Opinion
Civil Docket No.: CL19-2417
11-12-2019
Re: Stephen K. Walton, Sr. v. Virginia International Terminals, LLC, et al.
Jon J. Montagna, Esq. Montagna Klein Camden LLP 425 Monticello Avenue Norfolk, Virginia 23510 John E. Holloway, Esq. Ryan T. Gibson, Esq. Troutman Sanders LLP 222 Central Park Avenue, Suite 2000 Virginia Beach, Virginia 23462
Jon J. Montagna, Esq.
Montagna Klein Camden LLP
425 Monticello Avenue
Norfolk, Virginia 23510 John E. Holloway, Esq.
Ryan T. Gibson, Esq.
Troutman Sanders LLP
222 Central Park Avenue, Suite 2000
Virginia Beach, Virginia 23462 Dear Counsel:
Today the Court rules on Virginia International Terminals' ("VIT") Motion for Summary Judgment on its Plea in Bar. This case was last before the Court on October 8, 2019, when it was scheduled for a hearing (the "Hearing") on motions and responsive pleadings filed by both parties whereupon the Court took the instant Motion under advisement.
The specific issue before the Court is whether VIT's Schedule of Rates ("SOR") is a valid and enforceable contract. Because the Court finds that the SOR is an implied contract pursuant to 46 U.S.C. § 40501(f) with an enforceable time bar provision pursuant to VA Code § 8.01-243(A) the Court GRANTS VIT's Plea in bar. Consequently, the court also finds that there are no material facts at issue and GRANTS VIT's Motion for Summary Judgment on its plea in bar.
Background
On March 15, 2017, Plaintiff, Stephen K. Walton Sr, ("Walton") was performing work as a reefer mechanic and container repair mechanic at Norfolk International Terminals ("NIT"), within his employment as a longshoreman for Marine Repair Services, Inc. ("MRS"). (Pl.'s Amend. Compl. ¶ 4, 8.) At all pertinent times, Defendant Virginia International Terminals ("VIT") operated, occupied, and maintained the NIT premises. (Id. ¶ 9-10.) Several business entities operated at NIT on a daily basis including Walton's employer MRS and defendants VIT, Ceres, and CP&O. (Id. ¶ 14.) MRS performed all of the container maintenance and repair work at NIT. (Id. ¶ 18.) Specifically, MRS employees, like Walton, were in charge of disconnecting reefer containers stored at "reefer row" to prepare the reefers for transportation away from NIT. (Id.) VIT typically stored its equipment, including its forklifts, at the VIT maintenance facility next to reefer row, and no other entities were permitted to park or store equipment at the maintenance facility. (Id. ¶ 25.) At all relevant times, VIT's forklifts at the NIT facility were used by three entities: VIT, Ceres, and CP&O. (Id. ¶ 27.) VIT marked their forklifts with a VIT sticker. (Id.)
On the day in question, VIT maintained exclusive control over the VIT maintenance facility, including the lighting and all available forklifts, permitting only VIT employees to drive equipment on to the VIT maintenance facility. (Id. ¶ 30,49.) Moreover, VIT occupied, controlled, and maintained a walkway that ran along the south side of the N4 row ("the walkway"), where Walton was injured. (Id. ¶ 31.) After Walton finished disconnecting reefer units in the walkway, he proceeded a short distance down the walkway when he tripped over the blade of a VIT forklift projected out into the walkway from the VIT maintenance area, causing him to fall and be injured. (Id. ¶ 40.) The blade of the forklift was obscured by shadows in the walkway. (Id. ¶ 41.) On previous occasions, VIT usually stored and placed its forklifts at the northern border of the maintenance facility, either facing away from the walkway or with the blades removed. (Id. ¶ 42.)
