Court Opinion

ID: 9963192
Source: CourtListenerOpinion
Date Created: 2024-04-24 18:01:31.452034+00
Date Added: 2024-06-11T08:24:42.252276
License: Public Domain

Case: 23-40209   Document: 95-1   Page: 1     Date Filed: 04/24/2024

       United States Court of Appeals
            for the Fifth Circuit                         United States Court of Appeals
                                                                   Fifth Circuit

                       ____________                              FILED
                                                             April 24, 2024
                        No. 23-40209                        Lyle W. Cayce
                       ____________                              Clerk

Paragon Asset Company, Limited, as Owner of the Drillship
DPDS1,

                                                 Plaintiff—Appellant,

                            versus

American Steamship Owners Mutual Protection and
Indemnity Association, Incorporated,

                                                 Defendant—Appellee,

                            versus

Paragon Offshore Limited,

                                               Defendant—Appellant,

Paragon International Finance Company,

                                     Third Party Defendant—Appellant,

Paragon Offshore Drilling, L.L.C.,

                                        Counter-Claimant—Appellant,

                            versus

Signet Maritime Corporation,
Case: 23-40209         Document: 95-1        Page: 2    Date Filed: 04/24/2024

                                                             Claimant—Appellee,
______________________________

In the matter of the Complaint of Signet Maritime
Corporation, as Owner of the Tug Signet Enterprise, its engines, tackle,
etc., in a Cause of Exoneration from or Limitation of Liability

Signet Maritime Corporation, as Owner of the Tug Signet
Enterprise, its engines, tackle, etc., in a Cause of Exoneration from or Limitation
of Liability,

                                                              Plaintiff—Appellee,

                                      versus

Paragon Asset Company, Limited,

                                                  Counter-Claimant—Appellant,
______________________________

In the matter of the Complaint of Signet Maritime
Corporation, as Owner of the Tug Signet Arcturus, its engines, tackle,
etc., in a Cause of Exoneration from or Limitation of Liability

Signet Maritime Corporation, as Owner of the Tug Signet
Arcturus, its engines, tackle, etc., in a Cause of Exoneration from or Limitation
of Liability,

                                                              Plaintiff—Appellee,

                                      versus

Paragon Asset Company, Limited,

                                                                        Appellant.

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                ______________________________

                Appeal from the United States District Court
                    for the Southern District of Texas
                  USDC Nos. 1:17-CV-203, 1:17-CV-247,
                                1:18-CV-35
                ______________________________

Before Higginbotham, Smith, and Higginson, Circuit Judges.
Stephen A. Higginson, Circuit Judge:
       This is an appeal of an Opinion and Order issued by the district court
concerning liability in a series of maritime casualties caused by the breakaway
of a drillship in Port Aransas, Texas during and after Hurricane Harvey. Ap-
pellant Paragon Asset Company (“Paragon”) owned the vessel, the
DPDS1—an unmanned and unpowered drillship—which was docked at Port
Aransas prior to Hurricane Harvey’s arrival to the area on August 25, 2017.
After its evacuation effort failed, Paragon hired two tugs owned by Signet
Maritime Corporation (“Signet”) to apply power throughout the storm in an
attempt to help keep the vessel moored to the dock.
       On August 25, 2017, at the height of the storm, the DPDS1 broke from
its moorings, alliding with both Signet tugs and sinking one. The DPDS1 then
ran aground in the Corpus Christi ship channel, but on August 28, 2017 it
refloated and allided with a nearby research pier owned by the University of
Texas (“UT”). Applying maritime negligence law, the district court found
Paragon alone to be liable for the August 25 breakaway. Because Signet had
supplied a third tug to monitor the DPDS1’s movement after the storm, and
that tug failed to stop the vessel’s allision with the UT pier, the district court
concluded that Signet and Paragon were equally liable for the damages suf-
fered by UT.
       Paragon appeals, asking that we apply a “towage law” standard of
duty to Signet’s provision of its services to Paragon. Paragon further contests
the district court’s determination that a force majeure defense was not

