Ormet Primary Aluminum Corp. v. Ballast Technologies, Inc. , 436 F. App'x 297 ( 2011 )


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  •      Case: 10-30710        Document: 00511508092          Page: 1   Date Filed: 06/14/2011
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT  United States Court of Appeals
    Fifth Circuit
    FILED
    June 14, 2011
    No. 10-30710                 Lyle W. Cayce
    Clerk
    Ormet Primary Aluminum Corporation
    Plaintiff-Appellee/Cross-Appellant
    v.
    Ballast Technologies, Inc.
    Defendant-Appellant/Cross-Appellee
    Appeals from the United States District Court
    for the Eastern District of Louisiana
    (09-CV-6726)
    Before WIENER, BENAVIDES, and STEWART, Circuit Judges.
    PER CURIAM:*
    Plaintiff-Appellee/Cross-Appellant Ormet Primary Aluminum (“Ormet”)
    sued Defendant-Appellant Ballast Technologies (“Ballast”) for unpaid storage
    services at Ormet’s bulk marine terminal. Ormet also sought attorneys’ fees
    under the Louisiana Open Account Statute.1 Ballast countered that Ormet’s
    claim was a compulsory counterclaim in a previous proceeding involving Ormet,
    Ballast, and a third party, Universal Minerals. Ballast reasoned that Ormet had
    *
    Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
    be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
    R. 47.5.4.
    1
    LA . REV . STAT . ANN . § 9:2781.
    Case: 10-30710    Document: 00511508092      Page: 2   Date Filed: 06/14/2011
    No. 10-30710
    waived any right to unpaid fees for storage services by failing to make that claim
    in the earlier proceeding. The district court disagreed with Ballast, concluding
    that Ormet’s claim was not a compulsory counterclaim, and granted Ormet’s
    motion for summary judgment. The district court nevertheless held that Ormet
    was not entitled to attorneys’ fees. We agree with the district court that Ormet’s
    claim was not a compulsory counterclaim in the previous proceeding and affirm
    its grant of summary judgment in favor of Ormet. Disagreeing with the district
    court’s determination that Ormet was not entitled to attorneys’ fees, however,
    we reverse that holding and remand for further proceedings consistent herewith.
    I. FACTS & PROCEEDINGS
    A. Facts
    Ormet owns and operates Burnside Terminal, a bulk marine facility
    located on the Mississippi River in Louisiana. Ormet provides stevedoring and
    storage services at the Burnside Terminal. Starting in 2004, Ballast delivered
    cargo to the Burnside terminal for storage on a number of occasions.
    In 2005 Ormet entered into a written contract with Universal Minerals to
    provide stevedoring services for the cargo on Universal Minerals’s vessels. Early
    the following year, a ship chartered and operated by Universal Minerals, the
    M/V Biloxi Belle, discharged magnetite ore owned by Ballast for storage at
    Ormet’s Burnside Terminal. A few months later, additional magnetite ore
    owned by Ballast was stored at Ormet’s terminal. Ballast failed to pay storage
    fees for either of those shipments from October 1, 2007 to January 8, 2008.
    Beginning in January 2008, Ormet made repeated attempts to collect the
    outstanding fees from Ballast, culminating in a final demand for payment by
    certified mail made in July 2009.           Ormet calculated that Ballast had
    accumulated $145,290.77 in storage fees on its account by that time. In response
    to the final demand, Ballast offered a check for $10,919.92 marked “in full
    2
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    payment of all outstanding handling, discharge and/or storage charge balances.”
    Ormet refused to accept this payment.
    In the meantime, a controversy had arisen regarding the docking of the
    Biloxi Belle. In 2006, when that ship approached the Burnside Terminal, it was
    forced to wait while another ship was loaded. The terminal’s conveyor system
    was damaged during the loading of the other ship, disrupting the normal
    schedule of discharge and loading at the terminal. As a result, the Biloxi Belle
    had to wait for almost a month before its cargo could be unloaded. The delay
    caused Universal Minerals, the charterer of the vessel, to incur demurrage under
    the terms of its charter agreement with the ship’s owners.
    B. Proceedings
    The owners of the Biloxi Belle instituted arbitration proceedings against
    Universal Minerals to recover the demurrage. Neither Ballast nor Ormet were
    parties to this arbitration, and Universal Minerals was solely responsible,
    including the portion of the arbitration award for the demurrage owed, interest
    thereon, the costs of arbitration, and the vessel owners’ attorneys’ fees.
