IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 15-30504

JAB ENERGY SOLUTIONS II, L.L.C., 

 Plaintiff – Appellee

v.

SERVICIO MARINA SUPERIOR, L.L.C.; CASHMAN EQUIPMENT 

CORPORATION, 

 Defendants – Appellants

Appeals from the United States District Court

for the Eastern District of Louisiana

USDC No. 2:13-CV-556

Before PRADO, OWEN, and HAYNES, Circuit Judges.

PER CURIAM:*

Cashman Equipment Corp. (“Cashman”) and its subsidiary Servicio 

Marina Superior, LLC (“SMS”) appeal the district court’s judgment awarding 

damages to JAB Energy Solutions II, LLC (“JAB”) for breach of contract. 

Cashman and SMS argue that the district court erred when it: (1) found that 

Cashman and SMS breached the contract’s warranty of seaworthiness and the 

warranty to perform transportation services with “due dispatch”; (2) concluded 

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

February 26, 2016

Lyle W. Cayce

Clerk

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that neither the contract’s terms nor a subsequent agreement between JAB 

and Cashman barred JAB’s claim; and (3) determined that Cashman was the 

alter ego of SMS. For the reasons that follow, we AFFIRM the district court’s 

judgment in all respects as to SMS, AFFIRM the dismissal of Cashman’s 

counterclaim for failure to brief the issue properly, and REVERSE the 

judgment of liability as to Cashman, which was predicated on an erroneous 

alter ego finding; we RENDER judgment in favor of Cashman on JAB’s claims 

against it. 

I. Background

After being awarded a job to transport and install an oil drilling platform 

in Malaysia, JAB contacted an employee of SMS and Cashman for the 

estimated cost to tow the drilling platform by ocean tug and barge from 

Louisiana to Malaysia. On March 1, 2012, the employee sent an email to JAB

providing details of a potential voyage. It designated a vessel owned by SMS, 

the Atlas, as the tug to perform the job. The email made predictions regarding 

the voyage’s length, the vessel’s speed and fuel consumption, and noted that 

only two fuel stops would be required. This email was expressly incorporated 

into the Contract of Affreightment (the “Contract”), which was signed by JAB 

and SMS on June 1, 2012. While another email and a voyage plan submitted 

by SMS to JAB further outlined the details of the voyage, they were not 

expressly incorporated into the Contract. The cost of the project in the 

Contract was $5,048,000. 

On June 16, 2012, the Atlas—which had received work on its engines a 

few months prior—left Louisiana to perform the Contract, tugging the JMC3330 barge, owned by Cashman, with the drilling platform attached. During 

the journey, the Atlas experienced significant difficulties. The Atlas’s 

starboard main engine reported constant issues that required numerous

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repairs, the chief engineer was fired, and at one point, the tug’s tow bridle 

broke and had to be fixed. 

On the afternoon of July 12, JAB emailed representatives at SMS and 

Cashman to suggest that they find a replacement tug as soon as possible, a 

suggestion that SMS and Cashman rejected. Two days later, JAB then notified 

SMS and Cashman that it had located a tug to replace the Atlas on its own in 

order to complete the voyage to Malaysia. On July 23, JAB replaced the Atlas 

and also executed the Barge Bareboat Charter (the “Bareboat Charter”) with 

Cashman, which arranged for JAB’s continued use of the JMC-3330 barge to 

transport the drilling platform to Malaysia. 

JAB filed suit against SMS and Cashman on March 26, 2013, claiming 

breach of contract and seeking all costs associated with the replacement of the 

Atlas. Cashman asserted a counterclaim seeking the amount still due under 

the Bareboat Charter for the continued use of the barge. After a bench trial, 

the district court ruled for JAB and dismissed Cashman’s counterclaim. The 

district court, describing a long list of problems with the Atlas, noted that the 

Atlas made unexpected stops to refuel and undergo repairs, vastly exceeded 

fuel consumption estimates, and had failed to even approach the speed 

described in the emails and the voyage plan provided to JAB.1 As a result, the 

district court determined that it was reasonable for JAB to find a replacement 

tug, and that JAB had no choice but to sign the Bareboat Charter for continued 

use of the JMC-3330 barge because the drilling platform was already secured 

to the JMC-3330’s deck. It also concluded that neither the terms of the 

Contract nor the Bareboat Charter barred JAB’s contractual claim. The 

district court found that SMS breached the terms in the Contract requiring

 

1 The district court found that it took the Atlas twenty-one days to reach Panama, at

which point it had consumed 68,894 gallons of fuel. The voyage plan projected that this leg 

of the trip would take around eight days and consume 32,000 gallons of fuel. 

