United States District Court,

S.D. New York.

NATIONAL LIABILITY AND FIRE INSURANCE COMPANY As Subrogor of New Balance Athletic Shoes, Inc., Plaintiff,

v.

MEDITERRANEAN SHIPPING COMPANY, S.A., Defendant.

 

No. 09 Civ. 6516(WHP).

Jan. 11, 2011.

 

MEMORANDUM & ORDER

WILLIAM H. PAULEY III, District Judge.

Plaintiff National Liability and Fire Insurance Co., as subrogor of New Balance Athletic Shoes, Inc. (“New Balance”), brings this action against Mediterranean Shipping Co., S.A. (“Mediterranean”) for breach of contract, bailment, and negligence. Mediterranean moves for summary judgment dismissing the action, and New Balance seeks partial summary judgment striking Mediterranean’s limitation of liability defense. For the following reasons, both motions are denied.

 

BACKGROUND

This action arises from the theft of part of a shipment of New Balance athletic shoes on October 29, 2008. (Rule 56.1 Statement in Support of Defendant’s Motion for Summary Judgment (“Def’s. 56.1 Stmt.”) ¶¶ 3-18.) New Balance hired Saratoga Forwarding Co., Inc. (“Saratoga”) to arrange for transport of the athletic shoes from New Balance’s facility in Flimby, UK to its warehouse in Lawrence, Massachusetts. (Def’s. 56.1 Stmt. ¶ 4.) Saratoga, a freight forwarder located in Massachusetts, then contracted with Anglia Forwarding Ltd. (“Anglia”), a UK-based freight forwarder, to arrange for the shipment. (Def’s. 56.1 Stmt. ¶ 5.) Anglia, in turn, contracted with Mediterranean Shipping Company (UK) Ltd. (“Mediterranean (UK)”) to organize the shipment. (Def’s 56.1 Stmt. ¶ 6.) Mediterranean (UK) is a privately owned company that serves as agent for Mediterranean within the United Kingdom. However, on occasion. Mediterranean (UK) acts separately as an agent for shippers for overland road haulage bookings. (Def’s. 56.1 Stmt. ¶ 2.)

 

After being hired by Anglia, Mediterranean (UK) issued a booking confirmation dated October 28, 2008 (the “Booking Confirmation”). (Def’s. 56.1 Stmt. ¶ 7; Affirmation of Glyn Smy in Support of Motion for Summary Judgment dated June 1, 2010 (“Smy Aff.”) Ex. A: Booking Confirmation dated October 28, 2008 (“Booking Confirmation”).) The Booking Confirmation provided for both inland shipping from New Balance (UK)’s Flimby facility to the port at Felixstowe, and then overseas shipping from Felixstowe to Boston on one of Mediterranean’s vessels. (Def’s 56.1 Stmt. ¶¶ 7-8.) Clause 11 of the Booking Confirmation provides:

 

[Mediterranean (UK) ] act[s] as agents only for the carrier [Mediterranean] for all services within the scope of and under the terms of the relevant contract of carriage for the cargo, whether the written contract of carriage has been issued at that time or not. Haulage services performed outside the scope of the contract of carriage for the cargo are provided as agents for the shipper/consignee and are carried out under [Road Haulage Act] terms and conditions (1998).

 

(Def’s. 56.1 Stmt. ¶ 11.)

 

Mediterranean (UK) contracted with MacIntyre Transport Ltd. (“MacIntyre”), a UK trucking company, to arrange for overland transport of the shipment from Flimby to Felixstowe. (Def’s, 56.1 Stmt. ¶ 15.) However, the cargo never reached Felixstow, because a portion was pilfered from the Maclntyre truck en route from Flimby and the rest of the shipment was returned to New Balance’s UK facility. (Def’s, 56.1 Stmt. ¶¶ 18, 22.) Mediterranean never issued a bill of lading.

