Water Oil & Gas Corp. v. Teekay Shipping, G-03-008.

• Decision Date: 30 May 2003
• Docket Number: No. G-03-008.,G-03-008.
• Citation: 270 F.Supp.2d 855
• Parties: WALTER OIL & GAS CORPORATION, Plaintiff, v. TEEKAY SHIPPING, in personam, and the M/V Orkney Spirit, and her engines, furniture, apparel, etc., in rem, Defendants/Third-Party Plaintiffs, v. Skaugen Petrotrans, Inc., Third-Party Defendant.
• Court: U.S. District Court — Southern District of Texas

270 F.Supp.2d 855

WALTER OIL & GAS CORPORATION, Plaintiff, v. TEEKAY SHIPPING, in personam, and the M/V Orkney Spirit, and her engines, furniture, apparel, etc., in rem, Defendants/Third-Party Plaintiffs, v. Skaugen Petrotrans, Inc., Third-Party Defendant.

No. G-03-008.

United States District Court, S.D. Texas, Galveston Division.

May 30, 2003.

COPYRIGHT MATERIAL OMITTED

Gray Hampton Miller, Steven Lynn Roberts, Fulbright & Jaworski, Houston, TX, for Walter Oil & Gas Corporation.

James Patrick Cooney, Royston Rayzor, et al., Houston, TX, for Teekay Shipping, in personam, M/V Orkney Spirit, and her engines, tackle, furniture, apparel, etc., in rem.

ORDER DENYING THIRD-PARTY DEFENDANT SKAUGEN PETROTRANS, INC.'S MOTION TO TRANSFER VENUE, DENYING SKAUGEN PETROTRANS, INC.'S MOTION TO DISMISS THIRD-PARTY COMPLAINT, DENYING SKAUGEN PETROTRANS, INC.'S MOTION TO STAY THE COMPLAINT OF WALTER OIL & GAS CORPORATION PENDING ARBITRATION, AND PARTIALLY GRANTING AND PARTIALLY DENYING SKAUGEN PETROTRANS, INC.'S MOTION TO STAY THIRD-PARTY COMPLAINT

KENT, District Judge.

Plaintiff Walter Oil & Gas Corporation ("Walter") brings this action against Teekay Shipping, in personam ("Teekay")¹ and the M/V ORKNEY SPIRIT, in rem ("Vessel")² (hereinafter, Teekay and Bona will be referred to collectively as "Defendants"), for damages it sustained because the Vessel's anchor allegedly damaged one of Walter's sub-sea natural gas pipelines. Following the initiation of this lawsuit, Bona (the owner of the Vessel) filed a third-party complaint against Skaugen Petrotrans, Inc. ("Skaugen") alleging that Skaugen chartered the Vessel and is ultimately responsible for any damages the Mooring Master, which Skaugen provided, caused under the lightering contract. Now before the Court is Skaugen's Motion to Transfer Venue, Skaugen's Motion to Dismiss/Stay the Third-Party Complaint, and Skaugen's Motion to Stay the Complaint of Walter Oil & Gas Corporation Pending Arbitration, and the timely Responses thereto. After careful thought and consideration, and for the reasons articulated below, the Court DENIES Skaugen's Motion to Transfer Venue, DENIES Skaugen's Motion to Dismiss Third-Party Complaint, DENIES Skaugen's Motion to Stay Walter's Complaint, PARTIALLY GRANTS Skaugen's Motion to Stay Third-Party Complaint, and hereby STAYS Bona's claims against Skaugen for contribution and indemnity only PENDING RESOLUTION OF THEIR ARBITRATION, and PARTIALLY DENIES Skaugen's Motion to Stay Third-Party Complaint as to any other relief sought.

INTRODUCTION

On December 27, 2002, Bona chartered its Vessel to Skaugen pursuant to a lightering contract ("Contract"). During the relevant times, as best as the Court can tell from the pleadings, Bona owned the Vessel, Teekay operated³ the Vessel, and Skaugen chartered the Vessel.⁴ The charter of the Vessel began when it was offshore of Galveston. The Vessel arrived at the Southwest Pass Lightering area on January 6, 2003. After completion of the pre-lightering operations, the Vessel awaited the arrival of the ship to be lightered. The two vessels attempted to moor so that they could perform their transfer operations, but they were unsuccessful due to inclement weather. While Skaugen was operating the Vessel on January 7, 2003, the Vessel's anchor damaged one of Walter's sub-sea natural gas pipelines, which was located offshore at South Timbalier Blocks 255 and 260. The accident severely damaged the pipeline causing its associated wells to catch fire, shut in, and cease production. Walter sued Defendants alleging that its pipeline was clearly marked on the Vessel's charts. On February 5, 2003, Bona filed a third-party complaint against Skaugen pursuant to Federal Rule of Civil Procedure 14(c). Bona alleges that Skaugen, pursuant to the Contract, was responsible for providing the Vessel with a Mooring Master "who had effective operational control of the lightering operation, including but not limited to the movement and positioning of both the mother vessel and the Vessel." Bona further alleges that to the extent the Vessel's anchor damaged Walter's pipeline, Skaugen is solely responsible under the Contract for the Mooring Master's negligence.

