RSDC Holdings, LLC v. M.G. Mayer Yacht Servs., Inc.

• Decision Date: 26 November 2018
• Docket Number: CIVIL ACTION NO. 16-3573 SECTION M (5)
• Citation: RSDC Holdings, LLC v. M.G. Mayer Yacht Servs., Inc., CIVIL ACTION NO. 16-3573 SECTION M (5) (E.D. La. Nov 26, 2018)
• Parties: RSDC HOLDINGS, LLC v. M.G. MAYER YACHT SERVICES, INC., ET AL.
• Court: U.S. District Court — Eastern District of Louisiana

RSDC HOLDINGS, LLC v. M.G. MAYER YACHT SERVICES, INC., ET AL.

CIVIL ACTION NO. 16-3573 SECTION M (5)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

November 26, 2018

ORDER & REASONS

Before the Court are cross-motions for summary judgment filed by the plaintiff and defendant-in-counterclaim, RSDC Holdings, LLC("RSDC"), and third-party defendant, Donald Joe Calloway("Calloway");¹ and the defendant, M.G. Mayer Yacht Services, Inc.("Mayer").²Having considered the parties' memoranda and the applicable law, the Court issues this Order & Reasons.

I.BACKGROUND

This maritime action arises out of two liens on the Tuna Taxi, a 48-foot ocean sport fishing vessel, filed by Mayer for allegedly unpaid repairs.³On or about October 29, 2012, Calloway paid $65,000 to First NBC Bank to acquire the Tuna Taxi as part of an extra-judicial foreclosure.⁴Mayer contends that, as of October of 2012, Calloway believed himself to be owner of the vessel, having testified as much.⁵RSDC and Calloway dispute this, claiming that the act of transfer, endorsement, assignment, and subrogation of note between Calloway and First NBC Bank datedAugust 14, 2014, mark the first moment of Calloway's ownership.⁶Regardless, both parties agree that, after submitting payment to First NBC Bank in October of 2012, Calloway and Richard Sanderson, Calloway's business associate, traveled to California to obtain the vessel.⁷In order for the vessel to be transported to New Orleans, its bridge had to be removed from the main body of the vessel.⁸Thus, upon arriving in New Orleans, Calloway and Sanderson sought to have the bridge reattached.

While Calloway testified that he never intended Sanderson to have Mayer perform any repair work because of Mayer's purported unreliable reputation in the business community,⁹ Calloway also admits that he submitted payment for the bridge repair and intended Sanderson to communicate with Mayer about completing the bridge repair.¹⁰The parties agree that Sanderson directed Mayer to complete repairs of the vessel pursuant to a work order dated November 16, 2012, which provided that unpaid invoices within thirty days of receipt would be charged interest at eighteen percent per annum, and that the buyer would owe costs incurred to collect them, including attorney's fees.¹¹The parties dispute the extent of repairs that Sanderson requested and that Mayer ultimately performed.¹²While Sanderson and Calloway contend that the only repair either authorized or performed was that of the bridge reassembly, Mayer claims that Sanderson authorized and performed much more work, up until July of 2013.¹³Of the twenty-two invoicesissued between December 2, 2012, and July 14, 2013, Mayer received one partial payment for the first invoice from Sanderson on behalf of Calloway in the amount of $1,023.13.¹⁴In February of 2013, Mayer issued a fifty percent credit totaling $10,472.15 on nine invoices.¹⁵

All invoices were addressed to Sanderson.¹⁶Calloway and RSDC dispute ever receiving the invoices.¹⁷Mayer's owner, Michael Mayer, testified he did not believe Mayer contracted with RSDC or Calloway, but with Sanderson.¹⁸A Mayer employee, Rene Gros, testified by way of affidavit that he believed Sanderson was the vessel's owner at the time of Mayer's dealings with Sanderson.¹⁹On or about March 18, 2013, Mayer filed its first notice of lien with the U.S. Coast Guard for $31,085.75, the amount of the then-outstanding invoices.²⁰Thereafter, Mayer submitted additional invoices, and, failing payment, Mayer filed a second notice of recorded lien for $4,588.40 on or about July 24, 2013.²¹

RSDC alleges that Mayer released the vessel to Calloway in July of 2013 after completing the bridge repair and warranting it free of all liens.²²Mayer, on the other hand, claims the vessel was moored at its dock from December 2012 to July 2013, and claims to have performed work authorized by RSDC and Calloway through their agent Sanderson.²³RSDC, the current owner of the Tuna Taxi, initiated this civil action seeking a declaratory judgment that the Tuna Taxi is not subject to any liens in favor of Mayer.²⁴By way of counterclaim and third-party demand asserting claims for suit on open account under Louisiana law, breach of contract, quantum meruit, anddetrimental reliance, Mayer seeks to recover the cost of the repairs (as invoiced), finance charges, collection expenses, and attorney's fees.²⁵

