Canal Barge Co Inc v. Gulfstream Trdg Ltd ( 2000 )

Revised August 8, 2000
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 99-30002
CANAL BARGE COMPANY, INC.,
Plaintiff-Appellee,
VERSUS
TORCO OIL COMPANY; GULFSTREAM TRADING, LTD. COMPANY,
Defendants-Appellants.
Appeal from the United States District Court
for the Eastern District of Louisiana
July 20, 2000
Before KING, Chief Judge, and DUHÉ and DeMOSS, Circuit Judges.
DeMOSS, Circuit Judge:
Torco Oil Company (“Torco”) appeals the magistrate judge’s
final judgment, after a bench trial, awarding $90,766 to Canal
Barge Company, Inc. (“Canal Barge”) for damages arising from the
alleged contamination and loss of use of a barge. Finding no error
on the part of the magistrate judge, we affirm.
I. BACKGROUND
On July 11, 1996, Gulfstream Trading, Ltd. (“Gulfstream”)
agreed to purchase 18,000 barrels of reconstituted fuel oil, also
known as spent lube oil, from Torco. Under the agreement, the
delivery was to occur between July 23 and July 25, 1996, at Torco’s
Chicago facility. The purchase agreement further provided that an
independent surveyor, Saybolt Inc. (“Saybolt”), would conduct pre-
loading and post-loading inspections of the spent lube oil.
Gulfstream had the responsibility for procuring transportation.
As a result, Gulfstream’s broker Seahull contacted Canal Barge
to transport the spent lube oil. Canal Barge agreed to provide the
tank barge CBC-501 to transport the oil from Chicago to Louisiana.1
CBC-501 is a double-skinned tank barge assigned to Canal Barge’s
“clean” fleet. Canal Barge divides its barges into three separate
fleets: 1) the “dirty” fleet, 2) the “clean” fleet, and 3) the
“chemical” fleet. Both ships in the dirty and clean fleets
transport petroleum products, including spent lube oil. Those in
the former primarily transport heavy oil products such as No. 6 oil
and are rarely, if ever, cleaned while those in the latter
concentrate on transporting light oil products. Unlike the dirty
barges, the clean ones are periodically cleaned between loadings.
1
This was the fourth of four charter agreements that Canal Barge
entered into with Gulfstream during 1995 and 1996 to transport
spent lube oil from Torco’s Chicago facility to Louisiana. The
other charter agreements had transpired without incident.
2
During the time of the charter agreement with Gulfstream, CBC-
501 was dedicated to a long-term contract with Citgo Petroleum
Corporation (“Citgo”) for the transportation of clean lube oil from
Louisiana to Illinois. For the CBC-501's return voyage to
Louisiana, Canal Barge often practiced “backloading” other
petroleum products, including spent lube oil. The charter
agreement with Gulfstream was consistent with that practice. After
backloading spent lube oil, a clean barge must be cleaned prior to
being loaded with clean lube oil.2 In the present case, CBC-501
was scheduled for a cleaning after transporting the spent lube oil
contracted for on July 11.
After offloading Citgo’s clean lube oil, the CBC-501 was towed
to Torco’s Chicago facility to load the spent lube oil from Torco’s
Tank 101. That tank is approximately 50 years old and was
purchased by Torco from Amoco in 1981. It has been dedicated to
spent lube oil storage and has never been cleaned by Torco. Since
Torco’s purchase, Tank 101 has been drained to its lowest level no
more than one or two times.
When the CBC-501 arrived at the facility on July 26, Torco did
not have enough barrels of oil in Tank 101 to fulfill the 18,000
barrel contract. Therefore, Torco officials determined to get
every drop out of Tank 101 that they could and to load it onto the
2
Routine cleaning of a clean fleet barge is known as
“butterworthing” and usually takes two to three days at a cost of
$4,500 to $7,500. That cost was factored into the rate that Canal
Barge charged Gulfstream under the charter agreement.
