Court Opinion

ID: 2797024
Source: CourtListenerOpinion
Date Created: 2015-04-28 19:01:06.784543+00
Date Added: 2024-06-11T11:29:21.211532
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                               No. 14-1245

RG STEEL SPARROWS     POINT,    LLC,    f/k/a     Severstal    Sparrows
Point, LLC,

                 Plaintiff – Appellee,

           and

SEVERSTAL SPARROWS POINT, LLC,

                 Plaintiff,

           v.

KINDER MORGAN BULK TERMINALS,          INC.,    d/b/a    Kinder   Morgan
Chesapeake Bulk Stevedores,

                 Defendant – Appellant.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.   William M. Nickerson, Senior District
Judge. (1:09-cv-01668-WMN)

Argued:   January 28, 2015                      Decided:      April 28, 2015

Before TRAXLER,    Chief   Judge,   and    DIAZ    and    THACKER,   Circuit
Judges.

Affirmed by unpublished per curiam opinion.              Judge Diaz wrote a
separate concurring opinion.

ARGUED: Thomas M. Wolf, LECLAIRRYAN, PC, Richmond, Virginia, for
Appellant.   Denise A. Lazar, BARNES & THORNBURG, LLP, Chicago,
Illinois, for Appellee.     ON BRIEF:     Joseph M. Rainsbury,
LECLAIRRYAN, PC, Roanoke, Virginia, for Appellant.    L. Rachel
Lerman, BARNES & THORNBURG, LLP, Los Angeles, California; Linda
S. Woolf, GOODELL DEVRIES LEECH & DANN, LLP, Baltimore,
Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

                                2
PER CURIAM:

            This case arose in the aftermath of the catastrophic

collapse of a bridge crane used by Kinder Morgan Bulk Terminals

Inc. (“Appellant”) to unload coke used to fuel a steel mill

located near Baltimore, Maryland.             Ownership of the steel mill

and   the   bridge   crane   changed    hands    several     times   in   recent

history.    The appellee in this case, RG Steel Sparrows Point LLC

(“RG Steel”), 1 acquired the company that owned the steel mill and

the bridge crane through a stock purchase on March 31, 2011.

Following the bridge crane collapse, Appellee sued Appellant for

negligence.    Appellee also claimed its right to indemnification

for losses pursuant to a lease and service contract governing

Appellant’s use of the bridge crane (“Lease”).

            Appellant   maintained     that     it   was   not   negligent   and

that it had no duty to indemnify Appellee.                 It argued that the

limitation-of-liability provision of a purchase order that was

in force at the time of the crane accident applied instead of

the Lease’s indemnity clause.          After a bench trial, the district

court entered judgment in Appellee’s favor.                The district court

found that the parties renewed the Lease by an implied-in-fact

contract and concluded that the purchase order did not supersede

      1
       For ease of reference, we refer to RG Steel and the
companies that previously owned the steel mill and the bridge
crane collectively as “Appellee.”

                                       3
the    Lease’s       indemnity          clause          under    Maryland       law       because      the

Lease       defined       the    parties’          relationship          with    respect         to    the

crane       and     the    purchase           order         governed     a    different         subject

matter.       The district court held Appellant liable for over $15.5

million,          awarding           compensatory            damages     for        destruction         of

Appellee’s         property           and    consequential            damages       for    Appellee’s

resulting business losses.

               In the instant action, Appellant does not challenge

the district court’s award of compensatory damages, nor does it

dispute      the     court’s          finding       that       the    parties       were    generally

operating         under         an     implied-in-fact               renewal     of       the    Lease.

Instead,       it     argues          the     district          court    erred       in    concluding

Appellant was liable for consequential damages pursuant to the

Lease’s indemnity clause.                         Appellant claims the district court

should have applied the limitation-of-liability provision of a

purchase order agreement that was in force at the time the crane

collapsed -- a provision that Appellant contends superseded the

Lease’s       indemnity              clause       and       foreclosed        any     consequential

damages award.             In the alternative, Appellant avers that, even

if    the    district       court           was   correct        to    hold    Appellant         to    the

Lease’s       indemnity          clause,          the       district    court       erred       when    it

qualified Appellee’s damages expert to testify and relied on the

expert’s      calculation             in     ordering         its     award    for    consequential

damages.

                                                        4
             We       affirm    the     district           court’s    rulings      in    their

entirety, albeit on different grounds.                         See Hutto v. S.C. Ret.

Sys., 773 F.3d 536, 549-50 (4th Cir. 2014) (affirming “for a

reason supported by the record but not relied on by the district

court”).         Appellant is liable for consequential damages even

under the express terms of the purchase order it wishes us to

apply.      Furthermore,          the    district          court     did   not     abuse      its

discretion by permitting Appellee’s damages expert to testify,

and   it    did       not    clearly     err    in     determining         the    amount      of

Appellee’s damages award.

                                               I.

                                               A.

             The Lease at issue originated in 1992, although both

parties      acquired          their      interests            in     this       contractual

relationship at a much later date.                          Under the Lease, Appellee

leased     the    bridge       crane    to     companies       providing         stevedoring 2

services     for       the     steel    mill’s        “A     Yard.”        The    stevedores

undertook        to   keep     the     bridge       crane    in     good   repair       and    to

maintain an insurance policy on it.

             The Lease contained an indemnity provision, which read

as follows:

      2
       Stevedores load and unload cargo from ships.                          See Black’s
Law Dictionary 1549 (9th ed. 2009).

