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Greger Pacific Marine, Inc. v. Oregon Offshore Towing, Inc.

United States District Court, D. Oregon

July 10, 2014

GREGER PACIFIC MARINE, INC., Plaintiff,
v.
OREGON OFFSHORE TOWING, INC., Defendant.

Michael E. Haglund and Michael K. Kelley, HAGLUND KELLEY LLP, Portland, OR, Of Attorneys for Plaintiff.

Michael G. Hanlon, LAW OFFICES OF MICHAEL G. HANLON, Portland, OR, Robert A. Green, LAW OFFICES OF ROBERT A. GREEN, INC., P.S., Seattle, WA, Of Attorneys for Defendant.

OPINION AND ORDER

MICHAEL H. SIMON, District Judge.

In this admiralty case, Plaintiff, Greger Pacific Marine, Inc. ("Greger Pacific"), seeks to recover for the loss of two barges that sank while being towed by Defendant, Oregon Offshore Towing, Inc. ("Oregon Offshore"), from Pearl Harbor, Hawaii to San Francisco, California. Greger Pacific claims that the two barges (known as "the Weeks 243" and "the DB-560") sank as a result of Oregon Offshore's gross negligence. Oregon Offshore asserts two counterclaims, breach of contract and breach of warranty, seeking to recover $132, 500 under the parties' charter towing agreement. Oregon Offshore moves for summary judgment, arguing: (1) both barges were unseaworthy as a matter of law, thereby relieving Oregon Offshore from any liability to Greger Pacific; (2) Greger Pacific was not the owner of the Weeks 243 barge at the time of loss and thus may not assert a claim for the loss of that barge; and (3) Oregon Offshore is entitled under its contract with Greger Pacific to be paid the agreed-upon towage fee that became "irrevocably" due upon the commencement of the tow. For the reasons that follow, Oregon Offshore's motion for summary judgment is DENIED on all three grounds.

STANDARDS

A party is entitled to summary judgment 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." Fed.R.Civ.P. 56(a). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1257 (9th Cir. 2001). Although "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge... ruling on a motion for summary judgment, " the "mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient...." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 255 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).

BACKGROUND[1]

Greger Pacific is a California corporation that provides ocean towing, tow rigging, and harbor tug and barge services to the maritime industry along the West Coast. Ronald Greger is the founder and Vice President of Greger Pacific. Oregon Offshore is an Oregon corporation that owns and operates tugboats and tows barges for hire. Jerry White is the President of Oregon Offshore and is responsible for its operations.

In May 2011, Greger Pacific purchased the DB-560, a 120-foot inland derrick barge built in 1944, from a seller in Hawaii. Greger Pacific paid $80, 000 for the DB-560. In July 2012, a company affiliated with Mr. Greger purchased the Weeks 243, a 175-foot flat deck inland crane barge built in 1962, also from a seller in Hawaii.[2] Greger Pacific paid $1 plus "other valuable consideration" for the Weeks 243.

Greger Pacific wanted to transport both barges from Hawaii to San Francisco. Before purchasing the Weeks 243, Mr. Greger hired Dana Teicheira, a maritime surveyor with more than 30 years of experience in the maritime industry, to perform a "condition and valuation" survey of both barges. In his survey, Mr. Teicheira recommended that some repairs be made to both barges. Mr. Teicheira also has submitted a declaration in this action, opining that he believed the DB-560 was "in adequate condition to be towed from Honolulu to San Francisco."[3] Teicheira Decl. ¶ 19. Regarding the DB-560 specifically, Mr. Teicheira reported in his survey that there were "heavy indentations to the deck, " and he recommend that Greger Pacific "seal the holes watertight, and then apply 4" to 6" thick asphalt or concrete wear." Id. In his declaration, Mr. Teicheira explains that he did not actually discover any "holes" that needed to be filled and that the "indentations, " which he did recommend be filled, did not affect the barge's watertight integrity. Id.

In addition to Mr. Teicheira's statements about the seaworthiness of the DB-560, Mr. Greger submitted his own declaration opining about the seaworthiness of both barges. Mr. Greger states that he personally examined both barges before the towing commenced and, after applying marine plywood cover to two open hatches on the deck of the DB-560, he believed that both barges were seaworthy for the Hawaii to San Francisco transit. Greger Decl. ¶ 9.

In August 2012, Greger Pacific and Oregon Offshore entered into a written towing agreement for Oregon Offshore to tow the two barges in tandem from Hawaii to California. Oregon Offshore sent its standard form towage contract (the "Towage Agreement") to Greger Pacific, and on August 18, 2012, Greger Pacific returned the signed Towage Agreement by email.

Both the Towage Agreement and federal regulations required that Greger Pacific tender the barges for tow in "seaworthy condition, " meaning fit for sea travel. The Coast Guard also required that a barge that will be towed from Hawaii to the continental United States obtain a load line certificate (or a trip permit or exemption letter), which is intended to ensure the overall seaworthiness of the vessel. See U.S. COAST GUARD, LOAD LINE POLICY NOTES § 1 (2008), available at http://www.uscg.mil/hq/cg5/cg5212/docs/LLPN.pdf. Greger Pacific, however, did not obtain a valid load line certificate (or either a trip permit or exemption letter) for either the Weeks 243 or the DB-560. The Coast Guard later penalized Greger Pacific for not doing so. In addition, Greger Pacific did not obtain insurance for either of the barges. This was allegedly in violation of the Towage Agreement, which further provided that if one party fails to obtain insurance or is in violation of its insurance policy, then that party is deemed to be an insurer (or self-insurer) and shall accept or pay claims that would have otherwise been submitted to the insurance company.

The Towage Agreement also contains a requirement disclosure provision. Paragraph 3(B) of the Towage Agreement provides in relevant part: "Customer [Greger Pacific] warrants that... it has informed Owner [Oregon Offshore] of any special circumstances or conditions applicable to the Tow or the cargo which may affect the Owner's performance of services under this agreement." Green Decl., Attachment 3, at 3. Greger Pacific did not provide copies to Oregon Offshore of the surveys prepared by Mr. Teicheira or any other information regarding the condition of either barge.

Oregon Offshore's tug, the Ocean Eagle, left Hawaii with the two barges in tow on September 4, 2012. The Ocean Eagle towed the two barges in a tandem formation, with the DB-560 in front and the Weeks 243 in back, at the instruction of Mr. White, the President of Oregon Offshore. In his deposition, Captain Dennis Cooley, the captain of the Ocean ...


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