In re the Complaint of Atlantic Marine, Property Holding Co.

Citations: 570 F. Supp. 2d 1369; 2008 U.S. Dist. LEXIS 61030; 2008 WL 3290387Docket: Civil Action No. 06-0100-CG-B

Court: District Court, S.D. Alabama; August 11, 2008; Federal District Court

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The court is addressing Atlantic Marine, Inc.'s motion for summary judgment, which is opposed by multiple parties, including the State of Alabama Department of Transportation and Pemex Exploración y Producción (PEP). The lawsuit stems from an incident on August 29, 2005, during Hurricane Katrina, when the barge MOBILE HEAVY LIFTER (MHL) and the PSS CHEMUL broke free from their moorings, colliding with ships and structures along the Mobile River, ultimately becoming lodged under the Cochrane-Africatown Bridge. Atlantic Marine and Bender Shipbuilding, as the owner and bareboat charterer of the MHL, respectively, seek exoneration or limitation of liability for the incident.

Claims for property damage have been filed against them. PEP, the CHEMUL's owner, had contracted Bender for repairs, which involved the use of the MHL for drydocking the CHEMUL under a charter agreement outlining specific operational restrictions. The MHL has compartments that can be ballasted to submerge it, allowing for the lifting of the CHEMUL. The charter stipulated that the MHL was only to be used for docking the CHEMUL, with provisions for Atlantic Marine to monitor its condition and terminate the charter if deemed unsafe.

Atlantic Marine conducted daily inspections of the MHL's draft and structural integrity, as it was in their interest to ensure the vessel's operational safety. The court ultimately finds that Atlantic Marine's motion for summary judgment should be denied.

Atlantic Marine's assistant dockmaster and an operator managed the MHL's hydraulically-controlled tank valves for water adjustments, while Bender was prohibited from operating the MHL. During Hurricane Ivan in September 2004, the CHEMUL was submerged in the Mobile River for storm preparation without any difficulties. In July 2005, before Tropical Storm Cindy, the MHL and CHEMUL remained moored without submersion and sustained no damage, although concerns arose about their safety against 70 mph winds. For Hurricane Dennis on July 9, 2005, Atlantic Marine submerged the MHL and CHEMUL at Bender's decision, with expenses covered by Bender.

As Hurricane Katrina approached in late August 2005, Bender considered submerging the MHL and strengthening its moorings. Atlantic Marine's dockmaster informed Bender's COO that Dutch engineers could not arrive in time for submersion, but Atlantic Marine could manage it independently. Ultimately, Bender opted not to submerge the MHL, instead adding lines and securing loose materials, and contracted Sea Bulk Towing for additional security. The tug captain left the MHL due to unsafe conditions caused by flying debris, and shortly thereafter, around 8:30 a.m. on Monday, the MHL with CHEMUL broke loose from its moorings.

Summary Judgment under Federal Rule of Civil Procedure 56(c) permits a court to grant summary judgment when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. The court does not weigh evidence but assesses whether a genuine dispute exists (Anderson v. Liberty Lobby, Inc.). Mere evidence supporting the non-moving party is insufficient; there must be enough for a jury to reasonably rule in their favor (Bailey v. Allgas, Inc.). Summary judgment can be granted if the evidence is merely colorable or not significantly probative (Anderson). The primary question is whether the evidence presents sufficient disagreement to warrant a jury trial (Anderson). The burden lies with the moving party to prove the absence of a genuine issue of material fact (O’Ferrell v. United States). The court must view evidence favorably toward the non-moving party and resolve factual doubts in their favor (Burton v. City of Belle Glade). If reasonable minds could differ, summary judgment should be denied (Miranda v. B. B Cash Grocery Store, Inc.). Once the moving party meets its burden, the non-moving party must demonstrate the existence of essential elements of their case, showing a material issue of fact (Howard v. BP Oil Company). General allegations are inadequate; specific facts are required (Fed. R.Civ. P. 56(e)). A mere scintilla of evidence is insufficient; there must be enough for a reasonable jury to find for the non-moving party (Walker v. Darby). The non-moving party can utilize all facts and reasonable inferences from the entire record (Tipton v. Bergrohr GMBH-Siegen). If the record does not allow a rational fact-finder to rule for the non-moving party, no genuine issue exists for trial (Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp.). 

Atlantic Marine, Inc. argues that it did not participate in the decision-making or preparations for the MHL and CHEMUL regarding Hurricane Katrina, asserting it bears no responsibility or fault for the breakaway and subsequent damages.

