Ins. Co. of North Am. v. Puerto Rico Marine Mgmt.

• Decision Date: 06 December 1984
• Docket Number: Civ. No. 83-2920(PG).
• Citation: 599 F. Supp. 199
• Parties: INSURANCE COMPANY OF NORTH AMERICA, et al., Plaintiffs, v. PUERTO RICO MARINE MANAGEMENT, INC., Defendant.
• Court: U.S. District Court — District of Puerto Rico

599 F. Supp. 199

INSURANCE COMPANY OF NORTH AMERICA, et al., Plaintiffs, v. PUERTO RICO MARINE MANAGEMENT, INC., Defendant.

Civ. No. 83-2920(PG).

United States District Court, D. Puerto Rico.

December 6, 1984.

James A. Toro, Old San Juan, P.R., Robert W. Fenet, Lake Charles, La., for plaintiffs.

Jaime Mayol, Jiménez & Fusté, J. Ramón Rivera Morales, San Juan, P.R., for defendant.

OPINION AND ORDER

PEREZ-GIMENEZ, Chief Judge.

This action was brought by Insurance Company of North America, (hereinafter referred to as INA) as representative and on behalf of various insurance companies, to recover for loss of cargo allegedly due to defendant's breach of contract and negligence.

Defendant filed a motion for summary judgment on August 21, 1984, alleging that the complaint is time barred and that plaintiff failed to state a claim upon which relief can be granted. On September 5, 1984, plaintiff filed an opposition thereto and a cross-motion for summary judgment. Subsequently, defendant filed, on October 1, 1984, an opposition to plaintiff's cross-motion for summary judgment and a reply to plaintiff's opposition to defendant's motion for summary judgment. On October 15, 1984, plaintiff filed a supplemental Memorandum in Opposition to Defendant's Motion for Summary Judgment.

Jurisdiction of this Court is based on admiralty pursuant to 28 U.S.C. § 1333.

When all the parties have moved for summary judgment and no party has raised any genuine issue of material fact this case is appropriate for disposition by summary judgment. Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 2720 (and cases therein cited at p. 25 n. 14).

Based on the pleadings, their annexed exhibits and supporting affidavits, the Court makes the following findings of facts and arrives at the following conclusions of law:

Findings of Fact

1. On December 16, 1981, Canadian Saltfish Corporation shipped a container of 800 cartons of codfish from Elizabeth, New Jersey, to Méndez & Company, Inc., in San Juan, Puerto Rico.

2. A bill of lading was issued by Puerto Rico Marine Management, Inc., (hereinafter referred to as PRMMI) covering the shipment of codfish consigned to Méndez & Company, Inc. (Exhibit A to defendant's motion for summary judgment).

3. The container wherein the codfish was shipped arrived in Puerto Rico on January 2, 1982.

4. Upon the arrival of the goods in San Juan, PRMMI held the goods in storage at its facilities in San Juan for safekeeping and delivery to Méndez & Company, Inc.

5. On January 4, 1982, PRMMI delivered the container to someone purporting to be consignee, Méndez & Company, Inc.'s trucker, as evidenced by the Trailer Interchange Receipt and Inspection Report (Exhibit B to defendant's motion for summary judgment).

6. On the above date, a truck driver for Méndez & Company, Inc., arrived at the facilities of PRMMI to pick up the container and was informed that the same had been picked up by someone purporting to work for Méndez & Company, Inc.

7. PRMMI released the container to an unauthorized person whose signature on the Trailer Exchange Receipt and Inspection Report is illegible.

8. Plaintiff, INA, as insurer of Méndez & Company, Inc., paid them the sum of $57,263.80 for the loss of the codfish and brings this subrogation claim in its own name for an alleged failure to deliver the cargo held in storage for Méndez & Company, Inc.

9. The complaint was filed on December 1, 1983, but summons were not served on PRMMI until March 19, 1984.

Conclusions of Law

Defendant alleges that this action arises under the U.S. Carriage of Goods by Sea Act, (COGSA) 46 U.S.C. § 1300 et seq., and is time barred pursuant to the provisions of the Bill of Lading which sets a one-year limit to initiate damage or loss suits commencing from the time of delivery of the goods or the date when the goods should have been delivered. Plaintiff opposes summary judgment contending that this is not an action arising under COGSA because (1) this was a shipment from a U.S. port to a U.S. port, and (2) the goods involved herein were delivered and thus were no longer "on board ship." INA further alleges that PRMMI had the duties of a bailee or a warehouseman and that if the Court should find otherwise, then the Harter Act, 46 U.S.C. § 190 et seq., would prevail.

