Waterfront Petroleum Terminal Co. v. Detroit Bulk Storage, Inc.
| Decision Date | 25 August 2021 |
| Docket Number | Case No. 19-13621 |
| Citation | 556 F.Supp.3d 748 |
| Parties | WATERFRONT PETROLEUM TERMINAL COMPANY, Plaintiff/Counter-Defendant, v. DETROIT BULK STORAGE, INC., Defendant/Counter-Plaintiff. |
| Court | U.S. District Court — Eastern District of Michigan |
Philip C. Brickman, Sidney W. Degan, III, Degan, Blanchard & Nash, New Orleans, LA, Anthony F. Caffrey, III, Cardelli Lanfear, P.C., Thomas G. Cardelli, Cardelli, Hebert, Royal Oak, MI, for Plaintiff/Counter-Defendant.
Adam C. Zwicker, Paul D. Galea, Gallagher Sharp LLP, Avery K. Williams, Williams Acosta, Juan A. Mateo, Jr., Law Offices of Juan Mateo, Robert Edward Higbee, Law Offices of Robert E. Higbee PLLC, Detroit, MI, Sarah Valeria Beaubien, Gallagher Sharp LLP, Toledo, OH, Teri D. Whitehead, Whitehead Law Counsel, PLLC-, Lake Orion, MI, for Defendant/Counter-Plaintiff.
PlaintiffWaterfront Petroleum Terminal Company("Waterfront") and DefendantDetroit Bulk Storage, Inc.("DBS") the owner and lessor, respectively, of maritime facilities on the Detroit River, are litigating over the usage of wharf space at the adjoining facilities, among other issues.The parties have filed cross-motions for summary judgment seeking to determine their respective usage rights.(SeeECF Nos. 43, 44.)1The court finds a hearing unnecessary.E.D. Mich. L.R. 7.1(f)(2).The court will deny, in part, both parties’ motions for summary judgment, as factual disputes exist that prevent the court from definitively determining if Defendant's use of the wharf space is reasonable under the applicable Michigan common law standard.
Since 2007, Plaintiff Waterfront has operated a marine fuel terminal, with a physical address of 5431 West Jefferson Avenue, for commercial vessels on the Detroit River.(ECF No. 43-3, PageID.998;ECF No. 44, PageID.1232.)Later, Plaintiff purchased two adjoining parcels at 5701 and 5601 West Jefferson with dock frontage immediately downriver of its fueling terminal.(ECF No. 43-3, PageID.994.)Plaintiff used the newly acquired land to open a bulk cargo terminal to accept deliveries from the freighters operating on the Great Lakes.(Id. )Plaintiff's three parcels together provide approximately 1,783 combined linear feet of dock frontage on the Detroit River.(ECF No. 57-5, PageID.2541.)Plaintiff's facility is outlined in red in Figure 1 below.
In 2019, Defendant DBS entered a month-to-month lease2 for a riverfront parcel at 5851 West Jefferson (the "Revere Dock"), which is owned by Revere Dock, LLC.(ECF No. 43-2, PageID.952-53.)The Revere Dock has approximately 540 feet of river frontage and is immediately adjacent to Waterfront's bulk dock.(ECF No. 43-2, PageID.954.)The Revere Dock is bordered by Plaintiff's facility upstream and by an active boat slip and marine facility operated by the U.S. Army Corps of Engineers on the downstream side.(ECF No. 43-2, PageID.960.)Defendant operated a bulk cargo facility at the Revere Dock between August and November 2019 until a dock collapse on the parcel suspended operations at the Revere Dock (the dock collapse is the subject of Defendant's counterclaim).(ECF No. 44, PageID.1234;ECF No. 57-5, PageID.2545.)The Revere Dock parcel is outlined in yellow in Figure 1 below.
Both parties are owned by individuals with substantial experience operating maritime facilities.Plaintiff's owner, Harry Warner, has been operating petroleum facilities on the Great Lakes since 1976.(ECF No. 43-3, PageID.996.)Warner's other facilities include a location on the Rouge River in Detroit and a maritime facility in the Chicago area.(ECF No. 43-5, PageID.1047.)Defendant's principal owner, Jack Frye, started his bulk aggregate business in Detroit in 1985 and now operates two such docks in Michigan and seven docks through a sister company on the Canadian side.(ECF No. 43-13, PageID.1199-1200.)
When the Revere Dock was active during 2019, Defendant received 21 separate deliveries of bulk aggregate at the facility from freighters ranging between approximately 625 and 750 feet in length.(ECF No. 57-5, PageID.2545.)While in full operation, Defendant received about one delivery every five-and-a-half days on average.(Seeid. )To make a delivery, a freighter docks parallel to the river bank a few feet from the wharf.Lake freighters have a long "self-unloading" boom containing a conveyor belt that swings to shore and dumps large piles of bulk cargo on the dock.(ECF No. 43-13, PageID.1204, 1207.)These piles are later loaded into trucks for distribution to the customer.While unloading bulk cargo, it is customary for the moored freighters to move ahead and astern along the dock by an action known as "warping"(using their mooring lines) to facilitate the freighter's self-unloading boom to place piles of material on the requested section of dock.(ECF No. 57-5, PageID.2546.)To unload a full freighter, it can take between five and seven-and-a-half hours.(ECF No. 43-2, PageID.955.)
