Comar Marine Corp. v. Raider Marine Logistics, L.L.C.

COMAR MARINE CORPORATION F/K/A NAUTICAL OFFSHORE CORPORATION

v.RAIDER MARINE LOGISTICS, L.L.C., ET AL.

NO. 6:09-CV-1438 (LEAD)

NO. 6:12-CV-1533 (MEMBER)

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA LAFAYETTE DIVISION

Dated: May 20, 2013

JUDGE RICHARD T. HAIK, SR.

MAGISTRATE JUDGE C.

MICHAEL HILL

REASONS FOR RULING

This case filed by Comar Marine Corporation f/k/a Nautical Offshore Corporation ("Comar") against Raider Marine Logistics, L.L.C. ("Raider Marine"), in personam, Conqueror Marine Logistics, L.L.C. ("Conqueror Marine"), in personam, Marauder Marine Logistics, L.L.C. ("Marauder Marine"), in personam, Enforcer Marine Logistics, L.L.C. ("Enforcer Marine"), in personam, Tracy P. Lirette, in personam ("Lirette") and Chris St. Amand, in personam ("St. Amand"), (sometimes referred to collectively as "Owners"), arises from an action under admiralty and maritime law pursuant to Rule 9(h) of the Federal Rules of Civil Procedure. The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1333 of the Federal Rules of Civil Procedure.

This matter was tried before the Court as a bench trial conducted on February 26, 27 and 28, 2013 with the parties' agreement that the record would remain open until the parties completed the trial deposition of John Oliver and the rebuttal testimony of Charles Tizzard, both of which were filed into the record on April 1, 2013. Based on the evidence adduced at the trial on the merits, the Court makes the following findings of fact and conclusions of law pursuant toFederal Rule of Civil Procedure 52(a). To the extent any of the following findings of fact comprise conclusions of law or a mixed finding of fact and law, they shall be considered as such.

Findings of Fact

The following facts were stipulated to by the parties or have been established by a preponderance of the evidence:

1. Comar Marine L.L.C. ("Comar") is Louisiana LLC in the business of operating and chartering various classes of vessels to third parties engaged in the offshore oil and gas exploration and production industry.

2. Comar operates a fleet of vessels owned by its affiliated companies (also referred to as "Comar"), and from time to time enters into management agreements with third-party owners for the operation and management/marketing of third-party owners' vessels to end-users.

3. Gator Offshore, LLC ("Gator") is a Louisiana limited liability company whose members are TPL Management Services, LP and Gator Consulting, LLC.

4. Tracy Lirette ("Lirette") is the 99% limited partner of TPL Management Services, LP, whose 1% general partner is Global Coast Services, LLC.

5. Chris St. Amand ("St. Amand") is the sole owner and manager of Gator Consulting, LLC.

6. Conqueror Marine Logistics, LLC, Enforcer Marine Logistics, LLC, Raider Marine Logistics, LLC, and Marauder Marine Logistics, LLC (collectively, "the Marine Logistics Entities") are Louisiana limited liability companies, each of which has as its sole member Gator Offshore, LLC.

7. The Marine Logistics Entities are the owners of the vessels M/V CONQUEROR, M/V ENFORCER, M/V RAIDER, and M/V MARAUDER ("Vessels").

8. The CONQUEROR, RAIDER and ENFORCER are U.S.-flag 120 foot class crewboats and were purchased by the related Marine Logistics Entities on January 31, 2007 with financing from J.P. Morgan Chase Bank, N.A. on a three-year amortized pay-off schedule, secured by preferred ship mortgages.

9. The MARAUDER is a 135 foot class crewboat and was purchased from Comar by the related Marine Logistics Entity for $975,000.00, on May 21, 2008, with financing from Allegiance Bank, secured by a preferred ship mortgage.

10. In 2007, The Marine Logistics Entities and Gator Offshore, LLC purchased the M/V CONQUEROR, M/V ENFORCER and M/V RAIDER from Comar and, as a conditionprecedent, entered into separate Master Management and Operating Agreements ("Agreements") with Comar for each of the Vessels, dated January 31, 2007.

11. Each of the Agreements was for a term of three (3) years and was identical to each other except for vessel- and Owner-specific information.

12. Under each Agreement, Comar agreed to market, manage and operate the Vessels in exchange for the payment by the Owners of a management fee equal to the greater of $3,000 per calendar month or ten (10%) percent of the gross income of each vessel per month ("Management Fees"). [Agreements, Art. 2.]

13. The Agreements authorized Comar to deduct the Management Fees from revenues received from the chartering of the Vessels and remit the balance to Owners, "subject to any right of Comar to withhold additional amounts from such charter revenues as permitted by [the] Agreement." [Agreements, Art. 3.]

