Pacific Survey Group LLC v. Tyche High Seas Capital Corp

District Court, W.D. Washington·Decided August 10, 2023·No. 2:21-cv-01712·Unknown

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

PACIFIC SURVEY GROUP, LLC, CASE NO. C21-1712JLR Plaintiff / ORDER Counter-Defendant, v.

TYCHE HIGH SEAS CAPITAL CORP., et al., Defendants / Counter-Claimants.

I. INTRODUCTION Before the court are (1) Plaintiff/Counter-Defendant Pacific Survey Group, LLC’s (“PSG”) motion for summary judgment (PSG Mot. (Dkt. # 32); PSG Reply (Dkt. # 44)); and (2) Defendant/Counter-Claimant Tyche High Seas Capital Corp.’s (“Tyche”) combined opposition to PSG’s motion for summary judgment and cross-motion for dismissal on mootness grounds (Cross-Mot. (Dkt. # 42)). PSG opposes Tyche’s cross-motion for dismissal. (Cross-Mot. Resp. (Dkt. # 47).) The court has considered the motions, all materials filed in support of and in opposition to the motions, the relevant

portions of the record, and the governing law. Being fully advised,1 the court DENIES Tyche’s motion to dismiss and GRANTS PSG’s motion for summary judgment. II. BACKGROUND2 This case arises from a time charter agreement (“Charter”) between PSG, the owner of the research vessel R/V OCEAN TITAN, and Tyche, the charterer of that vessel. (See generally Compl. (Dkt. # 1).) Tyche chartered the R/V OCEAN TITAN,

together with its remote operated vehicle (“ROV”), for the purpose of surveying the wreck and, if possible, recovering the cargo of the S/S ISLANDER, which was lost off the coast of Alaska in 1901 while carrying a cargo of gold. (McLean Decl. (Dkt. # 33) ¶ 3(ii), Ex. 2 (“Charter”)); see Yukon Recovery v. Certain Abandoned Prop., Nos. A96-0270-CV (HRH), A96-0304-CV (HRH), 1998 WL 965985, at *1-3 (D. Alaska Aug.

28, 1998) (setting forth findings of fact regarding the loss of the S/S ISLANDER and its cargo). PSG and Tyche entered into the Charter on November 22, 2019. (Charter at 4.) The Charter provided for a hire rate of $33,700 per day, plus a mobilization fee of 1 Neither party has requested oral argument (see Mot. at 1; Cross-Mot. at 1) and the court finds that oral argument would not be helpful to its resolution of the motion, see Local Rules W.D. Wash. LCR 7(b)(4). 2 Tyche relies solely on its assertion that this matter is moot in opposing PSG’s motion for summary judgment; it does not respond substantively to PSG’s arguments in favor of summary judgment, nor does it identify any facts that are in dispute. (See generally Cross-Mot.) Therefore, this recitation of background facts is drawn solely from PSG’s summary judgment materials. $250,0003 and a two-day maximum demobilization fee at $33,700 per day. (Id. at 1-2, ¶¶ 20, 12, 15.) Delivery of the vessel was to occur on November 29, 2019, and the

Charter was to end no later than December 20, 2019. (Id. at 1, ¶¶ 5, 10.) Payment of any invoiced amounts was due within 30 days and unpaid sums were to accrue interest at the rate of 12% per annum. (Id. at 3, ¶¶ 24-25.) The parties agreed that, in the event of a dispute arising out of the Charter, the substantially prevailing party was entitled to recover its reasonable legal fees and costs. (Id. at 29.) The Charter could be modified only by a written amendment signed by both parties. (Id. at 30, ¶ 41.)

