Skandia Ins. Co., Ltd. v. Star Shipping As
| Decision Date | 05 April 2001 |
| Docket Number | No. Civ.A. 99-0284-CB-L.,Civ.A. 99-0284-CB-L. |
| Citation | 173 F.Supp.2d 1228 |
| Parties | SKANDIA INSURANCE CO., LTD., et al., Plaintiffs, v. STAR SHIPPING AS, d/b/a AtlantiCargo, et al., Defendants. |
| Court | U.S. District Court — Southern District of Alabama |
Edward G. Hawkins, Hawkins & Thompson, LLC, Mobile, AL, Machale Andrew Miller, Miller & Williamson, New Orleans, LA, Ray M. Thompson, Mobile, AL, for Skandia Insurance Co.
Ray M. Thompson, Mobile, AL, for Haindl GMBH & Co., Parenco B.V. and Interot Speditions, GMBH.
Joseph M. Allen, Jr., E. Erich Bergdolt, Johnstone, Adams, Bailey, Gordon & Harris, Mobile, AL, for Star Shipping Co.
Joe E. Basenberg, Hand Arendall, L.L.C., Mobile, AL, for Strachan Shipping.
Iliaura Hands, Miller & Williamson, New Orleans, LA, Ray M. Thompson, Mobile, AL, for Perkins-Goodwin Co., Inc.
This admiralty action consists of two consolidated actions.1 Plaintiffs seek recovery from the Defendants of the value of containerized cargo (reels of paper), which were damaged at container yards located at the Alabama State Docks, ("State Docks"), in Mobile, Alabama, ("Mobile"), by tidal surge flooding associated with Hurricane Georges, which struck Biloxi/Ocean Springs, Mississippi, on September 28, 1998. Generally, Plaintiffs allege, notwithstanding that this hurricane was an Act of God,2 that the Defendants are liable because they failed to take reasonable precautions to secure the safety of, and avoid damage to, the cargo in question, by failing to move the containers out of harm's way. Accordingly, "[a] case spawned by the ill winds"3 and tidal surges of Hurricane Georges made landfall in this Court for a bifurcated4 bench trial on January 8, 2001, and continued through January 12, 2001. As the waters of this legal tide have now since receded, this Court enters its findings of fact and conclusions of law as follows.
In June of 1998, SCA, Graphic Sundsvall AB ("SCA") contracted through its selling agent, Weyerhaeuser, to sell 2,130 reels of printing paper to be manufactured in Sweden and shipped to the United States, to consignee, World Color Press ("WCP"), to be delivered to its facility in Dyersburg, Tennessee ("Dyersburg").5 The terms of the sale were "DDP," which is an INCOTERM for "Delivered Duty Paid," and means that title to the paper and risk for its loss or damage transferred when the goods are put at the disposal of the buyer at the named place (seller bears all risks of the goods during the whole transport) — so that the risk would not transfer from SCA to WCP until the paper was actually delivered to the WCP warehouse in Dyersburg. See Plf's Tr. Ex. 83, 84, 85. The containerized cargo in question contained Swedish and German manufactured LWC offset magazine quality paper which was stored at the container yards at the State Docks when Hurricane Georges struck the Gulf Coast on September 28, 1998, causing the flooding which damaged the cargo carried by the M/V STAR FRASER6 and the M/V STAR GRINDANGER vessels.7
Plaintiff, Skandia Insurance Co., Ltd., ("Skandia"), is the subrogee to the rights of the consignee of the cargo in question and insured the cargo shipped by its assured SCA, Graphic Sundsvall AB ("SCA"), from Europe to Mobile, aboard the STAR FRASER. Plaintiffs, Haindl GMBH & Co. K.G., Parenco B.V., and Interot Speditions, GMBH, are the owners, consignees and/or successors in title to the cargo described herein. Plaintiff, Perkins-Goodwin Co., Inc., ("Perkins"), was the owner, consignee and/or successor entitled to the cargo which was carried by the M/V STAR GRINDANGER from Germany and The Netherlands, for final delivery to Nashville, Tennessee, Corinth, Mississippi, and Metarie, Louisiana, via Mobile, Alabama, pursuant to one or more bills of lading issued by and on behalf of Star Shipping AS d/b/a AtlantiCargo. See Plf's Tr. Ex. 48, 49, 50.
Defendant, Star Shipping AS d/b/a AtlantiCargo ("Star"), was the ocean carrier of the cargo, under a through bill of lading. Defendant, Strachan Shipping Co., ("Strachan"), was engaged in the business of providing agency, terminal handling, and stevedoring services for Star, as Star's local agent in Mobile. SCA Graphic Sundsvall AB ("SCA") was the shipper of the cargo. SCA contracted through its selling agent, Weyerhaeuser Paper Co. ("Weyerhaeuser"), to sell 2,130 reels of printing paper to be manufactured in Sweden and shipped to the U.S., to WCP, to be delivered to its Dyersburg facility.
