Revised August 8, 2000
UNITED STATES COURT OF
For the Fifth Circuit
CANAL BARGE COMPANY,
TORCO OIL COMPANY; GULFSTREAM
TRADING, LTD. COMPANY,
Appeal from the United States
for the Eastern District
July 20, 2000
Before KING, Chief Judge, and DUHÉ
and DeMOSS, Circuit Judges.
DeMOSS, Circuit Judge:
Torco Oil Company ("Torco")
appeals the magistrate judge's final judgment, after a bench
trial, awarding $90,766 to Canal Barge Company, Inc. ("Canal
Barge") for damages arising from the alleged contamination
and loss of use of a barge. Finding no error on the part of the
magistrate judge, we affirm.
On July 11, 1996, Gulfstream Trading,
Ltd. ("Gulfstream") agreed to purchase 18,000 barrels
of reconstituted fuel oil, also known as spent lube oil, from
Torco. Under the agreement, the delivery was to occur between
July 23 and July 25, 1996, at Torco's Chicago facility. The purchase
agreement further provided that an independent surveyor, Saybolt
Inc. ("Saybolt"), would conduct pre-loading and post-loading
inspections of the spent lube oil. Gulfstream had the responsibility
for procuring transportation.
As a result, Gulfstream's broker
Seahull contacted Canal Barge to transport the spent lube oil.
Canal Barge agreed to provide the tank barge CBC-501 to transport
the oil from Chicago to Louisiana.(1)
CBC-501 is a double-skinned tank
barge assigned to Canal Barge's "clean" fleet. Canal
Barge divides its barges into three separate fleets: 1) the "dirty"
fleet, 2) the "clean" fleet, and 3) the "chemical"
fleet. Both ships in the dirty and clean fleets transport petroleum
products, including spent lube oil. Those in the former primarily
transport heavy oil products such as No. 6 oil and are rarely,
if ever, cleaned while those in the latter concentrate on transporting
light oil products. Unlike the dirty barges, the clean ones are
periodically cleaned between loadings.
During the time of the charter agreement
with Gulfstream, CBC-501 was dedicated to a long-term contract
with Citgo Petroleum Corporation ("Citgo") for the
transportation of clean lube oil from Louisiana to Illinois.
For the CBC-501's return voyage to Louisiana, Canal Barge often
practiced "backloading" other petroleum products, including
spent lube oil. The charter agreement with Gulfstream was consistent
with that practice. After backloading spent lube oil, a clean
barge must be cleaned prior to being loaded with clean lube oil.(2) In the present case, CBC-501 was scheduled
for a cleaning after transporting the spent lube oil contracted
for on July 11.
After offloading Citgo's clean lube
oil, the CBC-501 was towed to Torco's Chicago facility to load
the spent lube oil from Torco's Tank 101. That tank is approximately
50 years old and was purchased by Torco from Amoco in 1981. It
has been dedicated to spent lube oil storage and has never been
cleaned by Torco. Since Torco's purchase, Tank 101 has been drained
to its lowest level no more than one or two times.
When the CBC-501 arrived at the
facility on July 26, Torco did not have enough barrels of oil
in Tank 101 to fulfill the 18,000 barrel contract. Therefore,
Torco officials determined to get every drop out of Tank 101
that they could and to load it onto the CBC-501. Normally, whenever
Tank 101 contained an insufficient quantity of oil to fulfill
a contract, Torco's practice was to monitor the transfer from
the tank to the barge and to shut off the pump before the level
of liquid in the tank fell to the bottom and the pump started
sucking air. But at the time of loading the spent lube oil onto
the CBC-501, the gauge on Tank 101 that discloses the quantity
of product in the tank, as well as the amount being pumped out,
was broken. The Torco worker assigned to monitor the pump hose
permitted the pump to suck air for five to ten minutes.
