Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


October 16, 1985


The opinion of the court was delivered by: TYLER

Before Magistrate Joel J.Tyler


 Essentially, we are faced with the claims of the plaintiff, Moore-McCormack Lines, Inc., ("Mormac"), for indemnification, to recover sums paid by it to cargo consignees (and a shipper as to one claim) as reimbursement for loss of portions of cargo claimed lost while in the alleged custody and control of defendant, International Terminal Operating Company, Inc. ("ITO") at the 23rd Street Terminal located in Brooklyn, New York. The conflict, which resulted by ITO's rejection of the claims, prompted this action and the resultant trial, held before this court on November 15, 16 and 23, 1982. *fn1" Pursuant to 28 U.S.C. § 636(c), the parties waived their right to proceed before a judge of the United States District Court and consented to trial before a United States Magistrate. Accordingly, Judge Charles L. Brieant, to whom the case is assigned, referred the matter to the undersigned for trial by order, dated May 21, 1982.

 The following constitutes this Court's Findings of Fact and Conclusions of Law following trial and after hearing argument of counsel, pursuant to Rule 52(a), Fed. R. Civ. P..


 A. Diversity

 The complaint here involved is the Second Amended Complaint ("the Complaint"). It alleges admiralty jurisdiction within the meaning of Rule 9(h), Fed.R. Civ. P.. It does not allege admiralty jurisdiction pursuant to 28 U.S.C. § 1333(1) or upon any other basis, save Rule 9(h). We agree with ITO that "[t]here has been no allegation or proof of diversity jurisdiction." (ITO's Post-Trial Memo, at 10), and, thus, we find none, McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 80 L. Ed. 1135, 56 S. Ct. 780 (1936) (Jurisdiction must be alleged and if challenged, established by "competent proof"); United State v. Montreal Trust Company, 358 F.2d 239, 245 n.2 (2d Cir.), cert. denied, 384 U.S. 919, 16 L. Ed. 2d 440, 86 S. Ct. 1366, reh'g denied, 384 U.S. 982, 16 L. Ed. 2d 693, 86 S. Ct. 1858 (1966); Trinanes v. Schulte, 311 F. Supp. 812, 813 (S.D.N.Y. 1970), given, in any event, our sua sponte responsibilities to note jurisdictional defects, McLearn v. Cowen & Co., 660 F.2d 845, 848-49 (2d Cir. 1981); United States v. Town of North Hempstead, 610 F.2d 1025, 1029 (2d Cir. 1979); Bernstein v. Universal Pictures, Inc., 517 F.2d 976, 979 (2d Cir. 1975), and our mandated obligation under Rule 12(h)(3), Fed. R. Civ. P. *fn2"

 B. The Claims

 (a) First Cause of Action - Breach of Contract

 Mormac alleges that:

 1. ITO, at all relevant times, was and is "a stevedore and terminal operator" and agreed (under contract) "to perform stevedoring and terminal services" (Complaint, PP6,7.).

 2. As a stevedore and terminal operator, ITO "received, accepted and agreed to properly store and load" outgoing cargo onto and into Mormac's vessels and to store the same to await delivery to proper consignees. (Complaint, PP5-7).

 3. The cargos in question were received and accepted by ITO, but portions thereof were "lost and/or otherwise damaged", in amounts delineated in Schedule "A", attached to the Complaint, and while the same were in ITO's "complete control". Because of such loss (or damage), ITO breached the agreement between the parties, which Mormac fully performed. (Complaint, PP7-9, 11).

 4. Mormac seeks indemnification for payments made by it to claimant-consignees (and a shipper), for whom it acts as "agent and trustee". (Complaint, P11).

 (b) Second Cause of Action - Breach of Warranty

 Mormac repeats all of the prior allegations in the first cause of action, and further alleges, as a separate cause of action, that ITO warranted, expressly and impliedly, that it would perform its work "in a safe and proper manner", but failed to do so. (Complaint, PP13-16).

 Said Exhibit "A", lists the type of shipments allegedly received by ITO, the ships upon which they arrived or were exported, the amount of shortage ITO failed to deliver, the names of the consignees and the respective values of the shortages. Eight shipments are involved; seven were inbound cargo and one was an outbound cargo.

 Given the liberal pleading requirements in admiralty cases and our instruction that such pleadings be read with liberality, Leather's Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800, 808 (2d Cir. 1971); Doris Trading Corp. v. SS Union Enterprise, 406 F. Supp. 1093, 1096 (S.D.N.Y. 1976), Mormac did not, nor was it required to indicate in the complaint, specifically, where and at what point in the operation the losses occurred, whether during the stevedoring operation or during storing or other terminal operations. No pre-trial motions were made by either side for summary judgment or by ITO to dismiss under Rule 12(b)(1) or 12(b)(6), Fed.R. Civ. P.. Accordingly, we were relegated to await the trial to determine the facts and whether admiralty jurisdiction obtained. Doris Trading Corp. v. SS Union Enterprise, supra, at 1096; Marubeni-Iida (American), Inc. v. Nippon Yusen Kaisha, 207 F. Supp. 418, 420 (S.D.N.Y. 1962).

