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Coastal Services Group LLC v. BP Company North America, Inc.

United States District Court, Fifth Circuit

August 30, 2013

COASTAL SERVICES GROUP LLC PLaintiff,
v.
BP COMPANY NORTH AMERICA, INC., BP CORPORATION NORTH AMERICA, INC., BP AMERICA, INC., BP P.L.C., BP PRODUCTS NORTH AMERICA, INC., BP EXPLORATION & PRODUCTION, INC., and PATRIOT ENVIRONMENTAL SERVICES INC. Defendants.

MEMORANDUM OPINION AND ORDER DENYING PLAINTIFF COASTAL SERVICES GROUP, LLC'S MOTION [68] FOR PARTIAL SUMMARY JUDGMENT, GRANTING DEFENDANT PATRIOT ENVIRONMENTAL SERVICES INC.'S MOTION [70] FOR SUMMARY JUDGMENT, AND GRANTING IN PART AND DENYING IN PART DEFENDANT BP'S MOTION [72] FOR SUMMARY JUDGMENT

HALIL SULEYMAN OZERDEN, District Judge.

BEFORE THE COURT are three Motions: (1) Plaintiff Coastal Services Group, LLC's (Coastal's) Motion [68] for Partial Summary Judgment; (2) Defendant Patriot Environmental Services Inc.'s ("Patriot's") Motion [70] for Summary Judgment; and (3) the Motion [72] for Summary Judgment, filed by Defendants BP Company North America, Inc., BP Corporation North America, Inc., BP America, Inc., BP Products North America, Inc., and BP Exploration & Production, Inc. (collectively "BP"). The Motions have been fully briefed. After due consideration of the record, the submissions on file, and relevant legal authorities, the Court finds that Coastal's Motion [68] should be denied, Patriot's Motion [70] should be granted, and BP's Motion [72] should be granted in part and denied in part.

I. BACKGROUND

A. Facts

The overriding issue in this case is whether a six-month minimum term contract for Plaintiff Coastal's recreational vessel decontamination services existed between Defendant BP and Coastal. Coastal is pursuing claims against BP for breach of contract, tortious breach of contract, breach of the duty of good faith and fair dealing, equitable estoppel, unjust enrichment, and specific performance. Coastal's Compl. [1-1] at pp. 5-7.

Coastal also asserts claims for breach of contract, tortious breach of contract, and breach of the duty of good faith and fair dealing against Defendant Patriot. Coastal did not allege in its Complaint that it entered into a contract with Patriot but nevertheless asserted that Patriot was liable for breach of contract. Coastal's Compl. [1-1] at p. 5 ("Plaintiff had a valid and binding contract with Defendant BP; and Defendant BP, along with Patriot, breached that contract, causing Plaintiff monetary damages."). In its briefing on the present Motions, Coastal argues that Patriot is liable in contract as an agent of BP, although Coastal also refers to BP as Patriot's agent. Coastal's Reply [81] at p. 1; Coastal's Resp. [75] at pp. 12, 19.[1] Coastal also now submits that there existed a six-month contract "between BP, Patriot, and Coastal Services" and "Patriot[] accept[ed] the terms" of Coastal's written proposal. Coastal's Resp. [75] at pp. 12, 19-20.

In response to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, Coastal performed recreational vessel decontamination services in Pascagoula, Mississippi, at a public boat launch, from August 21, 2010, until approximately October 15, 2010. BP's Mem. [73] in Supp. of Mot. for Summ. J. at p. 5, 7-8; Coastal's Mem. [69] in Supp. of Summ. J. at p. 11; Dep. of Don Morrison [68-2] at p. 319. BP hired Patriot to set up the Pascagoula site, and Patriot provided decontamination services at the site, in addition to overseeing other vendors providing those services. Dep. of Don Morrison [68-2] at pp. 55-59, 64-65. BP authorized Patriot to "augment its ranks" by hiring vendors, but BP retained the authority to also hire vendors. Don Morrison [68-2] at pp. 55-56, 68-69, 126; David Watson Email [75-6]. All contractors, no matter who hired them, required formal approval by BP. Dep. of Don Morrison [68-2] at p. 62. While BP ultimately paid for Coastal's services, Patriot forwarded the invoices for Coastal's services to BP, and when those invoices were approved and paid by BP, Patriot forwarded payment to Coastal. Id. at p. 58-59. For providing these and other managerial services, BP paid Patriot a surcharge equal to seven percent of the amount BP paid to Coastal. Dep. of Don Morrison [68-2] at p. 59; Dep. of Michael Sullivan [75-1] at pp. 146-47.