3
CBC-501. Normally, whenever Tank 101 contained an insufficient
quantity of oil to fulfill a contract, Torco’s practice was to
monitor the transfer from the tank to the barge and to shut off the
pump before the level of liquid in the tank fell to the bottom and
the pump started sucking air. But at the time of loading the spent
lube oil onto the CBC-501, the gauge on Tank 101 that discloses the
quantity of product in the tank, as well as the amount being pumped
out, was broken. The Torco worker assigned to monitor the pump
hose permitted the pump to suck air for five to ten minutes.
After the loading was complete on July 27, the CBC-501
traveled to Louisiana, arriving on August 4, 1996. That day,
unloading of the spent oil lube occurred, but nearly 188 barrels
could not be discharged. Before loading, there had only been 37
barrels of oil from the prior cargo on board the CBC-501. Because
of the discrepancy, Saybolt made a letter of protest on behalf of
Gulfstream. Of the oil that had been discharged from the CBC-501,
Saybolt analyzed and determined those barrels of oil as meeting
Gulfstream’s specifications. The analysis was not designed to test
for the presence of benzene.
On August 6, the CBC-501 arrived at T.T. Coatings, Inc.’s
(“TTC”) facility for its scheduled cleaning. After butterworthing
the barge, TTC officials observed at the bottom of the tanks a
three to four inch residue of heavy, black, tar-like sludge on
which a person could walk without sinking. The sludge looked more
like No. 6 oil bottoms or shore tank bottoms rather than residue
4
from spent lube oil. According to Canal Barge’s expert Richard
Silloway, Torco’s hose sucking air while draining Tank 101 allowed
for the shore tank bottoms to flow into the barge. Such bottoms
consist of a suspension of solids and semisolids in liquid, which
precipitate out from the liquid over time, settle to the bottom,
and are not generally pumped out or pumpable through the tank’s
system. In the present case, Silloway testified that the tank
bottoms became entrained in the liquid as the tank was drained, and
they were sucked out with the oil. The resulting sludge could not
be removed from the barge by the ordinary cleaning process.
On August 8, TTC moved the CBC-501 to its repair yard because
TTC officials believed that the cleaning would take two to three
weeks and TTC had a three-week backlog of orders to do at the
cleaning plant. During this time, Canal Barge had the barge’s
boiler replaced, which took two to three days. Canal Barge also
notified Gulfstream about the sludge problem on August 9, to
recover its costs pursuant to the charter agreement.3 It further
submitted two bids for the cleaning to Gulfstream on August 16, but
Gulfstream refused to pay for the cleaning and disposal costs.
Moreover, Gulfstream did not inspect the barge or attempt to
reclaim the 188 barrels of sludge. On August 30, the barge was
3
The cleaning provision of the charter party provided that “[a]ny
cleaning required subsequent to the movement contemplated hereunder
as a result of tank contamination or unusual buildup of cargo
residue shall be for shipper’s account and time so spent shall be
counted as used laytime.”
5
returned to the cleaning facility, and the cleaning began on
September 4.
TTC officials testified that whenever it cleans heavy tank
bottoms, federal and state regulations require testing of the
material for hazardous components. TTC hired Environmental
Analysts, Inc. (“EAI”), to do the analysis, and EAI reported that
the material was found to contain hazardous materials as per
Environmental Protection Agency (“EPA”) regulatory thresholds
promulgated in 40 C.F.R. part 261 and that the hazardous
constituent was .971 parts per million (ppm) of benzene. The
regulatory threshold for benzene in solid waste is .5 ppm.
Pursuant to 40 C.F.R. part 261 and EAI’s report, TTC officials
determined that the material was hazardous.
On September 16, TTC began to muck out the sludge by hand and
shovel into drums for disposal. TTC officials testified that there
was no market for this material and that it had to pay a third
party to dispose of the waste. The certificate of disposal and
some testimony indicated that the sludge was eventually used for
energy recovery. After the sludge was removed, the CBC-501
underwent additional hot-water and chemical cleaning and was placed
back into service on October 25, 1996, 80 days after arriving at
the TTC facility. Canal Barge incurred total costs of $60,966 for
the necessary cleaning, disposal, and inspections.
