The opinion of the court was delivered by: Tenney, District Judge.
Plaintiff, International Ore and Fertilizer Corporation
("Interore"), brings this breach of contract, breach of
warranty, negligence and misrepresentation action against
defendant, SGS Control Services, Inc. ("SGS"), alleging that
SGS improperly inspected and certified as suitable the holds
of a ship hired by Interore to ship fertilizer from Tampa,
Florida to New Zealand. Specifically, plaintiff contends that
an SGS inspector did not perform a workmanlike inspection of
the cargo holds in that he failed to observe a residue of
barley in each hold. Plaintiff claims that the barley
contaminated the fertilizer and ultimately caused New Zealand
authorities to reject the cargo in those holds. The case was
bifurcated and the liability portion was tried to the court
which, for the reasons set forth below, denies recovery under
the breach of contract claim but finds that defendant is
fifty percent liable on the claim of negligent
misrepresentation. The following, including those additional
facts referred to in the Discussion, constitutes the court's
findings of fact and conclusions of law pursuant to
1. Interore is a Delaware corporation with its principal
place of business in New York, New York. It is a vendor of
fertilizer products in the international market. Stipulated
Fact 1; see Tr. 3-4.
2. SGS is a New York corporation with its principal place
of business in New York, New York. It provides inspection,
testing and control services in connection with the movement
of bulk cargoes. Stipulated Fact 2.
3. On or about May 29-30, 1985, Interore entered into a
contract to sell 22,202 metric tons of compound fertilizers
to East Coast Fertilizer Company Limited ("East Coast") for
$4,118,287. See Stipulated Fact 5.
4. Interore's agreement with East Coast was on a cost and
freight basis, whereby title to the product passed as soon as
it was loaded on the ship and East Coast was responsible for
securing its own insurance for the product. Tr. 52.
5. This was the first such arrangement that Interore had
entered into with East Coast, but it had provided fertilizer
to a buyer in New Zealand on one prior occasion. Tr. 50.
6. On June 7, 1985, Interore entered into a voyage charter
party agreement to charter the vessel M/V ADELINA to
transport the fertilizer from Landskrona, Sweden and Tampa,
Florida to Napier, New Zealand. Pl.Exh. 2, Complaint ¶ 7.*fn1
8. Interore had hired SGS to perform similar services
200-400 times previously. Tr. 12. As in the past, the oral
agreement between plaintiff and defendant was memorialized in
a telex sent by Interore to SGS, which stated in pertinent
Pls act our behalf performing inspection,
sampling and analysis. Pls issue flwg docs: 1)
Cert of hold inspection, confirming vsls holds
were clean, dry and suitable.
Pl.Exh. 19; see Tr. 13-14.
9. Interore paid SGS $150 (three holds at fifty dollars per
hold) for the cleanliness survey, and an additional $1,859.92
for the other services. Pl.Exh. 30.
The Ship and its Prior Cargos
10. The ADELINA is a 16,356 ton bulk carrier of Greek
registry built in 1977 and owned by Blue Falcon Shipping
Corp. The vessel has five cargo holds. Holds two, three, four
and five each measure 26.4 meters long, 24.6 meters wide, and
14.23 meters high. Hold one is slightly narrower at the
front. Tr. 176; Pl.Exh. 1; Def.Exh. C, D. The holds are
separated fore and aft by vertical bulkheads. See Tr. 183.
11. At the aft end of each hold is an "Australian" ladder,
a staircase or step ladder running at an angle rather than
vertically, with hand tailings and steps rather than rungs.
See Pl.Exh. 21 (Picture 21). There is a standard vertical
ladder attached to the forward bulkhead. Pl.Exh. 21 (Picture
21). The Australian ladder is accessed through a manhole cover
on the deck of the ship. Tr. 180-81.
12. On the port and starboard side of each hold are
vertical ribs protruding out from the hull a distance of
approximately two feet. See Pl.Exh. 21 (Pictures 1, 22). The
ribs extend from the top of the hold to about eight feet off
the floor where the lower section of the hold wall runs off at
a forty-five degree angle toward the floor. Tr. 237, Def.Exh.
D. The angled portion of the hold's wall covers the ship's wing
tanks and measures twelve feet from the floor of the hold to
the point at which it joins the side of the hull.
13. Horizontal bars, called stringers, are attached at
regular intervals to the front of the vertical ribs, forming
a checkerboard pattern on the port and starboard side of each
hold. Pl.Exh. 21 (Picture 1); Def.Exh. D. Stringers are not
commonly found in bulk carriers built today, but are quite
common in older ships such as the ADELINA. Tr. 401.
14. Nested between some of the ribs are vertical pipes
running along the hull from the top of the hold to the top of
the wing tank. Each pipe is protected by a series of short,
horizontal bars affixed to the front of the two ribs between
which the pipe sits. Pl.Exh. 21 (Picture 1). Although they
extend downward only as far as the top of the wing tank,
these short horizontal bars resemble and can be used as a
ladder. Tr. 184-85.
15. At the top of each hold is a square hatch opening. The
dimensions of the opening on hold one are 12.5m x 8.6m, and
16.7m x 12m on holds two, three, four and five. Def.Exh. C.
Around the opening of the hatch, supporting the deck of the
ship, are a series of deck beams. These consist of a vertical
beam approximately three feet high with a horizontal lip on
the lower edge, which protrudes out several inches on either
side of the vertical beam. See Tr. 182; Pl.Exh. 20 (Picture
16. On December 17, 1984, the ship carried a full cargo of
barley from England to Iran. Pl.Exh. 13, 27, 28. The holds
were filled to the top with the grain. Tr. 178, 254. On April
30, 1985, the vessel carried a cargo of iron ore and coal
from South Africa to Rotterdam, Sweden. Pl.Exh. 13, 27, 28.
The Inspection in Landskrona
18. The ADELINA arrived in Landskrona on June 10, 1985,
where it was to be loaded with 7,353 metric tons of
fertilizer into ...