The controlling agreements between the shippers and carriers involved here, which govern the intermodal movement of the cargo, is the Combined Transport Bills of Lading drafted by Star. See Plf's Tr. Ex. 1, 2, 48, 49, 50. The Clause Paramount in the bills of lading, which were involved with both the STAR FRASER and STAR GRINDANGER cargo, reads in relevant part:
.... this bill of lading insofar as it relates to sea carriage by any vessel ... shall have effect subject to ... COGSA [which] shall apply to the carriage of goods by inland waterways and reference to carriage by sea in such Rules or legislation shall be deemed to include reference to inland waterways if and to the extent that the provisions of the Harter Act ... would otherwise be compulsorily applicable to regulate the carrier's responsibility for the goods during any period prior to loading on or after discharge from the vessel the carrier's responsibility shall instead be determined by the provisions of 4(2) below, but if such provisions are found to be invalid such responsibility shall be subject to COGSA.
See Plf's Tr. Ex. 2.
This Clause Paramount, for purposes of the carriage at issue here, incorporates the COGSA rules to "sea carriage by any vessel" and to "the carriage of goods by inland waterways" and for other periods during the intermodal carriage, "[t]he carrier's responsibility shall instead be determined by the provisions of 4(2) below, but if such provisions are found to be invalid such responsibility shall be subject to COGSA." Id.
Paragraph 4(2), entitled "Responsibility, Combined Transport," also states that "[s]ave as otherwise provided in this bill of lading, the carrier shall be liable for loss of or damage to the goods occurring from the time that the goods are taken into charge until the time of delivery to the extent set out below." Id. Subparagraph (A)8 does not at first glance appear to have direct application to the claims at issue because there is no dispute as to where or when the flooding damaged the STAR FRASER and STAR GRINDANGER cargo. Subparagraph (B)(i), however, addresses where the loss or damage occurred shall be proved, and imposes Harter Act obligations on the carrier Star and its agent Strachan, because by its own language, the only national law of the United States which "would have applied if the merchant had made a separate and direct contract with the carrier" for terminal operation services at the State Docks would be the Harter Act. This is so because at the stage of the carriage when the losses involved in this action occurred, the cargo was in terminal storage at container yards at the State Docks and the provisions of COGSA would not have been compulsorily applicable.9 As such, if SCA had made a separate direct contract with Star or Strachan, for terminal operation services at the State Docks in connection with the subject cargo, COGSA would not have applied to any such contract. Accordingly, an essential prerequisite to the application of paragraph 4(2)(B)(i) fails; namely in that COGSA would not have applied to a direct terminal operation services contract between the shipper SCA and Star or Strachan.
Paragraph 4(2)(B)(ii) is ambiguous as to whether or not it has application to the terminal operation services phase of the carriage as by its own language, it qualifies its application to "transportation in the United States of America" and does not address any application to intermediate points of rest such as those here with the cargo's point of rest at the container yards at the State Docks before carriage on to final inland destinations, nor does it mention specific applicability to any other intermediate points of rest (rail yard or inland trucking terminal somewhere between Mobile and the final point of destination for delivery). To the extent this paragraph applies here, the Harter Act is the only U .S. statute that could have compulsory application given the language of the Combined Transport Bills of Lading at issue. Of course, analysis of this bill of lading language is made against the backdrop of the "strong policy reasons motivating strict construction of the [bill of lading] clause against those who drafted it."10
This Court's analysis does not stop with the conclusion that the Harter Act applies to the stage of carriage involved when the loss occurred in this case. Further review of the agreement under 4(2)(B)(iii) reveals that where neither (i) nor (ii) apply, "any liability of the Carrier shall be determined by 4(2)(A)...." Because this is the case, paragraph 4(2)(B)(iii) reroutes this Court to paragraph 4(2)(A), to determine liability, and provides in relevant part under paragraph 4(2)(A)(i), that "[t]he carrier shall be entitled to rely upon all exclusions of liability under the Rules or Legislation that would have applied under 2(A) above [clause paramount] had the loss or damage occurred at sea...."11 As such, this directs this Court back to the general liability provisions set forth in the Clause Paramount in assessing Plaintiffs' claims.
The STAR FRASER and STAR GRINDANGER cargo arrived at the Port of Mobile, respectively, in August and September of 1998. Containers from the Star's two vessels were removed by an independent contract stevedore (Stevedoring Services of America...
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