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Heko Services, Inc. v. Chemtrack Alaska, Inc.

United States District Court, W.D. Washington, Seattle

November 19, 2019

HEKO SERVICES, INC, a Washington Corporation, Plaintiff,
v.
CHEMTRACK ALASKA, INC., an Alaskan Corporation, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          The Honorable Richard A. Jones United States District Judge.

         I. INTRODUCTION

         This matter is before the Court on the motion for summary judgment filed by Plaintiff Heko Services, Inc. (“Heko”). Dkt. # 15. For the reasons below, the motion is GRANTED in part and DENIED in part.

         II. BACKGROUND

         The case involves a time charter between Heko and Defendant ChemTrack Alaska, Inc. (“ChemTrack”). Under the terms of the time charter, Heko agreed to prove a tug and barge for ChemTrack to ship up to 7, 400 tons of contaminated soil from Naknek, Alaska to Elliot Bay in Seattle, Washington. Dkt. # 16-1 at 12.

         Although negotiations had been ongoing for some time prior, the parties reduced the time charter to writing by May 2018. Id. The time charter included the following relevant provisions concerning hire, charges, and payment:

Charterer shall pay Owner the “LUMP SUM HIRE” [of $925, 000], which shall be fully and irrevocably earned upon commencement of services, even if the Tug, Tow, and/or cargo is lost and/or the voyage is delayed, frustrated, or cancelled.
Owner shall invoice Charterer and payment for the contract “LUMP SUM HIRE” shall be due as follows:
• 20% upon contract execution
• 40% upon first arrival at the Starting Port
• 40% upon first arrival to Offloading Port

Id. at 14. The time charter also outlined several inclusions and exclusions. Under the time charter, ChemTrack would receive 48 consecutive hours from the barge's arrival in Naknek to load the soil before a demurrage rate of $750 per hour applied and 72 consecutive hours from the barge's arrival in Elliot Bay to offload the soil and return the barge before a demurrage rate of $200 per hour applied. Id. at 13. Fuel and lubricating oils were deemed part of the lump sum hire amount, subject to increases to a baseline fuel cost per gallon of $1.80. Id. at 14. In addition, ChemTrack was solely responsible for loading and adequately packaging the cargo “to withstand the hazards of cargo handling and transportation by open decked barge.” Id. at 13. If ChemTrack used Heko's crewmembers to assist with cargo handling, they would be deemed borrowed servants of ChemTrack, with ChemTrack solely responsible for all loss, damage, or liability involving the cargo. Id. at 14. Lastly, Heko agreed to be responsible for all loss, damage, expense, liability or claims applicable to the barge, even if resulting from the negligence of ChemTrack, and ChemTrack agreed to the same with respect to its cargo. Id. at 15. The lone exception to this allocation of liability was if the Vessel was damaged during ChemTrack's use of the barge to load, stow, trim, secure, or discharge its cargo. Id.

         It is undisputed that the transit did not go as planned. For one, there were issues loading the barge with cargo and equipment. In addition to ChemTrack's soil, the barge contained two cranes belonging to Heko as well as cargo belonging to other third parties. Dkt. # 16-3 at 5; Dkt # 18, ¶ 19. After ChemTrack's loaded its soil onto the barge and covered it with a liner, some crane parts were loaded on top. Dkt. # 19-1 at 32-33. Several days after the barge departed, in the vicinity of Unimak Pass, Alaska, the tug and tow encountered severe weather. For reasons that are disputed, the cargo became wet with seawater and tons of soil were lost overboard. Dkt. # 16-4 at 4; Dkt. # 19-1 at 122-127. The tug master diverted the tug and barge to the Port of Sand Point in Alaska, where Heko and ChemTrack reloaded the barge, before it proceeded to Elliot's Bay. Dkt. # 16-4 at 6-7; Dkt. # 19-1 at 48-51, 122-127.

         On October 30, 2018, Heko brought this action alleging that ChemTrack breached several sections of the time charter. Dkt. # 1. On November 21, 2018, ChemTrack answered the complaint and later counterclaimed for damages related to Heko's purported breaches of the time charter. Dkt. # 9, 13. On September 17, 2019, Heko filed a motion for summary judgment. Dkt. # 15. On October, ...


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