WILLIAM H. STEELE, District Judge.
This matter comes before the Court on plaintiff's Motion for Summary Judgment (doc. 61) and defendant's Motion to Strike Portions of Exhibit C (doc. 63). Although the parties did not fully avail themselves of briefing opportunities, both Motions are now ripe.
This action concerns an alleged breach of a charter agreement entered into between plaintiff, Ivy Marine Consulting, LLC, and defendant, Monarch Energy Partners, Inc. The barebones, single-count First Amended Complaint (doc. 16) alleges that Ivy Marine leased a certain barge vessel to Monarch Energy, but that Monarch Energy defaulted under the charter agreement by (i) failing to pay the $850 daily hire rate for 59 days, totaling $50,150; and (ii) failing to return the vessel in a "gas free condition suitable to load #2 diesel," which will cost Monarch Energy the sum of $57,775 to restore the vessel to that condition. (Doc. 16, ¶¶ 7-8.) On that basis, Ivy Marine demands judgment against Monarch Energy in the total amount of $110,150, plus interest and court costs.
The parties entered into a Standard Time Charter (the "Agreement"), pursuant to which Ivy Marine agreed to let, and Monarch Energy agreed to hire, a barge vessel known as the MB6 (the "Barge") at the rate of $850 per day, with an "on hire" date of July 6, 2017. (Doc. 61, Exh. A, at 1.) Monarch Energy agreed to pay that charter hire 30 days in advance and no later than 5 days after receiving an invoice, with late fees to be assessed at 12% per annum for payments not received by the applicable due date. (Id. at § 2.E.) The parties further agreed that the lease was for a period of five months and 29 days. (Id. at Amendment A.) An Amendment to the Agreement specified as follows: "If the barge is not returned to a fresh water port within the five months, twenty-nine days, there will be a penalty of $25,000, and the charter agreement will continue until the MB 6 is returned to Ivy in a `cleaned' state." (Id.)
By the express terms of the Agreement, "Redelivery shall be made after the barge has been cleaned to the satisfaction of Ivy Marine, LLC and the owner of the barge, MB Barge." (Id. at § 2.A.) The Agreement was devoid of any other description of the degree or specific nature of this "cleaning" requirement. It did not purport to delineate terms, degrees or standards for cleaning such as "gas-free" or "clean to diesel fuel." Nor were such terms discussed at any time during the negotiation or execution of the Agreement. (Shrader Aff. (doc. 65, Exh. 1), ¶ 8.)
Ivy Marine maintains that Monarch Energy breached the Agreement in two respects that form the basis of this litigation. First, plaintiff's evidence is that Monarch Energy failed to pay the agreed daily charter rate of $850/day for a 59-day period of the agreed term, running from November 2, 2017 through December 31, 2017. (Boles Aff. (doc. 61, Exh. C), ¶ 4.) For this alleged breach, Ivy Marine seeks to recover unpaid charter amounts of $50,150, plus interest. Defendant's evidence shows that at some unspecified time during the charter term, "a tug picked the barge up from Ivy and departed with it for Lake Charles. It was gone about 20 days. [Monarch Energy] did not arrange or pay for the tug nor send the barge to Lake Charles." (Shrader Aff., ¶ 19.)
Second, Ivy Marine contends that Monarch Energy breached the Agreement by failing to comply with the requirement that the Barge be returned in a condition that was "cleaned to the satisfaction of Ivy Marine." Monarch Energy conceded in a deposition that it did not clean the Barge upon redelivering it to Ivy Marine. (Shrader Dep., at 112.)
Summary judgment should be granted only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Rule 56(a), Fed.R.Civ.P. The party seeking summary judgment bears "the initial burden to show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial." Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). Once the moving party has satisfied its responsibility, the burden shifts to the non-movant to show the existence of a genuine issue of material fact. Id. "If the nonmoving party fails to make `a sufficient showing on an essential element of her case with respect to which she has the burden of proof,' the moving party is entitled to summary judgment." Id. (quoting Celotex Corp. v. Catrett, 477 U.S. 317 (1986)) (footnote omitted). "In reviewing whether the nonmoving party has met its burden, the court must stop short of weighing the evidence and making credibility determinations of the truth of the matter. Instead, the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 999 (11th Cir. 1992) (internal citations and quotations omitted). "Summary judgment is justified only for those cases devoid of any need for factual determinations." Offshore Aviation v. Transcon Lines, Inc., 831 F.2d 1013, 1016 (11th Cir. 1987) (citation omitted).
