Originally posted by Cameron Langford - Courthouse News Service - December 7, 2010
HOUSTON (CN) - As BP struggled to control the worst oil leak in U.S. history, it asked JESCO, a Mississippi-based disaster services firm, to supply "boats, barges, containers, decontamination operations, oil supply boats, fuel tanks, oil storage barges and lengths of boom to BP on an as-needed basis," JESCO says. So, JESCO says, it spent $1 million getting 11 boats ready for the job - and BP never hired them, won't pay the $1 million, and now it denies they ever had an agreement at all.
JESCO sued BP in Harris County Court, alleging breach of contract, fraud, negligent misrepresentation and other charges.
JESCO claims it had a "longstanding business relationship" with BP, even before the April 20 explosion of the Deepwater Horizon oil rig.
As early as April 21 "JESCO was in contact with BP representatives, offering to help by providing supplies and services," JESCO says.
On May 17 BP executive Stephen Richards and JESCO owner John Shavers executed a contract for JESCO to supply "boats, barges, containers, decontamination operations, oil supply boats, fuel tanks, oil storage barges and lengths of boom to BP on an as-needed basis," according to the complaint.
Though JESCO representatives repeatedly asked BP for a copy of the contract, "such copy was never provided," the complaint states. But BP assured JESCO's agent that the parties "did indeed 'have a contract,'" JESCO says.
In late June, Richards told JESCO "that BP needed a specific fleet of vessels with certain capabilities, and crews for each vessel, to participate in its much-ballyhooed 'Vessels of Opportunity' program," JESCO says.
"This program was intended to provide employment opportunities to Gulf vessel owners whose business ground to a half after the spill, and recruit such vessels into BP's cleanup and decontamination operations," the complaint states.
JESCO says that after Richards met with Shavers to discuss the number of vessels BP needed, Richards told him, "Mobilize immediately. I give you my word that the paperwork will follow."
JESCO drafted a proposal "specifically describing eleven vessels, training and crew required, in response to Mr. Richard's requests and sent it to BP on July 5, 2010," JESCO says. That same day Richards and his supervisor filled out a "resource request form" that incorporated JESCO's proposal "and agreed to the day rates listed therein for eleven specific vessels and crews," according to the complaint.
To comply with the contract JESCO says it retrofitted some vessels, rented others, and hired crews for the vessels. "Additionally, JESCO put all its field employees through HAZMAT (hazardous materials) and HAZWOPER (hazardous waste operations and emergency response) training," JESCO says. "Overall, JESCO spent over $1 million in the process." (Parentheses in complaint.)
In mid-July BP "successfully placed a temporary cap on the blown-out well and stemmed the flow of oil up to its collection vessels," JESCO says.
Despite this news, "Mr. Richards told JESCO to keep its vessels and crew 'on standby' for cleanup and contamination," JESCO says.
During this time Shavers repeatedly called Richards and told him JESCO's "vessels were crewed and ready to go at a moment's notice in shipyards in Alabama, Mississippi and Louisiana," according to the complaint. Richards told Shavers BP "knew where to find him" should it need a vessel, JESCO says.
But Richards was transferred back to BP's Houston office, JESCO says, and BP did not pay the monthly invoices JESCO submitted from July to October for having the vessels ready.
While trying to get payment over the ensuing weeks, JESCO "dealt with one billing contractor after another hired by BP to manage under its VO program, each of whom eventually passed off JESCO's claim to someone else," JESCO says.
Finally, on Sept. 29 a BP executive informed JESCO that the order Richards signed for JESCO to place the 11 boats on call "was an 'internal document' that was inappropriate for placing orders with outside contractors, and that it was not a 'work order' on which JESCO should have relied in obtaining, retrofitting and crewing vessels for BP," JESCO says.
A letter from another BP executive arrived at JESCO's offices on Oct. 1, denying the existence of an agreement between the parties: "To date we have not discovered any documentation that would support an agreement exists between BP and JESCO or that JESCO has performed any work on behalf of BP in the response."
Adding more confusion, on Sept. 30 and Oct. 1, "JESCO received two wire transfers of $225,000 totaling $450,000 from 'Amoco 6481' with no obvious explanation of what such monies were intended to pay for," JESCO says. JESCO presumes it's the Amoco owned by BP.
JESCO demands more than $1 million in damages. It is represented by Jessica Juren with Brent Coon and Associates.