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available to Paragon, and asks us to reverse the district court’s determination
regarding which contract between the parties governed Signet’s services.
Having reviewed the record and relevant law, we find that the district court
did not err in its finding of facts or conclusions of law. Accordingly, we AF-
FIRM.
                                      I.
       On Wednesday, August 23, 2017, Paragon and Signet began discus-
sions regarding the hiring of Signet tugs to tow the DPDS1 out to open sea
before Hurricane Harvey made landfall. On Thursday, August 24, 2017, after
delays and the closure of the port foiled the DPDS1’s evacuation effort, Sig-
net agreed to provide Paragon with two tugs, the ARCTURUS and the EN-
TERPRISE, to aid in keeping the DPDS1 moored to the Port Aransas dock
during the storm. At around 11:00 P.M. on August 25, 2017, the DPDS1
broke free of its moorings and propelled the ARCTURUS and the ENTER-
PRISE into nearby oil rigs. The ENTERPRISE sank, and the ARCTURUS
and the oil rigs sustained damage. The ENTERPRISE crew was rescued the
next morning.
       The DPDS1 continued into the Corpus Christi ship channel, where it
remained grounded for three days. During this time, Paragon retained Signet
to provide a tug to monitor the grounded vessel. On August 27, 2017, the tug
CONSTELLATION began monitoring the DPDS1, but because the DPDS1
had loose lines hanging from it, and because Hurricane Harvey was projected
to return to Corpus Christi, the crew of the CONSTELLATION did so from
a nearby dock rather than next to the vessel itself. On August 28, 2017, the
DPDS1 refloated and allided into the UT research pier. The CONSTELLA-
TION was unable to stop the allision with the UT pier, but afterwards it
pinned the DPDS1 to the shore. Signet subsequently provided three more

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tugs to hold the DPDS1 to the shore until the drillship could be towed to an-
other dock.
       After a five-day bench trial, the district court found that Paragon alone
was liable for the August 25, 2017 breakaway of the drillship, and rejected its
force majeure defense as well as its argument that Signet assumed the risk by
agreeing to help keep the vessel moored. In doing so, the trial court rejected
Paragon’s argument that it had no duty to Signet under maritime law of tow-
age, holding that Signet did not undertake the tow of the DPDS1 or take con-
trol of it, so towage law was inapplicable. The district court held that, under
maritime law of negligence, Paragon was liable for the breakaway incident be-
cause it unreasonably relied on reports about the strength of its mooring sys-
tem, which it knew were not based in fact, and because Paragon’s leadership
failed to call for an evacuation when it became clear that was the prudent
course of action. The district court found the parties—Paragon and Signet—
each to be 50% liable for the damage to the UT research pier.
       Finally, the parties debated whether a Master Charter Agreement
(“MCA”) or Signet’s Tariff (“the Tariff”) governed Signet’s provision of
tugboats to Paragon. The district court ruled in favor of the Tariff, finding
that Signet had expressly refused to agree to the terms of the MCA for the
provision of services, pointing to the course of dealing in the summer of 2017,
when Paragon had engaged Signet tows to hold the drillship multiple times
and had paid the Tariff rate. The district court rejected Paragon’s arguments
that the MCA governed, including its contention that the Tariff could not
govern because it contained explicit language that it did not cover Signet’s
services to vessels “aground or in distress, including assistance to a dead-
ship . . . , or when Services are performed during heightened Coast Guard
port conditions.”

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         Paragon appeals on three issues: first, it argues that the trial court
should have applied towage law, thus shifting to Signet some duty owed to
keep the drillship from harming others’ property. Second, it argues that the
trial court erred in rejecting its force majeure defense, “impermissibly” hold-
ing Paragon “to a standard of perfection and infallible judgment by viewing
its actions through the lens of post hoc knowledge.” Third, it argues that the
trial court erred in finding that Signet’s Tariff governed the interactions be-
tween the two parties, because Signet unilaterally and orally amended the
Tariff. Rather, under general maritime and Texas law, the district court
should have held the relationship to be “at law” or governed by the MCA,
and Signet should not have been allowed to seek indemnity or attorney’s fees
from Paragon.
                                       II.
         “The standard of review for a bench trial is well established: findings
of fact are reviewed for clear error and legal issues are reviewed de novo.”
One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258, 262 (5th Cir.
2011) (italics omitted) (quoting Water Craft Mgmt. LLC v. Mercury Marine,
457 F.3d 484, 488 (5th Cir. 2006)). We will first consider whether the district
court incorrectly applied maritime negligence law, before turning to Para-
gon’s arguments regarding the force majeure defense and the governing con-
tract.
         Paragon contends that the district court erred when it applied general
maritime negligence law rather than towage law. Paragon argues not that it
would be released from liability if the district court recognized Signet’s activ-
ities on August 25, 2017 as a tow; rather, it asserts that the application of
towage law would re-orient the inquiry about Paragon’s duty to Signet and
Signet’s duty to Paragon so as to reduce Paragon’s fault. At trial, Paragon
situated its law of towage argument within a larger contention that Signet