                                                5
            [The stevedores] shall . . . indemnify and
            save harmless [Appellee] from and against
            all loss or liability for or on account of
            any injury (including death) or damages
            received or sustained by any person or
            persons   (including     [Appellee]    and   any
            employee, agent, or invitee thereof) by
            reason of any act or omission, whether
            negligent or otherwise, on the part of [the
            stevedores]     or   any     employee,    agent,
            subcontractor, representative, invitee, or
            business    visitor   of    [the    stevedores],
            including any breach or alleged breach of
            any statutory duty which is to be performed
            by [the stevedores] hereunder but which is
            or may be the duty of [Appellee] under
            applicable provisions of law.

J.A. 692-93 (emphasis supplied). 3             The stevedores also “assume[d]

the entire risk of loss, theft, or destruction of the [bridge

crane]    resulting     from    any    cause    whatsoever.”        Id.   at   690.

During the life of the Lease, Appellee entered into purchase

order    contracts    with     the    stevedores      to   unload   coke-carrying

vessels in the port.

            In December 2002, Appellant, a company that provides

stevedoring    services,       purchased      its   predecessor’s     rights   and

liabilities under the Lease.                 Although the Lease was set to

terminate    at   the   end    of     July    2003,   Appellant     and   Appellee

entered into a separate short-term interim agreement to extend

the Lease.    Initially, this interim agreement was set to expire

     3
       Citations to the “J.A.” refer to the Joint Appendix filed
by the parties in this appeal.

                                         6
when    Appellee     and    Appellant      executed   a    long-term     agreement

governing the use of the bridge crane or on December 31, 2003,

whichever   occurred        sooner.        However,   Appellant    and    Appellee

extended the interim period several times.                 When they ultimately

were unable to reach a long-term agreement, the Lease finally

expired at the end of 2005.

            Although Appellant never expressly renewed the Lease

after   2005,   it    continued       to   conduct    business    with    Appellee

“largely in the same manner as [it] had under the Lease.”                       J.A.

600.    For example, Appellant “repeatedly referenced the Lease”

in its communications with Appellee and it “maintain[ed] the

[b]ridge [c]rane at its own expense,” in accord with the terms

of the Lease.        Id. at 600–01.         Appellant also continued to use

the bridge crane to unload ships pursuant to various purchase

order contracts.

                                           B.

                                           1.

            On June 4, 2008, the National Weather Service issued a

tornado watch for the central Maryland area.                  By 3:35 p.m. that

day, wind speeds measured over 90 miles per hour.                   Despite its

own     procedures         and    federal       regulations      which     require

preventative       measures      during    high   winds,    Appellant     did    not

deploy hurricane tie downs, and the bridge crane’s automatic

                                           7
rail clamps had been removed at some point in the mid-1990s. 4

Without the benefit of these safety measures, the wind toppled

one the bridge crane’s A-frame legs, and the crane fell.

                                          2.

            As an immediate result of the crane collapse, Appellee

closed   the    A     Yard   and   paid       for   emergency   repairs    to    its

facilities.         Appellee also suffered other consequential losses

arising from delays and increased handling charges attributable

to the loss of the crane.            Without a crane to unload coke for

the steel mill’s blast furnace, cargo ships carrying coke were

required to unload their cargo at another terminal farther away

from the blast furnace: the New Ore Pier.                  Because the New Ore

Pier already serviced a number of ships on a regular basis, it

struggled      to    accommodate    the    additional     traffic.        To    make

matters worse, in order to keep the blast furnace lit, Appellee

was required to schedule the coke-carrying ships before other

non-coke-carrying vessels also waiting to unload at the New Ore

Pier.    This rescheduling, coupled with port congestion caused by

     4
       Appellant does not dispute the fact that its own standard
operating procedures “instructed [Appellant] to employ hurricane
tie downs [on the crane to secure it] in the event of strong
winds.” J.A. 603. Additionally, Occupational Safety and Health
Administration regulations require bridge cranes to be equipped
with automatic rail clamps “that prevent cranes from moving
during high wind events.”    Id. at 614-15; see also 29 C.F.R.
§ 1910.179(b)(4).

                                          8
re-routing the coke-carrying ship traffic to the New Ore Pier,

resulted      in   transit    delays.        As    a     result,       Appellee    paid

demurrage 5 fees pursuant to its contracts with these ships.

              When the A Yard reopened in the latter half of 2008,

Appellant     used    floating   cranes      to   unload       coke     ships   and    it

placed the coke in piles near the mill.                      Because the floating

cranes unloaded cargo at a rate significantly slower than the

bridge crane, Appellee faced the possibility of future demurrage

fees.       To     mitigate    its   losses,      Appellee          renegotiated      its

contracts with cargo ships and agreed to pay increased fees to

offset the delays.          Appellee also needed to restore and modify a

conveyor in order to move the coke from piles in the A Yard to

the   blast      furnace.     Mill   operations        did    not    normalize     until

approximately three years later, in August 2011, when Appellant

purchased and installed its own crane at the A Yard.

                                        3.

              At the time of the bridge crane’s collapse on June 4,

2008, Appellee and Appellant were bound by a February 21, 2008

purchase      order   (“Purchase     Order”)      that       required    Appellee      to

“unload[] up to 500,000 [tons] of coke from ships with bridge

      5
        In maritime law, the term “demurrage” applies to
“[l]iquidated damages owned by a charterer to a shipowner for
the charterer’s failure to load or unload cargo by the agreed
time.” Black’s Law Dictionary 498 (9th ed. 2009).

