Eleventh Circuit affirms District Court decision in OW Bunker Case, awarding physical supplier the fair value of the delivered fuel

Bunkering, Disputes, Legal — By on May 11, 2018 at 9:55 PM

In an order issued yesterday (May 10, 2018), the United States Court of Appeals for the Eleventh Circuit affirmed a decision from the Northern District of Florida in Martin Energy Services, LLC v. M/V Bravante IX et al., No. 17-10899, awarding Martin Energy Services, LLC (“Martin”), a physical supplier of bunkers, the fair value of the fuel provided. The Court held that Martin can recover in quantum meruit for the benefit of the fuel Martin delivered to Boldini Ltd. (“Boldini”).

Boldini arranged to have fuel provided to its vessel, the M/V Bravante VIII, in Panama City, Florida, by contacting O.W. Bunker & Trading do Brasil, who in turn contacted two (2) affiliated O.W. Bunker entities. The transaction was structured as a sale of fuel by Martin, not to Boldini, but to O.W. Bunker USA Inc., who in turn sold the fuel to another O.W. Bunker affiliate, who then contracted to sell the fuel to Boldini. Martin subsequently delivered the fuel to the M/V Bravante VIII on credit. Shortly thereafter the O.W. Bunker entities worldwide filed for bankruptcy, and having not received payment from its contractual counterparty, Martin filed an admiralty action against Boldini for breach of contract and quantum meruit, seeking payment for the delivered fuel. Boldini asserted a cross-claim for interpleader against all parties with competing claims to the payment sought by Martin, including cross-defendant ING Bank, a secured lender of the O.W. Bunker entities. Boldini deposited the funds owed for the fuel into the registry of the district court, and was discharged from further liability.

The district court determined that Martin had a valid quantum meruit claim against Boldini and awarded Martin the fair value of the fuel (USD 286,000) for providing and delivering the fuel. ING Bank was awarded the amount the O.W. Bunker entities would have received as “resellers” of the fuel (USD 3,900).

The district court found Martin had conferred a benefit to Boldini by providing the fuel to the Bravante VIII, which Boldini knew of, accepted, retained, and memorialized in a bunkering certificate acknowledging delivery. The district court determined it would be inequitable for Boldini to retain the benefit of the fuel without paying for it.

The district court applied Florida law, as “neither statutory nor judicially created maritime principles provide[d] an answer” and “the application of state law [did] not frustrate national interests in having uniformity in admiralty law.” Under Florida law, a subcontractor can recover in quantum meruit from the owner, even though the subcontractor had a contract with the general contractor, if the owner had received a benefit from the subcontractor’s work and the owner had not paid for that work under the owner’s contract with the general manager.

The Eleventh Circuit concurred with the district court, noting that: “in the absence of a valid contract claim against Boldini, and with the relevant O.W. Bunker entity in bankruptcy and unpaid, Martin can recover in quantum meruit from Boldini for the benefit of the fuel Martin delivered and provided to Boldini.”

To read the full opinion of the Eleventh Circuit, please click here.

For more information about the Court’s decision, please do not hesitate to call on us at info@chaloslaw.com.

 

Tags: , , , , ,

Leave a Reply

IMPORTANT! To be able to proceed, you need to solve the following simple math (so we know that you are a human) :-)

What is 9 + 11 ?
Please leave these two fields as-is:

Trackbacks

Leave a Trackback