PEP and the non-PEP claimants argue that Atlantic Marine did not relinquish full custody and control of the MHL, thus invoking the Louisiana rule, which presumes fault for owners of drifting vessels that collide with stationary objects. Under this rule, an unmoored vessel striking an anchored vessel or structure is presumed at fault, though this presumption can be rebutted in three ways: by proving the allision was due to the stationary object’s fault, that the moving vessel exercised reasonable care, or that the allision was an unavoidable accident. The parties agree that the stationary objects were not at fault, but they dispute Atlantic Marine's duty of care, the standard of care exercised, and the nature of the incident. Atlantic Marine claims the presumption of fault is rebutted because it transferred care of the vessel to Bender. Citing a precedent (Compania De Navigation Porto Ronco, S.A. v. S/S American Oriole), the court found that the vessel's owners could not be held responsible for the shipyard’s inadequate mooring measures since they surrendered control of the vessel a month before the incident. The court concluded that the shipyard, having sole custody of the unmanned vessel, was solely at fault for the ensuing casualty.

The case centers on the interpretation of "fully" in relation to the custody and care of the vessel MHL, which was surrendered to Todd Shipyard one month before a breakaway incident. Atlantic Marine argues that "fully" refers to the one-month period rather than the extent of custody surrender. Despite the interpretation, it is established that Todd Shipyard had complete custody and care of the vessel at the time, as they managed moorings without input from the owners or crew after initial checks. Atlantic Marine retained some degree of custody and care over the MHL, actively monitoring it and making adjustments, while Bender was prohibited from operating the vessel. The submersion of the MHL was critical for preparing for Hurricane Katrina and required Atlantic Marine's involvement, which included ensuring the availability of necessary expertise. The court finds that Atlantic Marine had responsibilities regarding the vessel's care that influenced its hurricane preparation. The standard of reasonable care in this context involves evaluating whether the owner took sufficient actions to mitigate hurricane risks, considering prudent seamanship, statutory regulations, and customary practices. Expert testimonies have indicated what measures could have better protected the vessels during the hurricane.

Testimony regarding the preparations and conditions during Hurricane Katrina at Shipyard 9 reveals a lack of consensus among witnesses about appropriate measures and the circumstances present. Some argue that submerging the MHL would have provided protection, citing industry standards, while others contend that submerging it with the CHEMUL onboard would have led to the same outcome due to storm surge. Evidence indicates that other rigs submerged in similar conditions did not break loose, and if the MHL had been adequately moored, it could have withstood winds of 70-120 mph. However, winds at Shipyard 9 reportedly reached up to 145 mph, complicating the assessment of whether preparations were reasonable.

Atlantic Marine argues that unforeseen intervening acts caused the incident, asserting that proper moorings should have held against expected winds. They claim Bender was negligent in mooring preparations or that unexpected conditions constituted an act of God or force majeure. If winds indeed reached 140 mph, Atlantic Marine posits this was unforeseeable, absolving them of liability despite any negligence by Bender. The legal principle of an act of God can exonerate a negligent party if the extraordinary nature of the intervening event was not foreseeable. However, it remains unclear whether Bender's alleged negligence was sufficiently extraordinary to warrant such a defense.

During a prior hurricane, Atlantic Marine’s Assistant Dock-master observed the MHL's instability in high winds, expressing concern for its safety beyond 70 mph. Evidence indicated that the lines securing the MHL were inadequately maintained before Hurricane Katrina. Although additional lines were added afterward, Atlantic Marine's prior knowledge of these maintenance issues suggested a foreseeable risk of negligence in their upkeep. The company failed to monitor the MHL or confirm that Bender had secured it properly during the storm. The court, considering the facts favorably for the non-movants, determined that Bender’s alleged negligence was not extraordinary enough to be deemed unforeseeable. Atlantic Marine did not provide sufficient evidence to support a claim that wind speeds reached 130.5-145 mph as proposed by Dr. Williams, and even if they had, such conditions were not necessarily unforeseeable given the unpredictable nature of hurricanes. The court rejected Atlantic Marine’s argument that it was reasonable to prepare only for the forecasts, noting that the predictions for Hurricane Katrina changed significantly leading up to the event. With a category 4 hurricane approaching, it was foreseeable that wind speeds could exceed 75 mph. Consequently, the court denied Atlantic Marine Inc.'s motion for summary judgment.