American Home Assur. Co. v. Zim Jamaica
| Decision Date | 02 March 2006 |
| Docket Number | No. 01 CIV, 2854(PKL).,01 CIV, 2854(PKL). |
| Citation | 418 F.Supp.2d 537 |
| Parties | AMERICAN HOME ASSURANCE CO., a/s/o, Liberty Hardware Mfg. Co., Plaintiff, v. ZIM JAMAICA, her engines, boilers, etc., and Zim Israel Navigation Company, Ltd., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Donovan Parry McDermott & Radzik, New York, New York, Edward C. Radzik, for Plaintiff.
De Orchis, Walker & Corsa, LLP, New York, New York, John A. Orzel, for Defendants.
Plaintiff American Home Assurance Co., the subrogated marine cargo insurer of Liberty Hardware Mfg. Co., brings this action, pursuant to the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. app. §§ 1300-15 (2000), against defendants m/v Zim Jamaica, her engines, boilers, etc., and Zim Israel Navigation Company, Ltd., for damage to a shipment of hardware fixtures. Plaintiff previously moved for summary judgment, pursuant to Federal Rule of Civil Procedure 56, on the issue of defendants' liability. In an Opinion and Order dated December 24, 2003, the Court granted in part, and denied in part, plaintiff's motion, holding as a matter of law that no genuine issue of material fact existed as to whether the cargo was damaged at outturn, and that a genuine issue of material fact existed as to whether the cargo was delivered to defendants in good condition. Plaintiff now renews its summary judgment motion on this latter question. For the reasons set forth below, the disposition of this motion is stayed pending a sixty-day continuance for the sole purpose of deposing Lao Xiji.
Plaintiff is the insurer of Liberty Hardware Mfg. Co. ("Liberty"), the consignee of a shipment of hardware fixtures (the "Cargo") found damaged upon receipt in Greensboro, North Carolina. Pursuant to its open cargo insurance policy with Liberty (the "Policy"), plaintiff indemnified Liberty in the amount of $93,326.67 for the damage to the Cargo. (Pl.'s 56.1 ¶ 1; Thomas Decl. ¶ 5.) Pursuant to the Policy, plaintiff is subrogated to any and all rights of recovery that Liberty has against defendants m/v Zim Jamaica, her engines, boilers, etc., and Zim Israel Navigation Company, Ltd. ("Zim Israel"), the common carrier of the cargo and the carrier's vessel. (Thomas Decl. Ex. 1.) Consequently, plaintiff has brought this action, pursuant to COGSA, against defendants for sums paid to Liberty under the Policy. (Pl.'s 56.1 ¶ 1; Thomas Decl. ¶ 5.)
The Cargo began its journey on June 7, 2000 in Guangzhou, China. (Xiji Decl. ¶ 1.) Globe Express Services ("Globe"), the shippe1 of the Cargo, received at its warehouse in Guangzhou several shipments of hardware from various Chinese manufacturers. (Najm Decl. ¶ 2.) Those shipments, which were consolidated by Globe into one container, constitute the Cargo. (Najm Decl. ¶ 2; Xiji Decl. ¶ 2.) Defendants were obligated to provide the shipping container to Globe (Hirn Decl. ¶ 4); however, defendants only made the container available at the port of Huangpu, a port about forty miles away from Globe's warehouse. As such, Globe hired a truck driver to deliver the empty shipping container from Huangpu to its warehouse in Guangzhou.2 (Chan Decl. ¶ 4.)
Lao Xiji, the truck driver hired by Globe, picked up the forty-foot-tall empty shipping container from the Port of Huangpu, where he inspected the container and found it to be in good condition.3 (Xiji Decl. ¶ 1.) Mr. Xiji was given a seal to affix to the container after it was loaded in Guangzhou. (Xiji Decl. ¶ 1.) Mr. Xiji then drove the container to Globe's warehouse in Guangzhou. (Xiji Decl. ¶ 1.)
The loading of the Cargo into the container at Globe's warehouse (Najm Decl. ¶ 2; Xiji Decl. ¶ 2) was overseen by Asaam Najm, a Globe manager (Xiji Decl. ¶ 2). At the time of loading, Mr. Najm noted that the Cargo's contents were in good condition and corresponded to the packing list. (Najm Decl. ¶ 3.) The container was then closed and sealed.4 (Najm Decl. ¶ 4; Xiji Decl. ¶ 3.)
Because Globe had contracted with defendants to carry the Cargo on a "CY/CY," or "container yard to container yard," basis (Hirn Decl. ¶ 4) from the port of Huangpu, China to the port of Savannah, Georgia (Hirn Decl. ¶ 6), it was Globe's responsibility to transport the Cargo from its warehouse in Guangzhou to the port of Huangpu (Xiji Decl. ¶ 4). Accordingly, Mr. Xiji, the driver hired by Globe, drove the Cargo to Huangpu, where port personnel inspected the container and confirmed that the seal applied to the container had the same number as the seal provided to Mr. Xiji when he originally picked up the container. (Xiji Decl. ¶ 4.) Mr. Xiji has declared that the loaded and sealed container was in good condition when he delivered it to the port, and that the weather conditions at the time were hot and dry with no rain. (Xiji Decl. ¶ 5.) Defendants do not, as a matter of course, open any loaded and sealed containers provided to them for carriage unless there is an extraordinary reason to do so, such as the existence of an open and obvious defect like leaking water. (Hirn Decl. ¶ 4.) Defendants have no record of any open and obvious defects in the container housing the Cargo. (Hirn Decl. ¶ 4.) Consequently, the container housing the Cargo was not opened. (Chan Decl. ¶ 5.)
