Shelter Forest Int'l Acquisition, Inc. v. Cosco Shipping (USA) Inc.
| Decision Date | 06 January 2021 |
| Docket Number | Case No. 3:19-cv-01259-JR |
| Parties | SHELTER FOREST INTERNATIONAL ACQUISITION, INC., an Oregon Corporation, Plaintiff, v. COSCO SHIPPING (USA) INC., a Delaware Corporation; COSCO Shipping Lines (North America) Inc., a Delaware Corporation; COSCO Shipping Terminals (USA) LLC, a Delaware LLC; Rudy Rogers, an individual; COSCO Shipping Lines Co., Ltd.; and Jane and John Does Nos. 1-3, Defendants. |
| Court | U.S. District Court — District of Oregon |
Charles S. Jordan, Michelle Buhler, Harrigan Leyh Farmer & Thomsen, Seattle, WA, Joel P. Leonard, John D. Ostrander, William A. Drew, Elliott Ostrander Preston, PC, Portland, OR, for Plaintiff.
Philip R. Lempriere, Molly J. Henry, Schwabe, Williamson & Wyatt, Seattle, WA, for Defendants.
Shelter Forest International Acquisition, Inc. ("SFI") filed this action against defendants COSCO Shipping (USA) Inc., COSCO Shipping Lines (North America) Inc., COSCO Shipping Terminals (USA) LLC, Rudy Rogers, and COSCO Shipping Lines Co., Ltd. ("CSL") alleging multiple contractually-based claims under state law.1 All parties have consented to allow a Magistrate Judge enter final orders and judgment in this case in accordance with Fed. R. Civ. P. 73 and 28 U.S.C. § 636(c). CSL now moves for summary judgement on its remaining counterclaim pursuant to Fed. R. Civ. P. 56. For the reasons stated below, CSL's motion is granted in part and denied in part.
CSL is a shipping company based in China operating a fleet of oceangoing containerships that transport cargo internationally, including between China and the United States. SFI is an Oregon corporation that imports and distributes lumber, plywood, and other building materials.
Disputes over two separate shipments – i.e., Portland Shipment and the Chippewa Falls Shipment – gave rise to the present action. Each of these shipments was booked under the parties’ April 2018 Service Contract, as well as an individual bill of lading, which incorporated CSL's standard terms and conditions and set out the particulars for the respective shipments.2 These terms and conditions appear on the backside of every one of CSL's bills of lading and are also published as part of CSL's tariff of general applicability, which is filed with the Federal Maritime Commission ("FMC"). Accordingly, CSL's standard terms and conditions are publicly available through the FMC and CSL's website.3 Second Wei Zhang Decl. ¶ 3 (doc. 70 ).
The first incident, the Portland Shipment, was booked in April 2018 by SFI's affiliate, Xuzhou Shelter, who also was responsible for packing the containers. Wei Zhang Decl. ¶¶ 7, 9 (doc. 29 ). An SFI representative was present at Xuzhou Shelter's facility to ensure that its plywood was loaded in accordance with SFI's customary practices and consistent with industry standards. Fangmu Zhang Decl. ¶¶ 4-7 & Ex. A (doc. 78 ); Loe Decl. ¶¶ 5-8 (doc. 82 ).
The bill of lading for the Portland Shipment identified Xuzhou Shelter as the shipper and SFI as the consignee. Wei Zhang Decl. Ex. 3, at 2 (doc. 29-3 ). Xuzhou Shelter requested, and CSL agreed, to "telex release" the bill of lading to SFI's associate in China. Wei Zhang Decl. ¶ 8 & Ex. 4 (doc. 29-4 ); Second Henry Decl. ¶ 2 & Ex. 1 (doc. 47 ). Under the bill of lading, CSL is "not to be liable for loss of or damage to the Goods" where it does not pack the containers and SFI "shall indemnify [CSL] against any loss, damage, liability or expense incurred by [CSL] if such loss, damage, liability or expense has been caused by ... the manner in which the Container has been filled, packed, loaded or stuffed." Wei Zhang Decl. Ex. 2, at 37 (doc. 29-2 ).
A dispute arose when one of SFI's cargo shipments, and CSL's containers, was damaged in a rollover accident. Wei Zhang Decl. ¶¶ 10-12 (doc. 29 ). The parties disagree as to the cause of the accident – i.e., CSL's negligent driving or SFI's failure to properly load the container. Compare Fangmu Zhang Decl. ¶¶ 10-11 (doc. 78 ); Scheibe Decl. ¶¶ 6-19 (doc. 81 ); Loe Decl. ¶¶ 5-8 (doc. 82 ); Suppl. Scheibe Decl. Ex. A (doc. 83 ); with Wei Zhang Decl. ¶ 11 & Ex. 6 (doc. 29-6 ); Buhler Decl. Ex. A (doc. 80-1 ). The cargo was ultimately delivered to Portland on May 23, 2018, after being transloaded into a different container, and made available to SFI for pick-up upon payment for container damage and cargo transloading charges, which totaled $6,360.61. Wei Zhang Decl. ¶¶ 12-13 & Exs. 6-7 (doc. 29 ); Buhler Decl. Ex. C (doc. 80-3 ); Buhler Decl. Ex. E, at 2 (doc. 80-5 ). The parties were unable to resolve fault for the damage to SFI's cargo and CSL's container, such that CSL continued to hold the cargo in the container yard and on June 2, 2018, began charging demurrage.4 Buhler Decl. Ex. F (doc. 80-6 ).
