Caterpillar Overseas, S.A. v. Marine Transport Inc., Nos. 88-3114

CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)
Writing for the CourtBefore RUSSELL, WIDENER, and HALL; DONALD RUSSELL
Citation900 F.2d 714
PartiesCATERPILLAR OVERSEAS, S.A., Plaintiff-Appellee, v. MARINE TRANSPORT INC., Defendant-Appellant, Farrell Lines, Inc.; Virginia International Terminals, Inc., Defendants-Appellees. CATERPILLAR OVERSEAS, S.A., Plaintiff-Appellant, v. FARRELL LINES, INC.; Virginia International Terminals, Inc.; Marine Transport Inc., Defendants-Appellees. CATERPILLAR OVERSEAS, S.A., Plaintiff, v. FARRELL LINES, INC., Defendant-Appellant, Marine Transport Inc., Defendant-Appellee, and Virginia International Terminals, Inc., Defendant.
Decision Date20 September 1990
Docket Number88-3119 and 88-3122,Nos. 88-3114

Page 714

900 F.2d 714
1991 A.M.C. 75
CATERPILLAR OVERSEAS, S.A., Plaintiff-Appellee,
v.
MARINE TRANSPORT INC., Defendant-Appellant,
Farrell Lines, Inc.; Virginia International Terminals,
Inc., Defendants-Appellees.
CATERPILLAR OVERSEAS, S.A., Plaintiff-Appellant,
v.
FARRELL LINES, INC.; Virginia International Terminals,
Inc.; Marine Transport Inc., Defendants-Appellees.
CATERPILLAR OVERSEAS, S.A., Plaintiff,
v.
FARRELL LINES, INC., Defendant-Appellant,
Marine Transport Inc., Defendant-Appellee,
and
Virginia International Terminals, Inc., Defendant.
Nos. 88-3114, 88-3119 and 88-3122.
United States Court of Appeals,
Fourth Circuit.
Argued Feb. 8, 1989.
Decided April 5, 1990.
As Amended Sept. 20, 1990.

Page 716

William Brinkley Eley, Willcox & Savage, P.C., Norfolk, Va., for defendant-appellant.

Carter Branham Furr, Jett, Berkley, Furr & Bouffard, Philip Norton Davey, Hunton & Williams, Charles Faulkner Tucker, Sr., Vandeventer, Black, Meredith & Martin, Norfolk, Va., for plaintiff-appellee.

Before RUSSELL, WIDENER, and HALL, Circuit Judges.

DONALD RUSSELL, Circuit Judge:

The shipper in this case has sued to recover damages to cargo delivered by it to a sea carrier for transportation to a foreign port. The cargo was damaged while being transferred overland by a trucker employed by the carrier from the port of delivery to another port in the same vicinity. The defendants were the port terminal, which owned and operated the ports to which the cargo was first delivered as well as the other port to which the cargo was being transported, the carrier Farrell, and the trucker who transported the cargo from the Portsmouth Port to the Norfolk International Port. The district judge found the port terminal free of negligence but concluded both the carrier and the trucker had caused the damage to the cargo by their negligence. He found, though, that the carrier's liability was limited by the application of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C.App. Sec. 1304(5) to $500.00 but that the trucker was not entitled to the limitation of liability provided it under the "Himalaya" provision in the bill of lading. He also restricted the shipper to its actual loss, eliminating any profit, in his award. The shipper appeals both the district judge's limitation of the carrier's liability to $500.00 under COGSA and the elimination of the recovery of the profit it expected from delivery of the cargo at destination; the trucker appeals the failure to provide it the limitation of liability under COGSA. We affirm.

I.

The plaintiff Caterpillar Overseas (Caterpillar), a Swiss corporation, is a subsidiary of Caterpillar, Inc., an American manufacturer, and is engaged in the business of sales representative for the products of its parent company in Europe, Africa and the Middle East. Caterpillar had sold a D-6 Caterpillar tractor to Chanimat, a Zaire corporation, for delivery via sea carriage at piers in Matadi, Zaire. The invoiced purchase price to Caterpillar from its parent for the tractor was $79,447.86. The tractor, manufactured by the parent at its plant in East Peoria, Illinois, was transported by truck to the Portsmouth (Virginia) Port for delivery to Caterpillar. Caterpillar, in turn, had arranged with Lusk Shipping Company to act as its agent and freight forwarder to handle the shipment of the tractor to Zaire. Under the original understanding between the parties, Lusk agreed with Farrell to ship the tractor to the Zaire destination on Farrell's vessel EXPORT CHAMPION, scheduled to arrive momentarily at the Portsmouth Port.

