Seguros Banvenez, S.A. v. S/S Oliver Drescher, s. 440

• Decision Date: 30 April 1985
• Docket Number: 521 and 522,Nos. 440,D,s. 440
• Citation: 761 F.2d 855
• Parties: SEGUROS BANVENEZ, S.A., and C.V.G. Electrificacion Del Caroni C.A. (Edelca), Plaintiffs-Appellees, Cross-Appellants, v. S/S OLIVER DRESCHER, her engines, boilers, tackle, etc., Containership Erich Drescher K.G., Erich Drescher, Containerline Joachim Drescher, Reederei Joachim Drescher, Defendants-Appellees, Hansen & Tidemann, Inc., Defendant-Appellee, Cross-Appellant, Compania Anonima Venezolana De Navegacion, Defendant-Appellant, Cross-Appellee. Cal.ocket 84-7580, 84-7594 and 84-7596.
• Court: U.S. Court of Appeals — Second Circuit

Page 855

761 F.2d 855

1985 A.M.C. 2168

SEGUROS BANVENEZ, S.A., and C.V.G. Electrificacion Del Caroni C.A. (Edelca), Plaintiffs-Appellees, Cross-Appellants, v. S/S OLIVER DRESCHER, her engines, boilers, tackle, etc Containership Erich Drescher K.G., Erich Drescher Containerline Joachim Drescher, Reederei Joachim Drescher, Defendants-Appellees Hansen & Tidemann, Inc., Defendant-Appellee, Cross-Appellant Compania Anonima Venezolana De Navegacion, Defendant-Appellant, Cross-Appellee.

Cal. Nos. 440, 521 and 522, Docket 84-7580, 84-7594 and 84-7596.

United States Court of Appeals, Second Circuit.

Argued Nov. 29, 1984.

Decided April 30, 1985.

Vincent J. Barra, New York City (Dougherty, Ryan, Mahoney, Pellegrino, Giuffra & Zambito, New York City, of counsel), for defendant-appellant, cross-appellee Compania Anonima Venezolana de Navegacion.

Albert J. Avallone, New York City (Halley & Chalos, and James R. Halley, Jr., New York City, of counsel), for defendant-appellee, cross-appellant Hansen & Tidemann, Inc.

Harold M. Kingsley, New York City, for plaintiffs-appellees, cross-appellants Seguros Banvenez S.A., and C.V.G. Electrificacion del Caroni C.A. (EDELCA).

Elizabeth T. McCandless, New York City (Haight, Gardner, Poor & Havens, and Chester D. Hooper, New York City, of counsel), for defendants-appellees S/S Oliver Drescher and Containerline Joachim Drescher.

Before VAN GRAAFEILAND, KEARSE, and PIERCE, Circuit Judges.

VAN GRAAFEILAND, Circuit Judge:

This case comes to us on an appeal and cross-appeals from a judgment of the United States District Court for the Southern District of New York in an admiralty action for loss of cargo. The district court (Motley, C.J.) held all the defendants liable for the loss but granted indemnification in favor of the charterer's general agent and the vessel owner against the charterer. As part of its appeal from the final judgment, the charterer seeks reversal of interim orders denying its application for a partial stay pending arbitration and compelling it to post security in order that the vessel might be released from arrest.

C.V.G. Electrificacion del Caroni C.A. (Edelca) and Seguros Banvenez S.A. (Seguros), its cargo underwriter, brought this action on November 24, 1982, seeking damages for the loss at sea of five large mobile cranes. Named as defendants were the ship, the S/S OLIVER DRESCHER, its owner, Containerline Joachim Drescher and related entities (Drescher), the charterer, Compania Anonima Venezolana de Navegacion (Venline), and Venline's general agent, Hansen & Tidemann, Inc. (Hansen).

Edelca, a Venezuelan corporation, purchased the cranes in November of 1981 from Grove Manufacturing Company. Grove delivered the cranes to the Port of Baltimore from where they were to be carried by Venline to Matanzas, Venezuela. Pursuant to a stowage plan prepared by Hansen and approved by Venline, Stockard Shipping & Terminal Corporation (Stockard), Venline's port agent at Baltimore, supervised the stowage of the cranes aboard ship. Although dock receipts for the cranes bore the legend "MANDATORY UNDERDECK STOWAGE BOOKED AND REQUIRED", and clean bills of lading were issued, the cranes were stowed on deck.

After leaving Baltimore, the ship made scheduled calls at Philadelphia and New York. However, instead of then heading for Venezuela, it set sail for Searsport, Maine, an unscheduled stop, in order to receive a cargo of newsprint. En route, the vessel encountered severe weather, and the cranes were washed overboard. This suit followed, plaintiffs alleging that the defendants had committed both stowage and geographical deviations. Cross-claims were interposed between Venline and Drescher and between Venline and Hansen.

Shortly after the complaint was filed, the S/S OLIVER DRESCHER was arrested in Brooklyn, New York. It was released after the district court, at the request of the vessel's owner, ordered Venline to furnish the owner with sufficient security so that the owner in turn could post the bond necessary for such release. Venline counterclaimed against the plaintiffs and cross-claimed against Drescher for damages sustained as a result of this allegedly improper order.

