Hapag-Lloyd, AG v. Levine

• Decision Date: 14 June 1979
• Docket Number: No. 77 C 2663.,77 C 2663.
• Citation: Hapag-Lloyd, AG v. Levine, 473 F. Supp. 991 (N.D. Ill. 1979)
• Parties: HAPAG-LLOYD, A. G., Plaintiff, v. Ernest L. LEVINE d/b/a Gerald Export & Import Company, Defendant.
• Court: U.S. District Court — Northern District of Illinois

473 F. Supp. 991

HAPAG-LLOYD, A. G., Plaintiff, v. Ernest L. LEVINE d/b/a Gerald Export & Import Company, Defendant.

No. 77 C 2663.

United States District Court, N. D. Illinois, E. D.

June 14, 1979.

John P. MacRae, Dennis M. Robb, Lord, Bissell & Brook, Chicago, Ill., for plaintiff.

Edgar A. Blumenfeld, Chicago, Ill., for defendant.

MEMORANDUM DECISION

MARSHALL, District Judge.

In this admiralty suit, the plaintiff seeks $3,225.60 in unpaid freight charges under a contract of carriage providing for goods exported by defendant to be shipped from Norfolk, Virginia to Felixstowe, England. The plaintiff, Hapag-Lloyd, is a German corporation engaged as a common carrier of merchandise on the high seas. Defendant, Ernest L. Levine, doing business as Gerald Export and Import Company, is an exporter and importer of merchandise in both foreign and domestic commerce. Our jurisdiction is predicated upon 28 U.S.C. § 1333. After plaintiff filed its original complaint, defendant filed a counterclaim based on the antitrust laws. Plaintiff's motions for summary judgment on its freight claim and the antitrust counterclaim are now pending.

Plaintiff's Claim for Ocean Freight

Plaintiff contends that on or prior to July 23, 1975, it executed a contract of carriage with defendant, pursuant to which plaintiff transported on the vessel M/V Alster Express one container of carpet measuring 2016 cubic feet. The carpet was shipped from Norfolk, Virginia to Felixstowe, England, with freight charges totalling $3,225.60, which defendant did not pay. Contending that no material question of fact remains as to this transaction, plaintiff seeks summary judgment.

In support of its motion, plaintiff first points to defendant's answer to the amended complaint, which admits that on or after July 23, 1975, plaintiff took one container of carpeting measuring 2016 cubic feet aboard the M/V Alster Express in Norfolk and delivered it to Felixstowe. See Defendant's Answer to Amended Complaint, ¶ 5. Further, defendant's answers to plaintiff's interrogatories indicate that the container of carpet referred to in defendant's answer was exported by defendant and sold to a customer in the United Kingdom. See Answers to Interrogatories, ¶ 2, ¶ 3(A)-(G). Furthermore, plaintiff notes that the freight charge contained in the carriage contract and the bill of lading was fixed by the North Atlantic United Kingdom Freight Conference Tariff No. (47) FMC-2. See Plaintiff's Exhibit A. The Shipping Act of 1916 requires a carrier to charge the figure contained in its filed tariff. 46 U.S.C. § 817.

In response, defendant contends that no privity of contract existed between plaintiff and defendant because the parties to the carriage contract were defendant and Fred P. Gaskell Company, the forwarding agent in the transaction. Defendant claims that plaintiff has not proved an assignment of rights from Gaskell to plaintiff, and without such an assignment plaintiff has no right to the freight charges. Defendant further contends that plaintiff has not conclusively established that we have subject matter jurisdiction over plaintiff's claim. Finally, defendant claims that the contract of carriage is unenforceable because plaintiff engaged in discriminatory rate practices.

Plaintiff's response to defendant's privity argument is that plaintiff was a party to the carriage contract, and that even if Gaskell was the party in privity with defendant, Gaskell assigned any rights it may have had to plaintiff. After plaintiff filed its original complaint against defendant, defendant filed a counterclaim for interpleader seeking to add Gaskell as a party and to obtain adjudication as to which party is entitled to recover from defendant. Gaskell then filed a verified answer, in which it stated that it has no contract with defendant covering the shipment of the carpet, and that Hapag-Lloyd is entitled to recover the entire amount of the freight charges. See Answer to Counterclaim for Interpleader, ¶ 3. The answer further stated that Gaskell acted only as a freight forwarder, a task which involved arranging to have the carpet loaded aboard the Alster Express and included overseeing the execution of the freight contract between plaintiff and defendant. Id., ¶ 6. Finally, to remove all doubt, the answer purported to assign to plaintiff all rights Gaskell may have had in the collection of the freight charges. Id., ¶ 4.

