Conoco Inc. v. Halter-Calcasieu LLC

865 So. 2d 813, 3 La.App. 3 Cir. 00136, 2003 La. App. LEXIS 3179, 2003 WL 22722822
Louisiana Court of Appeal·Decided November 19, 2003·No. 03-00136·Published·Cited by 2 cases

Opinion

865 So.2d 813 (2003)

CONOCO, INC.
v.
HALTER-CALCASIEU, L.L.C., et al.

No. 03-00136.

Court of Appeal of Louisiana, Third Circuit.

November 19, 2003.
Writ Denied March 12, 2004.

*815 James H. Hohenstein, Haight, Gardner, Holland & Knight, L.L.P., New York, NY, William B. Swift, Swift, Spears & Harper, L.L.P., Lake Charles, LA, for Appellant: CITGO Petroleum Corporation.

Hugh Ramsey, Straub Terriberry, Carroll & Yancey, New Orleans, LA, Gregory W. Belfour, Jones, Tete, Nolen, Fonti & Belfour, L.L.P., Lake Charles, LA, for Appellant: ConocoPhillips Company.

James B. Doyle, Woodley, Williams, Boudreau, Norman, Brown & Doyle, L.L.C., Lake Charles, LA, for Appellee: Halter-Calcasieu, L.L.C., et al.

Court composed of SYLVIA R. COOKS, OSWALD A. DECUIR, and MARC T. AMY, Judges.

COOKS, Judge.

In this consolidated appeal, the appellants, CITGO Petroleum Corporation and ConocoPhillips, Inc., seek to reverse the judgment of the lower court granting summary judgment in favor of the appellees, and further seek entry of summary judgment in their favor on the issue of liability. Alternatively, CITGO and Conoco request this court vacate the judgment and remand the case to the district court for trial on the issues of whether appellees' actions constituted ultrahazardous activity and/or intentional tort. For the following reasons, we affirm.

*816 FACTS

On June 13, 2000, Halter-Calcasieu, L.L.C. (hereafter Halter) floated the Calcasieu Dry Dock No. 4, which it operated, to the middle of the Calcasieu River for the purpose of retrieving a disabled vessel and bringing it back to shore for repairs. To accomplish this end, Halter sank the drydock with the intention of lifting the disabled vessel. Once the drydock was sunk, the disabled vessel was moved into position over the drydock's submerged deck. The drydock's ballast tanks were then emptied, which ordinarily would cause it to rise and lift the vessel clear of the water. However, in this instance the drydock did not rise and remained in the middle of the river, effectively blocking traffic from moving up and down the river. Efforts to raise the drydock were unsuccessful and it was eventually declared a total loss and destroyed during the salvage operation.

On October 10, 2000, ConocoPhillips, Inc. filed suit in the Louisiana Fourteenth Judicial District Court (hereafter 14th JDC) alleging economic loss and other inconvenience as a result of the drydock's mishap, and the temporary blocking of the Calcasieu River.[1] This river affords the only marine access to the Port of Lake Charles and to the property of several riparian owners, including Conoco and CITGO Petroleum Corporation. No property damage or physical injury was alleged by Conoco. The suit by Conoco was grounded exclusively on Louisiana state law.

On December 13, 2000, the defendants filed a Petition for Exoneration from or Limitation of Liability pursuant to the Limitation of Liability Act, 46 U.S.C.App. § 183 et seq., in U.S. District Court. The Federal Court issued an order enjoining any actions in other forums.

Conoco then filed a motion to dismiss the Limitation Petition on the basis that the drydock was not a vessel. CITGO filed an identical petition. The Federal Court directed that the motions be converted to motions for summary judgment.

In view of the prescriptive period under Louisiana law, CITGO obtained permission from the Federal Court to lift the Limitation Act stay to allow CITGO to file an action in the 14th JDC. CITGO then filed its Petition for Damages in the district court on April 11, 2001, against the Halter defendants.[2] Following CITGO's filing, *817 the matters were consolidated.[3]

On June 13, 2001, the Federal Court issued a Memorandum Ruling concerning CITGO's and Conoco's summary judgment motions. In re Halter-Calcasieu, L.L.C., 2001 WL 1435468 (W.D.La.2001). The Federal Court held that Halter was not entitled to the limitation of liability because it failed to establish that the drydock was a vessel under Title I, § 3 of the United States Code. Thus, it concluded that its admiralty jurisdiction did not apply to the drydock.[4]

On August 9, 2001, defendants filed their Exceptions and Answers to Conoco's petition in the 14th JDC. On October 2, 2001, defendants also filed Exceptions and Answers to CITGO's petition.

On November 6, 2001, the Bankruptcy Court lifted the stay to await a merit determination of Conoco's and CITGO's claims by the 14th JDC. The stay was not lifted to allow execution upon any resulting judgments, requiring Conoco and CITGO to return to bankruptcy court in order to collect upon any possible judgments.

At the beginning of argument in the 14th JDC, counsel for the Halter defendants informed the trial judge of its intention to remove the litigation to the federal court based on bankruptcy law. On December 4, 2001, defendants removed the actions pending in the 14th JDC to Federal Court, based on the applicability of various bankruptcy statutes. Conoco and CITGO opposed the removal and moved for remand and abstention. On May 14, 2002, the Federal Court granted the motions to remand and abstain.

On August 12, 2002, Conoco and CITGO filed their Joint Motion for Partial Summary Judgment for Liability Only. Defendants opposed the motion, filing a cross-motion for Summary Judgment and asserted exceptions of no cause and no right of action. Hearings on the motions were held, and in a judgment dated December 7, 2002, the trial court denied the Joint Motion for Partial Summary Judgment for Liability Only filed by Conoco and CITGO. The trial court also granted the Halter defendants' cross-motion for Summary Judgment finding the "presence of the dock on the river bottom was an obstruction of navigation and that admiralty law would apply." The trial court also found the pleadings and evidence insufficient to support a finding of an intentional tort or ultrahazardous activity.

Conoco and CITGO have appealed the trial court's judgment, asserting the following assignments of error[5]:

(1) The district court erred in finding that maritime law rather than Louisiana law applied in the case, and specifically, that this dispute was between riparian landowners whose rights are protected by Louisiana Civil Code arts. 656-658;
*818 (2) The district court erred in not following the earlier determination of the Federal District Court that admiralty jurisdiction did not attach to Halter's drydock;
(3) The district court erred in excluding evidence and in denying the opportunity to prove at trial Halter's actions constituted an intentional tort and ultrahazardous activity.

ANALYSIS

CITGO and Conoco both argue the trial court erred in finding that maritime law, rather than Louisiana law, governs this case. Both point to the decision rendered on June 13, 2001 by the Federal Court, finding Halter failed to establish that the drydock was a vessel under Title I, § 3 of the United States Code. As noted, the issue before the federal court was whether the drydock was a "vessel" under maritime law and thus whether Halter's action for exoneration from or limitation of liability under the Limitation of Liability Act, 46 U.S.C.App. § 181 et seq., was appropriate. The Limitation Act allows a vessel owner to limit liability for damage or injury to the value of the vessel or the owner's interest in the vessel.

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Conoco Inc. v. Halter-Calcasieu LLC, 865 So. 2d 813, 3 La.App. 3 Cir. 00136, 2003 La. App. LEXIS 3179, 2003 WL 22722822 (La. Ct. App. 2003).

865 So. 2d 813 (Conoco Inc. v. Halter-Calcasieu LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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