After the loading was complete on
July 27, the CBC-501 traveled to Louisiana, arriving on August
4, 1996. That day, unloading of the spent oil lube occurred,
but nearly 188 barrels could not be discharged. Before loading,
there had only been 37 barrels of oil from the prior cargo on
board the CBC-501. Because of the discrepancy, Saybolt made a
letter of protest on behalf of Gulfstream. Of the oil that had
been discharged from the CBC-501, Saybolt analyzed and determined
those barrels of oil as meeting Gulfstream's specifications.
The analysis was not designed to test for the presence of benzene.
On August 6, the CBC-501 arrived
at T.T. Coatings, Inc.'s ("TTC") facility for its scheduled
cleaning. After butterworthing the barge, TTC officials observed
at the bottom of the tanks a three to four inch residue of heavy,
black, tar-like sludge on which a person could walk without sinking.
The sludge looked more like No. 6 oil bottoms or shore tank bottoms
rather than residue from spent lube oil. According to Canal Barge's
expert Richard Silloway, Torco's hose sucking air while draining
Tank 101 allowed for the shore tank bottoms to flow into the
barge. Such bottoms consist of a suspension of solids and semisolids
in liquid, which precipitate out from the liquid over time, settle
to the bottom, and are not generally pumped out or pumpable through
the tank's system. In the present case, Silloway testified that
the tank bottoms became entrained in the liquid as the tank was
drained, and they were sucked out with the oil. The resulting
sludge could not be removed from the barge by the ordinary cleaning
On August 8, TTC moved the CBC-501
to its repair yard because TTC officials believed that the cleaning
would take two to three weeks and TTC had a three-week backlog
of orders to do at the cleaning plant. During this time, Canal
Barge had the barge's boiler replaced, which took two to three
days. Canal Barge also notified Gulfstream about the sludge problem
on August 9, to recover its costs pursuant to the charter agreement.(3) It further submitted two bids for
the cleaning to Gulfstream on August 16, but Gulfstream refused
to pay for the cleaning and disposal costs. Moreover, Gulfstream
did not inspect the barge or attempt to reclaim the 188 barrels
of sludge. On August 30, the barge was returned to the cleaning
facility, and the cleaning began on September 4.
TTC officials testified that whenever
it cleans heavy tank bottoms, federal and state regulations require
testing of the material for hazardous components. TTC hired Environmental
Analysts, Inc. ("EAI"), to do the analysis, and EAI
reported that the material was found to contain hazardous materials
as per Environmental Protection Agency ("EPA") regulatory
thresholds promulgated in 40 C.F.R. part 261 and that the hazardous
constituent was .971 parts per million (ppm) of benzene. The
regulatory threshold for benzene in solid waste is .5 ppm. Pursuant
to 40 C.F.R. part 261 and EAI's report, TTC officials determined
that the material was hazardous.
On September 16, TTC began to muck
out the sludge by hand and shovel into drums for disposal. TTC
officials testified that there was no market for this material
and that it had to pay a third party to dispose of the waste.
The certificate of disposal and some testimony indicated that
the sludge was eventually used for energy recovery. After the
sludge was removed, the CBC-501 underwent additional hot-water
and chemical cleaning and was placed back into service on October
25, 1996, 80 days after arriving at the TTC facility. Canal Barge
incurred total costs of $60,966 for the necessary cleaning, disposal,
Because Gulfstream failed to pay
for the costs of cleanup, Canal Barge filed suit against Gulfstream
and Torco. Canal Barge charged Gulfstream with breach of contract
and negligence and averred a negligence claim against Torco.(4) After a bench trial, the magistrate
judge made findings of fact and conclusions of law, ruling in
favor of Canal Barge and holding Gulfstream and Torco jointly
and severally liable. But the magistrate judge reduced the amount
by $5,720 because some of the disposal costs were wrongly calculated
in the total costs. In addition to the cleanup costs, the magistrate
awarded demurrage charges of $35,520.(5)
While laid up for cleaning, the CBC-501 was unable to perform
its contract work with Citgo. All of Canal Barge's other clean
barges were in operation, and the company had no other comparable
ships. Although Canal Barge utilized some smaller barges from
its spot market to service the Citgo contract, a Canal Barge
official testified that those barges were in an active market
and would have been used for other jobs. Despite the lack of
documentation, the magistrate judge credited the testimony of
Canal Barge's official and allowed lost profits or detention
charges of $480/day.(6) This appeal
by Torco ensued.