On March 11, 2019, Walton, filed the initial complaint for an action by a longshoreman for personal injuries that occurred at a marine terminal in Norfolk, Virginia. (Pl.'s. Compl.) On May 20, 2019, Defendants responded with a demurrer. (Def.'s Dem.) Defendants also filed a Motion Craving Oyer on May 20, 2019, the Court entered an Order on July 3, 2019, upon consent of the parties on the Motion Craving Oyer. The Order granted Walton leave to amend the complaint and stayed Defendant's Motion Craving Oyer. (Order 7/3/19.) On July 12, 2019, Walton filed an Amended Complaint. (Pl.'s Am. Compl.) Defendants filed a Plea in Bar and Demurrer (Def. Plea in Bar & Dem.), and a Motion for Summary Judgment on its Plea in Bar, (Mot. Sum. J on Plea in Bar). Both parties have filed briefs in support and opposition of the aforementioned motions and VIT has filed a reply brief addressing Walton's opposition brief. The parties also presented arguments before this Court at a hearing for VIT's Motion for summary judgment on its plea in bar on October 8, 2019. (Hearing Transcript, Oct. 8, 2019.)
Party Positions
VIT's Position
At all relevant times, VIT maintained a Schedule of Rates ("SOR") governing rates, regulations, and practices at marine terminals operated by VIT, including NIT. (VIT's Brief in Supp of Plea in Bar & Dem. & Mot. Sum. J. on Plea in Bar, 3.) VIT made their SOR available to the public via VIT's website in accordance with FMC regulations. (Id. at 7.) VIT argues that it's SOR is enforceable, even without proof that Plaintiff had actual knowledge of its provisions. (Id. at 6.) VIT argues that 46 U.S.C. § 40501(f), permits marine terminal operators to publish a schedule of rates, which may include limited liability provisions. (Id.) VIT further argues that where a SOR is made public, it is enforceable as an implied contract without proof of actual knowledge of its contents. (Id. at 7.) Accordingly, VIT argues that Walton, in his capacity as a longshoreman using the NIT premises, is considered a "USER" under the terms of the SOR and so agreed to the terms and provision of the SOR via implied contract, despite his lack of actual knowledge. (Id. at 8.) To the extent that VIT's SOR is enforceable as an implied contract, VIT argues enforceability and implied consent extend to the entirety of the SOR, not just selected provisions. (Id.)
VIT specifically argues that its SOR provisions requiring notice of injury and limiting time to bring suit are enforceable and bar Walton's claim. (Id. at 10.) VIT's SOR contains a specific provision that requires Users to notify VIT, in writing, of any occurrence of loss, injury, or damage to person or property caused by VIT within thirty days of the occurrence, and the injured party must bring suit within one year of the occurrence. (Id.) Under VIT's SOR, if notice is not given or suit is not brought within one year, the claim is time-barred. (Id.) VIT argues that contractual provisions like the SOR time-bar provision are permissible and not contrary to public policy. (Id.) In fact, VIT argues it assists the public policy behind the statute of limitations: preventing stale claims. (Id.) VIT further alleges that Virginia has permitted contractual limitations period shorter than the relevant statute of limitations period, as long as, the agreed time is not unreasonably short. (Id.) Moreover, VIT alleges that notice requirements and time-bar provisions are a recognized aspect of general maritime law, limited only by the reasonableness of the provision. (Id. at 11.) VIT argues that the SOR provision and the time frame are reasonable because it investigates all claims of loss, injury, or damage occurring on the marine terminals it operates. (Id. at 13.) Accordingly, VIT defends its thirty-day notice provision by noting that there is a pressing need to acquire security footage and that time is of the essence in its investigations because security footage is not held indefinitely. (Id.)
VIT also notes that Walton is not a party to any actual contract that may nullify the SOR's enforceability as an implied contract. (VIT's Reply Brief in Supp. of Mot. for Sum. J. on Plea in Bar & Dem., 3-4.) Alternatively, VIT argues that even if the actual contract between VIT and MRS nullified the SOR as an implied contract, the terms of the actual contract validly incorporate the entire SOR by reference. (Id. at 4-5.) Moreover, VIT argues that even if Walton were a party to the actual contract, the location of his injury was outside of the specified area covered by that contract. (Id. at 5.) As such, the SOR was the only contract capable of governing his conduct and presence at the terminal. (Id.)