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assumed the risk that the DPDS1 might break free when Signet agreed to the
task of helping keep the DPDS1 at the dock—and, therefore, that Signet for-
feited any right to recover from Paragon when it failed to mitigate the risk it
was hired to guard against. The district court rejected this argument, and
Paragon does not pursue its general assumption of risk argument on appeal.
       Here, Paragon has retained its claim that the law of maritime towage
should apply. The district court rejected the towage law standard that Para-
gon proposed because “Signet never undertook the tow of the DPDS1, and
at no point did Paragon relinquish custody of the DPDS1 to the Signet tugs.”
Helping keep the DPDS1 moored to the dock did not constitute a tow, the
district court held, and “Paragon did not shift to Signet the duties that Para-
gon owed to ensure that the drillship was properly moored to prevent allision
with objects within the scope of danger should the mooring system fail.”
       Instead, the district court found that the incidents during Hurricane
Harvey should be governed by the standard for negligence articulated within
general maritime law. “To establish maritime negligence, ‘a plaintiff must
demonstrate that there was [1] a duty owed by the defendant to the plaintiff,
[2] breach of that duty, [3] injury sustained by the plaintiff, and [4] a causal
connection between the defendant’s conduct and the plaintiff’s injury.’”
GIC Servs., L.L.C. v. Freightplus USA, Inc., 866 F.3d 649, 659 (5th Cir. 2017)
(alteration in original) (quoting Canal Barge Co. v. Torco Oil Co., 220 F.3d
370, 376 (5th Cir. 2000)). A shipmaster has a “a special duty to take all rea-
sonable steps consistent with safety to [a] ship and her crew, to avoid or min-
imize the chance of harm to others.” Boudoin v. J. Ray McDermott & Co., 281
F.2d 81, 85 (5th Cir. 1960). The Supreme Court has stated that, if a ship drifts
from her moorings and causes a collision, “she must be liable for the damages
consequent thereon, unless she can show affirmatively that the drifting was
the result of inevitable accident, or a vis major, which human skill and

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                                  No. 23-40209

precaution, and a proper display of nautical skill could not have prevented.”
The Louisiana, 70 U.S. (3. Wall.) 164, 169 (1865) (internal italics omitted).
       The district court also cited our court’s decision in In re United States,
425 F.2d 991, 995 (5th Cir. 1970) to articulate the responsibility of a ship-
owner during a storm: “If those responsible for the [barges that broke free
and caused allisions] were reasonable in their anticipation of the severity of
the impending storm and undertook reasonable preparations in light of such
anticipation, then they are relieved of liability.” Id. And, specifically with re-
gard to docked vessels, the trial court relied on the rule expressed in the Car-
roll Towing case:
       Since there are occasions when every vessel will break from her
       moorings, and since, if she does, she becomes a menace to
       those about her; the owner’s duty, as in other similar situa-
       tions, to provide against resulting injuries is a function of three
       variables: (1) The probability that she will break away; (2) the
       gravity of the resulting injury, if she does; (3) the burden of ad-
       equate precautions.
United States v. Carroll Towing Co., 159 F.2d 169, 173 (2d Cir. 1947). Under
the caselaw regarding maritime negligence, the district court concluded that
Paragon was negligent: first, “company decision makers knew or should have
known that they possessed inaccurate information about the mooring system
installed to keep the DPDS1 docked,” because the reports on the strength of
the mooring system commissioned by Paragon reflected projected combina-
tions of mooring lines and ropes—not any real mooring system that had ac-
tually been put in place. Second, the district court found that Paragon com-
pany officials were unreasonable in their assessment of the strength and po-
tential danger of Hurricane Harvey, and in their choice to wait until Wednes-
day, August 23, to choose to evacuate the drillship even though they received
weather reports at 9:00 A.M. the morning of Monday, August 21 that showed
Corpus Christi in the storm’s cone of uncertainty. Testimony supported the

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trial court’s factual finding that the DPDS1’s evacuation would more likely
have been successful if Charles Yester, Paragon’s Senior Vice President of
Operations, had called in the evacuation order earlier, and the trial court
found that a reasonable captain would have planned for potential exigencies,
including the sources of delay that accrued on Thursday before the port
closed.
       Paragon argues that the district court was mistaken in its reliance on
the normal negligence standard for maritime torts. Rather, it argues that
Paragon “owed Signet no duty to provide a vessel which would not break
away during Hurricane Harvey, as this was the precise reason Signet under-
took the job of holding it.” Reasoning that the DPDS1 was a “dead” vessel,
Paragon relies on caselaw that emphasizes the duty of a tug owner to guard
against hazards, even those caused by the unseaworthiness of the vessel being
towed. See Bisso v. Waterways Transp. Co., 235 F.2d 741, 743 (5th Cir. 1956)
(“To be sure, there was a strong current . . . but this was well known and its
imminence was the reason the owners of [the vessel] agreed expressly with
[the tug] to provide a local assisting tug of adequate power.”).
       The threshold question, therefore, is whether the relationship be-
tween Signet and Paragon involved a tow at all. As an initial matter, treatises
and caselaw state generally that towage law is applicable when one vessel acts
to “aid the propulsion or to expedite the movement of another vessel.” 2 T.
Schoenbaum, Admiralty and Maritime Law § 12:1 (West 6th ed. 2023); see
also Stevens v. The White City, 285 U.S. 195, 200 (1932) (“The supplying of
power by a vessel, usually one propelled by steam, to tow or draw another is
towage. Many vessels, such as barges and canal boats, have no power of their
own and are built with a view to receiving their propelling force from other
sources. And vessels having motive power often employ auxiliary power to
assist them in moving about harbors and docks.”).