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SMS to tender the Atlas “in a seaworthy condition, fully equipped and fully 

capable to performing the intended services,” and also breached its express 

obligation to “perform the transportation services with due dispatch.” The 

district court also determined that Cashman was the alter ego of SMS, and was 

thus also liable despite not being a signatory to the Contract. It entered 

judgment against Cashman and SMS for $4,864,214.89, plus $439,576.02 in 

attorneys’ fees. Cashman and SMS timely appealed. 

II. Jurisdiction and Standard of Review

The district court had jurisdiction over this admiralty action under 28 

U.S.C. § 1333. As with any bench trial, we review findings of fact for clear 

error and issues of law de novo. Mid-South Towing Co. v. Exmar Lux (In re 

Mid-South Towing), 418 F.3d 526, 531 (5th Cir. 2005). The interpretation of 

contracts is a question of law reviewed de novo. Dell Comput. Corp. v. 

Rodriguez, 390 F.3d 377, 384 (5th Cir. 2004). “A basic principle of contract 

interpretation in admiralty law is to interpret, to the extent possible, all the 

terms in a contract without rendering any of them meaningless or 

superfluous.” Chembulk Trading LLC v. Chemex Ltd., 393 F.3d 550, 555 (5th 

Cir. 2004). 

“[A] district court’s findings on unseaworthiness are findings of fact and 

therefore are reviewed for clear error.” Boudreaux v. United States, 280 F.3d 

461, 468 (5th Cir. 2002). We review alter ego determinations for clear error.

Zahra Spiritual Tr. v. United States, 910 F.2d 240, 242 (5th Cir. 1990). A 

finding of fact is clearly erroneous when, after viewing the evidence in its 

entirety, we are left with a definite and firm conviction that a mistake has been 

made. See Bertucci Contracting Corp. v. M/V ANTWERPEN, 465 F.3d 254, 

258–59 (5th Cir. 2006). 

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III. Discussion

A. SMS’s breach of the Contract’s express warranties

Cashman and SMS argue that the district court clearly erred when it 

found that the Atlas was unseaworthy. To be seaworthy, a vessel must be 

“reasonably suited for the purpose or use for which [it was] intended.” In re 

Signal Int’l, LLC, 579 F.3d 478, 498 (5th Cir. 2009) (citation omitted). This 

requires that “a ship, whether the hull, the decks, the machinery, the tools 

furnished, the stowage, or the cargo containers . . . be reasonably fit for the 

purpose for which they are to be used[.]” Id. (citation omitted). 

Article 3(A) of the Contract expressly warranted that the Atlas would be 

seaworthy when tendered: 

Warranties. Carrier [SMS] shall tender the Vessels to 

Shipper [JAB] in a seaworthy condition, fully equipped 

and fully capable to performing the intended services 

as advised in advance by [JAB] to [SMS] with all 

documentation, licensing and permits required for 

routine operation of the Vessels.

In finding that SMS failed to tender a seaworthy vessel, the district court

credited the testimony of an SMS employee who revealed that the Atlas had 

previously experienced fuel-consumption problems and that it emitted thick 

black smoke as it was sailing away from Louisiana. It also referenced the 

daily email reports provided by the Atlas during the voyage that indicated 

recurring engine problems, excessive fuel consumption, and issues with the 

Atlas’s engineer. Accordingly, we are not left with a definite and firm 

conviction that the district court made a mistake and therefore conclude that 

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it did not clearly err in finding that the Atlas was tendered in an unseaworthy 

condition. See Boudreaux, 280 F.3d at 468.

