United States Court of Appeals

For the First Circuit

No. 00-2004

FEDERAL MARINE TERMINALS, INC.,

Plaintiff, Appellee,

v.

WORCESTER PEAT COMPANY, INC.,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. D. Brock Hornby, Chief U.S. District Judge]

Before

 Boudin, Chief Circuit Judge,

Lynch and Lipez, Circuit Judges.

Michael X. Savasuk for appellee.

Charles E. Gilbert, III, Christopher L. Dalton, Gilbert &

Greif, P.A., William H. Welte, and Welte & Welte, P.A. for

appellant.

August 27, 2001
-2-

LIPEZ, Circuit Judge. This appeal arises from a

payment dispute between Worcester Peat Company (Worcester Peat)

and Federal Marine Terminals (FMT) over a stevedoring contract.

FMT contracted to load peat for Worcester Peat onto a vessel for

shipment to Europe. After the loading was completed, the

parties disagreed about the contract's provision regarding the

calculation of FMT's fee. FMT charged Worcester Peat for the

volume of peat it handled through the port based on the number

of truckloads Worcester Peat had delivered and the volume of

peat in each truck. However, Worcester Peat based its payment

on the quantity of peat calculated by reference to the box

volume, or total cubic capacity, of the vessel, a sum

significantly less than the amount of FMT's invoice. The

district court found that the contract unambiguously stated that

FMT was to be paid by the volume of peat handled, and not by the

box volume of the shipping vessel, and entered judgment against

Worcester Peat for nearly $80,000. The court also rejected

Worcester Peat's counterclaim for peat it alleges was lost

during the loading process.

On appeal, Worcester Peat challenges the district

court's determination that the contract was unambiguous and

argues that the court also erred in not charging FMT for
-3-

demurrage and for peat Worcester Peat claims was lost due to

FMT's negligence in the loading process. Finding no error in

the district court's rulings, we affirm.

I.

Worcester Peat, a company located in Deblois, Maine,

grows and sells peat moss. In September 1998, Worcester Peat

began exploring the possibility of selling peat to buyers in

Europe. With the assistance of a Finnish broker, Mikko Valli,

affiliated with an Estonian company called BioMix, Ltd.,

Worcester Peat agreed to sell peat to Blumenerdenwerk Stender

GmbH (Stender), a German company. The contract provided that

Stender would be responsible for chartering a ship to load the

peat in Maine and transport it to Europe. Stender contracted

with another German company, Schulte & Bruns, to secure a

vessel. The contract between Worcester Peat and Stender

established an anticipated loading time of five days for the

shipment of peat. Worcester Peat's contracts with both BioMix

and Stender provided that the cost of the peat would be

calculated by reference to "box volume" of the ship, or its

total capacity in cubic meters.

Worcester Peat then entered negotiations with FMT, the

owner and operator of a cargo terminal in Eastport, Maine, to

load the peat onto the vessel chartered by Stender from Schulte
-4-

& Bruns. Roland Rogers, general manager of FMT, testified that

FMT had never worked with peat and was unfamiliar with its

properties. The parties exchanged a series of communications in

the fall of 1998 regarding FMT's prices and the plans for

loading the vessel. FMT and Worcester Peat agree that their

understanding during this negotiating process was that Stender

would provide a "geared" vessel, meaning one equipped with

cranes and other machinery for loading the peat.

On December 10, FMT was informed that the vessel

involved would not be a geared vessel as expected, but rather a

non-geared vessel that would not be carrying the equipment

needed to load the peat from the dock onto the ship. FMT

attempted to locate cranes and other equipment to load the

vessel. After a conversation between Rogers and Morrill

Worcester, president of Worcester Peat, Worcester Peat agreed to

share in the cost of renting a crane up to the amount of $2100.

