RG Steel Sparrows Point, LLC v. Kinder Morgan Bulk Terminals, Inc.

609 F. App'x 731
CourtCourt of Appeals for the Fourth Circuit
DecidedApril 28, 2015
Docket14-1245
StatusUnpublished
Cited by12 cases

This text of 609 F. App'x 731 (RG Steel Sparrows Point, LLC v. Kinder Morgan Bulk Terminals, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RG Steel Sparrows Point, LLC v. Kinder Morgan Bulk Terminals, Inc., 609 F. App'x 731 (4th Cir. 2015).

Opinions

Affirmed by unpublished PER CURIAM opinion. Judge Diaz wrote a separate concurring opinion.

Unpublished opinions are not binding precedent in this circuit.

PER CURIAM:

This case arose in the aftermath of the catastrophic collapse of a bridge crane used by Kinder Morgan Bulk Terminals Inc. (“Appellant”) to unload coke used to fuel a steel mill located near Baltimore, Maryland. Ownership of the steel mill and the bridge crane changed hands several times in recent history. The appellee in this case, RG Steel Sparrows Point LLC (“RG Steel”),1 acquired the company that owned the steel mill and the bridge crane through a stock purchase on March 31, 2011. Following the bridge crane collapse, Appellee sued Appellant for negligence. Appellee also claimed its right to indemnification for losses pursuant to a lease and service contract governing Appellant’s use of the bridge crane (“Lease”).

Appellant maintained that it was not negligent and that it had no duty to indemnify Appellee. It argued that the limitation-of-liability provision of a purchase order that was in force at the time of the crane accident applied instead of the Lease’s indemnity clause. After a bench trial, the district court entered judgment in Appellee’s favor. The district court found that the parties renewed the Lease by an implied-in-fact contract and concluded that the purchase order did not supersede the Lease’s indemnity clause under Maryland law because the Lease defined the parties’ relationship with respect to the crane and the purchase order governed a different subject matter. The district court held Appellant liable for over $15.5 million, awarding compensatory damages for destruction of Appellee’s property and consequential damages for Appellee’s resulting business losses.

In the instant action, Appellant does not challenge the district court’s award of compensatory damages, nor does it dispute the court’s finding that the parties were generally operating under an implied-in-fact renewal of the Lease. Instead, it argues the district court erred in concluding Appellant was liable for consequential damages pursuant to the Lease’s indemnity clause. Appellant claims the district court should have .applied the limitation-of-liability provision of a purchase order agreement that was in force at the time the crane collapsed — a provision that Appellant contends superseded the Lease’s indemnity clause and foreclosed any consequential damages award. In the alternative, Appellant avers that, even if the district court was correct to hold Appellant to the Lease’s indemnity clause, the district court erred when it qualified Appellee’s damages [734]*734expert to testify and relied on the expert’s calculation in ordering its award .for consequential damages.

We affirm the district court’s rulings in their entirety, albeit on different grounds. See Hutto v. S.C. Ret. Sys., 773 F.3d 536, 549-50 (4th Cir.2014) (affirming “for a reason supported by the record but not relied on by the district court”). Appellant is liable for consequential damages even under the express terms of the purchase order it wishes us to apply. Furthermore, the district court did not abuse its discretion by permitting Appellee’s damages expert to testify, and it did not clearly err in determining the amount of Appellee’s damages award.

I.

A.

The Lease at issue originated in 1992, although both parties acquired their interests in this contractual relationship at a much later date. Under the Lease, Appel-lee leased the bridge crane to companies providing stevedoring2 services for the steel mill’s “A Yard.” The stevedores undertook to keep the bridge crane in good repair and to maintain an insurance policy on it.

The Lease contained an indemnity provision, which read as follows:

[The stevedores] shall ... indemnify and save harmless [Appellee] from and against all loss or liability for or on account of any injury (including death) or damages received or sustained by any person or persons (including [Appellee] and any employee, agent, or invitee thereof) by reason of any act or omission, whether negligent or otherwise, on the part of [the stevedores] or any employee, agent, subcontractor, representative, invitee, or business visitor of [the stevedores], including any breach or alleged breach of any statutory duty which is to be performed by [the stevedores] hereunder but which is or may be the duty of [Appellee] under applicable provisions of law.

J.A. 692-93 (emphasis supplied).3 The stevedores also “assume[d] the entire risk of loss, theft, or destruction of the [bridge crane] resulting from any cause whatsoever.” Id. at 690. During the life of the Lease, Appellee entered into purchase order contracts with the stevedores to unload coke-carrying vessels in the port.

In December 2002, Appellant, a company that provides stevedoring services, purchased its predecessor’s rights and liabilities under the Lease. Although the Lease was set to terminate at the end of July 2003, Appellant and Appellee entered into a separate short-term interim agreement to extend the Lease. Initially, this interim agreement was set to expire when Appel-lee and Appellant executed a long-term agreement governing the use of the bridge crane or on December 31, 2003, whichever occurred sooner. However, Appellant and Appellee extended the interim period several times. When they ultimately were unable to reach a long-term agreement, the Lease finally expired at the end of 2005.

Although Appellant never expressly renewed the Lease after 2005, it continued to conduct business with Appellee “largely in the same manner as [it] had under the Lease.” J.A. 600. For example, Appellant “repeatedly referenced the Lease” in its communications with Appellee and it [735]*735“maintain[ed] the [bjridge [cjrane at its own expense,” in accord with the terms of the Lease. Id. at 600-01. Appellant also continued to use the bridge crane to unload ships pursuant to various purchase order contracts.

B.

1.

On June 4, 2008, the National Weather Service issued a tornado watch for the central Maryland area. By 3:35 p.m. that day, wind speeds measured over 90 miles per hour. Despite its own procedures and federal regulations which require preventative measures during high winds, Appellant did not deploy hurricane tie downs, and the bridge crane’s automatic rail clamps had been removed at some point in the mid-1990s.4 Without the benefit of these safety measures, the wind toppled one the bridge crane’s A-frame legs, and the crane fell.

2.

As an immediate result of the crane collapse, Appellee closed the A Yard and paid for emergency repairs to its facilities. Appellee also suffered other consequential losses arising from delays and increased handling charges attributable to the loss of the crane. Without a crane to unload coke for the steel mill’s blast furnace, cargo ships carrying coke were required to unload their cargo at another terminal farther away from the blast furnace: the New Ore Pier. Because the New Ore Pier already serviced a number of ships on a regular basis, it struggled to accommodate the additional traffic.

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Bluebook (online)
609 F. App'x 731, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rg-steel-sparrows-point-llc-v-kinder-morgan-bulk-terminals-inc-ca4-2015.