After approximately two months of work, Bernise Davis, a contract representative of BP, notified Coastal that its services were no longer needed and that it was being "demobilized." Dep. of Andrew Cambre [72-1] at pp. 89-90; Email from Bernise Davis [68-13]. Coastal contends that its demobilization was unlawful because it had a six-month minimum term contract with BP. Coastal alleges that this contract was formed at an August 19, 2010, meeting, where BP representatives orally accepted Coastal's written proposal for services. The proposal provided: "These services will be available between the hours of 0800 and 1600 seven days a week for a period not less than six (6) months." Pl.'s Written Proposal [1-1] at p. 8. BP and Patriot deny entering into a contract with Coastal. Dep. of Don Morrison [73-3] at p. 249; BP's Response [78] at p. 7; BP's Reply [83] at p. 6. Patriot maintains that it was "directed by BP on-site personnel to use Coastal Services" as a vendor. Dep. of Michael Sullivan [70-5] at pp. 120-121.

Alternatively, BP and Patriot argue that even if they had accepted the terms of Coastal's written proposal, the six-month provision in the proposal cannot reasonably be interpreted to mean that BP or Patriot was required to utilize Coastal's services for six months. Patriot's Mem. [71] in Supp. of Mot. Summ. J. at pp. 15-16; BP's Mem. [73] in Supp. of Mot. Summ. J. at pp. 5-6. Instead, they argue that the six-month provision can only be interpreted to mean that Coastal was offering to make its services available for no less than six months. Patriot's Mem. [71] in Supp. of Mot. Summ. J. at pp. 15-16; BP's Mem. [73] in Supp. of Mot. Summ. J. at pp. 5-6.

At the August 19, 2010, meeting, Coastal's sole member Andrew Cambre met with James Froebel and Greg Allen, individuals hired by BP through employment agencies. Dep. of Froebel [70-2] at pp. 14, 18, 20-21, 39; Dep. of Don Morrison [68-2] at pp. 318-19; Dep. of Andrew Cambre [68-4] at p. 45-47; BP's Mot. [72] for Summ. J. at p. 4. Plaintiff concedes that no employee or representative of Patriot was present at the meeting. Dep. of Andrew Cambre [68-4] at p. 46; Pl.'s Resp. [74] at p. 4 ("Both Mr. Froebel and Mr. Allen were representatives of BP, not Patriot."). Froebel testified that he retired from BP in 2009 but was hired through ACRO Service Corporation to oversee the Pascagoula site on behalf of BP. Dep. of James Froebel [72-4] at pp. 13-14. According to BP's 30(b)(6) representative, Don Morrison, Allen was "employed through O'Brien's [Response Management]" and reported directly to BP. Dep. of Don Morrison [73-3] at p. 253. Froebel arranged the August 19, 2010, meeting by calling Cambre and testified that he did so based upon the recommendation of a Pascagoula police officer who told Froebel that "he knew a guy" who could provide decontamination services at the public boat launch. Dep. of James Froebel [70-2] at pp. 27-28.[2]

