Aegean Mar. Petroleum S.A. v. KAVO PLATANOS M/V

646 F.Supp.3d 1347

AEGEAN MARITIME PETROLEUM S.A., Plaintiff, v. KAVO PLATANOS M/V, et al., Defendants.

CASE NO. 2:15-cv-00172-JHC

United States District Court, W.D. Washington, at Seattle

Signed December 16, 2022

J. Stephen Simms, Pro Hac Vice, Simms Showers LLP, Baltimore, MD, Christopher W. Nicoll, Jeremy Jones, Nicoll Black & Feig PLLC, Seattle, WA, for Plaintiff.

David R. Boyajian, Schwabe Williamson & Wyatt, Seattle, WA, Colin Jeffrey Folawn, Schwabe Williamson & Wyatt, Portland, OR, for Defendants Canpotex Shipping Services Ltd., Indy Maritime SA, Gourdomichalis Maritime SA.

ORDER GRANTING MOTION TO DISMISS WITHOUT PREJUDICE

John H. Chun, United States District Judge

IINTRODUCTION

This matter comes before the Court on Defendant Canpotex Shipping Services, Ltd.'s Motion to Dismiss the Amended Complaint. Dkt. # 82. The Court has considered the materials filed in support of, and in opposition to, the motion, the applicable law, and the balance of the case file. Being fully advised, the Court GRANTS the motion to dismiss without prejudice and grants Aegean leave to file a second amended complaint. The Court grants Aegean twenty-one (21) days to file this amended complaint.

IIBACKGROUND

In 2014, Defendant Canpotex chartered a vessel, the M/V KAVO PLATANOS (Vessel). Dkt. # 82 at 3. In October 2014, Canpotex contracted with O.W. Bunkers (U.K.), Ltd. (OW) to have 900 metric tons of bunker fuel delivered to the Vessel in Vancouver, Canada. Dkt. # 79-1. OW then contracted with Plaintiff Aegean Maritime Petroleum S.A. (Aegean) to deliver the bunker fuel to the Vessel. Dkt. # 79-3. Aegean delivered the fuel, and the Vessel's Chief Engineer accepted the delivery. Dkt. # 79-4. In November 2014, OW declared bankruptcy. Dkt. # 82 at 3. Aegean sent an invoice to OW for the bunker fuel but never received payment. Id. So Aegean then sent Canpotex a Notice to Pay for $463,050, the cost of the bunker fuel delivery. Dkt. # 54. Canpotex did not pay Aegean.

In February 2015, Aegean brought suit against the Vessel in rem and against Defendants Canpotex, Indy Maritime SA (the owner of the Vessel), and Gourdomichalis Maritime SA (the manager of the Vessel) to recover for the bunker fuel delivery. Dkt. # 1. Soon after Aegean's initial complaint was filed, this Court authorized the arrest and seizure of the Vessel (including all bunkers aboard) and a writ of maritime attachment and garnishment. Dkt. ## 9, 12. Based on the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions Rules B, C, and D (Supplemental Maritime Rules), the Court determined that the conditions for an action in rem were present. Dkt. # 9 at 1. The Court also concluded that a writ of maritime attachment and garnishment was appropriate under Supplemental Rule B. Dkt. # 12 at 1. Canpotex then posted $494,013 with this Court as a substitute security to secure release of the Vessel.¹ Dkt. # 21.

In May 2015, Canpotex moved to dismiss, transfer, or stay the action. Dkt. # 34. This Court granted a stay pending resolution of cases in the Southern District of New York, where similar legal issues were being litigated relating to OW's bankruptcy. Dkt. # 54. The Court stayed the case for six years. During that period, the parties submitted regular status updates. Dkt. ## 55-70. The "test cases" in the Southern District of New York have since been resolved. They generally hold that under United States maritime law, subcontractors (like Aegean) delivering bunker fuel do not have valid maritime liens over vessels for nonpayment unless they can show that the contractor (in this case OW) was acting as an "agent" of the Vessel to engage specific subcontractors. U.S. Oil Trading LLC v. M/V VIENNA EXPRESS, 911 F.3d 652, 662-63 (2d Cir. 2018). On facts much like those here, OW was not considered an "agent," so the subcontractor that delivered fuel did not have a maritime lien against the involved vessel. Clearlake Shipping Pte Ltd. v. NuStar Energy Servs., Inc., 911 F.3d 646, 651-52 (2d Cir. 2018); see also Aegean Bunkering (USA) LLC v. M/T AMAZON, 730 F. App'x 87, 89 (2d Cir. 2018); O'Rourke Marine Servs. L.P., L.L.P. v. M/V COSCO HAIFA, 730 F. App'x 89, 91 (2d Cir. 2018); Chemoil Adani Pvt. Ltd. v. M/V MARITIME KING, 742 F. App'x 529, 531 (2d Cir. 2018).

