MEMORANDUM OPINION AND ORDER
JOSEPH H. YOUNG, District Judge.
Plaintiff, B. Elliott (Canada) Ltd. (“Elliott”) has brought this action against defendant John T. Clark & Son of Maryland, Inc. (“Clark”) for damage to cargo allegedly incurred while in the custody of Clark following its discharge from the vessel, CV LIGHTNING. Clark filed a motion for summary judgment or, in the alternative, for partial summary judgment on April 15, 1982, claiming that it is entitled to the benefit of the limitations of liability under the U. S. Carriage of Goods by Sea Act (COGSA) (46 U.S.C. § 1300
et seq.),
as conferred by certain provisions of the bill of lading issued by the carrier, Farrell Lines, Inc. (“Farrell”).
FACTS
The essential facts material to the questions at issue are not in dispute. Elliott, a Canadian corporation, was the consignee of a gear hobber shipped in two containers from Hamburg, West Germany aboard the CV LIGHTNING, a vessel owned by Farrell, which arrived at the Dundalk Marine Terminal on February 10, 1980. Upon arrival, Clark, pursuant to its Stevedore Contract with Farrell, unloaded the containers from the vessel. One of the containers, ITLU 745034, was placed on a chassis and stored in a container yard owned by Farrell.
On the following day, John Kowaleviocz, a yard hustler employed by Clark, moved Container ITLU 745034 to Shed Number 4, a building leased by Farrell and operated by Clark, for preparation of the cargo for delivery to the overland trucker. As Kowaleviocz entered Shed Number 4, the container tipped over causing damage to the contents. Although the facts conflict as to the precise date of delivery to the overland trucker, it is clear from the pleadings filed that an overland trucker received delivery of the container on or before February 28, 1980. This action was filed August 19, 1981. DISCUSSION
I. The Applicability of COGSA to Clark
Clark asserts that its liability is limited under the terms of the bill of lading
and COGSA
. Certain limitations of liability under COGSA may be extended to third-party beneficiaries, even though COGSA by its own terms is applicable strictly to carriers. In
Herd and Company v. Krawill Machinery Corp.,
359 U.S. 297, 79 S.Ct. 766, 3 L.Ed.2d 820 (1959), the Supreme Court held that the limitation of liability provisions of the bill of lading, while applicable to the carrier, could not be extended to the stevedore claiming its protection, in the absence of clear and unambiguous language in the bill of lading providing for such an extension. Since the Herd decision, COGSA limitations of liability have been extended to stevedores
and terminal operators
by vir
tue of third-party beneficiary (“Himalaya”) clauses in the bills of lading.
The dispute between Elliott and Clark revolves around a provision of the bill of lading designated as the “Himalaya Clause.” Elliott contends that ¶ 1(b) is the applicable Himalaya Clause since it specifically mentions COGSA while terminal operators are not specifically mentioned as beneficiaries, and that the damages occurred to the goods while Clark was acting in the capacity of a terminal operator, alleging that Clark is therefore not entitled to the benefit of any limitation of liability under the bill of lading or COGSA. Clark concedes that it was acting in the capacity of a terminal operator when the damage to the goods allegedly occurred, but that ¶ 1(a) is the properly designated Himalaya Clause, and that terminal operators are specifically named beneficiaries of the limitations of liability enjoyed by the carrier.
If any one conclusion can be drawn from a reading of ¶¶ 1(a) and (b), it is that these paragraphs, taken together, constitute the Himalaya Clause, and when read
in pari materia,
form a clause benefitting specific third parties to the bill of lading. Clark, as a terminal operator, is entitled to the benefits conferred under ¶ 1(a) since that paragraph specifically names terminal operators as one of the beneficiaries, irrespective of the merits of the contention that terminal operators are not entitled to the benefits conferred under ¶ 1(b). In cases involving language in the bill of lading identical to that in ¶ 1(a), courts have held that the benefits to third parties include COGSA limitations of liability.
