Marine Transp. Services Sea-Barge Group, Inc. v. Python High Performance Marine Corp.

Decision Date21 March 1994
Docket Number92-4573,Nos. 92-4495,SEA-BARGE,s. 92-4495
Citation16 F.3d 1133
PartiesMARINE TRANSPORTATION SERVICESGROUP, INC., Plaintiff-Counterclaim Defendant Appellant-Cross-Appellee, v. PYTHON HIGH PERFORMANCE MARINE CORP., in Personam, Defendant-Counterclaim Plaintiff Appellee-Cross-Appellant, Top Performance Marine Group, Defendant. MARINE TRANSPORTATION SERVICESGROUP, INC., Plaintiff-Counterclaim Defendant-Appellant-Cross-Appellee, v. PYTHON HIGH PERFORMANCE MARINE CORP., in Personam, Defendant-Counterclaim Plaintiff-Appellee-Cross-Appellant, Top Performance Marine Group, Defendant-Appellee.
CourtU.S. Court of Appeals — Eleventh Circuit

Timothy J. Armstrong, Armstrong & Mejer, P.A., Coral Gables, FL, for Marine Transp. Services Sea-Barge Group, Inc.

Fernando S. Aran, Aran, Correa & Guasch, P.A., Coral Gables, FL, for Python High Performance Marine Corp.

Appeals from the United States District Court for the Southern District of Florida.

Before COX and BIRCH, Circuit Judges, and SMITH *, Senior Circuit Judge.

COX, Circuit Judge:

Marine Transportation Services Sea-Barge Group, Inc. ("Sea-Barge") is a Delaware corporation principally involved in transporting cargo between ports in Florida and Puerto Rico. Python High Performance Marine Corporation ("Python") is a Florida corporation that at one time was involved in the manufacture and sale of boats. Each appeals the district court's final judgment granting various forms of relief to both parties.

FACTS AND PROCEDURAL HISTORY

In September 1990, Julio DeVarona ("DeVarona"), an agent of Python, booked certain cargo for shipment from Miami to San Juan, Puerto Rico with Sea-Barge. The cargo consisted of one twenty-foot sealed container On October 2, 1990, DeVarona, on behalf of Python, booked the three boat molds for shipment; the booking document specified "BOAT MOLDS--ONE HULL, TWO DECKS." Python requested Sea-Barge provide cargo insurance on the boat molds. The hull mold and one of the deck molds were bound together for shipment ("two-mold set"), while the second deck mold ("Elegante mold") remained separate.

                of boat parts ("the container") and three boat molds. 1  Python shipped the container and the boat molds separately and under separate bills of lading.  Sea-Barge issued a bill of lading for the container on September 28, 1990, the same day the vessel carrying it departed for San Juan.  The bill named Python as the shipper/exporter and identified "Top Performance" as the consignee that would receive the shipment in San Juan.  The freight charge for carriage of the container was $1658.38.  Top Performance was to pay the freight and related charges, as the bill was marked "FREIGHT COLLECT;  OBLIGOR-CONSIGNEE."   Top Performance and Python allegedly planned to enter into a lease under which Top Performance would pay Python $2000.00 for each boat manufactured from the boat molds and equipment Python was shipping
                

Sometime between October 2, 1990 and October 5, 1990, the Elegante mold disappeared, never to be found again. Pictures taken by Sea-Barge on October 5, 1990, in preparation for shipment, reveal only the two-mold set; none of the pictures or documentary drawings made at the time record the presence of the Elegante mold.

The vessel carrying the two-mold set departed for San Juan on October 12, 1990. Despite the absence of the Elegante mold, the bill of lading issued for the shipment bears the entries "3" under the heading "NO. OF PKGS." and "BRBK BOATS MOLDS" 2 under the heading "DESCRIPTION OF PACKAGES AND GOODS." The bill of lading also disclosed a request and charge for insurance. Sea-Barge assessed total freight and related charges at $3155.70, also to be paid by Top Performance, as the bill was marked "FREIGHT COLLECT; OBLIGOR-CONSIGNEE."

