Vision Air Flight Service, Inc. v. M/V National Pride
| Decision Date | 22 September 1998 |
| Docket Number | No. 97-16839,97-16839 |
| Citation | 155 F.3d 1165 |
| Parties | , 98 Cal. Daily Op. Serv. 7339, 98 Daily Journal D.A.R. 10,167 VISION AIR FLIGHT SERVICE, INC., a Philippine Corporation, Plaintiff-Appellant, v. M/V NATIONAL PRIDE, in rem, Madrigal-Wan Hai Lines, Defendants-Appellees, National Development Co., Pix Line, Phoenix International Freight Services, Ltd., and Commercial Union Insurance Company, Defendants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Leopoldo J. Chanco, Jedeikin, Green, Meadows & Schneider, San Francisco, CA, for plaintiff-appellant.
John D. Giffin and Shannon S. Wagoner, Keesal, Young & Logan, San Francisco, CA, for defendant-appellee.
Appeal from the United States District Court for the Northern District of California Charles A. Legge, District Judge, Presiding.
Before: HALL and THOMAS, Circuit Judges, and MOSKOWITZ, * District Judge.
Appellant Vision Air Flight Service, Inc. ("Vision Air" or "Vision") appeals the district court's grant of partial summary judgment in favor of Appellees Madrigal-Wan Hai Lines Corp. and M/V National Pride (collectively, "Madrigal") limiting Madrigal's liability to $1000 for the destruction of two airport refueling trucks ("the refuelers") that Madrigal contracted to ship and allegedly destroyed. Because the evidence, viewed in the light most favorable to Appellant, creates a triable issue as to whether one of the refuelers was destroyed intentionally, we vacate the district court's grant of partial summary judgment as to liability for damage to that refueler and remand for further proceedings.
Vision Air purchased two refurbished airport refueling trucks (the "refuelers") from a Kansas supplier. The refuelers were purchased for use at the Subic Bay International Airport in the Republic of the Philippines. Through an intermediary, Vision Air arranged to have the refuelers shipped from Oakland, California to Manila.
In October 1995, Madrigal issued its bill of lading to serve as the contract of carriage for the shipment of the refuelers. The bill of lading included a clause that purported to limit Madrigal's liability to $500 on the entire shipment pursuant to the Carriage of Goods at Sea Act, 46 U.S.C.App. §§ 1300-1315 ("COGSA"), and which advised Vision that it could opt for higher liability by paying an increased freight charge. Vision declined to do so, and instead insured the refuelers with an independent insurance company.
The refuelers were carried aboard Madrigal's vessel M/V National Pride, and were discharged at the Manila International Container Port on October 17, 1995. A Vision Air representative, Anthony Jamora, was present at the pier to observe the off-loading of the refuelers. According to the uncontroverted declaration of Mr. Jamora, the refuelers were off-loaded using the ship's own cranes. The stevedores in charge of unloading the trucks attached cables to each end of the truck, but did not use spreader bars to keep the cables away from the sides and the bottom of the trucks. Nor did they use a platform under the trucks. Instead, the stevedores used tires as cushions between the trucks and the cables. 1
When the first truck was lifted by the ship's cranes, the cables shifted due to the weight of the truck settling into the sling formed by the cables. This caused the refueler to jolt noticeably and swing in the air. After the first refueler was placed on the pier and the cable strapping removed, severe damage was visible. It appeared that the cables had crushed the sides of the truck's refueling tank, crushed its doors and fenders, and damaged its underside.
Despite the visible damage that had resulted from the off-loading of the first refueler, the stevedores proceeded to off-load the second refueler in precisely the same fashion. Not surprisingly, the second refueler suffered damage similar to that incurred by the first. Both trucks were a total loss.
Vision Air brought suit against Madrigal seeking to recover damages resulting from destruction of the refuelers. Shortly thereafter, Madrigal filed a motion for partial summary judgment to limit its liability to $500.00 per refueler pursuant to the bill of lading and COGSA's liability limitation provision. The district court granted Madrigal's motion and issued an order granting partial summary judgment, limiting Madrigal's liability to $1000.00.
