Nextwave Marine Sys., Inc. v. M/V Nelida

• Decision Date: 21 September 2020
• Docket Number: Case No. 3:19-cv-01354-IM
• Parties: NEXTWAVE MARINE SYSTEMS, INC., a British Columbia corporation, Plaintiff, v. M/V NELIDA, her engines, tackle, apparel and equipment, Casamiro A. Stascausky and Gerard Stascausky, Defendants.
• Court: U.S. District Court — District of Oregon

488 F.Supp.3d 1004

NEXTWAVE MARINE SYSTEMS, INC., a British Columbia corporation, Plaintiff,

v.M/V NELIDA, her engines, tackle, apparel and equipment, Casamiro A. Stascausky and Gerard Stascausky, Defendants.

Case No. 3:19-cv-01354-IM

United States District Court, D. Oregon.

Signed September 21, 2020

Michael E. Haglund, Eric J. Brickenstein, Haglund Kelley LLP, 200 S.W. Market Street, Suite 1777, Portland, Oregon 97201. Attorneys for Plaintiff.

Nicholas A. Kampars, Wildwood Law Group LLC, 3519 NE 15th Avenue, #362, Portland, Oregon 97212. Attorney for Defendants.

OPINION AND ORDER

IMMERGUT, District Judge.

This case involves is a dispute between Plaintiff NextWave Marine Systems, Inc. ("NextWave"), a vessel repair company, and Defendants Gerard Stascausky, the owner of the M/V Nelida ("the Vessel"), and his father Casamiro ("Art") Stascausky, arising out of an agreement to repair the Vessel. The matter comes before the Court on Defendants’ motion for summary judgment and Plaintiff's cross-motion for partial summary judgment. ECF 23; ECF 26. This Court held a hearing on the parties’ motions on September 18, 2020.

After considering the evidence, pleadings, and arguments of counsel, this Court finds that there are genuine issues of material fact precluding summary judgment on Plaintiff's claims for breach of contract and quantum meruit. This Court further finds there are no genuine issues of material fact related to Plaintiff's conversion claims, and therefore summary judgment in favor of Defendants is proper on that singular claim. Finally, this Court finds there are genuine issues of material fact concerning Defendants’ counterclaim for breach of contract, precluding summary judgment in favor of Plaintiff. For the reasons that follow, Defendants’ motion for summary judgment is granted in part, and Plaintiff's cross-motion for partial summary judgment is denied.

STANDARDS

A party is entitled to summary judgment 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 moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards, Inc. v. Sixshooters Inc. , 251 F.3d 1252, 1257 (9th Cir. 2001). Although "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ... ruling on a motion for summary judgment," the "mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient ...." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 252, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and quotation marks omitted).

When parties file cross-motions for summary judgment, the court "evaluate[s] each motion separately, giving the nonmoving party in each instance the benefit of all reasonable inferences." A.C.L.U. of Nev. v. City of Las Vegas , 466 F.3d 784, 790–91 (9th Cir. 2006) (quotation marks and citation omitted); see also Pintos v. Pac. Creditors Ass'n , 605 F.3d 665, 674 (9th Cir. 2010) ("Cross-motions for summary judgment are evaluated separately under [the] same standard."). In evaluating the motions, "the court must consider each party's evidence, regardless under which motion the evidence is offered." Las Vegas Sands, LLC v. Nehme , 632 F.3d 526, 532 (9th Cir. 2011).

"Where the non-moving party bears the burden of proof at trial, the moving party need only prove that there is an absence of evidence to support the non-moving party's case." In re Oracle Corp. Sec. Litig. , 627 F.3d 376, 387 (9th Cir. 2010). Thereafter, the non-moving party bears the burden of designating "specific facts demonstrating the existence of genuine issues for trial." Id. "This burden is not a light one." Id. The Supreme Court has directed that in such a situation, the non-moving party must do more than raise a "metaphysical doubt" as to the material facts at issue. Matsushita , 475 U.S. at 586, 106 S.Ct. 1348.

BACKGROUND

NextWave is a vessel repair company headquartered in British Columbia, Canada. ECF 1 ¶ 1; ECF 22 at ¶ 1. The company is co-owned by Ted and Barbara Mark. ECF 22 at ¶ 1. Gerard Stascausky is the owner of the Vessel, but both he and Art Stascausky were parties to the contract at issue Id. at ¶¶ 2, 4–6.

In the Spring of 2018, Defendants Gerard Stascausky and Art Stascausky (the "Stascauskys") contacted NextWave to inquire about replacing the Vessel's transmission with a hydrostatic transmission. Id. at ¶ 3. Ted and Barbara Mark travelled to Portland, Oregon, around May 21, 2018, to inspect the Vessel and discuss the proposed project with the Stascauskys. Id. at ¶ 4. NextWave and the Stascauskys entered into a written "Contract to Perform Vessel Repair Services" in August of 2018 (the "August 2018 Agreement"). Id. at ¶ 4–6.