VIT also argues in the alternative, that paragraph 60 of the Amended Complaint, which lists multiple defendants that may have breached a duty owed to Plaintiff, is deficient and should be dismissed with prejudice via demurrer. (VIT's Brief in Supp of Plea in Bar & Dem. & Mot. for Sum. J. on Plea in Bar at 15.) VIT argues that Virginia does not permit plaintiffs to join two or more defendants in the alternative where the facts pleaded indicate that only one of the defendants may be liable. (Id. at 16.) VIT argues that by joining the defendants in the alternative, Plaintiff fails to inform VIT and the other defendants of the true nature of the cause of action. (Id.at 16.)
Walton's Position
Walton asserts that VIT's Motion for Summary Judgment should be denied and its Demurrer overruled. (Pl's brief in Opp'n to Def. Mot for Sum. J. on Plea in Bar & Opp'n to Def. Dem., 1.) First, Walton argues, as a matter of law, the act upon which VIT relies to support the enforceability of the SOR's notice and time bar provision, is contrary to Virginia law. (Id. at 4.) Accordingly, Walton argues that Virginia law applies, that he is not subject to the SOR's pre-suit notice requirement, and his claim is not time barred under the two-year statute of limitations for Virginia personal injury claims. (Id. at 4-5.) Walton argues that the Shipping Act of 1984, 46 U.S.C. §40101, is the sole basis for VIT's argument that its SOR applies instead of Virginia personal injury law. (Id. at 6.) Walton argues that VIT's reliance on the Shipping Act is flawed because the purpose and language of the Act make it clear that it does not pre-empt applicable Virginia Law. (Id. at 6-8.) Moreover, Walton points out that VIT never addresses the issue of pre-emption, and simply asserts the authority of its SOR. (Id. at 6.) Walton also attempts to distinguish the cases VIT cited in support of its SOR and notes that all of the maritime cases cited did not apply Virginia law, moreover, all of the non-maritime cases involved limitations imposed by an actual written contract, unlike the SORs in place in this case. (Id. at 9.)
Walton argues that there is no actual contractual relationship between VIT and himself. (Id. at 10.) Walton also argues that VIT's SORs and time limitations cannot be enforced against him as an implied contract because there were separate, actual contracts with his employer MRS, that governed his terminal use. (Id. at 11-12.) Additionally, Plaintiff bolsters its argument by asserting that the SOR does not apply because of the multi-party Collective Bargaining Agreement between VIT, MRS, and ILA Union Local 1970. (Id. at 14-15.) The collective bargaining agreement specifically address the use of the kind of maintenance Walton was to perform on waterfront facilities like NIT. (Id. at 15.) Walton argues that the Collective Bargaining Agreement was the actual contract in place leaving no room for an implied contract via VIT's SOR. (Id. at 15.)
Walton also argues that VIT's SOR is not enforceable as an implied in fact contract, because he was not aware of it and he personally never agreed to it. (Id.; Trans. 34-36.) Walton notes that VIT has the burden of proving an implied in fact contract, which requires a mutuality of assent. (Id. at 16.) Plaintiff argues that VIT has failed to meet that burden as it applies to VIT's SOR. (Id.) Plaintiff also argues that VIT's SOR is not enforceable under the equitable remedy as an implied-in-law contract because time-barring a personal injury claim through an implied-in-law contract is impermissible as a matter of equity and good conscience: (Id. at 18.)
Finally, Walton argues that the demurrer should be overruled because Virginia law permits a plaintiff to sue alternative parties where the allegation of liability arises from the same transaction or occurrence. (Id. at 19.) Plaintiff clarifies that he is alleging liability of each defendant named in the amended complaint based on their role in the same transaction and occurrence. (Id.)
Discussion
Legal Standard
A plea in bar presents a distinct issue of fact which, if proven, creates a bar to the plaintiff's right of recovery, and the moving party has the burden of proof on that issue. Hilton v. Martin, 275 Va. 176, 177, 654 S.E.2d 572 (2008). The function of a plea in bar is to harrow the litigation by resolving an issue that will determine whether a plaintiff may proceed to trial on a particular cause of action. Hawthorne v. VanMarter, 279 Va. 566, 578, 692 S.E.2d 226 (2010). The issue raised by a plea in bar may be submitted to the circuit court for decision based on a discrete body of facts identified by the parties through their pleadings, or developed through the presentation of evidence supporting or opposing the plea. Id. at 577.
