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O'Connell Machinery Co. v. M.V. Americana Her Engines

decided: July 18, 1986.

O'CONNELL MACHINERY COMPANY, INC., PLAINTIFF-APPELLANT-CROSS-APPELLEE,
v.
M.V. "AMERICANA," HER ENGINES, BOILERS, TACKLE, ETC., AND ITALIA DI NAVIGAZIONE, S.P.A. (D/B/A ITALIAN LINE), DEFENDANTS-APPELLEES, ITALIA DI NAVIGAZIONE, DEFENDANT-APPELLEE-CROSS-APPELLANT



Appeal from a judgment of the United States District Court for the Southern District of New York, Whitman Knapp, Judge, dismissing shipper's complaint against carrier for damage to shipper's machine sustained when that machine fell while on board, and dismissing carrier's counterclaim against shipper for damage to other cargo allegedly caused by the slippage of shipper's machine.

Oakes, Kearse, and Pierce, Circuit Judges.

Author: Pierce

PIERCE, Circuit Judge:

O'Connell Machinery Company, Inc. ("O'Connell") appeals from a judgment of the United States District Court for the Southern District of New York, Whitman Knapp, Judge, dismissing its complaint against the ocean carrier, M.V. "Americana," her engines, boilers, tackle, etc. ("the Americana") and the Americana's parent shipping company, Italia Di Navigazione, S.p.A. ("Italia") in an action seeking damages for the total loss of O'Connell's gear generator machine allegedly sustained when the machine broke loose and fell on board the Americana while the vessel was in transit. Italia cross-appeals from the district court's judgment dismissing its counterclaim against O'Connell for damage to six other containers on board that Italia maintains was caused by the falling of O'Connell's allegedly negligently packed machine.

O'Connell argues principally that the district court's decision improperly delegates to the shipper the carrier's obligation of ensuring proper stowage, erroneously approves on-deck stowage, and rests on insufficient or clearly erroneous findings of fact.

Italia refutes these claims on appeal. It also urges on cross-appeal that the district court erred in dismissing its counterclaim for damage to other cargo because, contrary to the district court's finding, the packer of O'Connell's machine was O'Connell's general agent, and hence O'Connell may be held liable for damage caused by negligent packing.

We hold that the carrier correctly avoided liability for damage to O'Connell's machine under the "insufficiency of packing" defense pursuant to the Carriage of Goods at Sea Act ("COGSA"), 46 U.S.C. ยง 1304(2)(n), and that O'Connell properly avoided liability for damage to other cargo because Italia failed to establish the requisite special agency relationship between O'Connell and the packer. We therefore affirm the judgment of the district court in all respects.

BACKGROUND

On the night of September 28, 1981, the Americana, en route from Genoa, Italy to New York, was crossing the North Atlantic Ocean in heavy seas and strong winds, when O'Connell's 43,000 pound gear generator machine broke free of its wire lashings and plunged off a flat-rack container stowed on deck. The machine toppled down eight feet, destroying six containers of separate cargo beneath it, and landing in irreparably damaged condition. The flat-rack container remained firmly in position on deck in the third tier of bay number 5, as did a 1.5 ton crate of spare parts secured by separate lashings to the same flatbed.

O'Connell had purchased the machine from Sogimex S.p.A. of Milan, Italy. The invoice and bill of sale indicate that the purchase was "ex works," although the letter of credit stated the delivery term of the purchase contract as "F.O.B. Italian port." Andrea Merzario S.p.A. ("Merzario"), a transportation concern that owns containers and operates its own vessels, was engaged by either Sogimex or O'Connell to oversee the loading and securing of the machine to a flat-rack container and the transport thereof to port. There was evidence, however, that Merzario failed to oversee the loading and securing of the machine, and that O'Connell therefore undertook responsibility for the task. The machine, coated with grease, was packed "oversize" onto a flat-rack, to which it was tied with wire lashings, and was covered by a plastic foil tarpaulin. On September 5, 1981, Merzario's trucker picked up the packed machine at the Sogimex factory. There is disagreement over whether the machine was delivered to Italia in Genoa on September 5 or 18. In either case the parties agree that Merzario did not specifically indicate to the stevedores or other Italia personnel that the machine was packed "oversize" or that it otherwise required special stowage arrangements, and that on September 18, when the machine was presented for loading, Italia was already in the final stages of loading cargo aboard the Americana.

Ettore Oldrini, Italia's port planner in Genoa, designated a bay on the third tier of the deck of the Americana for stowage of O'Connell's machine. The cargo had been described to Oldrini. Oldrini testified during his examination before trial that it would have been more dangerous to stow the machine below deck, since there "it cannot be under control all the time as it is on deck" and since, if the machine fell while below deck, "it could have damaged the ship itself perhaps for two or three days before we noticed it." The machine fell while the ship was crossing the ocean. In 1982 this action was commenced and in 1984 a bench trial was held before Judge Knapp, who found for defendant. The complaint and counterclaim were dismissed on July 17, 1985. This appeal followed.

Discussion

This case requires us to resolve two principal issues regarding the rights and liabilities of an ocean carrier and a commercial shipper pertaining to damage to cargo in the normal course of transport. These issues are, first, the liability, if any, of the carrier where the cargo slips from a secure flat-rack on deck; and, second, the liability, if any, of the shipper where his fallen cargo causes damage to ...


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