                                        9
crane [sic].”      J.A. 992.     The Purchase Order also incorporated

the terms of another document entitled “AMUSA-100.”             See id.

            The    AMUSA-100    defined     the     parties’     rights   and

liabilities with respect to the Purchase Order.              Section 7.6 of

the    AMUSA-100   contained    the    following    limitation-of-liability

provision:

            In no event shall either party be liable to
            the    other    under    this    order   for
            consequential, indirect or special damages,
            including without limitation lost profits,
            revenues, production or business . . . .

J.A. at 1000.      However, per section 1.4 of the AMUSA-100, other

“specific     terms    agreed     in     writing”     that     “contradict[]”

“corresponding” terms in the AMUSA-100 “shall prevail.”               Id. at

997.

                                       C.

            Appellee filed suit against Appellant in the District

Court for the District of Maryland on June 24, 2009.                  In its

amended complaint, Appellee claimed that Appellant was negligent

for failing to secure the bridge crane from the impending storm,

and that it was liable in contract for breaching the Lease by

refusing to indemnify Appellee for losses arising from the crane

collapse.

             The parties fought this dispute at a seven-day bench

trial in November and December 2013.          At trial, Appellee offered

the testimony of its Corporate Controller, Jeffrey Gennuso, who

                                       10
testified   about   the   general    effect   of       the    crane    collapse     on

steel mill operations and Appellee’s contractual relationships.

Jeffrey Cohen, an economist, provided expert testimony about the

calculation of consequential damages Appellee suffered.

            The   district   court   reached       a    verdict       in    favor   of

Appellee on both its negligence and breach of contract claims.

The district court awarded a total of $15,555,884 6 to Appellee,

which covered the following categories of damages:

              •   compensatory damages        for      loss    of     the
                  bridge crane;

              •   compensatory    damages   for emergency
                  repairs to Appellee’s facilities and
                  for restoration and modification of the
                  conveyor,    all   of   which Appellant
                  conceded at trial; and

              •   consequential   damages   for demurrage
                  fees, changes in commercial terms, and
                  increased handling costs. 7

            Appellant does not appeal any part of the district

court’s award of compensatory damages.              Instead, it argues only

     6
       The court’s original damages award was approximately $13
million, but it increased this amount after correcting a
clerical error.    This adjustment only affected the district
court’s calculation of Appellee’s compensatory damages for loss
of the bridge crane. See Order Granting Motion to Amend/Correct
Clerical Error, Severstal Sparrows Point, LLC v. Kinder Morgan
Bulk Terminals, Inc., No. 1:09-cv-01668 (D. Md. Jun. 24, 2009;
filed May 6, 2014), ECF No. 183.
     7
       At trial, Appellant conceded it was liable for damages due
to Appellee’s increased handling costs.

                                     11
that the district court erred in ordering consequential damages

for demurrage fees and changes in commercial terms.

                                             II.

                                             A.

                            Contract Interpretation

                                             1.

               The threshold question is whether the district court

correctly       concluded      that        Appellant    should       be    required    to

indemnify Appellee, or whether an agreement between the parties

prohibits such an award.

               Interpretation         of     a     contract      renders      a     legal

conclusion, and we review the district court’s legal conclusions

de novo.        See FTC v. Ross, 743 F.3d 886, 894 (4th Cir. 2014);

Perini/Tompkins Joint Venture v. Ace Am. Ins. Co., 738 F.3d 95,

101 (4th Cir. 2013).           We apply substantive state law to resolve

appeals    of    district      court       rulings     that   rest    on    state     law,

including those involving interpretation of private contracts.

See James v. Circuit City Stores, Inc., 370 F.3d 417, 421-22

(4th Cir. 2004).

               The district court found that the parties renewed the

Lease     by    an     implied-in-fact           agreement    and     therefore       “the

Lease . . . [and] its terms and conditions were in effect” at

the time of the crane collapse.                     J.A. 612.        In essence, the

district       court   found   that        this    implied-in-fact        contract     was

                                             12
nothing more than an agreement to renew the Lease and to amend

its duration term.           But Appellant argued that, even if the Lease

was     renewed      by     an    implied-in-fact          contract,       Maryland       law

required      that    the    later-in-time          written      Purchase    Order       took

precedence over the Lease.                Cf. Cnty. Comm’rs of Caroline Cnty.

v. J. Roland Dashiell & Sons Inc., 747 A.2d 600, 607 (Md. 2000)

(holding      that    a    contract       implied    in    law    cannot    supplant       an

express contract governing the same subject).                           It argued that

under the AMUSA-100, which was incorporated into the Purchase

Order, Appellant was not required to indemnify Appellee.                                  The

district court         rejected         Appellant’s    argument,      concluding         that

the   Purchase       did    not    govern    the     same     subject     and     that    the

Lease’s indemnity clause therefore applied.

              Appellant does not appeal the district court’s finding

that it renewed the Lease through an implied-in-fact contract.

Nor   does    it     dispute      the    district    court’s      conclusion       that    it

would    be    liable       for    consequential          damages    if     the    Lease’s

indemnity      provision         applied.      Instead,       Appellant      renews       its

argument that the Lease did not apply and that Appellant should

prevail by virtue of the AMUSA-100.                       We disagree, and conclude

that Appellant would be liable pursuant to the AMUSA-100’s plain

terms in any event.