Worcester Peat and FMT signed the stevedoring contract

on December 24. That document provides, in relevant part:

"Federal Marine Terminals Inc., Eastport hereby agrees to handle

your cargo of peat moss totaling 27,000 cubic meters,

approximately, for $4.95 dollars in U.S. funds per cubic meter

handled through Eastport including the loading of the vessel."
-5-

The contract also established a sliding fee scale such that the

price per cubic meter would be lowered if FMT achieved a

specified loading rate. Finally, the contract provided, as the

parties agreed, that Worcester Peat would pay up to $2100 for

the rental cost of the crane.

The vessel charted by Stender, the M/V BORIS LIANOV,

arrived in Eastport on the night of December 30, 1998. FMT

began loading the peat early the next morning. The weather

conditions during the loading of the peat were exceptionally

cold and windy. There was also precipitation in the form of

both rain and snow, which caused the top layer of the peat to

freeze. The wind blew so much peat into the air that visibility

was limited at times. The ship's captain ordered the doors of

the holds closed a number of times due to wind and snow. The

ship's logs also indicate that loading was stopped on some

occasions at the request of Worcester Peat.

Two conveyor belts were used to load the peat into the

ship's holds. Rogers testified that the intense cold created

problems with the hydraulics of the conveyors, making it

difficult to raise and lower them to align with the ship as the

tide rose and fell. One conveyor belt became completely

inoperable halfway through the loading process. Some of the
-6-

peat also froze, making it necessary to break up large chunks

before the peat was put on the conveyor belts. 

After FMT began loading the vessel, Worcester Peat

offered FMT the use of a clamshell bucket, which FMT attached to

a crane. The bucket was used to pick up peat from the loading

area on the dock and dump it directly into the holds of the

ship. FMT experienced fewer weather-related problems with the

use of the clamshell bucket because the peat in the bucket was

not as exposed to the wind as the peat on the conveyor belts.

Worcester Peat also suggested that FMT cover segments of the

conveyor belts with tarps to minimize the amount of peat blown

away by the wind.

The M/V BORIS LIANOV contained seven cargo holds. FMT

loaded peat into them one hold at a time, shutting the doors for

each hold after the hold had been filled with peat. However,

FMT found that the peat "settled," or recompressed, in the holds

after loading, reducing its volume and requiring FMT to open the

holds again and load more peat until the holds were full, a

process that further slowed the loading. The work was finally

completed on January 10, six days later than the five-day

loading period anticipated by Worcester Peat and Stender.

FMT sent Worcester Peat an invoice for $182,794.59.

Rogers testified that he arrived at this figure by using
1 "'Demurrage' is renumeration of a shipowner for the

detention of its vessel beyond the number of days allowed by the

charter party." TAG/ICIB Servs., Inc. v. Pan Am. Grain Co.,

Inc., 215 F.3d 172, 174 n.1 (1st Cir. 2000) (citing Black's Law

Dictionary 432 (6th ed. 1990)).

-7-

information Worcester Peat supplied him regarding how many

trucks brought peat to the terminal (425) and the average volume

per truck (115 cubic yards or 86.89 cubic meters). Multiplying

those figures, he concluded that FMT had handled 36,928.2 cubic

meters of peat at the agreed-upon price of $4.95 per cubic

meter, for a total of $182,794.59. However, Worcester Peat paid

FMT only $111,720.89. This figure relied upon the box volume of

the vessel, 26,917.1 cubic meters. Although Worcester Peat

added $2100 as agreed for the rental of the two cranes, it

deducted $2500 as a rental charge for the clamshell bucket it

had offered to FMT, as well as a demurrage charge1 of $21,118.75

that it had paid to Stender. 

Invoking the district court's admiralty jurisdiction,

see 28 U.S.C. § 1333, FMT filed a complaint against Worcester

Peat on June 17, 1999, seeking recovery for the difference

between the amount FMT charged and the amount Worcester Peat

paid (approximately $70,000). Worcester Peat filed a

counterclaim alleging that FMT was liable for peat lost during

the loading process.
2 This figure is larger than the amount calculated by Rogers

for two reasons. First, the district court found that Worcester

Peat had delivered 434 trucks of peat to the terminal, not 425

trucks as Rogers had thought. Second, the district court found

that the conversion factor Rogers used to convert cubic yards to

cubic meters was incorrect. Accordingly, the court used a

conversion of 87.9 cubic meters of peat per truck instead of

86.89 cubic meters per truck as Rogers calculated.

