Amstar Corp. v. M/V ALEXANDROS T.

• Decision Date: 17 July 1979
• Docket Number: Civ. No. H-76-166.
• Citation: 472 F. Supp. 1289
• Parties: AMSTAR CORPORATION, Plaintiff, v. M/V ALEXANDROS T., her engines, boilers, tackle, appurtenances and apparel, etc. and Nava Shipping Co., Limited, Defendants.
• Court: U.S. District Court — District of Maryland

472 F. Supp. 1289

AMSTAR CORPORATION, Plaintiff, v. M/V ALEXANDROS T., her engines, boilers, tackle, appurtenances and apparel, etc. and Nava Shipping Co., Limited, Defendants.

Civ. No. H-76-166.

United States District Court, D. Maryland.

July 17, 1979.

COPYRIGHT MATERIAL OMITTED

Donald A. Krach, Robert P. O'Brien and Niles, Barton & Wilmer, Baltimore, Md., Alan S. Loesberg, George F. Chandler, III, and Hill, Rivkins, Carey, Loesberg & O'Brien, New York City, for plaintiff.

Kieron F. Quinn, M. Hamilton Whitman, Jr., and Ober, Grimes & Shriver, Baltimore, Md., for defendants.

ALEXANDER HARVEY, II, District Judge:

The sole question presented in this civil action is the amount of damages due from a shipowner to the owner of a cargo of raw sugar which was delivered in a damaged condition.

Amstar Corporation, the plaintiff (hereinafter "Amstar"), operates a sugar refinery in the City of Baltimore. On January 31, 1976, a shipment of raw sugar arrived at Amstar's Baltimore refinery on board the M/V ALEXANDROS T., a cargo vessel owned by the defendant Nava Shipping Co., Ltd. (hereinafter "Nava"). During the ocean voyage which had preceded the arrival of the vessel in the Port of Baltimore, large amounts of sea water entered all four hatches and damaged the raw sugar. Invoking this Court's admiralty and maritime jurisdiction, Amstar is here seeking damages from the ship and its owner for the losses sustained. The defendants have admitted liability but have contested the award of damages to plaintiff.

Following extensive pretrial proceedings¹ and the entry of a Pretrial Order, the case came on for trial on the issue of damages alone. The trial lasted over a period of some five days, and various expert and other witnesses testified. The evidence pertaining to many of the questions raised was conflicting, and in making its findings, the Court has given due regard to the credibility of the witnesses and the weight their testimony deserves. The Court's findings of fact and conclusions of law, under Rule 52(a) of the Federal Rules of Civil Procedure, are embodied herein, whether or not expressly so characterized.

Plaintiff asserts that it is entitled to recover damages in the amount of $160,944.31, plus interest and costs. Defendants contend (1) that plaintiff has failed to prove any damages at all; (2) that, in the alternative, plaintiff's losses amounted to no more than $5,109.76; and (3) that, as a third alternative, if the Court agrees with plaintiff's methodology for computing damages, plaintiff would be entitled to recover merely $34,897.20.²

I

The facts

Many of the background facts have been stipulated. The M/V ALEXANDROS T. is a motor vessel registered in Cyprus and owned by the defendant Nava Shipping Co., Ltd., a Cypriot corporation with offices in Nicosia, Cyprus. At all times pertinent to this action, the vessel was being operated under a time charter between Nava and Eastern Mediterranean Maritime Limited. On December 17, 1975, the time charterer entered into a bulk sugar charter with Westway Trading Corporation of New Jersey (hereinafter "Westway") for the carriage of a cargo of approximately 4,000 long tons of raw sugar from Nicaragua to any one of several designated ports in the United States, including Baltimore. The next day, plaintiff Amstar contracted to purchase from Westway 4,000 long tons of sugar to be shipped on the ALEXANDROS T.

Pursuant to the bulk sugar charter, the ALEXANDROS T. took on a bulk cargo of raw sugar in the port of Corinto, Nicaragua. The cargo was loaded in good order and condition, loading having been completed on January 15, 1976, and clean bills of lading were then issued. On January 23, 1976, Amstar designated Baltimore as the port of discharge for the sugar it had purchased from Westway. When the vessel arrived at Baltimore Anchorage on January 29, 1976, Amstar was the owner of the cargo of sugar.

On January 31, 1976, a Saturday, the ALEXANDROS T. proceeded to the Amstar pier in Baltimore and docked at about 7:00 A.M. that day. Shortly thereafter, hatches Nos. 1 and 3 were opened and discharge of the raw sugar commenced. The Amstar facility in Baltimore discharges bulk sugar by the use of two gantry cranes which lower large clamshell grabs into the holds of ships which dock at the Amstar pier. Each lift of a grab removes approximately 14,000 pounds of sugar. The grab drops the raw sugar into hoppers on the pier, and the hoppers in turn feed conveyor belts which carry the sugar up to and through the scalehouse and ultimately into the raw sugar warehouse. The raw sugar is carried on conveyor belts along the pier and then into the scalehouse, which consists of three hoppers, one beneath the other.