In the alternative, SMS claims that the district court erroneously 

ignored Article 4B2 of the Contract, which, according to SMS, was a waiver of 

the express warranty of seaworthiness at tender. However, we have held that 

to adequately waive the warranty of seaworthiness, a contract must do so 

“clear[ly] and unequivocal[ly].” Thomas Jordan, Inc. v. Mayronne Drilling 

Mud, Chem. & Eng’g Serv., 214 F.2d 410, 412 (5th Cir. 1954). In Thomas 

Jordan, we held that an inspection provision stating that a customer “has had 

the barge inspected and found same to be in first-class condition” was not 

sufficiently clear and unequivocal to constitute a waiver. Id. We specifically 

noted that the customer only inspected the exterior of the vessel and that the 

inspection provision was on the vessel owner’s pre-printed form. Id. Similarly, 

SMS’s inspection provision was part of SMS’s pre-printed form and JAB only 

inspected the exterior of the Atlas. The inspection provision here failed to 

unequivocally waive any warranty of seaworthiness. See id. Accordingly, the 

district court correctly determined that Article 4(B) did not bar JAB’s 

unseaworthiness claim.3 

SMS further maintains that the district court erred in determining that 

SMS breached the warranty to conduct the voyage with “due dispatch.” Article 

3A on warranties states: “Carrier [SMS] shall perform transportation services 

 

2 Article 4(B) of the Contract states: “Inspection. Shipper [JAB] shall be responsible 

for inspecting the Vessels, including their fittings, gear and equipment, prior to acceptance 

at tender to determine their suitability and fitness for the intended services, with Shipper to 

note any deficiencies in writing to Carrier prior to the commencement of loading cargoes. 

Upon Shipper’s acceptance of the Vessels or commencement of loading, whichever shall first 

occur, Shipper shall be deemed to have acknowledged and agreed that the Vessels, including 

their fittings, gear and equipment, are in all respects suitable and fit for the intended 

services.” 

3 Nor did the district court err in holding that the Contract’s indemnity provisions 

presented no obstacle to JAB’s contractual claims. 

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with ‘due dispatch,’ but makes no warranty as to speed or arrival/departure 

times.” SMS’s obligation to perform with “due dispatch” is informed by the 

email sent to JAB—expressly incorporated into the Contract—that outlined

the Atlas’s planned fuel consumption, speed, and the number of fuel stops for 

the voyage. While the Contract made no firm guarantees as to speed or arrival 

times, these initial estimates provide an outline as to the obligations of SMS. 

The district court found that, due to SMS’s negligence, the Atlas failed to even 

come close to reaching any of these estimated figures. The Atlas vastly 

exceeded the estimated fuel consumption, made multiple unexpected stops for 

repair and refueling, and fell woefully short of the estimated speed as outlined 

in the email.4 The district court did not err in finding that SMS breached the

“due dispatch” warranty.5 

B. Neither the terms of the Contract nor the terms of the Bareboat Charter 

barred JAB’s claim

SMS also claims that the district court improperly failed to apply Article 

8,6 the provision of the Contract that bars JAB from recovering consequential 

damages. General or direct damages are “damages that are recoverable . . . for 

injuries that are the natural result of the breach” or “[l]osses that an ordinary 

 

4 The email incorporated into the Contract estimated that the Atlas would average a 

speed of seven knots, consume around 4,000 gallons of fuel per day, and make two stops to 

refuel. The district court found that the Atlas averaged around three or four knots, more 

than doubled the estimated fuel consumption, and made two additional unplanned stops in 

Manzanillo and San Diego for repairs. 

5 As we hold that the district court did not err in concluding that SMS violated the 

warranty of “due dispatch” based upon terms expressly incorporated into the Contract, we 

need not address whether the district court properly assessed other extrinsic evidence to 

determine whether SMS breached its “due dispatch” obligation. 

6 Article 8 states: “Neither Carrier [SMS], Shipper [JAB] nor any Vessel shall be 

responsible for any special or consequential damages whatsoever and howsoever caused, 

including the unseaworthiness of either of the Vessels or the sole or concurrent negligence of 

either Carrier or Shipper, including without limitation, extra expense, loss of earnings, loss 

of profits, loss of use and business interruption, whether resulting from negligence, 

unseaworthiness, breach of this Contract or otherwise, even if the possibility of such damages 

may have been foreseeable.” 

