Clevo Co. v. Hecny Transp., Inc.

• Decision Date: 26 April 2013
• Docket Number: No. 11–55823.,11–55823.
• Parties: CLEVO CO., a Taiwan Corporation, Plaintiff–Appellant, v. HECNY TRANSPORTATION, INC., a California Corporation, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

715 F.3d 1189

CLEVO CO., a Taiwan Corporation, Plaintiff–Appellant,

v.HECNY TRANSPORTATION, INC., a California Corporation, Defendant–Appellee.

No. 11–55823.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted Jan. 9, 2013.

Filed April 26, 2013.

Mitra M. Eskandari–Azari and Cassandra Hooks, Alston & Bird LLP, Los Angeles, CA; Yitai Hu and Elizabeth H. Rader, (argued) Alston & Bird LLP, Menlo Park, CA, for Plaintiff–Appellant.

Andrew D. Kehagiaras, Roberts & Kehagiaras LLP, Long Beach, CA, for Defendant–Appellee.

Appeal from the United States District Court for the Central District of California, Margaret M. Morrow, District Judge, Presiding. D.C. No. 2:09–cv–09135–MMM–MAN.

Before: ALFRED T. GOODWIN and WILLIAM A. FLETCHER, Circuit Judges, and EDWARD R. KORMAN, Senior District Judge.^*

OPINION

GOODWIN, Senior Circuit Judge:

Clevo Company appeals the district court's grant of summary judgment in favor of Hecny Transportation, Inc. We affirm.

I. BACKGROUND

A. Clevo's Sales Agreement with Amazon

Clevo is a Taiwan-based manufacturer of computer parts and accessories. In 2007, Clevo and a Brazilian entity, Amazon PC Industria e Comerciao de Microcomputadores, LTDA (“Amazon”), agreed that Clevo would manufacture and sell, and Amazon would buy, millions of dollars' worth of Clevo computer parts. Clevo and Amazon also agreed that the parts would be delivered to Amazon in multiple shipments; that Amazon would take delivery of each shipment in Brazil; and that Amazon would pay for each shipment in installments. The first installment, 10% of the shipment's price, would be paid pre-manufacture; another 20% installment would be paid before Clevo arranged shipment; and the remaining 70% balance would be paid after shipment but before Amazon took possession of the parts.

To protect its interest in receiving full payment, Clevo insisted that after it released a particular shipment for international carriage, Clevo would retain the original bills of lading for that shipment while awaiting Amazon's final 70% payment. Clevo and Amazon agreed that a shipment of parts would not be released to Amazon unless Amazon presented the original bills of lading.

B. The Hecny Group

Under Clevo and Amazon's negotiated terms, the Hecny Shipping Group (“Hecny Group”) was designated to handle all of the contract shipments. The Hecny Group's members include multiple separate entities:

(1) Hecny Shipping, Limited (“Hecny Shipping”). Hecny Shipping is a non-vessel-operating common carrier (“NVOCC”) based in Hong Kong, China. NVOCCs are “middlemen who typically arrange for relatively small shipments to be picked up from shippers, consolidate the ... parcels, and ship them via a carrier or several carriers.” Schoenbaum, Admiralty & Maritime Law (5th ed. 2012) § 7–7; see also Kukje Hwajae Ins. Co. v. M/V Hyundai Liberty, 294 F.3d 1171, 1176 (9th Cir.2002), vacated on other grounds by Green Fire & Marine Ins. Co. v. M/V Hyundai Liberty, 543 U.S. 985, 125 S.Ct. 494, 160 L.Ed.2d 368 (2004).

(2) Hecny Transportation, Inc. (“Hecny Transportation”). Hecny Transportation is a freight forwarder with operations in Miami. A “freight forwarder acts as an intermediary between [a] shipper and [an] ocean carrier.” Schoenbaum, Admiralty & Maritime Law § 7–7; see also Constructores Tecnicos v. Sea–Land Serv., Inc., 945 F.2d 841 (5th Cir.1991).

(3) Hecny Transportation (Shanghai) Limited (“Hecny Shanghai”). Hecny Shanghai is a China-based entity that takes delivery of Shanghai-originating shipments for the Hecny Group.

(4) HTI Transportes Internacionais Ltda. (“Hecny Brazil”). Hecny Brazil is a Manaus, Brazil-based freight forwarder. Hecny Transportation maintained Hecny Brazil as its agent in Brazil, and Hecny Brazil maintained Hecny Transportation as its agent outside Brazil.

C. The Guarantee

In May 2007, Clevo began sending numerous shipments of computer parts to Amazon, and the parts were delivered without incident. But at the end of 2007, Clevo took additional measures to protect its right to payment and to formalize Hecny Transportation's role in the delivery process.

To that end, Clevo sent a document denominated “Guarantee Letter” to Hecny Transportation on December 21, 2007. The document stated:

We (Clevo Co.) will give sea shipments over to your agent in Shanghai (Hecny Shipping Limited)....

....

In order to protect Clevo's right of ownership, we request you to sign [ sic ] a guarantee letter which contains as following:

If you release any sea shipment to Amazon PC without our further notice, Hecny Transportation, Inc.-MIA must compensate Clevo all damage which we suffer.

