Federal Marine Terminals, Inc. v. Worcester Peat Company, Inc.

United States Court of Appeals
For the First Circuit
No. 00-2004
FEDERAL MARINE TERMINALS, INC.,
Plaintiff, Appellee,
v.
WORCESTER PEAT COMPANY, INC.,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, Chief U.S. District Judge]
Before
Boudin, Chief Circuit Judge,
Lynch and Lipez, Circuit Judges.
Michael X. Savasuk for appellee.
Charles E. Gilbert, III, Christopher L. Dalton, Gilbert &
Greif, P.A., William H. Welte, and Welte & Welte, P.A. for
appellant.
August 27, 2001

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LIPEZ, Circuit Judge. This appeal arises from a
payment dispute between Worcester Peat Company (Worcester Peat)
and Federal Marine Terminals (FMT) over a stevedoring contract.
FMT contracted to load peat for Worcester Peat onto a vessel for
shipment to Europe. After the loading was completed, the
parties disagreed about the contract's provision regarding the
calculation of FMT's fee. FMT charged Worcester Peat for the
volume of peat it handled through the port based on the number
of truckloads Worcester Peat had delivered and the volume of
peat in each truck. However, Worcester Peat based its payment
on the quantity of peat calculated by reference to the box
volume, or total cubic capacity, of the vessel, a sum
significantly less than the amount of FMT's invoice. The
district court found that the contract unambiguously stated that
FMT was to be paid by the volume of peat handled, and not by the
box volume of the shipping vessel, and entered judgment against
Worcester Peat for nearly $80,000. The court also rejected
Worcester Peat's counterclaim for peat it alleges was lost
during the loading process.
On appeal, Worcester Peat challenges the district
court's determination that the contract was unambiguous and
argues that the court also erred in not charging FMT for

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demurrage and for peat Worcester Peat claims was lost due to
FMT's negligence in the loading process. Finding no error in
the district court's rulings, we affirm.
I.
Worcester Peat, a company located in Deblois, Maine,
grows and sells peat moss. In September 1998, Worcester Peat
began exploring the possibility of selling peat to buyers in
Europe. With the assistance of a Finnish broker, Mikko Valli,
affiliated with an Estonian company called BioMix, Ltd.,
Worcester Peat agreed to sell peat to Blumenerdenwerk Stender
GmbH (Stender), a German company. The contract provided that
Stender would be responsible for chartering a ship to load the
peat in Maine and transport it to Europe. Stender contracted
with another German company, Schulte & Bruns, to secure a
vessel. The contract between Worcester Peat and Stender
established an anticipated loading time of five days for the
shipment of peat. Worcester Peat's contracts with both BioMix
and Stender provided that the cost of the peat would be
calculated by reference to "box volume" of the ship, or its
total capacity in cubic meters.
Worcester Peat then entered negotiations with FMT, the
owner and operator of a cargo terminal in Eastport, Maine, to
load the peat onto the vessel chartered by Stender from Schulte

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& Bruns. Roland Rogers, general manager of FMT, testified that
FMT had never worked with peat and was unfamiliar with its
properties. The parties exchanged a series of communications in
the fall of 1998 regarding FMT's prices and the plans for
loading the vessel. FMT and Worcester Peat agree that their
understanding during this negotiating process was that Stender
would provide a "geared" vessel, meaning one equipped with
cranes and other machinery for loading the peat.
On December 10, FMT was informed that the vessel
involved would not be a geared vessel as expected, but rather a
non-geared vessel that would not be carrying the equipment
needed to load the peat from the dock onto the ship. FMT
attempted to locate cranes and other equipment to load the
vessel. After a conversation between Rogers and Morrill
Worcester, president of Worcester Peat, Worcester Peat agreed to
share in the cost of renting a crane up to the amount of $2100.
Worcester Peat and FMT signed the stevedoring contract
on December 24. That document provides, in relevant part:
"Federal Marine Terminals Inc., Eastport hereby agrees to handle
your cargo of peat moss totaling 27,000 cubic meters,
approximately, for $4.95 dollars in U.S. funds per cubic meter
handled through Eastport including the loading of the vessel."

