Northern Feather International, Inc. v. Those Certain London Underwriters Subscribing to Policy No. JWP108 Through Wigham Poland, Ltd.

714 F. Supp. 1352, 1989 A.M.C. 1805, 1989 U.S. Dist. LEXIS 14931, 1989 WL 66657
District Court, D. New Jersey·Decided February 22, 1989·No. Civ. A. 86-2424·Published·Cited by 1 cases

Opinion

OPINION

BISSELL, District Judge.

This civil action was filed on June 23, 1986 and alleges that the defendants, Those Certain London Underwriters, have failed to make payments under an “Open Cargo” insurance policy on two shipments of cotton cloth destroyed in a warehouse fire on February 21, 1985. Plaintiff, Northern Feather International, Inc. (Northern Feather) has attempted to invoke the diversity jurisdiction of this court pursuant to 28 U.S.C. § 1332. The Court is satisfied that complete diversity is lacking inasmuch as defendant, Sea Insurance Company, Ltd., like the plaintiff, is a citizen of New Jersey. This Court does, however, have original jurisdiction over this action pursuant to the admiralty or maritime jurisdiction set forth in 28 U.S.C. § 1333.

Presently before the Court is defendants’ motion for summary judgment and plaintiff’s cross-motion for summary judgment.

STATEMENT OF FACTS

Northern Feather purchases cotton cloth from C & L Enterprises Limited, Hong Kong, which is imported by Northern Feather’s Danish parent company Nordisk Fjer. (Pretrial Order at 2-3; Defendants’ Br. in Support, Exh. A). Defendants issued Northern Feather an “Open Cargo” insurance policy effective October 1, 1984 which insured shipments of plaintiff’s goods and merchandise “against all risks of physical loss or damage from any external cause” with certain exceptions to be discussed later in this opinion. (Pretrial Order at 8; Defendants’ Br. in Support, Exh. F). Northern Feather had paid all premiums and had an insurable interest in the destroyed shipments of cloth. Defendants have made no payment for the loss. (Pretrial Order at 8).

The following are the relevant stipulated facts contained in the “Pretrial Order” dated May 6, 1988: 1

Prior to the two shipments which are the subject of this claim, plaintiff had for some time been entering similar imports through United States Customs, under a tariff schedule category known as Visa Classification 320, covering dyed cloth. The tariff schedule sets forth the rate of duty for the described product and quota restrictions, if anu. (There are no quota restrictions for Visa Classification 320.)
On November 24, 1982, there were published in the Federal Register revisions to the textile category system in the tariffs which were effective January 1, 1983. A new visa category No. 315 covering printed cloth was established at *1354 such time, and this category was quota restricted. This visa category was cross-indexed with the same item number and description under the Tariff Schedules of the United States, Annotated (T.S.U.S. A.), containing the appropriate duty rates for various commodities including printed cloth.
Although most shipments of plaintiff were routinely released by Customs officials in New Jersey, and allegedly all such shipments were routinely released by Customs officials in New York, plaintiff began experiencing problems in entering these printed cloth shipments under category 320, at least as early as October, 1984.
On July 19, 1984, C & L ENTERPRISES, plaintiffs supplier, shipped 59 rolls of the comforter cloth from Hong Kong to plaintiff. The goods arrived in Newark, New Jersey on August 21,1984, and Customs released the goods for delivery under a regular Consumption Entry prepared by plaintiffs agent which reflected that the goods were being entered under Visa Category 320.
However, on October 16, 1984, the United States Customs Office in Newark issued a Notice for Re-delivery of the 59 rolls because, upon review, it was alleged by Customs that the correct Visa Category had not been used. Customs noted that the correct visa number should have been 315, as the fabric was considered printed cloth. [See Defendants’ Br. in Support, Exh. B], Once the Notice for Re-delivery had been issued, the plaintiff was required to deliver the goods to Customs or risk a fine. The goods having been delivered and consumed by that time, plaintiff was unable to redeliver to Customs.
On August 10, 1984, another shipment of plaintiff, consisting of 185 rolls of fabric left Hong Kong aboard the S/S President Peirce. The goods arrived in Newark on September 27, 1984, were entered also under Category 320 and were routinely released by Customs under a regular Consumption Entry prepared by plaintiffs agent. Customs, however, issued a Notice for Re-delivery of the 185 rolls on October 19,1984, once again because of the use of an improper visa number. [Nee Defendants’ Br. in Support, Exh. C]. This shipment was also unavailable for redelivery pursuant to the Notice for Redelivery because the goods had been delivered and consumed.
On November 2, 1984, plaintiff requested from Customs an extension to reply to the October 16th and October 19th Notices for Redelivery on the ground they needed additional time to research the problem.
Plaintiff had attempted to get the Hong Kong authorities through C & L ENTERPRISES LIMITED to change the category number to comply with Customs’ requirements to [sic] regards the goods in question, but to no avail.
On January 8,1985, plaintiff requested the Customs Classification and Value Department, Washington, D.C., to make a formal ruling on the use of visa category Nos. 315 and 320. The matter was referred to the New York Office of Customs, which maintained that Category 315 was the proper visa.
Customs issued a Notice of Penalty in the amount of $20,991.00 on January 15, 1985, due to plaintiff’s failure to comply with the October 16th Notice for Re-Delivery of the July 19th shipment. A similar Notice imposing a penalty of $186,-560.00 was issued by Customs on January 16, 1985, for plaintiff's inability to comply with the October 19, 1984 Notice for Re-delivery of the August 10, 1984 shipment. The two Notices of Penalty were eventually cancelled.
The first shipment for which the plaintiff is claiming under the Cargo Policy consisted of 125 rolls of dyed cotton ticking, valued at $151,386.59. These cotton piecegoods were manufactured in Taiwan and subsequently dyed in Hong Kong for use as comforter cloth. C & L ENTERPRISES, LTD., Hong Kong, sold the goods to plaintiff C & F New York.

Free access — add to your briefcase to read the full text and ask questions with AI

Northern Feather International, Inc. v. Those Certain London Underwriters Subscribing to Policy No. JWP108 Through Wigham Poland, Ltd., 714 F. Supp. 1352, 1989 A.M.C. 1805, 1989 U.S. Dist. LEXIS 14931, 1989 WL 66657 (D.N.J. 1989).

714 F. Supp. 1352 (Northern Feather International, Inc. v. Those Certain London Underwriters Subscribing to Policy No. JWP108 Through Wigham Poland, Ltd.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related