If the facts underlying a plea in bar are contested, a party may demand that a jury decide the factual issues raised by the plea Hawthorne, 279 Va. at 577. However, according to Kohn v. Marquis, 288 Va. 142, 146, 762 S.E.2d 755, 757, there is "no constitutional right to a jury trial if the case can be determined as a matter of law based upon material facts not genuinely in dispute." Conversely, if the facts are disputed and no demand for a jury is made, the "whole matter of law and fact" may be decided by the court. Id. at 578. In addition, a trial court may take evidence when considering a plea in bar. See, e.g., Cooper Indus., Inc. v. Melendez, 260 Va. 578, 594-95, 537 S.E.2d 580, 590 (2000) (acknowledging that the trial court heard evidence pertaining to a plea in bar); Broad Run Vill., L.C. v. Loudoun County Bd. of Supervisors, 59 Va. Cir. 96, 96 (Loudon 2002) ("To the extent the parties have sought to introduce evidence outside the four corners of the pleadings in support of their positions, such evidence will only be considered in relationship to the plea in bar.").
Any party may make a motion for summary judgment at any time after the parties are at issue . . . . If it appears from the pleadings, the orders, if any, made at a pretrial conference, the admissions, if any, in the proceedings, or, upon sustaining a motion to strike the evidence, that the moving party is entitled to judgment, the court shall enter judgment in that party's favor. . . . Summary judgment shall not be entered if any material fact is genuinely in dispute.Va. Sup. Ct. R. 3:20.
A trial court considering a motion for summary judgment must "accept as true those inferences from the facts that are most favorable to the nonmoving party, unless the inferences are forced, strained, or contrary to reason." Fultz v. Delhaize Am., Inc., 278 Va. 84, 88 (2009) (citing Dickerson v. Fatehi, 253 Va. 324, 327 (1997); Carson v. LeBlanc, 245 Va. 135, 139-40 (1993)). While summary judgment is available in certain circumstances, it is well settled that it "is a drastic remedy, available only when there are no material facts genuinely in dispute." Id. (citing Stockbridge v. Gemini Air Cargo, Inc., 269 Va. 609, 618 (2005); Smith v. Smith, 254 Va. 99, 103 (1997); Slone v. General Motors Corp., 249 Va. 520, 522 (1995)). "[I]f the evidence is conflicting on a material point or if reasonable persons may draw different conclusions from the evidence, summary judgment is not appropriate." Id. (citing Jenkins v. Pyles, 269 Va. 383 (2005)).
A. Demurrer
A demurrer tests the legal sufficiency of the claims stated in the pleading challenged. Dray v. New Mkt. Poultry Prods., Inc., 258 Va. 187, 189, 518 S.E.2d 312, 312 (1999). On demurrer, the court must admit the truth of all material facts properly pleaded, facts that are impliedly alleged, and facts that may be fairly and justly inferred from the alleged facts. Cox Cable Hampton Rds., Inc. v. City of Norfolk, 242 Va. 394, 397, 410 S.E.2d 652, 653 (1991). A demurrer does not admit the correctness of any conclusions of law. Ward's Equip., Inc. v. New Holland N. Am., Inc., 254 Va. 379, 382, 493 S.E.2d 516, 518 (1997). The only question for the court to decide is whether the facts are legally sufficient to state a cause of action against the defendant. Thompson v. Skate Am., Inc., 261 Va. 121, 128, 540 S.E.2d 123, 126-27 (2001).
Even if imperfect, a complaint drafted such that a defendant cannot mistake the true nature of the claim should withstand demurrer. Catercorp, Inc. v. Catering Concepts, Inc., 246 Va. 22, 24, 431 S.E.2d 277, 279 (1993). The court will not consider any factual assertions outside the pleadings for purposes of a demurrer. See Va . Code Ann. § 8.01-273.
Virginia Courts have recognized,
[a] party asserting either a claim, counterclaim, cross-claim, or third-party claim . . . may plead alternative facts and theories of recovery against alternative parties . . . provided that such claims . . . so joined arise out of the same transaction or occurrence.VA Code § 8.01-281(A).
