Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-03406/USCOURTS-cand-3_05-cv-03406-11/pdf.json

Nature of Suit Code: 120
Nature of Suit: Marine Contract Actions
Cause of Action: 28:1331 Fed. Question

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ARMADA BULK CARRIERS, a Foreign

Corporation,

Plaintiff,

v.

CONOCOPHILLIPS COMPANY, INC., a

Delaware Corporation, FOSS MARITIME

COMPANY, INC., a Washington

Corporation, and FOSS MARITIME

BARGE 185 P3, in rem,

Defendants. 

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

No. C-05-3406 SC

ORDER DENYING 

CONOCOPHILLIPS'

MOTION FOR SUMMARY

JUDGMENT

I. INTRODUCTION

Before the Court is a motion by Defendant ConocoPhillips

Company, Inc. ("CP") for summary judgment on its counterclaim

against Plaintiff Armada Bulk Carriers ("Armada") and on Armada's

three claims against CP. See Docket No. 68, Mot. for Summary J. 

Armada opposes the motion and asserts that there are several

material factual disputes. See Docket No. 72, Armada Opp'n. 

Defendant Foss Maritime Company, Inc. ("Foss") has not filed a

response to Defendant CP's motion. 

For the reasons stated herein, CP's motion for summary

judgment is DENIED. 

//

Case 3:05-cv-03406-SC Document 109 Filed 05/01/07 Page 1 of 6
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 2

II. BACKGROUND

This case arises out of the sale and delivery of 550 metric

tons of fuel oil (the "Fuel Oil"). See Docket No. 36, Second

Amended Complaint ("SAC" or "Complaint"), ¶ 11. According to the

Complaint, Armada contracted with CP to have the Fuel Oil

delivered to the M/V Spar Two (the "Vessel") between June 20 and

21, 2005, while the Vessel was afloat in the San Francisco Bay. 

See id. At the time of the delivery, Armada was the charterer of

the Vessel. See id. at ¶ 10. CP retained Foss to transfer the

Fuel Oil to the M/V Spar Two and Foss used the barge Foss 185 P3

to transport the Fuel Oil. See id. at ¶¶ 14-15. 

The gravamen of the allegations against CP and Foss is that

when the Fuel Oil was delivered to the Vessel it was "heavily

contaminated with excessive water, ash, silicon and aluminum." 

Id. at ¶ 21. As a result, "Armada has been forced to incur

substantial additional expenses relating to the fuel oil

including, inter alia, in arranging for the disposal and

replacement of the same, tank cleaning and other damages." Id.

(underline added). Armada values its damages at no less than

$189,906.73. Id. at ¶ 23.

Though not discussed in the Complaint, it appears that Armada

withheld payment to CP for the Fuel Oil. See Docket No. 46, CP's

Answer to SAC at ¶ 54. Accordingly, CP filed a counterclaim

against Armada for $189,906.73, the amount allegedly due for the

Case 3:05-cv-03406-SC Document 109 Filed 05/01/07 Page 2 of 6
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 3

Fuel Oil, plus interest. See id. at ¶ 57. 

 

III. LEGAL STANDARD

This case falls within the Court's admiralty jurisdiction

under 28 U.S.C. § 1333(1) because it involves a maritime

transaction for the sale of potentially contaminated fuel

delivered to a vessel and a counterclaim to recover the unpaid

contract price for the fuel. See Exxon Corporation v. Central

Gulf Lines, Inc., 500 U.S. 603, 612 ("lower courts should look to

the subject matter of the agency contract and determine whether

the services performed under the contract are maritime in

nature"). "In maritime commercial transactions, the Uniform

Commercial Code is taken as indicative of the federal common law

of admiralty." Interpool Ltd. v. Char Yigh Marine (Panama) S.A.,

890 F.2d 1453, 1459 (9th Cir. 1989) (citing G. Gilmore and C.

Black, The Law of Admiralty, 718-22). 