                                             13
                                          2.

               Appellant argues that the district court erred because

it permitted an implied-in-fact agreement to renew the Lease to

supersede an express contract on the same subject matter -- the

Purchase Order -- in contravention of Maryland law.                        Although

the    Lease    and    the    Purchase    Order    address   the    same      subject

matter, Appellant’s argument is nonetheless flawed.                        For one,

the Maryland courts have not adopted the rule Appellant pushes;

they   have     only   held    that   a   contract    implied      in   law   cannot

supplant an express contract governing the same subject.                         See

Cnty. Comm’rs of Caroline Cnty., 747 A.2d at 607.                          And even

assuming Appellant’s interpretation of Maryland law is correct,

the    AMUSA-100’s      plain    text     and     Appellant’s   implied-in-fact

agreement to renew the Lease compel us to reach the same result

as the district court: Appellant is liable to indemnify Appellee

for consequential damages.

                                          3.

               When a contract is unambiguous, Maryland courts give

full effect to the plain meaning of its terms.                      See Wells v.

Chevy Chase Bank, F.S.B., 768 A.2d 620, 630 (Md. 2001).                          Per

section 1.4 of the AMUSA-100, “specific terms agreed in writing”

by the parties that contradict “corresponding . . . provisions”

of the AMUSA-100 “shall prevail.”               J.A. 997.    The effect of this

safety valve provision is unambiguous: the AMUSA-100 bows to

                                          14
similar, yet contradicting, terms of a written agreement between

the parties.

             There is no question that the Lease’s indemnity clause

is a “specific term[] in writing” that “correspond[s]” to the

AMUSA-100’s     limitation-of-liability                provision.           J.A.    997.

Appellant instead argues that the implied-in-fact renewal of the

Lease is not a term agreed to in writing and section 1.4 “does

not prevent the Purchase Order from trumping any prior implied-

in-fact   agreement.”         Appellant’s        Reply     Br.    13.     Although    an

implied-in-fact      agreement      is   necessarily        not    in    writing,    the

implied-in-fact agreement in this case only amended the Lease

term   and   does    not   “contradict[]”            the   limitation-of-liability

provision of the AMUSA-100.              J.A. 997.          The AMUSA-100 has no

“corresponding”       temporal      limitation.            The    Lease’s    indemnity

clause,   on   the    other      hand,   is    an    agreement     in    writing    that

conflicts      with        the      AMUSA-100’s            limitation-of-liability

provision.     Therefore, the AMUSA-100 unambiguously requires that

Appellant be held to the Lease.                The Lease states that the crane

operator “assumes the entire risk of loss of the . . . [b]ridge

[c]rane resulting from any cause whatsoever.”                     Id. at 690.

             Therefore, we affirm the district court’s conclusion

that   Appellant       was       required       to     indemnify        Appellee     for

consequential damages it incurred as a result of the crane’s

collapse.

                                          15
                                     B.

                                   Damages

            We now turn to whether the district court’s awards for

demurrage    and   changes    in   commercial        terms   have    evidentiary

support.     The evidence upon which the district court principally

relied when ordering these awards was the calculation provided

by Cohen; Appellant asserts Cohen was unqualified to testify as

an expert on such matters.          Accordingly, Appellant claims the

district court lacked sufficient evidence to order damages for

demurrage and changes in commercial terms.

                                     1.

                   Admissibility of Expert Testimony

            A district court’s decision to qualify and admit the

testimony of an expert witness is one that we review for abuse

of discretion.     “A court abuses its discretion if its decision

is guided by erroneous legal principles or rests upon a clearly

erroneous factual finding.”         United States v. Garcia, 752 F.3d

382, 390 (4th Cir. 2014) (internal quotation marks omitted).

            Appellant claims that the district court abused its

discretion by qualifying Cohen as an expert to testify about

Appellee’s    damages   for    demurrage       and    changes   in   commercial

terms.      Appellant   concentrates      on    Cohen’s      admitted   lack   of

experience with maritime contracts.

                                     16
              Rule    702    of   the    Federal    Rules     of    Evidence      permits

expert witnesses to testify if their “scientific, technical, or

other    special      knowledge         will    help   the       trier    of    fact    to

understand the evidence or to determine a fact in issue,” such

as the amount of damages due.                  Fed. R. Evid. 702.          The question

of whether a witness is qualified to testify is context-driven

and “can only be determined by the nature of the opinion he

offers.”       Gladhill v. Gen. Motors Corp., 743 F.2d 1049, 1052

(4th Cir. 1984).             Because our general preference is to admit

evidence that will aid the trier of fact, the expert need only

have    “sufficient         specialized        knowledge    to     assist      jurors   in

deciding the particular issues in the case.”                             Belk, Inc. v.