    Universal Minerals then invoked admiralty jurisdiction and filed suit against
    Ormet in federal district court, seeking damages for the demurrage charges,
    interest on those charges, attorneys’ fees incurred by the owners of the ship,
    arbitration fees, Universal Minerals’s attorneys’ fees incurred at the demurrage
    arbitration, and demurrage on ten barges chartered by Universal Minerals. All
    of these damages were for costs incurred solely by Universal Minerals and none
    by Ballast. Ballast was joined as a plaintiff in this suit, which ultimately settled
    before going to trial. The settlement agreement among the three parties did not
    require Ormet to release or waive any rights against Ballast.
    After the underlying case settled and Ormet’s repeated demands for
    payment of storage fees from Ballast went unheeded, Ormet sued Ballast in
    3
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    district court. Ballast did not contest that Ormet provided the services invoiced,
    contending instead that Ormet’s failure to plead this claim as a counterclaim in
    the previous suit barred Ormet from suing Ballast on that claim in the instant
    action. The district court disagreed and granted Ormet’s motion for summary
    judgment, but the court denied Ormet’s claim for attorneys’ fees. Ballast timely
    filed a notice of appeal, after which Ormet filed a notice of cross-appeal.
    II. STANDARD OF REVIEW
    We review a district court’s summary judgment de novo.2                    Summary
    judgment is appropriate only when there exists no genuine issue of material fact
    and the movant is entitled to judgment as a matter of law.3
    III. ANALYSIS
    A. Compulsory Counterclaim
    We agree with the district court that Ormet’s claim against Ballast for the
    unpaid storage services was not a compulsory counterclaim in the initial lawsuit
    involving Universal Minerals. Therefore, Ormet was not required to assert that
    claim in the first suit and was free to bring it against Ballast in the instant suit.
    We apply the “logical relation” test to determine whether a counterclaim
    was compulsory.4              There is a logical relationship between a potential
    counterclaim and the principal claim when “the same operative facts serves as
    the basis of both claims or the aggregate core of facts upon which the claim rests
    2
    In re Am. River Transp. Co., 
    490 F.3d 351
    , 353 (5th Cir. 2007) (citing Holmes v. Atl.
    Sounding Co., 
    437 F.3d 441
    , 445 (5th Cir. 2006)); Thurman v. Sears, Roebuck & Co., 
    952 F.2d 128
    , 131 (5th Cir. 1992).
    3
    FED . R. CIV . P. 56(a).
    4
    Plant v. Blazer Fin. Servs., Inc. of Ga. 
    598 F.2d 1357
    , 1361 (5th Cir. 1979) (citations
    omitted).
    4
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    activates additional legal rights, otherwise dormant, in the defendant.”5 Ballast
    contends that its 2007 contract with Ormet was based largely on the 2005
    contract between Ormet and Universal Minerals, on which the previous trial was
    grounded. Even if this assertion were true, other courts have noted that, alone,
    such a contractual relationship is not sufficient to make a counterclaim
    compulsory.6 Furthermore, the two claims at issue here arise from different sets
    of operative facts: The prior case arose out of the botched docking and unloading
    of the Biloxi Belle; this case arose out of Ballast’s failure to pay for storage
    services provided by Ormet. The fact that the cargo stored at the Burnside
    Terminal traveled there on the Biloxi Belle is irrelevant to the instant case.
    Ballast also contends that Ormet’s attorney, Richard Foster, conceded
    during the settlement negotiations of the previous case that Ormet’s claims
    against Ballast would have been compulsory and that Ballast relied on that
    concession. Ballast’s contention is incorrect: Ormet did not concede that its
    claims were compulsory counterclaims, either through Foster or anyone else.
    The settlement agreement between Ormet, Ballast, and Universal Minerals does
    not contain any release language pertaining to Ormet’s claims, even though it
    does contain such language regarding Ballast and Universal Minerals’s claims.
    Furthermore, although Foster wrote in an email to Ballast’s counsel that any
    claims by Ormet against Ballast “would have been compulsory if [any] existed[,]”
    he immediately followed up with another email less than two hours later
    clarifying that Ormet did have claims against Ballast and that he did not
    consider these claims to be compulsory counterclaims.
    5
    
    Id.
     (citation omitted).
    6
    See, e.g., Plymouth Yongle Tape (Shanghai) Co. v. Plymouth Rubber Co., 
    683 F. Supp. 2d 102
    , 110 (D. Mass 2009); Cont’l Fed. Sav. & Loan Ass’n v. Delta Corp. of Am., 
    71 F.R.D. 697
    ,
    701 (W.D. Okla. 1976).
    5
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    Because the underlying facts of the two claims are largely unrelated, and
    Ormet did not concede that its counterclaims were compulsory, the district court
    correctly ruled that Ormet’s claims were not compulsory and therefore could be
    brought in the instant case. Largely for the reasons expressed by the district
    court, we affirm its grant of summary judgment in favor of Ormet.