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       By contrast, Paragon cites four cases that it says stand for the propo-
sition that “[t]owage law’s application does not require a tug’s provision of
motive power to a vessel in transit” Canadian Aviator, Ltd. v. United States,
324 U.S. 215 (1945); Stevens v. E.-W. Towing Co., 649 F.2d 1104 (5th Cir.
1981); Tebbs v. Baker-Whiteley Towing Co., 407 F.2d 1055 (4th Cir. 1969); and
River Pars. Co. v. M/V FLAG ADRIENNE, 2002 WL 1453826 (E.D. La. Jul.
2, 2002). Signet counters that each of these cases “involved an actual or con-
templated voyage or movement” rather than an “assist” designed to keep a
vessel from moving.
       Signet is correct. Three of these cases—Stevens, Tebbs, and River Par-
ishes Co.—involved accidents that happened while a tug was trying to fasten
itself to the side of a vessel so that it could embark on a tug or tow of a vessel.
See Stevens, 649 F.2d at 1109; Tebbs, 407 F.2d at 1057; River Parishes Co.,
2002 WL 1453826, at *3. And in Canadian Aviator, the tow was not attached
to the tug, but the tug was guiding it through waters when the tow was
grounded. 324 U.S. at 228.
       More importantly, each of these cases took place in a context that is
dissimilar to the one at issue here: Stevens involved a personal injury of a
deckhand on a tug, which occurred due to a shifting current and the negli-
gence of tug employees. 649 F.2d at 110. In River Parishes Co. the tug
grounded itself. 2002 WL 1453826, at *1. In Tebbs the tug was attaching to
its tow and nudged the tow into another vessel. 407 F.2d at 1057. The tug in
Canadian Aviator ran its tow aground. 324 U.S. at 217. Each of these cases,
then, involves an action by the tug or its crew that resulted in an injury, alli-
sion, or grounding. None of these is analogous to what occurred here, where
the tugs applied their power to the DPDS1 but could not hold the drillship
after the DPDS1’s own mooring system failed.

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        Furthermore, the other cases cited by Paragon to support its posi-
tion—In re TT Boat Corp., 1999 WL 123810, at *6–7 (E.D. La. Mar. 2, 1999)
and Bisso v. Waterways Transp. Co., 235 F.2d at 743—both involved a tug tow-
ing a vessel. In TT Boat Corp, a tug was towing a manned barge, and the barge
allided with an offshore platform. TT Boat Corp., 1999 U.S. Dist. LEXIS
2754, at *6–7. In Bisso, a tug was towing a vessel into the entrance of the
Southwest Pass of the Mississippi River. 235 F.2d at 743. The tug attempted
to swing its tow into the turn, and due to the current the tow continued
straight, then moved west, causing the tug and tow to be grounded. Id. In both
instances, too, a tug was acting in its capacity as mover of other vessels and
was in control of the navigation on a journey. These cases are not analogous
to the facts here, where there was no journey—just the application of the
force of the tugs to prevent the improperly moored DPDS1 from breaking
free of the dock. 1
        Additionally, Paragon claims that the district court was inconsistent
because, while it did not apply towage law to the August 25, 2017 events, it
did apply towage law when it considered the August 28, 2017 incident involv-
ing the CONSTELLATION and the UT research pier. But this is not a cor-
rect characterization of the district court’s opinion. The district court specif-
ically stated that the “law of tug and tow does not govern” the second allision
because “Signet did not undertake a tow of the DPDS1” when it agreed to
monitor the DPDS1 and then hold it to the shore after it hit the UT research
pier. The district court did draw on towage law cases to describe Signet’s
duties as “neither a bailee nor an insurer of the tow” but held that Signet
remained “obligated to provide reasonable care and skill ‘as prudent

        _____________________
        1
          The trial court pointed to the report of Signet’s mooring expert, who concluded
that given the wind conditions, the two tugboats reduced the tension of the mooring lines
by only three percent.

