Professional Documents
Culture Documents
No. 14-1245
RG STEEL SPARROWS
Point, LLC,
POINT,
LLC,
f/k/a
Severstal
Sparrows
Plaintiff Appellee,
and
SEVERSTAL SPARROWS POINT, LLC,
Plaintiff,
v.
KINDER MORGAN BULK TERMINALS,
Chesapeake Bulk Stevedores,
INC.,
d/b/a
Kinder
Morgan
Defendant Appellant.
Appeal from the United States District Court for the District of
Maryland, at Baltimore.
William M. Nickerson, Senior District
Judge. (1:09-cv-01668-WMN)
Argued:
Before TRAXLER,
Judges.
Chief
Judge,
Decided:
and
DIAZ
and
THACKER,
Circuit
PER CURIAM:
This case arose in the aftermath of the catastrophic
collapse of a bridge crane used by Kinder Morgan Bulk Terminals
Inc. (Appellant) to unload coke used to fuel a steel mill
located near Baltimore, Maryland.
and
the
history.
bridge
crane
changed
hands
several
times
in
recent
(RG Steel), 1 acquired the company that owned the steel mill and
the bridge crane through a stock purchase on March 31, 2011.
Following the bridge crane collapse, Appellee sued Appellant for
negligence.
maintained
that
it
was
not
negligent
and
the
Leases
indemnity
Lease
defined
crane
and
matter.
the
the
clause
parties
purchase
under
Maryland
relationship
order
governed
law
with
a
because
respect
different
to
the
the
subject
million,
awarding
Appellees
compensatory
property
and
damages
consequential
for
destruction
damages
for
of
Appellees
the
operating
Instead,
courts
under
it
finding
an
that
the
implied-in-fact
argues
the
district
parties
renewal
court
were
of
erred
generally
the
in
Lease.
concluding
indemnity
damages award.
if
the
Leases
clause
and
foreclosed
any
consequential
district
indemnity
court
was
clause,
correct
the
to
hold
district
Appellant
court
erred
to
when
the
it
calculation
in
ordering
damages.
4
its
award
for
consequential
We
affirm
the
district
courts
rulings
in
their
Sys., 773 F.3d 536, 549-50 (4th Cir. 2014) (affirming for a
reason supported by the record but not relied on by the district
court).
Furthermore,
the
district
court
did
not
abuse
its
it
did
not
clearly
err
in
determining
the
amount
of
acquired
their
interests
the
bridge
crane
to
mills
services
for
the
steel
undertook
to
keep
the
in
bridge
crane
contractual
companies
A
this
stevedoring 2
providing
Yard.
in
good
The
stevedores
repair
and
to
See Blacks
resulting
from
any
cause
whatsoever.
Id.
at
690.
contracts
with
the
stevedores
to
unload
coke-carrying
services,
purchased
at
the
end
of
its
predecessors
rights
and
July
2003,
Appellant
and
Appellee
when
Appellee
and
Appellant
executed
long-term
agreement
occurred
sooner.
However,
Appellant
and
Appellee
2005,
it
continued
to
conduct
business
with
Appellee
J.A.
Id. at 60001.
procedures
preventative
and
measures
federal
during
regulations
high
winds,
Despite its
which
Appellant
require
did
not
the
facilities.
Yard
and
paid
for
emergency
repairs
to
its
the steel mills blast furnace, cargo ships carrying coke were
required to unload their cargo at another terminal farther away
from the blast furnace: the New Ore Pier.
to
accommodate
the
additional
traffic.
To
make
Appellant does not dispute the fact that its own standard
operating procedures instructed [Appellant] to employ hurricane
tie downs [on the crane to secure it] in the event of strong
winds. J.A. 603. Additionally, Occupational Safety and Health
Administration regulations require bridge cranes to be equipped
with automatic rail clamps that prevent cranes from moving
during high wind events.
Id. at 614-15; see also 29 C.F.R.
1910.179(b)(4).
in
transit
delays.
As
result,
Appellee
paid
used
floating
cranes
to
unload
coke
ships
and
it
To
mitigate
its
losses,
Appellee
renegotiated
its
blast
furnace.
