United States v. Reul

14 Ct. Int'l Trade 661
CourtUnited States Court of International Trade
DecidedSeptember 12, 1990
DocketCourt No. 85-04-00562
StatusPublished

This text of 14 Ct. Int'l Trade 661 (United States v. Reul) is published on Counsel Stack Legal Research, covering United States Court of International Trade primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Reul, 14 Ct. Int'l Trade 661 (cit 1990).

Opinion

DiCarlo, Judge-.

The government brings this action under 28 U.S.C. § 1582(2) (1988)to recover liquidated damages forthe breach of two Im[662]*662mediate Delivery and Co nsumption Entry Bonds. Defendant St. Paul Fire & Marine Insurance Co., the surety on the bonds, cross moves for summary judgment and for judgment on the pleadings against the importer and principal Dr. George Reul. The government also seeks prejudgment and postjudgment interest.

St. Paul argues this action is barred by the six year statute of limitation, genuine questions of material fact make summary judgment inappropriate and the government is not entitled to prejudgment interest. The Court finds the action is not time barred, there are no material issues of fact and prejudgment and postjudgment interest are appropriate. St. Paul also argues it is entitled to exoneration of Dr. Reul’s debt or indemnification for any payments it makes to satisfy the debt. The Court grants the surety’s motion for judgment on the pleadings against Dr. Reul.

Background

Dr. Reul imported a 1974 Ferrari automobile on June 14,1977 and a 1977 Ferrari automobile on November 7, 1978. Dr. Reul declared the automobiles were not in conformity with the applicable Environmental Protection Agency and Department of Transportation standards. The automobiles were conditionally released upon the posting of two Immediate Delivery and Consumption Entry Bonds. St. Paul is the surety on those bonds.

Under the regulations in effect at the time the merchandise was entered, Dr. Reul was required to bring the vehicles into conformity with EPA and DOT regulations within ninety days of their conditional release or such additional time thereafter as Customs granted. See 19 C.F.R. §§ 12.74(c), 12.80(c) (1977 and 1978). Paragraph four of the bond provides for damages for failure to redeliver the non-conforming vehicles:

(4) And if in any case the above-bounden principal shall redeliver or cause to be redelivered to the order of the district director of customs, on demand by him, in accordance with the law and regulations in effect on the date of the release of said articles, any and all merchandise found not to comply with the law and regulations governing its admission into the commerce of the United States, * * * or, in default of redeliver after a proper demand on him, the above-bounden principal shall pay to the said district director such amounts as liquidated damages as may be demanded by him in accordance with the law and regulations, not exceeding the amount of his obligation, for any breach or breaches thereof;

(Emphasis added.)

On March 19 and 20,1979, Customs sent Dr. Reul notices to redeliver the automobiles within 30 days. To date, the vehicles have not been redelivered. Asserting that Dr. Reul is in breach of the bonds, the government filed this action on April 17,1985 to recover liquidated damages in the amount of $61,000.

[663]*663In their answers, Dr. Reul and St. Paul raised numerous affirmative defenses. With the exception of those arguments considered below, those defenses were not argued in the briefs submitted on this motion and cross-motion. Those arguments having been submitted without the support of facts or legal analysis are deemed to have been abandoned. The Court, therefore, does not pass on their merits. Except for an answer, Dr. Reul has not opposed either the government’s action or the cross-motion.

Discussion

I. The Statute of Limitation:

There is no dispute that a six year statute of limitation governs this action. See 28 U.S.C. § 2415(a) (1988). St. Paul argues that the cause of action accrued 90 days after entry of the merchandise because Custom’s regulations required redelivery or proof of compliance with EPA and DOT regulations within 90 days of entry unless the District Director of Customs granted an extension. See 19 C.F.R. §§ 12.73,12.80 (1977 and 1978). The government counters that under paragraph four of the bond, the statute of limitation began to run after the time for redelivery set forth in the demands elapsed. On March 19 and 20, 1979, Customs issued demand notices giving the importer 30 days to redeliver the vehicles.

The Court finds that under paragraph four of the bond the demand notices control the running of the statutory period. This finding is consistent with United States v. Peerless Ins. Co., 12 CIT 1182, 703 F. Supp. 955 (1988). In that case, the court considered a bond with identical language and held that the principal breached the bond on the failure to redeliver in accordance with a notice to redeliver. Here, Customs demanded redelivery on March 19 and 20, 1979. The importer breached the terms of the bond upon his failure to redeliver by April 18 and 19, 1979. The action is timely since the government filed it on April 17, 1985.

II. Questions of Fact:

Summary judgment is appropriate where there is no genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986). To survive a motion for summary judgment, the opposing party must come forward with specific facts showing that there is a genuine issue for trial. Id. at 587. The non-movant may not rest on its conclusory pleadings but must set out what specific evidence could be offered at trial. Sweats Fashions, Inc. v. Pannill Knitting Co., 833 F.2d 1560, 1562-63 (Fed. Cir. 1987).

St. Paul asserts that Dr. Reul will present evidence that one of the imported vehicles was destroyed and the other was brought into compliance. Neither defendant has submitted any evidence to substantiate the claim that one of the automobiles was brought into compliance with EPA and DOT regulations. Nevertheless, according to St. Paul, this as[664]*664sertion creates issues of material fact precluding summary judgment. St. Paul’s claim, without some specific facts indicating when or how the vehicle was brought into compliance, is insufficient to raise an issue of material fact. Furthermore, the Court notes this action is predicated on the importer’s failure to redeliver the vehicles in compliance with the redelivery notices. The fact that the importer may have complied with EPA and DOT regulations does not eliminate a cause of action for liquidated damages based on the failure to redeliver in accordance with the terms of the bond.

Under Customs’ regulation controlling the destruction of prohibited merchandise:

Merchandise regularly entered or withdrawn for consumption in good faith and denied admission into the United States by any Government agency after its release from Customs custody, pursuant to a law or regulation in force on the date of entry or withdrawal for consumption, may be destroyed under Government supervision.

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Related

United States v. Richard M. Frisk
675 F.2d 1079 (Ninth Circuit, 1982)
United States v. Gary L. Griffin
707 F.2d 1477 (D.C. Circuit, 1983)
Sweats Fashions, Inc. v. Pannill Knitting Company, Inc.
833 F.2d 1560 (Federal Circuit, 1987)
United States v. Lun May Co., Inc.
680 F. Supp. 1573 (Court of International Trade, 1988)
United States v. Peerless Insurance
703 F. Supp. 955 (Court of International Trade, 1988)
United States v. Imperial Food Imports
660 F. Supp. 958 (Court of International Trade, 1987)

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Bluebook (online)
14 Ct. Int'l Trade 661, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-reul-cit-1990.