 

Prior to this transaction, New Balance had booked two similar transatlantic shipments of shoes with Mediterranean (UK)one in May 2008 and another earlier in October 2008. (Def’s. 56.1 Stmt. ¶¶ 23-32.) On those two prior occasions, Mediterranean (UK), acting as agent for Mediterranean, issued its form bill of lading. (Def’s. 56 .1 Stmt. ¶¶ 26, 29.) Mediterranean’s bill of lading provides for two types of agreements: “Port-to-Port Carriage” and “Combined Transport.” Port-to-Port Carnage is defined as “carriage between the Port of Loading and the Port of Discharge.” (Aff. of Edward P. Flood dated June 4, 2010 (“Flood Aff.”) Ex E: Mediterranean Form Bill of Lading (“Bill of Lading”) at Clause 1.) Combined Transport includes Port-to-Port carriage as well as inland transport. (Bill of Lading at Clause 1.) The bill of lading specifies that Combined Transport arises only if “the Carrier has indicated a Place of Receipt and/or a Place of Delivery on the front [of the bill of lading] in the relevant spaces.” Neither of the bills of lading issued for the earlier shipments listed a place of receipt or place of delivery. (Def’s. 56.1 Stmt. ¶ 32.)

 

DISCUSSION

I. Legal Standard

Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Davis v. Blige, 505 F.3d 90, 97 (2d Cir.2007). The burden of demonstrating the absence of any genuine dispute as to a material fact rests with the moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). Once the moving party makes an initial showing that there is no genuine issue of material fact, the non-moving party cannot rely on the “mere existence of a scintilla of evidence” to defeat summary judgment but must set forth “specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U .S. 574, 587 (1986) (emphasis in original); Niagara Mohawk Power Corp. v. Jones Chem., Inc., 315 F.3d 171, 175 (2d Cir.2003) (citation omitted). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’ “ Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Matsushita, 475 U.S. at 586-87). In determining whether a genuine factual dispute exists, a court resolves all factual ambiguities and draws all inferences in favor of the non-moving party.   Liberty Lobby, 477 U.S. at 255; Jeffreys v. City of N.Y., 426 F.3d 549, 553 (2d Cir.2005).

 

II. Breach of Contract

Because the Booking Confirmation was between Anglia and Mediterranean (UK), Mediterranean can only be liable for breach of that contract if Mediterranean (UK) was acting as Mediterranean’s agent. See The Nat’l Shipping Co. of Saudi Arabia v. Diversified Freight Logistics, Inc., No. 02 Civ. 100(HB), 2003 WL 2299096, at(S.D.N.Y. Dec. 19, 2003). The Booking Confirmation provides that Mediterranean (UK) “act[s] as agents for the carrier [Mediterranean] for all services within the scope of and under the terms of the relevant contract of carriage for the cargo, whether the written contract of carriage has been issued at that time or not .”

 

Thus, the relevant contract of carriage for the cargo-the bill of lading-determines whether Mediterranean (UK) was acting as Mediterranean’s agent in booking overland transport for the shipment. Although a bill of lading was not issued for this shipment, unissued bills of lading can still bind parties “[w]here the terms of the form of bill of lading were concededly known by the parties,” and the parties “clearly intended to be bound by the carrier’s bill of lading form.” Fed. Ins. Co. v. Great White Fleet (US) Ltd., No. 07 Civ. 2415(GEL), 2008 WL 2980029, at (S .D.N.Y. Aug 1, 2008); see also Scott & Williams. Inc. v. Pittston Stevedoring Corp., 422 F.Supp. 40, 43 (S.D.N.Y.1976). The parties do not dispute that Mediterranean’s form bill of lading applies.

 

However, the form bill of lading does not answer the crucial question-whether Mediterranean (UK) was acting as Mediterranean’s agent. That is because the form provides for two different transport agreements-“Combined Transport” and “Port-to-Port Carriage.” And the choice of one or the other determines the outcome of this lawsuit.

