Harvey Gulf International Marine, LLC v. Hydradyne, LLC

CourtDistrict Court, E.D. Louisiana
DecidedOctober 17, 2024
Docket2:24-cv-00592
StatusUnknown

This text of Harvey Gulf International Marine, LLC v. Hydradyne, LLC (Harvey Gulf International Marine, LLC v. Hydradyne, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harvey Gulf International Marine, LLC v. Hydradyne, LLC, (E.D. La. 2024).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

HARVEY GULF INTERNATIONAL CIVIL ACTION MARINE, LLC

VERSUS NO. 24-592

HYDRADYNE, LLC SECTION: D (4)

ORDER AND REASONS

Before the Court is Defendant Hydradyne, LLC’s Rule 12(b)(6) Motion for Partial Dismissal.1 Plaintiff, Harvey Gulf International Marine, LLC (“HGIM”), opposes the Motion,2 and Hydradyne has filed a Reply.3 After careful consideration of the parties’ memoranda, the record, and the applicable law, the Motion is GRANTED in part and DENIED in part, as moot. The Court, however, will grant HGIM leave to amend its state court petition to address the deficiencies raised in the Motion. I. FACTUAL AND PROCEDURAL BACKGROUND This is a redhibition and breach of contract case involving the replacement of cylinders on HGIM’s “NOV cranes” that are located on vessels used for deepwater operations in the Gulf of Mexico and abroad. HGIM alleges that on January 24, 2023, it placed an order with Hydradyne for the overhaul of cylinders used in the operation of its NOV cranes, the terms of which were memorialized in the Terms and Conditions of Sale Agreement (the “Sale Agreement”).4 HGIM claims that shortly after it

1 R. Doc. 13. 2 R. Doc. 18. 3 R. Doc. 19. 4 R. Doc. 1-2 at ¶ 8 (citing R. Doc. 1-2 at p. 11). delivered its cylinders to the Hydradyne facility, the parties discovered that some of the cylinders’ Original Manufacturer Equipment (“OME”) was on back order, namely the cylinders’ original Rod Seals, Piston Seals, Rod Wear Rings, and Piston Wear

Rings (the “seals”).5 HGIM alleges that because the OME for the cylinders were on backorder, Hydradyne “replaced the cylinder’s original seals,” and that Hydradyne assured HGIM “that these aftermarket seals would be sufficient for HGIM’s intended use of its NOV crane cylinders upon the completion of the overhaul.”6 HGIM asserts that Hydradyne delivered the overhauled cylinders to HGIM on February 16, 2023 at a cost of $120,265.35.7 HGIM claims that immediately upon its use of the newly overhauled cylinders

it discovered that they were no longer operating properly.8 Per the terms of the Sale Agreement, HGIM returned the cylinders to Hydradyne to allow Hydradyne to remedy the issues causing the malfunctions.9 HGIM alleges that, despite Hydradyne’s efforts to repair the cylinders, they remained inoperable.10 HGIM asserts that when Hydradyne was unable to repair the cylinders, it sent the cylinders to Alatas Americas Inc. (“Alatas”) to correct the issue.11 HGIM alleges that upon

examining the cylinders, Alatas issued a Workshop Overhaul report, wherein it determined that the seals installed by Hydradyne “were not of the same type or material of the cylinder’s original seals,” and that, “Hydradyne improperly installed

5 R. Doc. 1-2 at ¶ 9. 6 Id. at ¶ 10. 7 Id. at ¶ 11 (citing R. Doc. 1-2 at p. 12). 8 R. Doc. 1-2 at ¶ 12. 9 Id. at ¶ 13. 10 Id. 11 Id. at ¶ 14. Nylon seals to the cylinders, which absorbed moisture overtime [sic] in the course of the cylinders’ ordinary and intended use.”12 Alatas determined that, “these improperly installed Nylon seals were too large, which in turn did not allow any room

for expansion once the unwanted moisture was absorbed, causing the cylinders’ rods to grab its wearbands and chatter.”13 Alatas further determined that, “the cylinders should have been fitted with seals made up of water resistant polyester resin material.”14 HGIM alleges that, “Alatas thereafter corrected Hydradyne’s mistakes and completed the overhaul with the proper seals,” at a cost of roughly $150,000.00.15 HGIM claims that it informed Hydradyne of Alatas’ findings on November 16, 2023, and demanded that Hydradyne “remedy its error” by paying HGIM $150,000.00 in

consequential damages.16 According to HGIM, Hydradyne denied liability for the cylinders’ failure and denied HGIM’s request for consequential damages.17 On or about February 9, 2024, HGIM filed a Verified Petition for Redhibition, Breach of Contract and Damages against Hydradyne in Louisiana state court, asserting the following causes of action under Louisiana law: (1) redhibition; (2) thing not fit for ordinary use; (3) violation of the Louisiana Unfair Trade Practices Act

