[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 99-11456
________________________
D. C. Docket No. 97-07449-CV-PAS
VENUS LINES AGENCY, INC.,
Plaintiff-Appellant-Cross-Appellee,
versus
CVG INTERNATIONAL AMERICA, INC.,
Defendant-Appellee-Cross-Appellant.
________________________
Appeals from the United States District Court
for the Southern District of Florida
_________________________
(December 4, 2000)
Before EDMONDSON, WILSON and MAGILL*,
Circuit Judges.
________________________
*Honorable Frank J. Magill,
U.S. Circuit Judge for the Eighth Circuit, sitting by designation.
WILSON, Circuit Judge:
This appeal raises the issue of
whether there was sufficient mutual assent for the parties to
form a valid new contract or to modify an existing one. We find
that there was not. Also at issue in this appeal are the application
of the doctrine of laches to demurrage claims, and the proper
calculation of damages on demurrage claims.
Plaintiff Venus Lines Agency, Inc.
(Venus) appeals the district court's ruling in favor of Defendant
CVG International America, Inc. (CVGIA) on Venus' claim that
CVGIA breached its contract with Venus, the ruling that Venus'
1995 and 1996 demurrage claims were barred by the doctrine of
laches, and the district court's calculation of damages with
respect to its 1997 demurrage claim. CVGIA cross-appeals the
district court's finding that CVGIA was liable for Venus' 1997
demurrage claim.
We have reviewed the record and
the arguments in the briefs. We find no reversible error in the
district court's rulings on Venus' breach of contract claim or
its finding that the doctrine of laches barred Venus' 1995 and
1996 demurrage and shipping claims, and affirm the district court's
findings of facts and law on those claims. We find that the district
court erred in calculating CVGIA's liability with respect to
Venus' 1997 demurrage claim, and remand this case for recalculation
of damages.
I. BACKGROUND
CVGIA is a Florida corporation that
arranges and secures the shipment of goods for a large Venezuelan
conglomerate. Prior to its relationship with Venus, another Venezuelan
company (Compañia Anonima Venezolana de Navegacion (CAVN))
handled CVGIA's freight pursuant to annual contracts that were
renewed each year. In March 1994, CVGIA began doing business
with Venus after CAVN went bankrupt by arranging one round-trip
voyage carrying the products of the Venezuelan conglomerate northward
to Mobile and carrying the CVGIA procured shipments southward
to Venezuela. Later, CVGIA solicited bids for the shipment of
goods southward from Miami, Port Everglades, and Mobile to Venezuela.
CVGIA requested bids to carry goods for one year at a fixed tariff
rate, and the bid request contained terms similar to CAVN's last
contract with CVGIA. Venus filed its tariff rates and terms for
the service with the Federal Maritime commission.1 Venus submitted its bid, and CVGIA
accepted it in April 1994.
Over the next few months, Michael
Kobiakov, Venus' President, met with representatives from CVGIA
on several occasions to discuss the possibility of a long-term
agreement. Venus contends the parties agreed to a four-year service
contract in October 1994 at a meeting between Kobiakov and CVGIA's
Executive Vice President Ramon Iglesias, and that the terms of
this contract were recorded in Kobiakov's notes, which he took
on the face of an earlier contract between CVGIA and Seafreight
Line Ltd. CVGIA, however asserts the parties never finalized
a long-term contract. Over the next two years, Venus and CVGIA
discussed possible written agreements, but were never able to
agree on written terms. CVGIA rejected several drafts that Venus
proposed. In September, 1997, CVGIA informed Venus that its services
were no longer needed for the Miami to Venezuela run.
Venus sued CVGIA in the Southern
District of Florida, alleging that CVGIA breached its contract
with Venus, and seeking liquidated damages provided for in the
1994 oral "agreement." Alternatively, Venus sought
damages for misrepresentation and promissory estoppel, alleging
CVGIA's actions led Venus to believe it was engaged in a contractual
relationship, and to rely on that belief to its detriment. Venus
also alleged CVGIA failed to pay demurrage2 and freight charges specified in
the bills of lading Venus issued CVG with each voyage.
After a five day bench trial, the
district court found that no long term contract existed between
Venus and CVGIA, as there had never been any agreement on the
fundamental issues of duration and price. The district court
rejected Venus' promissory estoppel and misrepresentation claims,
finding that CVGIA made no "clear and unambiguous promise"
upon which Venus relied, that any additional expenditures Venus
made to service CVGIA were necessary expenditures, and that there
was insufficient evidence to support a misrepresentation claim.
The court found that the doctrine of laches barred Venus' demurrage
claims for 1995 and 1996, because Venus had an obligation to
demand payment from CVGIA rather than waiting until this lawsuit
to file its demurrage claims for those years. The court found
Venus "made a timely pre-suit demand for the 1997 demurrage
and [was] entitled to recover from CVGIA under the terms of the
bills of lading." The court ordered that Venus was entitled
to collect $78,629.49 "plus ten percent . . . interest per
annum running from the date the freight or demurrage was due,
and for the attorneys' fees relating to the prosecution of freight
and demurrage claims."