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The contract also established a sliding fee scale such that the
price per cubic meter would be lowered if FMT achieved a
specified loading rate. Finally, the contract provided, as the
parties agreed, that Worcester Peat would pay up to $2100 for
the rental cost of the crane.
The vessel charted by Stender, the M/V BORIS LIANOV,
arrived in Eastport on the night of December 30, 1998. FMT
began loading the peat early the next morning. The weather
conditions during the loading of the peat were exceptionally
cold and windy. There was also precipitation in the form of
both rain and snow, which caused the top layer of the peat to
freeze. The wind blew so much peat into the air that visibility
was limited at times. The ship's captain ordered the doors of
the holds closed a number of times due to wind and snow. The
ship's logs also indicate that loading was stopped on some
occasions at the request of Worcester Peat.
Two conveyor belts were used to load the peat into the
ship's holds. Rogers testified that the intense cold created
problems with the hydraulics of the conveyors, making it
difficult to raise and lower them to align with the ship as the
tide rose and fell. One conveyor belt became completely
inoperable halfway through the loading process. Some of the

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peat also froze, making it necessary to break up large chunks
before the peat was put on the conveyor belts.
After FMT began loading the vessel, Worcester Peat
offered FMT the use of a clamshell bucket, which FMT attached to
a crane. The bucket was used to pick up peat from the loading
area on the dock and dump it directly into the holds of the
ship. FMT experienced fewer weather-related problems with the
use of the clamshell bucket because the peat in the bucket was
not as exposed to the wind as the peat on the conveyor belts.
Worcester Peat also suggested that FMT cover segments of the
conveyor belts with tarps to minimize the amount of peat blown
away by the wind.
The M/V BORIS LIANOV contained seven cargo holds. FMT
loaded peat into them one hold at a time, shutting the doors for
each hold after the hold had been filled with peat. However,
FMT found that the peat "settled," or recompressed, in the holds
after loading, reducing its volume and requiring FMT to open the
holds again and load more peat until the holds were full, a
process that further slowed the loading. The work was finally
completed on January 10, six days later than the five-day
loading period anticipated by Worcester Peat and Stender.
FMT sent Worcester Peat an invoice for $182,794.59.
Rogers testified that he arrived at this figure by using

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1 "'Demurrage' is renumeration of a shipowner for the
detention of its vessel beyond the number of days allowed by the
charter party." TAG/ICIB Servs., Inc. v. Pan Am. Grain Co.,
Inc., 215 F.3d 172, 174 n.1 (1st Cir. 2000) (citing Black's Law
Dictionary 432 (6th ed. 1990)).
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information Worcester Peat supplied him regarding how many
trucks brought peat to the terminal (425) and the average volume
per truck (115 cubic yards or 86.89 cubic meters). Multiplying
those figures, he concluded that FMT had handled 36,928.2 cubic
meters of peat at the agreed-upon price of $4.95 per cubic
meter, for a total of $182,794.59. However, Worcester Peat paid
FMT only $111,720.89. This figure relied upon the box volume of
the vessel, 26,917.1 cubic meters. Although Worcester Peat
added $2100 as agreed for the rental of the two cranes, it
deducted $2500 as a rental charge for the clamshell bucket it
had offered to FMT, as well as a demurrage charge1 of $21,118.75
that it had paid to Stender.
Invoking the district court's admiralty jurisdiction,
see 28 U.S.C. § 1333, FMT filed a complaint against Worcester
Peat on June 17, 1999, seeking recovery for the difference
between the amount FMT charged and the amount Worcester Peat
paid (approximately $70,000). Worcester Peat filed a
counterclaim alleging that FMT was liable for peat lost during
the loading process.

