Croft & Scully Co. v. M/V SKULPTOR VUCHETICH

• Decision Date: 03 February 1981
• Docket Number: Civ. A. No. H-78-2202.
• Citation: 508 F. Supp. 670
• Parties: CROFT & SCULLY CO., Plaintiff, v. M/V SKULPTOR VUCHETICH, Her Engines, Tackle, Apparel, Etc., Baltic Shipping Company, Goodpasture, Inc., and Shippers Stevedoring, Inc., Defendants.
• Court: U.S. District Court — Southern District of Texas

508 F. Supp. 670

CROFT & SCULLY CO., Plaintiff, v. M/V SKULPTOR VUCHETICH, Her Engines, Tackle, Apparel, Etc., Baltic Shipping Company, Goodpasture, Inc., and Shippers Stevedoring, Inc., Defendants.

Civ. A. No. H-78-2202.

United States District Court, S. D. Texas, Houston Division.

February 3, 1981.

COPYRIGHT MATERIAL OMITTED

R. M. Sharpe, Jr. and Stuart B. Collins, Sharpe & Kajander, Houston, Tex., for plaintiff.

Gus A. Schill, Jr., Robert H. Etnyre, Jr. and John M. Elsley, Royston, Rayzor, Vickery & Williams, Houston, Tex., for defendants.

MEMORANDUM AND ORDER

CARL O. BUE, Jr., District Judge.

Pending before the Court are cross motions for summary judgment filed by plaintiff and by defendants Goodpasture, Inc. (Goodpasture) and Shippers Stevedoring, Inc. (Shippers Stevedoring). Each party has filed a response in opposition to the other's motion, and the parties have filed memoranda in support of their respective positions. After careful consideration of the memoranda, accompanying exhibits and arguments, the Court concludes that no issues of material fact exist and that defendants are entitled to judgment as a matter of law. See Rule 56, Fed.R.Civ.P. Accordingly, defendants' motion is granted, and plaintiff's motion is denied.

I. Introduction

Plaintiff brought this cause to recover compensation for damage incurred on December 8, 1977, to some or all of 1755 cases of canned soft drinks. The facts of the cargo damage incident are undisputed. The 1755 cases of canned soft drinks were loaded by employees of the shipper's supplier into a twenty foot container which was owned by the carrier. The container was trucked by the shipper's supplier to Goodpasture's yard adjacent to the Houston Ship Channel. Goodpasture was selected by the vessel's owner or representative to store the container until it could be loaded onboard the M/V Skulptor Vuchetich. The vessel's owner or representative also appointed Shippers Stevedoring to load the container onboard the vessel. In order to do so, the superintendent of Shippers Stevedoring directed an employee to bring the container to the wharf, and the employee proceeded with a forklift machine owned by Shippers Stevedoring to the shore side stowage location of the container. The forklift operator picked up the twenty foot container, and as he was proceeding to place the container on a flatbed truck, the container slipped from the forklift and fell to the ground.

No employee of Goodpasture was involved in the sequence of events which resulted in damage to some or all of the cases of canned soft drinks. Employees who arranged for the container to be loaded aboard the vessel were Shippers Stevedoring employees. s employed by Shippers Stevedoring. The parties have stipulated that no agency relationship exists between Goodpasture and Shippers Stevedoring; therefore, as a matter of law, Goodpasture is not liable to plaintiff for the negligent acts of Shippers Stevedoring. Accordingly, the Court concludes that summary judgment should be entered in favor of defendant Goodpasture.

The parties additionally have stipulated that Shippers Stevedoring was negligent in handling plaintiff's cargo on December 8, 1977 and that said negligence proximately caused damage to plaintiff's cargo. Two issues thus remain for resolution by the Court: (1) whether clause 17 of the Baltic Shipping Company bill of lading extends the benefit of section 4(5) of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 1304(5) (1975), to Shippers Stevedoring; and (2) whether the container in question is a package pursuant to Section 4(5) of COGSA.¹

II. The Himalaya Clause

The liability of stevedores is not limited by the terms of Section 1304(5) of the statute,²see Herd & Company v. Krawill Machinery Corporation, 359 U.S. 297, 301-02, 79 S.Ct. 766, 769, 3 L.Ed.2d 820 (1959); however, the parties to an ocean bill of lading may extend the benefit of COGSA limitations of liability to stevedores and other parties who stand in the chain of the carriage contract. See Herd & Company v. Krawill Machinery Corporation, supra, at 302-03, 79 S.Ct. at 769-70. Defendants contend that clause 17³ of the governing bill of lading⁴ extends the $500-per-package limitation of liability to Shippers Stevedoring. As Shippers Stevedoring was not a party to the contract of carriage, its liability for negligence may be limited pursuant to COGSA only if the language of clause 17 clearly indicates that Shippers Stevedoring is an intended beneficiary. See, e. g., Warta Insurance and Reinsurance Company, Ltd. v. Calumet Harbor Terminals, Inc., 1978 A.M.C. 2244, 2245 (N.D.Ill.1978). Further, any such limiting clauses must be strictly construed against the parties whom they are claimed to benefit.⁵See, e. g., Herd & Company v. Krawill Machinery Corporation, supra, at 303-05, 79 S.Ct. at 770-71; Bernard Screen Printing Corporation v. Meyer Line, 464 F.2d 934, 936 (2d Cir. 1972) (per curiam), cert. denied, 410 U.S. 910, 93 S.Ct. 966, 35 L.Ed.2d 272 (1973).

