In re Complaint of Kindra Lake Towing, L.P.

In the Matter of the Complaint of

KINDRA LAKE TOWING, L.P. and BLACK DIAMOND MARINE EQUIPMENT, INC.

for exoneration from or limitation of liability.

In the Matter of the Complaint of

FOUNDATION THEATRE GROUP, INC.

for exoneration from or limitation of liability.

No. 15 C 3174

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

November 20, 2015

Judge Thomas M. Durkin

MEMORANDUM OPINION AND ORDER

Kindra Lake Towing, L.P., and Black Diamond Marine Equipment, Inc., bring this action under admiralty law, 46 U.S.C. § 30505, et seq. See R. 1. Kindra demise chartered¹ a barge to Black Diamond, which then demise chartered the barge to intervenor Foundation Theatre Group, Inc. The barge sank while docked at Navy Pier in Chicago. Kindra and Black Diamond seek a declaration that they are not liable for the barge accident. Foundation also seeks such a declaration regarding its potential liability. See R. 20. Additionally, Foundation answered Kindra and Black Diamond's complaint, asserting affirmative defenses and claims againstKindra and Black Diamond for the following: violation of an implied warranty of seaworthiness (Counts I and V); negligence with respect to the barge's seaworthiness and docking of the barge (Counts II and VI); fraudulent misrepresentation with respect to the barge's seaworthiness (Counts III and VII); and negligent misrepresentation with respect to the barge's seaworthiness (Counts IV and VIII). See R. 38. Kindra and Black Diamond have moved to dismiss Foundation's implied warranty and misrepresentation claims, and the negligence claims to the extent that they concern seaworthiness—Counts I and V; III and VII; IV and VIII; paragraph 18a of Count II; and paragraph 18a of Count VI—for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). R. 53.² For the following reasons, their motion is granted in part and denied in part.

Legal Standard

A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See, e.g., Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). A complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), sufficient to provide defendant with "fair notice" of the claim and the basis for it. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556U.S. 662, 678 (2009). While "detailed factual allegations" are not required, "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. The complaint must "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). "'A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013) (quoting Iqbal, 556 U.S. at 678). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Mann, 707 F.3d at 877.

Background

Supplemental Admiralty Rule F provides a process for a "vessel owner" to seek "exoneration from [or] limitation of liability" with respect to claims regarding the vessel. Kindra and Black Diamond's complaint seeks such a declaration. Rule F also provides that the plaintiff vessel owner may seek (1) an injunction staying any already pending actions against the vessel owner, and (2) issuance of a notice to all potential claimants to file their claims in the federal action filed by the vessel owner. The Court issued such an order in this case, R. 10, and Foundation filed its answer including its claims in response.

Foundation's answer not only responds to Kindra and Black Diamond's allegations and asserts affirmative defenses, but, pursuant to subsection (5) of Rule F, also states factual allegations of its own upon which Foundation bases its claimsagainst Kindra and Black Diamond. Since Kindra and Black Diamond seek to dismiss Foundation's claims against them, the following recitation of background facts is taken from the allegations upon which Foundation bases those claims (with an exception noted below).

Foundation has produced a Halloween haunted house for Navy Pier several times in years past. R. 38 at 9 (¶ 2). Navy Pier wanted Foundation to produce a haunted house again in 2014. Id. Navy Pier told Foundation that the haunted house should be constructed on a barge docked to the pier, and told Foundation to charter the barge from Kindra. Id. (¶ 3). Kindra entered into a demise charter with Black Diamond in order for Black Diamond to then demise charter the barge to Foundation. Id. at 10 (¶¶ 5, 7).