 The Contract

 Mormac's claims are asserted under an existing "Memorandum of Agreement" ("the contract"), entered into by it and ITO on October 1, 1976 (Plaintiff's Trial Exhibit "3"; hereinafter "Pl's. Ex."). That contract applied to work to be done by ITO at Mormac's 23rd Street Terminal, Brooklyn, New York, where the cargos here involved were loaded or unloaded to and from Mormac's vessels, and stored. We shall also consider a contract entered into between the parties on April 1, 1968 ("the 1968 contract"), which relates to work to be performed by ITO at Mormac's terminal facilities at Elizabeth, New Jersey. Although the 1968 contract is entitled "Stevedoring Agreement", it, in fact, like the 1976 contract, provided that ITO render both terminal as well as stevedoring services. We are here guided, of course, by the terms of the relevant 1976 contract, but shall distinguish the two contracts, insofar as they may shed light as to the intent of the parties concerning the responsibilities of ITO under the 1976 contract.

 The 1976 contract, in pertinent part, provides that:

 1. The contract is to "govern" two distinct and separate activities to be performed by ITO. The first is "loading and unloading" Mormac's vessels and furnishing "services customarily performed by a ... stevedore". *fn3" Further, ITO bound itself to "receiving and delivery of cargo" and, in that connection, to perform the "functions and services customarily performed by a terminal operator". The services to be performed by ITO, both as a stevedore and as a terminal operator, were to be paid for by Mormac in accordance with separate rate schedules attached to the contract. (See, Pl's. Ex. "3", the contract, at 1 and schedules attached).

 2. The stevedoring operations are more particularly set forth in the contract. For example, ITO is required to "[d]ischarge cargo from or load cargo into vessels' holds, tween decks, on deck, shelter or bridge spaces, deep tanks...." (Pl's. Ex. "3", at P2(d)). The terminal operations are also set forth. For example, ITO is to "sort and stack cargo upon discharge of vessel or breakdown cargo on pier upon loading of vessel"; to perform "long hauling" within the pier and "farm" area; "reasonable sorting of cargo"; "truck loading and unloading and assisting delivery"; "normal coopering"; "cleaning and general housekeeping of 23rd and 25th Street areas", etc.. (Id., at PP2(f)(g)(j)(p)(q)).

 3. ITO is required to supply all cargo handling gear and equipment for use in performance of its obligations (Id. P6, p.7).

 4. ITO agreed to "be legally liable...for damage to or loss of cargo through its negligence." Further, "loss or damage to cargo...shall be limited to actual damage caused by the negligence of [ITO] engaged in receiving and delivery of cargo, and the shifting, loading or discharging of cargo." (Id., at P8). In this connection, ITO agreed to "assume full responsibility" for "misloading or failure to load cargo...or in cross-delivery of cargo". (Id., at P21).

 5. Demurrage charges belong to Mormac, but demurrage reports are required to be completed by ITO's clerks on forms furnished by Mormac. (Id., at P24).

 6. As part of its terminal functions, ITO is required to furnish clerical personnel, including tallymen for delivery (to consignees) and receiving cargo (from shippers), and was required to issue receipts for delivered cargo on Mormac's forms and as its representative. ITO may collect and retain charges for loading and unloading cargo to and from delivery trucks. (Such charges are usually paid by the consignees). (Id., at PP2(b), 5).

 7. ITO guaranteed to secure other shipping lines to use the terminal at "a maximum of 100,000 tons per year at $1.50 per manifest ton for side and top wharfage." (Id. at P34). *fn4"

 The 1968 contract, PXI, at 9, (Pl's. Ex. "2") holds ITO liable, in part, for "loss of cargo overside" due to its negligence. That paragraph further provided that in "receiving, delivering and storing of cargo [ITO] is acting as an agent of Moore-McCormack and as such, is not to be considered as a bailee of the cargo." Further, Paragraph XVIII provided that that contract shall "constitute the full agreement of the parties and no warranty of any nature shall be implied from any of the wording of this agreement."

 Mormac's Contract Administrator, Caspare V. Curcuru ("Curcuru"), testified that he, on behalf of Mormac, negotiated the 1976 contract with ITO (Tr. 13),** and that he eliminated the above-quoted language of the 1968 contract from the 1976 contract, because he "felt that the responsibility for the proper handling of the cargo was not properly represented, ... in the old [1968] agreement, and I thought that the responsibility should be fixed on [ITO] the stevedore and terminal operator, so that I revised these and excluded them from the new [1976] contract." (Tr. 14).

 It was clear then, and I find, that it was Mormac's intent under the contract to hold ITO responsible, if negligent, for any cargo loss while in its hands, anywhere within the terminal area, and that Mormac disclaimed none of the usual implied warranties that may be legally ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.