Carle & Montanari, Inc. v. American Export Isbrandtsen Lines,
215 F.Supp. 76 (S.D.N.Y.1967),
aff’d,
386 F.2d 839 (2d Cir. 1967),
cert. denied,
390 U.S. 1013, 88 S.Ct. 1263, 20 L.Ed.2d 162 (1968);
Mediterranean Marine Lines, Inc. v. John T. Clark & Son of Maryland, Inc.,
485 F.Supp. 1330 (D.Md.1980).
Reaching the same conclusion in this case does not thereby render ¶¶ 1(a) and (b) duplicative of one another. Different interests are protected in each paragraph. ¶ 1(a) extends COGSA limitations of liability to third parties who are sued in the capacity of carrier or bailee. ¶ 1(b) extends the protection to all others who may assist the carrier in a capacity other than as a carrier or bailee. This seemingly nice distinction has been used to justify the denial to third parties of COGSA protection where only the language of ¶ 1(a) appeared in the bill of lading.
See Hanson & Orth, Inc.
v.
M/V Jalatarang,
450 F.Supp. 528 (S.D.Ga.1978) (Stevedore which negligently caused fire on vessel during unloading held not entitled to protection of either COGSA or the Fire Statute (46 U.S.C. § 182) under bill of lading provision identical to ¶ 1(a) in the document now under consideration, since stevedore was sued strictly in capacity of stevedore, not in capacity of carrier or bailee). The inclusion of ¶ 1(b) effectively cuts off the contention successfully raised by the consignees in
Hanson.
It is also apparent that ¶ 1(b) does not specifically include terminal operators as a third-party beneficiary simply because it is almost impossible to conceive a factual scenario in which a ter
minal operator could be sued in a status other than that of a bailee, so that its inclusion is unnecessary.
The contracting parties’ intent to protect Clark acting in the capacity of terminal operator, manifested by ¶ 1(a) of the bill of lading, is consistent with certain provisions of the stevedoring contract entered into between Clark and American Export Lines, Inc., predecessor in interest to Farrell, in 1973. That contract, in which Clark agreed to provide stevedoring and terminal yard services, states in Section XI(B)(2),
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MEMORANDUM OPINION AND ORDER
JOSEPH H. YOUNG, District Judge.
Plaintiff, B. Elliott (Canada) Ltd. (“Elliott”) has brought this action against defendant John T. Clark & Son of Maryland, Inc. (“Clark”) for damage to cargo allegedly incurred while in the custody of Clark following its discharge from the vessel, CV LIGHTNING. Clark filed a motion for summary judgment or, in the alternative, for partial summary judgment on April 15, 1982, claiming that it is entitled to the benefit of the limitations of liability under the U. S. Carriage of Goods by Sea Act (COGSA) (46 U.S.C. § 1300
et seq.),
as conferred by certain provisions of the bill of lading issued by the carrier, Farrell Lines, Inc. (“Farrell”).
FACTS
The essential facts material to the questions at issue are not in dispute. Elliott, a Canadian corporation, was the consignee of a gear hobber shipped in two containers from Hamburg, West Germany aboard the CV LIGHTNING, a vessel owned by Farrell, which arrived at the Dundalk Marine Terminal on February 10, 1980. Upon arrival, Clark, pursuant to its Stevedore Contract with Farrell, unloaded the containers from the vessel. One of the containers, ITLU 745034, was placed on a chassis and stored in a container yard owned by Farrell.
