Contract – Indemnification – NOAA assessment

Listen to this article

Where (1) a defendant served as the master aboard a vessel owned by the plaintiff on a scallop-fishing voyage, (2) during the voyage, the defendant harvested scallops in an area forbidden under federal law, (3) the National Oceanic and Atmospheric Administration (NOAA) subsequently imposed a monetary assessment on the plaintiff and the defendant for that unlawful conduct and (4) the plaintiff has filed a complaint seeking indemnification from the defendant for the portion of the NOAA assessment that it paid and for defense costs it incurred in connection with the NOAA enforcement action, the plaintiff should be awarded summary judgment because any reasonable factfinder would rule in the plaintiff’s favor on its claim that the defendant breached the indemnification provision in the parties’ agreement.

“In August 2022, Defendant Russell Isabel served as the master aboard the F/V JANE ELIZABETH (‘the Vessel’), a vessel owned by Plaintiff John & Jane, LLC (‘J&J’), on a scallop-fishing voyage. During the voyage, Isabel harvested scallops in an area forbidden under federal law. The National Oceanic and Atmospheric Administration (‘NOAA’) subsequently imposed a monetary assessment on Isabel and J&J for this unlawful conduct. J&J sought indemnification from Isabel for the portion of the NOAA assessment that it paid and for defense costs it incurred in connection with the NOAA enforcement action. When Isabel refused to indemnify J&J, J&J filed this action for breach of contract. …

“In August 2022, Isabel served as the master aboard the Vessel, which is owned by J&J, on an approximately two-week voyage from New Bedford, Massachusetts, to fish for Atlantic sea scallops. Before embarking on the voyage, Isabel filled out an ‘Agreement Between Owner and Master’ (‘the Agreement’), a form contract governing the master’s ‘rights and duties while working as a member of the [Vessel].’ …

“J&J’s sole claim against Isabel is for breach of the Agreement’s indemnification provision. …

“In their cross-motions for summary judgment, the parties dispute three issues related to J&J’s breach of contract claim: whether the Agreement is a binding contract formed between J&J and Isabel, whether Isabel breached the Agreement by failing to indemnify J&J in connection with the NOAA proceedings, and whether the Agreement is enforceable insofar as it requires Isabel to indemnify J&J in this instance. …

“… Isabel does not contest that he assented to the Agreement’s terms by signing the Agreement. He argues, however, that J&J never manifested its assent because [Jack] Morris, J&J’s employee, signed at the end of the appended medical questionnaire rather than on the signature page in the main part of the Agreement. J&J responds that Morris’s signature on the questionnaire was a sufficient manifestation of assent to the entire Agreement and, regardless, that the subsequent performance of the Agreement demonstrated its assent.

“The Court holds that any reasonable factfinder would conclude on this record that J&J manifested its assent to the terms of the Agreement. …

“Even if Morris’s signature were insufficient by itself to constitute J&J’s assent to the Agreement’s terms, J&J also unmistakably demonstrated its assent via its performance. …

“J&J is therefore entitled to summary judgment on the issue of whether the Agreement constitutes a binding contract between the parties. …

“Having concluded that the parties formed a binding contract as a matter of law, the Court turns to the question of whether Isabel breached the Agreement by failing to indemnify J&J in connection with the NOAA proceedings. … Isabel does not contest that his actions ‘subject[ed]’ J&J to the monetary assessment imposed by NOAA and that he did not indemnify J&J in connection with the NOAA proceedings. The parties dispute, however, whether the NOAA assessment constituted a ‘penalty’ that triggered the indemnification provision. …

“… NOAA’s notice to J&J and Isabel, NOAA’s policy document describing the calculation of this type of assessment, and the relevant statutory provision all call the total assessment a ‘penalty.’ … The entire NOAA assessment plainly was a ‘penalty,’ thus triggering Isabel’s duty to indemnify J&J under the Agreement.

“Accordingly, there is no genuine dispute that Isabel breached the indemnification provision in the Agreement, and J&J is entitled to summary judgment on the question of breach. …

“In sum, any reasonable factfinder would rule in J&J’s favor on its claim that Isabel breached the indemnification provision in the Agreement. The Court therefore grants summary judgment to J&J and denies Isabel’s motion for summary judgment.

“… There is no question that Isabel’s duty to indemnify J&J under the Agreement required Isabel to reimburse J&J for the portion of the NOAA assessment that J&J paid. … J&J is therefore entitled to damages in the amount of $40,651.25.

“… The Court awards prejudgment interest from April 12, 2024 — the date J&J paid its portion of the NOAA assessment, which followed Isabel’s statement to J&J that he would not provide indemnification — at the federal statutory rate. …

“Finally, J&J asserts that Isabel must reimburse it under the Agreement for the attorneys’ fees and costs it incurred in connection with both the NOAA enforcement action and this lawsuit. The Court will address J&J’s request for fees and costs on a post-judgment motion under Federal Rule of Civil Procedure 54(d).”

John & Jane, LLC v. Isabel (Lawyers Weekly No. 02-067-26) (21 pages) (Saris, J.) (Civil Action No. 24-cv-11508-PBS) (Feb. 9, 2026).

Click here to read the full text of the opinion.