3 Worcester Peat has not appealed the district court's

determination with respect to the clamshell bucket.

-8-

Following a three-day bench trial, the district court

found that the contract between FMT and Worcester Peat

unambiguously stated that payment was to be calculated using the

volume of peat handled and not, as Worcester Peat contended, the

box volume of the vessel. Accordingly, the district court found

that FMT was entitled to a total of $190,935.57.2 The court

further held that Worcester Peat was not entitled to deductions

either for FMT's use of the clamshell bucket3 or for the

demurrage charged to Worcester Peat by Stender. Finally, the

district court found that Worcester Peat could not recover on

any of its counterclaims because it had not established by a

preponderance of the evidence either the amount of peat lost

because of wind or the fact that FMT's negligence caused that

loss, or that any such loss exceeded Worcester Peat's expected

loss due to wind in the normal course of handling peat.

Subtracting the amount Worcester Peat had already paid to FMT,
-9-

the district court entered judgment in favor of FMT in the

amount of $79,214.68.

Worcester Peat appeals the judgment of the district

court on three grounds. First, it argues that the court erred

in finding that the contract unambiguously provided that FMT

would be paid according to the volume of peat handled. Second,

Worcester Peat claims that the court should have found FMT

liable for demurrage it was charged by Stender because FMT did

not load the vessel in a timely fashion. Finally, Worcester

Peat says that the district court erred in not holding FMT

responsible for amounts of peat lost in the wind during the

loading process.

II.

A. Interpretation of the Contract

A court sitting in admiralty jurisdiction applies

federal maritime rules. See Greenly v. Mariner Mgmt. Group,

Inc., 192 F.3d 22, 25-26 (1st Cir. 1999). See also Har-Win,

Inc. v. Consolidated Grain & Barge Co., 794 F.2d 985, 987 (5th

Cir. 1986). Therefore, we turn to principles of general

maritime contract law to determine whether the contract between

FMT and Worcester Peat was ambiguous. See Garza v. Marine

Transport Lines, Inc., 861 F.2d 23, 26 (2d Cir. 1988). The

district court found that "[t]he language of the contract
-10-

unambiguously called for Worcester Peat to pay FMT $4.95 per

cubic meter handled." We review this determination de novo.

See ITT Corp. v. LTX Corp., 926 F.2d 1258, 1261 (1st Cir. 1991).

"A word or phrase is ambiguous when it is capable of

more than a single meaning." Garza, 861 F.2d at 27. The

contract between FMT and Worcester Peat provided: "Federal

Marine Terminals Inc., Eastport hereby agrees to handle your

cargo of peat moss totaling 27,000 cubic meters, approximately,

for $4.95 dollars in U.S. funds per cubic meter handled through

Eastport including the loading of the vessel." (emphasis

added.) Notably, the contract does not mention box volume, or

the ship's total capacity, at all, and nothing in the contract

itself suggests that box volume would be the basis for

calculating FMT's fee.

Having concluded correctly that the "handled" language

of the contract was unambiguous, the district court applied that

language to the facts of the case: "Although the contract

clearly calls for Worcester Peat to pay FMT based on the amount

handled, determining the amount handled requires me to choose

between contradictory evidence." That contradictory evidence

related to "the numbers of trucks that delivered peat to the

terminal as well as various estimates on the amount each truck
-11-

held." The court resolved those contradictions and made the

appropriate calculations. Worcester Peat insists, however, that

the court's decision to calculate the amount of peat handled on

the basis of truck deliveries overlooks an ambiguity in the

contract because the volume of peat handled could just as easily

be measured by the amount that was actually placed into the

holds of the ship. The district court properly rejected this

attempt to create an ambiguity where none exists. FMT obviously

had to handle the peat that was delivered to its terminal by

Worcester Peat. The district court sensibly viewed truck

deliveries as the most accurate measure of the amount of peat

FMT had to handle pursuant to the contract.

