The opinion of the court was delivered by: TENNEY
Eaton Corporation (Construction Equipment Division) ("Eaton") and E.R.I.M., S.A. sued the S.S. GALEONA and Compania Trasatlantica Espanola, S.A. ("Spanish Line") for damages that allegedly occurred to an industrial tractor while being shipped aboard the S.S. GALEONA. Eaton now moves for partial summary judgment, seeking an order striking paragraph 17 of the Answer, which alleges that any recovery must be based on the terms of the Bill of Lading and/or the provisions of § 4(5) of the United States Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. § 1304(5) (hereinafter cited only as COGSA § 4(5)), settling Spanish Line's potential liability under section 4(5) at $ 500 per customary freight unit, and determining that the unboxed tractor equaled 67 such units. Spanish Line cross-moves for partial summary judgment, seeking an order upholding its affirmative defense of limited liability under COGSA § 4(5) and determining that the entire shipment equaled no more than 18 customary freight units. For the reasons given below, the Court grants and denies each motion in part: it upholds Spanish Line's affirmative defense under COGSA § 4(5), but determines that the tractor contained a total of 67 customary freight units and that, accordingly, Spanish Line's liability will be limited to the lesser of $ 33,500 or the actual damages, if any, to the tractor.
Eaton, by its agent, United States Forwarding Corporation ("Forwarding Corp."), arranged for the delivery to Spanish Line of one unboxed tractor, one tractor bucket, and one box of tractor parts for shipment from New York to Bilboa, Spain. The tractor, bucket, and parts were carried aboard the S.S. GALEONA under Bill of Lading # 44, dated Nov. 17, 1972. Sometime during the voyage the tractor was severely damaged; the bucket and parts arrived undamaged. Eaton and the consignee decided to return the tractor to the United States for repairs. According to the Survey Schedule and Repair Estimate provided by Eaton, Exhs. 4, 5 to Notice of Motion, the total damages amounted to $ 31,492.45.
When the unboxed tractor was returned to Eaton's plant, the plaintiff found it to be beyond repair and thus sold it "as is, where is." Affidavit of Thomas J. Patterson, sworn to Sept. 27, 1978, P 4 ("Patterson Aff.").
Eaton contends that the freight for the shipment was calculated by weight and that the customary freight unit for weight, by Spanish Line's Tariff and by the custom in the trade, is allegedly 40 cubic feet. The 2862.2 cubic feet of the tractor, when divided by 40 cubic feet, yields approximately 67 customary freight units. 67 customary freight units, when multiplied by the $ 500 limitation, equals $ 33,500. Accordingly, Spanish Line's liability for the damage to the tractor would be the lesser of $ 33,500 or the actual damage, allegedly $ 31,492.65.
Spanish Line contends that the freight for the shipment was calculated under two different customary freight units, as allegedly provided for in the Tariff: 1 lump sum customary freight unit for the first 2400 cubic feet and 17 additional customary freight units, each representing 40 cubic feet, for the remainder of the shipment, producing a total of 18 customary freight units for the entire shipment. Of these units, the tractor represented 9: the 1 lump sum unit and 7.05 additional units 8 when rounded off to the next unit of 40 cubic feet. Therefore, Spanish Line concludes, its liability, if any, for the tractor will be 9 units times $ 500, equaling $ 4,500.
In support of its position, Eaton offers the affidavits of, Inter alia, Thomas J. Patterson, Eaton's Credit Manager, and Donald G. Beaton, President of Forwarding Corp., Eaton's agent. Patterson's allegations are essentially what has been set out above. Patterson Aff. Beaton, whose corporation arranged for the shipment including processing the various paperwork alleges that the freight quoted to Forwarding Corp. was based on the total cubic feet of the entire shipment, as required by Spanish Line's Tariff. Affidavit of Donald G. Beaton, sworn to Sept. 27, 1978, PP 2-3 ("Beaton Aff."). Regarding the actual calculation involved, Beaton alleges that the charge for the first 2400 cubic feet was $ 2,000, "based on 60 "customary freight units' or $ 33.33 per 40 cft. and for the next 675 cft. divided by 40 cft., 17 "customary freight units' times $ 30.00 for $ 510.00, making a total freight charge of $ 2,510.00." Id. P 4. He alleges that 40 cubic feet is "known to all in the ocean transportation trade" as the customary freight unit when measurement, rather than weight, is used to determine the freight. He also relies on Spanish Line's Tariff for the applicability of this figure. These allegations, and his others, are made primarily in reliance on the Bill of Lading and the Tariff.
Spanish Line offers affidavits of William F. Burns, at the time in question Traffic Manager of Smith & Johnson, the defendant's shipping agent, and Peter E. W. Southwell, a Line Manager with Peralta Shipping Corporation and presumably an expert in the field, as well as an affidavit of Spanish Line's attorney. Burns supervised the preparation of the freight rate calculation for the shipment at issue here. He describes the calculation as follows. The Bill of Lading showed that the shipment was to be calculated on the number of freight units. Dock Receipt No. 092 indicated the cubic feet of the tractor, the tractor bucket, and the spare parts. To determine the proper freight, he referred to the applicable Tariff, "which called for a Lump Sum Charge for an industrial tractor of $ 2,000 for the first 2400 cubic feet (a customary freight unit)" of the shipment. He then added $ 30 for each 40 cubic feet in the remaining 674 cubic feet of the shipment. Affidavit of William F. Burns, sworn to Dec. 5, 1978, at 2 ("Burns Aff."). He added the sum from the latter calculation to the $ 2,000 and derived a total freight of $ 2,510. Id. at 3.
Southwell, who reviewed the documents for Spanish Line, concludes that the Tariff provides for two forms of customary freight units: a lump sum unit and a 40 cubic foot unit. He alleges that both freight units are customary in the trade to and from Spain and Portugal. He further concludes that the total shipment consisted of 18 customary freight units. Affidavit of Peter E. W. Southwell, sworn to Dec. 6, 1978, at 2. He also describes the arithmetic functions, including rounding of numbers, necessary to determine the freight as Spanish Line calculated it. Id. at 2-3.
Eaton replies that there can be no separate lump sum customary freight unit: under the Tariff the total shipment had to be measured, and the Tariff gives no rate for a portion 2400 cubic feet of just the tractor. Spanish Line, replying in turn, contends that a customary freight unit is a unit on which the charge is based, and here a lump sum of $ 2,000 was charged for the first 2400 cubic feet. It further reasons that if the total measurement had been 2400 cubic feet or just less, then unquestionably only 1 customary freight unit would have been used a lump sum unit.
The Bill of Lading for the shipment incorporated COGSA. Exh. 1, P 37, to Eaton's Notice of Motion. COGSA § 4(5) provides:
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 package lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.
By agreement between the carrier, master, or agent of the carrier, and the shipper another maximum amount than that mentioned in this paragraph may be fixed: Provided, That such maximum shall not be less than the figure above named. In no event shall the carrier be liable for more than the amount of damage actually sustained.
(Original emphasis). Under the Bill of Lading, P 30, the $ 500 limitation remains applicable, no higher valuation having been declared.
Because the parties agree that the tractor was not shipped as a package, the limitation must be based on the number of customary freight units in the tractor. The parties further agree that the freight was based on the measurement of the shipment and not its weight. Accordingly, the question is whether the freight charged was based solely on a customary freight unit of 40 cubic feet, as Eaton contends, or on 2 different customary freight units 1 lump sum unit for the first 2400 cubic feet of the shipment and the remaining units for customary freight units of 40 cubic feet as Spanish Line contends. Because the parties also agree throughout their papers that the customary freight unit for that part ...