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BINLADEN BSB LANDSCAPING v. M. V. NEDLLOYD "ROTTER

June 25, 1984

BINLADEN BSB LANDSCAPING, Plaintiff,
v.
M. V. NEDLLOYD "ROTTERDAM", her engines, boilers, etc., and Nedlloyd Lijnen B.V. (Nedlloyd Lines), Defendants.



The opinion of the court was delivered by: SOFAER

SOFAER, District Judge:

Plaintiff, Binladen BSB Landscaping (hereinafter "Binladen"), was the shipper and consignee of a shipment of ten refrigerated containers of live plants from the United States to Jeddah, Saudi Arabia in June and July 1980. Nine containers were shipped from Miami under Miami/Jeddah bills of lading RC-1 and RC-2 dated June 14, 1980. One container was shipped from Houston under Houston/Jeddah bill of lading RC-1 dated June 11, 1980. Def. Ex. B, C, D. The plants involved in this shipment were to be used in a landscape project at one of the palaces of the then -- Crown Prince Fahd, the present King of Saudi Arabia. Prior to this shipment plaintiff had received other refrigerated shipments of live plants in Saudi Arabia. Lavargna Dep. 33, 42-44.

Defendants, Nedlloyd Lijnen B.V. (hereinafter "Nedlloyd"), was the owner and operator of the M.V. "NEDLLOYD ROTTERDAM" during the time of the events in question.The containers in question were carried on board the NEDLLOYD ROTTERDAM Voy. 0115, a fully containerized, roll on-roll off vessel. When the shipment was picked up by plaintiff on Jeddah, the plants in two containers were diseased and destroyed, resulting in a loss to plaintiff of the freight and value of those plants. After a trial to the court, plaintiff established that defendant is liable for its total loss, for the reasons set forth in the following findings and conclusions.

 Plaintiff paid freight on a container basis, at a rate that reflected the additional cost of refrigeration. The containers were properly packed by plaintiff's suppliers, and returned to the loan ports for loading. All the plants shipped had been properly inspected and were in good condition when delivered to Nedlloyd. Ramirez Dep. 12, 18, 34-38.One of the containers at issue, ITLU 720073-6, was delivered to Nedlloyd in Houston on June 10, 1980. The other, SCXU488906-1, was delivered to Nedlloyd in Miami on June 13, 1980. Nedlloyd failed to produce partlow charts which would have demonstrated whether these containers were operating properly prior to their being connected to power on board the NEDLLOYS ROTTERDAM.

 With respect to the Houston container, the temperature specified by plaintiff (78 deg.) was appropriate for the plants shipped. Tr. 197-201. The court rejects testimony to the contrary. Tr. 184-85. The plants could not properly be transported without air circulation and refrigeration that kept down the humidity in the container. Nedlloyd as carrier of the plants and supplier of the reefers should have known the proper manner of maintaining the temperature specified, and was obligated to provide reefers that functioned properly in all material respects, including their capacity to dehumidify. Carribean Produce Exchange, Inc. v. Sea Land Service, Inc., 415 F. Supp. 88 (D.P.R.1976) (carrier cannot avoid responsibility for operation of refrigeration); Atlantic Banana Company v. M.V. "CALANCA", 342 F. Supp. 447, 452 (S.D.N.Y.1972), aff'd mem., 489 F.2d 752 (2d Cir.1974). If the container lacked circulation, as Mr. Hans Zutter assumed, then Nedlloyd is responsible for that result, although the proof did not establish a lack of circulation. The container used for the Houston/Jeddah trip was not properly checked, despite two potentially significant malfunctions before the trip. First, it was inoperative when delivered to Garden World, plaintiff's supplier in Laredo. Nedlloyd's agent arranged for repairs, consisting of a fuse replacement and adding the refrigerent freon. Pl.Ex. 12; Ramirez Dep. 7, 27. Second, when the container was delivered to the Nedlloyd terminal in Houston it was inspected and again found to be low in freon; a sight-glass was tightened, apparently because it was thought to be the source of the leak.

 This was not an adequate response to the condition. As all the experts testified, including Nedlloyd's, the container should have been checked comprehensively after two shortages of freon to determine the source of the leaks. Tr. 130-132; 225-26; 294-95. No such check was done. A proper inspection prior to the voyage would also have included a check of the calibration of the reefer sensors which activate the switch that initiates the heating mode. Tr. 46, 313-314. Nedlloyd produced no pre-trip partlow charts or other evidence of proper inspection and calibration. As the expert Robert J. Wall's testimony suggests, such lack of proper records of maintenance and operation was inconsistent with proper practice. See, e.g., Tupman Thurlow Co. v S.S. CAP CASTILLO, 490 F.2d 302, 308 (2d Cir.1974).

 The Houston container was received by Nedlloyd at Houston on June 10 at 4:13 p.m. Pl.Ex. 17. The available evidence establishes it was hooked up to power on the ROTTERDAM at 5:00 a.m., June 11. See Def.Ex.N. Nedlloyd's partlow charts for the period prior to 5:00 a.m., June 11, are missing, so it is impossible to know whether the proper practice was followed, or whether the container was left disconnected for about half a day. Nedlloyd failed to produce the partlow charts that would have cleared up this uncertainty.

