or other non-corrosive bulk materials" (Agreement Art. I.a).
In an April 19, 1989 letter Rose Marine informed Calciner that in its view the escalator clause required a new daily rate per barge of $ 188.04 as of April 1, 1989. Calciner did not automatically accede to that request. Instead Calciner continued to pay the $ 175 base rate while it considered Rose Marine's demanded increase. On July 6, 1989 Calciner sent Rose Marine a check for $ 38,155.04 to cover the claimed increase but explained that it was making the payment under protest because of its concern that the increase was not justified under the Agreement. That same day, before Rose Marine received the Calciner check or any notice of its having been sent, Rose Marine gave Calciner notice of the termination of the Agreement and proceeded to withdraw its barges from Calciner's use. Rose Marine also seized the approximately $ 7 million of coke that was then stored on the barges.
On July 7, after Rose Marine had refused to release the seized coke, ABB filed a complaint and moved for a temporary restraining order to recover the coke in the United States District Court for the Eastern District of Louisiana. Rather than proceeding with that injunction action the parties agreed, on an interim basis, that Rose Marine would release the coke for delivery to ABB customers as long as ABB posted a bond equal to the value of all the seized coke to be released. At this point all of the coke has been released, and the bond now stands at $ 7,213,071.41. ABB has continuing responsibility for premium payments on that bond.
Rose Marine has offered a plethora of reasons in support of its decision to terminate the Agreement
-- Calciner's failure to make timely payment of the escalator fee, Calciner's late payment of the invoice for the period covering the second half of June 1989, Calciner's use of non-Rose Marine barges for storing coke while allowing the number of Rose Marine barges in use to dip below the minimum of 30 and Calciner's failure to give Rose Marine the right of first refusal to supply vessels in excess of the contractual maximum of 50. Without waiving its rights later to dispute those facts and also the legal conclusion that they assertedly support (that Calciner was in default under the Agreement), ABB is willing to grant Rose Marine all its factual allegations for purposes of the current motion.
Thus the motion presents a simple question: Assuming that ABB and Calciner were joint venturers and that Calciner defaulted on its contract with Rose Marine so as to justify Rose Marine's termination of the Agreement, did Rose Marine have the corollary right to seize the cargo stored in its vessels as liquidated damages? Because that question demands a negative answer, ABB's motion must be and is granted.
Contractual Lien ?
Rose Marine attempts to justify its seizure of the coke by asserting a contractual lien.
Specifically Rose Marine relies on Agreement Art. X.b, which follows Rose Marine's stated right to terminate on default, as quoted in n. 5, with this language:
Thereupon Rose shall retain as liquidation damages, free from any claim by [Calciner], any sums or other security which Rose holds as security for the faithful performance of this agreement. In addition and together with or without the exercise of any other right Rose may retake the barges wherever the said may be found and if the barges be not then at the redelivery point hereinafter provided for, the expenses of transporting the barges to such redelivery point shall be for [Calciner's] account and the daily rate will run during the redelivery period and Rose shall have all such other liens and remedies as may be available to Rose at law or in equity.