Filed: Dec. 04, 2000
Latest Update: Feb. 21, 2020
Summary: [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS ELEVENTH CIRCUIT DEC 4 2000 _ THOMAS K. KAHN CLERK No. 99-11456 _ D. C. Docket No. 97-07449-CV-PAS VENUS LINES AGENCY, INC., Plaintiff-Appellant-Cross-Appellee, versus CVG INTERNATIONAL AMERICA, INC., Defendant-Appellee-Cross-Appellant. _ Appeals from the United States District Court for the Southern District of Florida _ (December 4, 2000) Before EDMONDSON, WILSON and MAGILL*, Circuit Judges. _
Summary: [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS ELEVENTH CIRCUIT DEC 4 2000 _ THOMAS K. KAHN CLERK No. 99-11456 _ D. C. Docket No. 97-07449-CV-PAS VENUS LINES AGENCY, INC., Plaintiff-Appellant-Cross-Appellee, versus CVG INTERNATIONAL AMERICA, INC., Defendant-Appellee-Cross-Appellant. _ Appeals from the United States District Court for the Southern District of Florida _ (December 4, 2000) Before EDMONDSON, WILSON and MAGILL*, Circuit Judges. _ *..
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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
DEC 4 2000
________________________ THOMAS K. KAHN
CLERK
No. 99-11456
________________________
D. C. Docket No. 97-07449-CV-PAS
VENUS LINES AGENCY, INC.,
Plaintiff-Appellant-Cross-Appellee,
versus
CVG INTERNATIONAL AMERICA, INC.,
Defendant-Appellee-Cross-Appellant.
________________________
Appeals from the United States District Court
for the Southern District of Florida
_________________________
(December 4, 2000)
Before EDMONDSON, WILSON and MAGILL*, Circuit Judges.
________________________
*
Honorable Frank J. Magill, U.S. Circuit Judge for the Eighth Circuit, sitting by
designation.
WILSON, Circuit Judge:
This appeal raises the issue of whether there was sufficient mutual assent for
the parties to form a valid new contract or to modify an existing one. We find that
there was not. Also at issue in this appeal are the application of the doctrine of
laches to demurrage claims, and the proper calculation of damages on demurrage
claims.
Plaintiff Venus Lines Agency, Inc. (Venus) appeals the district court’s ruling
in favor of Defendant CVG International America, Inc. (CVGIA) on Venus’ claim
that CVGIA breached its contract with Venus, the ruling that Venus’ 1995 and
1996 demurrage claims were barred by the doctrine of laches, and the district
court’s calculation of damages with respect to its 1997 demurrage claim. CVGIA
cross-appeals the district court’s finding that CVGIA was liable for Venus’ 1997
demurrage claim.
We have reviewed the record and the arguments in the briefs. We find no
reversible error in the district court’s rulings on Venus’ breach of contract claim or
its finding that the doctrine of laches barred Venus’ 1995 and 1996 demurrage and
shipping claims, and affirm the district court’s findings of facts and law on those
claims. We find that the district court erred in calculating CVGIA’s liability with
respect to Venus’ 1997 demurrage claim, and remand this case for recalculation of
damages.
2
I. BACKGROUND
CVGIA is a Florida corporation that arranges and secures the shipment of
goods for a large Venezuelan conglomerate. Prior to its relationship with Venus,
another Venezuelan company (Compañia Anonima Venezolana de Navegacion
(CAVN)) handled CVGIA’s freight pursuant to annual contracts that were renewed
each year. In March 1994, CVGIA began doing business with Venus after CAVN
went bankrupt by arranging one round-trip voyage carrying the products of the
Venezuelan conglomerate northward to Mobile and carrying the CVGIA procured
shipments southward to Venezuela. Later, CVGIA solicited bids for the shipment
of goods southward from Miami, Port Everglades, and Mobile to Venezuela.
CVGIA requested bids to carry goods for one year at a fixed tariff rate, and the bid
request contained terms similar to CAVN’s last contract with CVGIA. Venus filed
its tariff rates and terms for the service with the Federal Maritime commission.1
Venus submitted its bid, and CVGIA accepted it in April 1994.