II.PENDING MOTIONS

In their motion for summary judgment, RSDC and Calloway argue that Mayer's contract claims have the character of an open-account claim and are prescribed because Mayer filed suit more than three years after the last invoice.²⁶Regardless, RSDC and Calloway continue, Mayer's contract claims fail because Mayer lacks contractual privity with RSDC or Calloway.²⁷RSDC and Calloway also contend that Mayer's alternative claims for equitable relief must be dismissed as mere "gap fillers."²⁸Mayer responds that its claims are not prescribed because they sound in contract, which has a prescriptive period of ten years; that Sanderson acted as agent, with either actual or apparent authority, to bind Calloway as principal; and that Sanderson, acting on behalf of the owner, is presumed to have authority to procure necessaries under the Federal Maritime Lien Act.²⁹In their reply, RSDC and Calloway argue that Sanderson lacked actual authority to order repairs beyond the bridge reassembly; that an apparent agency theory fails because Mayer never believed it contracted with the principals (whether RSDC or Calloway); and that the Federal Maritime Lien Act is inapplicable to Mayer's in personam claims for damages.³⁰In particular, to support their request that Mayer's contract claims be dismissed, RSDC and Calloway point both to the invoices, which were solely addressed to Sanderson, and to Michael Mayer's testimony, in which he states that he did not contract directly with RSDC or Calloway.³¹

In its cross-motion for summary judgment, Mayer seeks (1) dismissal of RSDC's suit to have the Tuna Taxi declared free of liens and (2) judgment in Mayer's favor on the issues of liability and damages asserted in its third-party complaint against Calloway (the same claims RSDC and Calloway seek to have dismissed by their own motion for summary judgment).³²The parties largely repeat the arguments summarized above in connection with RSDC and Calloway's motion for summary judgment.In its reply, Mayer argues that even if Sanderson lacked actual or apparent authority, RSDC and Calloway are nonetheless bound because they ratified Sanderson's conduct.³³Mayer also notes it has since dismissed its open-account claim, now believing the true nature of its cause of action to involve the breach of a maritime contract.³⁴

III.LAW & ANALYSIS

A.Summary Judgment Standard

Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."Celotex Corp. v. Catrett, 477 U.S. 317, 322(1986)(citingFed. R. Civ. P. 56(c))."Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which the party will bear the burden of proof at trial."Id.A party moving for summary judgment bears the initial burden of demonstrating the basis for summary judgment and identifying those portions of the record, discovery, and any affidavits supporting the conclusion that there is no genuine issue of material fact.Id. at 323.If the moving party meetsthat burden, then the nonmoving party must use evidence cognizable under Rule 56 to demonstrate the existence of a genuine issue of material fact.Id. at 324.

A genuine issue of material fact exists if a reasonable jury could return a verdict for the nonmoving party.SeeAnderson v. Liberty Lobby, Inc., 477 U.S. 242, 248(1996).The substantive law identifies which facts are material.Id.Material facts are not genuinely disputed when a rational trier of fact could not find for the nonmoving party upon a review of the record taken as a whole.SeeMatsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587(1986);Equal Emp't Opportunity Comm'n v. Simbaki, Ltd., 767 F.3d 475, 481(5th Cir.2014)."[U]nsubstantiated assertions,""conclusory allegations," and merely colorable factual bases are insufficient to defeat a motion for summary judgment.SeeAnderson, 477 U.S. at 249-50;Hopper v. Frank, 16 F.3d 92, 97(5th Cir.1994).In ruling on a summary judgment motion, a court may not resolve credibility issues or weigh evidence.SeeDelta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99(5th Cir.2008).Furthermore, a court must assess the evidence, review the facts, and draw any appropriate inferences based on the evidence in the light most favorable to the party opposing summary judgment.SeeTolan v. Cotton, 572 U.S. 650, ___, 134 S. Ct. 1861, 1866(2014);Daniels v. City of Arlington, 246 F.3d 500, 502(5th Cir.2001).Yet, a court only draws reasonable inferences in favor of the nonmovant "when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts."Little Liquid Air Corp., 37 F.3d 1069, 1075(5th Cir.1994)(en banc)(citingLujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888(1990)).Nor must the court consider uncited evidence in the record.Fed. R. Civ. P. 56(c)(3).

After the movant demonstrates the absence of a genuine dispute, the nonmovant must articulate specific facts and point to supporting, competent evidence that may be presented in aform admissible at trial.SeeLynch Props., Inc. v. Potomac Ins. Co. of Ill., 140 F.3d 622, 625(5th Cir.1998);Fed. R. Civ. P. 56(c)(1)(A) & ...