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person would expect to follow the breach.” 11 JOSEPH M. PERILLO, CORBIN ON 

CONTRACTS § 56.6, at 102, 103 (2005). By contrast, consequential or special 

damages are losses “suffered as a ‘consequence’ of the breach of duty, but not 

as a direct and immediate and foreseeable consequence.” Id. at 105. SMS’s 

argument fails because the damages awarded are not consequential damages. 

The damages awarded represent the costs of hiring a tug to replace the 

unseaworthy and inadequate Atlas.7 They stem from the direct, immediate 

and foreseeable consequence of the Atlas being unable to perform the voyage. 

The district court did not err in deeming the ban on consequential damages 

inapplicable.8 

Also unpersuasive is SMS’s argument that the Bareboat Charter—the 

agreement between Cashman and JAB for the continued use of the JMC-3330 

barge—constituted a release of JAB’s claims or, in the alternative, a novation 

of the original Contract. Upon examination of the terms of the Bareboat 

Charter, we conclude that it does not indicate any intent by JAB to release any 

contractual claims or to novate the prior Contract. The district court correctly 

concluded that the Bareboat Charter presented no bar to JAB’s claims. 

C. Cashman was not the alter ego of SMS 

Cashman and SMS further argue that the district court erred when it 

found that Cashman was the “alter ego” of SMS. Under the alter ego doctrine, 

a court may bind a corporation to an agreement entered into by its subsidiary 

 

7 Given the lack of availability of other substitute tugs in the area to replace the Atlas, 

these damages also cannot be characterized as an “extra expense,” an item barred under the 

consequential damages provision of the Contract in Article 8. 

8 SMS also attempts to argue that under the language of Article 8, the Contract 

defined consequential damages to include any claims based on the unseaworthiness of the 

vessels, thus barring JAB’s claim. However, interpreting Article 8 to bar all claims based on 

the unseaworthiness of the Atlas would then ignore a basic principle of admiralty contract 

interpretation by rendering meaningless the express warranty of seaworthiness in Article 

3(A). See Chembulk Trading LLC, 393 F.3d at 555. We reject SMS’s argument. 

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when their conduct demonstrates a virtual abandonment of separateness. See 

Bridas S.A.P.I.C. v. Gov’t of Turkmenistan (Bridas I), 345 F.3d 347, 358–59 

(5th Cir. 2003). However, we have stated that “‘fraud’ may be required to 

pierce the corporate veil in contract cases, because the party seeking to utilize 

the doctrine has had the opportunity, during negotiations with a subsidiary, to 

obtain assurances . . . from its parent.” Bridas S.A.P.I.C. v. Gov’t of 

Turkmenistan (Bridas II), 447 F.3d 411, 417 (5th Cir. 2006); see also United 

States v. Jon-T Chems., Inc., 768 F.2d 686, 692 (5th Cir. 1985) (“[I]n contract 

cases, fraud is an essential element of an alter ego finding.”). Here, JAB never 

alleged that SMS or Cashman committed fraud. Further, JAB could have 

negotiated with Cashman to agree to the same warranties assented to by SMS, 

but failed to do so in the Contract. Accordingly, the determination that 

Cashman was the alter ego of SMS was clearly erroneous. See Zahra Spiritual 

Tr., 910 F.2d at 242. As such, Cashman should not have been held liable for 

SMS’s breaches.9

IV. Conclusion

For the reasons set forth above, we AFFIRM the decision of the district 

court as to SMS and the dismissal of Cashman’s counterclaim, REVERSE the 

judgment against Cashman, and RENDER judgment in its favor on JAB’s 

claims against it. 

 

9 Cashman’s counterclaim was mentioned in its brief on appeal, but it failed to brief 

the issue of the effect of a ruling against SMS on the merits but in Cashman’s favor on alter 

ego. Its sole argument regarding the counterclaim was as follows: “A plain reading of the 

contract and settled law negates all of these findings [holding SMS liable]. This Court should 

set aside the District Court’s finding of breach. [sic ,] The natural consequence of which would 

be to revive Cashman’s counterclaim.” This argument fails because we affirm SMS’s liability. 

We conclude that any separate arguments about Cashman’s counterclaim fail for want of 

adequate briefing. See In re Repine, 536 F.3d 512, 518 n.5 (5th Cir. 2008).

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