Gordon H. Mooney, Ltd. v. Farrell Lines, Inc.

Decision Date22 February 1980
Docket NumberD,No. 415,415
PartiesGORDON H. MOONEY, LTD., Plaintiff-Appellee, v. FARRELL LINES, INC., as successor by merger to American Export Lines, Defendant-Appellant, and Maislin Transport of Delaware and Maislin Transport Ltd., Defendants-Appellees. ocket 79-7536.
CourtU.S. Court of Appeals — Second Circuit

John J. Palmeri, New York City, for plaintiff-appellee Mooney.

Chester D. Hooper, New York City (Haight, Gardner, Poor & Havens, New York City, Keith L. Flicker, M. E. DeOrchis, New York City, of counsel), for defendant-appellant Farrell Lines, Inc.

Harvey P. Rosenberg, New York City, Friedlander, Gaines, Cohen, Rosenthal & Rosenberg, New York City, for defendants-appellees Maislin Transport of Delaware and Maislin Transport Ltd.

Before MULLIGAN, OAKES and GURFEIN, * Circuit Judges.

OAKES, Circuit Judge:

This appeal, by the ocean carrier of a refrigerated ("reefer") container of frozen Dover sole, is from a judgment of the United States District Court for the Southern

District of New York, Lloyd F. MacMahon, Judge. The judgment held the ocean carrier solely liable to the Canadian buyer-consignee for the value of the fish, which arrived in a decomposed state, even though it was the inland carrier that changed the reefer temperature setting from - 5o or - 10o Fahrenheit to 40o Fahrenheit. Following reference to and a report by Magistrate Jacobs, the district court held that the ocean carrier, American Export Lines, Inc. (Export), was solely negligent; that Export's negligence in presenting the inland carrier, Maislin Transport of Delaware and Maislin Transport Ltd. (collectively Maislin), with an inland bill of lading ("inland bill") that contained no temperature directions and an "equipment interchange receipt" or "Trailer Interchange Receipt" (TIR) that referred to a 50o "required" temperature setting, rendered Maislin not negligent; and that it was therefore unnecessary to determine Export's claim of a right to indemnity or contribution or Maislin's claim of a $500 limitation of liability. Judgment was awarded to the plaintiff shipper solely against Export's successor by merger, Farrell Lines, Inc., for 92,100 Canadian dollars plus interest. We reverse.

FACTS

A brief review of the evidence and the documents is necessary. After receipt from Gordon H. Mooney, Ltd., the plaintiff below, of a purchase order for 1400 cartons of Dover sole, the Netherlands supplier packed the cartons into a pre-cooled refrigerated reefer without incident. When received at the Amsterdam dock, however, the refrigerated unit developed a malfunction and the 1400 cartons had to be transferred to another reefer by the carrier, Export. A second malfunction developed and another transfer was made, but there is no dispute in the case that following the second transfer the 1400 cartons were still in their original, frozen condition, and the trip from Holland to New York was without incident. When the container was delivered to Maislin for transportation from New York to Toronto on September 8, 1976, Export prepared an inland bill of lading which, while it referred to "Dover Sole," contained no instructions concerning temperature. In addition, Export's "Equipment Condition Inspection Report" said nothing in section 7 relating to "reefers," where there are three lines as to "req. temp. ____," "temp. set at _____," and "temp. reads _____." According to the testimony of the truck driver for Maislin, Mr. Terrell, he received these two documents and he also observed an Export reefer mechanic 1 get up on the container and read the temperature setting and then fill out a handwritten slip of paper or "chit," which he gave to Terrell. The reefer mechanic's chit, after noting the date and number of the trailer, says "req. temp. 50o , temp. set at 50o , temp. reads 50o ." Terrell then gave the chit to another Export employee who completed the equipment interchange receipt (TIR). There was no separate temperature reading when the TIR was filled out; rather, reference was made solely to the "chit." There is no dispute, however, that the temperature both was set at, and read, between - 5o and - 10o at the time of delivery to Maislin, though Maislin could not produce the "Partlow" thermograph chart that was on the reefer at the time of delivery. 2

How or why the Export reefer mechanic made the error on the handwritten "chit" is only one of the several mysteries in the record. It is possible that the mechanic misread the thermograph, although that seems unlikely. The Maislin driver remembered the mechanic's climbing up to look at the chart. According to the surveyor who subsequently checked the matter out, there was some talk in the Export yard that there were several other containers containing photographic equipment or film in the yard on September 8 and that some of these carried with them a 50o required temperature. The mechanic may have assumed that the Dover sole reefer was one of those, but this explanation would mean that he did not look at the Partlow chart and conflicts with the Maislin driver's memory of the event. Or, conceivably, the mechanic may have acted intentionally, for reasons that can only be surmised. 3 The mystery is unsolved.