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2 This figure is larger than the amount calculated by Rogers
for two reasons. First, the district court found that Worcester
Peat had delivered 434 trucks of peat to the terminal, not 425
trucks as Rogers had thought. Second, the district court found
that the conversion factor Rogers used to convert cubic yards to
cubic meters was incorrect. Accordingly, the court used a
conversion of 87.9 cubic meters of peat per truck instead of
86.89 cubic meters per truck as Rogers calculated.
3 Worcester Peat has not appealed the district court's
determination with respect to the clamshell bucket.
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Following a three-day bench trial, the district court
found that the contract between FMT and Worcester Peat
unambiguously stated that payment was to be calculated using the
volume of peat handled and not, as Worcester Peat contended, the
box volume of the vessel. Accordingly, the district court found
that FMT was entitled to a total of $190,935.57.2 The court
further held that Worcester Peat was not entitled to deductions
either for FMT's use of the clamshell bucket3 or for the
demurrage charged to Worcester Peat by Stender. Finally, the
district court found that Worcester Peat could not recover on
any of its counterclaims because it had not established by a
preponderance of the evidence either the amount of peat lost
because of wind or the fact that FMT's negligence caused that
loss, or that any such loss exceeded Worcester Peat's expected
loss due to wind in the normal course of handling peat.
Subtracting the amount Worcester Peat had already paid to FMT,

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the district court entered judgment in favor of FMT in the
amount of $79,214.68.
Worcester Peat appeals the judgment of the district
court on three grounds. First, it argues that the court erred
in finding that the contract unambiguously provided that FMT
would be paid according to the volume of peat handled. Second,
Worcester Peat claims that the court should have found FMT
liable for demurrage it was charged by Stender because FMT did
not load the vessel in a timely fashion. Finally, Worcester
Peat says that the district court erred in not holding FMT
responsible for amounts of peat lost in the wind during the
loading process.
II.
A. Interpretation of the Contract
A court sitting in admiralty jurisdiction applies
federal maritime rules. See Greenly v. Mariner Mgmt. Group,
Inc., 192 F.3d 22, 25-26 (1st Cir. 1999). See also Har-Win,
Inc. v. Consolidated Grain & Barge Co., 794 F.2d 985, 987 (5th
Cir. 1986). Therefore, we turn to principles of general
maritime contract law to determine whether the contract between
FMT and Worcester Peat was ambiguous. See Garza v. Marine
Transport Lines, Inc., 861 F.2d 23, 26 (2d Cir. 1988). The
district court found that "[t]he language of the contract

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unambiguously called for Worcester Peat to pay FMT $4.95 per
cubic meter handled." We review this determination de novo.
See ITT Corp. v. LTX Corp., 926 F.2d 1258, 1261 (1st Cir. 1991).
"A word or phrase is ambiguous when it is capable of
more than a single meaning." Garza, 861 F.2d at 27. The
contract between FMT and Worcester Peat provided: "Federal
Marine Terminals Inc., Eastport hereby agrees to handle your
cargo of peat moss totaling 27,000 cubic meters, approximately,
for $4.95 dollars in U.S. funds per cubic meter handled through
Eastport including the loading of the vessel." (emphasis
added.) Notably, the contract does not mention box volume, or
the ship's total capacity, at all, and nothing in the contract
itself suggests that box volume would be the basis for
calculating FMT's fee.
Having concluded correctly that the "handled" language
of the contract was unambiguous, the district court applied that
language to the facts of the case: "Although the contract
clearly calls for Worcester Peat to pay FMT based on the amount
handled, determining the amount handled requires me to choose
between contradictory evidence." That contradictory evidence
related to "the numbers of trucks that delivered peat to the
terminal as well as various estimates on the amount each truck

