Expeditors Intern. of Wash. v. Crowley Amer. Tran.

• Decision Date: 07 February 2000
• Docket Number: No. C:97CV350.,C:97CV350.
• Citation: 117 F.Supp.2d 663
• Parties: EXPEDITORS INTERNATIONAL OF WASHINGTON, INC., Plaintiff, v. CROWLEY AMERICAN TRANSPORT, INC., Defendant.
• Court: U.S. District Court — Southern District of Ohio

117 F.Supp.2d 663

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC., Plaintiff, v. CROWLEY AMERICAN TRANSPORT, INC., Defendant.

No. C:97CV350.

United States District Court, S.D. Ohio, Eastern Division.

February 7, 2000.

COPYRIGHT MATERIAL OMITTED

Joseph M. Hegedus, Climaco, Climaco, Lefkowitz & Garofoli, Columbus, OH, Phillip A. Ciano, Phillip A. Ciano Co., L.P.A., Cleveland, OH, for plaintiff.

Thomas Louis Rosenberg, Ulmer & Berne, Columbus, OH, Daniel W. Raab, Daniel W. Raab, PA, Miami, FL, for defendant.

OPINION AND ORDER

KING, United States Magistrate Judge.

This is a diversity action in which plaintiff asserts claims of breach of contract, breach of implied covenant of good faith and fair dealing, promissory estoppel, negligence, fraudulent misrepresentation and concealment, conversion, breach of bailment and violation of the Pomerene Act, 49 U.S.C. § 80111(a)(2). Upon the consent of the parties, 28 U.S.C. § 636(c), this matter is before the undersigned on defendant's motion for partial summary judgment.

I. Background

Plaintiff, Expeditors International of Washington, Inc. of Columbus, Ohio ["Expeditors"], is a freight-forwarder and customhouse broker which provides global freight-forwarding services to manufacturers and suppliers of various goods. (Complaint, at ¶ 1). Defendant, Crowley American Transport, Inc. ["Crowley"], is a Delaware corporation which provides global marine cargo handling services to various entities. (Id., at ¶ 2).

In or about August, 1995, Expeditors entered into an agreement with Flxible Corporation of Delaware, Ohio ["Flxible"] under which Expeditors was to act as the freight-forwarder for the shipment of Flxible's buses from Delaware, Ohio to the Puerto Rico Metropolitan Bus Authority ["P.R.M.B.A."] in San Juan, Puerto Rico. (Onofrio Affidavit attached as Exhibit C to Plaintiff's Memorandum contra Defendant's Motion for Partial Summary Judgment, at ¶¶ 3-5). As a condition precedent to the agreement, Flxible granted Expeditors a contractual lien against its freight for all "charges, expenses or advances" incurred by Expeditors in connection with any shipments for Flxible. (Exhibit 1 attached to Complaint, at ¶ 15).

In order to carry out its duties under the contract with Flxible, Expeditors contracted with Crowley, whereby Crowley agreed to act as the maritime shipper for the ocean transport of the buses. (Onofrio Affidavit, at ¶¶ 6-8). Diana Bright, a salesperson for Crowley, was Expeditors' sole contact at Crowley regarding the contract. (Bright Affidavit attached as Exhibit A to Plaintiff's Memorandum contra Defendant's Motion for Partial Summary Judgment, at ¶ 14).

Between November 1995 and January 1996, Crowley shipped approximately 40 Flxible buses from Jacksonville, Florida to San Juan, Puerto Rico. (Onofrio Affidavit, at ¶ 13). However, Flxible became delinquent in December 1995 in its payments to Expeditors, and Expeditors enforced its lien against Flxible. On December 8 1995, Expeditors contacted Diana Bright requesting that "any buses now in route to [Puerto Rico] be held by Crowley and NOT RELEASED until [Expeditors notifies] you otherwise...." (Bright Affidavit, at ¶ 22). Ms. Bright agreed to this request to hold the buses and communicated this information to Crowley's Puerto Rico office. (Id., at ¶ 23). On December 11, 1995, Expeditors authorized the release of the buses. (Id., at ¶ 25).

On January 3, 1996, Ms. Bright again received a request from Expeditors that Crowley hold buses then en route and not to release them until notified otherwise. (Id., at ¶ 31). Ms. Bright again agreed to hold the buses, and communicated this information to Crowley's Puerto Rico office. (Id., at ¶ 32). Throughout February and March, the Puerto Rico office advised Ms. Bright that the buses were still being held, and Bright passed this information on to Expeditors. (Id., at ¶ 43). Sometime during Spring 1996, Expeditors contacted Ms. Bright and advised her that it had learned from Flxible that the buses has been released to the P.R.M.B.A., thereby extinguishing Expeditors' contractual lien over Flxible's freight. (Id., at ¶ 46).

