Lord & Taylor LLC v. Zim Integrated Shipping Servs., Ltd.
| Decision Date | 08 June 2015 |
| Docket Number | No. 13 Civ. 3478(AT).,13 Civ. 3478(AT). |
| Citation | 108 F.Supp.3d 197 |
| Parties | LORD & TAYLOR LLC, Plaintiff, v. ZIM INTEGRATED SHIPPING SERVICES, LTD. and New York Container Terminal, Inc., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Gregory George Barnett, Janine Elaine Brown, Martin F. Casey, Casey & Barnett, L.L.C., New York, NY, for Plaintiff.
Vincent M. Deorchis, Kaspar Kielland, Montgomery, McCracken, Walker & Rhoads, L.L.P., New York, NY, for Defendants.
I. Overview
On the evening of Monday, October 29, 2012, Hurricane1 Sandy made landfall in southern New Jersey, causing billions of dollars in damage along the East Coast of the United States. As a result of flooding at the New York Container Terminal ("NYCT" or the "Terminal") located on Staten Island, 211 cartons containing Plaintiff, Lord & Taylor LLC's, ladies cardigans and sweaters were ruined by wetting damage. Although Hurricane Sandy was figuratively an Act of God, the question before the Court is whether Hurricane Sandy was legally an Act of God that absolves Defendant, Zim Integrated Shipping Services, Ltd. ("Zim"), of liability for Plaintiff's loss.2 The answer is yes.
II. Procedural History
The Court held a bench trial from October 27 to 31, 2014. Post-trial memoranda were fully submitted on December 5, 2014. On January 8, 2015, the Court visited NYCT.
At trial, each party presented one fact witness and two expert witnesses. Robert Nixon, Vice President of Operations at NYCT, testified as a fact witness on behalf of Plaintiff, and Zim called Salvatore Grillo, a former NYCT employee who was present at NYCT on the night of the storm. The Court credits their testimony.
Each party presented its own terminal operations expert. Captain Ivo Knobloch testified on behalf of Plaintiff. Knobloch holds a Bachelor of Technology degree in Ship Management and Ship Operation from the Academy for Nautical Science and Marine Technology in Bremen, Germany. Ex. 57, at I. He has been a marine surveyor and casualty investigator since 1988, and prior to that, worked on ships for about 14 years.Id.; Tr. 239. Zim called Donald Hamm as its terminal operations expert. Hamm worked at container terminals in Europe and the United States for 40 years before retiring in 2009. Tr. 522; see also Ex. 62. Most recently, from 2003 to 2009, Hamm was president of the Port of Newark Container Terminal. Tr. 524.
Each party also presented a meteorology expert. Lee Branscome, Ph.D., testified for Plaintiff. Branscome earned a Ph.D. in meteorology at the Massachusetts Institute of Technology. Ex. 33, at 1. He is a Certified Consulting Meteorologist and is board certified by the American Meteorological Society. Id. Zim called Austin Dooley, Ph.D. Dooley holds a Ph.D. in Physical Oceanography from New York University. Ex. 35, at 22. Dooley was previously an associate professor of meteorology and oceanography at the SUNY Maritime College, an adjunct instructor of meteorology and oceanography at Purchase College, and an adjunct professor of meteorology at the U.S. Merchant Marine Academy. Id. at 1. In addition to the live testimony, the parties provided deposition excerpts constituting the direct testimony of several additional fact witnesses. See Joint Pre–Trial Order, Oct. 20, 2014, EOF No. 60.
"In an action tried on the facts without a jury ... the court must find the facts specially and state its conclusions of law separately." Fed.R.Civ.P. 52(a)(1). Following are the Court's findings of fact and conclusions of law.
III. Findings of Fact
Prior to trial, the parties stipulated to the following facts concerning Plaintiff's cargo, the manner of shipment, and the applicable damages.
Plaintiff contracted with Zim, a licensed ocean liner carrier, to transport Plaintiff's merchandise from Hong Kong to New York. Joint Stipulation of Facts ("Jt. Stip.") ¶¶ 1–3, 22, Oct. 20, 2014, ECF No. 60. Zim leased space aboard a ship known as the M/V OOCL Kobe (the "Kobe") to transport the goods in containers. Id.
On October 1, 2012, two containers, container GLDU 2916462 ("Container G"), carrying 268 cartons of Plaintiff's ladies cardigans, and container IPXU 3827688 ("Container I"), carrying 443 cartons of Plaintiff's sweaters and cardigans, were loaded onto the Kobe. Id. ¶ 1, 2. The Kobe departed Hong Kong for the Port of New York on October 1 and arrived in New York on Saturday, October 27. Id. ¶¶ 1–2, 4. The Kobe berthed at NYCT at approximately 9:00 a.m. and began cargo operations at approximately 1:00 p.m. Id. ¶ 4. The term "cargo operations" means the loading and unloading of cargo containers. The Kobe completed cargo operations at 2:12 a.m. on Sunday, October 28 and left shortly thereafter. Id. 5. Container G was stored outdoors on the asphalt surface of the Terminal; NYCT was unable to determine where Container I was stored. Id. ¶¶ 6–7.