Because Gulfstream failed to pay for the costs of cleanup,
Canal Barge filed suit against Gulfstream and Torco. Canal Barge
6
charged Gulfstream with breach of contract and negligence and
averred a negligence claim against Torco.4 After a bench trial,
the magistrate judge made findings of fact and conclusions of law,
ruling in favor of Canal Barge and holding Gulfstream and Torco
jointly and severally liable. But the magistrate judge reduced the
amount by $5,720 because some of the disposal costs were wrongly
calculated in the total costs. In addition to the cleanup costs,
the magistrate awarded demurrage charges of $35,520.5 While laid
up for cleaning, the CBC-501 was unable to perform its contract
work with Citgo. All of Canal Barge’s other clean barges were in
operation, and the company had no other comparable ships. Although
Canal Barge utilized some smaller barges from its spot market to
service the Citgo contract, a Canal Barge official testified that
those barges were in an active market and would have been used for
other jobs. Despite the lack of documentation, the magistrate
judge credited the testimony of Canal Barge’s official and allowed
lost profits or detention charges of $480/day.6 This appeal by
4
The magistrate judge also recognized Canal Barge as having
asserted a maritime products liability claim, a breach of warranty
claim, and/or a claim predicated on Canal Barge having been the
third-party beneficiary of the contract between Gulfstream and
Torco. But its ruling only addressed Canal Barge’s negligence tort
claim.
5
The contractual demurrage charge under the charter agreement was
$480 per day. The magistrate judge multiplied that amount by 74
days, the time the barge was out of commission [80 days - 6 days,
the time required for the boiler work and the regular cleanup].
6
Canal Barge had claimed lost profits of $502 per day, but the
magistrate judge went with the contractual demurrage charge of $480
7
Torco ensued.
II. DISCUSSION
When a judgment after a bench trial is on appeal, we review
the findings of fact for clear error and the legal issues de novo.
See Gebreyesus v. Schaffer & Assocs., Inc., 204 F.3d 639, 642 (5th
Cir. 2000) (quoting FDIC v. McFarland, 33 F.3d 532, 536 (5th Cir.
1994)). Under the clearly erroneous standard, we will reverse only
if we have a definite and firm conviction that a mistake has been
committed. See Mid-Continent Cas. Co. v. Chevron Pipe Line Co.,
205 F.3d 222, 229 (5th Cir. 2000). "The burden of showing that the
findings of the district court are clearly erroneous is heavier if
the credibility of witnesses is a factor in the trial court's
decision." Dunbar Medical Sys., Inc. v. Gammex, Inc., 2000 WL
797247, No. 99-20274 at *9 (5th Cir. June 21, 2000) (quotation
marks omitted). That’s because “due regard shall be given to the
opportunity of the trial court to judge of the credibility of the
witnesses.” Fed. R. Civ. P. 52(a); Torch, Inc. v. Alesich, 148
F.3d 424, 426 (5th Cir. 1998) (“The factual findings of the trial
court in a bench trial may not be set aside unless clearly
erroneous and due regard must be given to its credibility
evaluations.”); Ruiz v. Estelle, 679 F.2d 1115, 1131, amended in
part & vacated in part, 688 F.2d 266 (5th Cir. 1982) (“[I]n a bench
per day.
8
trial the assessment of witness credibility is inherently his
province.”). We cannot second guess the district court's decision
to believe one witness' testimony over another's or to discount a
witness' testimony. See Brister v. Faulkner, 214 F.3d 675, 684,
(5th Cir. 2000). Thus, we are reluctant to set aside findings that
are based upon a trial judge's determination of the credibility of
witnesses giving contradictory accounts. See Ruiz, 679 F.2d at
1131.
