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March 27, 1990


The opinion of the court was delivered by: Sand, District Judge.

This action arises from the transportation by sea of a shipment of Mocitaiba veneer subsequently found to have sustained fresh water damage. Plaintiff moves for summary judgment, or in the alternative for partial summary judgment, on the issues of liability, limitation of liability and damages.

I. Background

A shipment of Mocitaiba veneer was transported from Santos, Brazil to Baltimore, Maryland aboard the vessel Henrique Leal. The veneer was packed in six wood crates by the shipper, plaintiff David R. Webb Company, and these crates were then put inside larger containers by the carrier, defendant Companhia de Navegacao Maritima Netumar a/k/a Netumar Lines. Defendant issued a bill of lading dated January 13, 1988 for the voyage which read in relevant part:

  Description of packages and goods
       said to contain (STC)

06 Wooden Cases Containing:

14.103,00 square meters of Mocitaiba veneer.

       "AS PER CONTRACT No 10/87"
       NET MEASUREMENT: 7,051 M3
       FOB VALUE $98,721.00

See Baxter Affidavit, Exhibit B. The bottom of the same bill of lading read:

Freight Payable Basis       Rate      Basis      Charges
_____________________       ____      _____      _______
  14,040 M3                 106.00      MS       1,488.24
  AD. VALOREM 1%                                   987.21
  BSC 13.5%                                        334.19
COLLECT $2,809.64                     Prepaid $

Id. Plaintiff alleges that the shipment of veneer was consigned to and paid for by plaintiff.*fn1 John A. Baxter II, the treasurer of plaintiff, affirms that plaintiff contracted to purchase the veneer at a price of $12.00 per square meter for a total price of $169,236.00, $98,721.00 of which was to be paid through a Brazilian bank on January 12, 1988 and the balance to be paid upon discharge in Baltimore. Baxter Affidavit ¶ & 3.

The shipment was unloaded in Baltimore on approximately February 2, 1988. A container stuff/strip tally signed by C.R. Hubbard, a Baltimore stevedore, on February 8, 1988 includes the notation: "SANTOS 23, VENEER RECEIVED IN BAD CONDITION END OF CASE OFF CONTENTS MOLDY WET CASE 1, 2, 6". Gavalas Affidavit, Exhibit A. A second container stuff/strip tally also signed by Mr. Hubbard on the same day reads: "SANTOS 23, VENEER RECEIVED IN BAD CONDITION CASE # 3, 4, 5 END OF CASES OFF CONTENTS MOLDY & WET". On February 9, 1988 and again on February 19, 1988, the cargo was apparently inspected by a firm called Toplis and Harding, Inc. on behalf of the notify party named in the bill of lading, though neither party offers any documentary evidence of those inspections.

Willard F. Woytowick, of Transit Surveys, a marine surveying and adjusting firm retained by the cargo underwriter, subsequently arranged for a joint survey and inspection. The joint survey was conducted on February 29, 1988 by a surveyor appointed by defendant, a representative of plaintiff, a surveyor appointed by the cargo underwriter, a personal representative of the cargo underwriter, and two surveyors representing the freight forwarder. While plaintiff maintains that the veneer was jointly found to be "variously wet, stained, warped, moldy and split," defendant suggests that its surveyor noted that the veneer was "damp at the ends and many strips were warped at the ends." It is undisputed that the survey discovered the presence of some fresh water damage to the veneer.

Pursuant to the joint inspection, the parties apparently agreed that the veneer should be transported to plaintiff's warehouse in Edinburgh, Indiana. Plaintiff suggests that this action was designed to segregate the veneer and salvage and process it if possible. Woytowick reports that he conducted another survey at the plaintiff's premises in Edinburgh on March 9, 1988 and that he submitted a report to the cargo underwriter dated June 22, 1988 detailing the findings of both his inspections. George L. Jenkins, a marine surveyor hired by defendant, also prepared a report, dated June 24, 1988, of the February 29, 1988 inspection.

A salvor/appraiser, George M. Ruddy Company, was commissioned by Woytowick to analyze the condition of the veneer and the feasibility of reworking the salvageable portions. Woytowick also asked Ruddy Company to assign a veneer wood expert appraiser to analyze the cargo. Ruddy inspected the veneer on April 12, 1988 along with the veneer wood expert, Nardi International, Inc. A May 3, 1988 letter from the President of Nardi International to Ruddy estimated that the veneer logs would yield a recovery of 80-85% and had an "excellent salvage value." Plaintiff affirms that it conducted a detailed evaluation of the damage itself and concluded that the veneer had suffered a loss in value in excess of 75% of the fair market price in the market for which it was intended.

Plaintiff, Woytowick, and Ruddy indicate that it was then decided to put the veneer on the salvage market, and that after a "conditional and speculative" offer of $43,000.00 was refused and another offer of $37,000.00 was received, plaintiff agreed to retain the cargo at a value of $40,000.00. This sum was apparently approved by the appraiser. In an April 21, 1988 letter, Ruddy informed Woytowick that a credit of $40,000 should be taken once the insured's loss had been agreed. Plaintiff commenced this action on August 3, 1988.

II. Discussion

A. Liability

The Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C.A.App. § 1303(2) (1975), imposes upon the carrier the duty to "properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried." In order to establish a prima facie case for recovery for breach of this duty, plaintiff must demonstrate that "the goods were damaged while in the carrier's custody." Caemint Food, Inc. v. Brasileiro, 647 F.2d 347, 351 (2d Cir. 1981) (quoting Pan-American Hide Co. v. Nippon Yusen (Kabushiki) Kaisha, 13 F.2d 871 (S.D.N.Y. 1921) (L. Hand, J.)). Such a showing can be made by establishing "delivery of the goods to the carrier . . . in good condition, and outturn by the carrier . . . in damaged condition." Vana Trading Co., Inc. v. S.S. "Mette Skou", 556 F.2d 100, 104 (2d Cir.), cert. denied, 434 U.S. 892, 98 S.Ct. 267, 54 L.Ed.2d 177 (1977). In this case, defendant disputes both that the goods were delivered in good condition and that they were released damaged. If plaintiff can establish a prima facie case for recovery, the burden then shifts to the carrier to demonstrate that one of ...

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