As is "usual and customary" on the weekend, NYCT was closed for truck pickup of incoming cargo. Id. ¶ 8. At no time did Plaintiff request that Zim or NYCT provide Plaintiff the opportunity to collect its goods on Saturday or Sunday. Id. ¶ 9.
Due to Hurricane Sandy, NYCT was closed on Monday, October 29. Id. ¶ 10. NYCT "suffered flooding damage on the evening of Monday, October 29, 2012 as a result of the storm surge associated with Hurricane Sandy." Id. ¶ 11.
Plaintiff's truckers picked up the containers on November 6 and delivered them to Plaintiff the next day. Id. ¶ 12. As a result of Sandy, 118 cartons in Container G and 93 cartons in Container I suffered wetting damage and were destroyed. Id. ¶¶ 16–17. Based on the retail sales value of the merchandise, Plaintiff suffered a loss of $206,972.Id. ¶ 18. This amount was paid to Plaintiff by its cargo underwriter, Markel Syndicate 3000, which is subrogated to Plaintiff's rights to the claim under the cargo policy. Id.
Pursuant to the package limitation provision of the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. § 30701 note, formerly at 46 U.S.C. app. §§ 1301 et seq., the parties agree that Plaintiff's damages are limited to $105,500 and that this amount is directly attributable to wetting damage from Hurricane Sandy. Id. ¶¶ 19–20.
NYCT is one of six container terminals located in the Port of New York.3 NYCT is situated on the northwest corner of Staten Island. The Terminal sits on land owned by the City of New York (the "City"), which leases it to the Port Authority of New York and New Jersey (the "Port Authority"), which, in turn, leases it to NYCT. Tr. 141, 527–28. This is a common arrangement among terminal operators and local governments in the area. Tr. 529. Constructed in the 1960s, NYCT was previously known as the Howland Hook Container Terminal. Ex. 62, at 2. The Ontario Teachers Investment Group purchased the Terminal in 2006, and it was subsequently renamed. Id.
The Terminal is an asphalt-covered lot spanning 187 acres. Tr. 456, 491. It is roughly triangular in shape. Tr. 39; see also Ex. 62A (); Ex. 78 (). NYCT is bordered along the north by a swamp, Tr. 508, and along the south by railroad tracks that do not belong to the Terminal, Tr. 454. A tidal estuary known as Bridge Creek runs along the north edge and cuts southeast through the Terminal. Tr. 42, 347–48. Located in the northeast area of NYCT is an intermodal rail facility where containers are loaded onto rail cars. Tr. 138. The Terminal is bordered on the east by the Arlington Yard, a rail yard that is owned by the City, managed by Conrail, and connected to NYCT's intermodal rail facility. Tr. 43, 105.
NYCT is bordered on the west by the Arthur Kill, a tidal river. Tr. 89; Exs. 17, 38. The Arthur Kill is a navigable waterway that runs along the west side of Staten Island and separates Staten Island and New Jersey. Ex. 38. At its southern end, the Arthur Kill connects to Raritan Bay. Id. The Arthur Kill is considered part of New York Harbor, which also includes the Upper Bay and Lower Bay of New York at the convergence of the Hudson and East Rivers. Tr. 740. Bridge Creek connects to the Arthur Kill at the northwest edge of the Terminal. Tr. 33–34. NYCT has an estimated 3,000–foot bulkhead that runs along the Arthur Kill. Tr. 29, 38–39. The bulkhead, which is the front wall of the Terminal that faces the water, is roughly the same height above the water as the bulkheads of other terminals in the Port of New York because these bulkheads were built in accordance with standards established by the Port Authority and the U.S. Coast Guard. Tr. 543–44.
NYCT is engaged in the business of stevedoring, which involves transporting cargo onto and off of seafaring vessels. Tr. 577. Cargo is stored in corrugated steel containers that come in standard sizes of 20 or 40 feet long and 8 to 9.6 feet tall. Tr. 222, 535, 546. Containers sit on corner castings, which are standard-sized pieces of steel welded to the corners of a container. Tr. 535–36. The weight of a container rests on these corner castings, and they are used to attach and secure one container to another on a vessel or to lift a container out of a vessel. Tr. 536–37, 541–42; see also Ex. 96 (). Because the corner castings must be aligned in order to attach and provide stability, containers can only be stacked on other same-sized containers, e.g., 40–foot containers can only be stacked on other 40–foot containers. Tr. 538.
Containers transported by sea are loaded and stacked in specialized container ships and are unloaded at a container terminal using large, custom cranes. See Ex. 99 (). The cranes are anchored to a string piece, which is a strip of asphalt under the cranes along the bulkhead. Tr. 543–44; see also Ex. 88. NYCT has a total of 3 berths and 9 cranes distributed among the berths for cargo loading and unloading. Tr....
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