In contesting the judgment, Torco raises several legal and
factual arguments: 1) the magistrate judge wrongly admitted the
testimony of Richard Silloway, Canal Barge’s expert testimony, with
respect to the area of fluid dynamics; 2) the magistrate judge
improperly inferred a legal duty on the part of Torco to Canal
Barge; 3) the magistrate judge erred in determining that Torco’s
method of draining Tank 101 violated industry custom; 4) the
magistrate judge erred in concluding that the product remaining on
board the CBC-501 was a hazardous material under EPA standards; and
5) the magistrate judge should not have awarded Canal Barge lost
profits. We review each of Torco’s points of error in turn.
The admission of Silloway’s testimony is reviewed for abuse of
discretion. See Seidman v. American Airlines, Inc., 923 F.2d 1134,
1138-39 (5th Cir. 1991). Pursuant to Federal Rule of Civil
Procedure 26(a)(2), Canal Barge was obligated to submit Silloway’s
expert report 90 days before the pre-trial conference. That report
9
did not deal with fluid dynamics or the process of draining land
based storage tanks. Nevertheless, Canal Barge attempted to
qualify Silloway on those topics; whereupon, Torco objected. The
magistrate sustained the objection. In the cross-examination,
however, Torco’s counsel asked Silloway some questions about
whether the tank bottoms would “settle out” inside a tank and stay
there and whether a normal tank system would pump the bottoms out.
To these questions, Silloway answered that in a normal tank system,
the bottoms would not be sucked out. Interpreting the questions
and the answers as vague, the magistrate judge elicited further
testimony from Silloway as to whether the bottoms would have been
pumped out in a system like Torco’s Tank 101.
Reviewing the trial transcript, we conclude that Torco opened
the door to Silloway’s testimony. See Rizzo v. Corning Inc., 105
F.3d 338, 341-42 (7th Cir. 1997). In essence, Torco’s questions
pertained to fluid dynamics and whether the shore tank bottoms
could be pumped out of the tank. Due to the manner in which he was
questioned, Silloway gave an unclear answer that did not actually
comport with his views on the transferability of the shore tank
bottoms. Hence, the magistrate judge was merely clarifying the
cross-examination and seeking to understand the discussion of fluid
dynamics that Torco had surreptitiously initiated. Accordingly, we
10
find no abuse of discretion in admitting Silloway’s testimony.7
Torco’s second point of error concerns the district court’s
ruling that Torco negligently pumped the spent lube oil into the
CBC-501, thereby causing the residue buildup and the resulting
cleanup costs. When analyzing maritime tort cases, we rely on
general principles of negligence law. See Daigle v. Point Landing,
Inc., 616 F.2d 825, 827 (5th Cir. 1980); Casaceli v. Martech Int’l,
Inc., 774 F.2d 1322, 1328 (5th Cir. 1985) (citing Daigle). To
establish maritime negligence, a plaintiff must “demonstrate that
there was a duty owed by the defendant to the plaintiff, breach of
that duty, injury sustained by [the] plaintiff, and a causal
connection between the defendant’s conduct and the plaintiff’s
injury.” In re Cooper/T. Smith, 929 F.2d 1073, 1077 (5th Cir.
1991). Here, Torco maintains that it owed no legal duty to Canal
Barge. According to Torco, no cases specifically hold that a
third-party cargo supplier, not contractually bound to a shipowner,
owes a duty to the shipowner. Furthermore, Torco argues that if it
had a duty, that duty only extended to foreseeable hazards.
Because Torco had no knowledge of the kind of barge that Canal
Barge planned on using and because a dirty barge could have
transported the spent lube oil and would not have required the
7
We also note that Torco did not apparently object at the time
of the magistrate judge’s questioning, although it may have been
assuming that its prior objection was still in effect or running.
When a party fails to object at trial, the standard of review is
plain error.
11
cleanup costs, it contends that it had no reason to suspect that
the spent lube oil product would pose any hazard to the CBC-501.