Foundation did not attach its Charter Agreement with Black Diamond to its answer. But Foundation did attach the Charter Agreement to its own complaint seeking exoneration or limitation of liability. See R. 20-1. Although Kindra and Black Diamond caption their motion under Rule 12(b)(6), it seeks dismissal of Foundation's claims based on the affirmative defense of waiver and therefore it is really a motion for judgment on the pleadings pursuant to Rule 12(c). See Yassan v. J.P. Morgan Chase & Co., 708 F.3d 963, 975-76 (7th Cir. 2013) ("even though district courts have granted Rule 12(b)(6) motions on the basis of affirmative defenses and this court has affirmed those dismissals, we have repeatedly cautioned that the proper heading for such motions is Rule 12(c), since an affirmative defenseis external to the complaint").³ Therefore, the Court finds it inconsequential that Foundation attached the Charter Agreement to its complaint, and not its answer. Both Foundation's complaint and answer are pleadings in this case such that the Charter Agreement can be considered under Rule 12. See Fed. R. Civ. P. 10(c) ("A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.); cf. Prestone Prods. Corp. v. South/Win, Ltd., 2013 WL 5164024, at *2 n.1 (N.D. Ill. Sept. 13, 2013) ("While the Settlement Agreement [which is, of course, a kind of contract] was not attached as an exhibit to the Complaint, it was attached as an exhibit to [the] answer so the Court may properly consider it in deciding a Rule 12(c) motion.").

Moreover, even if the Charter Agreement is actually "outside the pleadings," it nevertheless falls in the "narrow exception" permitting consideration of such documents "aimed at cases interpreting, for example, a contract." 188 LLC v. Trinity Indust., Inc., 300 F.3d 730, 735 (7th Cir. 2002). "It is . . . well-settled in this circuit that documents attached to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to his claim." Yassan, 708 F.3d at 975. Kindra and Black Diamond's complaint referenced the Charter Agreement, see R. 1 ¶ 7, and so did Foundation's answer in which it stated the claims at issue on this motion. See R. 38 at 10 (¶ 7). Thus, the Court willconsider the Charter Agreement's provisions in addressing Kindra and Black Diamond's motion.

The Charter Agreement provides the following in relevant part:

[Foundation] understands and agrees that [Black Diamond], by tendering Delivery of the Barge to [Foundation], makes no warranty or representation, either express or implied, regarding the condition, seaworthiness or fitness of such Barge for any particular purpose. [Foundation] further agrees that by accepting Delivery of the Barge, it acknowledges that (i) [Foundation] is fully satisfied with the condition of the Barge and the fitness of the Barge for the purposes [Foundation] intends to use it, and (ii) [Foundation] thereafter shall have no right to make any claim of any kind against [Black Diamond] under any theory whatsoever (including without limitation theories or negligence, unseaworthiness, or breach of warranty) based in whole or in part on any alleged deficiency in the condition, design, fitness or suitability of the Barge and/or its equipment and/or appurtenances.

R. 20-1 at 2 (¶ 4(B)). The agreement was to be signed on behalf of Black Diamond by its general manager, Donald Campbell. See id. at 10. Campbell is also the general manager of Kindra. R. 38 at 10 (¶ 5).

Prior to signing the Charter Agreement, Foundation questioned Kindra and Black Diamond about the condition of a hatch on the deck of the barge. Id. at 10 (¶ 8). Kindra and Black Diamond assured Foundation that the hatch would not be a problem. Id.

Foundation also entered into a separate contract with Black Diamond and Kindra to move the barge to and from Navy Pier and to provide all necessary moorings of the barge to Navy Pier. Id. at 11 (¶ 9). When the barge arrived at NavyPier on September 24, 2014, Kindra and Black Diamond failed to ensure that it had a proper fender to protect the pier wall, and failed to ensure that the barge was properly secured to the pier. Id. (¶ 11). This led to the barge repeatedly slamming into the pier wall causing damage to the barge and the pier. Id. (¶ 12). Kindra oversaw installation of a new fender and re-securing of the barge to the dock on October 1, 2014, but did not inspect the barge for damage. Id. at 11-12 (¶ 14).

On October 31, 2014, the haunted house was cancelled due to a storm. Id. at 12 (¶ 15). Foundation contacted Kindra and Black Diamond to request assistance in moving the barge to a safer mooring, but no assistance was provided. Id. That evening the barge sank. Id. (¶ 16).

Analysis

I. Black Diamond

Black Diamond argues that Foundation's negligence claim to the extent it is based on seaworthiness (Count VI (¶ 18(a)), and Foundation's implied warranty and misrepresentation claims (Counts...