The shipping world has been struggling with the bankruptcy of O.W. Bunker and its entities. Many of the fuel suppliers have not been paid and creative legal efforts for restitution have been attempted in many jurisdictions. In the latest decision on May 10, 2018 coming out of the 11th Circuit, the unpublished case of “MARTIN ENERGY SERVICES, LLC versus M/V BRAVANTE IX” affirmed that under Florida law, even without a valid contract claim, the fuel supplier can recover the value of the bunkers under quantum-meruit.
Boldini Ltd. (“Boldini”), a Brazilian company, arranged to have fuel provided to its ship, M/V BRAVANTE VIII, in Panama City, Florida. Boldini contacted O.W. Bunker & Trading in Brasil, which in turn contacted two affiliated O.W. Bunker entities. The transaction was structured as a sale of fuel by Martin – not directly to Boldini – but to O.W. Bunker USA Inc., which sold the fuel to another O.W. Bunker affiliate, which then contracted to sell the fuel to Boldini.
Martin coordinated its delivery of the fuel with Boldini’s local agent. The BRAVANTE VIII’s captain, and the ship’s engineer signed the bunkering certificate acknowledging delivery. Martin delivered the fuel on credit, and was not paid at the time of delivery. Unfortunately, the O.W. Bunker entities worldwide filed for bankruptcy in their respective countries of origin shortly after the fuel was delivered. As a result, Martin remained unpaid for the fuel provided to the BRAVANTE VIII, which had left the territorial waters of the United States.
PROCEEDINGS IN THE LOWER COURTS:
Martin filed an admiralty action asserting in personam claims against Boldini for breach of contract and quantum-meruit arising out of the fuel provided to the BRAVANTE VIII. Martin also asserted a quasi in rem claim against a different Boldini-owned vessel within the court’s jurisdiction, the BRAVANTE IX, which Martin sought to attach pursuant to Rule B of the Supplemental Rules. Eight days later, Boldini filed an answer before the BRAVANTE IX was attached and asserted a counterclaim and cross-claim for interpleader against all of the parties with competing claims to the payment sought by Martin for the fuel provided to the BRAVANTE VIII. Boldini included as a crossdefendant ING Bank, a secured lender of certain O.W. Bunker entities. Boldini eventually deposited the appropriate funds owed for the fuel into the registry of the district court and was discharged from further liability.
Following a two-day bench trial, the district court determined Martin had a valid quantum-meruit claim against Boldini which was satisfied by Boldini’s tender into the court’s registry of the full amount due. The court awarded Martin the fair value of the fuel ($286,200) for providing and delivering the fuel, and awarded ING Bank the amount the relevant O.W. Bunker entities would have received as “resellers” or “traders” of the fuel ($3,900), plus a proportional share of interest on the principal deposited.
APPEAL AND AFFIRMATION:
ING Bank appealed the district court’s finding. After hearing the appeal, the 11th Circuit court agreed with the District court and applied Florida law. They concluded, in the absence of a valid contract claim against Boldini, with the relevant O.W. Bunker entity in bankruptcy and being unpaid, Martin can recover in quantum-meruit from Boldini for the benefit of the fuel Martin delivered and provided to Boldini. This affirmed the district court decision awarding Martin the value of the fuel provided from the fund in the registry of the court, and awarding ING Bank the remaining portion earned by the “resellers.”
The full decision can be viewed here.