When a judgment after a bench trial
is on appeal, we review the findings of fact for clear error
and the legal issues de novo. See Gebreyesus v. Schaffer
& Assocs., Inc., 204 F.3d 639, 642 (5th Cir. 2000)
(quoting FDIC v. McFarland, 33 F.3d 532, 536 (5th
Cir. 1994)). Under the clearly erroneous standard, we will reverse
only if we have a definite and firm conviction that a mistake
has been committed. See Mid-Continent Cas. Co. v. Chevron
Pipe Line Co., 205 F.3d 222, 229 (5th Cir. 2000). "The
burden of showing that the findings of the district court are
clearly erroneous is heavier if the credibility of witnesses
is a factor in the trial court's decision." Dunbar
Medical Sys., Inc. v. Gammex, Inc., 2000 WL 797247, No.
99-20274 at *9 (5th Cir. June 21, 2000) (quotation marks omitted).
That's because "due regard shall be given to the opportunity
of the trial court to judge of the credibility of the witnesses."
Fed. R. Civ. P. 52(a); Torch, Inc. v. Alesich,
148 F.3d 424, 426 (5th Cir. 1998) ("The factual findings
of the trial court in a bench trial may not be set aside unless
clearly erroneous and due regard must be given to its credibility
evaluations."); Ruiz v. Estelle, 679 F.2d
1115, 1131, amended in part & vacated in part, 688
F.2d 266 (5th Cir. 1982) ("[I]n a bench trial the assessment
of witness credibility is inherently his province."). We
cannot second guess the district court's decision to believe
one witness' testimony over another's or to discount a witness'
testimony. See Brister v. Faulkner, 214 F.3d 675,
684, (5th Cir. 2000). Thus, we are reluctant to set aside findings
that are based upon a trial judge's determination of the credibility
of witnesses giving contradictory accounts. See Ruiz,
679 F.2d at 1131.
In contesting the judgment, Torco
raises several legal and factual arguments: 1) the magistrate
judge wrongly admitted the testimony of Richard Silloway, Canal
Barge's expert testimony, with respect to the area of fluid dynamics;
2) the magistrate judge improperly inferred a legal duty on the
part of Torco to Canal Barge; 3) the magistrate judge erred in
determining that Torco's method of draining Tank 101 violated
industry custom; 4) the magistrate judge erred in concluding
that the product remaining on board the CBC-501 was a hazardous
material under EPA standards; and 5) the magistrate judge should
not have awarded Canal Barge lost profits. We review each of
Torco's points of error in turn.
The admission of Silloway's testimony
is reviewed for abuse of discretion. See Seidman v. American
Airlines, Inc., 923 F.2d 1134, 1138-39 (5th Cir. 1991).
Pursuant to Federal Rule of Civil Procedure 26(a)(2), Canal Barge
was obligated to submit Silloway's expert report 90 days before
the pre-trial conference. That report did not deal with fluid
dynamics or the process of draining land based storage tanks.
Nevertheless, Canal Barge attempted to qualify Silloway on those
topics; whereupon, Torco objected. The magistrate sustained the
objection. In the cross-examination, however, Torco's counsel
asked Silloway some questions about whether the tank bottoms
would "settle out" inside a tank and stay there and
whether a normal tank system would pump the bottoms out. To these
questions, Silloway answered that in a normal tank system, the
bottoms would not be sucked out. Interpreting the questions and
the answers as vague, the magistrate judge elicited further testimony
from Silloway as to whether the bottoms would have been pumped
out in a system like Torco's Tank 101.