In its minimalist Motion for Summary Judgment, supported by a brief spanning barely two pages in length and with no reply, Ivy Marine moves for judgment as a matter of law in its favor on the claim for breach of the charter agreement. Plaintiff's contention is that it is entitled to summary judgment as to both components of the claim, namely Monarch Energy's alleged (i) failure to pay the charter rate for 59 days of the agreed term; and (ii) failure to satisfy the contractual requirement that the Barge be returned to Ivy Marine in a "cleaned" state.
"In order to establish a breach-of-contract claim, a plaintiff must show (1) the existence of a valid contract binding the parties in the action, (2) his own performance under the contract, (3) the defendant's nonperformance, and (4) damages." City of Gadsden v. Harbin, 148 So.3d 690, 696 (Ala. 2013) (citations and internal quotation marks omitted). Ivy Marine's position, stated simply, is that the record unambiguously reflects that it has satisfied all of these elements with regard to both the failure-to-pay-charter and the failure-to-clean aspects of its claim against Monarch Energy for breach of the Agreement.
As discussed supra, Ivy Marine has presented record evidence showing the existence and validity of the Agreement binding the parties. The record also shows that Ivy Marine furnished (or caused to be furnished) the Barge to Monarch Energy as required under the Agreement, but that Monarch Energy failed to pay the daily charter rate for a portion of the agreed lease term. None of these record facts are controverted, disputed or challenged by Monarch Energy on summary judgment. Nor has defendant articulated any defense to liability for plaintiff's claim that Monarch Energy breached the Agreement by failing to pay the charter rate as agreed. As such, the Court finds that there is no genuine issue of material fact and that Monarch Energy is liable to Ivy Marine on the failure-to-pay-charter portion of the breach of contract claim. Plaintiff's Motion for Summary Judgment is therefore
With respect to damages, however, the factual landscape is far murkier. To be sure, Ivy Marine's evidence is that Monarch Energy paid none of the $850 daily charter rate for the last 59 days of the agreed term, running from November 2, 2017 through December 31, 2017. This would equate to contractual damages of $50,150, plus interest. In response, however, Monarch Energy invokes the doctrine of mitigation of damages. Under Alabama law, "[g]enerally, an injured party is required to mitigate his damages in a reasonable manner consistent with what an ordinarily prudent person would do in similar circumstances." Carnival Cruise Lines, Inc. v. Goodin, 535 So.2d 98, 103 (Ala. 1988) (citations omitted); see also Avco Financial Services, Inc. v. Ramsey, 631 So.2d 940, 942 (Ala. 1994) ("a plaintiff can recover only for that damage or loss that would have been sustained if the plaintiff had exercised such care as a reasonably prudent person would have exercised under like circumstances to mitigate the damage or loss"). "Whether a party has sufficiently mitigated his damages is a question of fact." Goodin, 535 So.2d at 103. Additionally, it is well settled that "damages awarded for breach of contract should return the injured party to the position he would have been in had the contract been fully performed." Target Media Partners Operating Co. v. Specialty Marketing Corp., 177 So.3d 843, 861 (Ala. 2013) (citations omitted). A corollary to that proposition is that an "injured party is not to be put in a better position by a recovery of damages for the breach than he would have been in if there had been performance." Century Automotive Group v. Structure Designs, LLC, 168 So.3d 64, 67 (Ala.Civ.App. 2014) (citation omitted).
Monarch Energy contends that it would run afoul of these principles to award Ivy Marine the full $50,150 it seeks for breach of contract as to the failure to pay the daily charter rate. In particular, defendant points to record evidence supporting a reasonable inference that Ivy Marine rented the Barge to a third party called Rio Energy (also called Rio Petroleum in the record) for some period of time in December 2017. (Doc. 65, Exh. 4.) From that evidence, however, it is unclear how long the Barge was chartered to Rio Energy. The exhibit bears the calendar entries "MB6 — Rio Energy" for just five days in December, but Monarch Energy says it is entitled to an offset for a 15-day rental, including days where the exhibit shows entries reading "Barge in NOLA (Off Charter)." (Id.) If the Barge was "Off Charter" at that time, then what record basis is there for defendant's contention that Ivy Marine received a daily charter rate for those days in mitigation of its damages caused by Monarch Energy's breach? Defendant does not say. Furthermore, while defendant asserts that Ivy Marine received $850 per day for the Rio Energy charter, it cites generically to the 83-page deposition of Michael Wilson for that proposition, with no pinpoint citation as required by the Local Rules of this District Court.