Worcester Peat further claims that the district court's

finding that the contract is unambiguous ignored the clause that

established the following sliding scale for payment: 

Should the loading of the vessel be

accomplished at an average gross production

scale of greater than 350 cubic meters per

hour we will refer to the sliding scale that

has been provided. This scale would

incrementally reduce the total cost to

Worcester industries by up to $0.08 (eight

cents) per cubic meter maximum at 440 cubic

meters per hour.

Worcester Peat contends that the only way to determine whether

this production incentive had been met was to reference the

volume of peat loaded onto the vessel. Therefore, Worcester
-12-

Peat argues, the phrase "per cubic meter handled through

Eastport" in the clause specifying FMT's payment is ambiguous

because the contract required the use of box volume to determine

whether the sliding fee scale would apply. We need not decide

whether Worcester Peat's interpretation of the sliding fee scale

is correct because that provision - even under Worcester Peat's

reading of it - does not conflict with the conclusion that the

contract unambiguously provided for payment according to volume

of peat handled. Even if, as Worcester Peat contends, the

sliding scale could only be calculated by reference to box

volume of peat in the vessel, the reduced fee established by the

sliding scale could still be applied to calculate FMT's fee

according to the volume of peat handled through the port.

Accordingly, nothing in the sliding fee provision changes our

conclusion that the district court's reading of the contract was

correct.

Unable to locate language in the contract to bolster

its assertion that the term "handled" is ambiguous, Worcester

Peat identifies other evidence in the record referring to the

vessel's box volume of peat. For example, Rogers stated in a

communication to Valli dated October 21, 1998: "The difficulty

in determining the volume of cargo handled, I believe, dictates

that we calculate using box volume." Worcester Peat also argues
-13-

that because its contracts with Biomix and Stender calculated

payment according to the box volume of peat, the district court

reached a "manifestly absurd result" in finding that FMT's fee

would be calculated according to volume of peat handled.

Finally, Worcester Peat claims that documents signed by Rogers

on behalf of FMT, including the bill of lading and the mate's

receipt for the M/V BORIS LIANOV, measured the cargo by box

volume.

However, the district court correctly decided that

these documents were irrelevant to its consideration of whether

the contract between FMT and Worcester Peat was ambiguous:

"[T]he shipping documents refer to box volume, because the

shipping documents necessarily measure what is on the vessel.

They have nothing to do with stevedoring contracts." Moreover,

the district court's consideration of this extrinsic evidence

was precluded by the parol evidence rule:

The purpose and essence of the [parol

evidence] rule is to avoid the possibility

that fraud might be perpetrated if testimony

as to subjective intent could be substituted

for the plain meaning of a contract. In the

absence of ambiguity, the effect of

admitting extrinsic evidence would be to

allow one party to substitute his view of

his obligations for those clearly stated.

Garza, 861 F.2d at 26-27 (internal quotation marks omitted).

Having concluded that the contract between Worcester Peat and
-14-

FMT unambiguously provided that FMT's payment would be

calculated by reference to cubic meters of peat handled through

Eastport, the district court properly refused to consider

evidence of any negotiations or extrinsic documents to alter

that language. See Har-Win, Inc., 794 F.2d at 987 ("[E]vidence,

whether parol or otherwise, of antecedent understandings and

negotiations will not be admitted for the purpose of varying or

contradicting the writing."); Battery S.S. Corp. v. Refineria

Panama, S.A., 513 F.2d 735, 739-40 (2d Cir. 1975) (stating, in

interpreting a contract governed by maritime law, that the parol

evidence rule "renders legally inoperative . . . evidence of

prior understandings and negotiations which contradicts the

unambiguous meaning of a writing which completely and accurately

integrates the agreement of the parties").

