Kirby Offshore Marine Pacific LLC v. Emerald Services Inc.

          ORDER DENYING DEFENDANT'S DISPOSITIVE MOTION

          Robert S. Lasnik United States District Judge.

         This matter comes before the Court on defendant's “Motion to Dismiss.” Dkt. # 5. On February 14, 2017, Plaintiff filed this action alleging that Defendant was negligent, breached its warranty of workerlike^[1] performance, and breached the contract that Plaintiff and Defendant entered into to clean Plaintiff's ship. Defendant moved to dismiss the breach of contract and breach of warranty claims. Having reviewed the memoranda, declarations, and exhibits submitted by the parties, the Court finds as follows.

         BACKGROUND

         Plaintiff alleges that Plaintiff and Defendant entered into a Master Service Agreement (“the MSA”) the terms of which were negotiated between December 2015 and March 2016. Dkt. # 1, ¶ 3.2. Under the MSA Defendant would provide vessel related services to Plaintiff. Id. The MSA was never signed, Dkt. # 11 at 3, but Plaintiff asserts that the negotiations between Plaintiff and Defendant resulted in an enforceable contract, either written or oral. Id at 6.

         On April 8, 2016, Plaintiff alleges, it contracted with Defendant to provide cleaning services for KAYS POINT, a tank barge. Dkt. # 1, ¶ 3.3. Defendant provided the cleaning services on April 10, 2016. Id. at ¶ 3.4. Plaintiff claims that while Defendant's employees and/or agents were providing the contracted cleaning services the employees and/or agents opened and/or removed deep well inspection hatches but failed to close or reinstall them. Id. at ¶¶ 3.6, 3.7. Plaintiff states that this caused the fuel cargo to become contaminated. Id. at ¶ 3.7. Plaintiff also alleges that Defendant failed to properly clean the tanks, which resulted in cargo contamination. Id. at ¶ 3.8.

         Plaintiff argues that due to Defendant's conduct, Plaintiff had to settle a claim relating to cargo contamination and suffered damages of $973, 071.33 or greater. Id. at ¶¶ 5.6, 6.5. Plaintiffs claims of negligence, breach of contract, and breach of warranty arise out of these facts. Id. at ¶¶ 4.1-6.5.

         DISCUSSION

         A. Standard and Scope of Review

         The question is whether the facts alleged in the complaint sufficiently state a plausible ground for relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 520 (2007). The Court will construe the complaint in the light most favorable to the plaintiff In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008). “Dismissal is proper only where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory.” Taylor v. Yee, 780 F.3d 928, 935 (9th Cir. 2015) (internal citation omitted).

         When considering a motion to dismiss under Rule 12(b)(6), courts are generally limited to the four corners of the complaint. Campanelli v. Bockrath, 100 F.3d 1476, 1497 (9th Cir. 1996). However, if “matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56." Fed.R.Civ.P. 12(d). “All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.” Id. Defendant, in attempt to bolster its motion, presented material outside the pleadings for the Court's consideration. Dkt. # 5, Exhibit A. Plaintiff's responded with their own declarations and exhibits. Dkt. # 11, Exhibit A. Therefore, both parties have had an opportunity to present the material that is pertinent to the motion. Accordingly, summary judgment is the proper standard.

         Under Rule 56(a), summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The moving party “bears the initial responsibility of informing the district court of the basis for its motion.” Fed.R.Civ.P. 56(c). The Court will “view the evidence in the light most favorable to the nonmoving party . . . and draw all reasonable inferences in that party's favor.” Krechman v. County of Riverside, 723 F.3d 1104, 1109 (9th Cir. 2013). Summary judgment is inappropriate if a result other than that proposed by the moving party is possible under the facts and applicable law. City of Pomona v. SQM N. Am. Corp., 750 F.3d 1036, 1049 (9th Cir. 2014). It is not the function of the Court “to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). However, the mere existence of a scintilla of evidence in support of the non-moving party's position will be insufficient “to avoid summary judgment.” City of Pomona, 750 F.3d at 1049; Anderson, 477 U.S. at 252.

         B. Breach of Contract

         “A contract is within admiralty jurisdiction if its subject matter is maritime.” Royal Ins. Co. of Am. v. Pier 39 L.P., 738 F.2d 1035, 1036 (9th Cir. 1984) (citing Ins. Co. v. Dunham, 78 U.S. 1, 26 (1871)). “The type of contracts that invoke admiralty jurisdiction are well established. The list includes contracts to furnish services . . . to a particular vessel.” Thomas J. Schoenbaum, 1 Admiralty & Mar. Law § 3-10 (5th ed. 2016). “Basic principles in the common law of contracts readily apply in the maritime context.” Cleveo Co. v. Hecny Transp., Inc., 715 F.3d 1189, 1194 (9th Cir. 2013). To determine the basic elements of contract law, the Ninth Circuit looks to the Restatement (Second) of Contracts. Id. “The requisite elements of contract formation are offer, acceptance, and consideration.” Crowley Marine Serv., Inc. v. Vigor Marine LLC, 17 F.Supp.3d 1091, 1095 (W.D. Wash. 2014). “The formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.” Casa del Caffe Vergnano S.P.A. v. ItalFlavors, LLC, 816 F.3d 1208, 1212 (9th Cir. 2016) (quoting Restatement (Second) of Contracts § 17 (1981)).

         Therefore, in order for Plaintiff to survive a motion for summary judgment, Plaintiff needs to show a genuine issue of material fact regarding the existence of a contract. Under maritime law contracts can either be oral or written. Kossick v. United Fruit Co., 365 U.S. 731, 734 (1961) (“oral contracts are generally regarded as valid by maritime law.”); see also Round Gold LLC. v. Ameron Int'l Corp., No. C07-791Z, 2008 WL 3288408, at *4 (W.D. Wash. Aug. 7, 2008). State law can supplement admiralty law “so long as state law does not actually conflict with ...