Vesuvius v. American Commercial Lines — Contract Provision Requiring that Lawsuit be Filed Within Four Months of Claimed Breach of Contract Upheld on Appeal — Chicago Breach of Contract and Business Dispute Trial Attorneys Near Elmhurst and Oak Brook

When a shipment of sand was tainted by excess moisture, the contract between the two companies involved in the transaction required that any suit be filed within four months of the delivery. As the plaintiff corporation’s suit was filed over two years later, it was untimely.

In 2014, Vesuvius Corporation and American Commercial Lines, LLC (“ACBL”), entered into a shipping contract to transport olivine sand from New Orleans, Louisiana to Vesuvius’ facility in Wurtland, Kentucky, by way of a river barge. The shipment arrived in January 2015, at which time Vesuvius’ employees inspected the cargo and found it damaged by excess moisture. The employees notified ACBL, and ACBL arranged for a surveyor to perform an inspection that same day. The surveyor found no structural defect in the barge, and instead concluded that the sand was wet when it was loaded and that some of that moisture had evaporated during transit, condensed on the overhead portion of the cargo space, and dripped back onto the sand. The surveyor filed his report with ACBL on Feb. 23, and ACBL promptly contacted Vesuvius to disclaim liability.

Two years later, in February 2017, Vesuvius filed suit to recover damages for its loss, alleging that ACBL had breached the contract by providing an unseaworthy vessel. ACBL moved to dismiss the complaint, pointing to the limitations provision in the contract. After considering the contract, the district court determined that the action was untimely and granted the motion to dismiss. Vesuvius then appealed.

On appeal, Vesuvius argued that the contract only required it to notify ACBL of the problem within four months of its occurrence, rather than file suit within four months. Vesuvius further argued that it had provided this notification when it contacted ACBL upon the shipment’s arrival. The appellate panel began by noting that other provisions in the disputed paragraph concerned choice of law, choice of forum and venue, and consent to personal jurisdiction. The panel determined that the four-month requirement, therefore, pertained to the filing of suits, not merely to notification of a problem with a shipment. The panel also noted that the contract contained a separate notification provision, and, if it were to interpret the disputed provision as being one of notification only, it would render the other provision superfluous. The panel stated that it was prohibited from reaching a conclusion that would render a portion of the contract superfluous under Indiana law. The panel concluded by finding that, though the provision standing on its own may have been ambiguous when considered in the context of the contract as a whole, it clearly referred to the timeline with which Vesuvius had to file its complaint, and that, as a result, Vesuvius’ complaint was untimely.

You can view the Appellate Court’s decision here.

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