1
Rule 7-02 of the tariff filed with the Federal
Maritime Commission allowed the carrier (Venus) to
recover all costs of collection for freight charges
past due, plus twelve percent annual interest
compounded daily. This interest rate in the tariff is
relevant to our discussion of the district court’s
calculation of damages, infra.
3
Over the next few months, Michael Kobiakov, Venus’ President, met with
representatives from CVGIA on several occasions to discuss the possibility of a
long-term agreement. Venus contends the parties agreed to a four-year service
contract in October 1994 at a meeting between Kobiakov and CVGIA’s Executive
Vice President Ramon Iglesias, and that the terms of this contract were recorded in
Kobiakov’s notes, which he took on the face of an earlier contract between CVGIA
and Seafreight Line Ltd. CVGIA, however asserts the parties never finalized a
long-term contract. Over the next two years, Venus and CVGIA discussed
possible written agreements, but were never able to agree on written terms.
CVGIA rejected several drafts that Venus proposed. In September, 1997, CVGIA
informed Venus that its services were no longer needed for the Miami to
Venezuela run.
Venus sued CVGIA in the Southern District of Florida, alleging that CVGIA
breached its contract with Venus, and seeking liquidated damages provided for in
the 1994 oral “agreement.” Alternatively, Venus sought damages for
misrepresentation and promissory estoppel, alleging CVGIA’s actions led Venus to
believe it was engaged in a contractual relationship, and to rely on that belief to its
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detriment. Venus also alleged CVGIA failed to pay demurrage2 and freight
charges specified in the bills of lading Venus issued CVG with each voyage.
After a five day bench trial, the district court found that no long term
contract existed between Venus and CVGIA, as there had never been any
agreement on the fundamental issues of duration and price. The district court
rejected Venus’ promissory estoppel and misrepresentation claims, finding that
CVGIA made no “clear and unambiguous promise” upon which Venus relied, that
any additional expenditures Venus made to service CVGIA were necessary
expenditures, and that there was insufficient evidence to support a
misrepresentation claim. The court found that the doctrine of laches barred Venus’
demurrage claims for 1995 and 1996, because Venus had an obligation to demand
payment from CVGIA rather than waiting until this lawsuit to file its demurrage
claims for those years. The court found Venus “made a timely pre-suit demand for
the 1997 demurrage and [was] entitled to recover from CVGIA under the terms of
the bills of lading.” The court ordered that Venus was entitled to collect
$78,629.49 “plus ten percent . . . interest per annum running from the date the
2
Demurrages are penalties for delays in the loading
and unloading of goods.
5
freight or demurrage was due, and for the attorneys’ fees relating to the prosecution
of freight and demurrage claims.”
II. DISCUSSION
A. Jurisdiction and Standard of Review
An appeal from a final judgment entered by a United States District Court
provides us with jurisdiction under 28 U.S.C. § 1291.
We review a district court’s factual findings when sitting without a jury in
admiralty under the clearly erroneous standard. See Marine Transp. Servs. Sea-
Barge Group, Inc. v. Python High Performance Marine Corp., 16 F.3d 1133, 1138
(11th Cir. 1994). We review the district court’s conclusions of law de novo. See
id.
B. Contract Claim
Venus contends the district court erred when it framed the central issue of
whether a long-term contract existed between CVGIA and Venus as one of
formation and not modification. Venus also argues the district court misstated the
rule governing parties contemplating a written agreement, because the intention to
sign a written agreement does not prevent the parties from agreeing to an
enforceable oral contract. Venus asserts it had an enforceable four-year oral
contract to ship goods for CVGIA that arose from a modification of the contract
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formed when CVGIA accepted Venus’ bid, and that the modified terms were the
contract’s extended duration and modified scope of service.
“It is not necessary . . .to reduce an agreement to writing to bind the parties,
as long as the parties intend to be bound at the time of the oral agreement.” Nautica
Int’l, Inc. v. Intermarine USA, L.P., 5 F. Supp. 2d 1333, 1341 (S.D. Fla. 1998). In
April 1994, CVGIA accepted Venus’ bid to perform the services contract.