The August 2018 Agreement included a section describing the "[s]cope of contracted work" which lists several types of repair projects, as well as a section entitled "Contract Price and Payment Terms." Id. at Ex. A. That section states:

USD $65,000. To be paid ½ up front (USD $32,500) and the balance paid monthly (USD $5,000 per month). The actual price may vary by plus or minus 10% (USD $6,500), and NextWave Marine Systems Inc. agrees to work in good faith in determining any such adjustments. Monthly payments will be due the first of each month until the contract balance is paid in full. Monthly payments received after the 15th day of the month in which they were due will be considered to be in default and will accrue interest at an annual rate of 24% starting from the first day of the month until paid in full.

Id. The document also estimates that the project will take 90 to 100 days to complete. Id.

After signing the document, the Stascauskys wired $32,500 to NextWave and sailed the Vessel to the French Creek Marina in British Columbia in late August of 2018, where NextWave would be performing repairs on the Vessel while it was moored. Id. at ¶ 7. Thereafter, the Stascauskys made monthly $5,000 payments to NextWave from October 2018 through May 2019. Id. at ¶ 8. By May 2019, these monthly payments and the initial deposit totaled $72,500. Id.

In April of 2019, the Stascauskys came to French Creek Marina for a water test of the Vessel with NextWave. Id. at ¶ 9. During the water test, the parties identified outstanding operational issues with the Vessel that needed to be addressed. Id. After the test, NextWave presented the Stascauskys with a bill for time and materials for the project, which the Stascauskys disputed. Id. at ¶ 10. Almost a month later, NextWave sent the Stascauskys a revised invoice, which acknowledged receipt of prior payments and sought an additional $82,286.11 in Canadian dollars. ECF at 24 at 51; ECF 22 at ¶ 11. The Stascauskys disputed the invoice, and NextWave informed the Stascauskys that it would continue to support a second water test, but that the Stascauskys could not retrieve the Vessel until the invoice was paid in full. ECF 22 at ¶ 11.

Around May 27, 2019, the Stascauskys travelled to French Creek Marina, boarded the Vessel and sailed it away without notifying NextWave or paying the invoice issued by NextWave. Id. at ¶ 12. The Stascauskys immediately identified operational issues while sailing that prevented the Vessel from travelling faster than three knots. Id. at ¶ 13. Instead of returning to port, however, they sailed the Vessel to Port Angeles, Washington. Id. The Stascauskys later mailed NextWave certain tools they found aboard the Vessel. Id. at ¶ 14.

NextWave ("Plaintiff") filed this action against the Vessel, Gerard Stascausky, and Art Stascausky ("Defendants"). ECF 1. Plaintiff brings claims for breach of contract, conversion, and quantum meruit. ECF 11 at ¶¶ 8–20. Plaintiff claims the Stascausky Defendants breached the parties’ contract and consequently owe them approximately $68,000. Id. at ¶¶ 9–10. Plaintiff alleges, in the alternative, that NextWave performed valuable services for Defendants beyond the scope of the August 2018 Agreement, and it is entitled to recover approximately $68,000 for their services. Id. at ¶¶ 17–20. Plaintiff also claims that the Stascausky Defendants intentionally converted NextWave's tools left onboard the Vessel when they sailed away from French Creek Marina. Id. at ¶¶ 13–14. Defendants assert counterclaims against Plaintiff for breach of contract, alleging Plaintiff failed to complete performance of the repair services for the contract price designated in the August 2018 Agreement. ECF 15 at ¶¶ 39–43. Defendants seek $100,000 in damages. Id.

On May 20, 2020, Defendants filed a motion for summary judgement. ECF 23. Plaintiff also filed a motion for partial summary judgment that same day. ECF 26. The Court considers each motion in turn.

DISCUSSION

A. Choice of Law

As a threshold matter, this Court must determine the applicable law for this dispute. Both parties advance general maritime law and Oregon law in support of their arguments. See ECF 35 at 11; ECF 42 at 2; ECF 26 at 9–13; ECF 32 at 6–7; ECF 43 at 3–5. Because the original complaint was properly in federal court on federal admiralty subject matter jurisdiction, general maritime law applies. See U.S. Const. art. III, § 2. "Admiralty jurisdiction brings with it a body of federal jurisprudence, largely uncodified, known as maritime law." Ballard Shipping Co. v. Beach Shellfish , 32 F.3d 623, 625 (1st Cir. 1994). Developed from state...