United States District Court,S.D. New York.
Catherine MARISA, Plaintiff,
v.
M/V CMA CGM LA TOUR, her engines, tackle, boiler, etc., in rem, and P & O Nedlloyd, Ltd., Defendants.
Aug. 29, 2006.
MEMORANDUM AND ORDER
BUCHWALD, J.
Plaintiff Catherine Marisa (“plaintiff”) filed this admiralty and maritime action against M/V CMA CGM LA TOUR (the “ship”) and P & O Nedlloyd, Ltd. (“Nedlloyd” or “defendant”) alleging that defendants breached and violated their contractual duties and obligations as common carriers by allowing her household goods to be damaged during transport from England to the United States. See Complaint (“Compl.”) at 2. Nedlloyd has moved for partial summary judgment to limit its liability to $500 under the United States Carriage of Goods by Sea Act, 46 U.S.C.A. § 1304(5) (“Section 4(5) of COGSA” or “COGSA”). See Defendant’s Memorandum of Law in Support of Summary Judgment (“Def.Mem.”). For the reasons set forth below, the motion is denied.
BACKGROUND
Unless otherwise noted, the facts set forth in this section are not disputed. We note that while defendant filed a statement of undisputed material facts as required by Local Civil Rule 56.1(a), plaintiff failed to file a counter statement. In such cases, defendant’s factual statements may be deemed admitted, unless they are unsupported by the record. See Local Civil Rule 56.1(c); Holtz v. Rockefeller & Co., Inc., 258 F.3d 62, 74 (2d Cir.2001).
Plaintiff, through a moving company, hired Nedlloyd to transport a container of her household goods from London, England to Chicago, Illinois. See Decl. of Edward Picerno dated October 11, 2005 (“Picerno Decl.”), Ex. A; Statement of Material Facts (“Def. 56.1 Statement”) at ¶ ¶ 1, 6. On June 24, 2003, Nedlloyd dispatched a shipping container to the shipper. See Reply Declaration of Edward Picerno dated November 16, 2005 (“Reply Picerno Decl.”) at ¶ 3. The shipping container was apparently loaded by either plaintiff or her moving company and returned to Nedlloyd on June 24, 2003. See id. Plaintiff claims that her household goods were consolidated into cartons or otherwise protectively wrapped before being placed in the container. See Plaintiff’s Memorandum in Opposition (“Pl.Opp.”) at 6. Thereafter, the container was transported to Tilbury, England and loaded aboard the ship on July 4, 2003. See Picerno Decl., Ex. A; Reply Picerno Decl. at ¶ 3. On the same date, Nedlloyd issued a bill of lading for the container. See Picerno Decl., Ex. A.
Defendant asserts that plaintiff hired Team Relocations, an affiliate of The Movers Trading Club, to handle all of the logistics of moving her household goods. See Def. 56.1 Statement at ¶ 6. Plaintiff has not disputed this fact and documentary evidence suggests that Team Relocations and/or The Movers Trading Club were responsible for packing and arranging for the transportation of plaintiff’s goods. See Picerno Decl., Ex. A; Decl. of Daniel J. McInerney, Exs. 4, 5.
It is unclear whether the container was sent to plaintiff’s residence or the warehouse of her moving company.
To support this claim, plaintiff has submitted photographs allegedly taken on September 9, 2003 by a marine surveyor after the container arrived in the United States which tend to suggest that the household goods inside the shipping container were consolidated in cartons and otherwise protectively wrapped. See Decl. of Douglas R. Palmquist, Ex. 3. The surveyor’s written report stated that the container included “74 cartons/items of Household Goods/Personal Effects.” Id., Ex. 2.
On this bill of lading, below a column heading entitled “Number and kind of Packages; description of Goods” is the following entry: “1 x 20 GP CONTAINER SAID TO CONTAIN 74 ITEMS HOUSEHOLD GOODS.” Id. In the lower left quadrant of the document, the number “1” is entered below a caption entitled “Total No. of Containers/Packages received by the Carrier.” Id.
After the shipment arrived in Chicago in August 2003, plaintiff discovered that some of her household goods had sustained water damage. See Def. 56.1 Statement at ¶ 5; Decl. of Douglas R. Palmquist, Exs. 1-2. Plaintiff initiated this lawsuit on March 18, 2005 and seeks $120,000 in damages.