14. All expenses incurred by Comar in operating the Vessels were for the account of and at the sole expense of Owners, including all costs of crewing, supplies, equipment and necessaries, maintenance and repairs, mooring and insurance ("Owners' expenses"). [Agreements, Art. 4.]

15. The Agreements provided that these expenses would be reimbursed to Comar from funds held on account of Owner or, if sufficient funds are not immediately available to Comar, Owners weres to pay Comar these unreimbursed amounts within ten (10) days invoicing by Comar. [Id.]

16. The Agreements gave Comar the option, if requested by Owners, to fund Owner Expenses by borrowing against outstanding Accounts Receivable ("A/R"), which Comar claimed ownership of and controlled entirely. [Agreements, Art. 3(f), 3(c).]

17. In such event, Comar agreed to loan at an interest rate of 10% per annum, up to 80% of eligible A/R that met certain criteria specified in the agreements. [Agreements, Art. 3(f).]

18. When payment of such A/R were received by Comar, Comar's management fee, and the principal and interest owing on the A/R loan were deducted by Comar and the balance remitted to Owners. [Agreements, Art. 3(f).]

19. The Agreements also required that Comar present an invoice to the Marine Logistics Entities and allow ten days for payment of any outstanding Owner Expenses that were not funded either through cash on hand and/or A/R loans. [Agreements, Art. 4(i).]

20. The Agreements required each Owner to establish and maintain a checking account in the name of the Owners at the Patterson State Bank ("Owners' Account"), and to maintain a minimum balance of $25,000.00, which Owners were required to replenish upon written request by Comar. [Agreements, Art. 4(j).]

21. The Owners' Account was used to pay all vessel operating expenses incurred under the Agreements. [Agreement, Art. 4(j).]

22. The Agreements provided that if Owners' Account fell below the required minimum balance and owners failed to provide additional funding within five (5) days of Comar's request, then Comar had the sole option to either (i) advance the necessary funds at an interest rate of 1.5% per month and deduct said funds plus accrued interest from any pending or future amounts due to Owner; or (ii) declare Owner to be immediately in default of the Agreement and, if such default was not timely cured, terminate the Agreement. [Agreement, Art. 4(k).]

23. The Agreements required that the vessels be painted and maintained in the Comar color scheme with Comar emblems and the Comar vessel name at the expense of the Owner, and the vessels were maintained in such color scheme and with such emblems and names throughout Comar's operation of the Vessels. [Agreement, Art. 4(m).]

24. In the Agreements, Owners acknowledged that Comar, either directly or through its affiliated companies or designees, may perform other services (including without limitation maintenance and repair services), and may supply materials, equipment and supplies (including without limitation repair and replacement of parts, material, equipment and supplies) as are necessary for the operation of Owners' vessels, and that such services, materials, equipment and supplies shall be deemed an expense for Owners' account. [Agreement, Art. 3.]

25. In the Agreements, Comar agreed to use "its best efforts" to obtain charters for the Vessels and keep the Vessels under charter throughout the term of the Agreements; and to use "all reasonable efforts" to manage and operate the Vessels within the terms, conditions and limitations of the agreements and to comply with the terms and conditions of any time charter to which the Vessels became subject during the term of the Agreements. [Agreements, Art. 3(a).]

26. The Agreements gave Comar sole responsibility and sole decision-making authority for the solicitation, bidding, setting charter rates, selecting customers, and negotiation of charters. [Agreements, Art. 3(a).]

27. In the Agreements, Owners acknowledged that Comar performed vessel management services for others and may be in competition with the Owners' vessels. [Agreements, Art. 3(a).]

28. The Agreements provided that Owners' vessels would receive preferential treatment as to any potential charters over a vessel subchartered or brokered by Comar. [Agreements, Art. 11(f).]

29. This preferential treatment did not apply to other Comar managed vessels or Comar or Comar affiliate owned vessels, which vessels, which, along with Owner's vessel, wouldreceive equal treatment with respect to any charters, subject to customer requirements and availability. [Agreements, Art. 11(f).]

30. This equal treatment policy was stated in the Agreements to be generally a first in, first out policy, meaning that a suitable vessel for the job that has been out of work the longest will be the first vessel put back to work, absent any overriding customer requirements. [Agreements, Art. 11(f).]

31. In the Agreements, Owners acknowledged and recognized that Comar did not represent or warrant that the Owners' vessels would be chartered for any specific period or at any specific day rate during the term of the agreements and that the market for offshore crewboats is cyclical in nature. [Agreements, Art. 3(a).]

32. In the Agreements, Owners acknowledged and recognized that Comar made no...