“‘Whether a defendant owes a plaintiff a legal duty is a
question of law.’” Florida Fuels, Inc. v. Citgo Petroleum Corp.,
6 F.3d 330, 333 (5th Cir. 1993) (quoting Chavez v. Noble Drilling
Corp., 567 F.2d 287, 289 (5th Cir. 1978)); Consolidated Aluminum
Corp. v. C.F. Bean Corp., 833 F.2d 65, 67 (5th Cir. 1987)
(“Determination of the tortfeasor’s duty, and its parameters, is a
function of the court.”). In Ionmar Compania Naviera, S.A. v. Olin
Corp., 666 F.2d 897, 904 (Former 5th Cir. 1982), the former Fifth
Circuit held that a manufacturer/shipper of a product had a duty to
warn a shipowner of the foreseeable hazards inherent in the cargo
of which the ship’s master could not reasonably have been expected
to be aware. Conversely, the shipper had no duty to warn the
shipowner of hazards of which the shipowner was aware or could
reasonably have been expected to be aware. See id. Although
Ionmar involved a shipper and shipowner who were in contractual
privity, we still find the case instructive because the shipper’s
duty was predicated on tort, not contract, principles. See id.
Indeed, Ionmar is consistent with this circuit’s general statements
on maritime negligence. As this circuit has recognized in the
past, the determination of whether a party owes a duty to another
depends on a variety of factors, “most notably the foreseeability
of the harm suffered by the complaining party.” Consolidated, 833
12
F.2d at 67. “‘Duty . . . is measured by the scope of the risk that
negligent conduct foreseeably entails.’” Id.; see also 2 Thomas J.
Schoenbaum, Admiralty and Maritime Law § 5.2, at 159 (2d ed. 1994).
To explicate that concept, this circuit noted the following in
Consolidated:
We perceive a harm to be the foreseeable
consequence of an act or omission if harm of a
general sort to persons of a general class might
have been anticipated by a reasonably thoughtful
person, as a probable result of the act or
omission, considering the interplay of natural
forces and likely human intervention.
Id. at 68. With that statement and Ionmar in mind, we address
Torco’s second point of error.
According to elementary fluid dynamics, draining a tank with
a suction pipe near the bottom to the point that it sucks air will
create a greater tendency for the tank’s bottoms to be drawn into
the suction pipe and transported out.8 Combine that knowledge,
which a reasonably prudent person would have known, with the fact
that Torco knew that there were tank bottoms in Tank 101 but had
never tested the bottoms or cleaned the tank, and it was
foreseeable that Torco’s decision to “get every drop out of Tank
101," despite a broken tank gauge, and to allow the hose to suck
air would pump shore tank bottoms into the CBC-501, damaging that
8
That is because draining to the tank’s bottom creates more
lateral flow at a higher velocity across the bottom of the tank,
thereby entraining the bottoms into the liquid and allowing those
bottoms to be sucked out of the pipe.
13
boat. And although Canal Barge used a clean, rather than a dirty,
boat to transport the oil, that decision did not preclude the
existence of a duty on the part of Torco to Canal Barge. Clean
boats were at times used to transport spent lube oil; thus, it was
foreseeable that a clean barge would be brought to Torco’s oil
facility. Moreover, even dirty barges must be cleaned, and Canal
Barge would have ultimately had to dispose of the residue material.
Accordingly, we believe that Torco could have anticipated that its
decision to drain Tank 101 down to the bottom and its failure to
stop the loading of oil before the sucking of air would likely
result in the harm suffered by Canal Barge, and therefore, we find
no error in the magistrate judge’s implicit conclusion that Torco
owed a duty to Canal Barge.
Closely aligned with the element of duty is Torco’s next point
of error that the magistrate judge wrongly determined that Torco’s
method of draining Tank 101 violated industry custom. Although
custom itself does not create a duty, “custom may help define the
standard of care a party must exercise after it has undertaken a
duty . . . .” See Florida Fuels, 6 F.3d at 334. First off, we
note that there is little, if any discussion, of actual industry
custom in the magistrate judge’s findings of fact and conclusions
of law, let alone the trial record. Other than a single reference
to Silloway’s comment that a reasonable operator would not drain a
shore tank to a level where the pump is sucking air when the
14
operator knows that the bottoms contain sludge, there is no other
statement that indicates that the magistrate judge may have
considered the issue of custom. Thus, we are not of the view that
custom played a role in necessarily establishing the standard of
care.
