Gic Services, L.L.C. v. Freightplus USA, Incorpora
866 F.3d 649
5th Cir.2017Background
- GIC contracted Freightplus to arrange ocean transport of the tug REBEL from Houston to Nigeria; Freightplus subcontracted to Yacht Path, which engaged IMC as the vessel-operating carrier. Money flowed to Freightplus and Yacht Path, but Yacht Path never paid IMC.
- Conflicting paperwork: Freightplus/Yacht Path documents listed Lagos as port of discharge; IMC-issued booking note, non‑negotiable bill of lading, and manifest listed Warri. The discrepancy was not resolved before departure; IMC discharged the REBEL at Warri.
- The REBEL remained in Warri in custody of Julius Berger because IMC had not been paid; GIC incurred large storage/security/release costs and sued Freightplus; Freightplus impleaded IMC. After bench trial the district court awarded GIC damages against Freightplus and required IMC to indemnify Freightplus for 30% of that judgment; the court also awarded IMC unpaid freight against Freightplus but barred IMC’s in rem lien against the REBEL.
- On appeal, the Fifth Circuit affirmed most rulings but considered (1) whether Freightplus was an NVOCC and could obtain tort indemnity from IMC, (2) admissibility/weight of an invoice (Visifi) underpinning damages, (3) allocation of fault and availability of attorneys’ fees, and (4) whether IMC may proceed in rem against the REBEL to collect unpaid freight.
- The court upheld: Freightplus’s NVOCC status; IMC’s negligence causation finding; the damages award (declining to disturb district court’s authentication ruling and mitigation findings); the 70/30 fault allocation (IMC pays 30%); IMC’s recovery of unpaid freight from Freightplus. The court reversed only the bar on IMC’s in rem action — IMC may assert a maritime lien against the REBEL.
Issues
| Issue | GIC / Freightplus (Plaintiff) Argument | IMC (Defendant) Argument | Held |
|---|---|---|---|
| Whether Freightplus acted as an NVOCC and can seek maritime tort indemnity from IMC | Freightplus functioned as an NVOCC (issued bill of lading to GIC, paid only by shipper) and so may seek indemnity from VOCC | IMC: Freightplus was merely a freight forwarder / not a "shipper" to IMC because not listed on IMC docs and received no bill of lading from IMC | Court: Freightplus qualifies as an NVOCC based on function; NVOCC–VOCC relationship can give rise to maritime tort indemnity; IMC liable to Freightplus (negligence finding not clearly erroneous) |
| Whether IMC was negligent in delivering to Warri (causation) | Freightplus/GIC: IMC’s documents listing Warri were erroneous; IMC failed to ensure delivery to Lagos after notice, causing damages | IMC: Contractually bound to deliver to Warri based on Yacht Path instructions; cannot be negligent for performing contract | Court: District court’s factual finding that IMC mistakenly recorded Warri and had notice of Lagos is not clearly erroneous; negligence and causation stands |
| Admissibility and sufficiency of the Visifi invoice supporting GIC’s damages; mitigation | IMC: Visifi invoice was never properly authenticated and is not best evidence; Julius Berger invoices show much lower charges; GIC could have mitigated (post bond) | GIC: Witness authentication stipulation and testimonial record support admission; attempted bonding efforts were blocked | Court: Affirmed district court’s finding that parties (Freightplus and IMC) effectively stipulated to authentication and declined to reweigh evidence; damages and mitigation rulings not clearly erroneous |
| Allocation of fault, availability of full indemnity and attorneys’ fees | Freightplus: entitled to full indemnity from IMC (or at least attorneys’ fees) because IMC’s negligence caused loss | IMC: Freightplus was majority at fault so not entitled to indemnity or fees; comparative fault precludes full indemnity | Court: Under comparative-fault maritime law, full indemnity unavailable when indemnitee is partly at fault; upholds 70% Freightplus / 30% IMC allocation and denies attorneys’ fees to Freightplus |
| Whether IMC may assert in rem maritime lien against the REBEL for unpaid freight | IMC: maritime lien exists; may proceed in rem against REBEL | GIC/Freightplus: payment to intermediary and bill marked "freight prepaid" released carrier lien / would cause double recovery | Court: Reversed district court — Strachan framework controls (carrier intent governs release); no clear intent to release; IMC may pursue in rem lien against REBEL |
Key Cases Cited
- Hardy v. Gulf Oil Corp., 949 F.2d 826 (5th Cir. 1992) (limits availability of maritime tort indemnity; comparative fault displaces broad indemnity)
- Cities Serv. Co. v. Lee-Vac, Ltd., 761 F.2d 238 (5th Cir. 1985) (discussing special-relationship basis for indemnity)
- United States v. Reliable Transfer Co., 421 U.S. 397 (U.S. 1975) (adoption of comparative fault allocation in maritime cases)
- Seal Offshore, Inc. v. Am. Standard, Inc., 736 F.2d 1078 (5th Cir. 1984) (rejecting full indemnity where parties share fault)
- Loose v. Offshore Navigation, Inc., 670 F.2d 493 (5th Cir. 1982) (abandoning active/passive negligence distinction; apportions fault)
- Sea-Land Service, Inc. v. Crescent Towing & Salvage Co., 42 F.3d 960 (5th Cir. 1995) (partial indemnity/contribution and attorneys’ fees analysis)
- Odd Bergs Tankrederi A/S v. S/T Gulfspray, 650 F.2d 652 (5th Cir. 1981) (distinction between indemnity permitting attorneys’ fees and contribution that does not)
- Strachan Shipping Co. v. Dresser Indus., Inc., 701 F.2d 483 (5th Cir. 1983) (carrier’s intent, not mere payment to intermediary or "freight prepaid" marking, controls whether shipper or intermediary was released from freight liability)
- Lykes Lines Ltd. v. M/V Bbc Sealand, 398 F.3d 319 (5th Cir. 2005) (recognizes maritime lien for unpaid freight and clarifies charter exception)