In determining whether a material question of fact remains here, we note first that defendant's jurisdictional argument formed the basis of defendant's motion to dismiss filed on October 3, 1977, which we denied on October 21, 1977. Thus we need not reconsider any jurisdictional issues. We do note, however, that we are still certain that we have admiralty jurisdiction under 28 U.S.C. § 1333 to resolve a dispute relating to a contract for carriage of goods across the Atlantic Ocean. Second, the proper charge for transporting the carpet under the applicable tariff, approved by the Federal Maritime Commission (FMC), was $3,225.60, the amount plaintiff charged.¹ Thus defendant cannot be heard to claim that plaintiff charged an illegal rate for this transaction.

Because defendant admits that its container of carpet was transported to England on the Alster Express and that defendant did not pay the freight charges, the only issue remaining is which party is entitled to recover the freight charges from defendant. We conclude that no material question of fact remains as to plaintiff's right to the freight charges. Defendant disputes not that a contract existed but only that plaintiff rather than Gaskell was the other party to it. The only evidence of a contractual relationship between defendant and Gaskell indicates that Gaskell served only as a freight forwarding agent. Gaskell's answer to the counterclaim for interpleader convincingly demonstrates that Gaskell had no contract of carriage with defendant and that Gaskell performed only the duties of a forwarding agent. See Answer to Counterclaim for Interpleader, ¶ 6.² Moreover, the "freight contract," attached as Plaintiff's Exhibit 1, does not establish a contractual relationship between Gaskell and defendant. The contract is a printed form with the name of plaintiff's general agent, United States Navigation, Inc., printed at the top and the bottom, defendant's name typed at the top, and Gaskell's name typed at the bottom. The form does not name anyone specifically as a party to the contract, but Hapag-Lloyd's name does appear as the "line" and the Alster Express is named as the ship. Thus to the extent that the ambiguous form evidences a contract of carriage, Hapag-Lloyd, and not Gaskell, is identified as the carrier responsible for transporting the carpet. We fail to see how the document establishes defendant obligated itself to Gaskell for the freight charges.

We need not trouble ourselves with the ambiguities inherent in the form contract, however, because Hapag-Lloyd's bill of lading clearly indicated that the "exporting carrier" was to be M/V Alster Express, that the "shipper/exporter" was defendant, and that Gaskell would be the forwarding agent. See Plaintiff's Exhibit 2. Further, the document clearly indicated that it was Hapag-Lloyd's bill of lading. The bill of lading thus bound both plaintiff and defendant, because one of the functions of a bill of lading is to serve as a contract of carriage. See Amoco Overseas Co. v. S. T. Avenger, 387 F.Supp. 589 (S.D.N.Y.1975); Asbestos Corp., Ltd. v. Compagnie de Navigation Fraissinet et Cyprien Fabre, 345 F.Supp. 814 (S.D.N.Y.1972); 2A Benedict on Admiralty § 31 at 4-1 (1977). Moreover, Gaskell has stated that one of its responsibilities as freight forwarder was to see that the ocean bill of lading was prepared for defendant and submitted to plaintiff "for execution as a contract of carriage between Hapag-Lloyd and Gerald." See Answer to Counterclaim for Interpleader, ¶ 6e. Defendant has not challenged the validity of the bill of lading or any of the statements in the Gaskell answer.³

We see no reason to depart from the basic policy of admiralty law that carriers be paid for their services. See Bartlett-Collins Co. v. Surinam Navigation Co., 381 F.2d 546, 549 (10th Cir. 1967). Defendant does not dispute that plaintiff transported defendant's goods. This is not a case in which the shipper has already paid the freight charges to a defaulting forwarder and thus would have to pay twice if the carrier recovered. See id.; Koninklijke Nedlloyd BV v. Uniroyal, Inc., 433 F.Supp. 121 (S.D.N.Y. 1977). Moreover, defendant is in no danger of being found liable to Gaskell on the freight charges, because Gaskell has admitted in its answer that it is not entitled to the freight charges and has already accepted defendant's offer of judgment in the amount of $95.14, the amount Gaskell charged defendant for the freight forwarding services. Finally, defendant's contention that plaintiff was an undisclosed principal is difficult to believe in light of the bill of lading and a July 11, 1975 letter from defendant to Gaskell regarding the shipment of carpet which states that the ship was to be the Alster Express and the carrier was "Happ Lloyd."

The evidence available to us on this summary judgment motion convinces us that defendant knew that plaintiff was the carrier, that Gaskell was merely the forwarding agent, and that a contractual obligation arose between defendant and plaintiff which required defendant to pay plaintiff for the services that plaintiff performed. The rate was clearly proper, and defendant does not contend that the goods did not reach their destination or were damaged in transit. Defendant was obligated to pay the $3,225.60 freight charge to the carrier. Plaintiff's motion for summary judgment on the ocean freight claim is granted.

Antitrust Counterclaim

In its antitrust counterclaim, defendant contends that plaintiff has engaged in discriminatory pricing and price...