In any case, we conclude that the magistrate judge did not
clearly err if it presumed that Torco’s draining of Tank 101 did
violate industry custom. Notwithstanding the testimony that
draining of a tank to the bottom had occurred on a few rare
occasions and that problems had not ensued from those acts, the
magistrate judge was the trier of fact, and he heard contradictory
testimony that reasonable operators tested their tanks and did not
drain them to the bottom. We must give due regard to his specific
credibility determinations, and nothing leaves us with the definite
and firm conviction that a mistake has been committed.
Torco next asserts that the magistrate judge incorrectly
determined that the sludge product that remained on the CBC-501 was
hazardous. It essentially disagrees with the court’s assessment
that TTC and Canal Barge did not err when they construed the
residue pursuant to part 261 of the Code of Federal Regulations,
rather than part 279. In general, part 279 governs the
transportation and management of used oil and used oil residue.
See 40 C.F.R. part 279. It excludes used oil that is to be used
for energy recovery and certain other purposes from the hazardous
15
waste regulations of part 261. See id. § 279.10. Two of its
subsections provide in pertinent part:
(a) Used Oil. EPA presumes that used oil is to be
recycled unless a used oil handler disposes of
used oil, or sends used oil for disposal.
Except as provided in § 279.11, the
regulations of this part apply to used oil,
and to materials identified in this section as
being subject to regulation as used oil,
whether or not the used oil or material
exhibits any characteristics of hazardous
waste identified in subpart C of part 261 of
this chapter.
(e)(2) Materials produced from used oil that are
burned for energy recovery (e.g. used oil
fuels) are subject to regulation as used oil
under this part.
See id. (a) & (e)(2). Torco contends that the residue was used oil
that was ultimately used for energy recovery and that should have
been regulated by part 279.
EPA regulations, however, differentiate between used oil set
for energy recovery and solid hazardous waste. Compare id. part
279, with id. part 261. Solid waste may include discarded
material, which is material that has often been abandoned. See
generally id. § 261.2. If the product is solid waste, then it is
classified as hazardous waste based on certain characteristics of
the material. See id. § 261.3. For example, solid waste that
contains a certain level of contaminants, such as a benzene level
greater than .5 ppm, constitutes hazardous waste. See id.
§ 261.24.
16
Because neither Torco or Gulfstream wanted the residue that
was inside CBC-501, Canal Barge and TTC viewed the material as
discarded, or abandoned. That material was found to be solid.
Thereafter, that solid waste was tested for contaminants and
discovered to have a benzene level greater than .5 ppm. Hence,
Canal Barge and TTC treated the residue, or tank bottoms, as
hazardous material.
Reviewing those facts, we see no error on the part of the
magistrate judge in construing the discarded residue material as
hazardous waste. In light of the fact that no one attempted to
recover the residue, it was not clearly erroneous for the
magistrate judge to believe that the residue had been abandoned and
was, thus, discarded material. Although some conflicting testimony
existed regarding the liquid or solid nature of the material, the
magistrate judge made specific credibility determinations to
conclude that the material was solid. We give due deference to
those determinations. Considering that even Torco’s expert
testified that if the residue were found to have been solid and
discarded, it had to be classified as hazardous due to its benzene
level, we find no error in the magistrate judge’s conclusion.
Lastly, Torco challenges the magistrate’s award of damages, in
particular the amount for lost profits or detention damages. It
argues that Canal Barge has failed to adequately document and
support its claims for lost profits and that the delays in repair
should not have been included in the calculation of damages.