Meyer Corp., U.S., 679 F.3d 146, 162 (4th Cir. 2012) (internal

quotation marks omitted); see Westberry v. Gislaved Gummi AB,

178 F.3d 257, 261 (4th Cir. 1999) (“Rule 702 was intended to

liberalize      the    introduction        of     relevant    expert       evidence.”);

Thomas J. Kline, Inc. v. Lorillard, Inc., 878 F.2d 791, 799 (4th

Cir. 1989) (“Generally, the test for exclusion is a strict one,

and     the    purported       expert      must     have     neither       satisfactory

knowledge,      skill,      experience,        training    nor     education      on    the

issue for which the opinion is offered.”).                    In order to offer an

opinion,      “one . . . need       not    be     precisely      informed      about    all

details of the issues raised” or even have prior experience with

the particular subject the testimony concerns.                           Lorillard, 878

                                           17
F.3d at 799; see Fed. R. Evid. 703 (providing that “[a]n expert

may base an opinion on facts or data in the case that the expert

has been made aware of [at trial] or personally observed”).

                  In    this   case,    Appellant     “reads     this    [qualification]

requirement far too narrowly.”                  Belk, 679 F.3d at 162.               Although

Cohen       had    no     prior    experience       with    maritime     contracts,         his

opinion did not call for such expertise.                         Rather, his function

was    to    calculate         Appellee’s      damages. 8      Cohen     has    an    MBA    in

economics.             He created mathematical formulas for this case after

reviewing          information         that    he     obtained        before    trial        by

personally interviewing Appellee’s employees and reading their

deposition         testimony.          Cohen   then    formed    his     opinion      on    the

extent of Appellee’s losses by applying his formulas.

                  The fact that Cohen had not previously analyzed issues

that       are    specific        to   maritime     contracts     does    not     mean      the

district court abused its discretion in admitting Cohen’s expert

testimony.             Here, similar to the appellant in Belk, Inc. v.

Meyer       Corp.,       U.S.,    Appellant     “provide[d]      no     support      for    its

argument” that the economics of maritime contracts and steel

mill operations “is so sui generis such that an expert’s lack of

       8
       Cohen testified at trial as to his limited role: “I mean,
as an economist, looking at the data, the best I can do is make
a comparison between two conditions and the result of that
analysis attributes only the incremental effect to that
condition.” J.A. 325.

                                               18
expertise              in . . . these       specific       [areas]       necessarily

disqualifies him from giving an expert opinion.”                      Belk, 679 F.3d

at 162.           Background issues that required special knowledge of

steel       mills      and     maritime    commerce     were   addressed      by    other

witnesses at trial, including Gennuso. 9                 Although Cohen relied on

information provided by other witnesses at trial to devise his

formula, the Federal Rules of Evidence specifically authorized

him to do so.           See Fed. R. Evid. 703.

               Thus,      we    conclude    that   the   district     court    did    not

abuse       its     discretion       by   permitting     Cohen   to    offer       expert

testimony         as    to     his   calculation   of    Appellee’s     damages       for

demurrage and changes in commercial terms.

        9
       Gennuso’s testimony drew a relationship between lower
discharge rates and the higher prices Appellee paid on coke
contracts after the accident:

                    So when we entered into new coke
               contracts, that portion that determined the
               delivery cost of the material required a
               discharge rate in order for them to properly
               calculate the freight.
                    The discharge rate of 5,000 tons a day
               [using   the   floating  cranes,   which   is
               approximately 3,000 tons per day slower than
               rates achieved using the bridge crane] was
               provided to us from Kinder Morgan. . . .
                    . . . So we used the 5,000 tons per day
               [discharge    rate    in   the   renegotiated
               contracts], which again was provided by
               Kinder Morgan . . . .

J.A. 485.

                                             19
                                         2.

                Sufficiency of Evidence for Damages Award

                                         a.

            When considering an appeal after a bench trial, we

review the district court’s factual findings for clear error and

its legal conclusions de novo.                See Universal Furniture Int’l,

Inc. v. Collezione Europa USA, Inc., 618 F.3d 417, 427 (4th Cir.

2010).   “A court’s calculation of damages is a finding of fact

and is therefore reviewable only for clear error . . . .”                       Id.

(internal       quotation   marks    omitted).        Furthermore,      when     “a

district court’s factual findings turn on . . . the weighing of

conflicting evidence during a bench trial, such findings are

entitled to even greater deference.”                 Ross, 743 F.3d at 894

(internal quotation marks omitted); see also F.C. Wheat Mar.

Corp. v. United States, 663 F.3d 714, 723 (4th Cir. 2011).

            A    court   sitting    in   diversity    must   apply    state     law

governing the threshold of proof necessary for a damages award

and the amount of that award.            See Defender Indus., Inc. v. Nw.

Mut. Life Ins. Co., 938 F.2d 502, 504-05 (4th Cir. 1991) (en

banc).    According to Maryland law, “if the fact of damage is

proven with certainty, the extent of amount thereof may be left

to   reasonable     inference.”      David      Sloane,   Inc.   v.   Stanley   G.

House & Assocs. Inc., 532 A.2d 694, 696 (Md. 1987) (internal

quotation marks omitted).

                                         20
                                            b.

           Our task is to determine whether the district court

had sufficient evidence to conclude that Appellee proved, to a

reasonable certainty, that it suffered damages for demurrage and

change in commercial conditions.                   We must also decide if the

amount the district court awarded was supported by a reasonable

inference from the record.

            During     trial,      Cohen      presented       his   calculation     of

damages     and      concluded        that        Appellant     was       liable    for

approximately      $2.7     million    in    demurrage     fees     and    about   $1.5

million    in     damages    for   changes        in    commercial    terms.       The

district court agreed with Cohen on his demurrage calculations

and   awarded     damages     to   Appellee        accordingly.       However,     the

district court disagreed, in part, with Cohen’s calculation of

Appellee’s damages for changes in commercial terms.                        Therefore,

the court awarded $1.06 million for these damages according to

its own calculation.