We have jurisdiction to hear this interlocutory appeal pursuant to 28 U.S.C. § 1292(a)(3), and review a partial grant of summary judgment de novo. See Amdahl Corp. v. Profit Freight Systems, Inc., 65 F.3d 144, 146 (9th Cir.1995). Viewing the evidence in the light most favorable to the nonmoving party, we must determine whether there is any genuine issue of material fact and whether the district court correctly applied the relevant substantive law. See id.
Vision Air contends the district court's grant of partial summary judgment was erroneous on two grounds. First, Vision argues that the limitation of liability provision in the bill of lading was invalid, because it failed to give adequate notice that liability was limited under COGSA. Second, Vision maintains that Madrigal's manner of off-loading the refuelers constituted an unreasonable deviation, rendering COGSA's liability limitation inapplicable. Madrigal, on the other hand, contends that its liability is properly limited to $1000.00. 2
COGSA regulates the terms of international ocean carriage covered by bills of lading. Section 4(5) of COGSA limits a carrier's liability for loss and damage to goods shipped:
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 lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.
A carrier may limit its liability under COGSA "only if the shipper is given a 'fair opportunity' to opt for a higher liability by paying a correspondingly greater charge." Nemeth v. General Steamship Corp., Ltd., 694 F.2d 609, 611 (9th Cir.1982). The carrier has the initial burden of producing prima facie evidence showing that it provided notice to the shipper that it could pay a higher rate and opt for higher liability. See Royal Insurance Co. v. Sea-Land Service, Inc., 50 F.3d 723, 726 (9th Cir.1995). The carrier satisfies this initial burden by legibly reciting the terms of 46 U.S.C.App. § 1304(5) or language to the same effect in the bill of lading. 3 See id. The burden then shifts to the shipper to prove it was denied such an opportunity. See id. at 727.
Here, the bill of lading for shipment of the refuelers contained the following provision, which purported to limit liability:
Where container(s) is loaded by the shipper or on his behalf and/or freight rate is charged per container, carrier's liability will be limited to U.S. dollars 500 regardless of the contents of each container except when the shipper declares ad valorem valuation on the face hereof and pays additional freight on such declared valuation. The freight rate charged when no higher valuation is declared by the shipper is based on valuation of U.S. Dollar 500 per container, bundle, skid, pallet, or other unit, or where goods are received by the carrier breakbulk, the carrier's liability shall be limited to U.S. Dollar 500 per carton, bundle, skid, pallet or other unit, except when the shipper declares ad valorem value herein and pays additional freight as above.
As is clear from its language, the bill of lading explicitly limited liability to $500 and invited Vision to declare a higher value and pay additional freight. This language tracks COGSA § 4(5) and is quite similar to other limitation of liability provisions that have been held to provide notice sufficient under COGSA. See Carman Tool & Abrasives, Inc. v. Evergreen Lines, 871 F.2d 897, 899-900 n. 4 (9th Cir.1989); Henley Drilling Co. v. McGee, 36 F.3d 143, 146 (1st Cir.1994). Because the bill of lading explicitly limited Madrigal's liability and invited Vision Air to opt for higher liability, it provided the notice that COGSA requires. Thus, Madrigal has made its prima facie showing, and the burden shifts to Vision Air to prove it was denied such an opportunity. See Royal Insurance, 50 F.3d at 726.
Having been notified in the bill of lading that it may opt for higher liability, Vision declined to declare ad valorem value and pay additional freight. Instead, Vision chose to insure the cargo with an independent insurance carrier. This decision in and of itself demonstrates that Vision knew liability was limited by COGSA, and that Vision made a conscious decision not to opt out of the liability limitation. See Yang Machine Tool Co. v. Sea-Land Service, Inc., 58 F.3d 1350, 1355 (9th Cir.1995) (). Vision cannot contend that it was not given a "fair opportunity" to opt for higher coverage precisely because Vision did opt for higher coverage when it insured the refuelers through an independent entity.
Sweeping the issue of notice and "fair opportunity" aside, Vision maintains the liability limitation provision in the bill of lading is rendered null and void by operation of section 3(8) of COGSA, which provides that any contract or agreement lessening the statutory liability of the carrier below the limits set by COGSA is null and void. See 46 U.S.C.App. § 1303(8). 4
Vision Air argues that the bill of lading...
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