DISCUSSION
I. Legal Standards
A. Summary Judgment
A motion for summary judgment should be granted only “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 judgment as a matter of law.” Fed.R.Civ.P. 56(c). The moving party has the initial burden of showing the absence of a genuine issue concerning any material fact. See Amaker v. Foley, 274 F.3d 677, 682 (2d Cir.2001). Once a moving party has satisfied this initial burden, “[t]he non-moving party may not rely on mere conclusory allegations nor speculation, but instead must offer some hard evidence showing that its version of the events is not wholly fanciful.” Golden Pacific Bancorp. v. F.D.I.C., 375 F.3d 196, 200 (2d Cir.2004) (quoting D’Amico v. City of New York, 132 F.3d 145, 149 (2d Cir.1998)). In resolving a summary judgment motion, courts must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in their favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
B. Section 4(5) of COGSA
Section 4(5) of COGSA dramatically limits the liability of carriers and ships for damage to the goods they transport. In relevant part, the statute provides:
Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package … or in the case of goods not shipped in packages, per customary freight unit … unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.
46 U.S.C.A. § 1304(5). Neither the statute nor its legislative history defines the term “package,” and courts have encountered significant difficulty in determining what constitutes a COGSA package in individual cases. See Orient Overseas Container Line, Ltd. v. Sea-Land Service, Inc., 122 F.Supp.2d 481, 486 (S.D.N.Y.2000) (“If it was the COGSA drafters’ purpose to avoid the pains of litigation, they must be rolling in their graves. Myriad courts have struggled with what a COGSA package is.”)(internal quotation marks omitted).
The Second Circuit has developed two separate frameworks for applying the liability limitation of Section 4(5)-one for “container cases” and another for “non-container cases.” See Monica Textile Corp. v. S.S. TANA, 952 F.2d 636, 638-41 (2d Cir.1991). In container cases, one party contends that the shipping container is the relevant package for the purpose of Section 4(5), while in non-container cases neither party contends that the shipping container is the package. See, e.g., American Home Assurance Co. v. Crowley Ambassador, 01 Civ. 3605(PKL), 2003 WL 328301, at(S.D.N.Y. Feb. 11, 2003). This is a container case because Nedlloyd contends that the shipping container is the relevant package.
Disputes in container cases typically involve the carrier arguing that the container is the relevant package for the purpose of Section 4(5) while the shipper contends that the goods inside the container are the relevant packages.
We limit our discussion of the relevant law accordingly.
The Second Circuit has identified a number of general principles to guide courts in determining whether a shipping container should be treated as the relevant “package” for purposes of Section 4(5). First, because the bill of lading is the contract between the shipper and the carrier, it is the starting point and “touchstone” of any analysis. Binladen BSB Landscaping v. M.V. Nedlloyd Rotterdam, 759 F.2d 1006, 1012 (2d Cir.1985). Second, a wide range of items may be considered COGSA packages, but to qualify there must be “some preparation of the cargo item for transportation which facilitates handling.” Binladen, 759 F.2d at 1012 (quoting Aluminios Pozuelo Ltd. v. S.S. Navigator, 407 F .2d 152, 155 (2d Cir.1968))(internal quotation marks omitted). Third, because a finding that a shipping container is the relevant package under Section 4(5) may “permit the carrier to limit its liability unduly,” the Second Circuit has traditionally refused to treat containers as COGSA packages “absent a clear agreement between the parties to that effect, at least so long as [the shipping container’s] contents and the number of packages or units are disclosed.” Id. at 1013 (quoting Mitsui and Co., Ltd. v. American Export Lines, Inc., 636 F.2d 807, 821 (2d Cir.1981) and citing Smythgreyhound v. M/V Eurygenes, 666 F.2d 746, 753 (2d Cir.1981)). Finally, goods placed in containers and described as not separately packaged on the bill of lading will be classified as “goods not shipped in packages” under Section 4(5) and the $500 limitation will be applied per “customary freight unit.” See Binladen, 759 F.2d at 1013.