Summary judgment is appropriate only "if the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact." Celotex Corp. v. Catrett,

477 U.S. 317, 322 (1986). A genuine issue of fact exists when the

non-moving party produces evidence on which a reasonable trier of

fact could find in its favor viewing the record as a whole in

light of the evidentiary burden the law places on that party. 

Case 3:05-cv-03406-SC Document 109 Filed 05/01/07 Page 3 of 6
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 4

See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252-56 (1986). 

Summary judgment is therefore appropriate against a party "who

fails to make a showing sufficient to establish the existence of

an element essential to the party's case, and on which that party

will bear the burden of proof at trial." Celotex, 477 U.S. at

322-23. The more implausible the claim or defense asserted by the

opposing party, the more persuasive its evidence must be to avoid

summary judgment, see Matsushita Electric Industrial Co. v. Zenith

Radio Corp., 475 U.S. 574, 587 (1986), but "[t]he evidence of the

non-moving party is to be believed, and all justifiable inferences

are to be drawn in its favor." Anderson, 477 U.S. at 255.

IV. DISCUSSION

CP moves for summary judgment based on three lines of

argument. First, CP asserts that the fuel samples obtained by CP

are binding on the parties and met all the relevant contract

specifications. See Mot. for Summary J. at 18. Second, CP

asserts that Armada cannot make a proper fuel quality claim

because Armada failed to account for the three preceding

deliveries to the Vessel, failed to account for the contents of

Tank 1C, and failed to preserve a sealed barge sample. See id. at

19-21. Third, CP asserts that Armada cannot create a triable

issue of fact that the Fuel Oil failed to meet contract

specifications. See id. at 21-24.

Case 3:05-cv-03406-SC Document 109 Filed 05/01/07 Page 4 of 6
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 5

In response to CP's first argument, Armada asserts that the

samples upon which CP relies are manifestly in error. See Armada

Opp'n at 16. CP states that the results of several tests

performed by Columbia Inspection confirm that the Fuel Oil met

contract specifications. See Mot for Summary J. at 6. First, on

June 6, 2005, a composite sample test revealed levels of water,

ash, silicon, and aluminum within the ISO 8217 and contract

limits. See Nassir Decl., ¶ 3, Ex. 2. In addition, on June 20,

2005, Columbia Inspection returned and performed tests on both the

shore tanks and tanks aboard the Foss barge which transported the

oil from shore to the Vessel. See id. at ¶¶ 6-9. CP asserts that

these samples also met ISO 8217 and contract specifications. See

Stillings Decl.

To counter CP's claims, Armada presented evidence from its

expert, Mr. Grossey, and from the deposition of Mr. Nassir that

CP's samples may not be representative of the Fuel Oil and that

testing errors were made. See id.; Grossey Decl.; Poulos Decl.,

Ex. 7. Because Armada has put forth the above listed facts, the

Court finds there are material factual disputes as to whether CP's

Fuel Oil samples met the contract specifications.

In response to CP's third argument, Armada asserts that it

has raised a triable issue of fact regarding the quality of the

Fuel Oil. Armada presented evidence that testing of a "drip

sample" taken from the Foss Barge indicated that the Fuel Oil was

Case 3:05-cv-03406-SC Document 109 Filed 05/01/07 Page 5 of 6
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 6

contaminated and did not meet contract specifications. See

Grossey Decl.; Poulos Decl., Exs. 5 and 6. Though CP disputes

Aramada's evidence, Armada has succeeded in raising a genuine

factual issue as to the quality of the Fuel Oil.

Thus, Armada has indicated several factual disputes regarding

the quality of the Fuel Oil and whether proper testing procedures

were followed. The Court finds Armada's showing sufficient to

preclude granting CP's motion for summary judgment.

V. CONCLUSION

For the foregoing reasons, Defendant ConocoPhillips' Motion

for Summary Judgment is DENIED. 

IT IS SO ORDERED.

Dated: May 1, 2007.

 

UNITED STATES DISTRICT JUDGE

Case 3:05-cv-03406-SC Document 109 Filed 05/01/07 Page 6 of 6