On March 12, 1984, the district court granted the plaintiffs' motion for summary judgment against all defendants on the issue of liability, finding that the defendants had committed unreasonable deviations by stowing the cranes on deck and by sailing for Searsport, but denied that portion of the motion which sought punitive damages and attorney's fees. 587 F.Supp. 172, 175-77. The court also denied Venline's motion to stay the proceedings between itself and Drescher pending arbitration, dismissed Venline's counterclaim, and denied Drescher's and Hansen's motions for summary judgment against the plaintiffs, id. at 177-80.

Thereafter, in a pretrial order dated May 22, 1984, the district court granted Drescher's claim for indemnification and attorney's fees against Venline and dismissed Venline's cross-claim against Drescher. Following a two-day trial on the issues which in the opinion of the district court remained to be decided, the court found that Stockard was the agent of Venline, granted Hansen's cross-claim against Venline for indemnification, and dismissed Venline's cross-claim against Hansen. It also determined plaintiffs' damages to be $1,800,000. Judgment for that amount with interest and costs was entered on June 4, 1984.

Venline now appeals from the judgment and the adverse interim rulings, including the district court's order requiring it to post security for the release of the S/S OLIVER DRESCHER, which we earlier held to be nonappealable for lack of finality, 715 F.2d 54 (2d Cir.1983). Hansen cross-appeals, contending that the district court erred in granting summary judgment against it and in not awarding it attorney's fees against Venline. Hansen also joins Venline in challenging the amount of the damage award. Seguros and Edelca cross-appeal as well, arguing that the district court should have awarded them punitive damages and attorney's fees. We affirm in part, vacate in part, and reverse in part.

I. The Summary Judgment Ruling

As this Court recently noted, "[t]he law governing summary judgments is too well settled to require elaboration. Succinctly stated, it authorizes the summary disposition of litigation if, but only if, there are no genuine issues of material fact to be tried." Granite Computer Leasing v. Travelers Indemnity Co., 751 F.2d 543, 545 (2d Cir.1984) (citing Katz v. Goodyear Tire & Rubber Co., 737 F.2d 238, 244-45 (2d Cir.1984)). It also is well established that, when ruling on a motion for summary judgment, a court "must resolve all ambiguities and draw all reasonable inferences in favor of the party against whom summary judgment is sought". Heyman v. Commerce and Industry Insurance Co., 524 F.2d 1317, 1320 (2d Cir.1975).

Our examination of the summary judgment motion papers satisfies us that the district court disregarded these rules by granting summary judgment against all of the defendants on the issue of liability. However, only Venline and Hansen challenge this ruling on appeal. The attorneys for the ship and its owner, having received the benefit of a completely favorable ruling on their cross-claim, concede that the district court's decision was correct. Confining our review to the grant of summary judgment against Venline and Hansen, we hold first that, insofar as Venline is concerned, summary judgment was proper.

Venline does not dispute the rule, first enunciated by Judge Weinfeld in Jones v. The Flying Clipper, 116 F.Supp. 386 (S.D.N.Y.1953), that on-deck stowage when stowage below deck is required constitutes an unreasonable deviation under the Carriage of Goods by Sea Act, 46 U.S.C. Secs. 1300-1315 (COGSA). Neither does it deny that, absent an agreement or an established custom from which consent of the shipper for on-deck stowage may be imputed, a clean bill of lading imports stowage below deck. Du Pont de Nemours International S.A. v. S.S. Mormacvega, 493 F.2d 97, 100-01 (2d Cir.1974); Encyclopaedia Britannica, Inc. v. SS Hong Kong Producer, 422 F.2d 7, 15 (2d Cir.1969), cert. denied, 397 U.S. 964, 90 S.Ct. 998, 25 L.Ed.2d 255 (1970). Instead, Venline contends that on-deck stowage was both the custom with heavy cargo destined for Orinoco River ports and the specific request of Edelca. These contentions were properly rejected.

The vague and conclusory references in Venline's affidavits to a preferred method of on-deck discharge of cargo at certain locations on the Orinoco River were insufficient to create a factual issue concerning a prevailing custom for on-deck stowage at the Port of Baltimore. See Encyclopaedia Britannica, supra, 422 F.2d at 17-18; Fed.R.Civ.P. 56(e). In the instant case, the usual import of the clean bill of lading is supported both by specific language in the dock receipts and the requirement of clean bills of lading in the letters of credit issued in connection with the purchase of the cranes. Venline did not indicate at any time that it was prepared to prove a specific request by Edelca for on-deck stowage.

Turning to the issue of geographical deviation, Venline does not attack the district court's finding that "the sole reason for the deviation northward in winter was to take on additional cargo." 587 F.Supp. at 176. What Venline does argue is that the voyage to Searsport did not constitute a deviation at all because, Venline says, Searsport was an advertised customary port.

Again, Venline has failed to meet the requirements of Rule 56(e). The affidavits which Venline submitted do not furnish any factual support for its contention that, in 1981, Searsport, Maine was a scheduled port for Venline vessels destined for Orinoco River ports. Advertisements which list only New York, Philadelphia, and Baltimore, and add, "other ports by inducement", do not indicate a route that is "established and by all means...