Dimond Rigging Co. v. BDP Int'l, Inc.

• Decision Date: 22 June 2018
• Docket Number: CASE NO. 1:17CV2054
• Parties: DIMOND RIGGING CO., LLC, Plaintiff, v. BDP INTERNATIONAL, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

320 F.Supp.3d 947

DIMOND RIGGING CO., LLC, Plaintiff,

v.BDP INTERNATIONAL, INC., et al., Defendants.

CASE NO. 1:17CV2054

United States District Court, N.D. Ohio, Eastern Division.

Signed June 22, 2018

Duncan H. Brown, Northville, MI, for Plaintiff.

Juan J. Perez, Evelyn S. Smith, Troy B. Morris, Perez & Morris, Eric W. Beery, Michael Spurlock, Beery & Spurlock, Columbus, OH, for Defendants.

OPINION AND ORDER

CHRISTOPHER A. BOYKO, United States District Judge:

This matter is before the Court on Motions to Dismiss by Defendants BDP International, Inc. ("BDP") and Logitrans International, Inc. ("Logitrans") (ECF DKT # 9, 21). For the following reasons, the Court grants Defendants' Motions and dismisses the above-captioned case.

According to Plaintiff Dimond Rigging Co., LLC ("Dimond"), Defendants BDP and Logitrans performed international shipping on behalf of Dimond without having proper licenses and qualifications, resulting in increased shipping delays and expenses. Plaintiff's Complaint alleges Breach of Fiduciary Duty: Agent/Principal, Fraudulent Non-Disclosure, Intentional Fraud, Breach of Agreement: Failure to Perform and Illegality of Contract and Unjust Enrichment.

Background Facts

Plaintiff Dimond's claims concern the shipment of several tons of used manufacturing equipment consisting of 132 individual pieces (the "Equipment") from the port of Cleveland, Ohio to the port of Xingang, China (the "Shipment"). Compl. ¶ 36. Dimond was inexperienced in international shipment, especially considering the size and weight of the Equipment. Compl. ¶ 10. Dimond alleges that, while the project was in initial stages during "late spring/early summer of 2011," Dimond received an unsolicited call from BDP, who offered to "assume and perform ... each and every aspect of the shipment." Compl. ¶¶ 9, 12-15. Dimond hired BDP to perform the Shipment. Compl. ¶ 24. Plaintiff contends that BDP failed to disclose that it was not a properly licensed Ocean Transportation Intermediary ("OTI") and that it was illegal for BDP and Logitrans to perform the Shipment since neither BDP nor Logitrans was a licensed OTI or Non Vessel Operating Common Carrier ("NVOCC"). Compl. ¶¶ 18, 44.

Shortly thereafter, BDP informed Dimond that they had obtained a ship on Dimond's behalf and sent a "con line booking note" to Dimond to execute, even though the Equipment had not been fully disassembled and weighed. Compl. ¶ 25. Dimond created what they believed was "a preliminary and estimated packing list" (emphasis original). Compl. ¶ 26. BDP allegedly provided this preliminary list, which underestimated the weight of the Equipment and misstated how many pieces the Equipment was when obtaining quotes from third-party contractors, including stevedores who would load the Equipment onto the ship. Compl. ¶¶ 27, 29, 33.

The next month BDP informed Dimond that the initial ship had fallen through and that Logitrans, which BDP allegedly misrepresented as a licensed NVOCC, would be the replacement. Compl. ¶ 30. Dimond alleges that BDP and Logitrans were actually scrambling to find a replacement ship at this late stage and finally selected the Gisele Scan , operated by Scan-Trans, Inc. ("Scan-Trans"), without disclosing to Dimond that they had contracted with Scan-Trans. Compl. ¶¶ 31, 39. According to Dimond, the Gisele Scan was not equipped to handle the Shipment's volume and BDP and Logitrans failed to exercise due diligence in choosing the Gisele Scan for the job. Compl. ¶ 32. On November 17, 2011, Dimond paid BDP $898,000 for the Shipment. Compl. ¶ 104. BDP acknowledged its receipt of this payment on December 9, 2011. Compl. ¶ 105.

In connection with hiring the Gisele Scan , BDP prepared a new Bill of Lading, which "errantly identified only 75 pieces of Equipment and only 3,100 revenue tons." Compl. ¶ 33. This Bill of Lading identified Dimond as the merchant, Logitrans as the carrier, Scan-Trans as the agent/shipbroker and BDP as the merchant's representative. The Bill of Lading contained terms and conditions, including the following:

U.S. Trade. Period of Responsibility.

(a) In case the Contract evidenced by this Bill of Lading is subject to the Carriage of Goods by Sea Act of the United States of America, 1936 (U.S. COGSA), then the provisions stated in said Act shall govern before loading and after discharge and throughout the entire time the cargo is in the Carrier's custody and in which event freight shall be payable on the cargo coming into the Carrier's custody.