The container was loaded onto the feeder barge CHANG YONG for carriage to Hong Kong. (Furman Decl. ¶¶ 2-4.) The bill of lading governing the shipment was issued by defendants and stamped "Shipper's Load Stowage and Count—Said to Contain." (Chan Decl. ¶ 5.)
The CHANG YONG departed Huangpu on June 10, 2000 (Furman Decl. ¶ 4) and arrived in Hong Kong on June 11, 2000 (Furman Decl. ¶ 5). In Hong Kong, the container was transferred to the barge CHANG TONG, which carried the container to the port of Shekou, arriving on June 12, 2000. (Furman Decl. ¶ 6.) At the port of Shekou, the container was loaded onto the M/V Zim Jamaica on June 15, 2000, for carriage to the United States. (Furman Decl. ¶ 7.)
Pursuant to the governing bill of lading and the freight manifest, Globe contracted with defendants for the latter to arrange for the trucking of the Cargo from the port of Savannah to its final destination in Greensboro, North Carolina.5 (Hirn Decl. ¶ 6, Ex. A, Ex. C.) Accordingly, defendants hired Panther International (Hirn Decl. ¶ 8), who picked up the Cargo in Savannah and then drove it to Liberty's facility in Greensboro (Thomas Decl. ¶ 3). Liberty received the shipping container on July 19, 2000. (Thomas Decl. ¶ 2.) When the container was opened, Liberty found that its contents were wet and damaged (Thomas Decl. ¶ 3), with a visible waterline of approximately eighteen to twenty inches (Thomas Decl. ¶ 4). As a result, most of the affected boxes were either damp or soaking wet, and the actual hardware contained therein was damaged and beginning to rust. (Thomas Decl. ¶ 4.)
The Court previously held, and the parties do not contest on this motion,6 that no genuine issue of material fact existed as to whether the Cargo was damaged at out-turn, i.e., upon its arrival in Greensboro, North Carolina. Am. Home Assurance Co. v. ZIM JAMAICA, 296 F.Supp.2d 494, 501 (S.D.N.Y.2003) (Leisure, J.). The Court went on to hold, however, that a genuine issue of material fact existed as to whether the Cargo was in good condition when defendants assumed its custody in Huangpu.7 Id. at 504. Here, the parties both contest that the Cargo was exposed to, and damaged by, freshwater while in the other's custody. (E.g., Pl.'s Mem. Law Supp. Mot. 4.) The parties' specific contentions follow.8
Plaintiff maintains that there is no dispute as to the following chain of custody of the Cargo: Mr. Xiji drove the empty shipping container to Guangzhou, where it was inspected and found to be in good condition (Pl.'s 56.1 ¶ 3); both Mr. Najm and Mr. Xiji viewed and confirmed that the Cargo was in good condition when loaded into the container at Guangzhou (Pl.'s 56.1 ¶ 4); the loaded container was then locked and sealed at Guangzhou (Pl.'s 56.1 ¶ 4); Mr. Xiji drove the container to Huangpu, during which time neither the Cargo nor the container was damaged (Pl.'s 56.1 ¶ 5); and the container arrived at Huangpu on June 7 (Pl.'s 56.1 ¶ 6), where port personnel accepted the container in good condition (Pl.'s 56.1 ¶ 5).
Plaintiff contends that there was no report of rain in Hong Kong on June 7, 2001. (Pl.'s 56.1 ¶ 6.) Between June 8, 2001 and June 17, 2001, the alleged date on which the container was finally loaded onto the Zim Jamaica, it rained in the "region of the container terminal," with a downfall of 3.15 inches of rain on June 12, 2000. (Pl.'s 56.1 ¶ 6.) Because the Cargo was undamaged up until, and through, June 7, and because the Cargo was in defendants' custody as of June 8, 2000 (Pl.'s 56.1 ¶ 8; Def.'s 56.1 ¶ 8), plaintiff contends that the Cargo could only have been exposed to freshwater while in defendants' custody.
Defendants contend generally that there are disputed issues of material fact as to whether the cargo was damaged by the time it reached the port of Huangpu. (Def.'s 56.1 ¶ 5.) They first contend that the cargo was delivered to Huangpu on June 8, and not June 7. (Def.'s 56.1 ¶ 65; Furman Decl. ¶ 2.) In support of this contention, defendants point to a discrepancy among Mr. Xiji's declaration, Mr. Najm's declaration and deposition, and the declaration of U. Furman, the Director of Operations of Zim Israel Navigation Co., Ltd. Far East.9 (Def.'s 56.1 ¶ 5; Furman Decl. ¶ 2.) While Mr. Xiji has declared that he delivered the Cargo to Huangpu on June 7, 2000 (Xiji Decl. ¶ 2), Mr. Najm only declared that it was delivered in June 2000 (Najm Decl. ¶ 2), and then stated in his deposition that he was...
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