For the purpose of protecting your right, on[ ] the other hand, provided that Clevo agree[s] to release sea shipment[s] to Clevo's customer, Clevo will give you a notice by fax, and please work[ ] in accordance with International Transportation Rule.

Unless Clevo propose[s] a written notice to terminate this letter, the Parties have caused [it] to be executed....

Notably, the text of the letter lacks any reference to a contractual statute of limitations or any other significant provisions limiting the parties' liability. But those omissions did not prevent Hecny Transportation from giving assent. Instead, a Hecny Transportation employee signed the letter and returned the signed copy (the “Guarantee”) to Clevo.

After receiving the Guarantee, Clevo made multiple additional shipments of parts to Amazon between January 2008 and September 2008. Although the Hecny Group completed each of those shipments without any apparent difficulty, it would fare much worse when handling Clevo's next shipment, in October 2008.

D. Shipping the Goods1. Clevo prepares the Goods and Hecny Shipping issues the Bills of Lading.

In October 2008, Clevo received an Amazon order for an additional $2,210,000 in parts (the “Goods”), as well as Amazon's pre-shipment payments. After manufacturing the Goods, Clevo delivered them to Hecny Shanghai for transport on or about October 23, 2008. Four days later, Hecny Shipping issued two bills of lading for the shipment (the “Bills of Lading”).

Each of the Bills of Lading includes a front and back page. The front pages describe:

• the Goods;

• the name of the shipper (“CLEVO CO.”);

• the consignee, Amazon;

• the port of loading and destination (“SHANGHAI” and “MANAUS”, respectively); and

• the delivery agent (“HECNY TRANSPORTATION, INC.-MIA”).

The back pages contain numerous Terms and Conditions of Contract (“Terms and Conditions”).

Section 5 of the Terms and Conditions includes a Himalaya clause (the “ Himalaya Clause”), which provides that:

[Hecny Shipping] shall be entitled to sub contract on any terms the whole or any part of the carriage ... and any and all duties whatsoever.... [E]very such servant, agent and sub contractor shall have the benefit of all provisions herein for the benefit of [Hecny Shipping] as if such provisions were expressly for their benefit....

Himalaya clauses are commonly used in bills of lading. See Mori Seiki USA, Inc. v. M.V. Alligator Triumph, 990 F.2d 444, 450 (9th Cir.1993); Norfolk S. Ry. v. James N. Kirby, Pty Ltd., 543 U.S. 14, 31–32, 20 n. 2, 125 S.Ct. 385, 160 L.Ed.2d 283 (2004); Adler v. Dickson (The Himalaya) [1954] 2 Lloyd's Rep. 267; [1955] 1 Q.B. 158 (C.A.).

Additionally, Section 21 of the Terms and Conditions states that Hecny Shipping “shall [be] discharged from all liability in respect of non-delivery [,] misdelivery[,] delay[,] loss[,] or damage unless suit is brought within 1 year after delivery of the Goods.”

Clevo received the original Bills of Lading on or about October 27, 2008, and retained them, as Amazon had yet to pay the remaining 70% of the Goods' purchase price.

2. The Goods are transported and released.

At or around the time that Hecny Shipping issued the Bills of Lading, the Goods began their transit to Brazil. Hecny Shanghai arranged an initial sea transportation segment, during which the Goods traveled from Shanghai to Los Angeles. After the Goods arrived in Los Angeles, Hecny Transportation booked their motor transport to Miami, unloaded them, and staged them for air transportation between Miami and Manaus. Hecny Transportation then arranged for carrier Arrow Air, Inc. (“Arrow Air”) to complete the Goods' final air transportation segment via two flights. For both flights, Hecny Transportation issued its own “house” air waybill, as well as a “master” air waybill on behalf of Arrow Air (the “Waybills”).

Soon after the Goods arrived in Manaus, Hecny Transportation forwarded the Waybills to Hecny Brazil, and Hecny Brazil released those Waybills to Amazon. With the Waybills in hand, Amazon took delivery of the Goods in November 2008.

Hecny Brazil concedes that it never required Amazon to present the Bills of Lading prior to taking possession of the Goods. For its part, Clevo never provided the Bills of Lading to Amazon and Clevo never notified any Hecny Group entity that it could release the Goods. Instead, Clevo retained the Bills of Lading while awaiting the final 70% balance of the Goods' purchase price.

3. Clevo discovers the improper delivery.

By January 2009, Clevo still had not received payment and emailed Hecny Transportation to ensure that the Goods were still being held. To Clevo's apparent surprise, a Hecny Transportation employee responded that the “sh[i]p [men]ts were moved to Manaus.... I have not received any request to hold the [shipments] in Miami.”

Despite taking delivery of the Goods, Amazon never forwarded the outstanding purchase price to Clevo and instead filed for bankruptcy. On December 11, 2009, more than one year after the initial misdelivery to Amazon, Clevo sued numerous Hecny Group entities for the unpaid remainder of the Goods' purchase price.

II. DISCUSSION

A. Jurisdiction and Standard of Review

The district court correctly concluded that it had original jurisdiction under 28 U.S.C. § 1333, and we have jurisdiction under 28 U.S.C. § 1291. We review orders granting summary...