Mill
operations
did
not
normalize
until
order
(Purchase
Order)
that
required
Appellee
to
crane [sic].
J.A. 992.
AMUSA-100
defined
the
parties
AMUSA-100
contained
the
following
See id.
rights
and
Section 7.6 of
limitation-of-liability
provision:
In no event shall either party be liable to
the
other
under
this
order
for
consequential, indirect or special damages,
including without limitation lost profits,
revenues, production or business . . . .
J.A. at 1000.
specific
terms
agreed
in
writing
that
contradict[]
Id. at
997.
C.
Appellee filed suit against Appellant in the District
Court for the District of Maryland on June 24, 2009.
In its
testified
about
the
general
effect
of
the
crane
collapse
on
district
court
reached
verdict
in
favor
of
compensatory damages
bridge crane;
compensatory
damages
for
emergency
repairs to Appellees facilities and
for restoration and modification of the
conveyor,
all
of
which
Appellant
conceded at trial; and
consequential
damages
for
demurrage
fees, changes in commercial terms, and
increased handling costs. 7
for
loss
of
the
11
concluded
that
Appellant
should
be
required
to
of
contract
renders
legal
See FTC v. Ross, 743 F.3d 886, 894 (4th Cir. 2014);
Perini/Tompkins Joint Venture v. Ace Am. Ins. Co., 738 F.3d 95,
101 (4th Cir. 2013).
appeals
court
of
district
rulings
that
rest
on
state
law,
by
an
implied-in-fact
agreement
and
therefore
the
court
found
that
this
12
J.A. 612.
In essence, the
implied-in-fact
contract
was
renewed
required
by
that
an
the
implied-in-fact
later-in-time
contract,
written
Maryland
Purchase
Order
law
took
v. J. Roland Dashiell & Sons Inc., 747 A.2d 600, 607 (Md. 2000)
(holding
that
contract
implied
in
law
cannot
supplant
an
It argued that
Purchase
rejected
did
not
Appellants
govern
the
argument,
same
concluding
subject
and
The
that
that
the
does
would
be
indemnity
it
dispute
liable
the
for
provision
district
courts
consequential
applied.
conclusion
damages
Instead,
if
Appellant
the
that
it
Leases
renews
its
argument that the Lease did not apply and that Appellant should
prevail by virtue of the AMUSA-100.
13
2.
Appellant argues that the district court erred because
it permitted an implied-in-fact agreement to renew the Lease to
supersede an express contract on the same subject matter -- the
Purchase Order -- in contravention of Maryland law.
the
Lease
and
the
Purchase
Order
address
the
Although
same
subject
For one,
the Maryland courts have not adopted the rule Appellant pushes;
they
have
only
held
that
contract
implied
in
law
cannot
See
And even
AMUSA-100s
plain
text
and
Appellants
implied-in-fact
See Wells v.
Chevy Chase Bank, F.S.B., 768 A.2d 620, 630 (Md. 2001).
Per
J.A. 997.
limitation-of-liability
provision.
J.A.
997.
agreement.
implied-in-fact
Appellants
agreement
is
Reply
Br.
necessarily
13.
not
in
Although
writing,
an
the
and
does
not
contradict[]
temporal
clause,
other
on
the
the
the
J.A. 997.
limitation.
hand,
is
an
limitation-of-liability
The AMUSA-100 has no
The
Leases
agreement
AMUSA-100s
in
indemnity
writing
that
conflicts
with
provision.
limitation-of-liability
Id. at 690.
Appellant
was
required
to
indemnify
Appellee
for
B.
Damages
We now turn to whether the district courts awards for
demurrage
and
support.
changes
in
commercial
terms
have
evidentiary
damages
Appellant
for
demurrage
concentrates
on
16
and
changes
Cohens
in
commercial
admitted
lack
of
Rule
702
of
the
Federal
Rules
of
Evidence
permits
special
knowledge
will
help
the
trier
of
fact
to
The question
evidence that will aid the trier of fact, the expert need only
have
sufficient
specialized
knowledge
to
assist
jurors
in
Belk, Inc. v.