After the Court lifted the stay in December 2021, see Dkt. # 70, Canpotex moved to dismiss the case given the new Southern District of New York decisions. Dkt. # 77. Aegean then amended its complaint, bringing several claims:

(1) Under Canadian law, Aegean has an in rem maritime lien over the Vessel, and is thus entitled to the substitute security for the unpaid bunker fuel delivery.

(2) Canpotex breached the terms of its contract with OW—which was subject to Aegean's terms and conditions—by not paying Aegean for the bunker fuel delivery.

(3) Even if no contract terms exist between Canpotex and Aegean, Aegean has a quantum meruit claim for the substitute security because Canpotex received the benefit of the bunker fuel and never paid for it.

(4) Under Aegean's terms and conditions, Aegean still has title to the bunker fuel onboard the Vessel because it was never paid for its delivery.

(5) Under Supplemental Maritime Rule B, this Court should maintain its order of Maritime Attachment and Garnishment and award Aegean the substitute security.

Dkt. # 79.

In March 2022, Canpotex filed this motion to dismiss Aegean's amended complaint for failure to state a claim upon which relief can be granted. Dkt. # 82.

IIIDISCUSSION

A. 12(b)(6) Motion to Dismiss Standard

Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss a claim if it "fails to state a claim upon which relief can be granted." To survive a Rule 12(b)(6) motion, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Plaintiffs must plead enough facts that the court can "draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. For Rule 12(b)(6) motions, the court does not accept all legal conclusions in the complaint to be true, so conclusory statements of law or "formulaic recitation of the elements of a cause of action" are not sufficient. Id.

B. Judicial Estoppel

Canpotex argues that the Court should reject Aegean's maritime lien theory based on judicial estoppel.² Dkt. # 82 at 2. This, Canpotex says, is because Aegean's new maritime lien theory—that Canadian law governs the existence of a maritime lien—contradicts the allegations in Aegean's initial complaint, in which it argued that its lien claim is governed by U.S. law. Id.

Judicial estoppel is an equitable doctrine meant to "protect the integrity of the judicial process by prohibiting parties from deliberately changing positions according to the exigencies of the moment." New Hampshire v. Maine, 532 U.S. 742, 750, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001). The court applies judicial estoppel at its discretion and typically considers, (1) whether a party's later position is "clearly inconsistent" with its earlier one; (2) whether the court has adopted the party's earlier position, such that judicial acceptance of a later inconsistent position "would create the perception that the court was misled"; and (3) "whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped." Ah Quin v. County of Kauai Dept. of Transp., 733 F.3d 267, 270 (9th Cir. 2013) (quoting New Hampshire, 532 U.S. at 750-51, 121 S.Ct. 1808). In general, judicial estoppel is used to prevent a litigant from "playing fast and loose with the courts." Russell v. Rolfs, 893 F.2d 1033, 1037 (9th Cir. 1990). It is "most commonly applied to bar a party from making a factual assertion in a legal proceeding which directly contradicts an earlier assertion made in the same proceeding or a prior one." Id.

In its amended complaint, Aegean changes its choice of law theory for its maritime lien claim. While Aegean argued before that U.S. law applies to its lien claim, it now argues that Canadian law governs. Dkt. # 79 at 8.

The Court concludes that judicial estoppel should not apply. Despite the multi-year delay in proceedings generated by the stay, this case is still in its procedural infancy: The Court is considering a motion to dismiss following Aegean's first amendment to its complaint. See Dkt. # 82; Dkt. # 79. At such an early stage, parties are entitled and encouraged to modify, hone, and refine their factual and legal theories. The parties have not engaged in extensive discovery, nor is Aegean shifting its legal theory on the eve of trial.

A federal district court in California denied a motion to dismiss because a change in legal theory between the plaintiff's original and amended complaint did not justify application of the judicial estoppel doctrine. Regents of the Univ. of Cal. v. Aisen, CASE NO. 15-cv-1766-BEN (BLM), 2016 WL 4097072 (S.D. Cal. Apr. 18, 2016). The court concluded:

Rather than forcing a party to continue litigating a theory it no longer wants and preventing the abandonment of weak claims, courts ought to encourage the paring away of flawed claims. See Fed. R. Civ. P. 1 (Rules to be construed to secure the just, speedy, and inexpensive determination of cases). In any event, the plaintiff is master of its complaint, it is early in the proceedings, and this Court will not employ its discretion to preclude [plaintiff] from discarding its earlier claimed violation of the federal Copyright Act. Intergen N.V. v. Grina, 344 F.3d 134, 145 (1st Cir. 2003) ("An amended complaint supersedes the original complaint, and facts that are neither repeated nor otherwise incorporated into the amended complaint no longer bind the pleader. Absent some sign

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