 

Nevertheless, Mediterranean contends that the Court may look to the course of dealings between the parties to determine whether the agreement between the parties was for “Combined Transport” or “Port-to-Port Carriage.” See ABN Amro Verzekeringen BV v. Geologistics Americas, Inc., 253 F.Supp.2d 757, 769 (S.D.N.Y.2003) (Court may consider course of dealing from “hundreds of other shipments” when bill of lading not issued). A prior course of dealing for contract purposes exists only when the parties have a “well-established custom” practiced in “numerous purchases over a period of time.” New Moon Shipping Co. v. Man B & W Diesel, 121 F.3d 24, 31 (2d Cir.1997). Here, Mediterranean carried cargo for New Balance on only two prior occasions. While the bills of lading for both shipments provided for “Combined Transport,” two prior engagements are insufficient to establish a course of dealing. New Moon Shipping Co., 121 F.3d at 31; see also Cherry River Music Co. v. Simitar Entm’t, Inc., 38 F.Supp.2d 310, 319 (S.D.N.Y.1999) (“Three unrelated transactions over a three year period are insufficient to establish a course of dealing in the sense the term is used in the law.”) Thus, a question of material fact exists as to whether the transport agreement was for “Combined Transport” or “Port-to-Port Carriage” and summary judgment is inappropriate.

 

III. Bailment and Negligence Claims

“The elements of a bailment are the intent to create a bailment, delivery of possession of the bailed items, and acceptance of the items by the bailee.”   Chilewich Partners v. M.V. Alligator Fortune, 853 F.Supp. 744, 756 (S.D.N.Y.1994). While there is no dispute that the athletic shoes were stolen from MacIntyre’s truck, an issue of fact remains: was Mediterranean (UK) acting as Mediterranean’s agent when it arranged for inland transport? The answer to that question determines whether the shoes were in Mediterranean’s possession, custody, or care. Accordingly, summaryjudgment is denied. See George Weintraub & Sons, Inc. v. E .T.A. Transp., Inc., No. 01 Civ. 6417(JSM), 2003 WL 22023907, at(S.D.N.Y. Aug. 28, 2003).

 

IV. Mediterranean’s Limitation of Liability Defense

New Balance moves for partial summary judgment dismissing Mediterranean’s limitation of liability defense. This motion rests on Clause 11 of the Booking Confirmation, which provides that “[h]aulage services performed outside the scope of the contract of carriage for the cargo are provided as agents for the shipper/consignee and are carried out under current [Road Haulage Act] terms and conditions (1998).” Under the Road Haulage Act, liability is limited to approximately $2,340 per ton.

 

New Balance argues that Clause 6 of Mediterranean’s form bill of lading limits liability under the Carriage of Goods by Sea Act (“COGSA”) to $500 per package. See Royal & Sun Alliance Ins., PLC v. Ocean World Lines, Inc., 612 F.3d 138, 143 (2d Cir.2010); 46 U.S.C. § 30701. Clause 6 provides that:

 

[F]or carriage to or from any port of the United States, its territories or possessions … this Sea Waybill shall have effect subject to the provisions of the COGSA…. The Provisions of the COGSA are incorporated herein and save as otherwise provided herein shall apply through the entire time the Goods are in the Carrier’s custody, including before loading and after discharge as long as the Goods remain in the custody of the Carrier or its Subcontracts, including cargo carried on deck.

 

(Bill of Lading at Clause 6.) However, a question of fact remains as to whether the goods were “in the custody of the Carrier or its Subcontracts” when they were stolen. Thus, even assuming the Bill of Lading is applicable, partial summary judgment on Mediterranean’s limitation of liability defense is not warranted.

 

CONCLUSION

For the foregoing reasons, Mediterranean’s motion for summary judgment is denied and New Balance’s motion for partial summary judgment is denied. The Clerk of Court is directed to terminate the motions found at Docket Entry Numbers 14 and 19.

 

SO ORDERED: