Consolidated Grain & Barge Co. v. American Barge and Towing Co.
| Decision Date | 12 June 1991 |
| Docket Number | No. 89-0853A(6).,89-0853A(6). |
| Parties | CONSOLIDATED GRAIN AND BARGE COMPANY, et al., Plaintiffs, v. AMERICAN BARGE AND TOWING COMPANY, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
James W. Herron, St. Louis, Mo., for plaintiffs.
Frank S. Thackston, Jr., Lake, Tindall, Hunger & Thackston, Greenville, Miss., Gary D. McConnell, Peper, Martin, Jensen, Maichel & Hetlage, St. Louis, Mo., for defendants.
This matter is before the Court on the merits of plaintiffs' claims after a two-day non-jury trial. The Court having considered the pleadings, the testimony of the witnesses, the deposition testimony, the documents in evidence and the joint stipulation of the parties, and being fully advised in the premises, makes the following findings of fact and conclusions of law as required by Rule 52 of the Federal Rules of Civil Procedure. Fed.R.Civ.P. 52.
1. Consolidated Grain & Barge Company (Consolidated) is a corporation duly organized and existing under law and engaged in the business of buying and selling grain and other commodities.
2. International Marine Underwriters, Inc. (IMU) is a corporation duly organized and existing under law and engaged in the business of marine insurance.
3. American Barge and Towing Company (American) is a corporation duly organized and existing under law and engaged in the business of moving bulk grains and other similar cargoes on the Inland River System by barges and towboats operated by American.
4. American Milling Company (American Milling) is a corporation duly organized and existing under law.
5. On April 4, 1988, American agreed with American Milling to move grain cargoes from Granite City, Illinois to the New Orleans, Louisiana area in barges provided by American. American Milling and American exchanged American Freight Confirmation No. 3241 and American Milling Confirmation No. 1329. This arrangement between American Milling and American is commonly referred to as the sale of freight by a carrier, in this case American. Thereafter American Milling sold the freight to Consolidated on June 20, 1988 for transportation of cargo therein from Granite City to New Orleans.
6. The documents exchanged in conjunction with that transaction were American Milling Confirmation of Barge Freight Sales Contract No. 1385 and Consolidated purchase confirmation No. 26710. Contracts for private carriage of bulk cargoes are traded as commodities in the river industry. The contracts entered into between American and American Milling concerning the agreement for movement of the cargo included a provision that the carrier, American in this case, would insure the cargo being carried for the benefit of shipper and consignee. On June 20, 1988, American Milling sold one of the agreed movements of cargo to Consolidated. Pursuant to that agreement, Consolidated and American executed written standard contracts containing language substantially identical to the language contained in the agreement between American Milling and American, including the provision outlining the carrier's obligation to provide insurance on and for the benefit of the cargo being carried.
7. Pursuant to its agreement with American Milling, American provided barge RM-245B, a typical jumbo hopper barge for carriage of bulk cargoes in the Mississippi River. Barge RM-245B has exterior dimensions of two hundred foot length by thirty-five foot width by twelve foot hull depth. The large, undivided cargo box is covered by nine interlocking fiberglass cargo covers and each cargo cover has two grain doors, one to port and the other to starboard. American Milling directed that barge RM-245B be placed by American for movement of Consolidated's cargo. Barge RM-245B was constructively placed for loading at Granite City, Illinois on June 20, 1988 at 7:00 a.m. Beginning on June 22 and ending on June 25, 1988, barge RM-245B was loaded with 1,527.33 net tons of maize by-product expeller pellets at the APC Warehouse Company Terminal in the Chain of Rocks Canal near Granite City for movement to the New Orleans area where such cargo would be transferred to an ocean vessel for export to Europe. At the time of loading and releasing of the barge to American, the cargo was not damaged as reflected by the samples taken for analysis at the point of origin.
8. On June 25, 1988, Consolidated, acting as agent for American pursuant to a written agreement authorizing the issuance on a form provided by American, issued American's Bill of Lading covering the 1527.33 net tons of maize by-product pellets loaded onto barge RM-245B in order to expedite the billing and the collection of the purchase price of the sale of cargo to the consignee. The Bill of Lading listed American as the carrier and Consolidated as the shipper and consignee. The Bill of Lading was a standard American form provided by American for issuance by Consolidated.
9. On June 28, 1988, Consolidated sold and consigned the cargo to Kurt A. Becher, c/o Overseas Commodities Corporation (OCOMCO), for a total of $224,517.51, $147.00 a net ton and C.I.F. destination. Becher paid the purchase price on June 30, 1988 prior to the arrival of the cargo at destination.
10. On June 29, 1988, RM-245B was released to American and arrived at Upper St. Rose Fleet at Mile 127 UMR near New Orleans on July 27, 1988. American paid for and scheduled the movement of barge RM-245B on July 30, 1988 from Upper St. Rose Fleet to thirty-one miles downriver to Covenant Marine Fleet, the staging fleet for the Delta Bulk Terminal's Cargo Transfer Rig and the location used for the transshipment of barge cargoes to ocean-going freighters.
11. Employees of Russell Marine Supervisory Services (Russell), agents for the consignee, conducted an inspection of the cargo on July 29, 1988 shortly after the arrival of the cargo at destination near New Orleans. This inspection disclosed that the cargo under the No. 7 cargo cover was wet, hardened and blackened over the width and length of the cover to an undetermined depth, and the remainder of the cargo was of medium compact. The analysis of the cargo taken by Russell after barge RM-245B's arrival determined a low to moderate content of moisture in the pellets. Approximately one thousand five hundred pounds of damaged cargo was present under the cover. Russell further determined that there were fractures in the No. 7 cargo cover, and water had entered the cargo hopper through the fractures and damaged the cargo under the cargo cover.
12. In the joint stipulation entered on March 30, 1990, American agreed that it is liable to plaintiffs for the one thousand five hundred pounds of damaged cargo present on July 29, 1988 and does not contend that it exercised due diligence in making the barge seaworthy in all respects at or prior to the inception of the voyage or that it is entitled to the benefit of the Harter Act, 46 U.S.C.App. §§ 190-196. The parties' joint stipulation does not address the responsibility or liability of American for any subsequent damage sustained to the cargo after July 29, 1988.
13. Mark Fletcher of Consolidated notified American concerning the Russell inspection and the finding of the damaged cargo and the cargo cover. Consolidated informed American that the cargo on barge RM-245B could not be loaded onto the ocean-going vessel TREBIZOND so long as the damaged cargo remained on the barge and instructed American to remove the damaged cargo so that the remaining cargo on RM-245B could be loaded onto the TREBIZOND. On August 1, 1988, Fletcher discussed with Jack Haskell of American the removal of the damaged cargo. On August 3, 1988, Haskell indicated that American would investigate and take care of the damaged cargo problem so that barge RM-245B could be taken to the transfer rig. On August 5, 1988, American advised the consignee's representative that American would have the damaged cargo removed from barge RM-245B in preparation for loading onto the TREBIZOND. Two laborers working with shovels and buckets could have removed the damaged cargo by passing the cargo through doors in the damaged cover in approximately two hours without removing the No. 7 cargo cover.
14. The common practice in the New Orleans area is for the carriers to be responsible for culling damaged cargo caused by defects in or unseaworthiness of the carrying vessel so that the consignee will accept the cargo for loading on a vessel.
15. Russell scheduled barge RM-245B's cargo for loading to begin on August 4, 1988 onto the ocean-going vessel TREBIZOND. The TREBIZOND completed loading during the afternoon of August 10, 1988.
16. In the morning of August 8, 1988, Bruce Davis of Russell contacted Norman Antrainer instructing him that barge RM-245B was scheduled to discharge into the TREBIZOND within the next twenty-four hours and that he needed to make arrangements for barge RM-245B's damaged cargo to be culled out. As a result of barge RM-245B's not being ready to load, another barge loaded in its place. The cargo of barge RM-245B could have been loaded into the TREBIZOND if American had removed the damaged cargo as promised. Instead of removing the damaged cargo, American placed a plastic visquine sheeting over cargo cover No. 7 to prevent water damage until the cargo could be loaded on another ocean-going vessel, the KONPOLIS, later in August.
17. A survey performed by Russell on August 9, 1988 disclosed that the damaged cargo had not been removed and was progressing. The cargo was wet and moldy in several locations.
18. On August 15, 1988, Russell conducted another inspection of the cargo on barge RM-245B to determine the status of its cleaning. None of the damaged cargo had been removed, and the cargo was showing signs of heating.
19. Even though the cargo remained in American's care, custody, and control, American did nothing to monitor the condition of the cargo until...
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