ADMIntermare v. Kamca Trading SA

Background

ADMIntermare alleged that it entered a contract with Kamca to supply fuel for the M/V SFL Yukon. The contract required the fuel to meet specified marine-fuel standards and incorporated Kamca’s general terms and conditions. Those terms required ADMIntermare to give notice of a fuel-quality dispute within 21 days after delivery and stated that failing to do so would bar a claim.

Kamca delivered the fuel on June 22, 2018. ADMIntermare alleged that the fuel was defective and caused a fuel-pump seizure, engine problems, a blackout, and engine failure. ADMIntermare notified Kamca on July 19, 2018—27 days after delivery. The vessel’s owner later began arbitration against ADMIntermare, but the opinion states that, when the complaint was filed, there had been no determination of liability and ADMIntermare had not paid an arbitration award.

ADMIntermare asserted breach of contract and other claims against Kamca. It asserted the same non-contract claims against Glencore, the company from which Kamca allegedly obtained the fuel. The case was transferred to the Southern District of New York. Kamca and Glencore each moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim for relief.

Kamca’s Motion

The court considered Kamca’s later Rule 12 motion even though Kamca had previously filed a Rule 12 motion. The court read the applicable rules permissively because there was no evidence of delay and because judicial efficiency favored considering the motion.

The court dismissed ADMIntermare’s breach-of-contract and breach-of-warranty claims against Kamca. The contract’s 21-day notice requirement was a condition that had to be met before bringing those claims. ADMIntermare’s complaint and incorporated contract documents showed that notice was given after 27 days, and ADMIntermare did not dispute that timing. The court rejected ADMIntermare’s argument that general legal standards made the contractual deadline irrelevant, concluding that the 21-day period was not manifestly unreasonable.

The court dismissed the misrepresentation claim against Kamca as duplicative because it relied on the same alleged failure to provide conforming fuel as the warranty claim and did not allege a legal duty independent of the contract.

The court also dismissed the negligence and product-liability claims. Under the maritime economic-loss rule discussed in the opinion, a party generally cannot recover economic losses from an unintentional maritime tort without physical damage to property in which it has a proprietary interest. Because ADMIntermare was a time charterer, the court held that it lacked a sufficient proprietary interest in the vessel.

The court stated that the same rule required dismissal of ADMIntermare’s indemnity and contribution claims. It dismissed the equitable-subrogation claim because equitable subrogation is available only after the claimant has fully paid the debt owed by another party, and ADMIntermare acknowledged that it had not yet paid for the vessel’s damage.

The court denied ADMIntermare’s request to amend its complaint because the proposed additional information would not make its notice to Kamca timely.

Glencore’s Motion

The court dismissed ADMIntermare’s negligence, product-liability, indemnity, contribution, and equitable-subrogation claims against Glencore for the same reasons applied to Kamca.

The court dismissed the misrepresentation claim against Glencore because ADMIntermare did not allege that it had contacted Glencore, requested information from Glencore, received information from Glencore, or relied on information supplied by Glencore.

The court dismissed the breach-of-warranty claim against Glencore because ADMIntermare did not allege that Glencore made an express warranty. The court also concluded that an implied-warranty claim was unavailable because ADMIntermare was not in a contractual relationship with Glencore and alleged only economic injury.

Disposition

Judge J. Paul Oetken granted Kamca’s and Glencore’s motions to dismiss. The court denied ADMIntermare’s request to amend its complaint, denied the letter motion at Docket Number 88 as moot, and directed the clerk to close the motions at Docket Numbers 14, 64, and 88 and to close the case. The opinion does not state whether the dismissals were with or without prejudice.