On the following day, John Kowaleviocz, a yard hustler employed by Clark, moved Container ITLU 745034 to Shed Number 4, a building leased by Farrell and operated by Clark, for preparation of the cargo for delivery to the overland trucker. As Kowaleviocz entered Shed Number 4, the container tipped over causing damage to the contents. Although the facts conflict as to the precise date of delivery to the overland trucker, it is clear from the pleadings filed that an overland trucker received delivery of the container on or before February 28, 1980. This action was filed August 19, 1981. DISCUSSION
I. The Applicability of COGSA to Clark
Clark asserts that its liability is limited under the terms of the bill of lading
and COGSA
. Certain limitations of liability under COGSA may be extended to third-party beneficiaries, even though COGSA by its own terms is applicable strictly to carriers. In
Herd and Company v. Krawill Machinery Corp.,
359 U.S. 297, 79 S.Ct. 766, 3 L.Ed.2d 820 (1959), the Supreme Court held that the limitation of liability provisions of the bill of lading, while applicable to the carrier, could not be extended to the stevedore claiming its protection, in the absence of clear and unambiguous language in the bill of lading providing for such an extension. Since the Herd decision, COGSA limitations of liability have been extended to stevedores
and terminal operators
by vir
tue of third-party beneficiary (“Himalaya”) clauses in the bills of lading.
The dispute between Elliott and Clark revolves around a provision of the bill of lading designated as the “Himalaya Clause.” Elliott contends that ¶ 1(b) is the applicable Himalaya Clause since it specifically mentions COGSA while terminal operators are not specifically mentioned as beneficiaries, and that the damages occurred to the goods while Clark was acting in the capacity of a terminal operator, alleging that Clark is therefore not entitled to the benefit of any limitation of liability under the bill of lading or COGSA. Clark concedes that it was acting in the capacity of a terminal operator when the damage to the goods allegedly occurred, but that ¶ 1(a) is the properly designated Himalaya Clause, and that terminal operators are specifically named beneficiaries of the limitations of liability enjoyed by the carrier.
If any one conclusion can be drawn from a reading of ¶¶ 1(a) and (b), it is that these paragraphs, taken together, constitute the Himalaya Clause, and when read
in pari materia,
form a clause benefitting specific third parties to the bill of lading. Clark, as a terminal operator, is entitled to the benefits conferred under ¶ 1(a) since that paragraph specifically names terminal operators as one of the beneficiaries, irrespective of the merits of the contention that terminal operators are not entitled to the benefits conferred under ¶ 1(b). In cases involving language in the bill of lading identical to that in ¶ 1(a), courts have held that the benefits to third parties include COGSA limitations of liability.
Carle & Montanari, Inc. v. American Export Isbrandtsen Lines,
215 F.Supp. 76 (S.D.N.Y.1967),
aff’d,
386 F.2d 839 (2d Cir. 1967),
cert. denied,
390 U.S. 1013, 88 S.Ct. 1263, 20 L.Ed.2d 162 (1968);
Mediterranean Marine Lines, Inc. v. John T. Clark & Son of Maryland, Inc.,
485 F.Supp. 1330 (D.Md.1980).
Reaching the same conclusion in this case does not thereby render ¶¶ 1(a) and (b) duplicative of one another. Different interests are protected in each paragraph. ¶ 1(a) extends COGSA limitations of liability to third parties who are sued in the capacity of carrier or bailee. ¶ 1(b) extends the protection to all others who may assist the carrier in a capacity other than as a carrier or bailee. This seemingly nice distinction has been used to justify the denial to third parties of COGSA protection where only the language of ¶ 1(a) appeared in the bill of lading.
See Hanson & Orth, Inc.
v.
M/V Jalatarang,
450 F.Supp. 528 (S.D.Ga.1978) (Stevedore which negligently caused fire on vessel during unloading held not entitled to protection of either COGSA or the Fire Statute (46 U.S.C. § 182) under bill of lading provision identical to ¶ 1(a) in the document now under consideration, since stevedore was sued strictly in capacity of stevedore, not in capacity of carrier or bailee). The inclusion of ¶ 1(b) effectively cuts off the contention successfully raised by the consignees in
Hanson.