II. DISCUSSION
A. Jurisdiction and Standard
of Review
An appeal from a final judgment
entered by a United States District Court provides us with jurisdiction
under 28 U.S.C. § 1291.
We review a district court's factual
findings when sitting without a jury in admiralty under the clearly
erroneous standard. See Marine Transp. Servs. Sea-Barge
Group, Inc. v. Python High Performance Marine Corp., 16 F.3d
1133, 1138 (11th Cir. 1994). We review the district court's conclusions
of law de novo. See id.
B. Contract Claim
Venus contends the district court
erred when it framed the central issue of whether a long-term
contract existed between CVGIA and Venus as one of formation
and not modification. Venus also argues the district court misstated
the rule governing parties contemplating a written agreement,
because the intention to sign a written agreement does not prevent
the parties from agreeing to an enforceable oral contract. Venus
asserts it had an enforceable four-year oral contract to ship
goods for CVGIA that arose from a modification of the contract
formed when CVGIA accepted Venus' bid, and that the modified
terms were the contract's extended duration and modified scope
of service.
"It is not necessary . . .to
reduce an agreement to writing to bind the parties, as long as
the parties intend to be bound at the time of the oral agreement."
Nautica Int'l, Inc. v. Intermarine USA, L.P., 5 F. Supp.
2d 1333, 1341 (S.D. Fla. 1998). In April 1994, CVGIA accepted
Venus' bid to perform the services contract. Acceptance of a
bid to perform services can create an enforceable contract in
the absence of a written agreement. See Roberts & Schaefer
Co. v. Hardaway Co., 152 F.3d 1283, 1295 (11th Cir. 1998).
CVGIA does not dispute that the parties entered into a contract
in April 1994, but it argues that the relationship between CVGIA
and Venus was a series of discrete contracts to ship the goods
at the tariff rate, and that these agreements were never modified
in favor of a long- term agreement. We agree with the district
court that the parties did not form a valid long-term agreement.
In order to form an enforceable
oral contract, "there must be a meeting of the minds on
all essential terms and obligations of the contract." Browning
v. Peyton, 918 F.2d 1516, 1521 (11th Cir. 1990). Venus has
failed to establish there was a meeting of the minds between
itself and CVGIA on all of the essential terms of the alleged
four-year contract. Venus maintains that it always charged, and
CVGIA always paid, the tariff rate. However, Kobiakov's notes
allegedly reflected the terms of the oral agreement reached in
October 1994. Those notes, taken on the face of a prior contract
between CVGIA and another company, reflect rates that were not
implemented. Furthermore, the tariff rates were never revised
to implement the negotiated rate terms reflected in Kobiakov's
notes. The district court found, and we agree, that the rate
term was an essential term upon which the parties had to agree.
The conduct of the parties after they reached the alleged oral
agreement suggests there was no meeting of the minds on the rate
term.
Even if Venus were correct that
the central issue in this case is not whether the parties formed
a new contract, but whether they modified an existing one, the
conduct of the parties after they reached the purported agreement
demonstrates there was no valid modification of the contract
formed when CVGIA accepted Venus' bid. A meeting of the minds
on modified terms is necessary to validly modify a contract.
See United Contractors, Inc. v. United Constr. Corp.,
187 So. 2d 695, 702 (Fla. Dist. Ct. App. 1966) (holding "one
party to a contract cannot alter its terms without the assent
of the other parties; the minds of the parties must meet as to
the proposed modification.") (internal quotation marks and
citation omitted). The parties in this case continued to negotiate,
trying to work out a long-term deal. CVGIA continued to compensate
Venus at the tariff rate, and Venus continued to accept payment
at that rate, not at the modified rates that would be required
by the modified scope of service. Venus also alleged that the
modified contract contained a liquidated damages clause, but
Venus did not seek to enforce that clause until more than a year
after it originally filed this action. These facts indicate that
there was no mutual assent on the new terms of the contract.
Venus is correct that in certain
contractual situations, the parties' intent to eventually reduce
the agreement to writing does not prevent the contractual obligations
from arising immediately. See Lifecare Int'l, Inc. v. CD Medical,
Inc., 68 F.3d 429, 436 (11th Cir. 1995), modified and
supplemented on other grounds, 85 F.3d 519 (11th Cir. 1996).
In such situations, however, the parties must intend that their
oral or written negotiations be immediately binding. See id.
CVGIA's refusal to sign Venus' written proposals was continuous
for nearly two years. This consistent refusal to sign Venus'
proposed drafts is strong evidence that CVGIA did not intend
the earlier negotiations to be immediately binding. Therefore,
we find that the district court correctly held that CVGIA intended
that any contract would be reduced to writing and signed.
C. Doctrine of Laches
The equitable doctrine of laches
will bar a claim when three elements are present: "(1) a
delay in asserting a right or a claim; (2) that the delay was
not excusable; and (3) that there was undue prejudice to the
party against whom the claim is asserted." Kason Indus.,
Inc. v. Component Hardware Group, Inc., 120 F.3d 1199, 1203
(11th Cir. 1997). Venus concedes that in admiralty claims, the
equitable doctrine of laches generally controls whether a party's
delay in bringing a claim should bar the suit. See, e.g.,
Puerto Rican-American Ins. Co. v. Benjamin Shipping Co.,
829 F.2d 281, 283 (1st Cir. 1987); Azalea Fleet, Inc. v. Dreyfus
Supply & Machinery Corp., 782 F.2d 1455, 1458 (8th Cir.