Meyer Corp., U.S., 679 F.3d 146, 162 (4th Cir. 2012) (internal
quotation marks omitted); see Westberry v. Gislaved Gummi AB,
178 F.3d 257, 261 (4th Cir. 1999) (Rule 702 was intended to
liberalize
the
introduction
of
relevant
expert
evidence.);
Thomas J. Kline, Inc. v. Lorillard, Inc., 878 F.2d 791, 799 (4th
Cir. 1989) (Generally, the test for exclusion is a strict one,
and
the
purported
knowledge,
skill,
expert
experience,
must
have
training
neither
nor
one . . . need
not
be
precisely
satisfactory
education
on
the
In order to offer an
informed
about
all
Lorillard, 878
F.3d at 799; see Fed. R. Evid. 703 (providing that [a]n expert
may base an opinion on facts or data in the case that the expert
has been made aware of [at trial] or personally observed).
In
this
case,
Appellant
had
no
prior
reads
this
experience
with
maritime
to
calculate
economics.
Appellees
[qualification]
damages. 8
Although
contracts,
his
has
an
MBA
in
reviewing
that
he
obtained
before
trial
by
testimony.
Cohen
then
formed
his
opinion
on
the
are
specific
to
maritime
contracts
does
not
mean
the
Corp.,
Appellant
provide[d]
no
support
for
its
18
expertise
in . . . these
specific
[areas]
necessarily
Belk, 679 F.3d
mills
and
maritime
commerce
were
addressed
by
other
abuse
its
testimony
we
conclude
discretion
as
to
his
by
that
the
permitting
calculation
of
district
Cohen
court
to
Appellees
offer
did
not
expert
damages
for
19
2.
Sufficiency of Evidence for Damages Award
a.
When considering an appeal after a bench trial, we
review the district courts factual findings for clear error and
its legal conclusions de novo.
Inc. v. Collezione Europa USA, Inc., 618 F.3d 417, 427 (4th Cir.
2010).
quotation
marks
omitted).
Furthermore,
when
Id.
a
court
sitting
in
diversity
must
apply
state
law
Mut. Life Ins. Co., 938 F.2d 502, 504-05 (4th Cir. 1991) (en
banc).
reasonable
inference.
David
Sloane,
Inc.
v.
Stanley
G.
House & Assocs. Inc., 532 A.2d 694, 696 (Md. 1987) (internal
quotation marks omitted).
20
b.
Our task is to determine whether the district court
had sufficient evidence to conclude that Appellee proved, to a
reasonable certainty, that it suffered damages for demurrage and
change in commercial conditions.
and
approximately
million
in
trial,
Cohen
concluded
$2.7
that
million
damages
for
presented
in
his
Appellant
demurrage
changes
in
calculation
was
fees
and
commercial
of
liable
for
about
$1.5
terms.
The
awarded
damages
to
Appellee
accordingly.
However,
the
Therefore,
damages,
but
21
it
disagrees
with
Cohens
Relating to
to
reasonable
establish
certainty,
the
and
extent
thus
of
no
Appellees
damages
losses
should
have
to
been
demurrage
calculation
--
which
the
district
court
See
22
paid
in
demurrage
due
to
the
accident,
Cohen
then
asked
Appellees
accounting
personnel
if
any
commercial
terms,
components)
prices,
could
have
interest
caused
the
rates
or
pronounced
attribute
collapse.
the
J.A.
[incremental
327.
As
demurrage]
the
to
district
the
court
bridge
noted,
Id.
Appellants
staff
to
determine[]
that
[the
increased]
23
Id. at 217.
computation
causes
bridge
of
crane
equipment,
the
and
in
him
incremental
accident,
delays
faults
such
tugs,
for
demurrage
as
problems
problems
with
not
investigating
unrelated
with
the
to
the
shore-side
ships,
labor
that
other
potential
factors
that
could
have
Id. at 56.
court
findings
during
bench
trials,
the
records
district
courts
damages
award
for
demurrage
was
Cohen
relied
on
this
assumption
to
calculate
an
approximate
the
post-collapse
concluded
that
period
Cohens
was
not
analysis
entirely
failed
to
reliable.
recognize
It
that
Accordingly,
this
committed
regard,
three
Appellant
errors
in
argues
relying
that
on
the
Cohens
district
court
calculation
of
deficiencies
rendered
unreasonably
uncertain;
sufficient
evidence
changes
commercial
in
Cohens
therefore,
to
conclude
terms.
calculation
of
the
court
district
Appellee
Each
of
proved
these
damages
lacked
damages
arguments
for
lacks
merit.