In their brief in support of Demurrer, VIT relies on Baker v. Doe, to prove that a plaintiff in a personal injury case may not join multiple defendants in the alternative. Baker is both factually and legally distinguishable from the facts in this case. Legally, the aforementioned governing statute and its relevant language incorporating the suit of alternative parties was enacted in 1974. Notably, the statutory language was enacted after the cited authority, Baker v. Doe, which VIT relies on in support of its argument that Plaintiff impermissibly joined alternative parties, in its amended complaint. 211 Va. 158 (1970). While there is no case law expressly overruling Baker, there is case law that expressly overrules Norfolk Union Bus Term. v. Sheldon, 188 Va. 288, 296, 49. S.E.2d 338, 341, the case upon which Baker relies for its interpretation of alternative joinder.
The defendants rely primarily upon Norfolk Bus Term. v. Sheldon . . . Norfolk Bus Term., however, it was decided . . . before the 1974 enactment of Code §8.01-281. . . . the foregoing statutes and rule represent a radical departure from the common-law pleading rule stated in Norfolk Bus Term.Fox v. Deese, 234 Va. 412, 423, 362 S.E.2d 699, 705. Accordingly, the statutory language governs and permits the naming of defendants in the alternative, so long as, the nature of the joinder arises out of the same transaction or occurrence.
Moreover, the Baker court specifies that defendants may not be named in the alternative unless "their interests were joint . . . In the case of tort feasors, they could be joined as party defendants only if their acts concurred to produce a single injury to the plaintiff." Baker at 160, 176 S.E.2d at 427.
Factually, Baker is distinguishable as the party Plaintiff's sought to join in the alternative was unknown. Here, Plaintiff is aware of everyone who had access and control of the forklift and walkway where he was injured, and he has named them as defendants in the alternative, pursuant to § 8.01-281(A), alleging that they breached a duty owed to him.
Amended Complaint ¶ 60 states that "the defendant VIT...and/or the defendant Ceres . . . and/or the defendant CP&O" breached a duty owed to the Plaintiff. The specific duty owed references the negligent placement of the forklift that ultimately lead to the Plaintiff's injuries. The placement and resulting injury are the transaction and occurrence at issue. Furthermore, all three of the named defendants may properly be considered alternative parties under §8.01-281(A), because the plaintiff is alleging liability based on their respective involvement. The naming of the alternative defendants does not render the amended complaint deficient, nor is there any other alleged grounds to find the complaint deficient, warranting a demurrer. Therefore, VIT's Demurrer is OVERRULED.
B. VIT's Schedule of Rates is an Implied Contract
Virginia Code § 8.01-243(A) states in part, "Unless otherwise provided in this section or by other statute, every action for personal injuries, whatever the theory of recovery . . . shall be brought within two years after the cause of action accrues." However, "parties to a contract may agree that any action to enforce the contract must be filed within a shorter period of time than that established by an otherwise applicable statute of limitations." Massie v. Blue Cross & Blue Shield, 256 Va. 161, 164, 500 S.E.2d 509, 509 (1998). Accordingly, VIT's SOR states,
USERS must notify VIT in writing of the occurrence of loss, injury, or damage to person or property caused by VIT immediately upon discovery, and in no event more that thirty (30) days from occurrence, or all claims based on the loss, injury, or damage shall be time-barred. If suit . . . based on the occurrence is not filed within one (1) year after the occurrence, the claim shall be time-barred.(SOR No. 207, Notification of Loss, Injury, or damage; time limits; jurisdiction and venue; applicable law) (emphasis in original). The Schedule of Rates defines a "USER" as "(i) each VESSEL and CARRIER, (ii) stevedore, (iii) shipper, consignee, and beneficial cargo owner, (iv) contractor, subcontractors and vendor of VIT, VPA, HRCP II, or another USER, (v) licensee and permittee, and (vi) and every other person or entity using, coming onto, or berthing at a Terminal." (Schedule of Rates, Section XI)
The Court finds that VIT's SOR meets all of the requirements of an effective contract. Specifically, the SOR functions as an implied contract pursuant to 46 U.S.C. § 40501. "A marine terminal operator may make available to the public a schedule of rates, regulations . . . . Any such schedule made available to the public is enforceable by an appropriate court as an implied contract without proof of actual knowledge of its provisions." 46 U.S.C. § 40501(f). Walton, in his capacity as a refrigerator mechanic for MRS, fell within the anticipated category of a USER pursuant to SOR Section XI. Walton may reasonably be considered either a licensee and permittee of VIT or a person coming onto a VIT Terminal, both of whom are subject to the SOR as parties to the implied contract.