When the shipments reached San Juan, Top Performance refused to accept the cargo. The district court determined that this refusal was due to the absence of the Elegante deck mold. 3 Upon learning of the missing deck mold from a Top Performance agent, DeVarona contacted Felipe Inostroza ("Inostroza"), Sea-Barge's traffic manager. Inostroza instructed DeVarona to file a claim for the lost deck mold along with two replacement estimates. Inostroza also offered to return the cargo to Miami at no charge and agreed that the freight for the Miami to San Juan trip would be deducted from the proceeds of the claim payment for the lost deck mold. 4

Sea-Barge's vessel carrying the two-mold set and container departed for Miami from San Juan on April 12, 1991. Sea-Barge issued a bill of lading for the container and a separate bill for the two-mold set. Under the charges section on each bill appears the notation "TOTAL THRU FREIGHT; TOTAL CHARGES," with no dollar amount entered. (Def. Exh. 1-2 and 1-3). At trial, Sea-Barge submitted "corrected" copies of Upon receipt of arrival notices for the container and two-mold set, DeVarona attempted to reclaim the cargo. Relying on the accommodation Inostroza had made, DeVarona went to Sea-Barge's terminal believing he could pick up the cargo without having to pay any freight charges. Inostroza told DeVarona that he would have to pay the freight charges on the two-mold set for the Miami to San Juan trip before Sea-Barge could release the cargo. Inostroza also referred DeVarona to Dolores Trapani ("Trapani"), Sea-Barge's claims manager, for resolution of Python's account. DeVarona contacted Trapani and she demanded payment in the amount of $3155.70 prior to release of the cargo. 5

these same bills of lading showing typewritten entries for freight charges.

In compliance with Trapani's demand for freight charges, DeVarona returned to Sea-Barge's terminal on or about April 30, 1991, with a Python corporate check in the amount of $3155.70. Inostroza again refused to release Python's cargo and declined to accept the check. This time, Inostroza told DeVarona simply that he could not release Python's cargo and to wait to hear from Sea-Barge's attorney. At trial, Trapani testified that only cash or a cashier's check were acceptable forms of payment and that this was the reason Python's check was not accepted. The district court found that this requirement had not been communicated to DeVarona. At the time of trial the container and two-mold set remained in Sea-Barge's possession. The molds had deteriorated beyond repair due to their exposure to the elements.

Sea-Barge brought this action against Python and Top Performance to recover freight due for the carriage of the container and the boat molds from Miami to San Juan and for the return trip to Miami. Sea-Barge also sought to collect demurrage on the cargo while it remained in Sea-Barge's possession in San Juan and Miami. Subject matter jurisdiction was grounded on admiralty jurisdiction pursuant to 28 U.S.C. Sec. 1333 (1988).

Python filed an answer and counterclaim. Python's counterclaim sought damages from Sea-Barge for the loss of the Elegante boat mold. Python also counterclaimed for conversion of the container and two-mold set due to Sea-Barge's refusals to release Python's cargo.

After a non-jury trial, the district court ruled that Sea-Barge was entitled to recover the freight charges and resulting interest. The court denied Sea-Barge's claim for demurrage. A provision in the bill of lading provided that no demurrage was applicable for delay caused by Sea-Barge. The court ruled that the delay had been Sea-Barge's fault and thus no demurrage was due.

On Python's counterclaim, the district court ruled that Sea-Barge was liable to Python for $40,000.00 (the value of the missing Elegante deck mold) plus the resulting interest. Sea-Barge's bill of lading included a $500.00 per package limit of liability for any lost, damaged, or misdelivered cargo unless the shipper declared a higher value on the cargo and paid an additional freight charge. The court ruled that Python had satisfied these two requirements by, (1) declaring a $100,000.00 value on the boat molds and (2) incurring a $50.00 insurance charge 6 that the court apparently deemed the equivalent of additional freight.

The district court also concluded that Sea-Barge had converted the container of boat parts and the two-mold set by refusing to release the cargo after Python presented a corporate check as payment for the freight. The court awarded damages of $86,500.00 plus the resulting interest based on the value of the boat parts and two-mold set. Finally, the district court denied Python's claim for lost profits because the lease between Python and Top Performance for the manufacture of boats had not been consummated.

ISSUES ON APPEAL AND CONTENTIONS OF THE PARTIES

On appeal, Sea-Barge contends that the district court lacked admiralty jurisdiction and substantive grounds to: (1) apply the doctrine of equitable estoppel to estop Sea-Barge from seeking demurrage and (2) grant relief on the claim that Sea-Barge converted the two-mold set and boat parts. Alternatively, Sea-Barge argues that the district court erred in failing to apply the doctrine of avoidable consequences against Python. Sea-Barge also contends that the district court erred in refusing to award demurrage charges and in not limiting Sea-Barge's liability for the lost Elegante mold to $500.00. On cross-appeal, Python contends that the district court erred in denying its claim for lost profits. Finally, we note that neither party questions the district court's ruling concerning Python's liability for freight charges for the cargo's initial shipment from Miami to San Juan.

STANDARD OF REVIEW

We review factual findings entered by a district court, sitting without a jury in admiralty, under the clearly erroneous standard. See Anderson v. Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985). We review a district court's conclusions of law de novo. Insurance Co. of N. Am. v. M/V Ocean Lynx, 901 F.2d 934, 939 (11th Cir.1990), cert. denied, 498 U.S. 1025, ...

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