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.
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.
CONTENTS OF PACKAGES ARE SHIPPER'S
"CLEAN ON BOARD"
"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
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.
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 ...