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navigators employ for the performance of similar services.’” King Fisher Ma-
rine Serv., Inc. v. The NP Sunbonnet, 724 F.2d 1181, 1184 (5th. Cir. 1984)
(quoting Stevens, 285 U.S. at 202)); Even if the employment of this terminol-
ogy to describe Signet’s duties to Paragon were erroneous, it was harmless
because it did not meaningfully change the district court’s analysis of the re-
sponsibilities of Signet and Paragon under maritime negligence law, resulting
in the trial court’s finding each party 50% responsible for the damage to the
UT pier.
       Finally, Paragon positions the applicability of towage law as a factor
that would diminish its liability meaningfully. That is not the case. As the
district court noted, even if towage law applied, Signet would be unable to
“complain about a condition of unseaworthiness or other weakness that
caused the loss if it knew of the condition and failed to use reasonable care
under the circumstances.” King Fisher, 724 F.2d at 1184. But, as the district
court found, Signet had no opportunity to determine whether the DPDS1’s
mooring system would be adequate to withstand the hurricane—so even a
heightened duty for Signet would not result in a finding that Paragon was not
negligent.
                                      III.
       Second, Paragon argues that the trial court erred in its holding that
Paragon could not rely on a force majeure defense because its “delayed deci-
sion and inadequate mooring system represented unreasonably deficient ac-
tions by Paragon.” Paragon argues that the trial court erred by holding it to a
standard of “perfection” rather than reasonability, and by evaluating Para-
gon’s decisions “through some sort of nautical rear view mirror.” United Ge-
ophysical Co. v. Vela, 231 F.2d 816, 819 (5th Cir. 1956).
       The district court correctly articulated and applied the standard for a
force majeure defense, which may be invoked by a showing that an “Act of

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God,” such as a hurricane, occurred and that a shipmaster “took reasonable
precautions under the circumstances as known or reasonably to be antici-
pated.” See In re United States, 425 F.2d at 995. The district court also cor-
rectly noted that “the party asserting the defense bears the burden of proof.”
See In re Marine Leasing Servs., 471 F.2d 255, 257 (5th Cir. 1973); see also In re
United States, 425 F.2d at 995 (“The burden of proving inevitable accident
or Act of God rests heavily upon the vessel asserting such defense.”).
       The parties did not dispute that Hurricane Harvey was an Act of God
sufficient to activate a force majeure defense. However, with regard to the
second factor—reasonable precautions, the trial court cited Boudoin, in
which our court affirmed a district court’s ruling that an appellee was liable
for its vessel’s breaking free of its moorings and causing damage to a nearby
dock during Hurricane Audrey. 281 F.2d at 88. In that case, our court found
that, even though Audrey was a hurricane, the appellee failed to meet its bur-
den to show that “the tug master had no reason to anticipate that Audrey
would strike with the fury which she had and where the [vessel] was moored”
sufficient to excuse his failure to evacuate the vessel. Id.
       Paragon argues that, while the tug master in Boudoin did not attempt
to evacuate his vessel, Paragon did try to evacuate the DPDS1 and was foiled
in its attempts to do so. However, the district court considered this argument
and concluded that “Paragon’s delay in deciding to tow the DPDS1 out to
sea ultimately caused the drillship to remain at the dock,” particularly con-
sidering what it knew or should have known about the deficiencies of the
mooring system. The district court found the following facts:
       1. On August 2, 2017, Aldert Schenkel, Vice President of Engineering,
recommended in an email that the DPDS1 should depart 3 days before an
approaching storm that had a wind speed of 63 mph or more.

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       2. On Monday, August 21, Paragon received two weather reports.
One, released at 4:00 A.M., reported that the tropical system would reach
winds of 65 mph. A report later that morning put Port Aransas in the cone of
uncertainty, though it anticipated maximum winds to be at 57 mph. At that
time Schenkel (Vice President of Engineering) told Michael Koenig (Marine
Operations Manager) that “we don’t have to do anything yet” and they had
about 24 hours to make a decision.
       3. Koenig testified that he thought they should have “immediately”
decided to move the vessel, but that he deferred to decisionmakers.
       4. A weather report on Monday, August 21, at 4:00 P.M. stated the
maximum wind speeds were predicted to be 70 mph.
       5. At least one company, Rowan Companies, decided no later than
Monday to evacuate and it contacted the Aransas-Corpus Christi Pilots As-
sociation to communicate its decision.
       6. Paragon was aware that the Genesis Engineering reports estimating
the strength of the mooring system were incorrect because it relied on a series
of lines that were hypothetical and not actually in place on the vessel.
       7. Captain Jay Rivera, of the Aransas-Corpus Christi Pilots Associa-
tion, testified that a Monday evacuation order would result in a “pretty good
chance and a high likelihood” that the DPDS1 would have been towed to sea
before the arrival of Hurricane Harvey.
       8. The DPDS1 was the only drillship, of five docked along the Texas
Gulf Coast, that did not evacuate before Hurricane Harvey.
       9. While Charles Yester, Senior Vice President of Operations, took
some steps to prepare for an evacuation as early as Monday, he did not file
the Deadship Tow Application or communicate with port authorities. Para-
gon did not issue its official order of evacuation until Wednesday.

