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Saks International Inc. v. M/V Export Champion Her Engines

decided: May 4, 1987.


Appeal and cross-appeal from a judgment of the United States District Court for the Southern District of New York, Gerard L. Goettel, Judge, finding defendants and third-party-defendant liable for shortage to coffee cargo consigned to plaintiff and denying third-party-plaintiffs' claim against third-party-defendant for attorney's fees.

Kearse, Miner, and Mahoney, Circuit Judges.

Author: Kearse

KEARSE, Circuit Judge:

Third-party-defendant Maher Terminals, Inc. ("Maher"), appeals from so much of a final judgment of the United States District Court for the Southern District of New York, entered after a bench trial before Gerard L. Goettel, Judge, as (1) awarded plaintiff Saks International, Inc. ("Saks"), $307,010.82 against Maher and defendants-third-party-plaintiffs Farrell Lines, Inc., and M/V "EXPORT CHAMPION," a ship owned by Farrell (collectively "Farrell"), for the nondelivery of 1,773 bags of coffee, part of a shipment consigned to Saks, carried aboard the EXPORT CHAMPION from the Ivory Coast to New Jersey and stevedored at discharge by Maher, and (2) held Maher liable to Farrell in indemnity for that amount. Maher contends principally that the trial court erred in admitting certain documents in evidence and that, without those documents, the evidence was insufficient to support a finding of liability against it. Farrell cross-appeals, contending, inter alia, that the court erred in refusing to award it attorneys' fees from Maher. We reject Maher's contentions, but vacate so much of the judgment as denied Farrell's claim for attorneys' fees and remand the case to the district court for further consideration of this claim.


According to findings of the district court that are undisputed on this appeal, in October 1984, the EXPORT CHAMPION carried a shipment of several thousand bags of coffee beans from two Ivory Coast ports, Abidjan and San Pedro, to Port Elizabeth, New Jersey. Farrell issued and signed clean bills of lading covering more than 19,000 bags of coffee, 16,800 of which belonged to Saks. Maher, which operated a marine terminal at Port Elizabeth and was under contract with Farrell Lines, Inc., to perform stevedoring services, unloaded the EXPORT CHAMPION's entire cargo upon arrival at Port Elizabeth and stored it pending delivery to the consignees. When Saks sought delivery of its 16,800 bags of coffee, it received only 15,027 bags; of the bags delivered, 657 were slack or torn.

Saks commenced the present action against Farrell to recover its losses resulting from the nondelivery and slackage; Farrell, claiming that the full consignment had been delivered to Maher in good order and condition, sued Maher as third-party-defendant, seeking to be indemnified against possible liability to Saks. Because Maher's checkers had made only an approximate count of the number of bags actually discharged at Port Elizabeth, the parties focused at trial on establishing the number of bags loaded aboard the vessel in Africa.

According to bills of lading prepared prior to the actual loading of the coffee, 6,048 bags of coffee were to be loaded in Abidjan and 13,440 bags in San Pedro. At each of these ports, employees of the loading stevedore prepared loading tallies; these tallies indicated that the amounts of coffee set forth in the bills of lading were in fact loaded onto the vessel. Each of the Abidjan tallies was signed by a checker employed by the loading stevedore, and most were countersigned by the EXPORT CHAMPION's chief mate. Fewer than half of the San Pedro tallies were signed by a checker, and none was countersigned by the chief mate. As discussed more fully in Part II.A. below, the district court admitted the tallies into evidence pursuant to the business records exception to the hearsay rule, acknowledging some question regarding the weight that should be accorded to them.

Partly in reliance on these tallies, the court found that the amount of coffee set forth in the bills of lading had actually been loaded onto the vessel and was received by Maher, and concluded that in failing to make delivery to Saks of all 16,800 bags Maher had been negligent and had breached its warranty of workmanlike performance. The court concluded that Farrell failed to meet its burden of showing that it was not responsible for the slackage among the bags that were delivered and held Farrell liable for the entire slackage loss. Judgment was entered in favor of Saks (1) against Maher and Farrell in the amount of $307,010.82, representing damages for nondelivery, including interest, and (2) against Farrell in the amount of $45,817.53, representing damages for slackage, including interest. The judgment provided that Farrell was entitled to indemnity from Maher in the amount of $307,010.82. These appeals followed.


On appeal, Maher contends principally that the district court erred in admitting the loading tallies into evidence and that the properly admitted evidence was insufficient to establish the amount of coffee loaded onto the ship in Africa. Farrell argues, inter alia, that the district court erred in not awarding it the attorneys' fees it incurred in the proceedings below. We have considered all of the arguments of Maher and Farrell in support of their respective appeals and find possible merit only in Farrell's contention that it was entitled to an award of attorneys' fees from Maher. Only that issue and Maher's evidentiary contention warrant discussion.

A. The Admissibility of the Loading Tallies

Maher's principal contention is that the trial court should not have allowed Farrell to introduce the African loading tallies as business records because they were not the records of Farrell and the foundation for their treatment as business records was inadequate. We find no abuse of discretion in the court's receipt of these documents.

The principal precondition to admission of documents as business records pursuant to Fed. R. Evid. 803(6) is that the records have sufficient indicia of trustworthiness to be considered reliable. See United States v. Mendel, 746 F.2d 155, 166 (2d Cir. 1984), cert. denied, 469 U.S. 1213, 84 L. Ed. 2d 331, 105 S. Ct. 1184 (1985); United States v. Lavin, 480 F.2d 657, 662 (2d Cir. 1973). Documents may properly be admitted under this Rule as business records even though they are the records of a business entity other than one of the parties, see United States v. Consolidated Edison Co., 580 F.2d 1122, 1131 n.18 (2d Cir. 1978), and even though the foundation for their receipt is laid by a witness who is not an employee of the entity that owns and prepared them, see United States v. Mendel, 746 F.2d at 166; United States v. Hathaway, 798 F.2d 902, 906 (6th Cir. 1986). Further, there is no requirement that the person whose first-hand knowledge was the basis of the entry be identified, so long as it was the business entity's regular practice to get information from such a person. See United States v. Atchley, 699 F.2d 1055, 1059 (11th Cir. 1983); United States v. Basey, 613 F.2d 198, 201 n.1 (9th ...

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