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ATLANTIC MUT. INS. CO. v. M/V PRESIDENT TYLER

April 16, 1990

ATLANTIC MUTUAL INSURANCE COMPANY, PLAINTIFF,
v.
M/V PRESIDENT TYLER, HER ENGINES, BOILERS, ETC., KAM CONTAINER LINE, COMET INTERNATIONAL TRANSPORT, CF OCEAN SERVICE AND AMERICAN PRESIDENT LINES, LTD., DEFENDANTS.



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

MEMORANDUM AND ORDER

This maritime action concerns two vacuum steam sterilizers damaged in shipment from New York to Keelung, Japan. Plaintiff Atlantic Mutual Insurance Company ("AMIC"), a subrogated insurer of the shipper, Environmental Tectonics, seeks the recovery of $50,000 from defendants Comet International Transport ("Comet"), American President Lines and its ship the M/V President Tyler ("APL"), as well as KAM Container Line and CF Ocean Service ("KAM"). Defendant Comet cross-claims for indemnity and contribution against defendants APL and KAM. Defendant KAM similarly cross-claims against defendants APL and Comet. Defendant APL in turn cross-claims against defendant KAM.

Defendant APL moves for summary judgment, arguing that the complaint and cross-claims against it are time-barred under the Carriage of Goods by Sea Act, 46 U.S.C.App. §§ 1300 et seq. (1984) (hereinafter "COGSA"). Defendant Comet also moves for summary judgment, arguing that the complaint and cross-claim against it are time-barred.

BACKGROUND

Environmental Tectonics, Inc., a Pennsylvania Corporation, plaintiff's subrogor, manufactures and sells vacuum steam sterilizers. In the fall of 1986, Environmental Tectonics agreed to sell two boxed vacuum steam sterilizers to Academia Sinica, in Taipei, Taiwan. On November 24, 1986, Environmental Tectonics contacted Comet International Transport ("Comet"), a freight forwarder, and requested Comet's assistance in arranging transport of the sterilizers to Taiwan. Comet hired KAM Container Line to carry the sterilizers to Taiwan, and apparently also arranged for the M/V President Tyler to carry the sterilizers over the sea to Taiwan. Comet never had actual possession of the cargo.

DISCUSSION

I. APL's Motion for Summary Judgment

Defendant APL moves for summary judgment, arguing that the suit is time-barred under the provisions of COGSA. COGSA governs ocean carriage pursuant to bills of lading or other documents of title. 46 U.S.C.App. § 1300. Bills of lading must state, in what is termed a "clause paramount," that they are subject to the express provisions of COGSA. 46 U.S.C. App. § 1312. COGSA establishes the responsibilities, liabilities, rights and immunities of the carrier and the ship. 46 U.S.C. App. § 1305. APL argues that the instant lawsuit is time-barred under 46 U.S.C.App. § 1303(6), which provides: "[T]he carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered."

Plaintiff AMIC responds that no bill of lading exists evidencing a contract of carriage between APL and AMIC, and that COGSA is therefore inapplicable. AMIC argues that its cause of action sounds in the common law of bailments, for which the limitation period is two years.

AMIC's argument is without merit. Assuming arguendo that AMIC's subrogor is Environmental Tectonics, Academia Sinica, or another holder of the bill of lading issued by Comet, the terms of that bill of lading, as a contract of carriage, contemplate ocean carriage and the applicability of COGSA, in addition to specifically incorporating the terms of the bill of lading issued by APL.

The Comet bill of lading states that the shipment is to be loaded on the M/V President Tyler in New York. Chang Aff.Ex. G-1. Furthermore, the front of the Comet bill of lading states that Comet has received the goods "for shipment included under a consolidated Ocean Bill of Lading issued and signed by the above mentioned Steamship Company — all terms, conditions and clauses printed or otherwise inserted on Steamship Company's Bill of Lading to apply." Environmental Tectonics, the plaintiff's subrogor, was thus bound to the terms of the vessel's bill of lading, incorporated by reference.*fn1

Plaintiff's subrogor was also on notice that COGSA would apply. Clause 5.0 of the Comet bill of lading contains the Clause Paramount, stating that ocean carriage pursuant to the bill of lading shall be governed by the terms of COGSA. AMIC advances no effective arguments that the contract was obtained by fraud or that it is otherwise invalid.*fn2

Even if the bill of lading issued by Comet to the shipper had not given the shipper full notice that the ocean bill of lading (and COGSA) would be applicable to the shipment, the shipper would still be bound to Comet's arrangements of transport. As a freight forwarder, Comet acted as the agent of the shipper in arranging transport. Reisman v. Medafrica, 592 F. Supp. ...


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