March 25, 2019

Colorado Court of Appeals: Action Seeking to Enforce Contractual Agreements In Personam in Nature; Maritime Law Not Implicated

The Colorado Court of Appeals issued its opinion in BDG International, Inc. v. Bowers on Thursday, April 11, 2013.

Subject Matter Jurisdiction—Maritime Law—Finality of Judgment—Contract—Duress—Offsetting—Attorney Fees.

Defendants Robert J. Bowers and Auxiliary Graphic Equipment, Inc. (AGE) appealed the judgment entered after a bench trial in favor of plaintiff BDG International, Inc. (BDG). The judgment was affirmed.

AGE purchased printing presses from a seller in Australia for a client located in Colorado. AGE contracted with Fortner Graphic Solutions, Inc. (Fortner) to dismantle the printing presses and transport them to Colorado. Fortner then subcontracted with BDG and other firms to perform its contractual duties. BDG was responsible for transoceanic shipping, and another company was responsible for packing and inland transportation to the client’s site in Colorado. BDG brought this action after defendants failed to pay all costs for inland and ocean freight for the dismantling and shipping of the presses and failed to make payment as required by the agreements to release the resulting liens. The court entered a judgment in favor of BDG and against defendants, jointly and severally.

On appeal, defendants contended that the trial court lacked subject matter jurisdiction over this case, because it involved admiralty or maritime law and exclusive jurisdiction resided with the federal courts. Contrary to defendants’ arguments, however, this action is not in rem in nature; rather, it is a proceeding in personam, because it sought to enforce the contractual agreements against defendants personally and not against the cargo or another type of property of a maritime nature. Accordingly, jurisdiction in this case did not lie exclusively in the federal courts, and the trial court did not lack subject matter jurisdiction to hear this case.

Defendants also contended that the judgment was not final because it does not dispose of the litigation. The judgment entered by the trial court resolved BDG’s and the third-party claim; dismissed the counterclaim with prejudice; and awarded a sum certain for damages, collection costs, and prejudgment interest. Although the trial court provided directions with regard to how the proceeds of any sums recovered by Bowers or AGE should be applied to the judgments they obtained against Fortner in Colorado and Missouri, those directions do not alter the finality of the underlying judgment.

Defendants also contended that the trial court erred in not finding the contracts voidable on the basis of duress. Although defendants may have felt economic pressure to sign the releases to obtain possession of the cargo, the lienholders did not engage in wrongful conduct to coerce payment from defendants.

Defendants further contended that the trial court erred in failing to set off against one another the judgments in this case. Contrary to defendants’ contention, however, the principle of offsetting judgments does not apply, because the judgments are not against the same parties.

BDG collection costs primarily were attorney fees amounting to 40% of the principal due under the agreements signed by defendants. The Court of Appeals therefore ruled that the trial court did not err in awarding BDG collection costs.

Summary and full case available here.

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