Acceptance of a bid to perform services can create an enforceable contract in the
absence of a written agreement. See Roberts & Schaefer Co. v. Hardaway Co.,
152
F.3d 1283, 1295 (11th Cir. 1998). CVGIA does not dispute that the parties entered
into a contract in April 1994, but it argues that the relationship between CVGIA
and Venus was a series of discrete contracts to ship the goods at the tariff rate, and
that these agreements were never modified in favor of a long-term agreement. We
agree with the district court that the parties did not form a valid long-term
agreement.
In order to form an enforceable oral contract, “there must be a meeting of the
minds on all essential terms and obligations of the contract.” Browning v. Peyton,
918 F.2d 1516, 1521 (11th Cir. 1990). Venus has failed to establish there was a
meeting of the minds between itself and CVGIA on all of the essential terms of the
alleged four-year contract. Venus maintains that it always charged, and CVGIA
7
always paid, the tariff rate. However, Kobiakov’s notes allegedly reflected the
terms of the oral agreement reached in October 1994. Those notes, taken on the
face of a prior contract between CVGIA and another company, reflect rates that
were not implemented. Furthermore, the tariff rates were never revised to
implement the negotiated rate terms reflected in Kobiakov’s notes. The district
court found, and we agree, that the rate term was an essential term upon which the
parties had to agree. The conduct of the parties after they reached the alleged oral
agreement suggests there was no meeting of the minds on the rate term.
Even if Venus were correct that the central issue in this case is not whether
the parties formed a new contract, but whether they modified an existing one, the
conduct of the parties after they reached the purported agreement demonstrates
there was no valid modification of the contract formed when CVGIA accepted
Venus’ bid. A meeting of the minds on modified terms is necessary to validly
modify a contract. See United Contractors, Inc. v. United Constr. Corp., 187 So.
2d 695, 702 (Fla. Dist. Ct. App. 1966) (holding “one party to a contract cannot
alter its terms without the assent of the other parties; the minds of the parties must
meet as to the proposed modification.”) (internal quotation marks and citation
omitted). The parties in this case continued to negotiate, trying to work out a long-
term deal. CVGIA continued to compensate Venus at the tariff rate, and Venus
8
continued to accept payment at that rate, not at the modified rates that would be
required by the modified scope of service. Venus also alleged that the modified
contract contained a liquidated damages clause, but Venus did not seek to enforce
that clause until more than a year after it originally filed this action. These facts
indicate that there was no mutual assent on the new terms of the contract.
Venus is correct that in certain contractual situations, the parties’ intent to
eventually reduce the agreement to writing does not prevent the contractual
obligations from arising immediately. See Lifecare Int’l, Inc. v. CD Medical, Inc.,
68 F.3d 429, 436 (11th Cir. 1995), modified and supplemented on other grounds,
85 F.3d 519 (11th Cir. 1996). In such situations, however, the parties must intend
that their oral or written negotiations be immediately binding. See
id. CVGIA’s
refusal to sign Venus’ written proposals was continuous for nearly two years. This
consistent refusal to sign Venus’ proposed drafts is strong evidence that CVGIA
did not intend the earlier negotiations to be immediately binding. Therefore, we
find that the district court correctly held that CVGIA intended that any contract
would be reduced to writing and signed.
C. Doctrine of Laches
The equitable doctrine of laches will bar a claim when three elements are
present: “(1) a delay in asserting a right or a claim; (2) that the delay was not
9
excusable; and (3) that there was undue prejudice to the party against whom the
claim is asserted.” Kason Indus., Inc. v. Component Hardware Group, Inc., 120
F.3d 1199, 1203 (11th Cir. 1997). Venus concedes that in admiralty claims, the
equitable doctrine of laches generally controls whether a party’s delay in bringing a
claim should bar the suit. See, e.g., Puerto Rican-American Ins. Co. v. Benjamin
Shipping Co.,
829 F.2d 281, 283 (1st Cir. 1987); Azalea Fleet, Inc. v. Dreyfus
Supply & Machinery Corp.,
782 F.2d 1455, 1458 (8th Cir. 1986); Firearms Import
& Export Corp. v. Lykes Bros. Steamship Co.,
458 F. Supp. 88, 90 (S.D. Fla. 1978)
(holding doctrine of laches applies in absence of statute of limitations). Venus
argues, however, that courts use statutes of limitations periods in applying laches.