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       Considering these facts, the district court rejected Paragon’s argu-
ment that the delays on Thursday were unforeseeable, because “prudent
shipmasters foresee such situations and factor them into their decision-mak-
ing timetable.” The district court held that a prudent shipmaster would rec-
ognize that Navy ships would have priority over commercial ships in an evac-
uation, and that “[a] prudent shipmaster cannot rely on a plan that assumes
a best-case scenario with no sudden changes in circumstances.”
       As a reviewing court, we have a clear mandate. “Even though we
might have weighed the evidence differently had we been sitting as trier of
fact, we must accept the district court’s findings as long as they are plausible
in light of the record viewed in its entirety.” Perlman v. Pioneer Ltd. P’ship,
918 F.2d 1244, 1247 (5th Cir. 1990). The facts found by the district court are
“plausible in light of the record,” see id., and in fact reflect in painstaking
detail the accounts given in the testimony of Paragon’s own officials. The
DPDS1 was the only drillship, of five moored there, that did not successfully
evacuate from Port Aransas before the storm. This indicates that the trial
court did not use “hindsight” but rather applied the judgment that the other
drillship owners employed at the time of the storm. The district court’s hold-
ings about what a prudent shipmaster would anticipate, and its determination
that Paragon did not take “precautions under the circumstances as known or
reasonably to be anticipated” are not contrary to law. Paragon has failed to
show that it “took reasonable precautions under the circumstances as known
or reasonably to be anticipated,” In re United States, 425 F.2d at 995, and
therefore a force majeure defense is not available to Paragon.
                                      IV.
       Finally, Paragon contends that the trial court erred in its ruling that
the Tariff governed and asks that this court reverse the district court and hold

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                                    No. 23-40209

that the MCA governed Signet’s services to Paragon during Hurricane Har-
vey.
       As background on this dispute, in June 2015 Paragon and Signet estab-
lished the MCA to streamline future vessel-chartering negotiations. Each
party was represented by in-house counsel: Jay Oliver, Assistant General
Counsel for Paragon, and Scott Reid, General Counsel for Signet. The MCA
served as a template for specific projects, allowing quick finalization of details
like rates and locations. The MCA includes three documents: the document
spelling out the agreement, along with two parts of the Baltic & International
Maritime Council SUPPLYTIME 2005 Uniform Charter Party for Offshore
Service Vessels (“BIMCO”). Part I of the BIMCO agreement was a form
with 35 boxes to be filled in with details regarding each job, which would be
completed by business representatives rather than counsel. Part II included
contractual provisions tied to each of the boxes in Part I. The main document
of the MCA states that the agreement “shall control and govern in all situa-
tions in which Owners [(Signet)] charter to Charterers [(Paragon)] a vessel
or vessels, and the terms and conditions of this Agreement shall be deemed
incorporated by reference.” While “activities” and “voyages” are refer-
enced in the MCA, hold-in-place services like those provided by Signet on
August 24, 2017 are not.
        In August 2016, Signet introduced a Tariff establishing terms and
conditions for tug services in its Ingleside division, applicable to customers
within the Corpus Christi port area. 2 As is discussed below, Signet billed
Paragon according to the Tariff for services it provided earlier that year, in

       _____________________
       2
         The district court found that Signet’s competitors in Corpus Christi also
published tariffs that showed set rates and conditions for services provided within the
harbor.

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                                 No. 23-40209

June of 2017, when the DPDS1 had drifted from its moorings and Signet sent
tugs to hold it in place.
       The parties agree that a maritime contract is reviewed de novo. See
Weathersby v. Conoco Oil Co., 752 F.2d 953, 955 (5th Cir. 1984) (“A maritime
contract . . . should be read as a whole and its words given their plain meaning
unless the provision is ambiguous.”). Paragon argues that Signet proposed
using the Tariff during Hurricane Harvey without an arm’s-length negotia-
tion, and that no evidence supports the existence of an oral agreement be-
tween Signet and Paragon to apply the Tariff. Paragon argues that the only
reference to the Tariff before Hurricane Harvey’s landfall came from Sig-
net’s General Counsel, Scott Reid, in which he claimed that management
agreed to use the Tariff. Even accepting that the Tariff is valid, Paragon con-
tends, the only existing version was the Signet Ingleside Tariff posted on Sig-
net’s website and therefore Paragon did not have the ability to review it.
       Most problematic, Paragon posits, are the terms in the Tariff that dis-
allow unilateral, unwritten amendments and exclude the kind of services ren-
dered during Hurricane Harvey. In this instance, Signet provided services to
a deadship during heightened port conditions—and each circumstance was
excluded from the Tariff, according to Section 5, which reads:
       This Tariff does not cover Services to vessels aground or in dis-
       tress, including assistance to a deadship . . . , or when Services
       are performed during heightened Coast Guard port conditions.
Further, Paragon points to the contract language of § 21(a) and (b) of the
Tariff. Section 21(a) gives Signet the right to “adjust terms or conditions”
with “thirty (30) days’ advance notice to Owners” and states that these ad-
justments “shall be in writing.” And § 21(b) provides that the “Tariff shall
not be amended, modified, or waived unless and until made in writing and
signed by each party hereto.” Paragon argues that the trial court overlooked
the Tariff’s prohibition against unilateral waivers under §§ 21(a) and (b).

