Operaciones Tecnicas Marinas S.A.S. v. Diversified Marine Servs., LLC

• Decision Date: 19 December 2012
• Docket Number: Civil Action No. 12–1979.
• Parties: OPERACIONES TECNICAS MARINAS S.A.S. v. DIVERSIFIED MARINE SERVICES, LLC et al.
• Court: U.S. District Court — Eastern District of Louisiana

913 F.Supp.2d 254

OPERACIONES TECNICAS MARINAS S.A.S.

v.DIVERSIFIED MARINE SERVICES, LLC et al.

Civil Action No. 12–1979.

United States District Court,

E.D. Louisiana.

Dec. 19, 2012.

John A. Scialdone, Michael J. Thompson, Jr., Todd G. Crawford, Fowler Rodriguez, Gulfport, MS, for Operaciones Tecnicas Marinas S.A.S.

Henry A. King, Michael L. Vincenzo, King, Krebs & Jurgens, PLLC, Michael J. Cerniglia, Orrill, Cordell & Beary, LLC, New Orleans, LA, for Diversified Marine Services, LLC et al.

ORDER AND REASONS

MARTIN L.C. FELDMAN, District Judge.

Before the Court is Diversified Marine Services, LLC's motion to dismiss plaintiff's claims for gross negligence, recklessness, fraud, and punitive damages. For the reasons that follow, the motion is GRANTED with respect to plaintiff's fraud claim, and DENIED with respect to plaintiff's claims for gross negligence, recklessness, and punitive damages.

Background

This case arises from a failed maritime voyage.

Operaciones Tenicas Marinas (“OTM”) is a marine operating company based in Cartagena, Colombia. OTM purchased two sister vessels, M/V MARY TIDE and M/V THOMAS TIDE, which had been out of service for several years. In November 2010, OTM entered into a contract with Diversified Marine Services, LCC, to drydock the vessels, evaluate their condition, and determine the work necessary to make the vessels seaworthy.

From November 2010 to June 2011, Diversified allegedly communicated on a regular basis with OTM to relay recommendations based on its inspection of the vessels, obtain approval for maintenance and repair, and invoice and collect funds from OTM for work performed.¹ According to the plaintiff's complaint, OTM relied on the representations of Diversified and approved a schedule of work, which Diversified supposedly performed and told OTM it had performed. OTM paid and satisfied all invoices, and on May 17, 2011, based on Diversified's assurances that the vessels were nearly ready for use, OTM entered into a bareboat charter agreement with Serviport S.A.² According to the terms of the charter agreement, OTM was to deliver the vessels to Serviport on July 15, 2011. OTM contends it informed Diversified of the charter agreement and Diversified told OTM that the vessels would be fit for the voyage to Colombia in sufficient time to commence the charter.

On or about June 20, 2011, OTM paid Diversified the outstanding balance for the vessel repairs. In total, OTM paid $344,769.15 in repairs purportedly performed to both vessels. OTM asserts that it relied upon the representations of Diversified that the following repairs had been made:

(1) the main engines of both vessels had been inspected;

(2) the center and starboard main engines of the M/V MARY TIDE had undergone full out-of-frame overhauls; ³

(3) the center main engine of the M/V THOMAS TIDE had undergone an in-frame overhaul; ⁴

(4) the gears transmitting the power between the main engine to the shaft of both vessels has been inspected and repaired;

(5) the rudder stocks and steering systems of both vessels has been inspected and repaired;

(6) the hull integrity of both vessels has been inspected for water leakage and possible compromised areas, and repair for laying the same had been recommended and performed;

(7) the necessary navigational equipment on both vessels had been inspected, tested, and repaired or replaced accordingly;

(8) the air-conditioning systems, along with other various systems, had been inspected and repaired as new.

On June 23, 2011, both vessels departed the Diversified shipyard for Cartagena, Colombia. The vessels soon experienced severe mechanical and electrical problems, and became adrift approximately 340 miles from Cartagena, Colombia. As a result, both vessels had to be towed the last leg of the voyage, first by the Colombian Navy and later by a commercial assist tug hired by OTM.

