627 F.2d 724 (5th Cir. 1980), 80-1157, Noritake Co., Inc. v. M/V Hellenic Champion

Docket Nº:80-1157
Citation:627 F.2d 724
Party Name:NORITAKE CO., INC., Plaintiff-Appellant, v. M/V HELLENIC CHAMPION et al., Defendants-Appellees.
Case Date:October 09, 1980
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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627 F.2d 724 (5th Cir. 1980)

NORITAKE CO., INC., Plaintiff-Appellant,

v.

M/V HELLENIC CHAMPION et al., Defendants-Appellees.

No. 80-1157

Unit A

United States Court of Appeals, Fifth Circuit

October 9, 1980

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[Copyrighted Material Omitted]

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Frederick M. Boss, Robert A. Feltner, Houston, Tex., for plaintiff-appellant.

Royston, Rayzor, Vickery & Williams, W. Robins Brice, John M. Elsley, Houston, Tex., for defendants-appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before GEE, RUBIN and RANDALL, Circuit Judges.

RANDALL, Circuit Judge:

Plaintiff-Appellant Noritake Company, Inc. ("Noritake"') appeals from the largely adverse judgment entered after a nonjury trial in the district court below. Noritake's claim for $4,976.62 in damages was brought under the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. §§ 1300-1315 (1976), and was within the federal courts' admiralty jurisdiction under 28 U.S.C. § 1333 (1976). Noritake alleged damage to the contents of 152 cartons of a 472-carton shipment of porcelainware that was shipped and temporarily stored by Defendant-Appellee Hellenic Lines, Ltd. ("Hellenic"). 1 The district court found Hellenic liable for damages to only 17 of the total of 152 damaged cartons, and awarded $556.56 to Noritake based on a stipulated per-carton figure--an award from which Hellenic does not appeal. The three points that Noritake argues on appeal are that: (1) the district court's finding that Hellenic was liable for only 17 of 152 damaged cartons was clearly erroneous because Hellenic failed to prove under section 1304(2)(d) of COGSA that the damage to the 138 remaining cartons was caused by an act of God unmixed with any negligence of Hellenic; (2) the district court erred in failing to award prejudgment interest to Noritake; and (3) the district court erred in denying attorneys' fees to Noritake. For the reasons set out below, we affirm the district court on points one and three, but reverse in part and remand the case on point two regarding prejudgment interest.

I. FACTUAL BACKGROUND OF THE LITIGATION

In early April of 1976, Noritake delivered 472 cardboard cartons packed with dinner sets and other articles of porcelainware to Hellenic at Colombo, Sri Lanka. Hellenic carried these cartons to the Port of Houston on the M/V Hellenic Champion under an exception-free bill of lading. When the cargo was unloaded at the Port of Houston on June 14, 1976, a checker employed by Hellenic noted that 17 of the cartons were water-stained. The entire shipment was stored in a pierside warehouse pending transfer to the inland carrier, Brown Express, Inc., who was to carry the cargo on to Noritake in Dallas.

On June 15, 1976, the Port of Houston area experienced severe, localized flash flooding from heavy rains. Though the weather bureau had predicted only a 15% chance of rain that day, the port area received some thirteen inches of rain within a few hours, while a local airport received less than two inches. Though they were

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stacked in tiers on wooden pallets, some of the cartons became wet from the flood waters. Initial efforts by warehouse personnel to move the cartons to a higher place in the warehouse were hampered when part of the floor near where the cartons were stacked gave way beneath the weight of the flood waters. Additionally, many of the warehouse personnel had already gone home by the time the water reached the floor level, and the flooding prevented others from being summoned. The crew of the Hellenic Champion was prohibited from helping move the cargo by labor contracts. The entire shipment was eventually moved to a dry portion of the warehouse, but no other efforts were made to safeguard the cartons or dry them out.

On June 24, 1976, Hellenic delivered 469 cartons from its warehouse to Brown Express in Houston for inland shipping to Dallas. Brown Express' clerk noted water damage to the exterior of 95 cartons in his records. When the shipment reached Dallas, a surveyor for Noritake determined that 152 cartons were noticeably water-stained. The surveyor chose 15 of those 152 cartons for inspection. He found salt crystals in and on approximately 75% of the tested boxes, and also noted that the packing materials had adhered tightly to the porcelainware, which could be attributed to either salt water exposure or flood-dissolved glue used in the manufacture of the boxes. 2 There was also breakage, which he attributed to the collapse of the wet cartons beneath the weight of cartons stacked above them. The shipment was rejected by Noritake's ultimate consignee and sold for salvage. Noritake's damages on the entire shipment were stipulated to be $4,976.26.

The district court interpreted COGSA to provide that once a plaintiff shows that cargo was damaged while in the custody of a defendant ocean carrier, the burden shifts to the defendant to establish a defense that, under the Act, exonerates him from liability. The court found that Hellenic had successfully established the act of God defense created by section 1304(2)(d) of COGSA, absolving Hellenic of liability for all but the 17 cartons noted as water-stained when unloaded from the ship. Based on this finding, the district court entered judgment for Noritake for $556.56, the value of 17 cartons; the judgment did not provide for prejudgment interest, and explicitly denied attorneys' fees.

II. HELLENIC'S LIABILITY

In its conclusions of law, the district court held that Hellenic could absolve itself of liability if it could establish that the cartons were damaged by an act of God, as that term is used in section 1304(2)(d) of COGSA, that was unmixed with any negligence on Hellenic's part. The district court cited Mamiye Brothers v. Barber Steamship Lines, Inc., 241 F.Supp. 99 (S.D.N.Y.1965), aff'd, 360 F.2d 774 (2d Cir.), cert. denied, 385 U.S. 835, 87 S.Ct. 80, 17 L.Ed.2d 70 (1966), for this proposition. Mamiye Brothers defined damage caused by act of God to be damage that could not have been prevented by reasonable foresight and care. Noritake does not challenge on appeal the district court's decision to follow the Mamiye Brothers case, and thus we do not consider that question. Rather, Noritake challenges as clearly erroneous the district court's decision that Hellenic was liable for damages to only 17 cartons.

In appeals of admiralty cases, as in other appeals, the appellant has the burden of establishing that the district court's finding was clearly erroneous. McAllister v. United States, 348 U.S. 19, 75 S.Ct. 6, 99 L.Ed. 20 (1954); Marcona Corp. v. Oil Screw Shifty III, 615 F.2d 206, 208 (5th Cir.1980); Tittle v. Aldacosta, 544 F.2d 752, 754 (5th Cir.1977); Movible Offshore, Inc. v. M/V Wilkin A. Falgout, 471 F.2d 268, 271-72 (5th Cir.1973). To prevail, Noritake must

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demonstrate that the district court's findings are without support in the record or that they were induced by an erroneous view of the law; the court of appeals is not a trier of fact, and will not lightly set aside factfindings of the trial court. Chaney v. City of Galveston, 368 F.2d 774, 776 (5th Cir.1966). A finding is clearly erroneous when, although there is enough evidence to support it, the reviewing court is left with the definite and firm conviction that a mistake has been committed and that the district court could not permissibly find as it did. Volkswagen of...

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