Salofa v. South Seas Steamship, Inc.

3 Am. Samoa 3d 130
CourtHigh Court of American Samoa
DecidedApril 6, 1999
DocketCA No. 7-98
StatusPublished

This text of 3 Am. Samoa 3d 130 (Salofa v. South Seas Steamship, Inc.) is published on Counsel Stack Legal Research, covering High Court of American Samoa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Salofa v. South Seas Steamship, Inc., 3 Am. Samoa 3d 130 (amsamoa 1999).

Opinion

OPINION AND ORDER

On January 12, 1998, plaintiff Paul Salofa (“Salofa”) filed a complaint seeking damages allegedly incurred during the shipment of his truck from Honolulu to American Samoa. Defendants South Seas Steamship, Inc. and Samoa Pacific Shipping, Inc. (collectively “SSS/SPS”) filed a motion for partial summary judgment on Febmary 13, 1998, which was withdrawn at a subsequent hearing. Trial was held on March 1, 1999, with counsel for both parties present.

Facts

The facts of this case are largely uncontested. In December 1996, Salofa purchased a new Dodge Ram Truck in Honolulu, Hawaii, which he desired to be shipped to American Samoa. Salofa made local inquiries regarding shipping options and subsequently instructed the Honolulu dealership, Cutter Dodge, to deliver the track and make arrangements for shipping.

When the Cutter Dodge representative delivered the track, a bill of lading was prepared for shipment. That form, Bill of Lading No. A013S2905, was admitted at trial as Exhibit No. 12. The section marked “Shippers Declared Value $”, which on its face includes a reference to the liability limitation clause on the reverse of the form, was left blank. SSS/SPS proceeded to ship the track, and when it arrived in American Samoa, it was slightly dented on the right side of the track box, and scratched on the right side step.

A. Liability

The court recently analyzed the issue of liability in shipping cases in Tuimavave v. Harbor Maritime, CA No. 30-97, slip op. at 4-6 (Trial Div. November 6, 1998), and we begin with a brief review of that analysis. Under the Carriage of Goods by Sea Act (“COGSA”), applicable by its own terms to American Samoa, the carrier has an affirmative duty to “properly and carefully load, handle, stow, carry, [132]*132keep, care for, and discharge the goods carried.” 46 U.S.C.S. App. § 1303(2), 1312 (1987 & Supp. 1994). The plaintiff bears the initial burden of establishing a prima facie case for breach, and does so by establishing that the goods were damaged while in the carrier’s custody. Caemint Food, Inc. v. Brasileiro, 647 F.2d 347, 351 (2d Cir. 1981) (citation omitted).

The plaintiff meets this burden merely by establishing that the goods were delivered to the carrier in good condition but were nevertheless found to be damaged upon receipt. Vane Trading Co., Inc. v. S.S. “Mette Skou", 556 F.2d 100, 104 (2d Cir. 1977); United States v. Lykes Bros. Steamship Co., Inc., 511 F.2d 218, 223 (5th Cir. 1975).

In the instant case, the track presented to SSS/SPS for shipping was brand new, and was delivered directly by the vehicle dealership’s representative. The bill of lading specifically lists the cargo to be shipped as “NEW MOTOR VEHICLE.” Further, that document includes standard verbiage acknowledging the cargo to be in “good order and condition, unless otherwise indicated in this Bill of Lading.” We note that a bill of lading functions as both a contract and a receipt as to the quantity and description of the goods to be shipped. 70 Am. Jur. 2d Shipping § 732 (1987 & Supp. 1993). Moreover, a “clean bill of lading,” one which does not specifically identify any prior damage to the goods to be shipped, will generally suffice as prima facie evidence of delivery in good condition. David R. Webb Co., Inc. v. M/V Henrique Leal, 773 F. Supp. 702, 705 (S.D.N.Y. 1990), citing Madow Co. v. S.S. Liberty Exporter, 569 F.2d 1183, 1185 (2d Cir. 1978). Because the track was new and the bill of lading failed to indicate any defects prior to shipping, we find by a preponderance of the evidence that the damage occurred during the voyage as a result of negligence by SSS/SPS’s agents.

As Salofa has therefore established a prima facie case for recovery, SSS/SPS now assume the burden of proving that they acted with “due diligence.” Tuimavave, CA No. 30-97, slip op. at 4-6; Roman Crest Foods Inc. v. S.S. Delta Columbia ex S.S. Santa Clara, 574 F. Supp. 440, 441-42 (S.D.N.Y. 1983); Quaker Oats Co. v. H/V Torvanger, 734 F.2d 238, 240-241 (5th Cir. 1984); Puerto Rican American Ins. Co. v. Sea-Land Service, 653 F. Supp. 396, 400 (D. P.R. 1986). However, SSS/SPS failed to prove that they acted with due diligence. As in Tuimavave, SSS/SPS instead relied on the statutory limitation of liability established under COGSA and discussed below.

B. Limitations to Damage Award

COGSA provides in relevant part:

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 [133]*133package lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit . . . unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.

46 U.S.C.S. App. § 1304(5). This provision, which limits a carrier’s liability to $500 per item, unless the shipper chooses to declare a higher value, was plainly incorporated into the bill of lading in this case. The section on the front of the form entitled “Shippers Declared Value” offered Salofa the opportunity to declare the full value of his truck (or some lesser amount above $500), and he would therefore have been subject to a correspondingly higher freight charge. That section specifically alerts the shipper to “Carriers Liability Limits,” and it further cross-references Clause 13, the smaller print on the reverse which explains the COGSA liability limitations in detail. Whether unwittingly or not, Salofa left this part of the bill of lading blank and declined the additional coverage, thereby limiting his recovery to the statutory minimum.

This case does, however, present a potential issue of notice. Basic fairness requires that before a carrier can rely on the $500 liability limitation, it must at least afford the shipper the opportunity to choose between accepting the COGSA minimum or paying a higher freight charge to receive a correspondingly higher level of protection. General Electric Co. v. Nediloyd, 817 F.2d 1022, 1028 (2nd Cir. 1987). One element of that fair opportunity is that the carrier give the shipper adequate notice of the limitation of liability. Id. at 1027-28.

The carrier bears the initial burden of offering prima facie evidence of adequate notice, and he may do so simply by showing that the bill of lading advised the shipper of the $500 liability limitation and of his options for increasing that amount. Tuimavave, CA No. 30-97, slip op. at 4-6; Nediloyd, 817 F.2d at 1028; Brown & Root, Inc. v. H/V Peisander, 648 F.2d 415, 424 (5th Cir. 1981).

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