First,
that
it
was
Appellants
fatally
attack
uncertain
on
Cohens
because
it
methodology
--
relied
an
on
As
the district court noted, Mr. Cohen testified that he did not
rely on the contracts to glean the prices charged for coke, but
instead sought verification of the discharge rates.
J.A. 633.
Appellant
evidence.
The
failed
district
to
support
courts
decision
courts
from
conclusion
Cohens
was
challenges
to
credit
with
Cohens
not
testimony
26
these
and
legally
the
justifiable
entirety
of
the
record.
Cir. 1983).
Appellant
possible
offered
alternative
calculations.
no
evidence
causes
indicating
actually
that
impacted
the
Cohens
that coke prices did not appreciably change from prices before
the
[b]ridge
[c]rane
collapse.
J.A.
632.
Furthermore,
See
Appellee
paid
for
coke
after
the
accident.
See
the
testimony
weight
and
not
that
the
jury
should
the
admissibility
of
give
that
the
experts
testimony).
Here, whether
27
Further,
although
Appellant
argues
Cohen
improperly
in
the
record
showing
that
the
district
courts
that
then
discharge
impact
the
rates
cost
of
affect
coke,
Cohens
transportation
was
built
on
costs,
Gennusos
no
reason
to
upset
the
district
courts
determination.
F.C. Wheat Mar. Corp., 663 F.3d at 723 (internal quotation marks
omitted).
the
foregoing
reasons,
the
judgment
of
the
district court is
AFFIRMED.
28
that
Kinder
Morgan
specifically
did
not
wish
to
be
new
long-term
improvements
to
agreement
the
in
order
Pier.
In
to
invest
fact,
when
in
capital
RG
Steels
Kinder
Morgans
occasional
post-2005
references
to
the
references
support
Kinder
Morgans
assertion
that
it
no
Nonetheless,
Kinder
Morgans
actions
are
entirely
Importantly, a holdover
Real
Prop.
8-402(c)
(West
2015)
(Unless
stated
When
a tenant holds over, the tenancy remains on all the terms and
conditions of the original lease.
of
demonstrating
the
predecessors,
Point
after
district
Lease
Kinder
the
court
in
an
its
Morgan
final
intent
undoubtedly
it
to
negotiations
Interim
observed,
not
bound
with
remained
Agreement
also
be
by
RG
Steels
at
Sparrows
expired.
continued
to
the
As
pay
the
rent,
Kinder
Morgan also failed to take any of the actions that would have
been
required
upon
the
expiration
of
the
Lease,
including
And
although
Kinder
Morgan
did
not
consider
J.A.
to
the
Bridge
Crane,
and
did
not
provide
for
any
J.A. 992.
Delivery of
the coke was promised approximately four months later, and the
purchase order provided for a delivery location, a unit price,
and a total price.
AMUSA-100
General
Goods or Services.
Purchasing
Conditions
for
Purchase
of
apply
to
the
products . . . and
any
purchase
related
of
services
terms
of
the
procurement
of
topics
price
as
AMUSA-100
specific
any
and
adjustments,
(Goods)
items,
offered
or
thus
goods
materials,
explicitly
services,
delivery,
apply
to
addressing
inspection
of
the
such
the
that
neither
party
will
be
liable
for
consequential
Steel
and
its
predecessors.
The
purchase
order
and
its
the event that it fails to maintain and protect the Bridge Crane
itself, despite the fact that Kinder Morgan was unloading coke
at
the
time
of
the
accident.
would
therefore
find
that
the
Lease
remained
in
force
and
continued
to
govern
the
Although the
supersede
majoritys
the
Lease
conclusion
terms.
that
Kinder
therefore
Morgan
is
join
in
liable
the
for
consequential damages, and that the district court did not err
in relying on Appellees expert in calculating those damages.
33