Interpace Corp. v. Board of Commissioners

489 F. Supp. 140, 1980 U.S. Dist. LEXIS 11090
CourtDistrict Court, E.D. Louisiana
DecidedApril 30, 1980
DocketCiv. A. No. 79-3021
StatusPublished
Cited by2 cases

This text of 489 F. Supp. 140 (Interpace Corp. v. Board of Commissioners) 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
Interpace Corp. v. Board of Commissioners, 489 F. Supp. 140, 1980 U.S. Dist. LEXIS 11090 (E.D. La. 1980).

Opinion

CHARLES SCHWARTZ, Jr., District Judge.

This matter came on for non-jury trial on a former day. At the conclusion of trial the case was submitted for further review by the Court. Now, having carefully considered the evidence adduced at trial, the memoranda and oral argument of counsel, and the applicable law, and for the reasons hereinafter set out, it is the opinion of the Court that judgment should issue in favor of defendant and against plaintiff dismissing plaintiff’s claim at its cost and prejudice.

To the extent that any of the following findings of fact constitute conclusions of law, they are adopted as such, and to the extent that any of the conclusions of law constitute findings of fact, they are so adopted.

[142]*142FINDINGS OF FACT

Plaintiff, Interpace Corporation (hereinafter Interpace), is a Delaware corporation qualified to do and doing business in Louisiana, with its principal place of business in the state of New Jersey. Defendant, Board of Commissioners of the Port of New Orleans (hereinafter Dock Board), is a separately constituted agency of the state of Louisiana created by and operated pursuant to LRS 34:1 et seq.

On November 12, 1959 an agreement was entered into between the Dock Board and Bestwall Gypsum Company (Bestwall) which provided that, in consideration of the Dock Board’s construction of a bulk handling terminal adjacent to certain Bestwall property in the city of New Orleans, Best-wall would loan the Dock Board $800,000 to be used to help defray construction costs. The agreement provided that the loan would be repaid over a twenty-five year period in annual installments of principal and interest totaling $62,000. Such installments were to be paid at the end of the year (ending November 19), out of and from dockage, wharfage, and other handling charges incurred by Bestwall for use of the terminal facilities. The agreement further provided that in the event Bestwall’s use of the terminal facilities during any year generated charges less than $62,000, Bestwall would accept whatever amount was generated in full satisfaction and discharge of the Dock Board’s obligation for such year’s installment and the Dock Board would be credited as if it had made payment in the full amount of $62,000.

In 1966 the rights and liabilities of Best-wall under the November 12, 1959 agreement were assigned to Georgia Pacific Corporation. In 1969 Carey Salt Company acquired a portion of land and facilities adjacent to the bulk handling terminal from Georgia Pacific. On November 12, 1969, Carey Salt Company, Georgia Pacific, and the Dock Board entered into an agreement by which the rights and liabilities under the November 12, 1959 agreement were transferred to Carey Salt Company and the November 12, 1959 agreement was cancelled except as to those provisions brought forward and included in the November 12, 1969 agreement. Subsequently, Carey Salt Company was dissolved and its assets were acquired by Interpace Corporation.

Under Paragraph V of the 1969 agreement the principal balance on the original loan would be repaid in the following manner:

(1) Out of and from dockage charges assessed by Board against vessels owned or chartered by Carey or by Carey’s parent corporation, Interpace Corporation, or other subsidiaries of said Interpace Corporation, and which vessels are assigned berths at the said Public Bulk Terminal, for the purpose of receiving, delivering, loading or unloading bulk cargoes, including particularly salt, for the account of Carey, or of said Interpace Corporation or other subsidiaries thereof, and
(2) Out of and from the wharfage, handling or other charges assessed by Board for the use of the facilities and services of said Public Bulk Terminal by Carey, or by Carey’s parent corporation, Interpace Corporation, or by other subsidiaries of Interpace Corporation .

The 1969 agreement, like the 1959 agreement, also provided that if charges were not generated in any one year, there would be no payment and the Dock Board would be forever relieved from paying the yearly installment.

From 1970 through 1973, inclusive, Inter-pace incurred dockage, wharfage, and other charges for use of the bulk handling terminal and related berthing facilities that were repaid by the Dock Board at or near the end of each respective year. From 1974-1977, inclusive, Interpace did not incur any dock-age, wharfage, and other charges for use of the facility, and no repayment was made by the Dock Board in those years.

Late in 1977, Interpace entered into negotiations with International Minerals and Chemical Corporation (IMC) for the lease or sale of the Interpace property adjacent to the public bulk terminal. The Dock Board [143]*143was aware that IMC was involved in negotiations with Interpace for the lease/sale of the Interpace property and that part of the negotiation included a possible assignment to IMC of Interpace’s rights under the 1969 lease agreement.

Pursuant to those negotiations, in late February, 1978 an agreement back dated to January 1, 1978 was entered into between IMC and Interpace whereby an option was granted by Interpace to IMC to either lease or purchase all or a portion of the Interpace property (Exhibit 31). Under the terms of the option agreement Interpace and IMC agreed to share in any repayments generated by IMC’s use of the bulk handling terminal and related facilities. The agreement provided that if the option to lease and/or purchase was exercised, then Interpace would assign its rights under the November 12, 1969 agreement to IMC. The agreement also provided that if the option was exercised IMC would make its best efforts to use the terminal and related facilities and would divide any repayments thus generated on the basis of 25% to IMC and 75% to Interpace.

Under date of January 5, 1978, Donald H. Weinblatt of IMC wrote to Mr. Edward S. Reed, Port Director for the port of New Orleans (Exhibit 32) advising of his company’s consideration of construction of a petroleum coke calciner on the Interpace property, a' project which he indicated would involve large expenditures in the New Orleans area, a large volume of shipping through the bulk terminal, and 15 year contracts with the port authorities and the bulk terminal lessees. Mr. Weinblatt advised of his understanding of the repayment agreement between the Dock Board and Interpace and of the fact that Inter-pace had indicated a desire to transfer the obligation to IMC in connection with IMC’s use of the property. Mr. Weinblatt noted that the project would not be completed for some 2 years during which time IMC would not be shipping significant tonnage through the bulk terminal. He indicated that IMC and Interpace, “ . . . are requesting the Board of Commissioners to rearrange the payment schedule to utilize the full present value of the repayment obligation, commencing with the operation of the facility.” The contents of the letter were the subject of a Dock Board inter-office memorandum of January 19, 1978 (Exhibit 33) from Comptroller William H. Urban to Mr. Reed and others which reveals that Urban recommended that the Dock Board merely agree to an assignment of the indebtedness to IMC and withhold any agreement relative to rearrangement of the payment schedule. According to the testimony of Mr. Weinblatt, he was verbally advised by someone from the Dock Board in January, 1978 that there was “no way” there would be a moratorium on payments during the construction of the calciner facility.

In late January, 1978 Mr.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Junker v. Crory
650 F.2d 1349 (Fifth Circuit, 1981)

Cite This Page — Counsel Stack

Bluebook (online)
489 F. Supp. 140, 1980 U.S. Dist. LEXIS 11090, Counsel Stack Legal Research, https://law.counselstack.com/opinion/interpace-corp-v-board-of-commissioners-laed-1980.