Skaugen responds by pointing to the Contract's arbitration agreement, which states that "[a]ny and all difference and disputes of whatsoever nature arising out of this Charter shall be put to arbitration in the City of New York ...." Skaugen also contends that the controlling provision of the Contract's indemnity clause exculpates it from any liability. According to Skaugen, the relevant provision, titled "SPT Mooring Master Liability Clause," provides:

The Master of each vessel shall throughout the STS cargo transfer operation be responsible for the safe operation of his vessel. The Mooring Master provided by SPT shall coordinate the STS transfer operation, serving as advisor only and assisting the masters in assuring that the requirements of all ICS/OCIMF Guidelines, SPT and U.S. Coast Guard Regulations and prudent seamanship are met. Neither the MM or his employer shall be responsible for any damages, losses, expenses and/or costs of any nature whatsoever, including without limitation any loss of time and/or delays that may be incurred or sustained by either party or third party arising out of, or in the matter related to the STS transfer between vessels, even if said claims and or damages, losses, delays, expenses or costs arise out of the negligence of the Mooring Master.

(emphasis added).⁵ Skaugen urges the Court to dismiss Bona's third-party complaint because all of Bona's claims are within the broad scope of the Contract's arbitration provision and are arbitrable. Similarly, Skaugen urges the Court to stay the entire lawsuit pending the resolution of arbitration because "[p]ermitting Plaintiffs suit to move forward during arbitration will severely prejudice Third-Party Defendant's rights to meaningful arbitration and nullify the strong federal policy in favor of arbitration." Alternatively, Skaugen asks the Court to stay Bona's third-party complaint pending arbitration.

Walter and Defendants argue that the Court cannot dismiss the third-party complaint because under Federal Rule of Civil Procedure 14(c), Skaugen is now directly liable to Walter. Hence, procedurally, Skaugen is both a defendant and a third-party defendant, and claims other than Bona's claims for contribution and indemnity under the Contract are now at issue after the Rule 14(c) tender. Walter argues that any dismissal of the third-party complaint because of the arbitration agreement will dismiss his claims against Skaugen, despite the fact that Walter was not a party to the Contract. Likewise, Walter and Defendants urge the Court to stay Bona's claims for contribution and indemnity only, allowing Walter to proceed on its claims against Defendants and Skaugen. Then, following the trial of Walter's claims, Skaugen and Bona may fight out who must pay the judgment, if any, in arbitration.

ANALYSIS

Motion to Transfer Venue to Houston

Rather curiously, Skaugen seeks to transfer this lawsuit to the Houston Division pursuant to Federal Rule of Civil Procedure 12(b)(3). A 12(b)(3) motion seeks dismissal of an action when venue is improper under 28 U.S.C. § 1391. However, Skaugen does not contend that this forum is improper in the substance of its Motion; rather, it argues that a trial in Galveston is inconvenient. Accordingly, the Court will construe Skaugen's Motion as seeking a transfer to the Houston Division of this District pursuant to 28 U.S.C. § 1404(a), which provides that "[f]or the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). Under § 1404, the party seeking the transfer bears the burden of demonstrating that the Court should, in its sound discretion, transfer the action. See Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir. 1989) (noting that the decision to transfer a case rests exclusively within the sound discretion of the district court); Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir. 1966) (highlighting that the movant bears the burden of demonstrating that the action should be transferred). When considering whether a transfer is warranted, the Court considers the following factors: the witnesses' and parties' availability and convenience; the location of pertinent books and records; the cost of obtaining attendance of witnesses and other trial expenses; the place of the alleged wrong; the possibility of delay and prejudice if the transfer is granted; and the plaintiffs choice of forum.⁶ See, e.g., Henderson v. AT & T Corp., 918 F.Supp. 1059, 1065 (S.D.Tex. 1996); Dupre v. Spanier Marine Corp., 810 F.Supp. 823, 825 (S.D.Tex.1993); Hogan v. Malone Lumber, Inc., 800 F.Supp. 1441, 1443 (E.D.Tex.1992); United Sonics, Inc. v. Shock, 661 F.Supp. 681, 682-83 (W.D.Tex.1986). Generally, a plaintiffs choice of forum is entitled to great deference. See Continental Airlines, Inc. v. American Airlines, Inc., 805 F.Supp. 1392, 1395-96 (S.D.Tex.1992) (discussing the importance of the plaintiffs choice of forum in light of the policies underlying § 1404(a)); United Sonics, 661 F.Supp. at 683 (stating that the plaintiff's choice of forum is "most influential and should rarely be disturbed unless the balance is strongly in defendant's favor").

In support of its Motion to Transfer Venue, Skaugen argues that a Houston forum would be more convenient because (1) the accident occurred offshore of Louisiana, not Galveston; (2) all of the Parties maintain their principal places of business in Houston; (3) Skaugen's witnesses who observed the accident aboard the Vessel, witnesses who signed the Contract, and witnesses who are familiar with the lightering operations training program reside in Houston; and (4) Plaintiff will not be prejudiced by a...