II. Discussion

A. Summary Judgment Standard

Defendant moves for summary judgment in regards to the amount of damages that plaintiff may recover from defendant in the event that the Court were to resolve the case in plaintiff's favor. Fed. R. Civ. R. 56© provides in pertinent part:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Pursuant to Fed.R.Civ.P. 56(c), summary judgment is appropriate if "there is no genuine issue as to any material fact...." In making this determination, the evidence must be viewed in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). Summary judgment will not lie if the dispute about a material fact is genuine, "that is, if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). However, summary judgment is appropriate if the opposing party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The mere existence of a scintilla of evidence in support of the opposing party's position will be insufficient; there must be evidence on which the jury could reasonably find for the opposing party. Anderson, 477 U.S. at 251, 106 S.Ct. 2505.

B. Carriage of Goods by Sea Act

Defendant contends that the Carriage of Goods by Sea Act ["COSGA"], 46 U.S.C.App. §§ 1300-1315, which limits a carrier's liability, applies to this action, having been incorporated into the bills of lading. Plaintiff argues that COSGA does not apply because its claims are based, not on the contract of carriage governed by the bills of lading, but rather on an entirely independent contract that arose subsequent to the issuance of the bills of lading, wherein defendant agreed to hold the buses until plaintiff authorized their release. Plaintiff further maintains that, even if COSGA does govern defendant's wrongful delivery of the buses, COSGA's $500 limitation of liability for cargo loss or damage does not limit plaintiff's damages to $500 per bus because the parties agreed prior to the shipments that the buses were valued in excess of $300,000.

COSGA governs "all contracts for carriage of goods by sea between the ports of the United States and the ports of foreign countries." Nippon Fire & Marine Ins. Co. v. M.V. Tourcoing, 167 F.3d 99, 100 (2nd Cir.1999). See also Royal Ins. Co. v. Sea-Land Serv. Inc., 50 F.3d 723, 726 (9th Cir.1994). Although COSGA does not espressly apply to bills of lading governing domestic or coastwise shipments, the parties may incorporate its terms into a contract of carriage. See Lucchese v. Malabe Shipping Co., Inc., 351 F.Supp. 588, 591 (D.P.R.1972); In the Matter of the Complaint of Norfolk, Baltimore & Carolina Line, Inc., 478 F.Supp. 383, 386 (E.D.Va.1979). "Section 13 of COSGA expressly authorizes the incorporation of COSGA into bills of lading governing domestic shipments, and further provides that any bill of lading which incorporates COSGA `shall be subjected hereto as fully as if subject hereto by the express provisions of this chapter.'" In re Norfolk, 478 F.Supp. at 386 (citations omitted).¹

COSGA provides the exclusive cause of action for cargo loss or damage; the law explicitly covers tortious and contractual conduct. See Crispin Co. v. Lykes Bros. S.S. Co., 134 F.Supp. 704, 706 (S.D.Tex.1955). When COSGA is applicable, no remedy exists under state law or general maritime law for breach of contract, negligence, or conversion. See St. Paul Fire & Marine Ins. v. Marine Transp. Serv. Sea-Barge Group, Inc, 727 F.Supp. 1438, 1442 (S.D.Fla.1989): National Automotive Publications v. United States Lines, 486 F.Supp. 1094, 1099, 1101-02 (S.D.N.Y.1980); B.F. McKernin & Co. v. United States Lines, 416 F.Supp. 1068, 1071 (S.D.N.Y.1976). Furthermore, COSGA "covers the period from the time when the goods are loaded [onto the ship] to the time when they are discharged[, or unloaded,] from the ship." Robert C. Herd & Co. v. Krawill Mach. Corp., 359 U.S. 297, 300, 79 S.Ct. 766, 3 L.Ed.2d 820 (1959). This period is known as "tackle to tackle." See Mori Seiki USA, Inc. v. M.V. Alligator Triumph, 990 F.2d 444, 447 (9th Cir.1993). However, the parties may contractually extend COGSA to cover the entire period during which the carrier has custody of the cargo. See id.; Brown & Root, Inc. v. M/V Peisander, 648 F.2d 415, 420 (5th Cir.1981); Baker Oil Tools, Inc. v. Delta Steamship Lines, 562 F.2d 938, 940 n. 3 (5th Cir.1977), reh'g denied, 571 F.2d 978 (5th Cir.1978).

"Section 4(5) of COGSA limits liability of a carrier to $500 per package or customary freight unit, unless the shipper declares a higher value which is inserted onto the bill of lading, or unless the shipper was not given a fair opportunity to declare the higher value." Aetna Ins. Co. v. M/V Lash Italia, 858 F.2d 190, 192 (4th Cir.1988). See also Acwoo Int'l Steel Corp. v. Toko Kaiun Kaish, Ltd., 840 F.2d 1284, 1288-89 (6th Cir.1988).² The penalty for failing to satisfy the fair opportunity doctrine is "that a carrier loses the benefit of any limitation of liability to which it might otherwise be entitled." General Elec. Co. v. MV Nedlloyd, 817 F.2d 1022, 1028 (2nd Cir.1987). The Sixth Circuit has held that the incorporation of the language of § 4(5) into a bill of lading sufficiently provides a shipper with a fair opportunity to...