B. Demurrage

The district court concluded that FMT was not liable

for demurrage costs of $21,118.75 that Worcester Peat paid to

Stender. The agreement between Stender and Schulte & Bruns, the

company from whom Stender chartered the M/V BORIS LIANOV,

provided that the vessel would be loaded in five days. Because

the loading of the peat exceeded this period by several days,

Schulte & Bruns charged Stender for demurrage, and Stender in

turn charged Worcester Peat. Worcester Peat and FMT were not
4 We also note that, although Worcester Peat paid Stender

for demurrage, the contract between those two parties did not

provide for such a payment in the event that the loading of the

peat exceeded the projected time period. The agreement between

Worcester Peat and Stender only established an accepted loading

time of 120 hours for a vessel the size of the M/V BORIS LIANOV

and did not even raise the possibility that Worcester Peat would

be charged for not meeting that guideline.

-15-

signatories to the contract providing that the loading would

take only five days.

The contract between FMT and Worcester Peat does not

mention demurrage or even provide a time frame for loading the

chartered vessel. As the district court found, "Worcester Peat

has not introduced any evidence showing that FMT was party to,

knew about, or was in possession of a document referring to

demurrage." We have said previously that "courts have been

reluctant to impose demurrage liability on a party that is

neither a signatory, successor nor possessor of a document that

expressly or by incorporation refers to demurrage." TransAsiatic Oil Ltd., S.A. v. Apex Oil Co., 804 F.2d 773, 781 (1st

Cir. 1986). As the district court noted, there is no evidence

in the record that FMT was a party to the contract between

Worcester Peat and Stender or to the contract between Stender

and Schulte & Bruns.4 Rogers acknowledged at trial that FMT had

received a fax from Dean Worcester indicating that 120 hours

were allowed for loading the vessel. However, there is no
-16-

evidence that Rogers realized that demurrage might be charged if

the loading exceeded that time. Under these circumstances, the

district court correctly declined to find FMT responsible for

the demurrage that Worcester Peat paid to Stender.

Worcester Peat also argues that FMT should be liable

for demurrage because FMT breached its duty of workmanlike

performance by not loading the M/V BORIS LIANOV more quickly.

See, e.g., F.J. Walker Ltd. v. Motor Vessel Lemoncore, 561 F.2d

1138, 1148 (5th Cir. 1977) ("A stevedore owes a warranty of

workmanlike performance to the vessel."). However, the contract

between FMT and Worcester Peat did not establish a time limit on

FMT's loading of the peat onto the vessel or even provide a

suggested guideline. In the absence of such a provision in the

contract, FMT was required to load the vessel in a reasonable

amount of time. The district court found that the time FMT

spent loading the M/V BORIS LIANOV was reasonable under the

circumstances:

At trial none of the evidence or testimony

suggested that the pace at which FMT loaded

the vessel was unreasonable under the

circumstances. Rather, all of the evidence

painted a picture of FMT simply doing the

best it could to load the peat under the

unexpectedly harsh conditions. Although FMT

may not have foreseen the problems posed by

using conveyors in the weather conditions

that existed, FMT attempted to address the

problems as they arose and implemented the
-17-

suggestions of Worcester Peat's

representatives to the extent possible.

Worcester Peat has not even attempted to demonstrate that this

determination was clearly erroneous. Indeed, Worcester Peat

concedes that the weather conditions were unusually harsh and

that those conditions complicated the loading of the peat.

Moreover, the weather was so harsh that Worcester Peat itself

caused delays in the loading by ordering that loading be stopped

to prevent losses of peat due to wind. Accordingly, we find no

clear error in the district court's conclusion that FMT's

loading time was reasonable under these circumstances.