It is also apparent that ¶ 1(b) does not specifically include terminal operators as a third-party beneficiary simply because it is almost impossible to conceive a factual scenario in which a ter
minal operator could be sued in a status other than that of a bailee, so that its inclusion is unnecessary.
The contracting parties’ intent to protect Clark acting in the capacity of terminal operator, manifested by ¶ 1(a) of the bill of lading, is consistent with certain provisions of the stevedoring contract entered into between Clark and American Export Lines, Inc., predecessor in interest to Farrell, in 1973. That contract, in which Clark agreed to provide stevedoring and terminal yard services, states in Section XI(B)(2),
With respect to claims for loss or damage to cargo or baggage, the liability of the contrator [sic] shall be limited by the vessel Owners bill of lading and/or baggage ticket clauses. It being the intention of the parties herein that the Contractor, where such limitation [sic] are valid, is not liable to cargo or other interests to any greater extent than is the vessels interests. * * *
This provision clearly indicates that Clark was an intended third-party beneficiary of Farrell’s bill of lading, whether it was performing stevedoring services or terminal yard services. If the bill of lading governed the rights and obligations of the parties at the time the damage to the cargo occurred, Clark is entitled to COGSA limitations of liability, specifically that of the Statute of Limitations, as a third-party beneficiary to the bill of lading.
II. At What Point “Delivery”?
The question that must now be addressed is “whether what the right hand had extended in the COGSA incorporation * * * the left hand had taken back in a couple of ‘except as may be otherwise specifically provided herein’ clauses, the effect of which would be
contractually
withdrawing this post-discharge occurrence from COGSA.” (Emphasis in original).
Zajicek v. United Fruit Company,
459 F.2d 395, at 399. Elliott points to ¶ 12
of the bill of lading as
an exception to ¶ 1 that takes this post-discharge occurrence out of the governance of COGSA and terminates the rights and obligations of all parties to the bill of lading. By the terms of ¶ 12, Elliott asserts, the carrier’s responsibility terminated upon discharge of the containers onto the pier, and from that time Clark was acting as an agent, and on behalf, of the consignee, Elliott, rather than the carrier, Farrell.
Although COGSA applies
ex proprio vigore
only from “tackle-to-tackle,” 46 U.S.C. § 1301(e), the parties to a bill of lading may extend the time within which the provisions of COGSA may govern to a time prior to loading or subsequent to discharge. 46 U.S.C. § 1307. The shipper, consignee and carrier agreed to this in ¶ 1 of the bill of lading. In addition, the Harter Act
governs the period of time following discharge of the goods to their proper delivery, and to the extent that contractual provisions in a bill of lading conflict with the Act, they are null and void.
See David Crystal, Inc. v. Cunard Steam-Ship Co.,
339 F.2d 295,297 (2d Cir. 1964),
cert. denied,
380 U.S. 976, 85 S.Ct. 1339, 14 L.Ed.2d 271 (1965);
Caterpillar Overseas, S.A. v. SS Expeditor,
318 F.2d 720, 723 (2d Cir. 1963),
cert. denied,
375 U.S. 942, 84 S.Ct. 347, 11 L.Ed.2d 272;
Levatino Company v. American President Lines, Ltd.,
233 F.Supp. 697, 701 (S.D.N.Y.1964),
aff’d,
337 F.3d 729 (2d Cir. 1964);
Central Trading Corp. v. M/V “Dong Myung”,
361 F.Supp. 302, 304 (S.D. N.Y.1973);
Pine Street Trading Corporation v. Farrell Lines, Inc.,
278 Md. 363, 380, 364 A.2d 1103, 1114 (1976). As a consequence, if Farrell’s definition of delivery and disclaimer of liability in ¶ 12 of the bill of lading conflict with what was required in order to constitute “proper delivery” to the consignee under the Harter Act, the definition and disclaimer are null and void.
