Daniel Steppe v. Venoco LLC
Published: Dec. 27, 2001 | Result Date: Oct. 30, 2001 | Filing Date: Jan. 1, 1900 |Case number: 721990028401 Arbitration – $122,428
Court
American Arbitration Association
Attorneys
Plaintiff
Paul J. Marron
(Marron Lawyers APC)
Defendant
Experts
Plaintiff
Steve Sterner
(technical)
Defendant
Steve Grieg
(technical)
Facts
Claimant Daniel Steppe was former principal of and current assignee of the receivables of Public Service Marine
Inc. PSMI owned the barge Jovalan. Jovalan was an environmentally sophisticated barge that loaded oil from
VenocoÆs Goleta California oil operations, in the Santa Barbara area. VenocoÆs Platform Holly brought crude
oil up from beneath the ocean floor and piped the crude oil to an on-shore processing facility at Goleta. From
there, the oil was passed to storage tanks. When the tanks were full, the Jovalan was summoned by a "charter
order" and the Jovalan anchored three-quarter miles off shore, where another pipe system carried oil from
shore-side storage tanks to the barge for loading. Venoco secured JovalanÆs presence and availability by
issuing a charter order directing Jovalan to appear for loading. Venoco issued such an order for Jovalan to
appear for loading on April 28, 1999. Bad weather prevented loading of Jovalan on that date, and the barge
was held over to April 29.
On April 29, a "process upset" at VenocoÆs Platform Holly occurred. As one of the wells was being restarted,
underground pressure caused ice to form on equipment, which in turn failed, allowing gas to vent into a crude
oil-test tank, which contained crude oil. The pressure of gas entering into the tank caused approximately 80
gallons of oil to spill into the ocean. Venoco then notified Jovalan that because of the spill, Santa Barbara
environmental authorities had ordered the shutdown of Platform Holly and shutdown of any loading operations
for Jovalan. Thus, Jovalan loading operations could not proceed and Jovalan was instructed to return to its
dock in Long Beach.
PSMI sent Venoco an invoice for the minimum barge load of $76,000. Venoco refused to
pay, claiming that the venting and associated spill was an event of "force majeure" that excused
VenocoÆs performance.
Settlement Discussions
Venoco offered $35,000 on Oct. 12, 2001. It was rejected with no counteroffer.
Result
Neutral arbitrator, retired justice Campbell Lucas, rejected VenocoÆs contentions and found that "there was no force majeure occurrence [that] could have been avoided by due diligence and reasonable protections." With respect to VenocoÆs permit defense, it was rejected. The argument that the same oil was loaded later was unpersuasive given VenocoÆs fault and PSMIÆs loss of other charter opportunities. Arbitration was awarded in favor of claimant Steppe, awarding 100 percent of original principal damages, interest, investigation and other costs, plus attorney fees as required by contract. Settlement was achieved for $99,740 of second claim that was due to commence on Nov. 1, 2001. This amount was 100 percent of damages claim, plus attorney fees as required by contract.
Other Information
<A>An arbitration was held before retied justice Campbell Lucas, neutral arbitrator of American Arbitration Association, Western Case Management Center; Bert L. Clardy, claimant arbitrator; and Richard L. Varner, respondent arbitrator.</A>
Deliberation
two hours
Length
two days
For reprint rights or to order a copy of your photo:
Email
jeremy@reprintpros.com
for prices.
Direct dial: 949-702-5390