17
A district court’s determination of damages is a factual
finding that will be set aside only if clearly erroneous. See
Marine Transport Lines, Inc. v. M/V Tako Invader, 37 F.3d 1138,
1140 (5th Cir. 1994). “`A ship owner is entitled to damages for
the loss of use of its vessel in addition to the cost of repairs of
the vessel.’” See id. (quoting Kim Crest, S.A. v. M.V. Sverdlovsk,
753 F. Supp. 642, 649 (S.D. Tex. 1990)). Included in such
computations are damages resulting from reasonable delays in repair
time. See Domar Ocean Transp., Ltd. v. M/V Andrew Martin, 754 F.2d
616, 619 (5th Cir. 1985). The ship owner has the burden to prove
lost profits. See Dow Chemical Co. v. M/V Roberta Tabor, 815 F.2d
1037, 1042 (5th Cir. 1987). To recoup damages for lost profits,
“[s]omething more than the simple fact that the vessel was laid up
for repairs must be shown – a market for the vessel must be shown.”
See In re M/V Nicole Trahan, 10 F.3d 1190, 1194 (5th Cir. 1994).
But we do not require that lost profits be proven specifically.
See id. at 1195. They need only be proven “with reasonable
certainty.” See Domar Ocean, 754 F.2d at 620 (quoting The
CONQUEROR, 17 S. Ct. 510, 516 (1897)).
Here, David Lane, a Canal Barge officer, testified about the
CBC-501's charter with Citgo, that the barge would have
continuously hauled clean lube oil from Louisiana to Illinois, that
the clean lube fleet was being used at full capacity, and that the
historical profitability of the barge was $502/day. Canal Barge
18
was able to utilize other barges to fulfill the Citgo contract
after the CBC-501 had to be taken in for cleaning, but Lane
testified that lost profits arose from the lost “spot market”
opportunities that the other barges would have serviced. The
magistrate found Lane’s testimony credible and awarded lost
profits. After having reviewed the trial record, we conclude that
the magistrate did not clearly err when it credited Lane’s
testimony as sufficiently supportive of a lost profits calculation.
As previously noted, we give due regard to the magistrate judge’s
credibility determinations, and we are not left with a firm and
definite conviction that a mistake has been committed.
As for the damages from the delays in the repairs, Torco makes
two primary arguments: 1) Canal Barge handled the residue as
hazardous material, which resulted in a much more laborious and
time-consuming task; and 2) although the CBC-501 was at TTC’s
facility from August 6 to October 25, the actual cleaning
operations took less time, and Canal Barge’s other vessels were
cleaned ahead of CBC-501 preventing its immediate cleaning.
Because we find that the treatment of the residue as hazardous
material was not error, Torco’s first basis for challenging the
cleanup costs is unavailing. Regarding Torco’s second argument, we
acknowledge that a considerable time delay occurred, but we find no
error in the damages calculation because the delay is excusable.
First, much of the delay resulted from Canal Barge’s discussion of
the sludge problem with Gulfstream. We will not punish Canal Barge
19
for the fact that those who were responsible for its damages were
dilatory or non-responsive in their actions. And as previously
noted, some additional time had to be expended because the residue
was treated as hazardous waste. For example, TTC had to wait for
the hazardous waste barrels to arrive from the supplier. As for
Torco’s argument that some delay resulted from the backlog of
cleaning orders at TTC, specifically Canal Barge’s other barges
having to be cleaned, we find it meritless. Under Torco’s logic,
Canal Barge could only get lost profits for the delays if the
backlog were due to ships of other companies. But making that
distinction is senseless, considering the fact that if Canal Barge
had moved the CBC-501 ahead of its other barges that were ready for
repair, then those other barges would have incurred lost profits,
which they would have made after being fixed. Torco’s argument
merely replaces one barge with another in the damages equation.
Accordingly, we affirm the magistrate judge’s lost profits and
damages calculation.
III. CONCLUSION
For the foregoing reasons, we conclude that the magistrate did
not err in making its findings of fact and conclusions of law.
Therefore, we affirm the final judgment of the magistrate judge.
20