Daval Steel Products v. M/V ACADIA FOREST

• Citation: 683 F. Supp. 444,1988 AMC 1669
• Decision Date: 15 April 1988
• Docket Number: No. 86 Civ. 8296 (MBM).,86 Civ. 8296 (MBM).
• Parties: DAVAL STEEL PRODUCTS, A DIVISION OF FRANCOSTEEL CORPORATION, Plaintiff, v. M/V ACADIA FOREST, her engines, boilers, etc.; Atlantic Lash Carriers Inc.; and Lash Carriers Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

683 F. Supp. 444

1988 AMC 1669

DAVAL STEEL PRODUCTS, A DIVISION OF FRANCOSTEEL CORPORATION, Plaintiff, v. M/V ACADIA FOREST, her engines, boilers, etc.; Atlantic Lash Carriers Inc.; and Lash Carriers Inc., Defendants.

No. 86 Civ. 8296 (MBM).

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

April 15, 1988.

John A.V. Nicoletti, and James Sweeney, Donovan, Maloof Walsh & Repetto, New York City, for plaintiff.

Peter Skoufalos, Chalos English & Brown, New York City, for defendants.

OPINION AND ORDER

MUKASEY, District Judge.

Plaintiff sued for damage to its shipment of steel products that allegedly occurred during a voyage on defendants' vessel, M/V Acadia Forest, from Antwerp, Belgium to New Orleans. Defendants interposed defenses based on the $500 per package liability limitation contained in one clause of the bill of lading, as authorized by the Carriage of Goods by Sea Act ("COGSA"), specifically 46 U.S.C.App. § 1304(5)¹. Now before the Court are plaintiff's motion to strike those defenses, and defendants' cross-motion for summary judgment applying the limitation, both brought pursuant to Rule 56, Fed.R.Civ.P. See, Ciprari v. Servicos Aereos Cruzeiro, 245 F.Supp. 819 (S.D.N.Y.1965), aff'd, 359 F.2d 855 (2d Cir.1966). An earlier motion by plaintiff pursuant to Rule 12(f), Fed.R. Civ.P., to strike the defenses here at issue was denied by Judge Sand in February 1987 on the ground that a factual inquiry was necessary to determine the intent of the parties, and therefore Rule 12(f), which limits inquiry to the pleadings, was insufficient to the task. The parties have now conducted that inquiry and laid the results, such as they are, before the Court. For the reasons set forth below, plaintiff's motion to strike is granted; defendants' cross-motion is denied.

The defenses at issue are based on Clause 10 of the bill of lading, which provides that if damage to the shipment exceeds $500 per package or other customary freight unit, "the value of the goods shall be deemed to be $500 per package or per customary freight unit" unless a higher value is declared and extra freight paid, if necessary. Although that clause does not mention COGSA specifically, it seems plain that the clause refers to the $500 per package limitation provided by 46 U.S.C.App. § 1304(5); plaintiff has suggested no other plausible reference.

Plaintiff bases its motion to strike on Clause 3 of the bill of lading, the so-called Clause Paramount, which reads as follows:

This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, approved April 16, 1936, or if this bill of lading is issued in a locality where there is in force a Carriage of Goods by Sea Act or ordinance or statute of a similar nature to the International Convention for the Unification of Certain Rules Melating sic to Bills of Lading date sic at Brussels, August 1924, it is subject to the provisions of such act, ordinance or statute and rule, sic thereto annexed.

Plaintiff reasons that because the bill of lading was issued in Belgium, where there was in force the International Convention for the Unification of Certain Rules Relating to Bills of Lading (the "Hague Rules"), the Visby Amendments thereto and the SDR Protocol, 6 Benedict on Admiralty 1-11, 1-30 and 1-32.4 (7th ed. 1988) (collectively the "Hague/Visby Rules"), the per package limitations of the Hague/Visby Rules, which exceed those under COGSA, govern.

By contrast, defendant argues that the reference to the Hague Rules does not necessarily include the Visby Amendments, and was intended to apply only to shipments that would not be governed by COGSA. Since all foreign shipments to or from United States ports are governed by COGSA, 46 U.S.C.App. §§ 1300, 1312, the defendant is arguing as a practical matter that the clause in question was intended to apply only to intra-European shipments, or to shipments between Europe and ports not in the United States.

When Judge Sand denied plaintiff's earlier motion to strike, he wrote that seeking the intent of the parties with respect to a barely legible standard form replete with typographical errors was a "fictional pursuit." (Mem.End. at 2) That description could not have been more apt if he had read the affidavits and depositions generated in the year of discovery that followed his brief opinion. Thus plaintiff, in support of its motion, has submitted the affidavit of the manager of the company that acted as its freight forwarder, who does not claim to have read and relied on the clause at issue but says only that because the shipment originated in Belgium, and because he knows that Belgium has adopted the Hague/Visby Rules, he has concluded that "the Hague/Visby Rules will automatically and compulsorily be applicable."

Defendants, on the other hand, set out to determine who drafted the bill of lading here at issue, and otherwise to determine the defendants' intent in using it. From the affidavits and deposition transcripts submitted, it would seem that most of the bill of lading originated with the New York law firm of Burlingham, Underwood & Lord ("BU & L") acting as counsel to International Navigation, Ltd. ("INL"), a prior charterer of the Acadia Forest. The INL executive who so avers says also that the Acadia Forest was engaged exclusively in trade between Europe and the United States — i.e., trade that would be governed by COGSA — and thus offers no justification whatever for the inclusion of a clause meant to apply only to shipments that would not be governed by COGSA.

A BU & L partner who apparently participated in drafting the INL bill of lading, recalls that he did not draft the Clause 3 that eventually found its way into the document. Rather, at some time after 1971 he incorporated the Clause Paramount from a bill of lading used by Central Gulf Lines ("CGL"), an entity related to defendants, because that was the carrier then operating the vessel.

The search for the draftsman of the Clause Paramount in the CGL bill of lading carried the parties to the New Orleans law firm of Jones, Walter, Waechter, Poitevent, Carrere & Denegre, and then ran aground. A partner at that firm involved in drafting the CGL bill of lading averred that, as one might expect of a carrier's lawyer, it was always his intent "to limit the carrier's liability to the greatest extent allowed by the applicable law," which he says means that COGSA applies. But this affiant is unable to state with certainty that he, rather than another of the more than 20 lawyers in the Maritime Section of his firm, in fact drafted the clause at issue, or to give any satisfactory explanation for why the clause refers to the Hague/Visby Rules when the vessel and the defendants at all relevant times operated only between Europe and the...