United States District Court, D. South Carolina, Charleston Division
Francis X. McGowan, Plaintiff,
Pierside Boatworks, Inc., Defendant.
PATRICK MICHAEL DUFFY, United States District Judge
action is before the Court on Plaintiff Francis X.
McGowan's motion to dismiss Defendant Pierside Boatworks,
Inc.'s counterclaim (ECF No. 18). For the reasons stated
herein, Plaintiff's motion is denied.
matter arises out of repairs Defendant performed on
Plaintiff's sailboat, “True Love.” When
Plaintiff did not pay for all of the costs of the repairs,
Defendant filed a maritime lien on the True Love with the
United States Coast Guard. Plaintiff filed this action in an
effort to remove the lien, and Defendant filed a counterclaim
seeking the costs of the repairs performed on Plaintiff's
vessel. Plaintiff now seeks to dismiss Defendant's
counterclaim pursuant to Rule 12(b)(6) of the Federal Rules
of Civil Procedure on the grounds that it is time-barred.
filed this action in the United States District Court for the
District of Columbia on April 25, 2016. Defendant
successfully moved to transfer the case to this Court, and
the case was transferred on October 31. Plaintiff then moved
to dismiss Defendant's counterclaim on December 22.
Defendant responded on January 11, 2017. Plaintiff did not
file a reply. Accordingly, this matter is now ripe for
complaint is subject to dismissal for failure to state a
claim if the allegations, taken as true, show the plaintiff
is not entitled to relief. If the allegations, for example,
show that relief is barred by the applicable statute of
limitations, the complaint is subject to dismissal . . .
.” Jones v. Bock, 549 U.S. 199, 215 (2007).
The Court may consider only the facts alleged in the
complaint, which may include any documents either attached to
or incorporated in the complaint, and matters of which the
Court may take judicial notice. Tellabs, Inc. v. Makor
Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).
“Ordinarily, a defense based on the statute of
limitations must be raised by the defendant through an
affirmative defense, see Fed. R. Civ. P. 8(c), and
the burden of establishing the affirmative defense rests on
the defendant.” Goodman v. Praxair, Inc., 494
F.3d 458, 464 (4th Cir. 2007). However, “where facts
sufficient to rule on an affirmative defense are alleged in
the complaint, the defense may be reached by a motion to
dismiss filed under Rule 12(b)(6).” Id.
“This principle only applies, however, if all facts
necessary to the affirmative defense ‘clearly appear
on the face of the complaint.'”
Id. (quoting Richmond, Fredericksburg &
Potomac R.R. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993)).
outcome of Plaintiff's motion to dismiss turns on the
interpretation of the parties' work order contract for
repairs to the True Love. That contract contains two relevant
provisions for purposes of this motion. First, in a section
titled “MARITIME LIEN, ” the contract provides
that “[t]his Agreement is an Admiralty and Maritime
Agreement under the General Maritime Laws, Statues [sic]; and
Codes of the United States of America between Pierside
Boatworks, Inc. . . . and the undersigned vessel
owner.” (Def.'s Opp'n 12(b)(6) Mot., Ex. 1,
Work Order Agreement, ECF No. 22-1, at 2.) Next, in a section
titled “VENUE, ” the contract provides that
“[t]his Agreement shall be construed under and in
accordance with the laws of the State of South Carolina. The
venue for any dispute arising hereunder shall be resolved in
Charleston County, South Carolina.” (Id.)
assumes that the second quoted provision is the only relevant
choice-of-law provision, and thus only South Carolina law
applies. In contrast, Defendant argues that general maritime
law applies, as specified in the first provision, and is
merely supplemented by South Carolina law where applicable.
The Court agrees with Defendant.
Second Circuit has held, the Court must first determine
“whether something is a maritime contract; then, once a
contract has been deemed a maritime contract, the next step
is determining whether a specific state's laws should be
used to supplement any area of contract law for
which federal common law does not provide.”
Williamson v. Recovery Ltd. P'ship, 542 F.3d 43,
49 (2d Cir. 2008). The inclusion of a choice-of-law provision
“does not, by itself, remove the contract from the
scope of maritime law.” Id.
clear that the parties' vessel repair contract invokes
the Court's admiralty jurisdiction. See Diesel
“Repower, ” Inc. v. Islander Investments
Ltd., 271 F.3d 1318, 1322-23 (11th Cir. 2001) (“A
contract to repair a vessel invokes admiralty
jurisdiction.”). Thus, the question becomes whether the
choice-of-law provisions require that the Court only apply
South Carolina law instead of general maritime law.
Specifically, the Court must determine whether the parties
intended for South Carolina's three-year statute of
limitations to apply in lieu of the maritime doctrine of
laches. “In assessing the timeliness of a maritime
claim, the doctrine of laches typically applies rather than
any fixed statute of limitations.” Am. S.S. Owners
Mut. Prot. & Indem. Ass'n, Inc. v. Dann Ocean Towing,
Inc., 756 F.3d 314, 318 (4th Cir. 2014). However, the
Fourth Circuit has stated that “an otherwise valid
choice-of-law provision in a maritime contract is enforceable
and may require application of a jurisdiction's statute
of limitations, in lieu of the doctrine of laches, to govern
issues regarding the timeliness of claims asserted under that
agreement.” Id. at 315.
the Court is confronted with two choice-of-law provisions
that provide for competing law on the question of whether
Defendant's counterclaim was timely. Both general
maritime law and South Carolina law require that contracts be
interpreted in order to give meaning to all of their terms.
Compare Foster Wheeler Energy Corp. v. An Ning Jiang
MV, 383 F.3d 349, 354 (5th Cir. 2004) (“Federal
courts sitting in admiralty adhere to the axiom that ‘a
contract should be interpreted so as to give meaning to all
of its terms-presuming that every provision was intended to
accomplish some purpose, and that none are deemed
superfluous.'” (quoting Mannesman Demag Corp.
v. M/V CONCERT EXPRESS, 225 F.3d 587, 594 (5th Cir.
2000))), with Ecclesiastes Prod. Ministries v. Outparcel
Assocs., LLC, 649 S.E.2d 494, 498 (S.C. Ct. App. 2007)
(contracts “‘will be interpreted so as to give
effect to all of their provisions, if practical.'”
(quoting Reyhani v. Stone Creek Cove Condo. II Horizontal
Prop. Regime, 494 S.E.2d 465, 468 (S.C. Ct. App.
1997))). In order to give effect to both choice-of-law
provisions, the Court agrees with Defendant that the parties
intended for general maritime law to be supplemented by South
Carolina state law in the absence of a conflict between the
two. Not only does this reading give effect to all of the
provisions of the parties' contract, but it is also
consistent with general maritime law. See Andrews v. A W
Chesterton Co., No. 2:13-cv-2055-RMG, 2015 WL 12831324,
at *4 (D.S.C. May 29, 2015) (“State law may be used to
supplement federal maritime law as long as state law is
‘compatible with substantive maritime policies' and
is not ‘inconsonant with the substance of federal
maritime law.'” (quoting Yamaha Motor Corp.,
U.S.A. v. Calhoun, 516 U.S. 199, 202 ...