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UNITED STATES STEEL INTL., INC. v. SS. LASH ITALIA

July 18, 1977

UNITED STATES STEEL INTERNATIONAL, INC., Plaintiff,
v.
SS. LASH ITALIA, etc., and Prudential Lines, Inc., Defendants and Third Party Plaintiffs, v. The NORFOLK AND WESTERN RAILWAY COMPANY, Third Party Defendant


Haight, District Judge.


The opinion of the court was delivered by: HAIGHT

MEMORANDUM DECISION AND ORDER

HAIGHT, District Judge.

 Plaintiff United States Steel International, Inc. ("U.S. Steel") seeks recovery for contract and cargo damage arising out of a transatlantic shipment of steel by defendant Prudential Lines, Inc. Paragraphs five (5) and six (6) of plaintiff's complaint set forth the relevant factual information underlying plaintiff's claim:

 
"5. On or about January 22, 1975 plaintiff delivered 496 packages of electrical steel sheets to defendant as common carrier at the port of Norfolk in good condition for delivery to Constanza, Roumania in consideration of an agreed freight and pursuant to the valid terms of bills of lading issued by defendant and the S.S. 'LASH ITALIA'.
 
"6. Thereafter the S.S. 'LASH ITALIA' arrived at Constanza where the cargo was delivered in a damaged condition."

 On March 7, 1977, defendant Prudential, as a third party plaintiff, served a third party summons and complaint on Norfolk & Western Railway Company ("N & W"), who it is alleged:

 
"[was] the inland carrier of part, or all, of the cargo described in paragraph 5 of the plaintiff's Complaint and delivered such cargo [to] the port of Norfolk where it was loaded aboard the third party plaintiff's vessels; and, [that] if the plaintiff's cargo was damaged as alleged in paragraph 6 of the Complaint, then such damage was due in whole, or in part, to the fault or neglect or want of due care of the Norfolk & Western Railway Co. . . ." (See paras. five (5) and six (6) of Prudential's third-party complaint).

 Issue was joined on April 29, 1977; and N & W now moves for summary judgment pursuant to Fed.R.Civ.Proc. 56, asserting that the claim for indemnity or contribution averred in the third party complaint is time barred under Section 2(b) of the Bill of Lading Contract issued by N & W to U.S. Steel. Section 2(b) provides that:

 
"As a condition precedent to recovery, claims must be filed in writing with the receiving or delivery carrier, or carrier issuing this bill of lading, or carrier on whose line the loss, damage, injury or delay occurred, within nine months after delivery of the property (or, in case of export traffic, within nine months after delivery at port of export) or, in case of failure to make delivery, then within nine months after a reasonable time for delivery has elapsed; and suits shall be instituted against any carrier only within two years and one day from the day when notice in writing is given by the carrier to the claimant that the carrier has disallowed the claim or any part or parts thereof specified in the notice. Where claims are not filed or suits are not instituted thereon in accordance with the foregoing provisions, no carrier hereunder shall be liable and such claims will not be paid."

 The above-cited language appears in the form approved by the Interstate Commerce Commission, and is used by all common carrier railroads engaged in interstate commerce. See Section 20(11), commonly known as the Carmack Amendment (set forth verbatim, infra).

 This Court need not elaborate on the fact that U.S. Steel did not file a written claim pursuant to Section 2(b) of the bill of lading -- a fact which Prudential does not dispute. See pages 2 and 3 of the Sullivan affidavit. Such a failure, even if unintentional, would strictly preclude U.S. Steel from succeeding in a cause of action for damages in a court of law. See B. A. Walterman v. Pennsylvania Railroad Company, 295 F.2d 627 (6th Cir. 1961).

 Prudential, on the other hand, asserts that it was not a party to the Bill of Lading Contract between U.S. Steel and N & W, and is therefore not bound by the conditions precedent to suit set forth in paragraph 2(b). Additionally, Prudential urges that since its third party complaint speaks of indemnity, the statute of limitations does not commence to run until Prudential is required to make payment to U.S. Steel for the damages alleged.

 In response to the statute of limitations argument pressed by Prudential, N & W directs this Court to three recent decisions (Brumley-Donaldson Co., Inc. v. Shipping Corp. of India, Ltd., et ano., (S.D.Ala. no date) 7020-72H; Yeromex v. S. S. Tendo v. Maritime Containerline v. Old Dominion Freight Lines, 75 Civ. 376 (S.D.N.Y. Pollack, J.); Union Carbide v. Lifschultz Fast Freight v. Union Pacific Railroad Company, 71 C 2379 (Ill.1972) -- all involving third party actions by either a steamship company or freight forwarder against a railroad company -- which held that a claim for indemnity is governed by the restrictions contained in the Carmack Amendment, 49 U.S.C.A. ยง 20(11). (Two of these decisions which are unpublished, are set forth in their entirety in the footnotes.) *fn1" In other words, the nine months' notice of claim provision of the Carmack Amendment inures to the benefit of the carrier, and no claim, whether for indemnity or otherwise, can be asserted unless a written claim is made with the carrier within nine months after delivery.

 Prudential's reliance on Federal Commerce & Navigation Co. Ltd. v. Calumet Harbor Terminals Inc., 542 F.2d 437 (7th Cir. 1976) is inapposite to the instant discussion. The Court of Appeals in Federal Commerce reversed a lower court ruling granting summary judgment to a third party defendant on a claim for indemnity. The facts in Federal Commerce were straightforward: Federal was a charterer and operator of vessels engaged in the carriage of goods for hire between ports on the high seas and the Great Lakes, including Chicago, Illinois. Federal retained Calumet Harbor Terminals Inc. to perform stevedoring and terminal services for cargo to be discharged from Federal's vessel at Chicago. During the period November 30-December 2, 1971, certain cargo carried aboard the Federal vessel was damaged as the result of improper handling by Calumet. The owner of the damaged cargo made a claim against Federal. After settling the claim, Federal sought indemnification from Calumet, who objected, citing Item 170(c) and 170(d) of its Terminal Tariff No. 3, ...


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