Reviewing the trial transcript,
we conclude that Torco opened the door to Silloway's testimony.
See Rizzo v. Corning Inc., 105 F.3d 338, 341-42
(7th Cir. 1997). In essence, Torco's questions pertained to fluid
dynamics and whether the shore tank bottoms could be pumped out
of the tank. Due to the manner in which he was questioned, Silloway
gave an unclear answer that did not actually comport with his
views on the transferability of the shore tank bottoms. Hence,
the magistrate judge was merely clarifying the cross-examination
and seeking to understand the discussion of fluid dynamics that
Torco had surreptitiously initiated. Accordingly, we find no
abuse of discretion in admitting Silloway's testimony.(7)
Torco's second point of error concerns
the district court's ruling that Torco negligently pumped the
spent lube oil into the CBC-501, thereby causing the residue
buildup and the resulting cleanup costs. When analyzing maritime
tort cases, we rely on general principles of negligence law.
See Daigle v. Point Landing, Inc., 616 F.2d 825,
827 (5th Cir. 1980); Casaceli v. Martech Int'l, Inc.,
774 F.2d 1322, 1328 (5th Cir. 1985) (citing Daigle).
To establish maritime negligence, a plaintiff must "demonstrate
that there was a duty owed by the defendant to the plaintiff,
breach of that duty, injury sustained by [the] plaintiff, and
a causal connection between the defendant's conduct and the plaintiff's
injury." In re Cooper/T. Smith, 929 F.2d 1073,
1077 (5th Cir. 1991). Here, Torco maintains that it owed no legal
duty to Canal Barge. According to Torco, no cases specifically
hold that a third-party cargo supplier, not contractually bound
to a shipowner, owes a duty to the shipowner. Furthermore, Torco
argues that if it had a duty, that duty only extended to foreseeable
hazards. Because Torco had no knowledge of the kind of barge
that Canal Barge planned on using and because a dirty barge could
have transported the spent lube oil and would not have required
the cleanup costs, it contends that it had no reason to suspect
that the spent lube oil product would pose any hazard to the
"'Whether a defendant owes
a plaintiff a legal duty is a question of law.'" Florida
Fuels, Inc. v. Citgo Petroleum Corp., 6 F.3d 330, 333
(5th Cir. 1993) (quoting Chavez v. Noble Drilling Corp.,
567 F.2d 287, 289 (5th Cir. 1978)); Consolidated Aluminum
Corp. v. C.F. Bean Corp., 833 F.2d 65, 67 (5th Cir. 1987)
("Determination of the tortfeasor's duty, and its parameters,
is a function of the court."). In Ionmar Compania
Naviera, S.A. v. Olin Corp., 666 F.2d 897, 904 (Former
5th Cir. 1982), the former Fifth Circuit held that a manufacturer/shipper
of a product had a duty to warn a shipowner of the foreseeable
hazards inherent in the cargo of which the ship's master could
not reasonably have been expected to be aware. Conversely, the
shipper had no duty to warn the shipowner of hazards of which
the shipowner was aware or could reasonably have been expected
to be aware. See id. Although Ionmar
involved a shipper and shipowner who were in contractual privity,
we still find the case instructive because the shipper's duty
was predicated on tort, not contract, principles. See id.
Indeed, Ionmar is consistent with this circuit's
general statements on maritime negligence. As this circuit has
recognized in the past, the determination of whether a party
owes a duty to another depends on a variety of factors, "most
notably the foreseeability of the harm suffered by the complaining
party." Consolidated, 833 F.2d at 67. "'Duty
. . . is measured by the scope of the risk that negligent conduct
foreseeably entails.'" Id.; see also
2 Thomas J. Schoenbaum, Admiralty and Maritime Law §
5.2, at 159 (2d ed. 1994). To explicate that concept, this circuit
noted the following in Consolidated:
We perceive a harm to be the foreseeable
consequence of an act or omission if harm of a general sort to
persons of a general class might have been anticipated by a reasonably
thoughtful person, as a probable result of the act or omission,
considering the interplay of natural forces and likely human
at 68. With that statement and Ionmar in mind,
we address Torco's second point of error.