The Court accepts as true the inferences from Walton's brief, affidavit, and testimony at the October 8, 2019, hearing. Specifically, the Court accepts Walton's representation that he was not made aware of the SOR or any changes to the SOR. The Court also accepts Walton's representation that he was familiar with the customs and practices of NIT and VIT based on his time working at the facility and his role on the local union, ILA Local 1970. However, Walton's knowledge, or lack thereof, does not nullify his status as a USER and the enforceability of the SOR as an implied contract. Walton may have been misinformed as to what his reporting responsibility was after the injury, but he was still a USER under the SOR obligated to comply with all of its notice requirements.
C. Pre-suit Notice and Time Bar Requirements
The two relevant provisions at issue are the pre-suit notice requirement and time bar provision. Here, Walton argues that those provisions are not enforceable, and he is not a party to the SOR. Walton specifically alleges that the existence of an actual contract between MRS and VIT nullify the enforceability of the SOR, he was not a signed party to any of the contracts in place, and he lacked notice of the relevant SOR requirements. None of these arguments are persuasive and the two relevant provisions are enforceable.
The SOR's time bar provision provides a maximum of thirty days to notify VIT of any injury on the premises and one year to file suit for any such injury. Walton violated both requirements. Walton did not provide notice of the injury to VIT at all. Furthermore, VIT was not notified of the injury until Walton filed suit two years later.
Walton's argument that the existence of an actual contract nullifies the implied contractual nature of the SOR is moot. The actual contract between VIT and MRS incorporates the entirety of the SOR, preserving any enforceability that would have otherwise been nullified by the existence of an actual contract. VIT correctly argued in their brief and at the hearing that Walton manifest his assent to the terms of the SOR, despite his lack of notice, by entering VIT's premises. Both parties agree that Walton entered VIT's premises as a Reefer mechanic for MRS. By entering the premises, Walton immediately qualified as a USER under the SOR and assented to the terms required by every person on VIT property. It makes no difference that Walton was not made aware of the requirements in his individual capacity. Put simply, the enforceability of the SOR is not contingent upon an individual user's failure to read its terms.
The SOR in this case anticipates that anyone on VIT premises may develop a claim against VIT. Accordingly, the SOR specifically lays out definitional categories for its users and procedural requirements for notifying VIT of any injury or claim developed on the premises. VIT alleged in their brief and proffered at the hearing that the time bar provision is reasonable because time is of the essence after any injury on the terminal. The purpose of these requirements is not merely to limit liability and litigation, instead these requirements are in place to ensure that VIT has adequate time to investigate and collect security footage of the injury. Walton, a USER by the terms of VIT's SOR, failed to adhere to these requirements and does not present an adequate justification for why he should be exempt from the SOR's requirements.
The Court finds that the SOR is an enforceable implied contract between VIT and all USERS of VIT's premises, including Walton. Therefore, the court GRANTS the Plea in Bar finding that the SOR's time bar provision applies to Walton as a USER and bars his right to recovery against VIT. Accordingly, there are no material facts genuinely in dispute, so the court also GRANTS VIT's motion for summary judgment.
Conclusion
In accordance with the analysis set forth in this opinion, the Court GRANTS VIT's Plea in Bar and Motion for Summary Judgment on its Plea in Bar.
The attorney for the Defendant (VIT) is directed to prepare an Order consistent with this ruling within seven (7) days and forward same to the Court after counsel for the Plaintiff has signed the Order and noted any objections.
Sincerely,
/s/
Michelle J. Atkins
Judge MJA/wmp