            Appellant claims the district court clearly erred in

ordering damages awards for demurrage and changes in commercial

terms.     Regarding demurrage, Appellant concedes that Appellee

suffered    demurrage       damages,        but    it   disagrees     with     Cohen’s

                                            21
conclusions regarding the amount of such damages. 10                  Relating to

changes in commercial terms, Appellant argues that the evidence

failed    to   establish    the   extent      of    Appellee’s   losses       to    a

reasonable     certainty,   and   thus     no      damages   should    have    been

awarded in this category.

                                     i.

                                  Demurrage

            Because Appellant only challenges the amount of the

district court’s award for demurrage, our inquiry focuses on

whether the district court had substantial evidence to find that

Cohen’s    demurrage   calculation       --     which    the   district       court

accepted -- was a reasonable inference from the record.                            See

Universal Furniture Int’l, Inc., 618 F.3d at 427; David Sloane,

Inc., 532 A.2d at 696.       Appellant has failed to demonstrate that

the district court’s award for demurrage was not supported by

reasonable inferences from the record.

            Cohen’s $2.7 million figure represented the amount in

demurrage fees that Appellee paid to ships bringing materials to

the steel mill as a result of the crane collapse, regardless of

whether their cargo was coke.            To arrive at this number, Cohen

found a “baseline” demurrage figure by averaging the amounts of

     10
        Appellant concedes it is liable for only approximately
$400,000 in demurrage damages, as opposed to the $2.7 million
the district court awarded.

                                     22
demurrage Appellee paid, per ton of cargo, for several months

before the crane collapse.            To determine the incremental amount

Appellee   paid    in     demurrage    due   to    the   accident,      Cohen      then

considered the difference between the baseline figure and the

average demurrage amount that Appellee paid over the two months

following the accident.

           Cohen    asked     Appellee’s      accounting        personnel     if   any

factors other than the crane collapse (e.g., changes in labor

relations,     commercial       terms,       prices,      interest       rates      or

inflationary      components)       could    have    caused       the    pronounced

increase in its payment of demurrage fees.                 After reviewing the

evidence and discussing the subject with Appellee’s accountants,

Cohen concluded that these other factors were not responsible

for the increase in demurrage.           He “was satisfied that one could

safely   attribute      the   [incremental        demurrage]      to    the   bridge

collapse.”         J.A.     327.        As   the     district       court     noted,

“no . . . [other] data quantifying the [demurrage] loss directly

attributable to the [b]ridge [c]rane [loss] was available.”                        Id.

at 627-28.        The district court also had access to Gennuso’s

testimony that one of Appellee’s employees worked with a member

of   Appellant’s     staff     to     “determine[]       that    [the    increased]

demurrage charges were directly a result of not being able to

unload those ships at the A Pier.”            Id. at 217.

                                        23
            Nonetheless, Appellant assails Cohen’s methodology for

failing “to account for factors that could have affected his

demurrage    computation”         and     faults    him     for     not   investigating

other    causes    of     the    incremental       demurrage        unrelated      to    the

bridge     crane     accident,      such     as     “problems        with       shore-side

equipment,       delays     in    tugs,    problems        with    the    ships,     labor

shortages, scheduling issues, etc.”                  Appellant’s Br. 55-56, 58.

Yet Appellant offered no evidence to support its speculative

claim     that      other        potential       factors          that    “could        have

significantly affected the amount of demurrage charges” actually

had such an effect.         Id. at 56.

            In light of the considerable deference we afford to

district     court      findings     during        bench    trials,       the     record’s

surplus of support for the court’s factual findings, and the

wholly speculative nature of Appellant’s argument, we conclude

the     district     court’s       damages       award     for      demurrage      was     a

reasonable inference from the record.

                                           ii.

                          Changes in Commercial Terms

            After losing the bridge crane, Appellee renegotiated

several of its contracts with coke-carrying vessels to account

for the increased unload time and to avoid further demurrage.

Gennuso testified that unloading delays increased transportation

costs and, in turn, drove up the price Appellee paid for coke.

                                           24
Cohen   relied   on    this     assumption     to    calculate      an   approximate

damages amount for changes in commercial terms.

             The district court did not take issue with Cohen’s

method, but it found that his calculation of the discharge rate

in   the    post-collapse     period     was   not       entirely   reliable.      It

concluded     that     Cohen’s    analysis       failed      to     recognize   that

Appellant built a new crane in the A Yard in the second half of

2011, which dramatically increased discharge rates above those

measured soon after the bridge crane collapsed.                          Accordingly,

the district court awarded Appellee approximately $1.06 million

for changes in commercial terms, which was substantially less

than the approximately $1.5 million Appellee sought.

             But Appellant argues that the district court should

not have awarded damages for changes in commercial terms at all.

In   this    regard,    Appellant       argues      that     the    district    court

committed     three    errors    in    relying      on   Cohen’s    calculation    of

damages for changes in commercial terms: (1) Cohen only reviewed

two shipping contracts in assessing the incremental discharge

rate, which was an unreliably small sample size; (2) Cohen did

not examine certain other potential causes for the change in

contract terms, such as market fluctuations in the price of coke

and Appellee’s credit history; and (3) Cohen lacked a basis to

assume a positive correlation between a decreased discharge rate

and the price of coke.                Appellant claims that these alleged

                                         25
deficiencies              rendered       Cohen’s         calculation             of      damages

unreasonably             uncertain;    therefore,        the       district      court     lacked

sufficient          evidence    to     conclude      Appellee        proved       damages       for

changes       in    commercial        terms.      Each     of      these      arguments       lacks

merit.