In
Orient Overseas Line v. Globemaster Baltimore, Inc.,
33 Md.App. 372, 365 A.2d 325 (1976), the Court, in determining what the Harter Act requires for a proper delivery, stated:
“Proper delivery” within the provisions of this Act means either actual or constructive delivery. Actual delivery consists in completely transferring the possession and control of goods from the vessel to the consignee or his agent. Constructive delivery occurs where the goods are discharged from the ship upon a fit wharf and the consignee receives due and reasonable notice that the goods have been discharged and has a reasonable opportunity to remove the goods or put them under proper care and custody. * * * (Citations omitted).
* * * Absent the consignee, to constitute a “proper delivery” due and reasonable notice must be given to the consignee of the intended delivery and the goods must be placed in a suitable place and under proper care and custody.
Constable v. National S.S. Co.,
154 U.S. 51, 14 S.Ct. 1062, 38 L.Ed. 903 (1894).
Id.
at 383-384, 365 A.2d at 335-336.
Whether a conflict does or does not exist depends in large part upon what constituted a delivery under the terms contained in the entire bill of lading. On the front of the bill of lading appear the words, “Pier to Pier Traffic Loading in Cont. No. ITLU 745034, ITLU 745036.” In the affidavit of Leslie F. McCorkle, Manager of Insurance and Claims for Clark, McCorkle states the following with respect to cargo designated “Pier to Pier”:
Cargo or containers designated as “Pier to Pier” on the Farrell Bill of Lading
indicate that such freight is to be discharged from the respective vessel by Clark and taken to the Farrell Lines containers yard. From this location, it is then taken to Shed 4, which is leased by Farrell and operated by Clark personnel, in order that the cargo may be removed or “stripped” and then placed in other containers or on trucks procured by the consignee for overland delivery. Under the designation of “Pier to Pier” the consignee does not receive delivery until it is removed from the Farrell containers and placed in or on the overland truck.
McCorkle affidavit, at 2. McCorkle also distinguishes the designation “Pier to Pier” from the designation “House to House,” which McCorkle indicates as meaning that the consignee receives delivery upon discharge from the ship and the cargo is picked up by the consignee or overland trucker from the Farrell Lines container yard.
Id.
At the very least, the designation “Pier to Pier” renders the carrier liable under both the Harter Act and the terms of the bill of lading for damage to cargo until the cargo is received by the consignee or an overland trucker contracted for by the consignee, or until the consignee has received due notice of the intended delivery and a reasonable time has elapsed within which the consignee could have taken delivery but has not.
See Grover-Ferguson Company, Inc. v. A/S Ivarans Rederi,
171 F.Supp. 766 (E.D.Pa. 1959);
cf. Phillipp Brothers Metal Corporation v. S.S. Rio Iguazu,
658 F.2d 30 (2d Cir. 1981) (Carrier had discharged duties under bill of lading and COGSA where consignee requested warehouseman storing goods on behalf of carrier to weigh and count them, then allowed goods to remain with warehouseman, and goods were subsequently found to be short in number when received by consignee). During this time, the bill of lading continues to govern the rights and obligations of the parties. As stated in
Leather’s Best, Inc. v. S.S. Mormaclynx,
451 F.2d 800, at 807 (2d Cir. 1971):
While the loss of the container occurred after the act of carriage had been completed, that does not mean that the contract of carriage, obviously a maritime contract, was at an end; the contract continues to govern the relationship between a shipper and a carrier after discharge but before delivery. (Footnote omitted).
See also David Crystal, Inc. v. Cunard Steam-Ship Co., supra,
339 F.2d at 297. Since the damage to the cargo occurred one day after discharge in this case, it could not be said that a reasonable time within which the consignee could have taken delivery had elapsed, and the carrier remained liable for damage.
