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Overseas Philadelphia, LLC v. World Council of Credit Unions

September 24, 2012


The opinion of the court was delivered by: Signed: Emmet G. Sullivan United States District Court Judge


Plaintiff Overseas Philadelphia, LLC brought a one-count Complaint against Defendant World Council of Credit Unions, Inc. ("WCCU"), alleging (1) breach of the maritime contract entered into by the parties, and (2) breach of the implied duty of good faith and fair dealing. Pending before the Court is Defendant's Motion to Dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Upon consideration of the motion, the opposition and reply thereto, the relevant law, the record in this case, and for the reasons stated below, the Court will GRANT Defendant's Motion to Dismiss.


On March 19, 2010, Plaintiff and Defendant entered into a maritime contract (the "Charter Party"), pursuant to which Defendant chartered the vessel owned by Plaintiff to carry 23,000 tons of wheat from the Gulf Coast to Addis Ababa, Ethiopia via the port of Djibouti. Compl. ¶ 6. The wheat was provided to Defendant at no cost by the U.S. Department of Agriculture ("USDA") under the Food for Progress Act ("FFPA"), 7 C.F.R. § 1499, et seq. Compl. ¶ 7. Paragraph 35 of the Charter Party provides: "This Charter Party is subject to all the provisions of the [FFPA], rules and regulations issued pursuant thereto and all applicable USDA regulations." Compl. Ex. A, at ¶ 35. One of the applicable regulations provides, in pertinent part, that "[t]he participant shall make all necessary arrangements for receiving the donated commodities in the targeted country, including obtaining appropriate approvals for entry and transit," and that "[a] participant shall arrange with the government of the targeted country that all donated commodities to be distributed will be imported and distributed free from all customs, duties, tolls, and taxes." Compl. ¶ 9 (citing 7 C.F.R. § 1499.8(a), (d)). Defendant concedes that it was a "participant" under the FFPA. Def.'s Mem. of P&A in Supp. of its Mot. to Dismiss ("Def.'s Mem.") at 2.

According to Plaintiff, the vessel loaded in a timely manner and departed from Galveston, Texas on April 15, 2010. Compl. ¶ 12. Soon after the vessel's departure, Plaintiff's agent, Phoenix Chartering ("Phoenix"), contacted Defendant's agent, Pacific Cargoes, Inc. ("PCI") to confirm that all duty exemptions would be in order prior to the vessel's arrival. Id.

¶ 14. PCI responded that "the documentation would be distributed in 'ample time to have all clearances in place prior to vessel arrival in Djib[outi].'" Id. Phoenix sought further confirmation that WCCU's documentation obligations would be fulfilled, and Phoenix expressly advised PCI that special care was needed for the transaction and that Plaintiff would suffer damages if the vessel were delayed. Id. ¶ 15. According to Plaintiff, another of Defendant's agents, BKA Logistics LLC, responded "that the sale was complete, that bills of lading had been issued, and that WCCU would be advised 'to have everything in order prior to Vessel arrival.'" Id.

The vessel arrived at the port of Djibouti on May 12, 2010. According to Plaintiff, however, the cargo documentation -- in particular documentation to establish that Plaintiff could discharge the cargo free of duty -- was still pending clearance with Ethiopian customs authorities. Id. ¶¶ 16-17. Therefore, the cargo could not be discharged and the vessel had to wait at anchorage. Id. Plaintiff asserts that Defendant could have paid the duty provisionally and sought reimbursement upon obtaining clearance so that discharge of the cargo could begin, but Defendant chose not to do so. Id. ¶ 18. During the time that the vessel was idled, Plaintiff secured, at its own expense, a lay berth within the port to safeguard the vessel and cargo until receiving clearance. Id. ¶ 19. Ethiopian customs cleared the cargo on May 21, 2010, and Plaintiff began discharging the vessel on May 23, 2010. Id. ¶ 20. Plaintiff alleges that, during the period from May 12 through May 23, 2010, it incurred significant charges including "daily operating costs, security, port charges and contractor truck charges."

Id. ¶ 21. Plaintiff sent an invoice for these charges to Defendant on June 8, 2010, but Defendant has not paid the invoice. Id. ¶ 24.

On September 14, 2011, Plaintiff filed its Complaint alleging breach of contract and the implied duty of good faith and fair dealing. Plaintiff seeks recovery of damages it suffered due to Defendant's failure to obtain the necessary import documentation for discharge of the cargo prior to the vessel's arrival in Djibouti, despite Defendant's assurances that it had done or would do so. Id. ¶¶ 1, 28-29. Defendant has filed a Motion to Dismiss the Complaint pursuant to Rule 12(b)(6). In its Motion, Defendant argues that a clause of the Charter Party precludes Plaintiff from recovering damages because that clause places all risk, time, and expenses of discharge upon Plaintiff. The motion is ripe for determination by the Court.


A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks and citations omitted). When ruling on a motion to dismiss under Rule 12(b)(6), a judge must accept as true all of the factual allegations contained in the complaint and grant the plaintiff the benefit of all inferences that can be derived from the facts alleged. Aktieselskabet AF 21 November 2001 v. Fame Jeans Inc., 525 F.3d 8, 15 (D.C. Cir. 2008); Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). A court need not, however, "accept inferences drawn by plaintiff[] if such inferences are unsupported by the facts set out in the complaint. Nor must the court accept legal conclusions cast in the form of factual allegations." Kowal, 16 F.3d at 1276. In addition, "[t]threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Aschroft v. Iqbal, 556 U.S. 662, 678 (2009). The complaint must plead facts that are more than "merely consistent with" a defendant's liability; "the plaintiff [must plead] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556); Rudder v. Williams, 666 F.3d 790, 794 (D.C. Cir. 2012). In evaluating a Rule 12(b)(6) motion, the Court may consider the facts alleged in the complaint, as well as any documents either attached to or incorporated in the complaint. EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624-25 (D.C. Cir. 1997).


A.The Charter Party Precludes Claims for Detention Damages

Defendant argues -- and Plaintiff does not dispute -- that Plaintiff's claims are for "detention" damages. Def.'s Mem. at 5-6. Clause 18 of the Charter Party states, in relevant part: "The cargo is to be discharged at vessel's time, risk and expense with no demurrage, no despatch, no detention."*fn1 Compl. Ex. A, ΒΆ 18. Therefore, Defendant argues that the clear terms of the Charter Party preclude ...

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