C. Worcester Peat's Counterclaim for Lost Peat

Worcester Peat alleged unsuccessfully in its

counterclaim that FMT was liable for amounts of peat lost during

the loading process. On appeal, Worcester Peat first argues

that we should find clearly erroneous the district court's

ruling that Worcester Peat failed to establish how much peat was

lost through FMT's negligence. The district court stated:

Although the evidence established that some

unquantified amount of peat was airborne at

the terminal and that some smaller

unquantified amount of peat actually was

blown into the water, Worcester Peat failed

to provide any reliable evidence of how much

peat was lost. Moreover, Worcester Peat

expected to lose some peat during the

loading process. Worcester Peat failed to

establish that the amount lost was beyond
-18-

what it anticipated. This failure makes it

impossible to calculate damages.

Witnesses for both Worcester Peat and FMT testified

that some of the peat was blown off the conveyor belts during

the loading process. Morrill Worcester estimated that twenty to

twenty-five percent of the peat brought to the loading dock did

not make its way into the vessel. Another Worcester Peat

employee estimated the loss of peat at twenty percent. However,

both witnesses acknowledged the difficulty of calculating with

certainty the amount of peat lost in the wind. When Morrill

Worcester was asked, "Are you able to estimate based on your

observations an amount of peat that was lost overboard?" he

stated:

I really - you know, I think you have to do

it through a process of deduction probably.

It's hard to say. The way I understand it,

I think there was 425 trailer loads of peat,

and you'd have to come up with a number of

cubic yards or cubic meters on each trailer,

and in the stock pile that we have, the peat

moss is kind of semi-compressed as it is.

And if you - it's just hard to say. I don't

know how you come up with a figure, but it

was considerable. Probably 20, 25 percent

possibly went overboard or went somewhere. I

don't know. Maybe in the bushes, in the

woods, overboard, into the ocean, and

everywhere else. 

As Morrill Worcester's testimony indicates, several factors

complicated the task of calculating the exact quantity of peat

lost in the wind. Because the volume of peat changes depending
-19-

on how much it is handled, Worcester Peat cannot rely on a

comparison of the volume of peat delivered off the trucks with

the volume of peat in the ship's holds.

Additionally, as the district court noted, Worcester

Peat expected to lose some peat even in perfect loading

conditions. Dean Worcester testified that peat is generally

lost due to wind whenever it is handled or moved from one

location to another because it is so light and fluffy.

Worcester Peat did not offer any evidence regarding how the

claimed loss of up to twenty-five percent exceeded the loss of

peat the company expected in the ordinary course of handling it.

Given the speculative testimony about how much peat was lost,

and Worcester Peat's failure to specify how much that loss

exceeded its expectations, the district court was not clearly

erroneous in declining to hold FMT responsible for an

unquantified loss of peat.

Worcester Peat also argues that the district court

erred in not shifting the burden to FMT to prove that it was not

negligent in handling the peat. Contending that FMT was a

bailee of the peat, Worcester Peat says that FMT should account

for the peat that was lost in the wind because FMT, as the party

in control of the peat, is in a better position than Worcester

Peat to marshal evidence to explain the loss of peat. See Goudy
-20-

& Stevens, Inc. v. Cable Marine, Inc., 924 F.2d 16, 19 (1st Cir.

1991) ("[S]ince the bailee is generally in a better position

than the bailor to ascertain the cause of the loss, the law lays

on it the duty to come forward with the information it has

available."). The district court found that even if "the

relationship between Worcester Peat and FMT could be described

as a bailment because FMT stored the peat prior to loading it on

the vessel, Worcester Peat has failed to establish by a

preponderance of the evidence that FMT did not load all of the

peat less the amount Worcester Peat anticipated losing during

the loading process." For the reasons we have explained, the

district court was not clearly erroneous in finding that

Worcester Peat failed to establish how much peat was lost, if

any. Therefore, Worcester Peat failed to establish a prima

facie case of negligence against FMT. See id. at 18 ("[W]hen

the bailor shows delivery to a bailee and the bailee's failure

to return the thing bailed, he makes out a prima facie case of

negligence against the bailee.") (internal quotation marks

omitted). Under these circumstances, the district court did not

err in declining to apply a presumption of negligence for FMT to

refute.

Affirmed.