Cargo Logistics Int'l, LLC v. Overseas Moving Specialists, Inc.

Citation557 F.Supp.3d 381
Decision Date30 August 2021
Docket Number20-CV-2130 (MKB)
CourtU.S. District Court — Eastern District of New York

557 F.Supp.3d 381

OVERSEAS MOVING SPECIALISTS, INC. and Boaz Aviani, Defendants.

20-CV-2130 (MKB)

United States District Court, E.D. New York.

Signed August 30, 2021

557 F.Supp.3d 386

Kirk M. Lyons, Lyons & Flood LLP, Great Neck, NY, Seth A. Nichamoff, Pro Hac Vice, Nichamoff Law, PC, Houston, TX, for Plaintiff.

Kevin Joseph O'Connor, Peckar & Abramson, P.C., New York, NY, Shannon Danielle Azzaro, Pekar & Abramson, P.C., River Edge, NJ, for Defendants.


MARGO K. BRODIE, United States District Judge:

Plaintiff Cargo Logistics International, LLC ("Cargo Logistics") commenced the above-captioned action on May 11, 2020, against Defendants Overseas Moving Specialists, Inc. ("Overseas Moving") and its owner, president, and chief executive, Boaz Aviani, alleging breach of maritime contract, negligent misrepresentation, and fraud. (Compl., Docket Entry No. 1; Am. Compl., Docket Entry No. 14.) Plaintiff alleges that Overseas Moving hired it to ship cargo to Ashdod, Israel, but inaccurately described the cargo in the bill of lading, and ultimately, when the consignee, Tevel Logistics, Ltd. ("Tevel") failed to take delivery of the cargo, Defendants refused to declare the cargo abandoned for over a year and refused to pay the associated fees, (Am. Compl. ¶¶ 14–30, 37–45), resulting in Plaintiff's temporary loss of shipping privileges with nonparty Zim Shipping Line ("Zim"), (id. ¶¶ 31–36).1

Defendants move to dismiss all claims against Aviani, the negligent misrepresentation and fraud claims against Overseas Moving, and all claims for lost profits.2 For the reasons set forth below, the Court grants the motion in part and denies it in part.

I. Background

The Court assumes the truth of the factual allegations in the Amended Complaint for the purposes of this Memorandum and Order.

Plaintiff is a non-vessel-owning common carrier ("NVOCC"), that books space with vessel-owning carriers to ship items overseas. (Id. ¶¶ 10–12.) Plaintiff assumes responsibility for shipments under bills of lading that it issues.3 (Id. ¶ 12.) Overseas Moving is also an NVOCC and Aviani owns and controls its daily operations. (Id. ¶ 7.)

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On June 30, 2017, Overseas Moving booked a shipment of cargo with Plaintiff, describing the cargo as "202 pieces of medical and office equipment, ‘For Personal Use Only Not for Resale No Commercial Value,’ " to be shipped from New York to Ashdod, Israel, for consignment to Tevel. (Id. ¶¶ 14, 18.) Plaintiff relied on this description and contends that it "had no way of knowing what was in the container containing the [c]argo because the container was sealed when received." (Id. ¶ 18.)

i. Bill of lading

Plaintiff shipped the cargo on a ship operated by Zim pursuant to a bill of lading dated July 22, 2017. (Id. ¶ 19.) The bill of lading described the goods to be shipped and states in relevant part:

9. (Description and Particulars of Goods) Any reference on the face of this [b]ill of [l]ading to marks, numbers, description, quantity, quality, gauge, weight, measure, nature, kind, value, and any other particulars of the [g]oods, is as furnished by the Merchant [defined as the shipper, consignor, consignee, owner, and receiver of the goods]. [Plaintiff] shall not be responsible for the accuracy of any such reference and is not bound thereby. The Merchant warrants to [Plaintiff] that the descriptions and particulars furnished by him are correct, and the Merchant shall indemnify [Plaintiff] against all loss, damage, expenses, liability, penalties and fines arising or resulting from inaccuracy of any description or particular.

(Bill of Lading 2, annexed to Am. Compl. as Ex. G, Docket Entry No. 14-7; see Am. Compl. ¶ 40.)4 The bill of lading also provides information about indemnification and states in relevant part:

24. (Freight and Charges) ... (F) The Merchant shall be liable for and shall indemnify the Ocean Carrier against: (1) all dues, duties, taxes, consular fees, and other charges levied on the [g]oods, and (2) all fines, damages and losses sustained by the Ocean Carrier in connection with [g]oods, howsoever caused, .... (H) The shipper, consignor, consignee, owner of the Goods and holder of this [b]ill of [l]ading shall be jointly and severally liable to the Ocean Carrier for the payment of all freight and charges and for the performance of the obligations of any of them under this [b]ill of [l]ading.