To compound the confusion as to mitigation of damages, Monarch Energy also claims a credit for 20 days of the daily charter rate for the period during which "someone other than Monarch" arranged to take the Barge to Lake Charles, Louisiana to deliver product that Monarch Energy had sold to a third party. However, defendant's evidence does not reflect the exact period of time it was without service of the Barge, saying only that it was "about 20 days." More fundamentally, it is far from clear why Monarch Energy should be entitled to a credit (and why Ivy Marine should be deprived of the agreed-upon daily charter rate) for a time period in which the Barge was moved to Louisiana to complete a sale that Monarch Energy itself had made. This uncertainty is exacerbated by the paucity of record evidence linking this 20-day period to anything Ivy Marine did or did not do, much less the reasons why what Monarch Energy says should have been an 8-day trip turned into an "about" 20-day trip. On this record, there are simply too many unanswered questions about the Barge's voyage to Lake Charles to know whether, how and to what extent it might factor into a mitigation of damages analysis for the breach-of-contract claim as it relates to Monarch Energy's failure to pay the daily charter rate.
In sum, while the summary judgment record unequivocally supports a finding that Monarch Energy is liable to Ivy Marine for failure to pay the agreed-upon daily charter rate, the presence of considerable factual gaps in the summary judgment record renders it impossible to ascertain whether and to what extent certain sums should be deducted from the gross amount of lost charter fees (59 days × $850/day, or $50,150) pursuant to Alabama principles of mitigation of damages and prohibition of double recoveries. These fact issues — which plaintiff did not attempt to clarify or resolve via a reply brief — necessitate that summary judgment be
Recall that Ivy Marine's breach-of-contract claim also alleges that Monarch Energy breached the Agreement by failing to return the Barge in a "clean" condition. Plaintiff moves for summary judgment on this aspect of the claim as well; however, myriad disputed issues of material fact preclude granting the requested relief at this time.
By its plain language, § 2.A. of the Agreement provided that "[r]edelivery shall be made after the barge has been cleaned to the satisfaction of Ivy Marine, LLC and the owner of the barge, MB Barge." However, the Agreement did not specify any parameters for what this "cleaned" requirement might entail. Of course, Alabama law has long provided that "in every contract there exists an implied covenant of good faith and fair dealing." Lloyd Noland Foundation, Inc. v. City of Fairfield Healthcare Authority, 837 So.2d 253, 267 (Ala. 2002) (citation omitted). Likewise, the Restatement (Second) of Contracts clarifies that where (as here) an agreement "does not make it clear that it requires merely honest satisfaction, it will not usually be supposed that the obligee has assumed the risk of the obligor's unreasonable, if honest, dissatisfaction. In such a case, to the extent that it is practicable to apply an objective test of reasonable satisfaction, such a test will be applied." Comment b, § 228.
These principles suggest that Ivy Marine's satisfaction with the "cleaned" condition of the Barge upon its return is subject to a reasonableness requirement. Plaintiff does not argue otherwise. Defendant's evidence (which must be credited for summary judgment purposes) is that, while Monarch Energy did not affirmatively clean the Barge, it returned the Barge to Ivy Marine in the same condition it was received. This evidence supports a reasonable inference that Monarch Energy did not breach the "cleaned" requirement of the Agreement because it redelivered the Barge to Ivy Marine in exactly the same condition, such that Ivy Marine could not reasonably have been dissatisfied with the condition of the Barge at that time. Moreover, Ivy Marine immediately leased the Barge to third parties following its redelivery by Monarch Energy, to perform the same kind of work it had performed previously. This evidence supports a reasonable inference that Ivy Marine expended no funds out-of-pocket to clean the Barge and lost no money in charter fees to lease it to third parties because of its purportedly "dirty" condition. In short, there are genuine issues of material fact as to (i) whether Monarch Energy breached the "cleaned" requirement of the Agreement at all, and (ii) even if it did, whether Ivy Marine incurred damages as a result.
For all of the foregoing reasons, it is
DONE and ORDERED.