Blake Marine Group, LLC v. Frenkel & Company

Background

Blake Marine Group, LLC, described in the opinion as a marine salvager, was hired by non-party Forward Marine, LLC to survey and stabilize the Hercules 211, an oil rig damaged by storms and hurricanes. The United States Coast Guard later ordered that the rig be removed or made seaworthy and that 116,000 gallons of waste oil be removed.

Blake and Forward entered into a pollution-removal contract conditioned on written assurances that Forward or its underwriters would pay Blake’s fees and expenses. Blake alleged that Frenkel & Company, Forward’s marine insurance broker, represented during a December 20, 2017 conference call that primary pollution insurance was in place. Frenkel allegedly disclosed six days later that the policy was not available and that the emergency pollution work would not be covered. Blake nevertheless began the work on December 28, 2017, and alleged that it was not paid. Forward later assigned Blake its claims against Frenkel.

Frenkel moved under Federal Rule of Civil Procedure 12(c) for judgment on the pleadings as to counts five, six, seven, and eight. The court applied the same standard used for a motion to dismiss for failure to state a claim, accepting the complaint’s well-pleaded factual allegations as true and drawing reasonable inferences for Blake.

Count Five: Common-Law Pollution Salvage

Blake claimed that Frenkel was liable under the common law of marine salvage. A salvage claim generally requires a marine peril, voluntary service not required by an existing duty or special contract, and success in whole or in part.

Frenkel argued that an in-personam salvage claim—one brought against a person rather than the property saved—could be brought only against the vessel owner. Blake argued that liability could extend to a party with a direct financial interest in preserving the property.

The court agreed with Blake at the pleading stage. It relied on authorities stating that an in-personam salvage remedy is not limited to the legal owner and can extend to a person with a direct financial interest in the property’s preservation. The court reasoned that, if the alleged insurance policy had been obtained, the insurer would have had such an interest because delayed pollution salvage could have exposed the rig and insurer to additional Coast Guard fines and penalties. The court further reasoned that a broker that negligently fails to obtain an insurance policy stands in the insurer’s place and may therefore be treated as having a financial interest in the salvage.

The court denied Frenkel’s motion as to count five. The count was not dismissed.

Counts Six and Seven: Texas Statutory Claims

Count six alleged violations of the Texas Insurance Code, and count seven alleged violations of the Texas Deceptive Trade Practices Act. Blake asserted both claims individually and as Forward’s assignee.

For the Deceptive Trade Practices Act claim, the court held that Blake could not sue individually because Blake was not a Texas resident and the challenged activities occurred in the Gulf of Mexico. The court also held that Blake could not bring the claim as Forward’s assignee because Texas law generally does not permit assignment of Deceptive Trade Practices Act claims.

For the Texas Insurance Code claim, the court likewise held that Blake could not sue individually because Blake was not a Texas resident and did not allege that the insurance agreement was governed by Texas law. The court also held that the Insurance Code claims were not assignable under the authorities before it.

Because amendment of counts six and seven would be futile, the court granted Frenkel’s motion as to those claims and dismissed both counts with prejudice.

Count Eight: New York General Business Law § 349

Count eight alleged a violation of New York General Business Law § 349, which addresses deceptive acts or practices in business, trade, commerce, or the provision of services in New York. The court explained that such a claim requires conduct affecting consumers broadly, not merely a private injury between the parties.

The court concluded that Blake alleged only private monetary losses arising from the failure to obtain the represented insurance policy. Although Blake alleged that Frenkel made misleading statements to the Coast Guard, Blake did not allege that those statements caused the agency to undertake unnecessary action. Instead, the complaint alleged that the statements led the Coast Guard to believe private cleanup was imminent and decide that government action was unnecessary. The court therefore held that the alleged conduct was not consumer-oriented.

The court granted Frenkel’s motion as to count eight and dismissed that claim without prejudice.

Disposition

Judge Analisa Torres granted in part and denied in part Frenkel’s motion for judgment on the pleadings. Count five remained pending; counts six and seven were dismissed with prejudice; and count eight was dismissed without prejudice. The Clerk of Court was directed to terminate the motion.