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held." The court resolved those contradictions and made the
appropriate calculations. Worcester Peat insists, however, that
the court's decision to calculate the amount of peat handled on
the basis of truck deliveries overlooks an ambiguity in the
contract because the volume of peat handled could just as easily
be measured by the amount that was actually placed into the
holds of the ship. The district court properly rejected this
attempt to create an ambiguity where none exists. FMT obviously
had to handle the peat that was delivered to its terminal by
Worcester Peat. The district court sensibly viewed truck
deliveries as the most accurate measure of the amount of peat
FMT had to handle pursuant to the contract.
Worcester Peat further claims that the district court's
finding that the contract is unambiguous ignored the clause that
established the following sliding scale for payment:
Should the loading of the vessel be
accomplished at an average gross production
scale of greater than 350 cubic meters per
hour we will refer to the sliding scale that
has been provided. This scale would
incrementally reduce the total cost to
Worcester industries by up to $0.08 (eight
cents) per cubic meter maximum at 440 cubic
meters per hour.
Worcester Peat contends that the only way to determine whether
this production incentive had been met was to reference the
volume of peat loaded onto the vessel. Therefore, Worcester

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Peat argues, the phrase "per cubic meter handled through
Eastport" in the clause specifying FMT's payment is ambiguous
because the contract required the use of box volume to determine
whether the sliding fee scale would apply. We need not decide
whether Worcester Peat's interpretation of the sliding fee scale
is correct because that provision - even under Worcester Peat's
reading of it - does not conflict with the conclusion that the
contract unambiguously provided for payment according to volume
of peat handled. Even if, as Worcester Peat contends, the
sliding scale could only be calculated by reference to box
volume of peat in the vessel, the reduced fee established by the
sliding scale could still be applied to calculate FMT's fee
according to the volume of peat handled through the port.
Accordingly, nothing in the sliding fee provision changes our
conclusion that the district court's reading of the contract was
correct.
Unable to locate language in the contract to bolster
its assertion that the term "handled" is ambiguous, Worcester
Peat identifies other evidence in the record referring to the
vessel's box volume of peat. For example, Rogers stated in a
communication to Valli dated October 21, 1998: "The difficulty
in determining the volume of cargo handled, I believe, dictates
that we calculate using box volume." Worcester Peat also argues

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that because its contracts with Biomix and Stender calculated
payment according to the box volume of peat, the district court
reached a "manifestly absurd result" in finding that FMT's fee
would be calculated according to volume of peat handled.
Finally, Worcester Peat claims that documents signed by Rogers
on behalf of FMT, including the bill of lading and the mate's
receipt for the M/V BORIS LIANOV, measured the cargo by box
volume.
However, the district court correctly decided that
these documents were irrelevant to its consideration of whether
the contract between FMT and Worcester Peat was ambiguous:
"[T]he shipping documents refer to box volume, because the
shipping documents necessarily measure what is on the vessel.
They have nothing to do with stevedoring contracts." Moreover,
the district court's consideration of this extrinsic evidence
was precluded by the parol evidence rule:
The purpose and essence of the [parol
evidence] rule is to avoid the possibility
that fraud might be perpetrated if testimony
as to subjective intent could be substituted
for the plain meaning of a contract. In the
absence of ambiguity, the effect of
admitting extrinsic evidence would be to
allow one party to substitute his view of
his obligations for those clearly stated.
Garza, 861 F.2d at 26-27 (internal quotation marks omitted).
Having concluded that the contract between Worcester Peat and

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FMT unambiguously provided that FMT's payment would be
calculated by reference to cubic meters of peat handled through
Eastport, the district court properly refused to consider
evidence of any negotiations or extrinsic documents to alter
that language. See Har-Win, Inc., 794 F.2d at 987 ("[E]vidence,
whether parol or otherwise, of antecedent understandings and
negotiations will not be admitted for the purpose of varying or
contradicting the writing."); Battery S.S. Corp. v. Refineria
Panama, S.A., 513 F.2d 735, 739-40 (2d Cir. 1975) (stating, in
interpreting a contract governed by maritime law, that the parol
evidence rule "renders legally inoperative . . . evidence of
prior understandings and negotiations which contradicts the
unambiguous meaning of a writing which completely and accurately
integrates the agreement of the parties").
B. Demurrage
The district court concluded that FMT was not liable
for demurrage costs of $21,118.75 that Worcester Peat paid to
Stender. The agreement between Stender and Schulte & Bruns, the
company from whom Stender chartered the M/V BORIS LIANOV,
provided that the vessel would be loaded in five days. Because
the loading of the peat exceeded this period by several days,
Schulte & Bruns charged Stender for demurrage, and Stender in
turn charged Worcester Peat. Worcester Peat and FMT were not

