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ENGLISH ELEC. VALVE CO. v. M/V HOEGH MALLARD

June 13, 1986

ENGLISH ELECTRIC VALVE CO., LTD., Plaintiff,
v.
M/V HOEGH MALLARD, her tackle, engines, etc., WESTWOOD SHIPPING LINES, ALLIANCE SKIBS, and LIEF HOEGH & CO., A/S, Defendants.



The opinion of the court was delivered by: LASKER

LASKER, D.J.

This admiralty case arises from water damage to an ocean shipment of electronic equipment from Oakland, California to Tilbury, England. The issues were presented to the court at a three-day non-jury trial following which the parties submitted proposed findings of fact and conclusions of law. The court finds that the plaintiff has failed to sustain its burden of proof on its damage claims and that the defendant is entitled to judgment accordingly. *fn1"

 I.

 Plaintiff English Electric Valve Co., Ltd. ("EEV") is a British company engaged in the manufacture of electronic tubes. EEV was the consignee of an ocean shipment of electronic equipment consisting of an A-type modulator for testing traveling wave tubes which it had contracted to provide to the British Ministry of Defense. EEV purchased the modulator in 1981 from the shipper, Aydin Energy Division ("Aydin") of Palo Alto, California, for an invoice price of $236,880. *fn2"

 On November 18, 1981, Rainer Overseas ("Rainer"), freight forwarders acting on behalf of the shipper, Aydin, booked the modular for shipment with Norton Lilly Co., Inc. ("Norton Lilly"), the agent representing Westwood Shipping Lines ("Westwood"), the defendant in this action. The cargo was booked for loading at Oakland, California aboard the vessel Hoegh Mallard (chartered at all relevant times by Westwood and owned by Alliance Skibs, A/S and Leif Hoegh & Co., A/S) and discharge at Tilbury, England. The booking note for the shipment indicates that the shipper's agent, Rainer, described the cargo as "electronic equipment," specified that it would be handled as an "H/H" (house-to-house) shipment, and requested a "flatrack" container as a "1st priority" and an "open top" container as a "2nd priority." *fn3" The parties agree that neither the shipper nor its representative ever specifically requested that the cargo be stowed below deck, and there is no evidence that any specific request for special handling was ever made.

 A "flat rack" is a container with a floor, but usually no top or side walls, that is utilized for cargo which exceeds the dimensions of the container and can be secured to posts located at the corners. An "open top" is a container with a floor and side walls but no roof that is often used for cargo which it too tall for the container, or over-height. *fn4" However, open top containers are also employed with normal-size cargo, for reasons ranging from the type of loading facilities which are available to the kinds of containers the carrier happens to have on hand. *fn5" The top of an open top container is covered with a tarpaulin. At least when not containing over-height cargo, an open top is designed to be stowed on the deck of a vessel and to withstand the same spray and rain conditions as a metal or solid box container. *fn6" When an open top contains over-height cargo, there is some distortion in the tarpaulin cover, *fn7" and, of course, no other containers can be stacked on top of such an open top.

 In a "house-to-house" shipment, the shipper bears the responsibility for picking up the container, packing or "stuffing" the cargo into the container, and delivering the container intact to the loading facility. *fn8"

 Shortly before the modulator was shipped, Barry Jennis, the EEV manager in charge of the modulator project, witnessed successful tests of the equipment at Aydin in Palo Alto. *fn9" The modulator was then packed by Aydin or its representative in five wooden crates and stuffed into a standard open top container provided by Westwood. The largest crate contained the modulator cabinet and extended 14 to 14.5 inches above the top of the container, which was covered with a tarpaulin. The modulator cabinet was enclosed in an aluminum envelope, cushioned at its base by paper packing material, and surrounded inside and outside the envelope by bags of desiccant, a drying agent. The four smaller crates contained various components that had been removed from the modulator cabinet. The contents of the smaller crates were packed in paper and bubble wrap and interspersed with bags of desiccant, but not sealed in any sort of envelope. *fn10"

 On December 1, 1981, the open top container in question was delivered to Westwood's stevedore at the pier in Oakland, who noted that the container was a "rag top" and "oversize" but indicated no damage. *fn11" The cargo was loaded aboard the Hoegh Mallard under the supervision of Westwood and Norton Lilly, and the bill of lading issued by Westwood, dated December 11, 1981, contained no exceptions to the condition of the cargo. *fn12" The Westwood bill of lading provided at Clause 20:

 The goods, including goods shipped or carried in containers, vans, trailers or other unitizing devices, whether supplied by the carrier or shipper, may be carried on deck at carrier's option without notice to the shipper, consignee or owner of the goods, and, if carried on deck, the carrier shall not be required to specially note, mark or stamp any statement of on deck carriage on this bill of lading, any custom to the contrary notwithstanding. The carriage of goods on deck shall be subject to the U.S. Carriage of Goods by Sea Act, 1936, notwithstanding Section 1(c) thereof. *fn13" [emphasis added]

 Plaintiff's Exhibit 10 (bill of lading); Plaintiff's Exhibit 22 at 5 (large-print bill of lading clauses). Westwood also had a tariff on file with the Federal Maritime Commission which contained the following provision:

 Rule 110 B. Stowage of Containers

 Rates named in this tariff will apply on shipments tendered for transportation, provided that all freight received for transportation in or on containers, railroad cars, trailers or other vehicles is received "To be held and Transported on Deck." Shippers may not request deviation from this provision.