In Mitsui, the Second Circuit first established the general presumption that if the contents of a shipping container are disclosed in a bill of lading, the shipping container will not be considered the package for purposes of Section 4(5). See 636 F.2d at 821; see also Smythgreyhound, 666 F.2d at 752 (discussing presumption established by Mitsui ). The Second Circuit later held in Monica Textile that this presumption can be overcome when there is “clear and unambiguous language indicating agreement” between the shipper and the carrier that the container should be treated as the COGSA package. 952 F.2d at 642.
II. Analysis
In this case, defendant argues that the bill of lading unambiguously identifies one package, a 20-foot shipping container, and that the description of plaintiff’s household goods does not connote packaging or preparation for shipment. See Def. Mem. at 2. Plaintiff responds with two basic arguments. First, plaintiff contends that the bill of lading is ambiguous and does not evidence an explicit agreement between the parties that the shipping container would be considered the package for purposes of Section 4(5). See Pl. Opp. at 2-4. Second, plaintiff argues that it is inappropriate to treat the shipping container as the package in this case because all of her “household goods were [actually] wrapped, boxed and otherwise prepared for shipment before being placed inside the container” and Nedlloyd had notice of the container’s contents. Pl. Opp. at 2; see also Pl. Opp. at 6-7.
As mentioned earlier, the focus of our analysis must be the bill of lading. We first consider defendant’s contention that the bill of lading unambiguously specifies that the shipping container is the COGSA package. A review of the case law suggests that bills of lading commonly have separate columns for the “number of packages” and for a “description of goods” or a “description of cargo.” See Monica Textile, 952 F.2d at 637; Binladen, 759 F.2d at 1009; American Home Assurance, 2003 WL 328301, at *1. In the instant case, the bill of lading has a combined column heading entitled “Number and kind of packages; description of goods.” See Picerno Decl., Ex. A. Below this caption is the entry: “1 x 20 GP CONTAINER SAID TO CONTAIN 74 ITEMS HOUSEHOLD GOODS.” Id. One reading of this entry is that a single shipping container is the number and kind of package and that “74 items [of] household goods” is the description of the goods inside the container. However, the combined heading supports another reading and creates ambiguity about the number of packages since “1 x 20 GP CONTAINER” and “74 items household goods” both appear below a heading beginning with “number and kind of packages” and the latter descriptor could refer to the number of packages.
A box in the lower left quadrant of the bill of lading with the caption “Total No. of Containers/Packages received by the Carrier” creates additional ambiguity. See Picerno Decl., Ex. A. The number “1” was typed into this box. Id. However, given the compound nature of the caption, a shipper might assume that the entry of a number in this box simply specified the number of shipping containers rather than the number of COGSA packages. Whether done deliberately or not, Nedlloyd’s form seems designed to create uncertainty, and it is well-established that ambiguities should be resolved against the carrier who drafted the agreement. See Monica Textile, 952 F.2d at 643; Mitsui, 636 F.2d at 822-23. In short, this is not a case where the bill of lading clearly lists the container as the package.
Defendant relies heavily on Binladen to support its motion for partial summary judgment. See Def. Mem. at 3, 5. In Binladen, the Second Circuit held that “when the bill of lading does not clearly indicate an alternative number of packages, the container must be treated as a COGSA package if it is listed as a package on the bill of lading and if the parties have not specified that the shipment is one of goods not shipped in packages.” 759 F.2d at 1015-16 (emphasis added and internal quotation marks omitted). Defendant overlooks the importance of the portion of the Second Circuit’s holding we have underlined.
The bill of lading in Binladen had separate columns entitled “No. of Pkgs.” and “Description of Packages and Goods.” See Binladen, 759 F.2d at 1009. Numbers corresponding to the number of shipping containers were entered below the heading “No. of Pkgs.” Id.Binladen is thus distinguishable from this case because the existence of the separate column in the bill of lading identified the containers as the “packages.”
