EMMET G. SULLIVAN, District Judge.
Plaintiff Overseas Philadelphia, LLC brought a one-count Complaint against Defendant World Council of Credit Unions, Inc. ("WCCU"), alleging (1) breach of the maritime contract entered into by the parties, and (2) breach of the implied duty of good faith and fair dealing. Pending before the Court is Defendant's Motion to Dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Upon consideration of the motion, the opposition and reply thereto, the relevant law, the record in this case, and for the reasons stated below, the Court will
On March 19, 2010, Plaintiff and Defendant entered into a maritime contract (the "Charter Party"), pursuant to which Defendant chartered the vessel owned by Plaintiff to carry 23,000 tons of wheat from the Gulf Coast to Addis Ababa, Ethiopia via the port of Djibouti. Compl. ¶ 6. The wheat was provided to Defendant at no cost by the U.S. Department of Agriculture ("USDA") under the Food for Progress Act ("FFPA"), 7 C.F.R. § 1499, et seq. Compl. ¶ 7. Paragraph 35 of the Charter Party provides: "This Charter Party is subject to all the provisions of the [FFPA], rules and regulations issued pursuant thereto and all applicable USDA regulations." Compl. Ex. A, at ¶ 35. One of the applicable regulations provides, in pertinent part, that "[t]he participant shall make all necessary arrangements for receiving the donated commodities in the targeted country, including obtaining appropriate approvals for entry and transit," and that "[a] participant shall arrange with the government of the targeted country that all donated commodities to be distributed will be imported and distributed free from all customs, duties, tolls, and taxes." Compl. ¶ 9 (citing 7 C.F.R. § 1499.8(a), (d)). Defendant concedes that it was a "participant" under the FFPA. Def.'s Mem. of P & A in Supp. of its Mot. to Dismiss ("Def.'s Mem.") at 2.
According to Plaintiff, the vessel loaded in a timely manner and departed from Galveston, Texas on April 15, 2010. Compl. ¶ 12. Soon after the vessel's departure, Plaintiff's agent, Phoenix Chartering ("Phoenix"), contacted Defendant's
The vessel arrived at the port of Djibouti on May 12, 2010. According to Plaintiff, however, the cargo documentation — in particular documentation to establish that Plaintiff could discharge the cargo free of duty — was still pending clearance with Ethiopian customs authorities. Id. ¶¶ 16-17. Therefore, the cargo could not be discharged and the vessel had to wait at anchorage. Id. Plaintiff asserts that Defendant could have paid the duty provisionally and sought reimbursement upon obtaining clearance so that discharge of the cargo could begin, but Defendant chose not to do so. Id. ¶ 18. During the time that the vessel was idled, Plaintiff secured, at its own expense, a lay berth within the port to safeguard the vessel and cargo until receiving clearance. Id. ¶ 19. Ethiopian customs cleared the cargo on May 21, 2010, and Plaintiff began discharging the vessel on May 23, 2010. Id. ¶ 20. Plaintiff alleges that, during the period from May 12 through May 23, 2010, it incurred significant charges including "daily operating costs, security, port charges and contractor truck charges." Id. ¶ 21. Plaintiff sent an invoice for these charges to Defendant on June 8, 2010, but Defendant has not paid the invoice. Id. ¶ 24.
On September 14, 2011, Plaintiff filed its Complaint alleging breach of contract and the implied duty of good faith and fair dealing. Plaintiff seeks recovery of damages it suffered due to Defendant's failure to obtain the necessary import documentation for discharge of the cargo prior to the vessel's arrival in Djibouti, despite Defendant's assurances that it had done or would do so. Id. ¶¶ 1, 28-29. Defendant has filed a Motion to Dismiss the Complaint pursuant to Rule 12(b)(6). In its Motion, Defendant argues that a clause of the Charter Party precludes Plaintiff from recovering damages because that clause places all risk, time, and expenses of discharge upon Plaintiff. The motion is ripe for determination by the Court.
A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C.Cir.2002). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotation marks and citations omitted). When ruling on a motion to dismiss under Rule 12(b)(6), a judge must accept as true all of the factual allegations contained in the complaint and grant the plaintiff the benefit of all inferences that can be derived from the facts alleged. Aktieselskabet AF 21 November 2001 v. Fame Jeans Inc., 525 F.3d 8, 15 (D.C.Cir.2008); Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C.Cir.1994). A court need not, however, "accept inferences drawn by plaintiff[] if such inferences are unsupported by the
Defendant argues — and Plaintiff does not dispute — that Plaintiff's claims are for "detention" damages. Def.'s Mem. at 5-6. Clause 18 of the Charter Party states, in relevant part: "The cargo is to be discharged at vessel's time, risk and expense with no demurrage, no despatch, no detention."
Detention damages are actual damages due the vessel owner for delay in the discharge of the cargo. Id. at 5 (citing GRANT GILMORE & CHARLES L. BLACK, JR., THE LAW OF ADMIRALTY 212-13 (2d ed. 1975)). Detention damages are equivalent to "demurrage," which is defined as "the sum which is fixed by the contract of carriage... as remuneration to the owner of a ship for the detention of his vessel beyond the number of days allowed by the charter-party for loading and unloading[.]" BLACK'S LAW DICTIONARY 432 (6th ed. 1990); see also Fregata Shipping Co. v. Star Carriers, S.A., No. 84-0756, 1987 WL 8716, at *2 n. 1 (D.D.C. Feb. 27, 1987) ("`Demurrage' is the charge assessed under the charter party to the charterer for detaining a vessel beyond the free time stipulated for loading and unloading."); Hellenic Lines, Ltd. v. Dir. Gen. of India Supply Mission, 319 F.Supp. 821, 831 (S.D.N.Y. 1970), aff'd on other grounds, 452 F.2d 810 (2d Cir.1971) (hereinafter, Hellenic I).