(Bill of Lading 2; see Am. Compl. ¶ 39.) The bill of lading also provides that "[i]f the [g]oods are unclaimed during a reasonable time ... [Plaintiff] (without responsibility to it) may at its discretion and subject to its lien, sell, abandon, or otherwise dispose of such [g]oods at the sole risk and expense of the Merchant." (Bill of Lading 2; Am. Compl. ¶ 41.)

Plaintiff shipped the cargo pursuant to its tariff, which provides that:

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Any and all charges that are incurred are the responsibility of booking party which includes any and all charges related to abandonment including but not limited to: Demurrage, storage, port or forwarding charges plus a 15% admin fee and a $750.00 USD abandonment surcharge per container.

All charges will be presented in the form of an abandonment invoice to the booking party (Shipper) and this abandonment invoice is payable immediately.

If abandonment invoice is not paid within 5 business days of receipt then a 33% surcharge will be added.

If legal representation must be consulted or retained for collection of these funds or any other need surrounding abandonment of cargo, booking party will be liable for all legal fees plus 15% legal admin fee.

(Am. Compl. ¶¶ 13, 41.)

ii. Arrival of cargo in Ashdod

The cargo arrived in Ashdod in mid-August of 2017, and despite several requests from Plaintiff, Tevel did not accept the cargo. (Id. ¶ 22.) Plaintiff "made multiple demands" on Overseas Moving to have the cargo claimed or deemed abandoned and destroyed so that the container could be returned to Zim. (Id. ) On September 6, September 15, September 21, October 2, October 9, October 12, October 18, and October 19, 2017, Overseas Moving represented to Plaintiff that the cargo was not abandoned and that Tevel was gathering documents necessary for customs clearance. (Id. ; see also Email Correspondence, annexed to Am. Compl. as Ex. K, Docket Entry No. 14-11.) On October 19, 2017, Tevel denied any connection to the cargo. (Am. Compl. ¶ 23; Letter from Tevel dated Oct. 19, 2017, annexed to Am. Compl. as Ex. L, Docket Entry No. 14-12.) On October 31, 2017, Overseas Moving emailed Aviani and other Overseas Moving employees, copying Plaintiff, "asking to ‘advise’ as to what to do." (Am. Compl. ¶ 23; Email from Overseas Moving dated Oct. 31, 2017, at 3, annexed to Am. Compl. as Ex. M, Docket Entry No. 14-13.)

After November 20, 2017, Plaintiff received a packing list reflecting that the cargo consisted of "nearly all the equipment, files, and office equipment" from the Massachusetts office of medical device manufacturer DirexGroup. (Am. Compl. ¶¶ 16–18, 22.) Based on the packing list, Plaintiff contends that (1) the cargo was misleadingly described as for personal use, when in fact it was business property from DirexGroup, (2) the incorrect description caused difficulties in clearing Israeli customs, and (3) Aviani personally directed Overseas Moving's response. (Id. ¶ 24.)

Because of Plaintiff's continued use of the container, Zim charged Plaintiff demurrage.5 (Id. ¶ 25.) On November 30, 2017, Plaintiff sent Overseas Moving an abandonment letter for signature "so that the [c]argo could be destroyed and the container returned to Zim." (Id. ¶ 26.) Overseas Moving refused to sign the letter at Aviani's direction, and demurrage and storage fees continued to accrue. (Id. ¶¶ 26–27.) Zim "refused to do anything with" the cargo without an abandonment letter signed by Overseas Moving and continued to seek payment of fees from Plaintiff. (Id. ¶ 28.)

On December 19, 2017, Plaintiff demanded that Overseas Moving pay

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$16,093.45 in accrued fees, copying Aviani and a bond company on the correspondence. (Id. ¶ 29.) Defendants ignored the demand until February 23, 2018, when they (or their bond company) refused the claim through counsel.6 (Id. )

On January 30, 2018, Plaintiff informed Defendants that Zim was refusing further shipments from Plaintiff until Plaintiff returned its container free of Defendants’ cargo. (Id. ¶¶ 34–36; see also Email from Pl.’s Chief Logistics Officer dated Jan. 30, 2018, annexed to Am. Compl. as Ex. P, Docket Entry No. 14-16.) Plaintiff contends that it lost $250,000 in profits because it could not offer competitive rates on cargo shipped from the United States to the Mediterranean. (Am. Compl. ¶¶ 35, 45.)

On May 3, 2019, Aviani signed a letter in which Overseas Moving "agreed to abandonment" of the cargo. (Id. ¶ 36.) The letter did not resolve the outstanding fees. (Id. ) On July 2, 2019, Zim accepted an abandonment letter from Plaintiff, the cargo was then destroyed...

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