The vessels were surveyed upon arrival, and, OTM contends, several electrical and mechanical problems were discovered. OTM also claims that the engines for both vessels were disassembled for inspection by an engine repair company, Stewart & Stevenson. The results of the inspection concluded that the center main engine of M/V THOMAS TIDE and the starboard main engine of M/V MARY TIDE had not been overhauled as Diversified agreed. Because the vessels would be unavailable for delivery to Serviport on July 15, 2011, OTM was in breach of the OTM–Serviport bareboat charter agreement, which was ultimately terminated.

OTM sued Diversified in this Court on July 31, 2012, alleging claims for breach of contract; negligent misrepresentation; intentional misrepresentation; negligence, gross negligence, and recklessness; breach of warranty of workmanlike performance; and fraud. OTM seeks damages arising from towage expenses, the cancellation of the charter agreement, survey expenses, additional repair costs, and other claimed damages associated with the work performed by Diversified. OTM also asserts a claim for punitive damages. Diversified now moves for dismissal of plaintiff's claims for gross negligence, recklessness, fraud, and punitive damages under Rule 12(b)(6).

I. Legal Standard

Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a party to move for dismissal of a complaint for failure to state a claim upon which relief can be granted. Such a motion is rarely granted because it is viewed with disfavor. See Lowrey v. Tex. A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir.1997) (quoting Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir.1982)). In considering a Rule 12(b)(6) motion, the Court “accepts ‘all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.’ ” See Martin K. Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464 (5th Cir.2004) (quoting Jones v. Greninger, 188 F.3d 322, 324 (5th Cir.1999)). But, in deciding whether dismissal is warranted, the Court will not accept conclusory allegations in the complaint as true. Kaiser, 677 F.2d at 1050. Indeed, the Court must first identify allegations that are conclusory and, thus, not entitled to the assumption of truth. Ashcroft v. Iqbal, 556 U.S. 662, 678–79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A corollary: legal conclusions “must be supported by factual allegations.” Id. at 678, 129 S.Ct. 1937. Assuming the veracity of the well-pleaded factual allegations, the Court must then determine “whether they plausibly give rise to an entitlement to relief.” Id. at 679, 129 S.Ct. 1937.

“ ‘To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.’ ” Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir.2009)(quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937)(internal quotation marks omitted). “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citations and footnote omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.”). This is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679, 129 S.Ct. 1937. “Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Id. at 678, 129 S.Ct. 1937 (internal quotations omitted) (citing Twombly, 550 U.S. at 557, 127 S.Ct. 1955). “[A] plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief’ ”, thus, “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (alteration in original) (citation omitted).

In deciding a motion to dismiss, the Court may consider documents that are essentially “part of the pleadings.” That is, any documents attached to or incorporated in the plaintiff's complaint that are central to the plaintiff's claim for relief. Causey v. Sewell Cadillac–Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir.2004) (citing Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498–99 (5th Cir.2000)). Also, the Court is permitted to consider matters of public record and other matters subject to judicial notice without converting a motion to dismiss into one for summary judgment. See United States ex rel. Willard v. Humana Health Plan of Tex. Inc., 336 F.3d 375, 379 (5th Cir.2003).

II. Discussion

Diversified contends that plaintiff's claims for gross negligence, recklessness, fraud, and punitive damages should be dismissed pursuant to Rule 12(b)(6). The Court can only agree with respect to plaintiff's fraud claim.

A.

The defendant first asserts that plaintiff fails to allege facts to support claims of gross negligence and recklessness. Specifically, defendant contends that OTM's complaint merely offers labels and conclusions, and does not allege facts that suggest Diversified acted to willfully inflict harm on OTM or its crew members. Moreover, defendant asserts that these claims are founded on the very same allegations that form the basis of OTM's contractual claims against Diversified.

Gross negligence is defined as reckless and wanton misconduct. SeeMiles v. Melrose, 882 F.2d 976, 989 (5th Cir.1989). Significantly, gross negligence is distinguished from ordinary negligence in that it “encompasses harm that is willfully inflicted or is caused by the wanton and reckless disregard for...