 The Houston container never defrosted during the voyage to Jeddah. P.Ex. 28, 37; D.Ex.N; Tr. 100-01, 123-24, 272; Meijer Dep. 70. Why this occurred is not entirely clear, but may have resulted from improper calibration, the shortage of freon, or some other deficiency. See, e.g., Tr. 298, 305-06. A build-up of humidity was certain to occur which, along with the earlier stress placed on the plants through a delayed hood-up, could readily explain the bacterial growth that killed the plants.A telex sent by the Nedlloyd representative at Jeddah on February 24, 1981, stated that the Houston container was malfunctioning when it left the ship. Pl.Ex. 35. This statement was later reversed, but the court is not satisfied that the statement was in fact erroneous, given the other evidence and the unlikelihood that container numbers could have been confused.

 The other container in which all the plants died was SCXU488906-1, or the Miami container.It was properly loaded and packed, with healthy plants, and delivered to Nedlloyd with four other filled containers. The carriage temperature specified (58 deg. F) was correct, and the plants in the other containers in this shipment arrived in Jeddah without significant damage. As with the Houston container, Nedlloyd's proof of proper handling is deficient.

 The Miami container was delivered to Nedlloyd on June 13, 1980, at 5:00 p.m.; the first proof that it was hooked up to electricity was a chart commencing at 6:00 a.m. on June 16. D.Ex.M., Tr. 230-31. In addition, the first temperature recorded on the relevant partlow chart was 66 deg. F, rather than 58 deg. F, and during June 13-15 the daily high temperature went far above 58 deg. F, averaging some 85 deg. F. P.Ex. 39. This container also failed to defrost for at least two days. D.Ex.M; Tr. 107-111, 117. If the container was not ventilated, as counsel for Nedlloyd suggested when convenient for him to do so, failure to properly open the vents was Nedlloyd's fault. P.Ex. 37; Tr. 176-77, 189-90. In fact, ventilation must have been provided to all containers, or all would have been delivered with dead plants. The combination of the delayed hookup, after an unrefrigerated trip on land, with the failure to dehumidify for two days probably damaged the plants even though the container subsequently functioned properly during the voyage. See Tr. 173-179.

 Thus, excess humidity, resulting from a delayed hookup and container malfunctions, most probably caused the death of the plants in both the Miami and Houston containers. See e.g., Lavargna Dep. 25-26. In connection with both containers, the court credits the testimony of Douglas L. Roberts that the reefers must not have been operating properly.

 Both the Houston and Miami containers failed to function properly after delivery at Jeddah to MTI, the port's terminal operator, on July 4. It is more probable than not that the plants in both were already irreversibly damaged, which finding is based in part on Nedlloyd's failure to produce proper records. S.S. CAP CASTILLO, 490 F.2d at 308. (The nonproduction of material evidence which is in control of a party raises an inference that the evidence is unfavorable to that party). In any event, delivery did not occur when the containers were given by Nedlloyd to MTI, but when they were picked up by Binladen, within a reasonable time after notice of their arrival. Binladen was under no obligation to remove the two containers immediately after getting the claimed notice of their malfunction from Alatas, Nedlloyd's agent. Furthermore, such action by the time of notice would not have prevented the damage in light of the extremely high temperatures involved, and might not even have resulted in Binladen's obtaining the containers under Saudi rules. See Meijer Dep. 139-41. Moreover, the containers had apparently been malfunctioning after discharge; MTI, whose responsibility it was to notify Alatas of container malfunctions, D.Ex. K.K., § 3.3, failed to notify Alatas as to the Houston container malfunction and did not tell Alatas of the Miami container malfunction until four or five days after discharge. Meijer Dep. 129-30.

 The normal admiralty rule applies here, because Nedlloyd incorporated COGS into its bills of lading, and no contrary custom or usage of the port of destination has been satisfactorily or convincingly established. See Tapco Nigeria, Ltd. v. M/V WESTWIND, 702 F.2d 1252, 1255 (5th Cir. 1983) (custom, regulations, or law of port of destination can modify common law requirements); cf. Farrell Lines, Inc. v. Highlands Ins. Co., 696 F.2d 28 (2d Cir. 1982) (carrier discharged of responsibility because of port's custom and usage). While the Saudi port regulations reserve control to Saudi authorities over the handling and discharge of goods, those rules fail to establish that the port authorities act in behalf of the consignee rather than the carrier. Nedlloyd as carrier pays the Saudi port authority for its services, see D.Ex. KK, including specifically the surcharge for the first three days for connecting and maintaining reefers, and for notifying the shipper of malfunctions. Id. § 3.3. Binladen, on the other hand, had no contact with the port authorities except to pick up its goods when authorized to do so by Nedlloyd.

 Nor do the rules establish that Nedlloyd relinquished total control of the goods to MTI. Cf. Tapco, 702 F.2d at 1260 (regulations requiring that government-employed stevedores take total control of the cargo from ship's hold until finally delivered to consignee absolved carrier from any responsibility for losses during unloading).To the contrary, the Saudi port regulations make clear that the carrier, through its agent, ...


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