1986); Firearms Import & Export Corp. v. Lykes Bros. Steamship
Co., 458 F. Supp. 88, 90 (S.D. Fla. 1978) (holding doctrine
of laches applies in absence of statute of limitations). Venus
argues, however, that courts use statutes of limitations periods
in applying laches. The limitations period in Florida's Statute
of Limitations for oral contracts is four years. See Fla.
Stat. ch. 95.11(k). Venus' delay in bringing the demurrage claims
was less than three years for the 1995 claims. Venus argues,
therefore, that it should have been presumed to have timely brought
the suit, and that the first element of the laches doctrine-a
delay in asserting the right or claim-cannot be met.
In admiralty claims, we look to
the analogous statute of limitations only as a benchmark in determining
whether to apply the doctrine of laches. The former Fifth Circuit
held that: "the analogy rule serves primarily to determine
where rests the burden of proof. `[W]hen a plaintiff files a
claim in admiralty within the analogous statutory period, defendant
must show inexcusable delay and resulting prejudice in order
to establish a laches defense.'" Mecom v. Levingston
Shipbuilding Co., 622 F.2d 1209, 1215 (5th Cir. 1980) (quoting
Barrois v. Nelda Faye, Inc., 597 F.2d 881, 885 (5th Cir.
1979));3see
also TAG/ICIB Servs., Inc. v. Pan American Grain Co., 215
F.3d 172, 175 (1st Cir. 2000); Puerto Rican-American Ins.
Co., 829 F.2d at 283; Azalea Fleet, Inc., 782 F.2d
at 1458-59. Assuming, then, that the analogous limitations period
is four years, we must determine whether CVGIA demonstrated Venus'
delay in demanding payment for outstanding demurrage was inexcusable
and whether the delay was prejudicial.
During 1995 and 1996, Venus accepted
payment from CVGIA's consignees (the Venezuelan conglomerate
that owned CVGIA), and failed to demand payment from CVGIA for
any outstanding demurrage. The district court found, and we agree,
that Venus had a responsibility to demand payment from CVGIA
on demurrage rather than to wait until filing this suit. As Venus
admitted at oral argument, the invoices for 1995 and 1996 demurrage
charges were not sent to CVGIA, and the invoices to the consignees
were not presented to CVGIA until Venus filed this lawsuit in
1998. We find that this delay was inexcusable. The delay was
prejudicial to CVGIA, because had Venus made a timely pre-suit
demand for payment, CVGIA could have contested the claim, or
sought to obtain payment from the consignees. Because we find
that Venus' delay in demanding payment for the 1995 and 1996
demurrage charges was inexcusable and prejudicial, we hold that
the district court correctly held that the doctrine of laches
barred those demurrage claims.
Venus, however, did make a timely
pre-suit demand for payment of the 1997 demurrage charges. Because
there was no inexcusable delay in making that demand, the district
court correctly held that the doctrine of laches does not bar
that claim.
D. Calculation of Damages
The tariff Venus submitted with
the Federal Maritime Commission clearly indicates that the interest
rate on costs of collection of freight and demurrage was twelve
percent. In calculating damages, the district court used an interest
rate of ten percent. What interest rate to apply in calculating
damages is a factual determination subject to a clear error standard
of review. See Marine Transp. Servs. Sea-Barge Group,
Inc., 16 F.3d at 1138. Because the bills of lading in this
case incorporated all the terms and conditions of the tariff,
we hold that the district court clearly erred in applying a ten
percent interest rate rather than the twelve percent rate in
the tariff. We reverse the district court's calculation of damages
and remand for recalculation.
III. CONCLUSION
For the foregoing reasons, we affirm
the district court's decision that the parties did not make a
long-term oral contract in October 1994, and we find that there
was no valid modification of the existing contract between CVGIA
and Venus. We also affirm the district court's decision that
the doctrine of laches barred Venus' 1995 and 1996 demurrage
claims, but did not bar its 1997 demurrage claim. We reverse
the district court's calculation of damages, and remand this
case to the district court for recalculation of damages.
AFFIRMED IN PART, REVERSED AND REMANDED
IN PART.
FOOTNOTES
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[1]
Rule 7-02 of the tariff filed with
the Federal Maritime Commission allowed the carrier (Venus) to
recover all costs of collection for freight charges past due,
plus twelve percent annual interest compounded daily. This interest
rate in the tariff is relevant to our discussion of the district
court's calculation of damages, infra.
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[2]
Demurrages are penalties for delays
in the loading and unloading of goods.
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[3]
In Bonner v. City of Prichard,
661 F.2d 1206, 1209 (11th Cir.1981) (en banc), we adopted as
binding precedent all of the decisions of the former Fifth Circuit
handed down prior to October 1, 1981.
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