               First,       Appellant’s        attack    on     Cohen’s        methodology       --

that     it        was     fatally     uncertain        because          it    relied     on    an

impermissibly small sample size for calculating the incremental

discharge rate -- is plainly inconsistent with the evidence.

Cohen viewed the two charter contracts merely to confirm that

the pre- and post-accident discharge rates were accurate.                                        As

the district court noted, “Mr. Cohen testified that he did not

rely on the contracts to glean the prices charged for coke, but

instead sought verification of the discharge rates.”                                  J.A. 633.

In any event, as we discussed with respect to the demurrage

award, Cohen bolstered his conclusion by ruling out other causes

for the delays that precipitated Appellee’s renegotiation of the

coke shipping contracts.

               We likewise reject Appellant’s two remaining arguments

because       Appellant        failed     to     support        these         challenges       with

evidence.            The    district     court’s        decision         to    credit    Cohen’s

testimony was not clearly erroneous.                          No evidence suggests the

district       court’s        conclusion       was   not       a    “legally       justifiable

inference”          from     Cohen’s     testimony       and       the     entirety      of    the

                                                26
record.     Miller v. Mercy Hosp., Inc., 720 F.2d 356, 365 (4th

Cir. 1983).

            Appellant       offered      no      evidence    indicating         that   the

possible      alternative            causes       actually         impacted       Cohen’s

calculations.        In fact, Appellant argued to the district court

“that coke prices did not appreciably change from prices before

the   [b]ridge      [c]rane    collapse.”            J.A.   632.        Furthermore,     a

district court’s decision on how much weight to give testimony

at a bench trial is one that we afford great deference.                                See

Ross, 743 F.3d at 894.              This principle applies to the district

court’s determination of whether Cohen sufficiently ruled out

possible alternative causes for the increase in the contract

prices     Appellee    paid     for      coke      after     the    accident.          See

Westberry, 178 F.3d at 265 (providing that, unless a plaintiff’s

expert provides “no explanation” for why a defendant’s suggested

alternative causes are not plausible, these alternative causes

“affect    the   weight       that    the     jury    should     give     the    expert’s

testimony     and     not     the     admissibility         of     that    testimony”).

Without question, Gennuso logically linked the crane accident to

actual changes in the contract price for coke.                            Here, whether

Cohen sufficiently ruled out other causes is only a question of

how much weight to give Cohen’s opinion, and so we defer to the

district court’s conclusion.

                                            27
             Further,       although     Appellant      argues    Cohen       improperly

assumed a positive correlation between decreased discharge rates

and the price of coke, Appellant again failed to point to any

evidence     in    the      record   showing      that    the     district      court’s

decision to credit this assumption was clear error.                             Cohen’s

reasoning      that    discharge       rates    affect     transportation        costs,

which   then      impact    the   cost   of     coke,    was    built    on   Gennuso’s

testimony that Appellee renegotiated coke shipping contracts at

a higher rate to account for slower discharge rates caused by

the crane collapse.

             Mindful that district court findings in a bench trial

should be given the “highest degree of appellate deference,” we

find    no   reason    to    upset   the   district       court’s       determination.

F.C. Wheat Mar. Corp., 663 F.3d at 723 (internal quotation marks

omitted).      The district court had a sufficient basis to conclude

that Cohen proved Appellee’s damages for changes in commercial

terms to a reasonable certainty.

                                         III.

             For      the    foregoing     reasons,       the    judgment       of   the

district court is

                                                                              AFFIRMED.

                                           28
DIAZ, Circuit Judge, concurring:

       Although I share the majority’s view of the outcome of this

case, I diverge slightly in my understanding of the nature of

the relationship between the parties after the expiration of the

Interim Agreement in 2005.               I would find that Kinder Morgan was

bound by the Lease terms as a holdover tenant, and that the

later purchase orders do not supersede the Lease terms in this

case because they cover a different subject matter.

       The record before the court does not support the conclusion

that Kinder Morgan objectively intended to be bound by the terms

of the 1992 Lease after the expiration of the final Interim

Agreement in 2005.                To the contrary, the undisputed evidence

suggests       that    Kinder     Morgan   specifically          did    not   wish    to    be

bound by the original lease terms because it wanted to negotiate

a     new    long-term       agreement     in       order   to    invest      in     capital

improvements          to    the   “A”    Pier.        In    fact,      when   RG     Steel’s

predecessor proposed a new contract that would have extended the

interim period through March 2006, Kinder Morgan refused to sign

it.         Kinder    Morgan’s       occasional      post-2005      references       to    the

expired Lease do not alter this conclusion, and indeed, some of

the    references          support    Kinder    Morgan’s     assertion        that    it    no

longer considered itself bound by the Lease.                            See, e.g., J.A.

888 (in which Kinder Morgan references “the previous contractual

relationship” under the Lease) (emphasis added).

