10-4846-cv American Home Ass. v. Wallenius Wilhelmsen
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York, on the 6th day of October, two thousand eleven.
PRESENT: JOHN M. WALKER, JR., DENNY CHIN, RAYMOND J. LOHIER, JR., Circuit Judges. - - - - - - - - - - - - - - - - - - - -x
AMERICAN HOME ASSURANCE COMPANY, Plaintiff-Appellant,
-v.- 10-4846-cv
WALLENIUS WILHELMSEN LINES A.S., WALLENIUS WILHELMSEN LOGISTIC A.S., WALLENIUS WILHELMSEN LOGISTICS AMERICAS, LLC, WILHELMSEN LINES SHIPOWNING, WILHELMSEN SHIP MANAGEMENT SINGAPORE, in personam, Defendants-Cross Claimants- Cross Defendants-Appellees,
GARRISON SHIPPING CO. LTD., in persona, M/V BLSE ENDURANCE, in rem, M/V TAMPA, in rem, M/V TARONGA, in rem, M/V TAPIOLA, in rem, Defendants.
- - - - - - - - - - - - - - - - - - - -x
FOR PLAINTIFF-APPELLANT: MATTHEW T. LOESBERG, Marshall, Dennehey, Warner, Coleman & Goggin, New York, New York.
FOR DEFENDANTS-APPELLEES: GARTH S. WOLFSON, Mahoney & Keane, LLP, New York, New York. Appeal from a judgment of the United States District
Court for the Southern District of New York (Crotty, J.). UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment is AFFIRMED.
Plaintiff-appellant American Home Assurance Company, a
subrogee of Caterpillar, Inc., appeals from the district court's
March 16, 2010 opinion and order limiting defendants-appellees'
potential liability to $2,000. Judgment was entered pursuant to
Rule 54(b) of the Federal Rules of Civil Procedure on November 5,
2010. We assume the parties' familiarity with the facts and
procedural history, which we reference only as necessary to
explain our decision to affirm.
On September 9, 2009, American Home Assurance commenced
this action seeking $170,729.16 for damage to four vehicles
shipped by defendants on behalf of Caterpillar on separate ocean
voyages between ports in Savannah, Georgia, Australia, Germany,
and Japan. Defendants moved for partial summary judgment,
pursuant to the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C.
§ 30701 note, to limit liability to $500 per unpackaged vehicle.
We review an order granting partial summary judgment de novo to determine whether the district court properly concluded
that there were no genuine issues of material fact and the moving
party was entitled to judgment as a matter of law. See Miller v.
Wolpoff & Abramson, L.L.P., 321 F.3d 292, 300 (2d Cir. 2003).
"In determining whether there are genuine issues of material
fact, we are required to resolve all ambiguities and draw all
-2- permissible factual inferences in favor of the party against whom
summary judgment is sought." Terry v. Ashcroft, 336 F.3d 128,
137 (2d Cir. 2003) (internal quotation marks omitted). After
reviewing the record, we conclude, for substantially the reasons
set forth by the district court, that defendants' liability is
capped at $2,000.
The parties agree that the four vehicles were shipped
pursuant to bills of lading that included a clause that provided
as follows:
[i]f U.S. COGSA applies to the contract evidenced by this bill of lading, the carrier's liability is limited to U.S. $500 per package, or for Goods not shipped in packages, per customary freight unit, unless a higher value is declared in the Declared Value box on the face of the bill of lading and a higher freight is paid. Each unpackaged vehicle or other piece of unpackaged cargo on which freight is calculated constitutes one customary freight unit.
The purpose of COGSA is to "limit liability of common
carriers for damage to cargo where the value of the cargo is not
known to the carrier." Gen. Motors Corp. v. Moore-McCormack Lines, Inc., 451 F.2d 24, 26 (2d Cir. 1971) (per curiam). COGSA
provides that neither the carrier nor the ship shall be liable
for any loss or damage to goods in an amount over $500 per
package, or in the case of goods not shipped in packages, per
customary freight unit (the "CFU"), unless the nature and value
of the goods have been declared by the shipper before shipment
and inserted in the bill of lading. 46 U.S.C. § 30701 note.
-3- If a company such as Caterpillar wants to avoid the
$500 limit, it can declare a higher value for its cargo, thereby
"alerting the carrier of its potential liability and allowing it
to charge extra freight, if appropriate." Moore-McCormick, 451
F.2d at 26. Caterpillar did not make such a declaration here.
In fact, each of the three bills of lading submitted
has a section labeled "Declared Value," next to which is a
section labeled "Extra Charge." Nothing was written in the
Declared Value section, and the word "none" was typed in the
Extra Charge section. For the fourth shipment, American Home
Assurance submitted a dock receipt and the shipper's packing
list. These documents do not indicate a declared value for the
shipment, and American Home Assurance does not challenge
defendants' assertion that the bills of lading do not recite a
higher value for the cargo.