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4 We also note that, although Worcester Peat paid Stender
for demurrage, the contract between those two parties did not
provide for such a payment in the event that the loading of the
peat exceeded the projected time period. The agreement between
Worcester Peat and Stender only established an accepted loading
time of 120 hours for a vessel the size of the M/V BORIS LIANOV
and did not even raise the possibility that Worcester Peat would
be charged for not meeting that guideline.
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signatories to the contract providing that the loading would
take only five days.
The contract between FMT and Worcester Peat does not
mention demurrage or even provide a time frame for loading the
chartered vessel. As the district court found, "Worcester Peat
has not introduced any evidence showing that FMT was party to,
knew about, or was in possession of a document referring to
demurrage." We have said previously that "courts have been
reluctant to impose demurrage liability on a party that is
neither a signatory, successor nor possessor of a document that
expressly or by incorporation refers to demurrage." Trans-
Asiatic Oil Ltd., S.A. v. Apex Oil Co., 804 F.2d 773, 781 (1st
Cir. 1986). As the district court noted, there is no evidence
in the record that FMT was a party to the contract between
Worcester Peat and Stender or to the contract between Stender
and Schulte & Bruns.4 Rogers acknowledged at trial that FMT had
received a fax from Dean Worcester indicating that 120 hours
were allowed for loading the vessel. However, there is no

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evidence that Rogers realized that demurrage might be charged if
the loading exceeded that time. Under these circumstances, the
district court correctly declined to find FMT responsible for
the demurrage that Worcester Peat paid to Stender.
Worcester Peat also argues that FMT should be liable
for demurrage because FMT breached its duty of workmanlike
performance by not loading the M/V BORIS LIANOV more quickly.
See, e.g., F.J. Walker Ltd. v. Motor Vessel Lemoncore, 561 F.2d
1138, 1148 (5th Cir. 1977) ("A stevedore owes a warranty of
workmanlike performance to the vessel."). However, the contract
between FMT and Worcester Peat did not establish a time limit on
FMT's loading of the peat onto the vessel or even provide a
suggested guideline. In the absence of such a provision in the
contract, FMT was required to load the vessel in a reasonable
amount of time. The district court found that the time FMT
spent loading the M/V BORIS LIANOV was reasonable under the
circumstances:
At trial none of the evidence or testimony
suggested that the pace at which FMT loaded
the vessel was unreasonable under the
circumstances. Rather, all of the evidence
painted a picture of FMT simply doing the
best it could to load the peat under the
unexpectedly harsh conditions. Although FMT
may not have foreseen the problems posed by
using conveyors in the weather conditions
that existed, FMT attempted to address the
problems as they arose and implemented the

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suggestions of Worcester Peat's
representatives to the extent possible.
Worcester Peat has not even attempted to demonstrate that this
determination was clearly erroneous. Indeed, Worcester Peat
concedes that the weather conditions were unusually harsh and
that those conditions complicated the loading of the peat.
Moreover, the weather was so harsh that Worcester Peat itself
caused delays in the loading by ordering that loading be stopped
to prevent losses of peat due to wind. Accordingly, we find no
clear error in the district court's conclusion that FMT's
loading time was reasonable under these circumstances.
C. Worcester Peat's Counterclaim for Lost Peat
Worcester Peat alleged unsuccessfully in its
counterclaim that FMT was liable for amounts of peat lost during
the loading process. On appeal, Worcester Peat first argues
that we should find clearly erroneous the district court's
ruling that Worcester Peat failed to establish how much peat was
lost through FMT's negligence. The district court stated:
Although the evidence established that some
unquantified amount of peat was airborne at
the terminal and that some smaller
unquantified amount of peat actually was
blown into the water, Worcester Peat failed
to provide any reliable evidence of how much
peat was lost. Moreover, Worcester Peat
expected to lose some peat during the
loading process. Worcester Peat failed to
establish that the amount lost was beyond