If the carrier remains liable as a bailee before proper delivery is effected to the consignee, it is entitled to the benefit of any limitations of liability it reserved unto itself in the bill of lading. It would take a tortuous construction of the bill of lading to find that in unsuccessfully attempting to relieve itself completely of its potential liability for post-discharge damage to cargo, the carrier during the post-discharge period thereby forfeits all COGSA
limitations
of liability which the bill of lading provides. ¶ 1(a) as it relates to terminal operators would be virtually meaningless under such an interpretation. Such a construction of the bill of lading would fly in the face of the carrier’s plain intention, expressed in a legally permissible manner, to limit not only its own liability but that of third parties when damage occurs to cargo during the post-discharge period.
Elliott relies on
Federal Insurance Co. v. American Export Lines,
113 F.Supp. 540 (S.D.N.Y.1953), for the proposition that the terms of ¶ 12 take the period during which the damage to the cargo allegedly occurred out of the scope of COGSA. In
Federal Insurance,
the carrier was sued for damage to cargo that occurred as the cargo was being unloaded from the ship to a lighter. The bill of lading contained provisions similar to those of ¶ 12. In rejecting the carrier’s COGSA defense, the court held that because the bill of lading had specifically provided that all lighterage would be at the risk and expense of the goods, the carrier had intended COGSA to be inapplicable
during this part of the carrier’s “non-possessive custody” period.
The difference between that case and this is that there was no clear intention manifested by the provisions in the bill of lading in
Federal Insurance
to make COGSA applicable during the time cargo was discharged to a lighter. However, ¶¶ 1 and 1(a) do manifest a clear intention on the part of the carrier that COGSA would apply during the post-discharge period in which the carrier would remain liable as bailee. The
Federal Insurance
rationale has a limited application.
Elliott also contends that ¶ 12, by providing that a warehouseman receives the delivery of the goods solely as agent of and on behalf of the shippers/consignees at the risk of the goods, effectively makes Clark the agent of Elliott rather than Farrell. To the extent that this provision conflicts with the Harter Act as a disclaimer of liability, it is null and void. 46 U.S.C. § 190. Moreover, the facts clearly belie the notion that Clark was acting as anything other than Farrell’s agent. In addition to the stevedoring contract between Clark and Farrell, all instructions relative to handling the cargo by Clark prior to receipt by the overland trucker were given by Farrell, not Elliott. McCorkle affidavit, at 3. All the work done by Clark covered by a “Pier to Pier” designation in a bill of lading is billed directly to Farrell’s account.
Id.
at 2. Additionally, cargo designated “Pier to Pier” is processed at a higher cost to Farrell than is cargo designated “House to House”, because of the additional work involved on behalf of the carrier. Affidavit of John P. Rohde, District Marketing Manager for Farrell Lines, at 1. It is clear that Clark provided services on behalf of Farrell rather than Elliott.
Jurisdiction is based on diversity of jurisdiction under 28 U.S.C. § 1332, and the law governing Elliott’s claim is land-based law rather than federal maritime law.
Leather’s Best, Inc. v. S.S. Mormaclynx, supra,
451 F.2d at 808, 817,
on remand, Leather’s Best, Inc. v. Tidewater Terminal, Inc.,
346 F.Supp. 962 (S.D.N.Y.1972). The test imposed by
Herd, supra,
having been satisfied, under Maryland law Clark is entitled to all of the defenses that are available to Farrell under the bill of lading.
See Howard Cleaners v. Perman,
227 Md. 291, 295, 176 A.2d 235, 237 (1961). Those defenses include all limitations under COGSA and the bill of lading.
In summary, the bill of lading remained in force at the time that the damage to the container allegedly occurred. Clark is therefore entitled to avail itself of the statute of limitations provided for in COGSA and the bill of lading.
Delivery having been received by Elliott’s overland trucker no later than February 28, 1980, and this action having been filed on August 19, 1981, this action was filed beyond the one year limitations period and is consequently time-barred.
In accordance with the foregoing, it is this 13th day of July, 1982 by the United States District Court for the District of Maryland, ORDERED:
That the motion of defendant for summary judgment BE, and the same IS, hereby GRANTED.