Page 717

However, when EXPORT CHAMPION arrived at Portsmouth, it was withdrawn from service and put in dry dock. Lusk was advised of the unavailability of EXPORT CHAMPION and it and Farrell agreed that the tractor should be transferred to the Norfolk International Port (Norfolk), which was owned and operated by the same terminal as the Portsmouth Port, where Farrell's vessel EXPORT FREEDOM was presently to dock and would be available to transport the tractor to Zaire. It was the intention and agreement of the parties that the tractor in this case was to be transported by the vessel EXPORT FREEDOM. Such a transfer between the two related ports was not unusual; in fact, it was said to be a practice well known and followed from time to time by both Lusk and Farrell.

Under the agreement between the parties, the arrangements for the transfer and any costs connected with the transfer between the two ports was the responsibility of Farrell, which employed Marine Transport (Marine), an independent trucker, to make the transfer using a flatrack container and chassis furnished for such purposes by Farrell. Virginia International Terminals (VIT), in turn, prepared the tractor for the necessary transportation from the Portsmouth Port to the Norfolk Port. As described by VIT's foreman, the tractor was put on a "flat rack which [was] on the chassis" in a "ro-ro fashion" and it was supposed to "stay on that flat rack until it [got] to overseas which it's gonna go." The floor of the flat rack was 69 inches above ground; the tractor itself was 9 feet 8 inches high. The load was thus overheight under state law. Had Farrell furnished a lowboy for loading the cargo for transportation between the ports, the height of the cargo and carriage would have been substantially less, a factor which, according to the testimony, would have made the transportation safer.

When Marine Transport's driver took charge of the flat rack and its cargo at the Portsmouth Terminal, he questioned the safety of the cargo, as loaded, with Farrell, which assured him the arrangement was safe. The driver, still uncertain, consulted his employer Marine Transport headquarters, which instructed him to transport the cargo as loaded by Farrell. The driver accordingly proceeded with the cargo from the Portsmouth Port toward a destination at the Norfolk International Terminal. While rounding a curve in exiting Interstate 264 to enter Interstate 64 at a rate of speed estimated by the driver variously at 25 to 35 miles per hours on this trip, the tractor "slid off the flat rack and smashed into the guard rail of the highway at the uprights of the overpass," severely damaging the tractor. After the damage was surveyed by representatives of Farrell and Caterpillar, the tractor, with its component parts, was sold at salvage to the highest bidder for $12,000.00.

Caterpillar has filed suit for the difference between what it contended was the sales price of the tractor at point of delivery less the proceeds upon the salvage sale or $95,559.97. Caterpillar named as defendants in its suit Virginia International Terminals, Inc., the operator of the terminal; Farrell Lines, Inc. (Farrell), the carrier; and Marine Transport, Inc. (Marine), the trucker employed by Farrell to transport overland via interstate highways the cargo from the Portsmouth Terminal to the Norfolk International Port. Caterpillar charged that its damage was proximately caused by the combined negligence of the several defendants. VIT responded by denying all liability but alternatively alleged that, if it should be found liable, it was entitled to recovery over against Farrell, since it was acting under the specific directions of Farrell. Neither Farrell nor Marine contested their negligence as a cause of the damages to the tractor. Farrell, however, contended that its liability was limited to $500.00 under the provisions of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C.App. Sec. 1304(5); it also sought indemnity by Marine. Marine urged in its answer that under the so-called "Himalaya" clause in the bill of lading, its liability was similarly restricted to $500.00 by COGSA. Marine Transport also denied any liability by way of indemnity to Farrell.

Page 718

II.

The case was heard by the district judge, who, at the conclusion of the testimony, found that VIT was "not guilty of negligence which contributed to the accident and damages suffered by plaintiff" but that, had it been guilty, it "in all probability would be entitled to indemnity from Farrell." He next concluded that Farrell had been guilty of negligence that contributed to Caterpillar's damage, but that it was protected by COGSA to a liability in the amount of $500.00. In reaching this conclusion, he recognized that no bill of lading had been issued "at the time of the accident, and in fact was never issued." He found, however, that the plaintiff, through its freight forwarder, "had previously shipped goods by Farrell" on many occasions, and that the parties intended the contract of carriage to be that provided in Farrell's standard bill of lading, copies of which were in Lusk's custody. As a matter of fact, Lusk had prepared a bill of lading on the Farrell form covering this transaction, intending to deliver it at the time the tractor was on board ship. In short, the district judge found that it was the intention of both parties that the contract of carriage herein would be that stated in Farrell's form bill of lading. Under these circumstances, the district judge found that the knowledge by Lusk of Farrell's bill of lading and the intention of both parties that the transportation was to be controlled by the bill of lading was such that knowledge of acceptance of the terms of such bill of lading could fairly be imputed as the contract of carriage. He found support for this view in Cincinnati Milacron, Ltd. v. M/V American Legend, 784 F.2d 1161, 1166 (4th Cir.1986). He accordingly concluded that it did "not seem unduly burdensome to impute the shipper's knowledge of all of the terms in the ... bill of lading including ... the applicable provisions of COGSA," citing Cincinnati Milacron, Ltd. v. M/V American Legend, supra, 784 F.2d at 1166, adopted by the en banc court in 804 F.2d 837 as the opinion of the court on this point.