According to elementary fluid dynamics,
draining a tank with a suction pipe near the bottom to the point
that it sucks air will create a greater tendency for the tank's
bottoms to be drawn into the suction pipe and transported out.(8) Combine that knowledge, which a reasonably
prudent person would have known, with the fact that Torco knew
that there were tank bottoms in Tank 101 but had never tested
the bottoms or cleaned the tank, and it was foreseeable that
Torco's decision to "get every drop out of Tank 101,"
despite a broken tank gauge, and to allow the hose to suck air
would pump shore tank bottoms into the CBC-501, damaging that
boat. And although Canal Barge used a clean, rather than a dirty,
boat to transport the oil, that decision did not preclude the
existence of a duty on the part of Torco to Canal Barge. Clean
boats were at times used to transport spent lube oil; thus, it
was foreseeable that a clean barge would be brought to Torco's
oil facility. Moreover, even dirty barges must be cleaned, and
Canal Barge would have ultimately had to dispose of the residue
material. Accordingly, we believe that Torco could have anticipated
that its decision to drain Tank 101 down to the bottom and its
failure to stop the loading of oil before the sucking of air
would likely result in the harm suffered by Canal Barge, and
therefore, we find no error in the magistrate judge's implicit
conclusion that Torco owed a duty to Canal Barge.
Closely aligned with the element
of duty is Torco's next point of error that the magistrate judge
wrongly determined that Torco's method of draining Tank 101 violated
industry custom. Although custom itself does not create a duty,
"custom may help define the standard of care a party must
exercise after it has undertaken a duty . . . ." See
Florida Fuels, 6 F.3d at 334. First off, we note that
there is little, if any discussion, of actual industry custom
in the magistrate judge's findings of fact and conclusions of
law, let alone the trial record. Other than a single reference
to Silloway's comment that a reasonable operator would not drain
a shore tank to a level where the pump is sucking air when the
operator knows that the bottoms contain sludge, there is no other
statement that indicates that the magistrate judge may have considered
the issue of custom. Thus, we are not of the view that custom
played a role in necessarily establishing the standard of care.
In any case, we conclude that the
magistrate judge did not clearly err if it presumed that Torco's
draining of Tank 101 did violate industry custom. Notwithstanding
the testimony that draining of a tank to the bottom had occurred
on a few rare occasions and that problems had not ensued from
those acts, the magistrate judge was the trier of fact, and he
heard contradictory testimony that reasonable operators tested
their tanks and did not drain them to the bottom. We must give
due regard to his specific credibility determinations, and nothing
leaves us with the definite and firm conviction that a mistake
has been committed.
Torco next asserts that the magistrate
judge incorrectly determined that the sludge product that remained
on the CBC-501 was hazardous. It essentially disagrees with the
court's assessment that TTC and Canal Barge did not err when
they construed the residue pursuant to part 261 of the Code of
Federal Regulations, rather than part 279. In general, part 279
governs the transportation and management of used oil and used
oil residue. See 40 C.F.R. part 279. It excludes used
oil that is to be used for energy recovery and certain other
purposes from the hazardous waste regulations of part 261. See
id. § 279.10. Two of its subsections provide
in pertinent part:
(a) Used Oil. EPA presumes that
used oil is to be recycled unless a used oil handler disposes
of used oil, or sends used oil for disposal. Except as provided
in § 279.11, the regulations of this part apply to used
oil, and to materials identified in this section as being subject
to regulation as used oil, whether or not the used oil or material
exhibits any characteristics of hazardous waste identified in
subpart C of part 261 of this chapter.
