Kumar Corp. v. Nopal Lines, Ltd., 83-2317

• Decision Date: 15 January 1985
• Docket Number: No. 83-2317,83-2317
• Citation: 10 Fla. L. Weekly 189,462 So.2d 1178
• Parties: 10 Fla. L. Weekly 189, 41 UCC Rep.Serv. 69 KUMAR CORPORATION, Appellant, v. NOPAL LINES, LTD., Lorentzen Shipping Agencies, Inc., and S.E.L. Maduro (Florida), Inc., Appellees.
• Court: Florida District Court of Appeals

Page 1178

462 So.2d 1178

10 Fla. L. Weekly 189, 41 UCC Rep.Serv. 69

KUMAR CORPORATION, Appellant, v. NOPAL LINES, LTD., Lorentzen Shipping Agencies, Inc., and S.E.L. Maduro (Florida), Inc., Appellees.

No. 83-2317.

District Court of Appeal of Florida,

Third District.

Jan. 15, 1985.

Rehearing Denied Feb. 26, 1985.

Finley, Kumble, Wagner, Heine, Underberg, Manley & Casey and C. Randolph Coleman, Miami, for appellant.

Mitchell, Harris, Canning, Murray & Usich and C. Robert Murray, Jr.; Smathers & Thompson and Fernando S. Aran, Miami, for appellees.

Before HUBBART, DANIEL S. PEARSON and FERGUSON, JJ.

DANIEL S. PEARSON, Judge.

Kumar Corporation, the plaintiff below, appeals from a summary judgment entered in favor of all defendants on Kumar's suit to recover damages for the loss of certain cargo. The stated basis for the judgment was that Kumar had no legally cognizable interest in the cargo and was thus without standing to sue for its loss when the action was instituted, and that efforts to confer standing on Kumar, made after the claim was time barred under the Carriage of Goods by Sea Act, 46 U.S.C. §§ 1300-1315 (1982), did not serve to breathe life into Kumar's timely-filed suit. ¹

The operative and undisputed facts are these. Kumar Corporation is in the business of shipping electronic equipment to Latin America. One of its largest customers is Freddy Nava, a Venezuelan wholesaler. In late 1981, Nava told Kumar that he wanted to purchase 700 television sets and spare parts. Kumar and Nava agreed that Nava would not pay Kumar until Nava actually sold the merchandise in Venezuela.

Thereafter, Kumar obtained the televisions and spare parts from its supplier, received them in its Miami warehouse, loaded them on a trailer, and on February 4, 1982, delivered the trailer to freight handler S.E.L. Maduro (Florida), Inc., one of the defendants, at Maduro's lot at the Port of Miami. The shipping documents reflected that the goods were sold by Kumar to Nava for $144,417.00, C.I.F. Maracaibo (Venezuela).

On February 16, 1982, a Maduro employee discovered that the trailer was missing from the Maduro lot. Sometime later, the trailer was found elsewhere, abandoned and empty.

Well within a year of these events, Kumar sued Maduro, along with Nopal Lines, Ltd. and Lorentzen Shipping Agency, Inc., the carrier and the carrier's shipping agent, respectively. The defendants challenged Kumar's standing to sue and moved for summary judgment.

The defendants' position is, as it was below, that under Section 672.320, Florida Statutes (1981), the term C.I.F., or its equivalent, required Kumar, the seller, to perform certain obligations with respect to the goods, including, inter alia, placing the goods in possession of the carrier, and that when these obligations were properly performed, as the defendants contend they were, the risk of loss or damage to the goods passed to Nava, the buyer, ² and that, therefore, since Kumar could not have suffered the loss, it had no standing to sue.

Kumar concedes that an ordinary incident of a C.I.F. contract is that, upon tender of the required documents, the buyer must pay the agreed price without awaiting the arrival of the goods. It argues, however, that its agreement with Nava to postpone Nava's obligation to pay for the goods until they were actually sold in Venezuela modified this ordinary incident and, in turn, modified the ordinary consequence of the C.I.F. contract (that the risk of loss shifts to the buyer) so as to leave the risk of loss on the seller. Kumar's second position is that if the term C.I.F. controls and thus the risk of loss shifted to Nava, Kumar nonetheless brought suit on Nava's behalf or as Nava's assignee and thereby had standing. In support of this latter position, Kumar filed two affidavits executed by Freddy Nava. The first, executed by Nava on July 6, 1983, and filed before the summary judgment hearing, stated in pertinent part:

"I hereby ratify and endorse the action that Kumar Corporation has taken by filing and prosecuting the lawsuit referenced ... above, appoint Kumar Corporation my agent, trustee and representative of any interest I may have in that lawsuit or any other cause of action I may have against the Defendants in that lawsuit, and hereby assign to Kumar Corporation all right, title and interest that I may have against the Defendants named in that lawsuit or any other parties for any other cause of action arising out of the loss, disappearance or theft of the goods. I authorize Kumar Corporation, its officers, directors, agents or attorneys to proceed in whatever manner, method or practice they deem appropriate in pursuing the action(s) in this matter on my behalf."