    B. Attorneys’ Fees
    We conclude, however, that the district court erred when it denied
    attorneys fees to Ormet. When, under the Louisiana Open Account Statute, (1)
    the account debtor fails to pay the outstanding balance on such an account
    within thirty days after the account creditor sends a written demand for the
    amount owed, and (2) a judgment on that claim is thereafter rendered in favor
    of that creditor, it is entitled to reasonable attorneys’ fees.7 In this case, Ormet
    complied with those statutory requirements: It sent Ballast a certified letter in
    July 2009 requesting full payment of $145,290.77 and, when payment was not
    forthcoming, Ormet sued and obtained a judgment against Ballast for that
    precise amount. The only remaining question is whether the dealings between
    Ormet and Ballast constituted an open account.8
    The Louisiana Supreme Court has cautioned that the Open Account
    Statute must be construed “strictly [] because the award of attorney fees is
    exceptional and penal in nature.”9 The relevant Louisiana statute defines an
    7
    LA . REV . STAT . ANN . § 9:2781(A).
    8
    See Jacobs v. Loeffelholz, 
    647 So. 2d 1282
    , 1284 (La. Ct. App. 1994) (“The evidence
    adduced at trial supports a finding that the plaintiff scrupulously complied with the technical
    requirements of LA . REV . STAT . § 9:2781 in that he sent a proper demand letter and secured
    a judgment for the exact amount specified in his demand. Thus, if the agreement constitutes
    an open account, the plaintiff is entitled to an award of attorneys fees for securing a favorable
    judgment.” (citing Scarborough v. Nelson, 
    371 So. 2d 1261
     (La. Ct. App. 1979))).
    9
    Frank L. Beier Radio, Inc. v. Black Gold Marine, Inc., 
    449 So. 2d 1014
    , 1015-16 (La.
    1984) (citations omitted).
    6
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    open account to “include any account for which a part or all of the balance is past
    due, whether or not the account reflects one or more transactions and whether
    or not at the time of contracting the parties excepted future transactions.” 10
    Louisiana courts have defined an open account alternatively as “an account in
    which a line of credit is running and is open to future modification because of
    expectations of prospective business dealings.”11 And, the Louisiana Supreme
    Court has noted that, “[u]nder a plain reading of that statute, there is no
    requirement that there must be one or more transactions between the parties,
    nor is there any requirement that the parties must anticipate future
    transactions.” 12
    In concluding that Ormet’s claim was not on an open account, the district
    court relied heavily on Construction Testing Labs, Inc. v. Wal-Mart Stores, Inc.,13
    in which the district court determined that “deferred payment of 30 days does
    not establish an open account where . . . each transaction had definitive terms.” 14
    The dealings between Ballast and Ormet in this case are distinguishable from
    those between the parties in Construction Testing Labs, however. Ormet did not
    merely defer the payment owed by Ballast; it also established an applicable
    interest rate for the eventuality that Ballast would not pay within the required
    period. A hallmark of an open account is that “[t]he total cost, unlike a contract,
    is generally left open or undetermined, although the rate for specific services
    10
    LA . REV . STAT . ANN . § 9:2781(D).
    11
    Tyler v. Haynes, 
    760 So. 2d 559
    , 563 (La. Ct. App. 2000).
    12
    Frey Plumbing Co. v. Foster, 
    996 So. 2d 969
    , 972 (La. 2008).
    13
    No. 08-0569, 
    2009 WL 2214678
     (W.D. La. July 23, 2009).
    14
    
    Id.
     at *3 (citing Cambridge Toxicology Grp., Inc. v. Exnicios, 
    495 F.3d 169
    , 174 (5th
    Cir. 2007)).
    7
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    may be fixed, such as an hourly rate.”15 The account in question here was left
    open or undetermined because the total amount depended on how long Ballast
    should delay payment to Ormet and how much interest would accrue.
    As the obligation in question constituted an open account because of its
    undetermined total, and as Ormet has complied with all requirements of the
    Louisiana Open Accounts Statute, it is entitled to attorneys’ fees.
    IV. CONCLUSION
    The claim brought by Ormet in the instant case was not a compulsory
    counterclaim in the previous case involving Ormet, Ballast, and Universal
    Minerals. Summary judgment in favor of Ormet was therefore appropriate and
    is AFFIRMED. Ormet is also entitled to attorneys’ fees, however, because it has
    satisfied all applicable requirements under Louisiana’s open accounts law. We
    REVERSE on this issue and REMAND for the district court to calculate
    attorneys’ fees based on the Louisiana Open Account Statute and to amend and
    re-enter its summary judgment accordingly.
    AFFIRMED in part; REVERSED and REMANDED in part.
    15
    Mid-S. Analytical Labs, Inc. v. Jones, Odom, Spruill & Davis, LLP, 
    912 So. 2d 101
    ,
    107 (La. Ct. App. 2005).
    8