(e)(2) Materials produced from used
oil that are burned for energy recovery (e.g. used oil fuels)
are subject to regulation as used oil under this part.
See id.(a) & (e)(2). Torco contends that the
residue was used oil that was ultimately used for energy recovery
and that should have been regulated by part 279.
EPA regulations, however, differentiate
between used oil set for energy recovery and solid hazardous
waste. Compareid. part 279, with id.
part 261. Solid waste may include discarded material, which is
material that has often been abandoned. See generally id.
§ 261.2. If the product is solid waste, then it is classified
as hazardous waste based on certain characteristics of the material.
See id. § 261.3. For example, solid waste
that contains a certain level of contaminants, such as a benzene
level greater than .5 ppm, constitutes hazardous waste. See
id. § 261.24.
Because neither Torco or Gulfstream
wanted the residue that was inside CBC-501, Canal Barge and TTC
viewed the material as discarded, or abandoned. That material
was found to be solid. Thereafter, that solid waste was tested
for contaminants and discovered to have a benzene level greater
than .5 ppm. Hence, Canal Barge and TTC treated the residue,
or tank bottoms, as hazardous material.
Reviewing those facts, we see no
error on the part of the magistrate judge in construing the discarded
residue material as hazardous waste. In light of the fact that
no one attempted to recover the residue, it was not clearly erroneous
for the magistrate judge to believe that the residue had been
abandoned and was, thus, discarded material. Although some conflicting
testimony existed regarding the liquid or solid nature of the
material, the magistrate judge made specific credibility determinations
to conclude that the material was solid. We give due deference
to those determinations. Considering that even Torco's expert
testified that if the residue were found to have been solid and
discarded, it had to be classified as hazardous due to its benzene
level, we find no error in the magistrate judge's conclusion.
Lastly, Torco challenges the magistrate's
award of damages, in particular the amount for lost profits or
detention damages. It argues that Canal Barge has failed to adequately
document and support its claims for lost profits and that the
delays in repair should not have been included in the calculation
A district court's determination
of damages is a factual finding that will be set aside only if
clearly erroneous. See Marine Transport Lines, Inc. v.
M/V Tako Invader, 37 F.3d 1138, 1140 (5th Cir. 1994).
"`A ship owner is entitled to damages for the loss of use
of its vessel in addition to the cost of repairs of the vessel.'"
See id. (quoting Kim Crest, S.A. v. M.V.
Sverdlovsk, 753 F. Supp. 642, 649 (S.D. Tex. 1990)).
Included in such computations are damages resulting from reasonable
delays in repair time. See Domar Ocean Transp., Ltd. v.
M/V Andrew Martin, 754 F.2d 616, 619 (5th Cir. 1985).
The ship owner has the burden to prove lost profits. See Dow
Chemical Co. v. M/V Roberta Tabor, 815 F.2d 1037, 1042
(5th Cir. 1987). To recoup damages for lost profits, "[s]omething
more than the simple fact that the vessel was laid up for repairs
must be shown - a market for the vessel must be shown."
See In re M/V Nicole Trahan, 10 F.3d 1190, 1194
(5th Cir. 1994). But we do not require that lost profits be proven
specifically. See id. at 1195. They need only be
proven "with reasonable certainty." See Domar
Ocean, 754 F.2d at 620 (quoting The CONQUEROR,
17 S. Ct. 510, 516 (1897)).
Here, David Lane, a Canal Barge
officer, testified about the CBC-501's charter with Citgo, that
the barge would have continuously hauled clean lube oil from
Louisiana to Illinois, that the clean lube fleet was being used
at full capacity, and that the historical profitability of the
barge was $502/day. Canal Barge was able to utilize other barges
to fulfill the Citgo contract after the CBC-501 had to be taken
in for cleaning, but Lane testified that lost profits arose from
the lost "spot market" opportunities that the other
barges would have serviced. The magistrate found Lane's testimony
credible and awarded lost profits. After having reviewed the
trial record, we conclude that the magistrate did not clearly
err when it credited Lane's testimony as sufficiently supportive
of a lost profits calculation. As previously noted, we give due
regard to the magistrate judge's credibility determinations,
and we are not left with a firm and definite conviction that
a mistake has been committed.
