispute arising from a dredging contract is entitled to collect attorneys' fees. Misener Marine Construction, Inc. subcontracted Norfolk Dredging Company to dredge sections of the Savannah River, a navigable waterway, as part of a larger construction project at the Port of Savannah (the "Port"). After problems at the construction site Misener sued Norfolk, and Norfolk counterclaimed. Norfolk prevailed in both Misener's lawsuit and its counterclaims. Norfolk contends that it is entitled to attorneys' fees pursuant to the Georgia Prompt Pay Act ("GPPA").¹ After reading the briefs, examining the record, and considering each party's oral argument, we affirm the order of the district court denying Norfolk recovery of attorneys' fees under the GPPA. We hold that the American Rule barring the shifting of attorneys' fees is a characteristic feature of maritime law,² which governs the interpretation of the contract in this case. The GPPA is in direct conflict with this principle of maritime law. Moreover, Norfolk was free to contract for attorneys' fees but chose not to.

I. FACTS AND PROCEDURAL HISTORY

The Port of Savannah is the "fourth-largest container port in the United States and the largest single-terminal operation in North America."³ It is a gateway to and from the Atlantic Ocean and serves as "a major distribution hub to and from a 26-state region—fully 75% of the U.S. population."⁴ Misener was contracted by the Georgia Ports Authority to demolish a dock and build a new dock at the Port. As part of this project, Misener subcontracted Norfolk to dredge parts of the Savannah River in the Port. Norfolk drafted a two-page dredging contract that was subsequently signed by Misener. The contract did not contain a choice-of-law provision. And, most importantly, it did not contain a provision providing for attorneys' fees.

Norfolk started the dredging work on March 23, 2004 and completed it within the time specified by the contract. The area in which Norfolk was dredging was close to two temporary mooring dolphins.⁵ On July 12, 2004 these mooring dolphins pulled partially from the riverbed, causing the vessel the STEVEN N to release from its secured position. Misener blamed Norfolk's dredging for the failure and brought suit in the Southern District of Georgia for negligence, breach of the dredging contract, and breach of warranty.

Misener's complaint stated that the lawsuit was filed pursuant to the district court's maritime jurisdiction. Norfolk answered Misener's complaint and counterclaimed for payment for the dredging work, interest, and attorneys' fees pursuant to the GPPA. In pleading its counterclaim Norfolk stated that the district court had jurisdiction, but did not explicitly state the basis for jurisdiction.⁶

Upon further investigation into the failure of the mooring dolphins, Misener determined that Norfolk was not responsible. Misener filed a voluntary dismissal of its claim against Norfolk on October 6, 2005. Norfolk moved for summary judgment on its claim for payment, interest, and attorneys' fees on November 8, 2005.

On January 6, 2006, the district court entered summary judgment for Norfolk, granting Norfolk attorneys' fees pursuant to the GPPA, and reserving ruling on the amount of attorneys' fees to be awarded. The summary judgment order held that this Court's precedent allowed state laws dealing with attorneys' fees to supplement maritime law.⁷ The district court judge ruled that there is not an established federal rule regarding attorneys' fees in maritime cases, and attorneys' fees is not the type of issue that requires a uniform national rule. Thus, the recovery of attorneys' fees under the GPPA was not inconsistent with maritime law, and the GPPA should supplement maritime law. The district court judge passed away prior to issuing a ruling setting the amount of attorneys' fees.

A new district court judge was subsequently assigned to the case. In determining the amount of attorneys' fees Norfolk was entitled to recover, the new judge found that the GPPA conflicted with a general principle of maritime law, that each party bears its own attorneys' fees. The district court entered an order denying Norfolk attorneys' fees under the GPPA. Norfolk appeals this order.⁸

II. STANDARD OF REVIEW

We review the district court's application of maritime law de novo. All Underwriters v. Weisberg, 222 F.3d 1309, 1310 (11th Cir.2000) (citation omitted).