As the sugar is unloaded, it is necessary that it be weighed and sampled so that the proper price can be established for a particular shipment. Sampling at Amstar's facility is ordinarily accomplished by an automatic sugar sampling device, which is a part of the bottom or discharge hopper and which includes a constantly rotating auger, three inches in diameter.³ Rotating at a constant speed, the auger is designed to take out continuous samples of the raw sugar passing through the bottom hopper and to deposit the sampled sugar into cans which have a 35-pound capacity. Sugar from the sample cans is then mixed and placed in 8-ounce jars, which are subsequently delivered to various laboratories for testing.

Henry Kief is manager of the Raw Sugar and Customs Department of Amstar's Baltimore facility. Shortly after 7:15 A.M. on January 31, 1976, Kief arrived at the pier, went aboard the ALEXANDROS T. and observed that salt water had wetted the sugar in the two hatches then open. Kief requested that the remaining two hatches be opened, and he observed wet raw sugar in hatches Nos. 2 and 4 as well. Each hatch held approximately 2,200,000 pounds of raw sugar. At 8:45 A.M., the discharge of the cargo was halted because Kief had concluded that the sugar was more damaged than he had first supposed. Kief then telephoned Mr. Richard Tierney, his superior in New York, who, among other things, ordered that a marine surveyor be engaged to make a proper determination of the cause and extent of the damage.

While on the scene, Kief consulted with Thomas Augulis of R. Markey & Sons, Inc. (hereinafter "Markey"), an independent sugar sampling firm, which had been engaged by Westway to sample the cargo. Kief and Augulis agreed that it would not be possible to segregate the wet sugar from the dry, and they decided that the cargo would have to be discharged with the wet and the dry sugar commingled. Kief and Augulis also concluded that the automatic sampler would not give reliable readings because of the large amount of wet sugar which would be passing through the bottom hopper. Accordingly, it was decided that Kief should take hand samples from each of the four hatches and that these hand samples would be used instead of the automatic sampling device for computing the price at which the sugar would be sold.

Unloading operations were accordingly resumed and continued throughout the day. During the unloading, Kief went into each of the four hatches and, using a small scoop, filled eight separate 35-pound cans with samples of raw sugar. Four of the cans were filled with wet, damaged sugar, and four of the cans were filled with dry, undamaged sugar. Sugar from these cans was then mixed, placed in jars and sent to various laboratories for testing. The resulting tests were used for determining the price paid by Amstar to Westway for the sugar it received and are also relied upon here by Amstar in calculating its damages.

At approximately 9:00 A.M. on January 31, 1976, Ramsay, Scarlett & Co., agents for the time charterers, had contacted a Baltimore law firm, which was the local representative of West of England Shipowners Mutual Insurance Association Limited, the liability insurer of the vessel. The request was made that a representative of the law firm make an immediate investigation aboard the ALEXANDROS T. with regard to a possible claim for cargo damage. At approximately 9:30 A.M., an attorney from that law firm engaged marine surveyor Sumner R. Dolber, of Edward F. Carter & Associates, to assist in the investigation. One half-hour later, the attorney and Dolber arrived at the ship and commenced their investigation. The attorney primarily interviewed the ship's master, Captain P. Daskalakis, and Dolber observed the discharge of the sugar, which by that time had been started up again and was continuing.

At approximately 11:15 A.M., Paul Trapani, a marine surveyor from Baltimore Cargo Surveyors who had been engaged by Amstar, arrived at the ship to begin his survey. He proceeded to the office of the ship's master, where he found the ship's attorney and Dolber. Trapani began his survey by inquiring into the cause and extent of the cargo loss but was then asked to leave the ship by the attorney. Trapani complied and left the ship. However, Kief remained on board and continued to supervise the unloading operations and to take samples of the damaged and sound sugar. Discharge was completed by 6:15 P.M., and the ship then left the Amstar pier and proceeded to anchorage in the Baltimore harbor. On Monday, February 2, 1976, this civil action was filed, and the ALEXANDROS T. was arrested by the United States Marshal.⁴

II

The applicable principles of law

In a cargo damage case, the primary objective in awarding damages is to indemnify the plaintiff for the loss sustained by reason of the carrier's fault. Interstate Steel Corp. v. SS CRYSTAL GEM, 317 F.Supp. 112, 121 (S.D.N.Y.1970); Wood, Damages in Cargo Cases, 45 Tul.L.R. 932, 942 (1971). The plaintiff, of course, bears the burden of proving the fact of damages and also the quantum of damages. Interstate Steel Corp. v. SS CRYSTAL GEM, supra; O'Brien Bros., Inc. v. THE HELEN B. MORAN, 160 F.2d 502, 504-05 (2d Cir. 1947).

In a case involving...