On March 15, 2019, "SFI wired the $6,369.61" in container damage and cargo transloading charges to CSL "under protest," in conjunction with outstanding freight charges on other shipments and arranged with CSL to take possession of the Portland Shipment "without concurrent payment of the demurrage" and have its credit terms restored. Loe Decl. ¶ 10 (doc. 82 ). CSL ultimately refused to release the Portland Shipment or reinstate SFI's credit terms. Id.
SFI subsequently discontinued shipping with CSL. SFI received its last shipment from CSL on July 9, 2019.
On July 10, 2019, SFI initiated this action in Multnomah County Circuit Court. In August 2019, CSL removed SFI's complaint to this Court on the basis of diversity jurisdiction. Later that month, SFI filed its First Amended Complaint alleging common law claims for negligence, conversion, breach of contract, and misrepresentation, as well as a statutory claim under Oregon's Unfair Trade Practices Act and seeking damages in excess of one million dollars. In October 2019, CSL asserted two counterclaims for breach of contract, one relating to the Service Contract's minimum quantity provision and the other relating to Xuzhou Shelter's purported negligent packing of the Portland Shipment.
On January 8, 2020, by agreement of the parties and reserving all rights and defenses, SFI took possession of the Portland Shipment without paying demurrage.
On April 2 and May 4, 2020, CSL moved for summary judgment as to its first counterclaim and SFI's claims, respectively. Concerning the former, CSL argued that SFI breached the Service Contract's unambiguous minimum quantity provision. Regarding the latter, CSL asserted that SFI's claims were time-barred under the Carriage of Goods by Sea Act's ("COGSA") one-year statute of limitations. On July 28, 2020, the Court issued an Opinion and Order granting CSL's motions.5 See generally Shelter Forest Int'l Acquisition, Inc. v. COSCO Shipping (USA) Inc., 475 F.Supp.3d 1171 (D. Or. 2020).
On October 15, 2020, CSL filed the present motion as to its sole remaining counterclaim. In particular, CSL seeks $160,930 in demurrage charges from June 2, 2019, through January 8, 2020, as well as attorney fees and costs. Briefing on that motion was completed on December 30, 2020.
Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, affidavits, and admissions on file, if any, show "that there is no genuine dispute as to any material fact and the [moving party] is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Substantive law on an issue determines the materiality of a fact. T.W. Elec. Servs., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). Whether the evidence is such that a reasonable jury could return a verdict for the nonmoving party determines the authenticity of the dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. Id. at 324, 106 S.Ct. 2548.
Special rules of construction apply when evaluating a summary judgment motion: (1) all reasonable doubts as to the existence of genuine issues of material fact should be resolved against the moving party; and (2) all inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. T.W. Elec., 809 F.2d at 630.
CSL argues that summary judgment on its remaining claim is proper because the undisputed evidence of record demonstrates "SFI breached the bill of lading by refusing to take timely possession of the Portland Shipment and refusing to pay demurrage." Def.’s Mot. Summ. J. 13-16 (doc. 69 ). Further, CSL maintains that fault for the rollover accident and, by extension, the damage to CSL's container and SFI's cargo is irrelevant: "Neither the bill of lading nor maritime law allow SFI to withhold amounts due under the bill of lading as a set-off for its time barred claims for damage under COGSA." Id. at 17.
In contrast, SFI contends that CSL's motion is "premature" because a "carrier can only recover these costs if the dispute that gave rise to the possessory lien is ultimately determined in the carrier's favor." Pl.’s Resp. to Mot. Summ. J. 1-2 (doc. 77 ). Specifically, SFI asserts that, "[p]ursuant to both the terms of the controlling bill of lading and the general maritime law, CSL has the burden of proving that the damage to the container, and the costs flowing therefrom which give rise to CSL's possessory lien, were caused by SFI's improper loading of the container" before being entitled to demurrage. Id. at 2.
Alternatively, SFI argues CSL failed to mitigate its damages since "CSL's claim for container damage amounted to $6,360" and the Portland Shipment "had an invoice value of $21,000 and had suffered de minimis damage." Id. at 2-3....
To continue reading
Request your trial
- Cincinnati Specialty Underwriters Ins. Co. v. Red Rock Hounds
-
Maersk Line A/S v. Carew
...upon delivery ... [without] asserting a claim in abatement or set-off"); see also Shelter Forest Intl. Acquisition, Inc. v. COSCO Shipping (USA) Inc. , 511 F. Supp. 3d 1118, 1125-26 (D. Or. 2021) (explaining that a "dispute concerning ... responsib[ility] for the damage to ... [the] cargo [......