Bernard Screen Printing Corporation v. Meyer Line, 265

• Decision Date: 14 July 1972
• Docket Number: No. 265,Docket 71-1764.,265
• Citation: 464 F.2d 934
• Court: U.S. Court of Appeals — Second Circuit
• Parties: BERNARD SCREEN PRINTING CORPORATION, Plaintiff-Appellant, v. MEYER LINE, Defendant, and Universal Terminal & Stevedoring Corporation, Defendant-Appellee.

464 F.2d 934 (1972)

BERNARD SCREEN PRINTING CORPORATION, Plaintiff-Appellant, v. MEYER LINE, Defendant, and Universal Terminal & Stevedoring Corporation, Defendant-Appellee.

No. 265, Docket 71-1764.

United States Court of Appeals, Second Circuit.

Argued December 1, 1971.

Decided July 14, 1972.

Martin B. Mulroy, Peter W. Flanagan, Thomas D. Toy, Hill, Rivkins, Warburton, McGowan & Carey, New York City, for plaintiff-appellant.

James M. Leonard, Albert S. Commette, Brown, Quencer & Commette, New York City, for defendant-appellee.

Before LUMBARD, WATERMAN and FEINBERG, Circuit Judges.

PER CURIAM:

We affirm the judgment order entered below limiting the liability of defendant-appellee (Universal), the negligent stevedore, to $500.00. Reference is had to the lower court opinion, reported at 328 F.Supp. 288 (S.D.N.Y.1971) for exposition of the uncontroverted and conceded facts.

The provisions of Meyer Line's bill of lading, totally drafted by it, include clause 1(J):

The contract evidenced hereby is between the shipper and the owner or demise charterer of the ship designated to carry the goods. It is understood and agreed that, other than said shipowner or demise charterer, no person, firm or corporation or other legal entity whatsoever (including the master, officer and crew of the vessel and all agents and independent contractors) is, or shall be deemed to be, liable to the shipper or consignee as carrier, bailee or otherwise howsoever in contract or in tort. If, however, it shall be adjudged that any other than said shipowner or demise charterer is carrier or bailee of the goods or under any responsibility to the shipper or consignee, all defences (including all limitations of said exonerations from liability) provided to said shipowner or demise charterer by law or by terms hereof shall be available to such other . . . .

(Emphasis supplied).

This provision gives to all "legal entities" reasonably comprehended within its language, and, specifically to "independent contractors" such as the stevedore here, the benefit which the carrier and the ship have under COGSA to limit liability to a maximum of $500 per unit "for any loss or damage to or in connection with the transportation of goods" unless the goods are shipped pursuant to a specific declaration of nature or value, under an adjusted rate. 46 U. S.C. § 1304(5).

Obviously such a clause as 1(J), which limits by contract one's recourse to the courts to pursue common law rights of action, must be looked at with distrust; and, inasmuch as the clause is drawn by the carrier and the shipper is, for all practical purposes, completely in the carrier's power, the clause, obviously, should be strictly construed against the carrier and any person benefitted thereby.¹ However, in Robert C. Herd & Co. v. Krawill Machinery Corp., 359 U.S. 297, 79 S.Ct. 766, 3 L.Ed.2d 820 (1959), the Supreme Court, while unanimously denying to a negligent stevedore the classification of a "carrier" under 46 U.S.C. § 1301(a), unanimously stated:

Looking to the limitation-of-liability provisions of the bill of lading, we see that they, like § 1304(5) of the Act and its legislative history, do not advert to stevedores or agents. Instead they deal only with the "Carrier\'s liability" to the shippers. They say that "the Carrier\'s liability, if any, shall be determined on the basis of $500 per package." There is, thus, nothing in those provisions to indicate that the contracting parties intended to limit the liability of stevedores or other agents of the carrier for damages caused by their negligence. If such had been a purpose of the contracting parties it must be presumed that they would in some way have expressed it in the contract. Since they did not do so, it follows that the provisions of the bill of lading did "not cut off respondent\'s remedy against the agent that did the wrongful act." Sloan Shipyards Corporation v. United States Shipping Board Emergency Fleet Corporation, 258 U.S. 549, 568, 42 S.Ct. 386, 388, 66 L.Ed. 762.

We therefore conclude that there is nothing in the provisions, legislative history and environment of the Act, or in the limitation-of-liability provisions of the bill of lading, to indicate any intention, of Congress by the Act, or of the contracting parties by the bill of lading, to limit the liability of negligent agents of the carrier. (Emphasis supplied). Id. at 302-303, 79 S. Ct. at 769.

This language has prompted a belief that a cargo-carrier and a cargo-owner may contractually extend to a stevedore the benefit enjoyed by carriers under COGSA's $500 limitation on damages, and we consider ourselves bound by a previous decision of this...