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B&A MARINE CO. v. AMERICAN FOREIGN SHIPPING CO.

August 27, 1993

B&A MARINE CO., INC., Plaintiff,
v.
AMERICAN FOREIGN SHIPPING CO., INC. and HARRY W. MARSHALL, Defendants.



The opinion of the court was delivered by: STERLING JOHNSON, JR.

 Plaintiff B&A Marine Co., Inc. commenced this diversity action against Defendants American Foreign Shipping Co., Inc. and Harry W. Marshall for defamation. Defendants move for 1) an order granting summary judgment, and dismissing the complaint, pursuant to Fed. R. Civ. P. ("Rule") 56 and 2) an order pursuant to Fed. R. Civ. P. 15(a) for leave to amend their answer to plead affirmative defenses. For the reasons stated below, Defendant's motion for summary judgment is granted.

 I. BACKGROUND

 On August 1, 1984, the United States Department of Transportation, Maritime Administration ("MARAD"), and American Foreign Shipping Co., Inc. ("AFS"), represented by its president, Captain Harry W. Marshall ("Marshall"), entered into a service agreement. Under this agreement, AFS would act as MARAD's general agent in managing and conducting the maintenance and repair of ships for the "Ready Reserve Force" ("RRF"). *fn1" In September 1987, B&A commenced repair work on two RRF ships, the S.S. Cape Ann and S.S. Cape Avinof, after successfully bidding on the contract with MARAD.

 In January 1988, after having already commenced work on the two ships, B&A expressed to AFS and MARAD that it was unable to meet its deadline and was experiencing prohibitive cost overruns. All three parties met on February 1, 1988 to discuss the problems B&A was having in meeting its contractual obligations. After this meeting, Marshall sent a letter dated February 3, 1988 to B&A stating in relevant part:

 
In the event that you are unable to immediately provide assurances satisfactory to us as to your ability and resources to complete the Contracts on the subject vessels, we consider it prudent to alter your bonding companies of the possibility of default in the performance of the Contracts.

 Captain Marshall sent his draft to George Howard Thurbon ("Thurbon") of MARAD for review and revision. MARAD added the following language:

 
B&A Marine Co., Inc. has placed itself in a default situation by falling behind the contract schedule. MARAD is hereby notifying the appropriate insurance companies by copy of this letter that B&A Marine Co., Inc. is in default of its contract obligations.

 On or about February 9, 1989, MARAD telecopied the redrafted letter to Marshall with instructions to incorporate MARAD's changes and to retype the letter on AFS stationery. Marshall retyped the letter and sent it back to MARAD. Thurbon reviewed the letter and directed Marshall to send it to B&A and its bonding companies.

 II. ANALYSIS

 Standard for Summary Judgment

 Defendants Marshall and AFS move for summary judgment pursuant to Rule 56. Summary Judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The court's function is not to resolve disputed issues of fact, but only to determine whether there is a genuine issue to be tried. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Eastman Machine Co. v. United States, 841 F.2d 469, 473 (2d Cir. 1988). No genuine issue exists

 
unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.

 Anderson, 477 U.S. at 249-50 (citations omitted). In making this determination, the court is required to view the evidence in the light most favorable to the nonmoving party. Adickes v. S.H. Kress and Co., 398 ...


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