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what it anticipated. This failure makes it
impossible to calculate damages.
Witnesses for both Worcester Peat and FMT testified
that some of the peat was blown off the conveyor belts during
the loading process. Morrill Worcester estimated that twenty to
twenty-five percent of the peat brought to the loading dock did
not make its way into the vessel. Another Worcester Peat
employee estimated the loss of peat at twenty percent. However,
both witnesses acknowledged the difficulty of calculating with
certainty the amount of peat lost in the wind. When Morrill
Worcester was asked, "Are you able to estimate based on your
observations an amount of peat that was lost overboard?" he
stated:
I really - you know, I think you have to do
it through a process of deduction probably.
It's hard to say. The way I understand it,
I think there was 425 trailer loads of peat,
and you'd have to come up with a number of
cubic yards or cubic meters on each trailer,
and in the stock pile that we have, the peat
moss is kind of semi-compressed as it is.
And if you - it's just hard to say. I don't
know how you come up with a figure, but it
was considerable. Probably 20, 25 percent
possibly went overboard or went somewhere. I
don't know. Maybe in the bushes, in the
woods, overboard, into the ocean, and
everywhere else.
As Morrill Worcester's testimony indicates, several factors
complicated the task of calculating the exact quantity of peat
lost in the wind. Because the volume of peat changes depending

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on how much it is handled, Worcester Peat cannot rely on a
comparison of the volume of peat delivered off the trucks with
the volume of peat in the ship's holds.
Additionally, as the district court noted, Worcester
Peat expected to lose some peat even in perfect loading
conditions. Dean Worcester testified that peat is generally
lost due to wind whenever it is handled or moved from one
location to another because it is so light and fluffy.
Worcester Peat did not offer any evidence regarding how the
claimed loss of up to twenty-five percent exceeded the loss of
peat the company expected in the ordinary course of handling it.
Given the speculative testimony about how much peat was lost,
and Worcester Peat's failure to specify how much that loss
exceeded its expectations, the district court was not clearly
erroneous in declining to hold FMT responsible for an
unquantified loss of peat.
Worcester Peat also argues that the district court
erred in not shifting the burden to FMT to prove that it was not
negligent in handling the peat. Contending that FMT was a
bailee of the peat, Worcester Peat says that FMT should account
for the peat that was lost in the wind because FMT, as the party
in control of the peat, is in a better position than Worcester
Peat to marshal evidence to explain the loss of peat. See Goudy

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& Stevens, Inc. v. Cable Marine, Inc., 924 F.2d 16, 19 (1st Cir.
1991) ("[S]ince the bailee is generally in a better position
than the bailor to ascertain the cause of the loss, the law lays
on it the duty to come forward with the information it has
available."). The district court found that even if "the
relationship between Worcester Peat and FMT could be described
as a bailment because FMT stored the peat prior to loading it on
the vessel, Worcester Peat has failed to establish by a
preponderance of the evidence that FMT did not load all of the
peat less the amount Worcester Peat anticipated losing during
the loading process." For the reasons we have explained, the
district court was not clearly erroneous in finding that
Worcester Peat failed to establish how much peat was lost, if
any. Therefore, Worcester Peat failed to establish a prima
facie case of negligence against FMT. See id. at 18 ("[W]hen
the bailor shows delivery to a bailee and the bailee's failure
to return the thing bailed, he makes out a prima facie case of
negligence against the bailee.") (internal quotation marks
omitted). Under these circumstances, the district court did not
err in declining to apply a presumption of negligence for FMT to
refute.
Affirmed.

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