Howmet Corporation v. Tokyo Shipping Co.

• Citation: 318 F. Supp. 658
• Decision Date: 09 November 1970
• Docket Number: Civ. A. No. 3278.
• Parties: HOWMET CORPORATION, Plaintiff, v. TOKYO SHIPPING CO., Ltd., Phoenis Cia De Nav Sa, and the Mayor and Council of the City of Wilmington, Delaware, a municipal corporation of the State of Delaware, the Board of Harbor Commissioners, an Agency of the City of Wilmington (as aforesaid) and its Commissioners, Charles E. Mendinhall, Paul Cramer and C. T. Foster, Defendants.
• Court: U.S. District Court — District of Delaware

318 F. Supp. 658

HOWMET CORPORATION, Plaintiff, v. TOKYO SHIPPING CO., Ltd., Phoenis Cia De Nav Sa, and the Mayor and Council of the City of Wilmington, Delaware, a municipal corporation of the State of Delaware, the Board of Harbor Commissioners, an Agency of the City of Wilmington (as aforesaid) and its Commissioners, Charles E. Mendinhall, Paul Cramer and C. T. Foster, Defendants.

Civ. A. No. 3278.

United States District Court, D. Delaware.

November 9, 1970.

Ernest S. Wilson, Jr., Wilmington, Del., for plaintiff.

William E. Wiggin, of Richards, Layton & Finger, Wilmington, Del., for defendant, Tokyo Shipping Co., Ltd.

H. James Conaway, Jr., and William F. Taylor, of Young, Conaway, Stargatt & Taylor, Wilmington, Del., for defendants, The Mayor and Council of Wilmington and Board of Harbor Commissioners.

OPINION

LATCHUM, District Judge.

This admiralty suit seeks to recover a monetary award in the amount of $31,832.04 for alleged rust damage to a shipment of 240 coils of galvanized sheet steel shipped by sea from Chiba, Japan to Wilmington, Delaware. The plaintiff is Howmet Corporation,¹ a Delaware company ("Howmet"). The named defendants are Tokyo Shipping Co., Ltd. ("Tokyo"), Phoenis Cia de Nav Sa ("Phoenis"), The Mayor and Council of the City of Wilmington, a municipal corporation of the State of Delaware, the Board of Harbor Commissioners,² an agency of the City of Wilmington, and its three individually named Commissioners³ (herein collectively referred to as "The City of Wilmington").

The steel coils in question, manufactured by Mitsui & Co., Ltd. ("Mitsui"), were delivered by Mitsui to Tokyo at Chiba, Japan on August 31, 1965 for shipment under a bill of lading to Mitsui's order for the account of Howmet to the Port of Wilmington. Tokyo, the carrier, placed the shipment on board of the S.S. Fenix, a cargo vessel owned by Phoenis but chartered by Tokyo.

Gannet Freighting, Inc., general agent for Tokyo, through its subagent, Lavino Shipping Company, made arrangements on October 13, 1965 on behalf of Mitsui for the discharge of the steel coils at the Wilmington Marine Terminal from the S.S. Fenix by J. A. McCarthy, Inc., stevedores.⁴ On October 19, 1965, J. A. McCarthy, Inc. for Howmet's account made arrangements with the Wilmington Marine Terminal for storage of the 240 steel coils on the pier to await delivery by the Terminal to Howmet's trucking agent, Jones Motor Freight, who was to remove the coils from storage.

The coils were discharged from the ship and placed on the pier at No. 1 berth at the Wilmington Marine Terminal on November 1-2, 1965. They remained on the pier in open storage in the custody of the Marine Terminal until November 10, 1965 when Howmet's trucking agent removed 77 of the steel coils from storage. When the coils were removed Howmet allegedly discovered them to be rusty. The remaining 163 steel coils remained at the Marine Terminal until sometime after December 31, 1965 when they were sold by Howmet.

On October 28, 1966, Howmet filed this suit. The complaint seeks damages from Tokyo, as charterer, and Phoenis, as owner of the S.S. Fenix, for breach of contract of carriage and negligence based on the allegations that the rust damage occurred while the coils were aboard the ship in transit under a bill of lading governed by the Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq. In the alternative, the complaint seeks damages from the City of Wilmington based on the allegations that the rust damage was caused by the negligence of the City of Wilmington in leaving the coils in open storage on the pier at the Marine Terminal in an exposed condition after they were discharged from the ship.

The case is presently before the Court on Tokyo's motion for summary judgment of dismissal. Tokyo contends that, because it had no notice of the alleged damage and was not served with process in this suit until January 12, 1970, Howmet has failed to prosecute this action against Tokyo with due diligence to the latter's prejudice and it therefore should be dismissed for laches as to Tokyo.

As previously stated the complaint was filed on October 28, 1966 for alleged damages to a cargo which was delivered to Wilmington on November 1-2, 1965. There is no question that suit against Tokyo was brought "within one year after the delivery of the goods or the date when the goods should have been delivered," the limitation period provided in the Carriage of Goods by Sea Act, 46 U.S.C. § 1303(6). But the record discloses that at the time suit was filed Howmet's attorney instructed the Clerk of this Court to issue a summons only to the Mayor of Wilmington and to the Board of Harbor Commissioners. The Clerk was not to issue process to Tokyo or Phoenis nor was he to issue a writ of attachment for the S.S. Fenix at that time.

The Mayor of Wilmington and the Board of Harbor Commissioners were duly served with process on November 1, 1966 and they thereafter appeared and filed answers on December 2, 1966. Discovery by interrogatories and depositions proceeded in the action between Howmet and the City of Wilmington.

The defendant Phoenis has never been served with any kind of process nor has it appeared in this action. It was not until December 23, 1969 that Howmet's attorney requested the Clerk to issue a summons to Tokyo to be served on the Delaware Secretary of State pursuant to Delaware's long-arm statute, 8 Del.C. § 382. This was accomplished on January 7, 1970. The Secretary of State in turn forwarded the summons and copy of the complaint by registered mail as required by statute to Gannet Freighting, Inc. in New York City, Tokyo's general agent in the United States.

Even though this suit against Tokyo was timely brought under the Carriage of Goods by Sea Act, supra, it is subject to dismissal under Rule 41(b), F.R.Civ.P., for failure to prosecute with reasonable diligence. "The mere institution of a suit does not of itself relieve a party from the charge of laches, and if he fail in the diligent prosecution of the action the consequences are the same as if no action had been taken." California Casualty Indemnity Exchange v. United States, 74 F.Supp. 408, 409 (S.D.Cal. 1947).

Ordinarily a suit will be barred by laches where there has been both an unreasonable delay in the institution or prosecution of the suit and undue prejudice to the defendant as a result of the delay. See Kane v. Union of Soviet Socialist Republics, 189 F.2d 303, 305 (C.A. 3, 1951) cert. den. 342 U.S. 903, 72 S.Ct. 292, 96 L.Ed. 676 (1952); United Nations Relief & Rehabilitation Adm. v. The Mormacmail, 99 F.Supp. 552, 554 (S.D.N.Y.1951).

Thus, failure to make service of process within a reasonable time as contemplated by Rule 4, F.R.Civ.P., may amount to want of prosecution. Elizabethtown Trust Co. v. Konschak, 267 F. Supp. 46 (E.D.Pa.1967); Hoffman v. Wair, 193 F.Supp. 727 (D.Ore.1961); Huffmaster v. United States, 186 F. Supp. 120 (N.D.Cal.1960). "Failure to use reasonable diligence in serving a summons is more fraught with possibilities of unfairness and abuse than failure to...