In its supplemental memorandum of law, plaintiff also alleges that because INA, as subrogee, was not a party to the contract between its insured and PRMMI and never received actual or constructive notice of the limitations provision, the COGSA statute of limitations incorporated in the short bill of lading did not apply to INA.

It is clear that the Carriage of Goods by Sea Act, (COGSA) 46 U.S.C. § 1300 et seq., does not apply ex propio vigore to goods in shipment between ports of the United States, 46 U.S.C. § 1312. It is also clear that COGSA does not apply ex propio vigore to the period before the goods are placed on board ship ("tackle to tackle") or to the period after their discharge, 46 U.S.C. § 1301(e). Firestone Tire & Rubber v. Almacenes Miramar, Inc., 452 F.Supp. 670 (D.C.P.R.1978), affirmed, 588 F.2d 817 (1st Cir.1978). The Harter Act applies to goods in the custody of the carrier before delivery and after discharge, 46 U.S.C. § 190 et seq. However, the parties agreed that the provisions of COGSA should be incorporated into their contract, and it has been repeatedly held that COGSA can be incorporated so as to apply in situations where it otherwise would not if so expressly stated in the "bill of lading or similar document of title which is evidence of a contract for carriage of goods by sea..." 46 U.S.C. § 1312. See, Empacadora Puertorriqueña de Carnes v. Alterman Tr. Line, 303 F.Supp. 474 (D.C.P.R.1969); Fireman's Insurance Company of Newark v. Gulf Puerto Rico Lines, Inc., 349 F.Supp. 952 (D.C.P.R.1972); Commonwealth of Puerto Rico v. SeaLand Service, Inc., 349 F.Supp. 964 (D.C.P. R.1970); Santiago v. Sea-Land Service, Inc., 366 F.Supp. 1309 (D.C.P.R.1973); North River, Ins. Co. v. FED SEA/FED Pac Line, 647 F.2d 985 (9th Cir.1981); Firestone Tire & Rubber v. Almacenes Miramar, Inc., supra; Home Ins. v. Puerto Rico Maritime Shipping Auth., 524 F.Supp. 541 (D.C.P.R.1981).

The contract governing the transaction at issue is a short-form bill of lading (short bill). The short bill incorporates two documents: one is the long-form bill of lading (long bill) on file with the Federal Maritime Commission, the other is the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 1300 et seq.

The shortbill contains a clause which reads as follows:

2. During all other periods, including the time the goods are in the custody of Puerto Rico Maritime Shipping Authority and during the time the goods are loaded on board, carried or discharged from any vessel, and during the time the goods are in the custody of Puerto Rico Maritime Shipping Authority at the port of discharge, and during the time the goods are carried or transported or in the custody of Puerto Rico Maritime Shipping Authority, its agents or any independent contractors after discharge and until delivery, this carriage shall be subject to the terms and conditions of the Puerto Rico Maritime Shipping Authority's regular long form bill of lading contract. All parties to this contract are bound by the terms, provisions, stipulations and conditions of Puerto Rico Maritime Shipping Authority's regular long form bill of lading and published tariff which is on file with the Federal Maritime Commission, posted on board each vessel and open for shippers' or other parties' inspection at the company's offices, and the same are hereby incorporated with the same force and effect for all purposes as if it were severally, fully and specifically set forth herein. Where applicable, this bill of lading is subject to Public Law 85-810, Stat. 977, approved August 28, 1958. This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States of America, approved April 26, 1936.

(Defendant's Exhibit C to motion for summary judgment)

The short bill is subject to the Regular Long Form of Bill of Lading which contains the following statement regarding when the contract shall have effect:

1. COVERAGE. This Bill of Lading shall have effect while the containers, goods and packages are in the custody of the vessel or Puerto Rico Maritime Shipping Authority, its agents, its servants and its independent contractors. At all other times containers, goods and packages shall be governed by the terms and conditions of the connecting carrier's Bill of Lading (if any) and/or Uniform I.C.C. Bill of Lading. When this Bill of Lading governs, it is subject to the provisions of

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