As for the damages from the delays
in the repairs, Torco makes two primary arguments: 1) Canal Barge
handled the residue as hazardous material, which resulted in
a much more laborious and time-consuming task; and 2) although
the CBC-501 was at TTC's facility from August 6 to October 25,
the actual cleaning operations took less time, and Canal Barge's
other vessels were cleaned ahead of CBC-501 preventing its immediate
cleaning. Because we find that the treatment of the residue as
hazardous material was not error, Torco's first basis for challenging
the cleanup costs is unavailing. Regarding Torco's second argument,
we acknowledge that a considerable time delay occurred, but we
find no error in the damages calculation because the delay is
excusable. First, much of the delay resulted from Canal Barge's
discussion of the sludge problem with Gulfstream. We will not
punish Canal Barge for the fact that those who were responsible
for its damages were dilatory or non-responsive in their actions.
And as previously noted, some additional time had to be expended
because the residue was treated as hazardous waste. For example,
TTC had to wait for the hazardous waste barrels to arrive from
the supplier. As for Torco's argument that some delay resulted
from the backlog of cleaning orders at TTC, specifically Canal
Barge's other barges having to be cleaned, we find it meritless.
Under Torco's logic, Canal Barge could only get lost profits
for the delays if the backlog were due to ships of other companies.
But making that distinction is senseless, considering the fact
that if Canal Barge had moved the CBC-501 ahead of its other
barges that were ready for repair, then those other barges would
have incurred lost profits, which they would have made after
being fixed. Torco's argument merely replaces one barge with
another in the damages equation. Accordingly, we affirm the magistrate
judge's lost profits and damages calculation.
For the foregoing reasons, we conclude
that the magistrate did not err in making its findings of fact
and conclusions of law. Therefore, we affirm the final judgment
of the magistrate judge.
1. This was the
fourth of four charter agreements that Canal Barge entered into
with Gulfstream during 1995 and 1996 to transport spent lube
oil from Torco's Chicago facility to Louisiana. The other charter
agreements had transpired without incident.
2. Routine cleaning
of a clean fleet barge is known as "butterworthing"
and usually takes two to three days at a cost of $4,500 to $7,500.
That cost was factored into the rate that Canal Barge charged
Gulfstream under the charter agreement.
3. The cleaning
provision of the charter party provided that "[a]ny cleaning
required subsequent to the movement contemplated hereunder as
a result of tank contamination or unusual buildup of cargo residue
shall be for shipper's account and time so spent shall be counted
as used laytime."
4. The magistrate
judge also recognized Canal Barge as having asserted a maritime
products liability claim, a breach of warranty claim, and/or
a claim predicated on Canal Barge having been the third-party
beneficiary of the contract between Gulfstream and Torco. But
its ruling only addressed Canal Barge's negligence tort claim.
5. The contractual
demurrage charge under the charter agreement was $480 per day.
The magistrate judge multiplied that amount by 74 days, the time
the barge was out of commission [80 days - 6 days, the time required
for the boiler work and the regular cleanup].
6. Canal Barge
had claimed lost profits of $502 per day, but the magistrate
judge went with the contractual demurrage charge of $480 per
7. We also note
that Torco did not apparently object at the time of the magistrate
judge's questioning, although it may have been assuming that
its prior objection was still in effect or running. When a party
fails to object at trial, the standard of review is plain error.
8. That is because
draining to the tank's bottom creates more lateral flow at a
higher velocity across the bottom of the tank, thereby entraining
the bottoms into the liquid and allowing those bottoms to be
sucked out of the pipe.