It is undisputed that the length of the vessels meant that freighters calling at the Revere Dock regularly extended in front of Waterfront's neighboring property, thereby blocking access to the most downriver portion of its property where Plaintiff now operates its own bulk dock; depending on the size of the vessel that is "warping" the encroachment could extend 100 to 200 feet beyond the property line.(ECF No. 43, PageID.906;ECF No. 44, PageID.1233, 1245.)Plaintiff does not allege that Defendant's employees trespassed on Plaintiff's dock front itself during the unloading process or physically moored the freighters to its dock.(SeeECF No. 57-5, PageID.2546.)And Plaintiff's owner Henry Warner acknowledged that the 2019 encroachments did not cause Plaintiff to turn away or delay any vessels at its very active fueling dock on the upstream portion of the property.(ECF No. 43-3, PageID.1005.)Nor is Plaintiff claiming any lost profits from the 2019 encroachments.3(id.;see alsoECF Nos. 43-8, 43-9, PageID.1082-84().)
Plaintiff alleges that the mooring of vessels so large that they extend in front of its property constitutes a maritime trespass, and Plaintiff began formally notifying Defendant on August 12, 2019 that it would take legal actions to prevent such encroachments in the future.(ECF No. 44-2, PageID.1269.)During 2020, while Defendant's operations were suspended due to the Revere Dock collapse, Plaintiff used some of a $3 million line of credit to fund seawall upgrades to what is now the downriver bulk dock portion of its facility.Warner testified that Plaintiff plans to add a "second [fueling] berth," use the improved dock as a staging, or as a storage area for some of its barges currently docked at other rented maritime facilities in the region.(ECF No. 43-3, PageID.997, 1018.)Plaintiff contends that Defendants continued encroachment will prevent it from fully utilizing its own property to its potential and could cause his business to incur demurrage charges (late fees) if the dock is not available to a calling vessel at the time promised by Waterfront.(ECF No. 44, PageID.1237.)Warner also raises safety concerns about Defendant's operations.
Plaintiff filed the present action in December 2019, relying on the court's jurisdiction over admiralty and maritime controversies through 28 U.S.C. § 1333.(SeeECF No. 1.)Plaintiff requests both declaratory and injunctive relief to prevent future encroachments in front of its wharf and seeks damages for maritime trespass during the 2019 shipping season.The parties have now completed extensive discovery in the action and have filed cross-motions for summary judgment on the encroachment issue.(SeeECF Nos. 43, 44.)
Defendant argues that it should be awarded summary judgment because the Michigan Supreme Court's 1932 decision in Rosema v. Construction of Materials Corp. , 258 Mich. 457, 243 N.W. 24(1932), adopted a common law rule establishing that a neighboring riparian landowner can moor a vessel beyond the property line as long as reasonable access is not obstructed, and, that Michigan does not recognize a cognizable claim for maritime trespass in such a situation.(ECF No. 43, PageID.915, 920-22.)
Defendant further contends, based on the testimony of its owner Jack Frye, that such encroachment on neighboring docks is a regular and customary occurrence at industrial docks on the Great Lakes.(Id.,PageID.909.)It further points out that Plaintiff engages in the same practice, at least twice each month, when it fuels 1,000-foot freighters at its Detroit fuel terminal that undisputedly protrude 80 feet over the property line in front of the dock of Plaintiff's upstream neighbor, the James Group.(Id. )Defendant notes that one of the three vessels that made a delivery to Plaintiff's bulk dock during 2019 also hung over the property line in front of the Revere Dock.(ECF No. 43-2, PageID.974.)
Defendant substantiates its position regarding local custom with the affidavit of an expert witness.(SeeECFNo. 43-14.)
Plaintiff contrastingly argues that it should be awarded summary judgment on the wharf usage dispute because, as a riparian property owner, it has the right to prohibit Defendant from mooring a ship on its bottomlands only a few feet from the edge of its bulk dock.While Plaintiff recognizes that the "[t]he use of water by the riparian owner is governed by the principles of reasonableness" and that "reasonableness depends on the facts of the case," it argues routinely docking vessels over 650 feet in length at a dock only 540 feet long, is not merely an incidental trespass and therefore should not be considered reasonable.(ECF No. 44, PageID.1249-50(citingHoover v. Crane , 362 Mich. 36, 106 N.W.2d 563(1960);W. Michigan Dock & Mkt. Corp. v....
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