Coastal's qualifications to provide vessel decontamination services, as well as Coastal's written proposal, were discussed at the meeting. Dep. of Andrew Cambre [68-4] at pp. 47-48; Dep. of James Froebel [70-2] at p. 42. Neither Cambre nor Froebel recall any discussion regarding the six-month provision in Coastal's proposal. Dep. of Andrew Cambre [68-4] at pp. 48-49; Dep. of James Froebel [70-2] at p. 41. Froebel admits that he verbally authorized Coastal to begin work. Dep. of James Froebel [70-2] at p. 40. Cambre contends that he asked Froebel whether a written contract for Coastal's services would be executed. Dep. of Andrew Cambre [68-4] at pp. 49-50. According to Cambre, Froebel telephoned Curtis Middleton, a decontamination manager hired by BP through Swift who reported directly to BP. Dep. of Curtis Middleton [68-3] at pp. 9, 35, 84; Dep. of James Froebel [70-2] at pp. 41-42. Cambre maintains that after speaking with Middleton, Froebel assured him that the written proposal was his contract. Id. at p. 8. Middleton does not recall a telephone call with Froebel regarding this matter or stating that Coastal's written proposal constituted its contract. Dep. of Curtis Middleton [68-3] at p. 87. Froebel does not recall stating to Cambre that Coastal's written proposal was its contract. Dep. of James Froebel [68-5] at p. 69. Cambre, on the other hand, contends that he "held the [written proposal] up" and said, "[s]o this is my contract?, " and Froebel, after contacting Middleton, affirmed that it was. Id. at p. 51. Cambre admits that he did not ask Froebel or Allen to sign the proposal and that there was no signature line on the proposal. Id.

Froebel "told Mr. Cambre to contact Patriot's Amy Blanchard, who would serve as his "point person for [Coastal] getting paid and submitting invoices." Dep. of Andrew Cambre [72-1] at pp. 59-60. Froebel subsequently submitted a requisition form to BP, along with Coastal's written proposal. Emails and Form 213 [75-10]. Two days after the meeting, Coastal began performing recreational vessel decontamination services in Pascagoula. BP's Mot. [72] for Summ. J. at p. 5. BP formally approved the requisition of Coastal's services on September 1, 2010. Executed Form 213 [75-10] at p. 10. Coastal was paid $5, 450.00 per day for its services, the precise rate Coastal had quoted in its written proposal. Written Proposal [1-1] at p. 3; Invoices [75-11]; Dep. of Michael Sullivan [74-1] at p. 146.

Almost two months after Coastal was demobilized on October 15, 2010, Michael Sullivan, an executive of Patriot, emailed Cambre a release form, which provided that Patriot would forward Coastal's final payment of $27, 250.00 upon Coastal's execution of a release acknowledging that it had been paid in full. Dep. of Michael Sullivan [70-5] at p. 223. Coastal demanded payment from Patriot by email on December 17, 2010, and represented that it was ready and willing to continue its services under its alleged six-month contract. Sullivan Email [75-29] at p. 2. Sullivan, on behalf of Patriot responded that

Coastal does not have a contract with Patriot. We utilized your services at BP's request as a vendor on the gulf coast project.... I will release this final check to you if you sign the conditional release stating Patriot has made all their payments to you and Patriot does not owe Coastal any other amounts.

Id.

Cambre submits that he contacted the state Attorney General's office to inquire as to whether Patriot could insist upon a release and withhold payment for work that Coastal had already provided. Dep. of Andrew Cambre [70-6] at p. 32. Patriot received a check from BP for Coastal's final services in early December 2010 but did not pay Coastal until March 2011. Dep. of Michael Sullivan [70-5] at p. 224; Deposit Notice [75-24]; Dep. of Andrew Cambre [70-6] at p. 33. Patriot ultimately paid Coastal after BP directed it to do so without requiring a release. Dep. of Michael Sullivan [70-5] at p. 247; Emails [75-22].

B. Procedural History

On September 29, 2011, Coastal filed its Complaint against BP and Patriot in the Chancery Court of Jackson County, Mississippi. Coastal's Compl. [1-1]. On November 7, 2011, BP removed the action to this Court. Not. of Removal [1]. Patriot consented to removal on November 8, 2011. Joinder [5]. On May 1, 2013, Coastal filed is Motion [68] for Partial Summary Judgment, ...


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