Ulrich Ammann Bldg. Equipment Ltd. v. M/V MONSUN

• Decision Date: 21 March 1985
• Docket Number: No. 83 Civ. 2752 (RWS).,83 Civ. 2752 (RWS).
• Citation: 609 F. Supp. 87
• Parties: ULRICH AMMANN BUILDING EQUIPMENT LTD., and Gothaer Versicherungs Bank A.G. for and on Behalf of itself and all other concerned underwriters, Plaintiffs, v. M/V MONSUN, her engines, boilers, etc. in rem, K.G. Zyklon Schiffahrtsges mbh & Co., Hugo Stinnes Zweigniederlassung, Saudi National Lines, Costa Armatori S.P.A. and Caterpillar Tractor Company, Defendants.
• Court: U.S. District Court — Southern District of New York

609 F. Supp. 87

ULRICH AMMANN BUILDING EQUIPMENT LTD., and Gothaer Versicherungs Bank A.G. for and on Behalf of itself and all other concerned underwriters, Plaintiffs, v. M/V MONSUN, her engines, boilers, etc. in rem, K.G. Zyklon Schiffahrtsges mbh & Co., Hugo Stinnes Zweigniederlassung, Saudi National Lines, Costa Armatori S.P.A. and Caterpillar Tractor Company, Defendants.

No. 83 Civ. 2752 (RWS).

United States District Court, S.D. New York.

March 21, 1985.

Hill, Rivkins, Carey, Loesberg, O'Brien & Mulroy, New York City, for plaintiffs.

Haight, Gardner, Poor & Havens, New York City, for defendants M/V MONSUN, K.G. Zyklon Schiffahrtsges mbh & Co. and Hugh Stinnes Zweigniederlassung.

DeOrchis & Partners, New York City, for defendants Saudi National Lines and Costa Armatori, S.p.A.

OPINION

SWEET, District Judge.

Plaintiffs Ulrich Ammann Building Equipment Ltd. and Gothaer Versicherungs Bank A.G. (collectively "Ammann") brought this action to recover for damage to and loss of Caterpillar tractors shipped from Wilmington, Delaware to the Port of Aqaba, Jordan on the M/V MONSUN. Defendant in rem M/V MONSUN and defendants K.G. Zyklon Schiffahrtsges mbH & Co., Hugo Stinnes Zweigniederlassung, Saudi National Lines and Costa Armatori S.p.A. (collectively "the Ship Defendants") have now moved for partial summary judgment pursuant to Fed.R.Civ.P. 56 limiting Ammann's damages to the $500 limitation contained in the United States Carriage of Goods by Sea Act ("COGSA"). The parties agree that all evidence as to this matter was before the court. Ammann opposes the motion for partial summary judgment and has moved to strike the Ship Defendants' assertion of this limitation of liability as an affirmative defense. For the reasons stated below, the Ship Defendants' motion for partial summary judgment is granted and Ammann's motion is denied.

Facts

The cargo which is the subject of the present action was carried from Wilmington, Delaware to the Port of Aqaba, Jordan on the M/V MONSUN pursuant to the terms of an ocean bill of lading. The M/V MONSUN is owned by K.G. Zyklon Schiffahrtsges mbH & Co. ("Schiffahrtsges"), the managing agent was Hugo Stinnes Zweigniederlassung ("Zweigniederlassung"), the time charterer of the vessel was Saudi National Lines ("Saudi National"), and the general agent for Saudi National was Costa. The shipping agent of Kuehne and Nagel ("Kuehne") acted as shipping and forwarding agent for Ammann.

In March of 1981, on Ammann's behalf, Kuehne booked thirty Caterpillar tractors, known as scrapers, for ocean carriage with Saudi National through its agent Costa, in Genoa, Italy. In accordance with 46 U.S.C. § 817(b)(1), Saudi National had a tariff on file with the Federal Maritime Commission and maintained rates for the transportation of commodities pursuant to such tariff. Instead of applying a rate from Saudi National's tariff, which would have provided for freight on a weight or measurement basis, a lump sum rate was negotiated covering the entire shipment. On March 13, 1981, a tariff amendment setting forth this lump sum rate was filed. The tariff shows the following reference to the scrapers:

Scrapers — 30 units to move on 1 or 2 vessels Aprox. 866 LT/156,690 cu ft. (Wilmington/Aqaba) (& thru 4/12/81) L/S 289,877.00 +

The rate basis in effect for this tariff item was "L/S," which is defined in the tariff as lump sum. The tariff on file listed the normal rate for scrapers at a minimum of $173.00 per measurement ton.

Subsequently, twenty Caterpillar tractors were carried under Saudi National's short form ocean bill of lading. The bill of lading described the twenty scrapers and listed both the gross weight in kilograms and the measurement in centimeters. The bill of lading also stated "Freight Prepaid" and, under the area for computation of freight charges, "Freight as Agreed." During the course of the shipment, several of the tractors were allegedly damaged or lost.

Discussion

Because the shipment was carried under an ocean bill of lading, it was subject to the provisions of the Carriage of Goods by Sea Act. 46 U.S.C. § 1304 states:

§ 1304. RIGHTS AND IMMUNITIES OF CARRIER AND SHIP

(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.

By agreement between the carrier, master, or agent of the carrier, and the shipper another maximum amount than that mentioned in this paragraph may be fixed: Provided, That such maximum shall not be less than the figure above named. In no event shall the carrier be liable for more than the amount of damage actually sustained.

Neither the carrier nor the ship shall be responsible in any event for loss or damage to or in connection with the transportation of the goods if the nature or value thereof has been knowingly and fraudulently misstated by the shipper in the bill of lading.

The "guiding policy" of COGSA is "to limit liability of common carriers for damaged cargo where the value of the cargo is not known to the carrier." THE MORMACOAK, 451 F.2d 24, 26 (2d Cir.1971). The statute was designed "to protect the shipping industry and to throw the burden to the shipper to declare the value of the goods and pay a higher tariff if he wished to have higher liability on the part of the carrier." Caterpillar Americas Company v. Steamship Sea Roads, 231 F.Supp. 647, 650 (S.D.Fla.1964), aff'd, 364 F.2d 829 (5th Cir.1966).

The words "customary freight unit", which describe the unit as to which the shipper's liability is limited to $500, refer not to the physical shipping unit but to the unit of cargo "customarily used as the basis for the calculation of the freight rate to be charged." The MORMACOAK, supra, 451 F.2d at 25; The Edmund Fanning, 201 F.2d 281, 286 (2d Cir.1953). Thus, where a freight charge is computed on a lump sum basis for each of several pieces of equipment, the relevant customary freight unit is each piece of equipment. Caterpillar Americas Co., supra, 231 F.Supp. at 650. If a freight charge is computed on a lump sum basis for an entire shipment, the relevant customary freight unit is the entire shipment.

In the case at hand, the parties agree that the tractors were shipped in an unpackaged form and are in a disagreement only as to the relevant customary freight unit. If the customary freight unit is held to be the entire shipment of thirty tractors, Ammann's recovery is limited to $500 under both COGSA and the terms of the bill of lading. Similarly, if the customary freight unit is held to be each piece of...