III. DISCUSSION

Norfolk presents several arguments all aimed at recovery of attorneys' fees pursuant to the GPPA. First, Norfolk argues that this case arises under diversity jurisdiction and Georgia law, i.e. the GPPA, should apply. The dredging contract at issue, however, makes this case one of maritime jurisdiction and thus the district court properly applied substantive maritime law. Second, Norfolk contends that our precedent supports the application of the GPPA to dredging cases. This argument is based on a misinterpretation of our precedent and has no merit. Third, Norfolk argues that the GPPA can supplement substantive maritime law because the bar against shifting attorneys' fees is not a characteristic feature of maritime law and the GPPA will not contravene the uniformity interests of maritime law. We find the rule that each party generally bears its own attorneys' fees is a characteristic feature of maritime law. The GPPA would directly contravene this established rule of maritime law. Further, a clearly established exception exists wherein Norfolk was free to contract for the indemnification of attorneys' fees. Norfolk chose not to include such a provision in the contract and we will not give Norfolk a second bite at the apple by way of the GPPA.

A. Substantive Maritime Law Controls This Case

The federal courts have primary jurisdiction of maritime issues.⁹ To determine whether a contract falls within maritime jurisdiction we look to "the subject-matter, the nature and character of the contract ... the true criterion being the nature of the contract, as to whether it have reference to maritime service or maritime transactions." N. Pac. S.S. Co. v. Hall Bros. Marine Ry. & Shipbuilding Co., 249 U.S. 119, 125, 39 S.Ct. 221, 223, 63 L.Ed. 510 (1919). In Hall Brothers the Supreme Court held that an agreement to repair a ship, even though on a dry dock, was a maritime contract. Id. at 129, 39 S.Ct. at 224. "In sum, we look to whether the substance of the contract at issue in the dispute—without regard to the identity of the parties—is reasonably necessary to the conduct of maritime commerce." Ambassador Factors v. Rhein-, Maas-, Und See-Schiffahrtskontor GmBH, 105 F.3d 1397, 1399 (11th Cir.1997) (footnote omitted).

The primary objective of the contract between Norfolk and Misener was dredging a navigable waterway in a port that services international and national commerce. There is no doubt that the work contracted for and performed by Norfolk had a direct effect on maritime services and commerce. Further, the Supreme Court has previously held that dredging is traditionally a maritime activity.¹⁰ Norfolk's dredging contract, and the dispute arising therefrom, falls within the federal courts' maritime jurisdiction.¹¹

"With admiralty jurisdiction comes the application of substantive admiralty law." E. River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 864, 106 S.Ct. 2295, 2298-99, 90 L.Ed.2d 865 (1986). "Drawn from state and federal sources, the general maritime law is an amalgam of traditional common-law rules, modifications of those rules, and newly created rules." Id. at 864-65, 106 S.Ct. at 2299 (footnote omitted). While Congress is empowered to pass laws regarding maritime activities, a large part of the body of substantive maritime law has arisen from common law principles of the Supreme Court. Wilburn Boat Co. v. Fireman's Fund Ins. Co., 348 U.S. 310, 314, 75 S.Ct. 368, 370, 99 L.Ed. 337 (1955). "And States can no more override such judicial rules validly fashioned than they can override Acts of Congress." Id.

B. Maritime Law Generally Requires That Each Party Bear Its Own Attorneys' Fees

The law in this Circuit regarding attorneys' fees in maritime disputes is clear.¹² "The prevailing party in an admiralty case is not entitled to recover its attorneys' fees as a matter of course." Natco Ltd. P'ship v. Moran Towing of Fla., Inc., 267 F.3d 1190, 1193 (11th Cir. 2001) (citing Noritake Co., Inc. v. M/V Hellenic Champion, 627 F.2d 724, 730 (5th Cir.1980) ("Absent some statutory authorization, the prevailing party in an admiralty case is generally not entitled to an award for attorneys' fees.")); see also Coastal Fuels Mktg., Inc. v. Fla. Express Shipping Co., 207 F.3d 1247, 1250 (11th Cir.2000) ("A party is not entitled...