The district judge found, however, that Marine Transport was not protected by the...

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36 practice notes
  • Ferrostaal, Inc. v. M/V Sea Phoenix, No. 05-1837.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • May 3, 2006
    ...burden at the second step. 9. See Nippon Fire & Marine Ins., 167 F.3d 99 (2d Cir.1999); Caterpillar Overseas, S.A. v. Marine Transp. Inc., 900 F.2d 714, 719 (4th Cir. 1990); Sabah Shipyard SDN BHD. v. M/V Harbel Tapper, 178 F.3d 400, 404 (5th Cir. 1999); Acwoo Int'l Steel Corp., v. Toko Kai......
  • Granite State Ins. Co. v. M/V CARAIBE, Civ. No. 92-2000 (JAF).
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    • United States District Courts. 1st Circuit. District of Puerto Rico
    • June 23, 1993
    ...General Motors Corp. v. Moore-McCormack Lines, Inc., 451 F.2d 24, 25 (2d Cir.1971); Caterpillar Overseas, S.A. v. Marine Transport Inc., 900 F.2d 714, 723 (4th Cir.1990) (adopting the Second Circuit's decision in FMC Corp.); but see Aetna Ins. Co., 858 F.2d at 193 (contradictory quote above......
  • In re Moran Phila., Div. of Moran Towing Corp., CIVIL ACTION NO. 14-7079
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • March 31, 2016
    ...acceptance of a clause repeatedly sent to the offeree in an order confirmation”); Caterpillar Overseas, S.A. v. Marine Transp. Inc., 900 F.2d 714 (4th Cir.1990) (holding that there was a sufficient course of dealing where a bill of lading containing terms and conditions was submitted upon d......
  • Core Commc'ns, Inc. v. Verizon Md. LLC, No. 12–2572.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • March 6, 2014
    ...here, the pertinent provision was “evident” in the contract “before the trial court.” Caterpillar Overseas, S.A. v. Marine Transp. Inc., 900 F.2d 714, 725 n. 7 (4th Cir.1990). Although not relying specifically on Caterpillar Overseas to support its ruling on timeliness, the court neverthele......
  • Request a trial to view additional results
36 cases
  • Ferrostaal, Inc. v. M/V Sea Phoenix, No. 05-1837.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • May 3, 2006
    ...burden at the second step. 9. See Nippon Fire & Marine Ins., 167 F.3d 99 (2d Cir.1999); Caterpillar Overseas, S.A. v. Marine Transp. Inc., 900 F.2d 714, 719 (4th Cir. 1990); Sabah Shipyard SDN BHD. v. M/V Harbel Tapper, 178 F.3d 400, 404 (5th Cir. 1999); Acwoo Int'l Steel Corp., v. Toko Kai......
  • Granite State Ins. Co. v. M/V CARAIBE, Civ. No. 92-2000 (JAF).
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • June 23, 1993
    ...General Motors Corp. v. Moore-McCormack Lines, Inc., 451 F.2d 24, 25 (2d Cir.1971); Caterpillar Overseas, S.A. v. Marine Transport Inc., 900 F.2d 714, 723 (4th Cir.1990) (adopting the Second Circuit's decision in FMC Corp.); but see Aetna Ins. Co., 858 F.2d at 193 (contradictory quote above......
  • In re Moran Phila., Div. of Moran Towing Corp., CIVIL ACTION NO. 14-7079
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • March 31, 2016
    ...acceptance of a clause repeatedly sent to the offeree in an order confirmation”); Caterpillar Overseas, S.A. v. Marine Transp. Inc., 900 F.2d 714 (4th Cir.1990) (holding that there was a sufficient course of dealing where a bill of lading containing terms and conditions was submitted upon d......
  • Core Commc'ns, Inc. v. Verizon Md. LLC, No. 12–2572.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • March 6, 2014
    ...here, the pertinent provision was “evident” in the contract “before the trial court.” Caterpillar Overseas, S.A. v. Marine Transp. Inc., 900 F.2d 714, 725 n. 7 (4th Cir.1990). Although not relying specifically on Caterpillar Overseas to support its ruling on timeliness, the court neverthele......
  • Request a trial to view additional results

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