The limitations period in Florida’s Statute of Limitations for oral contracts is four
years. See FLA. STAT. ch. 95.11(k). Venus’ delay in bringing the demurrage
claims was less than three years for the 1995 claims. Venus argues, therefore, that
it should have been presumed to have timely brought the suit, and that the first
element of the laches doctrine–a delay in asserting the right or claim–cannot be
met.
In admiralty claims, we look to the analogous statute of limitations only as a
benchmark in determining whether to apply the doctrine of laches. The former
Fifth Circuit held that: “the analogy rule serves primarily to determine where rests
10
the burden of proof. ‘[W]hen a plaintiff files a claim in admiralty within the
analogous statutory period, defendant must show inexcusable delay and resulting
prejudice in order to establish a laches defense.’” Mecom v. Levingston
Shipbuilding Co., 622 F.2d 1209, 1215 (5th Cir. 1980) (quoting Barrois v. Nelda
Faye, Inc.,
597 F.2d 881, 885 (5th Cir. 1979));3 see also TAG/ICIB Servs., Inc. v.
Pan American Grain Co.,
215 F.3d 172, 175 (1st Cir. 2000); Puerto Rican-
American Ins.
Co., 829 F.2d at 283; Azalea Fleet,
Inc., 782 F.2d at 1458-59.
Assuming, then, that the analogous limitations period is four years, we must
determine whether CVGIA demonstrated Venus’ delay in demanding payment for
outstanding demurrage was inexcusable and whether the delay was prejudicial.
During 1995 and 1996, Venus accepted payment from CVGIA’s consignees
(the Venezuelan conglomerate that owned CVGIA), and failed to demand payment
from CVGIA for any outstanding demurrage. The district court found, and we
agree, that Venus had a responsibility to demand payment from CVGIA on
demurrage rather than to wait until filing this suit. As Venus admitted at oral
argument, the invoices for 1995 and 1996 demurrage charges were not sent to
CVGIA, and the invoices to the consignees were not presented to CVGIA until
3
In Bonner v. City of Prichard, 661 F.2d 1206, 1209
(11th Cir.1981) (en banc), we adopted as binding
precedent all of the decisions of the former Fifth
Circuit handed down prior to October 1, 1981.
11
Venus filed this lawsuit in 1998. We find that this delay was inexcusable. The
delay was prejudicial to CVGIA, because had Venus made a timely pre-suit
demand for payment, CVGIA could have contested the claim, or sought to obtain
payment from the consignees. Because we find that Venus’ delay in demanding
payment for the 1995 and 1996 demurrage charges was inexcusable and
prejudicial, we hold that the district court correctly held that the doctrine of laches
barred those demurrage claims.
Venus, however, did make a timely pre-suit demand for payment of the 1997
demurrage charges. Because there was no inexcusable delay in making that
demand, the district court correctly held that the doctrine of laches does not bar
that claim.
D. Calculation of Damages
The tariff Venus submitted with the Federal Maritime Commission clearly
indicates that the interest rate on costs of collection of freight and demurrage was
twelve percent. In calculating damages, the district court used an interest rate of
ten percent. What interest rate to apply in calculating damages is a factual
determination subject to a clear error standard of review. See Marine Transp.
Servs. Sea-Barge Group, Inc., 16 F.3d at 1138. Because the bills of lading in this
case incorporated all the terms and conditions of the tariff, we hold that the district
12
court clearly erred in applying a ten percent interest rate rather than the twelve
percent rate in the tariff. We reverse the district court’s calculation of damages and
remand for recalculation.
III. CONCLUSION
For the foregoing reasons, we affirm the district court’s decision that the
parties did not make a long-term oral contract in October 1994, and we find that
there was no valid modification of the existing contract between CVGIA and
Venus. We also affirm the district court’s decision that the doctrine of laches
barred Venus’ 1995 and 1996 demurrage claims, but did not bar its 1997
demurrage claim. We reverse the district court’s calculation of damages, and
remand this case to the district court for recalculation of damages.
AFFIRMED IN PART, REVERSED AND REMANDED IN PART.
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