 Defendant's Exhibit A at 33 (Westwood Pacific Coast-Europe Tariff No. 1). In addition, there is some evidence that Aydin's booking agent, Rainer, had previously booked similar cargo for Aydin (electronic equipment which was over-height and stored in an open top container) with Westwood or its predecessor shipping line, operating the same vessels in the same Pacific Coast-Northern Europe trade, and had been informed at that time that such cargo would have to be stowed on deck. *fn14"

 The Hoegh Mallard is an open hatch container and break bulk carrier. The vessel is designed with container fittings to permit carriage of containers on deck and stowage of break bulk cargo below deck. Although the vessel lacks cell guides below deck with which fully containerized vessels are equipped, stowage of containers below deck is accomplished by locking containers to each other by the use of "twist locks" and "blocking and shoring" to reduce the shifting of cargo during a voyage. The Hoegh Mallard is equipped with two gantry cranes that are capable of lifting cargo to a height of two containers. Only the ship's gantry cranes (as contrasted with shore cranes) can be used to remove and replace hatch covers. *fn15" The eastbound service, i.e., Pacific coast to Northern Europe, offered by Westwood generally permitted the stowage of containers on deck only, since the area below deck was usually filled with forest products such as lumber, pulp, and plywood loaded in the Pacific northwest. In the westbound service, the full range of the vessel was available for the stowage of containerized cargo. *fn16"

 Prior to arriving in Oakland the Hoegh Mallard had loaded cargo at several ports in the Pacific northwest including Vancouver, British Columbia; Tacoma, Washington; and Coos Bay, Oregon. *fn17" Upon the vessel's arrival in Oakland, the area below deck was completely occupied by break bulk forest product cargo, with the exception of the underdeck stowage below hatch number 2 of ten standard containers which rested atop a number of tiers of break bulk cargo. There was a free space of 24 inches between the tops of the containers and the hatch cover. *fn18"

 At the time the vessel took on cargo at Oakland, the stowage of a container under deck could only have been accomplished by replacing one of the ten containers stowed under deck at hatch 2. This would have required the removal of all containers then stowed atop hatch 2, as well as the removal of all containers stowed atop one of the adjacent hatches, in order to permit the temporary placement of the second hatch cover during the restowage of hatch 2. *fn19" When the Hoegh Mallard arrived in Oakland, there were twenty containers on deck at hatch 2, two containers at hatch 1, and between five and eight containers (the record is indeterminate) at hatch 3. *fn20"

 he subject open top container was stowed toward the back of the forward third of the vessel atop hatch 4. It was placed in the third tier (the third and top container in its column, so to speak), in the third container position in from the port side of the vessel and seven containers from starboard. Containers were stowed three tiers high immediately to either side of the subject container, and containers stacked four high occupied positions fore and aft. *fn21"

 The crew of the Hoegh Mallard conducted regular inspections of the cargo during the voyage to make sure it was properly secured. *fn22" On the night of December 18, 1981, off the coast of Mexico, the vessel encountered winds of force 6-7 on the Beaufort scale and wave heights of four to six meters, which the master described as the worst weather of the voyage. *fn23" The master's protest described the five-hour period of difficult conditions as "vessel rolling with water spray overall and washing up on deck." Plaintiff's Exhibit 5 (note of protest). A cargo inspection conducted the next day, on December 19, revealed damage in the form of dents up to 20 centimeters deep to the outer walls of three containers stowed on the lower tier, portside of hatches 3 and 4. *fn24"

 At the vessel's first European port, Antwerp, Belgium, the open top container was restowed to a position two tiers high in order to permit off-loading by the ship's gantry cranes in the next port, Tilbury, England, where shore cranes were apparently not available. *fn25" On January 9, 1982, during the voyage between Antwerp and Tilbury, the vessel encountered Beaufort force 7 winds and sea spray on deck. *fn26" No notation was made at any time during the voyage about the tarpaulin covering the open top container having been ripped or dislodged, though the ship's master testified by deposition that such a development would have been noted during an inspection. *fn27"

 The open top cargo was discharged in Tilbury on January 11, 1982. Westwood's Tilbury agent, Van Ommeren, Ltd. ("Van Ommeren"), subsequently reported in a telex communication to Westwood that the tarpaulin protection was found torn on discharge. *fn28" There is no evidence that any other damage to the open top container was noted upon discharge from the vessel. The open top container was off-loaded and handled on the pier by the West Africa Terminal of the Port of London Authority, a government agency acting as stevedore for Westwood. *fn29" Following discharge from the Hoegh Mallard, the container was stored in an open container park on the quay to await customs clearance. *fn30" Although customs clearance normally takes two weeks, the container was kept in storage on the quay until February 3 at the request of EEV in order to await the return from overseas of EEV project manager Jennis. *fn31" Van Ommeren reported that the container was not dropped, struck, or otherwise damaged during discharge or movement upon the pier. *fn32" EEV's surveyor reported that during the period from January 10 until February 3 there were several occasions when there was heavy rain in Tilbury. *fn33"

 At the request of EEV, Brantford Inernational Ltd. ("Brantford"), its customs broker and freight forwarder, directed Van Ommeren to engage a trucker to transport the container to an EEV facility approximately 25 miles from the port of Tilbury. *fn34" The trucker, Edwin Freight Ltd. ("Edwin Freight"), delivered the container on February 3. The delivery note prepared by Edwin Freight contains no notation of any damage to the container when it was picked up at the port. However, upon delivery at EEV's premises, EEV manager Barry Jennis endorsed the delivery note: "Received damaged, by ...


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