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Paragon contends that the trial court’s ruling is contrary to federal maritime
and Texas law principles by allowing a unilateral waiver of a provision in-
tended for one party’s benefit and, in doing so, rendering a clause of the con-
tract meaningless.
       Finally, Paragon argues that the district court’s decision undermines
the MCA’s significance as a blanket contract between the parties to be appli-
cable to multiple transactions. Paragon contends that Signet’s refusal to ap-
ply the MCA to the new services on the morning of August 24 occurred “at
the 11th hour” when there was not “opportunity to discuss or negotiate.”
Further, Paragon maintains that negotiations between in-house counsels
were ongoing, indicating an agreement on material terms. Paragon argues
that despite not executing Section I of the MCA, the information was never
in dispute between the parties and so it governed services Signet offered dur-
ing Hurricane Harvey. It asserts that the MCA, established in June 2015, re-
mained in effect and encompassed the services provided during that period.
In seeking specific evidence that Signet agreed to provide services under the
MCA, Paragon contends, the district court “ignored evidence that the MCA
always governs.”
       In its Order and Opinion, the district court rejected Paragon’s argu-
ment that the MCA should govern Signet’s services during Hurricane Har-
vey, ruling that the MCA, signed in 2015, provided a “framework” for po-
tential services but lacked specific performance obligations. The district
court found that, because the terms of the MCA explicitly did “not obligate”
Signet “to charter their vessels to Paragon,” or vice versa, it was Paragon’s
task to prove at trial that Signet agreed the MCA would govern the services
provided during Hurricane Harvey.
       Based on trial testimony the district court concluded that negotiations
between corporate counsels began on Wednesday, August 23, in anticipation

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                                 No. 23-40209

of the tow Signet originally planned to complete before the DPDS1’s evacu-
ation was canceled. At that time, e-mails between the two representatives
primarily focused on the essential terms within the MCA’s Part II, such as
insurance and indemnity provisions, emphasizing the uncommon risks posed
by Hurricane Harvey. But the Coast Guard’s closure of the port on the morn-
ing of August 24 and the failure of the DPDS1’s evacuation led to a significant
change in services: rather than towing it to the sea, the Signet tugs would now
be hired to help keep the DPDS1 moored to the dock. At that point, the dis-
trict court found, “Signet expressly refused” to provide the new services un-
der the MCA. At trial, Barry Snyder—the President and owner of Signet—
testified that, in a phone call with Schenkel, he told Schenkel that it would be
“very dangerous” to use the MCA for the hold-in-place services. During a
deposition, Schenkel testified that he could not remember if he had spoken
with Snyder about whether the MCA would govern the hold-in-place ser-
vices. Accordingly, the district court held that Paragon could not demon-
strate that Signet agreed that the MCA would govern Signet’s assistance at
the dock.
       The district court cited other factors for its holding that the MCA did
not govern Signet’s services during Hurricane Harvey: First, while they dis-
cussed and agreed on the MCA terms for the tow-out services, after it became
clear that Signet would instead provide hold-in-place services, the parties did
not complete the job-specific MCA forms. This signaled an understanding
that the MCA did not cover the new services Signet would provide. Second,
the district court held that Paragon’s focus on MCA’s Paragraph 1.3—which
stated the MCA “shall control and govern in all situations in which [Signet]
charter[ed] to [Paragon] a vessel or vessels”—overlooked the broader con-
text of the MCA, as Part II specified that its application was to “offshore ac-
tivities” and “voyages.” While towing the DPDS1 out to sea would have

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                                  No. 23-40209

fallen under this contract, the district court held, the actual services rendered
during Hurricane Harvey did not.
       We agree with the district court that the parties’ past conduct demon-
strates that these services were governed by the Tariff, while MCA discus-
sions arose when considering “offshore activities.” For example, Signet
billed Paragon according to the Tariff for the services it provided during the
water surges in June of 2017, and no party presented evidence that there had
been discussion under the MCA. After Hurricane Harvey, Signet tugs held
the DPDS1 stationary on the shore of the ship channel, and Signet billed Para-
gon for Tariff rates, while later talks about a tow to Brownsville for the drill-
ship to be scrapped occurred under the MCA. This consistent pattern illus-
trated the parties’ practical distinction between services governed by the
Tariff and “voyages” or “offshore activities” that were conducted under the
aegis of the MCA.
       The course of dealing is also persuasive evidence that the Tariff did in
fact govern Signet’s provision of services during Hurricane Harvey. Federal
maritime law permits oral agreements to incorporate the terms of a written
document, such as the Tariff. Kossick v. United Fruit Co., 365 U.S. 731, 734
(1961). And the course of dealing between Paragon and Signet—in which Sig-
net provided services, Signet invoiced under the Tariff, and Paragon paid
without complaint—established a common understanding consistent with
industry customs. We agree with the district court that the language of Para-
graph 5 of the Tariff explicitly excluding “assistance to a deadship” or ser-
vices during “heightened Coast Guard port conditions” was for the benefit
of Signet and could be waived unilaterally under federal maritime and Texas
law. See Stauffer Chem. Co. v. Brunson, 380 F.2d 174, 182 (5th Cir. 1967)
(“We recognize that alteration, modification or waiver of contract provisions
may be implied from the acts and circumstances surrounding the perfor-
mance of such contract.”); Johnson v. Structured Asset Servs., LLC, 148