(“LUTPA”); and (4) breach of contract.18 HGIM also sought treble damages in

12 Id. at ¶¶ 15–16. 13 Id. at ¶ 16. 14 Id. at ¶ 17. 15 Id. 16 Id. at ¶ 18. 17 Id. at ¶¶ 18–19. 18 Id. at ¶¶ 21–59. connection with its LUTPA claim.19 Hydradyne removed the matter to this Court on March 8, 2024 on the basis of diversity jurisdiction, 28 U.S.C. § 1332.20 Hydradyne filed the instant Motion for Partial Dismissal on April 15, 2024,

seeking the dismissal with prejudice of HGIM’s request for consequential damages, HGIM’s LUTPA claim, and HGIM’s request for treble damages under the LUTPA.21 Hydradyne asserts that consequential damages are expressly excluded by the terms and conditions of the Sale Agreement and by the 2011 Master Service Agreement governing the parties’ business dealings (the “2011 MSA”).22 Hydradyne contends that the Court can consider both documents because the Sale Agreement was attached to HGIM’s state court Petition, the 2011 MSA is incorporated by reference

into the Sale Agreement, and the 2011 MSA is central to HGIM’s claims.23 Hydradyne also argues that HGIM’s Petition fails to state a valid claim under the LUTPA because its allegations sound in breach of contract and breach of warranty,24 and further asserts that HGIM is not entitled to treble damages under the LUTPA.25 Hydradyne asserts that these claims should be dismissed with prejudice at HGIM’s cost.26

HGIM opposes the Motion, asserting that the limitation of liability clauses contained in the Sale Agreement and in the 2011 MSA do not apply because it has

19 Id. at ¶¶ 49 & 53. 20 R. Doc. 1 at Introductory Paragraph. 21 R. Doc. 13. 22 Id. at p. 1; R. Doc. 13-1 at pp. 1, 2–3, & 7–11. 23 R. Doc. 13-1 at pp. 9–11. 24 Id. at pp. 11–13. 25 Id. at pp. 13–15. 26 Id. at p. 15. alleged that Hydradyne’s representations regarding the quality and performance of the seals were not true and, therefore, constitute intentional or gross fault, gross negligence, and/or a deliberate disregard of its contractual duties.27 HGIM claims

that it has alleged more than simple negligence, and that the Petition demonstrates that Hydradyne’s misrepresentations regarding the propriety of the aftermarket seals—which were made with knowledge of the seals’ incompatibility and defects— constitute, at a minimum, gross negligence and a deliberate disregard of contractual duties.28 HGIM further asserts that it has alleged sufficient facts to show that Hydradyne’s conduct amounted to unfair or deceptive trade practices prohibited by the LUTPA, and that it is entitled to treble damages under the LUTPA.29

Alternatively, if the Court finds that Hydradyne’s Motion has merit, HGIM requests leave to amend its Petition under Fed. R. Civ. P. 15(a) to address any deficiencies pointed out in the Motion.30 In response, Hydradyne maintains that HGIM’s conclusory allegations fail to state an LUTPA claim and that the claim, as well as HGIM’s request for treble damages, should be dismissed.31 Hydradyne also maintains that the limitation of

liability clauses in the Sale Agreement and in the 2011 MSA apply and constitute valid waivers of consequential damages.32 Hydradyne further asserts that HGIM’s “voluminous Complaint is devoid of any allegations of negligence, gross fault, gross

27 R. Doc. 18 at pp. 2–3 & 5–8. 28 Id. at pp. 7–8. 29 Id. at pp. 8–10. 30 Id. at pp. 10–11. 31 R. Doc. 19 at pp. 2–6. 32 Id. at pp. 6–7.

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Harvey Gulf International Marine, LLC v. Hydradyne, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harvey-gulf-international-marine-llc-v-hydradyne-llc-laed-2024.