Opinion ID: 617714
Heading Depth: 3
Heading Rank: 2

Heading: GAIC Must Indemnifty EMC and SWS for Their

Text: Cleanup Costs Between June 7, 2005 and August 31, 2005 GAIC argues, first, that it owes no coverage after June 7, 2005 because, on that date, the Coast Guard announced recovery operations for the spill concluded. Second, it asserts that if it does owe coverage, the district court erred in awarding $355,569 in damages because it also held that EMC and SWS could not substantiate its costs, including those after June 7, 2005. As an initial matter, the district court did not clearly err when it found that GAIC owed coverage after June 7, 2005. See discussion supra at I.B.3. On appeal, GAIC reiterates its argument that the Coast Guard’s On-Scene Co- ordinator declared the spill over on June 7, 2005. It disputes the district court’s finding that EMC and SWS faced requests from the IEPA to continue its cleaning operations both in the canal and with respect to the EMC 423 after June 7 as based on heresay; however, it offers no new arguments or evidence to undermine the district court’s analysis. GAIC, in short, simply disagrees with the outcome. Nos. 11-1266 & 11-1346 31 As the district court acknowledged, determining GAIC’s exposure for EMC and SWS’s post-June 7 invoices is “difficult.” The parties never established and presently disagree about what amounts appropriately constitute EMC and SWS’s true costs. EMC and SWS claim they are owed the full amount they invoiced—$723,710—and GAIC asserts that it owes nothing. Confronted with circumstances like these, where the terms of an oral contract are ambiguous, New York law considers “the acts of the parties thereunder [as] of controlling importance in its true interpretation.” Johnsten v. Dahlgren, 62 N.Y.S. 1115, 1119 (N.Y. App. Div. 1900). In this case, the district court calculated that GAIC willingly paid 80% of EMC and SWS’s claimed costs prior to June 7, 2005, at which time it was already aware of the substantiation problems presented by their method of invoicing. It was not clear error, therefore, to infer that GAIC would and should pay 80% of the post-June 7 invoices, particularly since GAIC offered the district court no alternative calculation of what it owed for the post-June 7 invoices. We affirm the district court’s awarding EMC and SWS $355,569 in damages. 3. GAIC is Liable for the Consulting Costs Expended to Defend Against the IEPA’s Charges Regarding the Disposal of the Remnant Oil on the EMC 423 The district court awarded EMC and SWS $10,215 for consulting costs it incurred addressing the IEPA’s claim that its removal of the petroleum residue from the EMC 32 Nos. 11-1266 & 11-1346 423 violated the law. See discussion supra at I.A.2.d.i; I.B.3. GAIC argues that there is “no proof to suggest the removal of cargo from [EMC 423] after May 18[, 2005] as the result of the [Captain of the Port] Order to remove the cargo from the uncertified Barge had anything to do with avoiding an OPA90 or similar Illinois state statute. Nor does it involve a CERCLA exposure.” Based on the evidence before us, we hold that the district court did not commit clear error when it awarded EMC and SWS $10,215 in consulting costs to defend against these charges. The court reasonably concluded that the fees were covered by the policy, and we find no compelling reason to disturb its ruling. 4. GAIC is Liable for Legal Costs Incurred Defending Against the IEPA’s Claim for Injunctive Relief GAIC challenges that it is not responsible for any of EMC and SWS’s defense costs with respect to the IEPA suit, including the $32,840 awarded by the district court. See discussion supra at I.B.3. The district court reasonably determined that EMC and SWS incurred these costs as they confronted potential liability under OPA90 and its state-law equivalents. The costs are, therefore, covered by the policy such that GAIC owes indemnification. Based on the evidence before us, we conclude that the district court did not clearly err in so finding, and we decline the invitation to overturn its damage award. Nos. 11-1266 & 11-1346 33