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                                 No. 23-40209

S.W.3d 711, 722 (Tex. App. 2004) (“A party can waive contract provisions
that are in the contract for his benefit.” (citing Joiner v. Elrod, 716 S.W.2d
606, 609 (Tex. App. 1986))).
       The trial record supports the district court’s conclusion that both par-
ties understood that the Tariff would be the contract under which Signet’s
provision of services during Hurricane Harvey would be governed, despite
contrary language that appeared within the Tariff—and that Paragon was not
forced to accept these terms. Similarly, Paragon fails to show that the trial
court misapplied contract law in its holding that Signet’s waiver of its right
to draft separate agreements in scenarios such as risky weather was permis-
sible. Paragraph 5 of the Tariff was designed for Signet’s benefit because it
allowed flexibility in assigning tug services without individual negotiations
and gave Signet the opportunity to provide alternate terms or ask for higher
prices in case it provided riskier services. Because Signet expressly agreed to
perform services under the Tariff on August 24, Signet waived the re-
strictions outlined in Paragraph 5 for that instance.
       The district court also rejected Paragon’s duress and unconscionabil-
ity defenses, holding that The Elfrida, 172 U.S. 186, 192 (1898), does not sup-
port Paragon’s claim of unconscionable bargains under extreme conditions.
The Tariff’s consistent terms, accepted by both parties in previous transac-
tions, demonstrate its enforceability. Furthermore, Paragon’s argument of
immediate danger fails, as it sought Signet’s services to support its mooring
system, and it was not in a “helpless condition” when it hired Signet. The
district court found that Paragon failed to demonstrate that the Tariff is a
contract of adhesion because there was no significant one-sidedness or pro-
cedural unconscionability—both parties are “sophisticated commercial en-
terprise[s]” represented by counsel. On August 24, Paragon’s counsel, Jay
Oliver, sent an email to Scott Reid in response to Reid’s own email advising
him that the commercial teams had agreed that the hold-in-place would take

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                                        No. 23-40209

place under the Tariff. Oliver’s email read “Thanks for the update—much
appreciated.” The district court concluded that the Tariff continued to gov-
ern services through the August 28 incident, with Signet’s invoicing Paragon
on August 31, 2017, and Paragon’s paying without objection.
        Upon examination of the law and the record, the trial court did not err
in its holding that the Tariff rather than the MCA governed the provision of
tugs during Hurricane Harvey. Important facts led the trial court, and lead
us, to the conclusion that the parties all agreed that the Tariff governed: First,
the uncontroverted testimony of Barry Snyder was that he and Schenkel
agreed to the use of the Tariff. 3 Second, Scott Reid’s August 24 message
clearly stated that “[b]ecause we will not be towing, but instead will be hold-
ing the DPDS1 in place, Signet’s work will be governed by our Ingleside Tar-
iff.” Paragon’s General Counsel responded, “Thanks for the update—much
appreciated.” Third, course of dealing evidence showed that Signet billed
Paragon according to the Tariff on multiple occasions for hold-in-place activ-
ities and that Paragon had paid these bills without complaint, while discus-
sions about tows out of the harbor involved negotiations under the MCA.
Fourth, Signet also billed Paragon under the Tariff on August 31, 2017, for
the services it provided during Hurricane Harvey, and Paragon paid without
objection. 4
        Taken together, the evidence presented at trial indicates that the Tar-
iff rather than the MCA governed the hold-in-place services that Signet

        _____________________
        3
            Schenkel testified that he could not remember the conversation.
        4
          See One Beacon Ins. Co., 648 F.3d at 266 (ruling against a litigant that “ratified
their course of dealing [with the adverse party] by submitting an invoice for the work on the
barge without objecting to the terms and conditions”).

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                                No. 23-40209

provided when it became clear that its tugs would no longer be towing the
DPDS1 to Port Aransas after the failed evacuation.
                                     V.
       Having reviewed the facts and record, we find that the district court
did not err in applying maritime negligence law, in holding that the force
majeure defense was not available to Paragon, or in concluding that the Tariff
governed the services that Signet provided during Hurricane Harvey. There-
fore, we AFFIRM the rulings of the district court’s Opinion and Order.

                                     23