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UNION CARBIDE CORP. v. M/V MICHELLE

July 24, 1990

UNION CARBIDE CORP., PLAINTIFF,
v.
M/V MICHELE, HER TACKLE, BOILERS, ENGINES, ETC., IN REM AND KIESERLING AMERICA CORP., DEFENDANTS.



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

OPINION

Plaintiff-shipper, Union Carbide Corporation ("UCC"), has brought suit against defendant-carrier, EKB Kierserling America Corp., alleging that the defendant is responsible for the contamination of a shipment of silicone resin valued at $200,000. The defendant has moved for partial summary judgment seeking to restrict its liability to $500 pursuant to title 46 § 1304(5) of the Carriage of Goods by Sea Act. For the reasons that follow, the defendant's motion is granted.

BACKGROUND

On June 29, 1987, the plaintiff loaded a cargo of silicone resin into a 20 foot tank container which had been furnished by the defendant. See Griggs' Affidavit. According to G.W. Wulfert, plaintiff's quality control manager, one sample of the resin was taken before the shipment was loaded into the tank and a second was taken from the loading valve after the shipment was loaded. Neither analysis revealed any contamination. Wulfert Affidavit, ¶ 3. The defendant received the cargo at the shipper's plant in Sisterville, West Virginia and transported it to New York via truck. According to Sumner Griggs, truck driver for Transport Resources Inc., before he left the UCC plant, UCC employees inspected the tank and examined its valves. Griggs' Affidavit, ¶ 2. In New York the cargo was loaded aboard the M/V MICHELE and then transported to Felixstowe, England. A sample taken in England before unloading was allegedly contaminated.

DISCUSSION

There are three issues in dispute in this contract action. The first is whether section 11707 of the Interstate Commerce Commission ("ICC") applies to the inland transport of the tank container or whether the Carriage of Goods by Sea Act ("COGSA") applies to the entire journey. The second is whether the defendant's bill of lading limits the defendant's liability when transporting liquids shipped in bulk. The third is whether the plaintiff had a fair opportunity to declare excess value and failed to do so.

Before determining the extent of defendant's liability, this Court must first decide whether ICC or COGSA rules govern the transaction between these two parties. Clause 1(a) of defendant's bill of lading states:

  [T]his bill of lading shall have effect subject
  to the provisions of the Carriage of Goods by Sea
  Act . . . [T]he provisions stated in said Act
  (except as otherwise specifically provided
  herein) shall govern before loading on and after
  discharge from the vessel and throughout the entire
  time the Goods are in the custody of the Carrier.

(emphasis added). Defendant states that this clause indicates that COGSA's provisions applied during the entire time that the cargo was in its custody, including the time it was in the possession of the motor carrier. Normally, COGSA applies from the time the goods are loaded on to the ship to the time that they are discharged from the ship. Colgate Palmolive Co. v. S/S Dart Canada, 724 F.2d 313, 314 (2d Cir. 1983). However, the parties may extend the coverage beyond the normal scope; when they do so, COGSA operates as a contractual term only. Id. at 307. In this case, it appears that the parties contracted to have COGSA apply to the transaction unless stated otherwise (see clause 1).

Plaintiff maintains that clause 6(b) of the defendant's bill of lading signifies that the ICC would govern the inland portion of the transport. Clause 6(b) provides in relevant part:

  Whenever any stage of the combined transport is
  accomplished by any land or air Carrier, each
  such stage shall be controlled according to any
  law compulsorily applicable to such stage and
  according to the contracts, rules and tariffs of
  each participating Carrier, the same as if such
  contracts, rules and tariffs were fully set forth
  herein.

However, defendant cites clause 4(d) of its bill of lading as evidence of its intent to have COGSA govern the agreement in case of damage. That clause says:

  If loss or damage occurs after receipt of the
  Goods or packages hereunder, and it cannot be
  determined from the records of the ocean Carrier
  or participating domestic or foreign Carrier(s)
  whether such damage or loss occurred during
  ocean, domestic or foreign carriage, it shall be
  conclusively presumed that the loss or damage
  occurred on board the vessel and while the Goods
  or packages were in the custody of the Carrier.

Plaintiff suggests that the contamination occurred when the shipment was loaded into the defendant's tank for transport to New York since it was received in "good order by the carriers and was contaminated when it arrived." Plaintiff's Brief at 11. According to a report cited by the plaintiff, the contaminate was probably in the tank before the silicone was loaded. Id. Plaintiff states though, that the question of at what stage of transport the shipment became contaminated is a material fact in dispute which would preclude our granting defendant's motion for partial judgment. However, plaintiff has offered no evidence that the contamination occurred during the journey to New York. The plaintiff by its own admission thoroughly inspected the defendant's tank, took samples of the silicone after it was loaded, and found no contamination present. Since plaintiff has not ...


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