PSG delivered the R/V OCEAN TITAN to Tyche on November 29, 2019, and Tyche used the vessel and its equipment through December 20, 2019. (McLean Decl. ¶ 3(iii), Ex. 3 (“Marek Dep.”) at 71:1-5, 106:3-8, 163:11-14 (acknowledging that the survey voyage lasted for 20 days, between November 29 and December 20, 2019).) Tyche’s Vice President of Marine Technology, Gene Marek, testified that the vessel

operated satisfactorily during the expedition and the equipment needed was on board. (Id. at 33:9-18, 59:21-23, 67:21-68:12.) No one from Tyche notified PSG at any time during the Charter that PSG’s performance was substandard. (Id. at 89:15-22, 73:24-75:17, 83:9-13, 97:20-22, 98:6-12, 100:23-101:6.) On January 31, 2020, PSG invoiced Tyche for the Charter. (McLean Decl. ¶ 3(v),

Ex. 5 (January 31, 2020 invoice and February 2020 email chain).) PSG agreed to Mr. Marek’s requests to credit Tyche for certain items and Mr. Marek stated in an email that

3 Tyche paid the $250,000 mobilization fee. (Counterclaim Ans. (Dkt # 22) ¶ 15.) “[t]he additions are legit.” (Id.) The approved invoice included 20 days of charter hire at $33,700 per day; one day at $33,700 for demobilization; and $11,775.11 for

“reimbursables.” (Id. at 3.) After a credit of $250,000 for the mobilization fee, the total amount owed was $536,875.11, with payment due on March 1, 2020. (Id.) Although Tyche subsequently acknowledged that payment of the invoiced amount was due, it did not timely make payment. (See, e.g., McLean Decl. ¶ 3(vi), Ex. 6 (April 2020 emails from Tyche’s president, Michael Frank).) On July 1, 2020, Tyche made a partial payment of $75,000 to PSG. (Compl. ¶ 19; Ans. (Dkt. # 14) ¶ 19.) In September

2020, Tyche again acknowledged that it still owed payment to PSG but stated that it was in the process of raising additional capital. (McLean Decl. ¶ 3(vii), Ex. 7 (September 19, 2020 email from Mr. Frank, stating, “[Y]ou will be paid. It is not an issue of if, it is only an issue of when.”).) Nevertheless, Tyche did not make any further payments to PSG. (See Ans. at 8-15 (“Counterclaims”) ¶ 19, Counterclaim Ans. ¶ 19 (acknowledging that

Tyche paid PSG $325,000 in total).) According to PSG, Tyche has “seized on the existence of” data collected by the R/V OCEAN TITAN’s ROV during the survey voyage “to avoid its obligations under the [C]harter.” (PSG Mot. at 7.) Specifically, Tyche asserts that that PSG materially breached the Charter by “failing to turn over all of the [d]ata” collected by the ROV to

Tyche. (Counterclaims ¶¶ 19, 24, 32.) There is no language in the Charter, however, that places any obligation on PSG to collect, store, process, report, or provide any type of data to Tyche. (See generally Charter.) To the contrary, the only provisions in the Charter regarding data state that any data collected during the term of Charter would remain confidential and that PSG could retain a copy of the survey data. (Id. at 20, ¶ 36; id. at 34.) In any event, PSG did provide data collected during the voyage to Tyche. (Marek

Dep. at 86:22-87:5, 102:2-23, 116:15-21 (acknowledging he received data from PSG).) PSG filed this action against Tyche (in personam) and the data collected during the term of the Charter (in rem) on December 30, 2021. (Compl.) PSG alleges that Tyche breached the Charter by failing to pay it the full amount owed for its services and alleges claims under the Charter for money due, attorneys’ fees, and maritime liens. (Id. ¶¶ 22-33.) On February 17, 2022, Tyche answered the complaint; asserted affirmative

defenses; and alleged counterclaims for breach of contract, breach of the implied covenant of good faith, attorney’s fees, violation of the Washington Consumer Protection Act (“WCPA”), ch. 19.86 RCW, and unjust enrichment. (See Ans.; Counterclaims.) Tyche asserts that it had the right to withhold payment because PSG breached the Charter Party by failing to turn over the data collected during the survey voyage. (Counterclaims

¶¶ 13-16.) PSG originally filed this motion for summary judgment on April 6, 2023, nearly five months before the dispositive motions deadline. (PSG Mot.; Sched. Order. (Dkt. # 21) (setting the dispositive motions deadline on August 29, 2023).) It asks the court to grant it summary judgment in its favor on its claim that Tyche is liable for the unpaid

balance due under the Charter Party, accrued interest, and attorneys’ fees and costs. (PSG Mot.4) It also seeks summary judgment in its favor on Tyche’s counterclaims.

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Pacific Survey Group LLC v. Tyche High Seas Capital Corp, (W.D. Wash. 2023).

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