Blasser Bros., Inc. v. Northern Pan-American Line
| Decision Date | 15 October 1980 |
| Docket Number | No. 78-2667,PAN-AMERICAN,78-2667 |
| Citation | 628 F.2d 376 |
| Parties | BLASSER BROTHERS, INC., Plaintiff-Appellee, Cross-Appellant, v. NORTHERNLINE, a/s d/b/a Nopal Caribe Line, Defendant-Appellant, Cross-Appellee, v. CONTINENTAL INSURANCE CO. OF NEW YORK, Defendant-Appellee, Cross-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
William B. Milliken, Miami, Fla., for defendant-appellant, cross-appellee.
Rodney Earl Walton, Timothy J. Armstrong, Miami, Fla., for plaintiff-appellee, cross-appellant.
Appeals from the United States District Court for the Southern District of Florida.
Before GOLDBERG, GARZA and REAVLEY, Circuit Judges.
This case involves a claim for damaged cargo instituted by Blasser Brothers, Inc. against a seagoing carrier and the company which insured the shipment, as well as a cross-claim by the insurance company against the carrier. The district court awarded damages, interest and taxable costs against the insurance company and the carrier, and allowed the insurance company Blasser Brothers is an export company based in Miami, Florida. Its sole stockholders and officers are Eduardo Blasser, Jose Blasser and Terry Blaser. One of the products exported by Blasser Brothers is Eterna-Glow Cosmetics, which is a private label cosmetics corporation owned and operated by the same three people that own Blasser Brothers. Eterna-Glow does not manufacture its own goods. Rather, it contracts with a manufacturer to provide the formula and packaging of the particular line of cosmetics. Blasser Brothers serves as a supplier to Impex Colonial Transoceanic, which is based in Panama City, Panama. Impex Colonial is a distributor of American products, including Eterna-Glow Cosmetics, which is owned and operated by Eduardo and Jose Blasser.
to recover against the carrier on its cross-claim. The court also ordered the insurance company to pay reasonable attorneys' fees to Blasser Brothers. Presently before this court are the appeal and cross-appeals of the parties involved. Finding no error in the district court's decision, we affirm.
The present shipment involved cosmetics manufactured by a corporation in New Jersey and transported overland to the Blasser Brothers' warehouse in Miami. The cosmetics, which were contained in 158 cartons, were packaged by the New Jersey manufacturer. The cartons were of heavy corrugated construction and sealed with gum tape. Inside each carton was a number of smaller cardboard boxes, each containing twelve plastic cosmetic kits. These cartons remained unopened and intact at Blasser Brothers' warehouse. Upon delivery to Blasser Brothers' warehouse, however, Jose Blasser customarily opened a few boxes to examine the new colors and shades of the cosmetics. Based upon such a visual inspection, he found them to be in perfect condition. In August, 1976, shortly after receiving the cartons of cosmetics, Jose Blasser contacted United Dispatch Services, a freight forwarder and insurance agent for Continental Insurance Company, in regard to a shipment of 404 cartons of merchandise. 158 of these cartons contained the cosmetics already mentioned and 246 cartons contained furniture.
Based upon an invoice from Eterna-Glow Cosmetics, United Dispatch Services valued the shipment at $42,000 and issued a certificate of insurance in that amount from Continental Insurance Company. The certificate of insurance specifically covered all risks, including war. United Dispatch Services also prepared the bill of lading for the carrier, Northern Pan-American Lines (NOPAL), and a shipper's export declaration. A few days later, a trailer arrived at Blasser Brothers' warehouse. The trailer belonged to Maritime Cartage and was leased to NOPAL. After packing the shipment into the trailer, Blasser Brothers notified NOPAL that it was ready for delivery to the carrier. Maritime Cartage's driver supplied the seals, which were placed on the trailer, while Blasser Brothers furnished the padlocks. After sealing and locking the trailer, the Maritime Cartage driver issued a clean delivery receipt. Neither Jose Blasser nor any of his employees had noticed any defects in either the cartons or the trailer.
The trailer was loaded on the deck of the M/V Lindinger Amber. Blasser Brothers had no knowledge that the trailer would be stowed on deck, although an employee of Caribbean Agencies, a steamship agent for NOPAL, stated that according to that particular stowage plan, all trailers were stowed on deck. This individual stated that such stowage was customary.