The Bill of Lading also contained the following provision, which the parties refer to as the "Himalaya Clause":

(a) It is hereby expressly agreed that no servant or agent of the Carrier (which for the purpose of this Clause includes every independent contractor from time to time employed by the Carrier) shall in any circumstances whatsoever be under any liability whatsoever to the Merchant under this Contact of carriage for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, negligent or default on his part while acting in the course of or in connection with his employment.

(b) Without prejudice to the generality of the foregoing provision of this Clause, every exemption from liability, limitation, condition and liberty herein contained and every right, defense and then and immunity of whatsoever nature applicable to the Carrier or to which the Carrier is entitled, shall also be available and shall extend to protect every such servant and agent of the Carrier acting as aforesaid.

Prior to shipping, Dimond signed a booking note ("Booking Note") which also contained a copy of the terms and conditions that would be present in the Bill of Lading.

Furthermore, Dimond alleges that it was not informed of the date of a pre-shipment meeting and that BDP and Logitrans failed to appear on their behalf. Compl. ¶¶ 107-108. This resulted in delays and increased costs which were passed on to Dimond, since the Gisele Scan was unable to accommodate the Equipment when the ship arrived at the dock and the stevedores refused to load all of the Equipment since it had not been included in their price quote. Compl. ¶¶ 50-56. The Gisele Scan eventually left for China, leaving behind 35 pieces of Equipment. Compl. ¶ 55.

As a result of the botched Shipment, Dimond was involved in five lawsuits with various parties, including its Chinese customer and the stevedores (collectively, the "Other Litigation"). On July 11, 2013, Dimond filed a Complaint against BDP alleging Breach of Fiduciary Duty, Unjust Enrichment and Fraud. While Logitrans was not a defendant in this 2013 action, Logitrans was named in the action. Dimond's 2013 Complaint was dismissed without prejudice for Dimond's failure to perfect service of process on BDP. On August 9, 2017, Dimond filed a Motion to Amend and Praecipe for Issuance of Amended Summons in the 2013 action, which the court denied. On October 2, 2017, Dimond filed its current Complaint against BDP and Logitrans.

Plaintiff's Complaint alleges Breach of Fiduciary Duty: Agent/Principal for the alleged misrepresentations and negligence of BDP and Logitrans in completing the Shipment, Fraudulent Non-Disclosure for BDP and Logitrans' failure to disclose that they were not properly licensed OTIs or NVOCCs, Intentional Fraud for the failure to disclose their non-licensure, Breach of Agreement: Failure to Perform and Illegality of Contract for BDP and Logitrans' failure to appear at the pre-shipment meeting and for forming an illegal contract in light of BDP and Logitrans' non-licensure, and Unjust Enrichment for BDP and Logitrans retaining Dimond's $898,000 shipping payment when the Shipment was not fully performed.

Defendants' Motions

Defendants argue that the Carriage of Goods by Sea Act ("COGSA") governs the Shipment. Defendants urge the Court to consider the Other Litigation, especially Federal Marine Terminals, Inc. v. Dimond Rigging Co., LLC , No. 1:13 CV 01329, 2014 WL 4809427 (N.D. Ohio September 26, 2014), in which this Court found that COGSA governed the Shipment and that the "Himalaya clause" in the Bill of Lading extended COGSA, including its one-year statute of limitations, to independent contractors. Since the Court in Federal Marine Terminals calculated that the statute of limitations began to run on May 17, 2012 (the day the goods were delivered, or should have been delivered), the Court held that Dimond's claims, filed in July 2013, were time-barred. Defendants urge this Court to hold in line with the Federal Marine Terminals case that all of Dimond's Claims are time-barred under COGSA.

Even if the Court applies state law instead of COGSA, Defendants argue that the result is the same; all of Dimond's Claims are barred by applicable statutes of limitations. Defendants contend that the Ohio statutes of limitations for breach of fiduciary duty and fraud are four years. With regard to Dimond's Claim for Breach of Fiduciary Duty, Defendants contend that the statute of limitations began to run on December 9, 2011 and the Claim should have been brought by December 9, 2015. As for Dimond's Fraud Claims, Defendants contend that the statute of limitations began to run in October 2011 and the Claims should have been brought by October 2015. Therefore, since the current Complaint was filed on October 2, 2017, Defendants argue that Dimond's Breach of Fiduciary Duty, Fraudulent Non-Disclosure and Intentional Fraud Claims are all time-barred.

Defendants argue that Dimond's Contractual Claims are governed by Pennsylvania law because the Bill of Lading states that "[d]isputes arising out of or in connection with this Bill of Lading shall be exclusively determined by the courts and in accordance with the law of the place where the Carrier has his principal place of business." Logitrans, who is listed as the carrier on the Booking Note, has its principal place of business in Pennsylvania. The statute of limitations for Dimond's Breach of Contract Claim began to run in 2012...