The clause at issue expressly extends the COGSA limitation of liability to "the benefit of any independent contractor performing services including stevedoring in connection with the goods hereunder." When analyzing similar language of other such clauses, various courts have found the questioned provisions of sufficient clarity to reflect the understanding of the parties so that the benefits would be extended to the third party. See, e. g., Grace Line, Inc. v. Todd Shipyards Corporation, 500 F.2d 361, 371 (9th Cir. 1974); Tessler Brothers (B.C.) Ltd. v. Italpacific Line, 494 F.2d 438, 445-46 (9th Cir. 1974); Bernard Screen Printing Corporation v. Meyer Line, supra, at 935-36; Secrest Machine Corporation v. S.S. Tiber, 450 F.2d 285, 287 (5th Cir. 1971); Brown & Root, Inc. v. M/V Peisander, # 75-H-2193 (S.D.Tex. September 30, 1977) (unpublished opinion) at 5, appeal pending, # 77-3277 5th Cir.; Miehle Company v. Hapag-Lloyd Aktiengesellschaft, 1975 A.M.C. 654, 656 (S.D.Tex.1974); Dorsid Trading Company v. S.S. Fletero, 342 F.Supp. 1, 6 (S.D.Tex.1972); Carle & Montanari, Inc. v. American Export Isbrandtsen Lines, Inc., 275 F.Supp. 76, 78-79 (S.D.N.Y. 1967), aff'd, 386 F.2d 839 (2nd Cir. 1967), cert. denied, 390 U.S. 1013, 88 S.Ct. 1263, 20 L.Ed.2d 162 (1968). The decisions in which the courts have accorded COGSA protections to third parties indicate that a negligent stevedore can avail itself of a limitation of liability, or other contractual benefits, only if the clause relied upon to confer the extension of benefits specifically refers to "stevedores" or "independent contractors".

As a result of utilizing strict construction, several courts have found the language in exculpatory clauses too general to reflect clearly that the contracting parties intended the benefits to be extended to the third party seeking to invoke protection. See, e. g., Toyomenka, Inc. v. S.S. Tosaharu Maru, 523 F.2d 518, 520-22 (2d Cir. 1975); DeLaval Turbine, Inc. v. West India Industries, Inc., 502 F.2d 259, 267-68 & n.10 (3rd Cir. 1974); Rupp v. International Terminal Operating Company, Inc., 479 F.2d 674, 676-77 (2d Cir. 1973); Cabot Corporation v. S.S. Mormacscan, 441 F.2d 476, 478-79 (2d Cir. 1971), cert. denied sub nom., John W. McGrath Corporation v. Cabot Corporation, 404 U.S. 855, 92 S.Ct. 104, 30 L.Ed.2d 96 (1971); Warta Insurance and Reinsurance Company, Ltd. v. Calumet Harbor Terminals, Inc., supra, at 2245; LaSalle Machine Tool, Inc. v. Maher Terminals, Inc., 1978 A.M.C. 1374, 1379-80 (D.Md.1978); Pan American World Airways, Inc. v. California Stevedore and Ballast Company, 1978 A.M.C. 1839, 1840-41 (N.D.Calif.1975).

The clause herein at issue expressly includes both stevedores and independent contractors. The Court, therefore, concludes that the provision clearly reflects an understanding by the contracting parties that Shippers Stevedoring was to be covered by the limitations of liability.⁶ Accordingly, the $500-per-package maximum described in clause 17 is applicable to limit the liability of Shippers Stevedoring for its negligence.

III. The Package Limitation

The facts involved in the cargo preparation sequence are undisputed. The shipper's representative contacted the vessel's local agent regarding the shipment of the canned soda pop, and a specific booking for space was made on board the M/V Skulptor Vuchetich at the request of the shipper through the vessel's local agent. Thereafter, the twenty (20) foot container, which was owned by defendant Baltic Shipping Company (the ocean carrier), was obtained through the vessel's local agent at the shipper's request, and the container was sent to Wharton to be loaded by the shipper's supplier, Wharton Beverage Company. Each of the 1755 cases of soft drinks consisted of twenty-four (24) pull-tab, twelve (12) ounce cans which were "loose packed" into a corrugated cardboard box. Each corrugated cardboard box was cut in half so that the top half of each can was exposed with no protective covering. The 1755 cases then were loaded into the container by employees of Wharton Beverage Company, and the container was sealed by their employees. No representative of the ocean carrier, terminal operator or loading stevedore was present during the loading and sealing of the container, and the only cargo that was packed into the container consisted of the shipper's 1755 cases of canned soda pop.

The container thereafter was trucked by Wharton Beverage Company to Goodpasture's yard adjacent to the Houston Ship Channel; Goodpasture was selected by the vessel's owner or representative to store the container until it could be loaded on board the M/V Skulptor Vuchetich. The vessel's owner or representative also appointed Shippers Stevedoring to load the container on board the vessel. Shortly after the container was received at Goodpasture's yard, it was placed on Tank Pad No. 11, a level concrete slab which was approximately six to eight inches higher than the...