This ship sailed on August 16, 1976. The day after the ship sailed, NOPAL issued a clean bill of lading showing no exceptions. The trailer was discharged at Las Minas, Panama, on August 21, 1976. A dock inspection of the exterior of the trailer conducted by NOPAL's agents revealed gashes in its side. NOPAL's agents did not open the trailer, nor did they notify the consignee, Impex Colonial. The trailer was placed in the customs yard, which is uncovered and exposed to the elements. About five days later, NOPAL hired Cargas Movibles, S. A., to transport the trailer from Las Minas to When Banco Exterior employees opened the trailer, they discovered that the inside of the trailer was wet and that parts of the cargo had become soaked. The warehouse manager called Eduardo Blasser, as well as NOPAL's agent, requesting an inspection. By the time Eduardo Blasser arrived, unloading had already begun. Eduardo Blasser testified that the floor of the trailer was wet and that a number of cartons were soaked. 1
the warehouse of Banco Exterior in the Free Zone, a trip of ten or twelve kilometers.
The wet cartons were then separated from the dry ones. The wet furniture was dried, cleaned, repacked and later sold. Forty-five cartons of cosmetics which had remained dry were also removed from the premises and later sold. 113 cartons which were either soaked or had come into contact with water remained in the warehouse. Each cosmetic kit in these cartons was cleaned, dried, and recoopered and stored in the Banco Exterior warehouse. The cosmetic kits remain there to this day. On August 27, 1976, an employee of Cargas Movibles inspected the empty trailer. This employee discovered gashes on the side, rips in other places and a hole in the roof. The hole in the roof occurred due to a faulty patching job done at an earlier time.
On August 30, 1976, Banco Exterior formally notified NOPAL of the damage. Blasser Brothers timely notified Continental of the damage and its claim. Blasser Brothers claimed a loss of $23,928.93. Eduardo Blasser testified at trial that each cosmetic kit in the 113 cartons had come in contact with water. Based upon his experience in the cosmetics industry and as a chemist, Eduardo Blasser did not believe that the cosmetics in the 113 wet cartons could be commercially used. He believed that because of the water damage, whether it was obvious or not, the kits could have been contaminated by fungi and bacteria. In November, 1976, Continental sent a surveyor from Miami. The surveyor performed no chemical or microscopic examinations. He merely conducted a visual inspection. Of the 1810 dozen kits that had been contained in the 113 cartons, he chose only 41.5 dozen, which were obviously water damaged, and 325.4 which showed signs of mold or fungi. The surveyor determined that the remaining kits were not damaged.
He did believe, however, that there might have been microbial contamination in all the kits. The surveyor, thus, sent samples to Continental but never informed Eduardo Blasser of any findings. Based upon the surveyor's report, Continental offered to pay $520, which accounted for only those kits clearly damaged. Continental refused to pay for those kits containing visible mold contending that such mold was an inherent vice of such cargo. Blasser Brothers refused to accept the offer. 2
In August, 1977, a mycologist retained by Continental, Dr. Syril B. Farber, examined the samples sent by the surveyor. Some samples had been marked by the surveyor as damaged and others as not damaged. Dr. Farber found that the undamaged samples contained aspergillus spores. She stated in her deposition, parts of which were read at trial, that aspergillus is a common airborne spore. She testified that the amount of spores found on the samples was an ordinary amount that would be found on a plate set on a windowsill. Dr. Farber had never examined cosmetics before and had no knowledge of F.D.A. standards regarding such cosmetics.
Parts of the deposition of Charles Schoch, a microbiologist, were also introduced at trial. Ninety percent of his testing experience concerns cosmetics. Most of his testimony is irrelevant, since he examined only samples that had been clearly contaminated by water, which claim Continental does not dispute. Schoch's remarks on aspergillus, however, shed some light on the problem before this court and, thus, are relevant. Schoch was examining samples that showed signs of mold. In the samples he inspected, he found Aspergillus Niger which he stated was a pathogenic fungi harmful to human beings. He also stated that Aspergillus Niger is present in the air, in the water and in the food we eat. Schoch stated that the F.D.A. forbids the presence of aspergillus in cosmetics. 3 Throughout all of the proceedings and litigation, NOPAL has never conducted any analysis or survey of the cargo.
NOPAL now contends that Blasser Brothers did not sustain its burden of proving damages and that the district court's finding of fact No. 31, 4 that all the samples examined by Dr. Farber were contaminated and contained a human pathogen, was clearly erroneous. The present dispute is governed by the Carriage of Goods by Sea Act, 46 U.S.C. §§ 1300-1315 (hereinafter COGSA). 5 Under COGSA, to establish a prima facie case of liability against the carrier, the shipper, Blasser Brothers in this case, has the burden of proving that the...
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