                                               29
       Nonetheless,           Kinder     Morgan’s           actions          are         entirely

consistent with a holdover tenancy.                         Importantly, a holdover

tenancy under Maryland law is not based on objective assent or

intent to be bound by a lease.                  Rather, it exists automatically

when a lessee overstays the term of a leasehold.                                  See Md. Code

Ann.,    Real     Prop.        § 8-402(c)          (West        2015)    (“Unless         stated

otherwise in the written lease . . . when a landlord consents to

a holdover tenant remaining on the premises, the holdover tenant

becomes . . . a periodic month-to-month tenant . . . .”).                                      When

a tenant holds over, the tenancy remains “on all the terms and

conditions of the original lease.”                   Straley v. Osborne, 278 A.2d

64, 68 (Md. 1971).

       Despite    demonstrating         an    intent       not     to   be     bound      by     the

terms    of     the    Lease     in     its     negotiations            with       RG     Steel’s

predecessors,         Kinder    Morgan       undoubtedly          remained        at    Sparrows

Point    after     the    final       Interim       Agreement       expired.              As    the

district      court      observed,       it    also        continued         to     pay        rent,

utilities, and wharfage fees to the owners of the property, and

it continued to operate and maintain the Bridge Crane.                                     Kinder

Morgan also failed to take any of the actions that would have

been    required       upon    the     expiration          of    the    Lease,          including

surrendering the property and conducting a final inspection of

the Bridge Crane.             Based on Kinder Morgan’s behavior, I agree

with the district court’s conclusion that the purchase orders

                                              30
alone could not possibly be construed to govern the parties’

relationship.        And   although    Kinder    Morgan     did   not   consider

itself bound by any agreement with RG Steel’s predecessors, its

continued presence at the site and “good faith” adherence to the

terms of the Lease is consistent with a holdover tenancy.

       Due to the holdover tenancy, the Lease terms remained in

force beginning on January 1, 2006, to the extent the parties

did not replace those terms with express, written agreements.

Among the Lease terms was an entire section dedicated to the

Bridge Crane wherein Kinder Morgan and its predecessors agreed

to assume “the entire risk of loss, theft, or destruction of the

No. 4 Bridge Crane resulting from any cause whatsoever.”                      J.A.

690.     The Lease’s indemnity provision further clarified Kinder

Morgan’s liability, stating that it would “indemnify and save

harmless” the crane’s owner from any loss or liability resulting

from any damages sustained by the owner as a result of any act

or omission of Kinder Morgan, “whether negligent or otherwise.”

J.A. 692.      Undoubtedly, the terms of the Lease directly covered

the subject matter of Kinder Morgan’s liability in the event of

damage    to   the   Bridge   Crane,    and     did   not   provide     for   any

limitation on consequential damages.

       In February 2008, the parties entered into a purchase order

under which Kinder Morgan agreed to unload “up to 500,000 nton

of coke from ships with Bridge Crane.”                J.A. 992.    Delivery of

                                       31
the coke was promised approximately four months later, and the

purchase order provided for a delivery location, a unit price,

and a total price.              The purchase order also made reference to

the buyer’s terms and conditions, contained in a document called

the    AMUSA-100       “General     Purchasing       Conditions      for    Purchase     of

Goods or Services.”             The first sentence of the AMUSA-100 clearly

states its scope: “These General Purchasing Conditions (“GPC”)

shall     apply        to     the   purchase      of      any     materials,      items,

products . . . and            any   related     services     (“Goods”)       offered    or

provided by suppliers (‘Seller’).”                     J.A. 997 (emphasis added).

The     terms    of     the     AMUSA-100     thus     explicitly        apply   to     the

procurement       of    specific     goods    and      services,     addressing        such

topics     as     price       adjustments,       delivery,        inspection     of    the

product, and warranties on the goods exchanged.

       Although the “Warranty – Liability” portion of the terms

states    that        neither    party   will     be     liable    for     consequential

damages “under this order,” that language is preceded by five

sections referring to the nature of the goods delivered under

the purchase order, including their quality, performance, and

timely delivery.             The limitation on liability under the purchase

order is narrow in scope: it only covers liability resulting

directly from Kinder Morgan’s delivery of goods and services to

RG    Steel     and    its    predecessors.        The    purchase       order   and    its

accompanying terms do not address Kinder Morgan’s liability in

                                            32
the event that it fails to maintain and protect the Bridge Crane

itself, despite the fact that Kinder Morgan was unloading coke

at    the   time    of   the    accident.       I    would   therefore       find    that

because the terms of the Lease were the only manifestation of

the parties’ intent with respect to the damages caused by the

accident, those terms apply and there is no limitation on Kinder

Morgan’s liability. *

       Ultimately, I agree with the majority’s view that the terms

of    the   Lease    remained     in   force    and      continued    to    govern   the

parties’ relationship at the time of the accident.                         Although the

parties subsequently entered into written purchase orders, those

orders (and their accompanying terms and conditions) addressed a

subject matter distinct from the events of this case and thus do

not    supersede      the      Lease   terms.        I    therefore    join     in   the

majority’s         conclusion      that     Kinder       Morgan   is       liable    for

consequential damages, and that the district court did not err

in relying on Appellee’s expert in calculating those damages.

       *
       The majority applies the Lease terms indirectly through
the AMUSA-100’s “safety valve provision.” But because I do not
agree that the limitation on liability in the purchase order and
the      indemnity     clause      in      the     Lease     are
“corresponding . . . provisions” “in contradiction with” each
other, J.A. 997, I conclude that Kinder Morgan’s liability for
the accident is governed only by the Lease.

                                          33