We next consider whether the entry “74 items household goods” disclosed the contents of the container. Citing Binladen, defendant emphasizes that the bill of lading in this case fails to specify precisely how the household goods were packaged. See Binladen, 759 F.2d at 1015 (stating that “if the bill of lading lists the container as a package and fails to describe objects that can reasonably be understood from the description as being packages, the container must be deemed a COGSA package.”) Defendant also argues that the terms “items” and “household goods” do not suggest packaging at all, and the Second Circuit has used the term “item” to refer to both packaged and unpackaged goods transported in a container. Compare Binladen, 759 F.2d at 1012, with Monica Textile, 952 F.2d at 640. Defendant also correctly observes that the bills of lading in many of the cases where the contents of a shipping container have been treated as the COGSA packages have contained terms that describe packaging such as “bales” or “cartons” or “bundles.” See Monica Textile, 952 F.2d 636 (bales); Smythgreyhound, 666 F.2d 746 (cartons); Mitsui, 636 F.2d 807 (bundles).
However, as a matter of common sense, it is difficult to believe that any carrier would think that “74 items household goods” referred to unpackaged goods. Unlike a college student’s move across town with a rental van, during a professional overseas move, furniture or carpets will be protectively wrapped and other household goods boxed or crated before being placed in a shipping container. Moreover, while some decisions do suggest that a description of the packaging method on the bill of lading is significant, we believe that defendant exaggerates the importance of a precise description of the packaging method.
See Binladen BSB Landscaping v. M.V. Nedlloyd Rotterdam, 759 F.2d 1006, 1014-15 (2d Cir.1985) (holding that shipping containers were COGSA packages and emphasizing that “plants” did not describe a packaged item); American Home Assurance Co. v. Crowley Ambassador, 01 Civ. 3605(PKL), 2003 WL 328301, at(S.D.N.Y. Feb. 11, 2003) (holding that container was COGSA package where description of garments did not indicate anything about packaging method); Alternative Glass Supplies v. M/V Nomzi, 97 Civ. 4387(MBM), 1999 WL 2870, at *3-4 (S.D.N.Y. Jan. 4, 1999) (holding that container was COGSA package where there was no indication on the bill of lading of how the dismantled units of a furnace had been packaged).
In determining whether a bill of lading adequately discloses the contents of a shipping container, courts seem to place greater emphasis on the importance of a shipper specifying an alternative number of units on the bill of lading that corresponds to units that were actually prepared or packaged in some way for transport.0 For example, the Second Circuit in Mitsui acknowledged that “rolls” of flooring could be packaged or unpackaged, but held that each was a separate COGSA package because the number of rolls had been specified on the bill of lading and the shipper had protectively wrapped the rolls of flooring using fiber discs and burlap cloth. See 636 F.2d at 821. These considerations are also emphasized in Binladen, where the Second Circuit devoted significant attention to whether and how the plants had actually been packaged before being placed in the container. See 759 F.2d at 1010, 1014-15. Evidence at trial suggested that some of the plants had been packaged in various ways before being placed in the shipping containers, while other plants were simply stacked and unpackaged. Id. Significantly, in Binladen, there was no correlation between the number of “live plants” declared on the bill of lading and the number of actually packaged units. See 759 F.2d at 1010.
0. Compare Alternative Glass Supplies, 1999 WL 2870, at(holding that container was COGSA package where bill disclosed “2 Unit(s) Components One Glass Tempering Machine (2 Pcs)” and there was no evidence that components were packaged in anything other than container), with Transatlantic Marine Claims Agency, Inc. v. M/V Mason Lykes, 92 Civ. 1846(LMM), 1993 WL 119780, at(holding that “sixteen pieces” of machinery disclosed on bill of lading that were wrapped in clear plastic prior to shipment were separate COGSA packages).
In this case, the phrase “74 items household goods” discloses a specific number of identifiable units as the contents of the shipping container. Moreover, plaintiff has submitted evidence tending to suggest that 74 boxed and protectively wrapped units were actually placed inside the shipping container. See Decl. of Douglas R. Palmquist, Exs. 2-3; Decl. of Daniel J. McInerney, Ex. 5. Under these circumstances and because of the bill of lading’s ambiguity, we conclude that defendant’s motion should be denied.
CONCLUSION
For the foregoing reasons, we find that the shipping container is not the relevant “package” under Section 4(5) and accordingly deny the motion for partial summary judgment limiting defendant’s liability to $500.
The parties should report for a conference on October 3, 2006 at 2:30 PM in the United States Courthouse, 500 Pearl Street, New York, New York in Courtroom 21A.
IT IS SO ORDERED.
