Appeal from a judgment of the District Court for the Southern District of New York (Robert J. Ward, Judge) awarding damages to defendants on a counterclaim following a bench trial. Affirmed.
Kaufman, Newman and Pratt, Circuit Judges.
JON O. NEWMAN, Circuit Judge:
CTI International, Inc. ("CTI"), plaintiff-appellant, appeals from the June 21, 1983, judgment of the District Court for the Southern District of New York (Robert J. Ward, Judge) entered following a bench trial, awarding defendants-appellees $363,597.57, plus prejudgment interest, on a counterclaim. The issues on appeal concern the District Court's rejection of plaintiff's claim for damages based on lost rental income and its alternative claim for damages for loss of use of rental property; both claims were advanced as an offset to the counterclaim. Finding no error in the District Court's award of damages, we affirm the judgment.
CTI, a Delaware corporation with its principal place of business in New York, is the world's largest lessor of cargo containers. CTI maintains container depots worldwide and regularly "repositions" containers from areas of excess supply to areas of high market demand.
Defendants-appellees are a group of unincorporated syndicates and American, British, and other foreign corporations engaged in the business of insurance (collectively "Lloyds"). Effective January 1, 1980, CTI and Lloyds entered into an insurance contract for "all-risk" coverage, specifically including "all repositionings" of CTI's containers located worldwide. The insurance policy covered "new" containers (less than one year old) at full replacement cost. Older containers were insured for book value. In the event of a covered loss Lloyds acquired subrogation rights against third-party wrongdoers.
Shortly after the effective date of the policy, CTI contracted with Ramsay Scarlett & Co. Inc. ("Ramsay") to reposition approximately 1,000 containers from Panama to the Gulf Coast in order to reduce excess inventories accumulated at the port of Coco Solo, Panama, and to satisfy market demand in New Orleans and Houston. Ramsay chartered the tug SEASPAN ROYAL and the barge GENMAR 106, both owned by Seaspan International, Ltd. ("Seaspan"), to accomplish the carriage.
On February 7, 1980, the GENMAR 106, with 1,007 containers on board, left Panama for New Orleans. Within hours of its departure an accident occurred, resulting in the loss of approximately half of CTI's containers and severe damage to most of the remainder. CTI made a claim under the Lloyds policy and also filed an admiralty action against Ramsay and Seaspan in the District Court for the District of Maryland seeking damages of $2.4 million. CTI sued to recover for both its insured losses -- loss of and damage to the containers -- and its uninsured losses -- the unreimbursed portion of the cost of replacing old containers, administrative expenses, and, especially pertinent to this appeal, lost rental income. Lloyds did not intervene in the Maryland litigation.
In November 1980, Lloyds paid CTI $1,135,994.38, representing the insured value (less a $5,000 deductible) of the containers lost overboard as a result of the GENMAR 106 accident. Subsequently, Lloyds made an additional payment of $79,420.08 for claims asserted under the policy for damage to CTI's "new" containers. In December 1981, the Maryland litigation between CTI and Ramsay and Seaspan was settled upon CTI's receipt of $600,000 and the exchange of mutual releases. When advised of the settlement, Lloyds demanded to be paid, pursuant to its subrogation rights, the entire settlement amount and ceased processing CTI's remaining claims under the policy. This litigation ensued.
In early 1982, CTI sued Lloyds in the District Court for the Southern District of New York seeking to recover $600,000 for loss of and damage to insured cargo containers suffered in several "repositionings," including an additional claim for damage to "old" containers as a result of the GENMAR 106 accident. Lloyds counterclaimed, demanding recovery, as subrogee, of the $600,000 CTI had obtained in settlement of the Maryland litigation. On the eve of trial the parties settled all issues raised by CTI's claims; Lloyds paid CTI $82,000 for damage to the GENMAR 106 "old" containers. In May 1983, Lloyds' counterclaim proceeded to trial before Judge Ward.
The District Judge determined that under New York law, which the parties agreed governs Lloyds' counterclaim, Lloyds was entitled to recover on its subrogation claim the amount by which CTI's recovery in the Maryland settlement exceeded CTI's uninsured losses.*fn1 The Court found that, as a result of the GENMAR 106 accident, CTI had suffered losses not covered by the Lloyds policy in the amount of $236,402.43. Judge Ward rejected as "not proven" CTI's additional claims of uninsured losses -- (i) excess of replacement cost of lost "old" containers over and above their insured book value, and (ii) lost rental income resulting from the loss of use of the damaged and destroyed containers. Deducting CTI's uninsured losses from its recovery in the Maryland litigation, the District Court entered judgment in favor of Lloyds on its subrogation claim for the difference, $363,597.57, plus prejudgment interest, from the date of the Maryland litigation.*fn2
The contested issues have narrowed on appeal. CTI primarily challenges the trial court's determination that it suffered no damages attributable to lost rental income as a result of the GENMAR 106 accident.*fn3 More specifically, CTI asserts that under the applicable legal standards it proved the fact of lost rental income with reasonable certainty and sufficiently quantified the amount of the resulting damages. Alternatively, CTI claims that, even if it has not established a recoverable amount of rental income actually lost, it is nonetheless entitled to recover the rental value of its containers as damages for loss of their ...