The parties agree that: COGSA applies; the vehicles
were shipped unpackaged; and the freight for each was calculated
by cubic meter. The single question on appeal is whether the CFU
for each of the four vehicles shipped is the vehicle itself or
the freight rate as calculated by cubic meter. If the CFU is
each vehicle, liability is capped at $2,000. If the CFU is the
cubic meters the vehicle occupied, as American Home Assurance
suggests, liability would be higher.
COGSA does not define the term "customary freight
unit." Accordingly, this Court has explained that "[t]o
determine the customary freight unit for a particular shipment,
-4- the district court should examine the bill of lading, which
expresses the 'contractual relationship in which the intent of
the parties is the overarching standard.'" FMC Corp. v. S.S.
Marjorie Lykes, 851 F.2d 78, 80 (2d Cir. 1988) (quoting Allied
Int'l. v. S.S. Yang Ming, 672 F.2d 1055, 1061 (2d Cir. 1982)).
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10-4846-cv American Home Ass. v. Wallenius Wilhelmsen
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York, on the 6th day of October, two thousand eleven.
PRESENT: JOHN M. WALKER, JR., DENNY CHIN, RAYMOND J. LOHIER, JR., Circuit Judges. - - - - - - - - - - - - - - - - - - - -x
AMERICAN HOME ASSURANCE COMPANY, Plaintiff-Appellant,
-v.- 10-4846-cv
WALLENIUS WILHELMSEN LINES A.S., WALLENIUS WILHELMSEN LOGISTIC A.S., WALLENIUS WILHELMSEN LOGISTICS AMERICAS, LLC, WILHELMSEN LINES SHIPOWNING, WILHELMSEN SHIP MANAGEMENT SINGAPORE, in personam, Defendants-Cross Claimants- Cross Defendants-Appellees,
GARRISON SHIPPING CO. LTD., in persona, M/V BLSE ENDURANCE, in rem, M/V TAMPA, in rem, M/V TARONGA, in rem, M/V TAPIOLA, in rem, Defendants.
- - - - - - - - - - - - - - - - - - - -x
FOR PLAINTIFF-APPELLANT: MATTHEW T. LOESBERG, Marshall, Dennehey, Warner, Coleman & Goggin, New York, New York.
FOR DEFENDANTS-APPELLEES: GARTH S. WOLFSON, Mahoney & Keane, LLP, New York, New York. Appeal from a judgment of the United States District
Court for the Southern District of New York (Crotty, J.). UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment is AFFIRMED.
Plaintiff-appellant American Home Assurance Company, a
subrogee of Caterpillar, Inc., appeals from the district court's
March 16, 2010 opinion and order limiting defendants-appellees'
potential liability to $2,000. Judgment was entered pursuant to
Rule 54(b) of the Federal Rules of Civil Procedure on November 5,
2010. We assume the parties' familiarity with the facts and
procedural history, which we reference only as necessary to
explain our decision to affirm.
On September 9, 2009, American Home Assurance commenced
this action seeking $170,729.16 for damage to four vehicles
shipped by defendants on behalf of Caterpillar on separate ocean
voyages between ports in Savannah, Georgia, Australia, Germany,
and Japan. Defendants moved for partial summary judgment,
pursuant to the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C.
§ 30701 note, to limit liability to $500 per unpackaged vehicle.
We review an order granting partial summary judgment de novo to determine whether the district court properly concluded
that there were no genuine issues of material fact and the moving
party was entitled to judgment as a matter of law. See Miller v.
Wolpoff & Abramson, L.L.P., 321 F.3d 292, 300 (2d Cir. 2003).
"In determining whether there are genuine issues of material
fact, we are required to resolve all ambiguities and draw all
-2- permissible factual inferences in favor of the party against whom
summary judgment is sought." Terry v. Ashcroft, 336 F.3d 128,
137 (2d Cir. 2003) (internal quotation marks omitted). After
reviewing the record, we conclude, for substantially the reasons
set forth by the district court, that defendants' liability is
capped at $2,000.
The parties agree that the four vehicles were shipped
pursuant to bills of lading that included a clause that provided
as follows:
[i]f U.S. COGSA applies to the contract evidenced by this bill of lading, the carrier's liability is limited to U.S. $500 per package, or for Goods not shipped in packages, per customary freight unit, unless a higher value is declared in the Declared Value box on the face of the bill of lading and a higher freight is paid. Each unpackaged vehicle or other piece of unpackaged cargo on which freight is calculated constitutes one customary freight unit.