The fact remains, however, that it was the Maislin people who changed the temperature setting on the containers in question to 40o , probably after the reefer arrived at Fort Erie, Ontario. The Maislin witnesses testified that when their clerical office sought to fill out their "pro" or "way" bill at the terminal in South Kearny, New Jersey, Mrs. Crapser, the clerk with the responsibility for preparing the bill, decided that the container needed some "protective service," not, she said, because she knew what Dover sole was, but because she saw the word "reefer" and wondered if it was fish. She made inquiry of the Maislin line haul dispatcher, Mr. Gallo, and brought to his attention the fact that the container was a reefer and that it should have "protective service." According to his testimony, although he had the TIR showing a 50o required setting, he called the maintenance man, Lefty Fahrenfeld. Lefty left the terminal to check the setting, presumably made a physical check, and came back in a matter of minutes and said that it was running at 40o . All this supposedly occurred on September 8, the day the shipment arrived at Maislin's yard in South Kearny, New Jersey. The 40o figure was inserted by Mrs. Crapser on the pro or way bill as the temperature to be maintained, and it was subsequently carried on the Maislin record of "Thermo-King" temperature checks as the required setting. There is also in evidence a memo dated September 9 on a Crystal Glass Company memo pad, evidently written at Fort Erie, Ontario by a Maislin employee, reading:

Came from Buffalo at 10o F,

Temp. does not go up.

Should be a 40o F.

Shut off.

leave it shut off.

Bill

And the Maislin Thermo-King temperature-check records contain two notations for September 9, when the truck left Buffalo for Canada: "reset for (illegible)" and "just arrived, shut off."

The Thermo-King readings between September 11 and September 20, by which time the container was sitting in Maislin's Toronto terminal, were lost or not available, see note 3 supra, but by September 20, the temperature reading had crept up to 35o . Thereafter, it stayed at 40o until about September 24. The Maislin records show no temperature readings after the 25th until 8:00 a. m. on the morning of the 27th, at which time the reading was 0o , even though the same Maislin record sheet called for a setting of 40o . 4 The temperature check

                record of September 29 shows the setting at 0o and the temperature reading at 20o . That was the day Maislin sought to make delivery to the consignee, but it was refused.  5 The following day, delivery was again attempted, but it was again refused and the goods were returned to the Maislin terminal for survey and potential salvage.  The fish was subsequently found to be largely decomposed and spoiled, although some of it was apparently salvaged at a very low price immaterial to the consideration of our case.  There was expert testimony from a transportation consultant, Cecil W. Henkels, to the effect that a TIR generally goes to a trucking line's operating department, as opposed to the rate clerk, but that an upward temperature change would not be made without authorization from either the original shipper or the carrier from which the shipment was obtained
                
DISCUSSION

The magistrate's and district court's findings that Export was negligent, and therefore liable, 6 were clearly supported by the evidence. Even though Export submitted evidence of numerous other reefer inland bills it had prepared which went to Maislin and contained no temperature directions, there was testimony by the marine surveyor that it was "certainly an error" not to have included such directions on the inland bill. Export's consultant, Mr. Henkels, confirmed that ordinarily all shipping instructions are contained on the shipping order. Moreover, there was the handwritten chit erroneously prepared by the Export reefer mechanic for whatever reason which did contain a 50o reading as well as a 50o setting. The same figures appear on the TIR, a more formal document prepared and signed by Export, though also signed by Terrell, the Maislin trucker. These errors at least contributed to the unfortunate chain of events and render Export liable. Export's own manager of maintenance and repair testified that he felt "there was an error made on both parts," the reefer mechanic's and the truck driver's.

But Maislin too was at fault, in a variety of ways. Its driver, Terrell, signed the TIR, noting that the equipment was "received in good condition except as noted." The temperature setting at that time was, indisputably, - 5o and the temperature reading was at or about - 10o . 7 Yet the TIR, based on the mechanic's chit,...

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