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PRUDENTIAL LINES, INC. v. GENERAL TIRE INTL. CO.

November 10, 1977

PRUDENTIAL LINES, INC., Plaintiff,
v.
GENERAL TIRE INTERNATIONAL CO., OVERSEAS PACKING, INC., DELAVAL TURBINE INC., SANTINI BROS., INC., NORTHEAST MARINE TERMINAL COMPANY, QUIN MARINE SERVICE, INC. and JOSEPH VINAL SHIP MAINTENANCE, INC., Defendants



The opinion of the court was delivered by: MACMAHON

MacMAHON, District Judge.

 Plaintiff Prudential Lines, Inc. ("Prudential"), an ocean carrier, seeks to recover monies paid in settlement of cargo damage claims made against it by the consignee of goods shipped to Rumania. Six of the seven defendants make motions pursuant to Rule 56, Fed.R.Civ.P. Defendants, Northeast Marine Terminal Co. ("Northeast"), Quin Marine Service, Inc. ("Quin"), and Joseph Vinal Ship Maintenance, Inc. ("Vinal"), move (1) for summary judgment on the ground that the action is time-barred, or (2), in the alternative, for partial summary judgment limiting their liability to $500 per package. Defendants General Tire International Co. ("General"), Delaval Turbine Inc. ("Delaval"), and Santini Bros., Inc. ("Santini"), move for partial summary judgment limiting their liability to $500 per package.

 I.

 In 1973, General contracted with I.S.C.E. Romchim, State Enterprise for Foreign Trade of Rumania ("Romchim"), for the sale of certain equipment and machinery to be used in the operation of a tire factory. Delaval entered into a contract with Romchim to supply equipment for an ammonia factory to be built in Rumania. General engaged Overseas and Santini to receive various component parts of the factory equipment and to prepare and package the equipment for ocean transportation to Rumania. Delaval arranged for similar work to be done by Santini.

 Prudential received the goods at its Brooklyn pier, where plaintiff issued bills of lading to General and Delaval. The bills incorporated the Carriage of Goods by Sea Act ("COGSA"), including COGSA's one-year statute of limitations, 46 U.S.C. § 1303(6), and its $500 per package damage limitation, id. § 1304(5). The bills also contained a so-called "Himalaya clause," *fn1" which extends to certain agents of the carrier "all exemptions and immunities from and limitations of liability which the carrier has" under the bill and COGSA. *fn2"

 Personnel of Northeast loaded the cargo into six Prudential LASH barges. Plaintiff urges that carpenters employed by Quin were responsible to brace and chock the cargo in the barges. Lashing work was to be performed by Vinal, and eventually the LASH barges were loaded aboard plaintiff's mother vessel, the SS LASH ITALIA.

 On January 25, 1975, the LASH ITALIA set sail for Europe. Rough seas were encountered en route, and, upon delivery in Rumania on February 9, 1975, the cargo was found damaged. Threatening suit in rem in Rumania, Romchim presented plaintiff with a cargo damage claim, including consequential damages, which were in excess of $16,000,000. After much negotiation, during which plaintiff says it became convinced that the Rumanian courts would not respect COGSA's $500 per package damage limitation, plaintiff and Romchim entered into a $2,000,000 settlement. The settlement was effected on February 19, 1976, one year and ten days after delivery of the cargo. On June 25, 1976, plaintiff instituted this action, seeking indemnification and alleging negligence and breach of warranty by the defendants in their failure to package and secure the cargo properly.

 II.

 MOTION FOR SUMMARY JUDGMENT ON BASIS OF STATUTE OF LIMITATIONS

 Defendants, Quin, Northeast and Vinal, move for summary judgment on the ground that this action is time-barred. Arguing that plaintiff's claim is one seeking to recover for cargo damage, defendants point to the one-year statute of limitations established for such actions by COGSA, 46 U.S.C. § 1303(6), and incorporated in the bills of lading. Since the cargo was delivered on February 9, 1975, and this suit was not instituted until June 25, 1976, they argue that the lapse of more than one year requires dismissal here.

 This, however, is an action seeking indemnification for monies expended by plaintiff in settlement of the claims of a third party. It is well settled that a cause of action for indemnification accrues not when the damage to the third party occurs, but when the judgment or settlement has been paid. *fn3" Since plaintiff paid the settlement on February 19, 1976 and brought this suit just over four months later, plaintiff's action was brought well within the analogous state statute of limitations of six years *fn4" and is certainly not barred by the maritime doctrine of laches.

 The defendants can draw no solace from the Himalaya clause which gives them, as agents of the carrier, the benefit of COGSA's one-year statute of limitations. While that one-year period might on these facts bar a damage action brought by cargo interests, it does not preclude this suit by the carrier. As we have already concluded, this is not an action for cargo damage. *fn5"

 Defendant Quin makes a further argument: prior to the settlement between plaintiff and Romchim, the statute of limitations had run on any claim Romchim had against Quin. Since plaintiff is now asserting the rights of cargo, and since cargo's action against Quin would be time-barred, Quin suggests that plaintiff's action should also be barred.

 Research discloses one case in point. In Grace Lines, Inc. v. Central Gulf S.S. Corp., 416 F.2d 977 (5th Cir. 1969), cert. denied, 398 U.S. 939, 26 L. Ed. 2d 271, 90 S. Ct. 1843 (1970), cargo interests sued the charterer (Central) and the owner of a vessel (Grace) for damage to cargo shipped under a contract which incorporated COGSA. The relationship between Central and Grace was regulated by a time charter party, which also incorporated COGSA. Cargo's suit was timely against Central but barred against Grace by the one-year statute of limitations. The Fifth Circuit dismissed Central's claim against Grace for indemnity under the charter party. Since Central's ...


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