The purpose of COGSA is to "limit liability of common
carriers for damage to cargo where the value of the cargo is not
known to the carrier." Gen. Motors Corp. v. Moore-McCormack Lines, Inc., 451 F.2d 24, 26 (2d Cir. 1971) (per curiam). COGSA
provides that neither the carrier nor the ship shall be liable
for any loss or damage to goods in an amount over $500 per
package, or in the case of goods not shipped in packages, per
customary freight unit (the "CFU"), unless the nature and value
of the goods have been declared by the shipper before shipment
and inserted in the bill of lading. 46 U.S.C. § 30701 note.
-3- If a company such as Caterpillar wants to avoid the
$500 limit, it can declare a higher value for its cargo, thereby
"alerting the carrier of its potential liability and allowing it
to charge extra freight, if appropriate." Moore-McCormick, 451
F.2d at 26. Caterpillar did not make such a declaration here.
In fact, each of the three bills of lading submitted
has a section labeled "Declared Value," next to which is a
section labeled "Extra Charge." Nothing was written in the
Declared Value section, and the word "none" was typed in the
Extra Charge section. For the fourth shipment, American Home
Assurance submitted a dock receipt and the shipper's packing
list. These documents do not indicate a declared value for the
shipment, and American Home Assurance does not challenge
defendants' assertion that the bills of lading do not recite a
higher value for the cargo.
The parties agree that: COGSA applies; the vehicles
were shipped unpackaged; and the freight for each was calculated
by cubic meter. The single question on appeal is whether the CFU
for each of the four vehicles shipped is the vehicle itself or
the freight rate as calculated by cubic meter. If the CFU is
each vehicle, liability is capped at $2,000. If the CFU is the
cubic meters the vehicle occupied, as American Home Assurance
suggests, liability would be higher.
COGSA does not define the term "customary freight
unit." Accordingly, this Court has explained that "[t]o
determine the customary freight unit for a particular shipment,
-4- the district court should examine the bill of lading, which
expresses the 'contractual relationship in which the intent of
the parties is the overarching standard.'" FMC Corp. v. S.S.
Marjorie Lykes, 851 F.2d 78, 80 (2d Cir. 1988) (quoting Allied
Int'l. v. S.S. Yang Ming, 672 F.2d 1055, 1061 (2d Cir. 1982)).
In short, the intent of the parties, as discerned from the bill
of lading, controls. Id. at 81. "Absent any ambiguity" in the
bill of lading, "the inquiry is ended, and both parties are bound
to the freight unit therein adopted." Id.
The most natural reading of the relevant part of Clause
10 -- "[e]ach unpackaged vehicle or other piece of unpackaged
cargo on which freight is calculated constitutes one customary
freight unit" -- is that each unpackaged vehicle is a CFU,
regardless of whether the vehicle's freight charge is determined
by reference to its volume. See FMC Corp., 851 F.2d at 81
(holding each fire engine shipped to be a CFU for COGSA
purposes); see also Vision Air Flight Serv., Inc. v. M/V Nat'l
Pride, 155 F.3d 1165, 1170 (9th Cir. 1998) ("Each unpackaged
refueling truck is properly defined as a customary freight unit under COGSA, and the district court therefore did not err in
holding that the bill of lading properly invoked COGSA's
liability limitation."); Caterpillar Overseas, S.A. v. Marine
Transp. Inc., 900 F.2d 714, 723 (4th Cir. 1990) ("[W]e have no
difficulty in concluding that the tractor in this case qualified
as a 'customary freight unit' under COGSA. Common sense dictates
as much as each vehicle was shipped as a single unit.
-5- Moreover, nothing in the service contract or the bills
of lading suggests that occupied space, as measured by cubic
meter, constitutes the CFU. That lump sum totals are based on
the ton or cubic meter does not render the ton or cubic meter the
CFU. See Moore-McCormick, 451 F.2d at 26 ("Although, as GM
claims, the 40 cubic foot ton is one factor utilized in computing
the charge, it does not thereby become the freight unit for the
transaction. Analysis of the relevant factors supports the view
of the district court that the entire power plant was the freight
unit."). In addition, none of the cases American Home Assurance
relies upon has held that the freight rate was the CFU when there
was, as here, a contrary CFU definition in the bill of lading.
Furthermore, the phrase "on which freight is calculated" makes
clear that the parties intended that the unpackaged vehicle was
the CFU. Accordingly, if American Home Assurance proves
liability, its recovery is limited to $500 per vehicle.
We have considered American Home Assurance's other
arguments and conclude they are without merit. Accordingly, the
judgment of the district court is AFFIRMED.
FOR THE COURT: CATHERINE O'HAGAN WOLFE, CLERK
-6-