Plaintiff argues that a "no demurrage or detention" clause cannot excuse a charterer from liability for delays caused by its own actions. Instead, Plaintiff contends that such clauses are intended to cover only delays that are beyond the charterer's control. See Pl.'s Opp'n at 5-6. The
In Hellenic I, the freight contract between the parties contained a clause that provided that "no demurrage or despatch is applicable at either loading or discharging ports." 319 F.Supp. at 831. The court concluded that this clause "clearly excludes any claims against the defendant for delay in berthing the vessels or discharging cargo, contractual or noncontractual." Id.; see also Hellenic II, 467 F.2d at 1155-56 (concluding that "the `no demurrage' clause contained in the freight contracts... preclude[s] holding [defendant] liable for detention damages").
By contrast, Plaintiff argues that case law and arbitration awards support its argument that, in cases where the charterer or shipper's actions caused avoidable delay, a "no demurrage or detention" clause does not bar damages for breach of contract. Pl.'s Opp'n at 7-9. The authorities cited by Plaintiff, however, construe contractual language dealing with "full liner terms," rather than clauses precluding liability for demurrage.
As Defendant argues, Clause 18 of the Charter Party unambiguously precludes holding it liable for detention or demurrage. "Under federal maritime law, a court `may not look beyond the written language of the document to determine the intent of the parties unless the disputed contract provision is ambiguous.'"
Even if the Court did not conclude that the "no demurrage" clause prevents Plaintiff from seeking detention damages from Defendant, the Complaint does not contain factual allegations that, taken as true, would permit the Court to infer that Defendant breached any provision of the Charter Party. In order to state a claim for breach of contract in an admiralty case, a plaintiff must state: (1) the terms of the maritime contract; (2) that the contract was breached; and (3)
In addition, the Complaint fails to state a claim for breach of the implied duty of good faith and fair dealing. Plaintiff asserts that Defendant breached its implied duty of good faith and fair dealing by "failing to secure the necessary documentation and import permits before the Vessel arrived at the discharge port despite assurances from [Defendant's] agents that it had done or would do so," and "by allowing the Vessel to proceed to Djibouti without informing [Plaintiff] that the approvals necessary to effectuate the basic purpose of the Charter and allow discharge of the cargo had not in fact been secured." Compl. ¶ 29. Defendant argues that there are no factual allegations in the Complaint upon which the Court can infer bad faith motive or malice, without which there cannot be a breach of the implied duty. See Def.'s Mem. at 12. Plaintiff contends, however, that Defendant's failure to have the documentation in order before arrival caused substantial damages to Plaintiff, and that Defendant's failure to notify Plaintiff that the clearance would not be obtained prevented Plaintiff from being able to take steps to reduce its losses. Pl.'s Opp'n at 10-12.
"Every maritime contract imposes an obligation of good faith and fair dealing between the parties in its performance and enforcement." F.W.F., 494 F.Supp.2d at 1359 (citing Flores v. Am. Seafoods Co., 335 F.3d 904, 913 (9th Cir. 2003); Misano di Navigazione, SpA v. United States, 968 F.2d 273, 274-75 (2d Cir.1992)); see also, e.g., Gaujacq v. EDF, Inc., 601 F.3d 565, 580 (D.C.Cir.2010); Allworth v. Howard Univ., 890 A.2d 194, 201 (D.C.2006).
Plaintiff does not allege that Defendant's failure to obtain the import documentation by the time the vessel arrived at port had the effect of "injur[ing] or destroy[ing] the right of [Plaintiff] to receive the benefits of the agreement." F.W.F., 494 F.Supp.2d at 1359. Plaintiff also fails to allege facts that would permit the Court to conclude that Defendant's failure to obtain the import documentation within that time amounted to "violat[ing] standards of decency, fairness or reasonableness" or "engag[ing] in any arbitrary or capricious action" towards Plaintiff. Gaujacq, 601 F.3d at 580. As the allegations in the Complaint acknowledge, the necessary import documentation ultimately was obtained. Compl. ¶ 20. Plaintiff also alleges that Defendant breached the implied duty of good faith and fair dealing by failing to inform Plaintiff before the vessel's arrival that the clearance permits had not yet been secured. Compl. ¶ 29. However, Plaintiff does not allege sufficient facts to support an inference that Defendant's failure to inform Plaintiff of the delay was a violation of the "standards of decency, fairness or reasonableness" or that Defendant's omission was "arbitrary or capricious." Gaujacq, 601 F.3d at 580. Therefore, based on the minimal allegations Plaintiff has made regarding Defendant's actions, Plaintiff has failed to allege facts that would permit the Court to infer that Defendant acted with the requisite bad faith.
Accordingly, because Plaintiff has failed to allege sufficient facts to demonstrate that Defendant breached either the Charter Party or the implied duty of good faith and fair dealing, the Court will
For the foregoing reasons, Defendant's Motion to Dismiss the Complaint pursuant to Rule 12(b)(6) is