The second, executed by Nava on July 7, 1983, and filed at the summary judgment hearing, was expressly intended to supplement the first affidavit. It recited in pertinent part:

"2. Mr. Lionel Harms and Mr. Curt Harms, from Kumar Corp., notified me in February, 1982, that the trailer containing the television sets I ordered from them had been stolen. At that time, in February 1982, I authorized Kumar Corp., directly to Lionel Harms, to take whatever action they deemed appropriate to pursue any rights that I had against any persons regarding the loss of that cargo, including negotiations for settlement, or the institution of legal action against any party including the Defendants in the action referenced in paragraph 1 above.

"3. I was aware at all times of the actions taken by Kumar Corp. in pursuing the claim against Nopal Lines, Ltd., Lorentzen Shipping Agency, Inc., and S.E.L. Maduro (Florida), Inc., and was informed of each action taken on a timely basis by Mr. Lionel Harms. I agree with and ratify each action taken by Kumar in the prosecution of its claim against those Defendants and did agree with and ratify each action taken at the time taken, or shortly after the time each action was taken."

The trial court rejected Kumar's arguments and granted the defendants' motion:

"[O]nce the Plaintiff, KUMAR CORPORATION, delivered possession of the subject trailer to the Defendant, S.E.L. MADURO (FLORIDA), INC., title to the television sets and spare parts passed to the consignee, Freddy Nava, and the Plaintiff, KUMAR CORPORATION, no longer had any legal interest in said shipment. More particularly, the Court finds that at the time of instituting the above captioned proceedings the Plaintiff, KUMAR CORPORATION, had no standing to bring a claim for cargo loss emanating out of the subject shipment; nor was standing subsequently conferred upon the Plaintiff, KUMAR CORPORATION, by the consignee, Freddy Nava, vis-a-vis Mr. Nava's July 6, 1983 Affidavit inasmuch as Mr. Nava's claim, as of the date of the execution of his Affidavit, was time barred under the Carriage of Goods by Sea Act."

We reverse the summary judgment and the consequent order taxing costs against Kumar. We conclude that under any view of the facts, Kumar had standing to sue. If Kumar's agreement with Nava concerning the time of payment (or Kumar's failure to procure a policy of insurance) had the effect of modifying the C.I.F. terms so as to prevent the risk of loss from passing to Nava, then, of course, Kumar had standing to sue the appellees by virtue of its agreement with Nava. If, on the other hand, as the trial court concluded, the risk of loss had passed to Nava, then Kumar, by virtue of having borne the loss in Nava's stead, had standing to sue as Nava's subrogee or, subrogation aside, as Nava's agent, its action having been later ratified by Nava.

We begin with some observations about the relationship between the overlapping but theoretically separate concepts of "standing" and "real party in interest." See 6 C. Wright & A. Miller, Federal Practice & Procedure, § 1542 (1971). In its broadest sense, standing is no more than having, or representing one who has, "a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy." ³ Sierra Club v. Morton, 405 U.S. 727, 731, 92 S.Ct. 1361, 1364, 31 L.Ed.2d 636, 641 (1972). See Gieger v. Sun First National Bank of Orlando, 427 So.2d 815 (Fla. 5th DCA 1983); Argonaut Insurance Co. v. Commercial Standard Insurance Co., 380 So.2d 1066 (Fla. 2d DCA), rev. denied, 389 So.2d 1108 (Fla.1980). Under this definition, it can hardly be doubted that Kumar, which under its agreement with Nava was not to be paid until Nava actually sold the merchandise in Venezuela and would thus suffer a loss of $144,417.00 if its suit does not succeed, has a sufficient stake in the outcome of an otherwise justiciable controversy so as to have standing. ⁴ See Levatino Co. v. M/S Helvig Torm, 295 F.Supp. 725 (S.D.N.Y.1968).

However, standing encompasses not only this "sufficient stake" definition, but the at least equally-important requirement that the claim be brought by or on behalf of one who is recognized in the law as a "real party in interest," that is, "the person in whom rests, by substantive law, the claim sought to be enforced," Author's Comment to Fla.R.Civ.P. 1.210, 30 Fla.Stat.Ann. 304, 306-07 (1967); see 3A J. Moore, Moore's Federal Practice, p 17.02 (2d ed.1984). The basic purpose of rules requiring that every action be prosecuted by or on behalf of the real party in interest is merely "to protect a defendant from facing a subsequent similar action brought by one not a party to the present proceeding and to ensure that any action taken to judgment will have its proper effect as res judicata...." Prevor-Mayorsohn Caribbean, Inc. v. Puerto Rico Marine Management, Inc., 620 F.2d 1, 4 (1st Cir.1980). The Florida real party in interest rule, Fla.R.Civ.P. 1.210(a), permits an action to be prosecuted in the name of someone other than, but acting for, the real party in interest. ⁵ See Durrant v. Dayton, 396 So.2d 1225 (Fla. 4th DCA 1981); 39 Fla.Jur.2d Parties, § 9 (1982); see also Thomas v. Martin, 100 Fla. 146, 129 So. 602 (1930) (real part...