National Expositions, Inc. v. Crowley Maritime Corp.

• Decision Date: 24 July 1987
• Docket Number: No. 86-2025,86-2025
• Citation: 824 F.2d 131
• Parties: NATIONAL EXPOSITIONS, INC., Plaintiff, Appellant, v. CROWLEY MARITIME CORPORATION, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

Page 131

824 F.2d 131

NATIONAL EXPOSITIONS, INC., Plaintiff, Appellant, v. CROWLEY MARITIME CORPORATION, Defendant, Appellee.

No. 86-2025.

United States Court of Appeals, First Circuit.

Argued May 8, 1987.

Decided July 24, 1987.

David Rive-Rivera with whom Vargas & Rive, Hato Rey, P.R., was on brief, for plaintiff, appellant.

Luis Sanchez-Betances with whom Kermit Ortiz-Morales and Sanchez-Betances & Sifre, Hato Rey, P.R., were on brief, for defendant, appellee.

Before BREYER and TORRUELLA, Circuit Judges, and CAFFREY, ^* Senior District Judge.

BREYER, Circuit Judge.

National Expositions, Inc., the appellant, entered into a contract with Crowley Maritime Corp., the appellee, under which Crowley would transport two bargeloads of National's carnival equipment from Maracaibo, Venezuela to Jacksonville, Florida. Crowley sent a tug and barge to pick up the equipment, but Venezuelan authorities would not allow the equipment to leave the country. The equipment stayed, the boats left, and National sued. This appeal involves National's suit against Crowley for the return of $300,000 which it had already paid for the transport.

In the court below, National based its claim upon its written contract with Crowley. Article 3 of that contract says that Crowley's payment "shall be fully and irrevocably earned upon tender of the barge for loading at Venezuela." National, moving for summary judgment, argued that, since the boat did not dock, there was no "tender." Crowley, in opposing summary judgment, conceded that the barge did not dock, but claimed that it had "tendered" the barge by bringing it into the harbor. The only reason the barge did not dock, Crowley added, was because the port authorities, who wanted to keep the cargo in the country, would not let it do so.

The district court, after reading the affidavits and supporting material, saw no "genuine" and "material" issue of fact. Fed.R.Civ.P. 56(c). It accepted Crowley's interpretation of the word "tender" in the contract, it denied National's motion for summary judgment, and, acting sua sponte, it entered a partial summary judgment in favor of Crowley.

The parties then filed cross-motions for summary judgment on two other issues. First, National sought the return of $75,000 under Article 19C of the contract, which says:

In the event that it does become necessary, in fact, to leave Maracaibo without the carnival equipment, carrier shall refund an amount not to exceed $75,000.00 to shipper subject to deductions for demurrage on tug and barge, demurrage on trailers supplied by TMT and any other port expenses, fines and/or penalties incurred as a result of the vessels' call at Maracaibo.

Second, Crowley, counterclaiming, sought damages under other language of Article 3, which says:

Shipper shall pay Carrier demurrage for any delay occurring by reason of shipper failing to deliver the cargo to Carrier at the port of loading as fast as the vessel can receive the cargo, failure to obtain necessary flag waivers and other exportation permits from the Venezuelan Government. Demurrage rate shall be $9,500.00 per day or fraction of a day.

The district court found, on the basis of affidavits and supporting material, that Crowley's deductions under Article 19C (not counting tug and barge demurrage) exceeded $75,000 and that Crowley was entitled to $38,000 for tug and barge demurrage under Article 3. Accordingly, the court entered judgment for $38,000 in favor of Crowley.

National now appeals the district court's judgments. It does not attack the court's interpretation of the relevant contractual language; we therefore assume that that interpretation is correct. Instead, National makes the following arguments.

First, National says that the district court should not have entered summary judgment on the main issue for Crowley sua sponte. It concedes, as it must, that a district court has the legal power to render "summary judgment ... in favor" of the party opposing a summary judgment motion "even though he has made no formal cross-motion under rule 56." 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure Sec. 2720, at 29-30 (1983); see Pueblo of Santa Ana v. Mountain States Telephone & Telegraph Co., 734 F.2d 1402, 1408 (10th Cir.1984), rev'd on other grounds, 472 U.S. 237, 105 S.Ct. 2587, 86 L.Ed.2d 168 (1985); Cool Fuel, Inc. v. Connett, 685 F.2d 309, 311 (9th Cir.1982); Local 33, International Hod Carriers Building and Common Laborers' Union v. Mason Tenders District Council of Greater New York, 291 F.2d 496, 505 (2d Cir.1961). But, it notes that the Supreme Court, in describing this procedural rule, has said that "the losing party" must be "on notice that she had to come forward with all of her evidence." Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986); cf. Preterm, Inc. v. Dukakis, 591 F.2d 121, 134 (1st Cir.) (requiring notice and opportunity to respond before court may dismiss case sua sponte on the basis of the complaint), cert. denied sub nom. Preterm, Inc. v. King, 441 U.S. 952, 99 S.Ct. 2181, 60 L.Ed.2d 1057 (1979), app. dismissed sub nom. King v. Preterm, Inc., 448 U.S. 901, 100 S.Ct. 3039, 65 L.Ed.2d 1131 (1980); Literature, Inc. v. Quinn, 482 F.2d 372, 374 (1st Cir.1973) (same). And, National adds, it had no such notice here.

The problem with National's argument is that being "on notice" does not mean that it had to receive a formal document called "notice" or that the district court had to say the words "you are on notice" or even that the court had to explicitly tell National, "I am thinking of ordering summary judgment for Crowley sua sponte." Rather, the question is whether, given the procedural circumstances of the case, "the original movant [i.e., National] has had an adequate opportunity to show that there is a genuine issue and that his opponent is not entitled to judgment as a matter of law." 10A C. Wright, A. Miller & M. Kane, supra, Sec. 2720, at 34 (emphasis added); see Lindsey v. United States Bureau of Prisons, 736 F.2d 1462, 1463-64 (11th Cir.), vacated and remanded on other grounds, 469 U.S. 1082, 105 S.Ct. 584, 83 L.Ed.2d 695 (1984); Cool Fuel, Inc. v. Connett, 685 F.2d at 312; McKenna v. Peekskill Housing Authority, 497 F.Supp. 1217, 1219-20 (S.D.N.Y. 1980), rev'd in part on other grounds, 647 F.2d 332 (2d Cir.1981).

Here, National's opportunity was more than adequate. For one thing, the pleadings, the prior proceedings, National's own summary judgment motion, the attached affidavits, and Crowley's opposition and supporting material all made clear, in context, that, as the parties saw the legal issues, the only relevant facts were 1) that the tug arrived in Maracaibo, 2) that...